/raid1/www/Hosts/bankrupt/TCR_Public/031001.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, October 1, 2003, Vol. 7, No. 194
Headlines
ABN AMRO: Fitch Rates Class B-3 and B-4 Certificates at BB/B
ADELPHIA BUSINESS: Seeks Nod for Amended Disclosure Statement
AIR CANADA: Canadian Court Extends CCAA Stay Until December 20
ALDERWOODS GROUP: Pursuing Talks to Sell United Kingdom Assets
ALLIED WASTE: Will Publish Third-Quarter Results on October 28
ALTERRA HEALTHCARE: Plan Filing Exclusivity Stretched to Dec. 19
AMERICAN MARKETING: Taps Shook Hardy Bacon as Special Counsel
AMERICAN SEAFOODS: Gets Requisite Consents to Amend Indentures
AMERICREDIT: Says SEC Closes Probe re Employee Insider Trading
ANC RENTAL: Wants Lease Decision Period Extended to January 6
ARMSTRONG: Court Allows Sale of Excess Lancaster Land to Wolf
AVALANCHE NETWORKS: July 31 Net Capital Deficit Tops $216,000
BAYOU STEEL: Lease Decision Time Extended through December 31
BOMBARDIER CAP.: Fitch Takes Rating Actions on Securitizations
CAPITAL GUARDIAN: Fitch Affirms BB- Preference Shares' Rating
CASTLTON EXCAVATING: Case Summary & 20 Largest Unsec. Creditors
CKE RESTAURANTS: Closes Convertible Subordinated Note Offering
CONE MILLS: Wins Necessary Orders to Continue Business as Usual
CONSECO INC: Court Fixes October 9 as Admin Claims Bar Date
COUNCILL CRAFTSMEN: Case Summary & 20 Largest Unsec. Creditors
CRYOPAK: Arranges C$500K Bridge Loan from Claridge Inc. Unit
CWMBS INC: Fitch Rates Class B-3 and B-4 Certificates at BB/B
DELTA FINANCIAL: Will Redeem All of Outstanding 9.5% Sr. Notes
DOBSON COMMS: Declares Cash Dividend on 12-1/4% Preferred Shares
DOBSON COMMS: Will Pay Cash Dividend on 6% Conv. Preferred
ENCOMPASS SERVICES: Wants Nod to Sell 3 Non-Core Business Units
ENRON CORP: Reaches Claims Dispute Settlement with 19 Parties
FAST FERRY: Court Sets Plan Confirmation Hearing for October 15
FLEMING COS.: Court Fixes Reclamation Claim Settlement Protocol
FORMICA CORP: Relocating Global Headquarters to Cincinnati Area
GAP INC: Fitch Affirms Senior Unsecured Debt Rating at BB-
GEORGIA-PACIFIC: Files Patent Infringement Suit vs. BPB America
GLOBAL CROSSING: Gets Nod to Up Directors' Fee Cap to $300,000
HARBISON-WALKER: Court Temporary Restraining Order Expires
HEALTHSOUTH CORP: Taps MedAssets HSCA as Supply Chain Partner
INT'L FIBERCOM: Court Converts Bankruptcy Case to Chapter 7
INTERNET SERVICES: Wants Schedule-Filing Deadline Moved to Oct 8
INTERWAVE COMMS: Silicon Valley Bank Ups Credit Line to $2.5MM
INTRAWEST CORP: Launches Tender Offer for 9.75% Senior Notes
J.A. JONES INC: Case Summary & Largest Unsecured Creditors
KASPER: Has Until Dec. 1 to Exclusively Solicit Plan Acceptances
LEAP WIRELESS: Court Approves Sale of 2 PCS Licenses to Edge
LEVEL 3 COMMS: Will Publish Third-Quarter Results on October 23
LORAL/QUALCOMM: Secures Exclusivity Extension through December 9
LTV CORP: Asks Court to Clear Intercompany Claims Settlement
MIRANT CORP: Court Approves Appointment of Equity Committee
MORGAN STANLEY: Fitch Affirms Low-B/Junk Ratings on 5 Classes
MOSAIC GROUP: Board of Directors Resigns Effective September 26
NAT'L STEEL: Coffee Wants $1MM Claim Allowed for Voting Purposes
NATIONSRENT INC: Terminates Common Stock and 10-3/8% Sr. Notes
NORSTAN: Takes Cost-Cutting Measures to Restore Profitability
NORTHWESTERN: Fitch Junks $388-Million Secured Term Loan at CCC
NRG ENERGY: Urges Court to Approve Recapitalization Financing
NUCENTRIX BROADBAND: Contract Staff Attorney as Special Counsel
PACIFIC GAS: Evidentiary Hearings on Proposed Settlement Conclude
PARAGON FIN'L: Inks Letter of Intent to Make Third Acquisition
PATHMARK STORES: James L. Moody Named to Board of Directors
PILLOWTEX: Intends to Sell Columbia and Phenix City Facilities
RESIDENTIAL ACCREDIT: Low-B Level Ratings Assigned to 2 Classes
RICA FOODS: Repays All Outstanding Indebtedness to Pacific Life
RIVERSTONE NETWORKS: Searching for New Chief Financial Officer
ROBOTIC VISION SYSTEMS: Closes $4.75 Million Private Placement
ROBOTIC VISION SYTEMS: Names Jeff Lucas Chief Financial Officer
ROGERS COMMS: Will Publish Third-Quarter Results on October 17
RURAL/METRO: Bank Agreement Extended Until December 31, 2003
SAFETY-KLEEN: EPA Demands $1.6MM Pospetition Penalties Payment
SOLUTIA INC: Receives Commitment to Refinance Credit Facility
SPIEGEL INC: FCNB Unit's Floating Rate Note Ratings Downgraded
SYMBOL TECHNOLOGIES: Receives Favorable Verdict in Patent Case
TRANSMONTAIGNE INC: Files Annual Report on SEC Form 10-K
UNUMPROVIDENT CORP: Names Thomas Watjen Company President & CEO
UPC DISTRIBUTION: S&P's Watch Implications Revised to Positive
US AIRWAYS: Seeks Clearance for Settlement with Lump Sum Parties
U.S. RESTAURANT: Gets Commitment for Credit Facility & Term Loan
VALENTIS INC: Independent Auditors Air Going Concern Uncertainty
WEIRTON STEEL: Wants to Pull Plug on Solid Waste & Valero Pacts
WHEELING-PITTSBURGH: Court Approves Six Settlement Agreements
WHEREHOUSE: Seeks Solicitation Period Extension through Jan. 26
YOUTHSTREAM MEDIA: Sells Patent and Related Rights for $700K
* Peter S. Heinecke Joins Kirkpatrick & Lockhart in San Francisco
* Sheppard Mullin Signs-Up Craig Cardon as San Francisco Partner
* Meetings, Conferences and Seminars
*********
ABN AMRO: Fitch Rates Class B-3 and B-4 Certificates at BB/B
------------------------------------------------------------
ABN AMRO Mortgage Corporation's Multi-Class Mortgage Pass-Through
Certificates, Series 2003-11, classes A-1 through A-14, A-P, A-X
and R ($295,897,690) are rated 'AAA' by Fitch Ratings. In
addition, the class B-1 certificate ($1,668,310) is rated 'A-',
the class B-3 certificate ($424,660) is rated 'BB', and the class
B-4 certificate ($454,993) is rated 'B' by Fitch. The class B-3,
B-4 and B-5 certificates are being offered privately. The class M,
B-2, and B-5 certificates are not rated by Fitch.
The 'AAA' rating on the senior certificates reflects the 2.45%
subordination provided by the 1.20% class M, the 0.55% class B-1,
the 0.26% class B-2, the 0.14% privately offered class B-3, the
0.15% privately offered class B-4, and the 0.15% privately offered
class B-5.
Fitch believes the amount of credit enhancement will be sufficient
to cover credit losses, including limited bankruptcy, fraud and
special hazard losses. The ratings also reflect the high quality
of the underlying collateral originated by ABN AMRO Mortgage
Group, Inc., the integrity of the legal and financial structures
and the servicing capabilities of AAMG (rated 'RPS2+' by Fitch).
The trust is comprised of one group of 627 conventional, 30-year
fixed-rate mortgage loans an aggregate principal balance of
$303,329,258. The loans are secured by first liens on residential
properties. As of September 1, 2003, (the cut-off date) the
average principal balance is $483,779. The weighted average
original loan-to-value ratio of the loan pool is approximately
67.17%; approximately 1.35% of the mortgage loans have an OLTV
greater than 80%. The weighted average coupon of the mortgage
loans is 5.452% and the weighted average FICO score is 747. Cash-
out and rate/term refinance loans represent 16.15% and 53.83% of
the loan pool, respectively. The states that represent the largest
geographic concentration are California (49.34%), Virginia
(6.21%), Illinois (5.98%), and New York (5.54%). All other states
represent less than 5% of the outstanding balance of the pool.
None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws.
AAMG originated all of the loans. U.S. Bank, N.A. will serve as
trustee. AMAC, a special purpose corporation, deposited the loans
in the trust, which issued the certificates, representing
undivided beneficial ownership in the trust. For federal income
tax purposes, election will be made to treat the trust as two real
estate mortgage investment conduits.
ADELPHIA BUSINESS: Seeks Nod for Amended Disclosure Statement
-------------------------------------------------------------
The Adelphia Business Solutions Debtors ask the Court, pursuant to
Sections 105, 502, 1125, 1126, and 1128 of the Bankruptcy Code and
Rules 2002, 3003, 3017, 3018, and 3020 of the Federal Rules on
Bankruptcy Procedure, to:
(a) approve the form and content of the Disclosure Statement,
(b) establish procedures for the solicitation of votes on the
Plan, including establishing, for voting purposes only, a
record holder date for the holders of claims, approving
the forms of ballots and balloting instructions,
establishing a voting deadline, establishing procedures
for tabulating votes on the Plan, and
(c) setting the date for the Plan confirmation hearing to
December 8, 2003 and the deadline for filing of plan
objections to be on November 26, 2003, at 4:00 PM
(Eastern Time).
Disclosure Statement
Judy G.Z. Liu, Esq., at Weil Gotshal & Manges, LLP, in New York,
contends that the Amended Disclosure Statement contains adequate
information within the meaning of Section 1125 of the Bankruptcy
Code, including, but not limited to, a discussion of:
(a) a Plan summary;
(b) the operation of the Debtors' business during the course
of these Chapter 11 cases;
(c) certain events preceding the Debtors' Chapter 11 cases;
(d) the Debtors' indebtedness;
(e) risk factors affecting the Plan;
(f) the administration of the Debtors' estate following
the Plan confirmation;
(g) the Plan's tax consequences;
(h) the Debtors' liquidation analysis;
(i) the Debtors' valuation as a going concern enterprise
prepared by the Debtors' financial advisors; and
(j) the Debtors' financial projections.
Thus, Ms. Liu asserts, the Disclosure Statement should be
approved.
Record Date
Bankruptcy Rule 3017(d) provides that, for the purposes of voting
solicitation, "creditors and equity security holders shall
include holders of stock, bonds, debentures, notes and other
securities of record on the date the order approving the
disclosure statement is entered or another date fixed by the
court, after notice and a hearing." Bankruptcy Rule 3018(a)
contains a similar provision regarding determination of the
record date.
In accordance with these Bankruptcy Rules, the record date is
typically the date the disclosure statement order is approved.
Thus, the Debtors ask the Court to set October 16, 2003 as the
"Record Holder Date" for voting purposes.
Pursuant to the Plan, Ms. Liu notes, Class 6, 7A, 7B, 7C and
Class 7D are the classes of claims entitled to vote under the
Plan. All other classes of claims and equity interests either:
(i) are rendered unimpaired under and, therefore, deemed to
have accepted, the Plan -- without voting -- or
(ii) will receive no recovery under and, therefore, deemed to
have rejected, the Plan.
Forms of Ballot
The Debtors propose to mail a ballot, substantially in the form
of the ballots submitted to the Court, to each claim holder in
the Voting Classes. Ms. Liu assures Judge Gerber that these
forms of Ballots comply with Bankruptcy Rule 3018(c) and are
based substantially on Official Form No. 14. However, these
forms of Ballot reflect certain modifications to the Official
Form to address the particular needs of the case. Accordingly,
Ms. Liu argues, the proposed forms of Ballot should be approved
in all respects.
Solicitation Procedures
If the Court determines that it is appropriate to approve the
Disclosure Statement, the Debtors propose to mail Solicitation
Packages to all holders of claims in the Voting Classes as of
the Record Holder Date on or before October 24, 2003. Each
Solicitation Package will include:
(a) notice of the confirmation hearing and related matters,
setting forth the dates established for filing
acceptances and rejections to the Plan, and filing
objections to Plan confirmation, and the date and time of
the hearing on confirmation;
(b) a copy of the Disclosure Statement, as approved by the
Court, with exhibits, including a copy of the Plan;
(c) a copy of the Disclosure Statement Order;
(d) a Ballot, in substantially the form approved by the Court;
and
(e) a letter from the co-proponents of the Plan, recommending
acceptance of the Plan.
Pursuant to Bankruptcy Rule 3017(d), the Debtors seek the Court's
authority to send a Notice of Non-Voting Status to all known
holders of claims and equity interests in classes that are
unimpaired. In additionally, the Debtors would also like to send
a similar notice to holders of claims or interests that are
impaired and receive no distribution under the Plan.
Ms. Liu explains that the proposed Notice of Non-Voting Status
identifies the classes designated as unimpaired or impaired which
will receive no distribution under the Plan, and sets forth the
manner in which a copy of the Plan and Disclosure Statement may
be obtained. Hence, the procedures with regard to the Notice of
Non-Voting Status comply with the appropriate Bankruptcy Rules
and should be approved.
Publication Notice
The Debtors propose to publish the Confirmation Hearing Notice
once in The Wall Street Journal (national edition) and The New
York Times (national edition) on a date not less than 25 calendar
days prior to the hearing to consider confirmation of the Plan to
provide notice of the time for filing and serving objections to,
and the date and time of the hearing on, the confirmation of the
Plan to:
(a) those creditors to whom no other notice was sent and who
are unknown or not reasonably ascertainable by the
Debtors,
(b) known creditors with addresses unknown by the Debtors,
and
(c) creditors with potential claims unknown to the Debtors.
According to Ms. Liu, the proposed publication of notice prior to
the hearing on confirmation is adequate and sufficient notice to
the creditors and equity interest holders under the
circumstances. Moreover, the Debtors will provide a copy of the
Plan and Disclosure Statement to any creditor or equity interest
holder that submits a written request for the documents.
Voting Deadline
Pursuant to Bankruptcy Rule 3017(c), the Debtors propose that, in
order to be counted as votes to accept or reject the Plan, all
Ballots must be properly executed, completed and delivered to the
Debtors' Court-appointed voting agent, Innisfree M&A Inc., 501
Madison Avenue, 20th Floor, New York, New York 10022, Attention:
Jane Sullivan by mail, by overnight mail, or by personal delivery
so that the Ballots are received by the Voting Agent no later
than 12:00 p.m. Eastern Time on December 1, 2003 -- the Voting
Deadline. Ms. Liu points out that no Ballots should be accepted
if transmitted by facsimile or e-mail -- ballots transmitted in
this manner should be deemed ineligible for voting purposes.
Tabulation Procedures
The Debtors propose to adopt these tabulation procedures:
(a) Any Ballot which is otherwise properly completed,
executed, and timely returned to the Voting Agent that
does not indicate an acceptance or rejection of the Plan
will not be counted;
(b) Any Ballot which is returned to the Voting Agent
indicating acceptance or rejection of the Plan but is
unsigned will not be counted;
(c) Any Ballot transmitted by facsimile or e-mail will not be
counted;
(d) Whenever a creditor casts more than one Ballot voting the
same claim prior to the Voting Deadline, only the last
timely Ballot received by the Voting Agent will be
counted;
(e) If a creditor casts simultaneous duplicative Ballots
with inconsistent votes, those Ballots will count as one
vote accepting the Plan;
(f) Each creditor will be deemed to have voted the full
amount of its claim except a creditor holding an
unliquidated or contingent claim, who will be deemed to
have voted in the amount of $1;
(g) Creditors will not split their vote within a class, thus
each creditor will vote all of its claim within a
particular class either to accept or reject the Plan;
(h) Any Ballot that partially rejects and partially accepts
the Plan will not be counted; and
(i) Any Ballot received by the Voting Agent by facsimile,
e-mail, or other electronic communication will not be
counted.
Ms. Liu contends that the proposed tabulation procedure is
necessary to simplify and avoid confusion in the solicitation
process.
Confirmation Hearing and Objection Deadline
Pursuant to Bankruptcy Rule 2002, a plan proponent is required to
provide creditors and equity interest holders not less than 25
days' notice of the date fixed for filing objections to, and the
hearing on, confirmation of a plan of reorganization, unless that
time is shortened.
Accordingly, the Debtors ask Judge Gerber to set the Plan
confirmation hearing on December 8, 2003. Any objections to the
Plan must be in writing; state the name and address of the
objecting party, the amount of its claim or the nature of its
interest, and the nature of the objection and the legal basis
therefore; and be filed with and received by the Court, and
served upon and received by the parties-in-interest, together
with proof of service, no later than November 26, 2003, at 4:00
p.m. (Eastern Time). (Adelphia Bankruptcy News, Issue No. 41;
Bankruptcy Creditors' Service, Inc., 609/392-0900)
AIR CANADA: Canadian Court Extends CCAA Stay Until December 20
--------------------------------------------------------------
Air Canada provided the following update on the airline's
restructuring under the Companies' Creditors Arrangement Act.
Extension of the Stay Order
Mr. Justice James Farley of the Ontario Superior Court of Justice
today approved an extension of the original stay period order
granted to Air Canada on April 1, 2003 to December 20, 2003.
The purpose of the extension is to allow the necessary time to
advance or complete the remaining steps in the Company's
restructuring under the CCAA, including the following: the
Company's negotiation of key remaining aircraft leases on more
favorable terms; the renegotiation of key operating contracts; the
completion of the due diligence and negotiations respecting the
proposed equity financing; the selection of the aircraft
manufacturer for the 70-100 seat aircraft and the establishment
and completion of the claims process with total claims estimated
to be in the range of CAD $8-10 billion. In addition, the funding
of the pension deficit must be resolved.
When these activities are completed, Air Canada will be in a
position to fully develop and file a Plan of Arrangement with the
Court.
ALDERWOODS GROUP: Pursuing Talks to Sell United Kingdom Assets
--------------------------------------------------------------
Alderwoods Group, Inc. (NASDAQ:AWGI) signed a letter of intent to
sell all of its assets in the United Kingdom to a consortium led
by the current U.K. management team.
Alderwoods Group has been engaged in a market review to identify
non-strategic funeral and cemetery operations that are not
consistent with the Company's long-term business plans. During the
quarter ended June 14, 2003, the Company identified all 39 funeral
locations in the United Kingdom as being non-strategic to its
long-term objective of focusing capital and management resources
in North America.
A management led consortium under the leadership of Mr. Jan
Hubrecht, the current Chairman of Alderwoods U.K. operations, has
signed a letter of intent to acquire all 39 funeral homes. This
would divest Alderwoods Group of all of its holdings outside of
North America. Alderwoods Group currently expects the transaction
to be concluded by the end of October 2003.
Launched on January 2, 2002, the Company is the second largest
operator of funeral homes and cemeteries in North America. As of
June 14, 2003, the Company operated 792 funeral homes, 167
cemeteries and 61 combination funeral home and cemetery locations
in the United States, Canada and the United Kingdom. Of the
Company's total locations, 143 funeral homes, 89 cemeteries and
five combination funeral home and cemetery locations are either
held for sale as at June 14, 2003, or identified for sale
subsequently. The Company provides funeral and cemetery services
and products on both an at-need and pre-need basis. In support of
the pre-need business, it operates insurance subsidiaries that
provide customers with a funding mechanism for the pre-arrangement
of funerals.
ALLIED WASTE: Will Publish Third-Quarter Results on October 28
--------------------------------------------------------------
Allied Waste Industries, Inc. (NYSE: AW) will report financial
results for the third quarter ended September 30, 2003 after the
close of the stock market on Tuesday, October 28, 2003.
The Company has scheduled a conference call to discuss these
results on October 28, 2003 at 5:00 p.m. (Eastern Time).
To listen to the call, please dial 484-630-4132 approximately 10
minutes prior to the start of the call and ask the operator for
the Allied Waste conference call. To hear a simulcast of the call
over the internet, access the Home page of the Allied Waste Web
site at http://www.alliedwaste.com
An on-line replay will be available after 7:00 p.m. October 28,
2003 and be accessible 24 hours a day through 5:00 p.m.,
November 11, 2003.
Allied Waste Industries, Inc. (S&P, BB Corporate Credit Rating,
Stable Outlook), is the second largest, non-hazardous solid waste
management company in the United States, providing non-hazardous
waste collection, transfer, disposal and recycling services to
approximately 10 million customers. As of June 30, 2003, the
Company operated 333 collection companies, 171 transfer stations,
171 active landfills and 64 recycling facilities in 39 states.
ALTERRA HEALTHCARE: Plan Filing Exclusivity Stretched to Dec. 19
----------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, Alterra Healthcare Corporation obtained an extension of
its exclusive periods. The Court gave the Debtor, until October
20, 2003, the exclusive right to file its plan of reorganization
and until December 19, 2003 to solicit acceptances of that Plan.
Alterra Healthcare Corporation, one of the nation's largest and
most experienced healthcare providers operating assisted living
residences, filed for chapter 11 protection on January 22, 2003,
(Bankr. Del. Case No. 03-10254). James L. Patton, Esq., Edmon L.
Morton, Esq.. Joseph A. Malfitano, Esq., and Robert S. Brady,
Esq., at Young, Conaway, Stargatt & Taylor LLP represent the
Debtors in their restructuring efforts. Ettta R. Wolfe, Esq., at
Richards, Layton & Finger, PA represents the Official Committee of
Unsecured Creditors of this case. When the Company filed for
protection from its creditors, it listed $735,788,000 in assets
and $1,173,346,000 in total debts.
AMERICAN MARKETING: Taps Shook Hardy Bacon as Special Counsel
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of Missouri
gave its stamp of approval to the application of American
Marketing industries, Inc., to employ Shook, Hardy & Bacon LLP as
Special Counsel in the Company's chapter 11 case to:
a) advise the Debtor and its lead counsel with respect to
legal issues associated with the American Marketing
Industries, Inc. Cafeteria Plan, American Marketing
Industries, Inc. 401(k) Plan, American Marketing
Industries, Inc. Long Term Disability Plan, American
Marketing Industries, Inc. Service Related Pension
Plans, and any other employee benefit plans sponsored or
maintained by American Marketing Industries, Inc., as
well as any trusts associated with the Plans, including
but not limited to issues arising under the Employee
Retirement Income Security Act and the Internal Revenue
Code of 1986, as amended; and draft documents relating
to same; and
b) advise the Debtor and its lead counsel, and represent
the Debtor, with respect to any investigations,
inquiries, or claims made by the Department of Labor,
the Internal Revenue Service, the Pension Benefit
Guaranty Corporation, or claims by Plan participants or
Plan beneficiaries, which relate to the Plans.
John L. Utz, Esq., reports that Shook Hardy will bill the Debtors
its current hourly rates of:
Partners $190 - $505 per hour
Of Counsel $130 - $355 per hour
Staff Attorneys $115 - $235 per hour
Associates $110 - $365 per hour
Legal Assistants & Analysts $ 55 - $165 per hour
Headquartered in Independence, Missouri, American Marketing
Industries, Inc., is a specialized apparel company. The Company
filed for chapter 11 protection on September 17, 2003 (Bankr. W.D.
Mo. Case No. 03-62333). Laurence M. Frazen, Esq., and Michelle M.
Masoner, Esq., at Bryan Cave LLP represent the Debtor in its
restructuring efforts. When the Company filed for protection from
its creditors, it listed estimated assets of over $10 million and
estimated debts of more than $100 million.
AMERICAN SEAFOODS: Gets Requisite Consents to Amend Indentures
--------------------------------------------------------------
American Seafoods Group LLC and American Seafoods Finance, Inc.
announced that, as of the close of business on September 26, 2003
and as part of their previously announced tender offer and consent
solicitation for their outstanding 10-1/8% Senior Subordinated
Notes due 2010, they had received the requisite consents to all of
the proposed amendments to the indenture governing the Notes.
A supplemental indenture effecting these amendments has been
executed, and the amendments will become operative on the date
that validly tendered Notes are accepted for purchase and payment.
The consent expiration date was 5:00 p.m., New York City time, on
September 26, 2003. The offer will expire at 12:00 midnight, New
York City time, on October 10, 2003, unless extended. Holders who
desired to receive the consent payment and the tender offer
consideration must have both validly consented to the proposed
amendments and validly tendered their Notes pursuant to the offer
on or prior to the consent expiration date. Holders who validly
tender their Notes after the consent expiration date will receive
the tender offer consideration, which is $1,170.00 per $1,000
principal amount of Notes, but not the consent payment. As of the
close of business on September 26, 2003, which was the consent
expiration date and the last day on which validly tendered Notes
could have been withdrawn, approximately $174.93 million of the
$175.0 million outstanding principal amount of the 10-1/8% Senior
Subordinated Notes due 2010 had been irrevocably tendered.
The proposed amendments to the indenture will eliminate
substantially all of the restrictive covenants, certain repurchase
rights and certain events of default and related provisions
contained in such indenture.
Consummation of the offer is subject to certain conditions,
including consummation of certain financing transactions
contemplated by the registration statement on Form S-1
(Registration no. 333-105499) filed with the Securities and
Exchange Commission by American Seafoods Corporation, an affiliate
of American Seafoods Group LLC and American Seafoods Finance, Inc.
Subject to applicable law, American Seafoods Group LLC and
American Seafoods Finance, Inc. may, in their sole discretion,
waive or amend any condition to the offer or solicitation, or
extend, terminate or otherwise amend the offer or solicitation.
Credit Suisse First Boston, or CSFB, is the dealer manager for the
offer and the solicitation agent for the solicitation. MacKenzie
Partners, Inc. is the information agent and Wells Fargo Bank
Minnesota, National Association is the depositary in connection
with the offer and solicitation. The offer and solicitation are
being made pursuant to the Offer to Purchase and Consent
Solicitation Statement, dated September 15, 2003, and the related
Consent and Letter of Transmittal, each as modified by our press
release, dated September 24, 2003, collectively set forth the
complete terms of the offer and solicitation. Copies of the Offer
to Purchase and Consent Solicitation Statement and related
documents may be obtained from MacKenzie Partners, Inc. at 212-
929-5500. Additional information concerning the terms of the offer
and the solicitation may be obtained by contacting CSFB at 1-800-
820-1653. Copies of the registration statement may be obtained
from the Securities and Exchange Commission's Internet site. The
site's Internet address is http://www.sec.gov
American Seafoods (S&P, BB- Corporate Credit Rating, Positive),
headquartered in Seattle, Washington, is the largest harvester and
at-sea processor of pollock and the largest processor of catfish
in the United States.
AMERICREDIT: Says SEC Closes Probe re Employee Insider Trading
--------------------------------------------------------------
AmeriCredit Corp. (NYSE:ACF) believes the Securities and Exchange
Commission has concluded its investigation of five Company
employees for insider trading. None of the five is or ever has
been a member of executive management.
In its investigation, the SEC asserts that five present or former
AmeriCredit employees traded in shares of the Company's common
stock in January 2002 while purportedly in possession of material,
non-public information about the Company -- prior to the release
of its financial results for the quarter ended December 31, 2001.
The Company has cooperated fully with investigators and has taken
appropriate disciplinary action.
The SEC also asserts that AmeriCredit is liable for a civil
penalty under Section 21A of the Securities Exchange Act of 1934
as a "controlling person" of those employees who are alleged to
have committed a violation of the Act. The Company neither admits
nor denies liability under the Exchange Act by virtue of the
trading activity of these employees, but has offered to resolve
its part of this matter with the SEC by paying a civil penalty of
$100,000 as full settlement. The Company believes that the SEC has
accepted this offer and that they will be making an announcement
soon to conclude this issue.
AmeriCredit has recently adopted tighter restrictions for
employees that trade in Company securities, including the
implementation of stricter trading blackout periods and defined
trading windows for a broader group of employees.
AmeriCredit Corp. (Fitch, B Senior Unsecured Debt & B+
Counterparty Credit Ratings, Negative) is a leading independent
middle-market auto finance company. Using its branch network and
strategic alliances with auto groups and banks, the Company
purchases retail installment contracts entered into by auto
dealers with consumers who are typically unable to obtain
financing from traditional sources. AmeriCredit has more than one
million customers and over $14 billion in managed auto
receivables. The Company was founded in 1992 and is headquartered
in Fort Worth, Texas. For more information, visit
http://www.americredit.com
ANC RENTAL: Wants Lease Decision Period Extended to January 6
-------------------------------------------------------------
To recall, on June 12, 2003, the ANC Rental Debtors executed an
Asset Purchase Agreement, as amended, with Cerberus Capital
Management, LP, pursuant to which the Cerberus will acquire
certain of the Debtors' assets and assume certain of their
liabilities. On August 6, 2003, the Court approved the APA and
authorized the Debtors to consummate the Acquisition. The Order
approving the APA was entered on August 21, 2003. According to
Bonnie Glantz Fatell, Esq., at Blank Rome LLP, in Wilmington,
Delaware, the Debtors and Cerberus are diligently working toward
closing the Acquisition on September 30, 2003. However, there is
no guarantee that the closing will occur at that time, and an
extension of the current lease decision period is needed to allow
the Debtors the additional time necessary to review the remaining
Leases, and plan for the closing and the eventual transfer of the
Debtors' operations to Cerberus.
While the Debtors have been working diligently to evaluate before
October 6, 2003 which Leases will be rejected and or assumed and
assigned to Cerberus, in light of the present status of these
Chapter 11 cases, Ms. Fatell tells the Court that it would be
virtually impossible for the Debtors to make a reasoned and
informed decision before the expiration of the current lease
decision period with respect to which of the remaining Leases to
assume or reject, since the Debtors do not know which Leases
Cerberus will be interested in having the Debtors assume and
assign to them or which Leases the Debtors should reject.
Accordingly, the Debtors ask the Court to further extend their
lease decision period to and including January 6, 2004.
Ms. Fatell explains that the Debtors' decision to assume or
reject a particular Lease, and the timing of the assumption or
rejection, depends in large part on whether the location that
relates to the Lease will play a future role in Cerberus' plans
for the Debtors' operations going forward. At this stage, the
Debtors and Cerberus have not yet determined whether each of
these locations will play a role in the Debtors' future
operations. Lease decisions cannot be made properly and
responsibly in these cases without an extension of the lease
decision period.
If the Debtors were forced to make the determination whether to
assume or reject the Leases now, or in the near term, they could
be compelled to make an imprudent determination that would create
unnecessary claims against the estate.
Ms. Fatell tells the Court that the Debtors are currently parties
to 50 unexpired non-residential real property leases located
throughout the United States. The Leases represent important
assets of the Debtors' estates and any decision with respect to
assuming or rejecting the Leases will affect the Sale. Many of
the Leases are for properties critical to the Debtors' operations.
The Debtors use the properties for their corporate offices,
reservation centers, on-airport and off-airport rental sites,
sales offices and vehicle storage and maintenance facilities.
While the Debtors have made significant progress in evaluating
their Leases -- the Debtors have rejected, inter alia, over 450
Leases, assumed over 190 leases, and closed 190 additional Alamo
Local locations upon the expiration of their leases -- more time
is needed to complete this large task. Extending the period to
assume or reject the Leases will provide the Debtors with the
time and flexibility they need to coordinate the assumption or
rejection of the Leases with Cerberus.
Union Station Wants Prompt Decision
Union Station Venture, Ltd. is the lessor of certain premises
located at Union Station, Washington, D.C. wherein the Debtors
operate one of their National Car Rental offices. These premises
are operated pursuant to an unexpired non-residential real
property lease. The Union Station Lease expires by its own terms
on October 31, 2003. No renewal lease or lease extension has
been executed by the parties, although there have been discussions
concerning a renewal. Unless a new lease is executed, Union
Station does not intend to extend the current term beyond October
31st.
With the impending expiration of the Union Station Lease only
weeks away, Union Station asks the Court to require the Debtors
to decide whether to assume or reject the Lease immediately. No
further extension is warranted.
David L. Pollack, Esq., at Ballard Spahr Andrews & Ingersoll,
LLP, in Philadelphia, Pennsylvania, tells the Court that while
one can appreciate that the Debtors do not want to make mistakes
by misevaluating leases, and assuming leases too early, thereby
incurring an administrative burden, or rejecting leases and
losing their value for the estate, the rights of the debtor and
its landlord must be balanced. This is especially true in Union
Station's case where the Lease -- one of fifty that have not been
previously assumed or rejected -- is due to expire very soon.
The Debtors do not need any additional time to determine whether
to assume or reject the Union Station Lease, Mr. Pollack contends.
(ANC Rental Bankruptcy News, Issue No. 39; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
ARMSTRONG: Court Allows Sale of Excess Lancaster Land to Wolf
-------------------------------------------------------------
Armstrong World Industries, Inc. obtained the Court's approval to
sell the excess Lancaster Real Estate Property to The Wolf Group
for $1,500,000, free and clear of liens, claims and encumbrances,
and to pay a commission of 5% to CB Richard Ellis, the real estate
broker.
Armstrong World Industries, Inc. owns 14.3 acres of land located
in the City of Lancaster, Lancaster County, Pennsylvania. AWI
bought this property in 1924 with the original intention of
expanding its Lancaster plant. AWI is selling its property
located on the opposite side of railroad tracks that run across
the north end of the Lancaster Plant. Although a small portion of
the Property is used as a parking lot for Lancaster Plant
employees, the remainder of the Property is not in use.
The Sale Terms
* Purchase Price: $1,500,000, or approximately
$104,000 per acre, payable by The Wolf Group:
(a) $75,000 to be paid as a deposit at the time
AWI executes the Sale Agreement;
(b) $75,000 to be paid as a deposit upon The Wolf
Group's completion of due diligence on the
Property; and
(c) the balance to be paid by The Wolf Group to
AWI at closing.
* Broker as Escrow Agent. All deposits paid by The Wolf
Group will be paid to the Broker, who will retain those
funds in an escrow account until consummation or
termination of the Sale Agreement in conformity with
all applicable laws and regulations. In the event of a
dispute over entitlement to deposit funds, the Broker
will retain the funds in escrow until the dispute is
resolved.
* Closing. The Closing will take place on or before
October 10, 2003, or 30 days after the completion of
certain items set forth on an addendum to the Sale
Agreement, including:
(a) Necessary Approvals. The parties' obligations
under the Sale Agreement are contingent upon
AWI's receipt of Bankruptcy Court approval of
the transactions contemplated by the Sale
Agreement within 60 days of the full
execution of the Sale Agreement; and
(b) Due Diligence Period. The Wolf Group will have 60
days from the date of Bankruptcy Court approval
of the transactions contemplated by the Sale
Agreement to:
(i) perform evaluations, inspections, and
a title search of the Property; and
(ii) review the survey of the Property and
reports and information provided by AWI
with respect to the Property. The Wolf
Group must provide AWI with written notice
of any defects discovered during the Due
Diligence Period. AWI will have 30 days
to correct any stated defects. If AWI
does not or cannot correct the defect,
The Wolf Group may accept the defect or
terminate the Sale Agreement upon written
notice given to AWI before the expiration
of the Due Diligence Period.
* Parking Area Lease. The Sale Agreement provides that
AWI has the right to lease an asphalt area at the rear
of the Property that currently is being used as a
parking area for AWI's employees at the Lancaster Plant,
and a propane tank area located on the Property, from
The Wolf Group for $1 per year for a three-year term.
The parties' obligations under the Sale Agreement are
contingent upon the parties' agreement on the terms of
the Parking Area Lease within 30 days following the
date of the Addendum. Prior to the termination of the
Parking Area Lease, AWI will remove the propane tanks
located on the Property at its own expense. AWI
estimates that the cost of that removal will be
approximately $150,000.
* Fuel Storage Tank Removal and Remediation. Within 10
days following the execution of the Sale Agreement,
AWI will provide The Wolf Group with copies of all
material information in AWI's possession concerning the
removal of three above-ground storage tanks and the
environmental remediation and cleanup associated with
the tank removal. If the Pennsylvania Department of
Environmental Protection requires AWI to perform
additional remediation or testing at the Property, The
Wolf Group will provide AWI and its agents and
contractors with reasonable access to the Property to
complete remediation and clean-up.
* Easements. At the closing, AWI will reserve easements
on the Property to maintain, repair, and replace
existing utility facilities located on and under the
Property and which serve AWI's adjoining properties.
The location and term of the easements will be
determined during the Due Diligence Period. If the
parties cannot agree on the location and term of the
easements, either party may terminate the Sale
Agreement prior to the expiration of the Due Diligence
Period.
* "As Is, Where Is" Sale. The Wolf Group is purchasing
the Property "as is, where is" in its present condition
and with all faults and, except as specifically set
forth in the Sale Agreement, AWI makes no further
representations or warranties with respect to the
Property, whether express or implied. The Wolf Group
will have the Property independently inspected and will
rely fully on that inspection. The Wolf Group assumes
the risk of all matters relating to conditions on the
Property and, except as specifically set forth in the
Sale Agreement, upon closing, releases AWI from any and
all claims, damages, losses, and causes of action with
respect to any condition, including, without limitation,
physical and environmental conditions of the Property.
* Release. The Wolf Group agrees to release, quit claim,
and forever discharge AWI, all brokers, their licensees,
employees, any other officer or partner of any one of
them, and any other person, firm or corporation that
may be liable by or through them, from any and all
claims, demands or losses -- including, but not limited
to, personal injuries and property damage and all of
the consequences that may arise from the presence of
environmental hazards, any deficiencies in the
Property's on-site water, service system, or any
defects or conditions in the Property. The Release
will survive after closing.
* Public System Contingency. The sale is contingent upon
The Wolf Group obtaining municipal approval for the
connection of the Property to a sewage disposal system
within 60 days of the parties' execution of the Sale
Agreement or, if The Wolf Group is unable to obtain such
approval, The Wolf Group's agreement to accept the
Property "as-is" and agree to the Release. If The Wolf
Group does not agree to accept the Property "as-is" and
the Release, The Wolf Group may terminate the Sale
Agreement and is entitled to a return of all deposits
paid under the Sale Agreement.
* Connection to Off-Property Water Source Contingency.
The sale is contingent upon The Wolf Group's
determination that the terms of connecting the Property
to an off-Property water source are acceptable to The
Wolf Group or, if the terms are not acceptable to The
Wolf Group, The Wolf Group's agreement to accept the
Property "as-is" and to the Release. If The Wolf Group
does not agree to accept the Property "as-is" and the
Release, The Wolf Group may terminate the Sale Agreement
and is entitled to a return of all deposits paid under
the Sale Agreement.
* Environmental Audit/Inspection Contingency. The sale is
contingent upon the completion, to The Wolf Group's
satisfaction, of certain environmental audits and
inspections by a licensed or otherwise qualified
professional within 60 days of the parties' execution
of the Sale Agreement or, if The Wolf Group is not
satisfied with the information contained in any written
reports it receives as a result of such audits or
inspections, The Wolf Group's agreement to accept the
Property with the information stated in the reports and
agree to the Release. If The Wolf Group does not agree
to accept the Property with the information stated in
the reports and the Release, The Wolf Group may
terminate the Sale Agreement and is entitled to a
return of all deposits paid under the Sale Agreement.
* Maintenance. Until the Closing, AWI will maintain the
Property, grounds, and fixtures in their present
condition, normal wear and tear excepted. If, prior to
the Closing, any system or appliance included in the
sale of the Property fails and AWI does not repair or
replace the item, The Wolf Group may choose to:
(a) accept the Property and agree to the Release; or
(b) terminate the Sale Agreement, in which case The
Wolf Group is entitled to a return of all deposits
paid under the Sale Agreement.
* Broker's Commission. The Sale Agreement provides that
AWI will pay the Broker a sales commission equal to 5%
of the Purchase Price.
* Default. If The Wolf Group (a) fails to make all of
the payments due under the Sale Agreement; (b)
furnishes false or incomplete information to AWI or
the Broker concerning The Wolf Group's legal or
financial status; or (c) violates or fails to fulfill
and perform any other term of the Sale Agreement, AWI
may elect to retain all sums paid by The Wolf Group,
including all deposits, as liquidated damages. If AWI
so elects, both AWI and The Wolf Group will be released
from further liability or obligation under the Sale
Agreement, and the Sale Agreement will be void. (Armstrong
Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
AVALANCHE NETWORKS: July 31 Net Capital Deficit Tops $216,000
-------------------------------------------------------------
Avalanche Networks Corporation (TSX Venture Exchange: AVH), a
business technology solutions provider, announced the financial
results for its first quarter of Fiscal 2004, ended July 31, 2003.
Copies of the most recent filings, including the audited financial
statements for Fiscal 2003 can be obtained on SEDAR at
www.sedar.com/command_servlet?cmd=DisplayCompanyDocuments&issuerNo=00001063
Highlights:
- Revenues for the first quarter of Fiscal 2004 ended July 31,
2003 were $104,931, up 155% from $41,121 from continuing
operations in the first quarter sales a year ago.
- The profit in the first quarter of Fiscal 2004 was $46,808 as
compared to a loss of $38,469 a year ago.
- Gross profit from continuing operations increased 155% to
$68,946 from $26,936 a year ago.
- Non-cash expenses included depreciation of $12,707.
- Extraordinary income included proceeds from an out-of-court
settlement of a lawsuit against two former employees in the
amount of $46,000.
- Earnings before interest, taxes, depreciation and amortization
(EBITDA) was $11,568, as compared to a loss from continuing
operations of $12,189 a year earlier.
"AvalancheSearch, in which we invested our development and sales
efforts over the past 2 years, has showed excellent growth and we
are now ready to raise funds to expand this venture faster",
stated company CEO, Bruce Lamb. "In addition to the growth in our
AvalancheSearch revenues, our results in our first quarter were
assisted by a favorable out-of-court resolution of a lawsuit
against two former employees."
AvalancheSearch guarantees first-page placement of client web
sites in major search engines, such as MSN, Yahoo, Google, AOL and
more, and our customers have been experiencing excellent returns
from their AvalancheSearch marketing investment.
"One of our AvalancheSearch clients has closed just shy of a
million dollars U.S. in new business over the course of the past
year specifically as a result of their $350 per month investment
in our AvalancheSearch search engine marketing process", stated
Mr. Lamb. "This is just one example of how our clients are
benefiting from our search engine marketing program."
The company's objective is now to grow beyond its current
geographic boundaries in order to expand its client base for its
AvalancheSearch initiative.
At July 31, 2003, Avalanche Networks' balance sheet shows a
working capital deficit of about $200,000 and a total
shareholders' equity deficit of about $216,000.
BAYOU STEEL: Lease Decision Time Extended through December 31
-------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the Northern District of
Texas, Bayou Steel Corporation and its debtor-affiliates obtained
an extension of their lease decision period. The Court gives the
Debtors until December 31, 2003 to determine whether to assume,
assume and assign, or reject their unexpired leases of
nonresidential real property.
Bayou Steel Corp., a producer of light structural shapes and
merchant bar steel products, filed for chapter 11 protection on
January 22, 2003 (Bankr. N.D. Tex. 03-30816). Patrick J. Neligan,
Jr., Esq., at Neligan, Tarpley, Andrews & Foley, LLP represents
the Debtors in their restructuring efforts. When the Company
filed for protection from its creditors, it listed $176,113,143 in
total assets and $163,402,260 in total debts.
BOMBARDIER CAP.: Fitch Takes Rating Actions on Securitizations
--------------------------------------------------------------
Fitch Ratings has performed a review of the Bombardier Capital
Manufactured Housing Transactions. Based on the review, the
following rating actions have been taken:
Series 1998-B:
-- Class A is affirmed at 'AAA';
-- Class M-1 is affirmed at 'BBB';
-- Class M-2 is affirmed at 'B';
-- Class B-1 remains at 'C';
-- Class B-2 is downgraded to 'D' from 'C';
Series 1999-B:
-- Classes A-1A, A-1B - A-6 are affirmed at 'BBB+';
-- Class M-1 is affirmed at 'B';
-- Class M-2 remains 'C';
-- Class B-1 is downgraded to 'D' from 'C';
Series 2000-A:
-- Classes A-1 - A-5 are affirmed at 'BBB+';
-- Class M-1 is downgraded to 'B-' from 'BB-';
-- Class M-2 remains at 'C';
-- Class B-1 is downgraded to 'D' from 'C';
Series 2001-A:
-- Class A is affirmed at 'AAA';
-- Class M-1 is affirmed at 'AA';
-- Class M-2 is affirmed at 'BBB-';
-- Class B-1 is downgraded to 'B-' from 'BB-';
-- Class B-2 remains at 'C';
These actions are being taken due to the continued poor
performance of the underlying collateral as a result of
Bombardiers reliance upon wholesale liquidations of repossessed
homes. Recovery rates on wholesale liquidations are generally
substantially lower than retail liquidation recoveries.
CAPITAL GUARDIAN: Fitch Affirms BB- Preference Shares' Rating
-------------------------------------------------------------
Fitch Ratings upgrades one class of notes and affirms five classes
of notes issued by Capital Guardian ABS CDO I.
The following class has been upgraded:
-- $11,926,580 class C notes to 'BBB+' from 'BBB'.
The following five classes have been affirmed:
-- $55,000,000 class A-1A notes 'AAA';
-- $150,000,000 class A-1B notes 'AAA';
-- $49,300,000 class A-1C notes 'AAA';
-- $70,000,000 class B notes 'AA-';
-- $15,000 preference shares 'BB-'.
Capital Guardian ABS CDO I is a collateralized debt obligation,
which closed in February 2002. The portfolio consists of
residential mortgage-backed securities (RMBS; 47.6%), asset-backed
securities (ABS; 23.1%), commercial mortgage-backed securities
(CMBS; 15.3%), corporate securities (6.8%), and collateralized
debt obligations (CDOs; 2.9%).
The upgrade rating action reflects the deleveraging of the CDO, as
the principal balances of the class C notes have been paid down by
approximately 17.4% over the past year and a half from excess
spread in the transaction. This is due to the equity cap
structured into the CDO, whereby excess spread is paid to the
equityholder in an amount that equates to a dividend yield of 32%
per annum, and any excess spread above the cap is then diverted to
pay down the principal balance of the class C notes.
Therefore, although the CDO is in its revolving period, during
which time any principal receipts from the collateral are
reinvested in new collateral unless a coverage test is tripped,
the CDO may still amortize the class C notes from interest if
there are excess proceeds. Fitch views this equity cap feature as
being positive for the rated notes of the CDO, as it traps excess
spread that would otherwise flow out of the deal and directs it to
pay down the most expensive liabilities without reducing the
credit enhancement to the senior notes.
Fitch has reviewed the credit quality of the individual assets
comprising the portfolio and has conducted cash flow modeling of
various default timing and interest rate scenarios. According to
the July 31, 2003 trustee report the class A/B
overcollateralization was 106.54% and the class C OC was 102.76%,
relative to test levels of 104% and 101.50%, respectively. The
report also indicated that the overall credit quality of the
portfolio has experienced no significant credit migration since
closing, with a current weighted average rating factor of 16, vs.
an initial WARF of 16, relative to test level of 18. Although the
collateral pool contains exposure to sectors of concern to Fitch,
including approximately 4.47% in aircraft lease and 11.58% in
manufactured housing, there are currently no distressed assets in
the portfolio.
Fitch will continue to monitor this transaction.
CASTLTON EXCAVATING: Case Summary & 20 Largest Unsec. Creditors
---------------------------------------------------------------
Debtor: Castlton Excavating Inc.
Dba Castlton Environmental Contractors
80 West Nyack Road
Nanuet, NY 10954
Bankruptcy Case No.: 03-23649
Chapter 11 Petition Date: September 30, 2003
Court: Southern District of New York (White Plains)
Debtor's Counsel: Jonathan S. Pasternak, Esq.
Rattet, Pasternak & Gordon Oliver, LLP
550 Mamaroneck Avenue
Suite 510
Harrison, NY 10528
(914) 381-7400
Fax : (914) 381-7406
Email: jsp@rattetlaw.com
Total Assets: $5,661,560
Total Debts: $2,899,069
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
ESMI of New York $197,399
Verizon $142,809
Tilcon New York Inc. $120,214
APL-Aqua Pro Tech Lab $67,348
Garrity Electrical Inc. $58,623
Paradise Energy Inc. $49,179
Ira D. Conklin & Sons, Inc. $45,758
Insurance Solutions & Services $44,301
Braen Van Orden Sand & Gravel $40,889
American Express $36,649
Oxford Health Insurance Inc. $28,146
O & G Industries Inc. $27,529
North Jersey Bobcat Inc. $26,585
Clean Water of New York $22,620
Arbill Glove & Safety Products $19,770
Pinnacle Materials Inc. $17,355
Mystic Bulk Carriers, Inc. $17,100
CG Industrial Safety $14,397
Overnite Transportation Co. $14,000
Zurich American Ins. Co. $12,724
CKE RESTAURANTS: Closes Convertible Subordinated Note Offering
--------------------------------------------------------------
CKE Restaurants, Inc. (NYSE: CKR) has completed the sale of $105.0
million aggregate principal amount of 4.0 percent Convertible
Subordinated Notes Due 2023, which includes the exercise by the
initial purchasers of the entire option to purchase $15.0 million
aggregate principal amount of the notes.
Pricing for said notes was announced on September 23, 2003. As
previously announced, the Company plans to use all of the net
proceeds from the offering to repay and retire a portion of its
outstanding 4.25 percent Convertible Subordinated Notes Due 2004
as soon as practicable after the closing of this offering.
Each $1,000 note will be convertible into approximately 112 shares
of the Company's common stock at a price of $8.89 per share if the
closing price of the Company's common stock on The New York Stock
Exchange exceeds certain levels for a specified amount of time or
in certain other circumstances. This conversion price represents
an initial conversion premium of approximately 27.0 percent over
the common stock's closing bid price of $7.00 on September 23,
2003. The notes carry an annual cash interest rate of 4.0
percent. The Company may not redeem the notes prior to October 1,
2008. The Company, at the option of holders, may be required to
purchase the notes at 100.0 percent of the principal amount of the
notes on October 1 of 2008, 2013 and 2018.
The notes and the common stock issuable upon conversion of the
notes were sold in the United States to qualified institutional
buyers pursuant to Rule 144A under the Securities Act of 1933, as
amended, and outside the United States pursuant to Regulation S
under the Securities Act. The notes and the common stock issuable
upon conversion of the notes have not been registered under the
Securities Act and may not be offered or sold in the United States
without registration or an applicable exemption from the
registration requirements.
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
CONE MILLS: Wins Necessary Orders to Continue Business as Usual
---------------------------------------------------------------
Cone Mills Corporation (OTC Pink Sheets: CJML) has received the
necessary orders from the U. S. Bankruptcy Court in Delaware to
continue business as usual. A further hearing will be held on
October 10.
In addition, the company confirmed the election of three new
directors, Charles L. Barry, Randall G. Kominsky and Jess M.
Ravich.
Cone Chairman, President and CEO, John L. Bakane, commented: "We
are now focused on moving ahead."
Founded in 1891, Cone Mills Corporation, headquartered in
Greensboro, NC, is the world's largest producer of denim fabrics
and the largest commission printer of home furnishings fabrics in
North America. Manufacturing facilities are located in North
Carolina and South Carolina, with a joint venture plant in
Coahuila, Mexico.
For more information on the Company, visit http://www.cone.com
CONSECO INC: Court Fixes October 9 as Admin Claims Bar Date
-----------------------------------------------------------
The U.S. Bankruptcy Court has fixed October 9, 2003 as the date by
which all individuals, partnerships, corporations, estates, trusts
and governmental units asserting administrative claims against the
Reorganizing Conseco Debtors must file a request for allowance of
Administrative Claims.
Requests must be filed at:
If by courier/hand deliver:
---------------------------
Bankruptcy Management Corp.
Attn: Conseco, Inc. Claims Agent
1330 E. Franklin Ave.
El Segundo, CA 90245
or, if by mail:
---------------
Bankruptcy Management Corp.
Attn: Conseco Inc. Claims Agent
P.O. Box 1042
El Segundo, CA 90245-1042
(Conseco Bankruptcy News, Issue No. 34; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
COUNCILL CRAFTSMEN: Case Summary & 20 Largest Unsec. Creditors
--------------------------------------------------------------
Lead Debtor: Councill Craftsmen, Inc.
dba Councill Companies
dba Councill Business Furniture, Inc.
dba Councill Upholstery
1156 North Main Street
POB 398
Denton, North Carolina 27239
Bankruptcy Case No.: 03-52880
Type of Business: The Debtor is in the business of furniture
making.
Chapter 11 Petition Date: September 23, 2003
Court: Middle District of North Carolina (Winston-Sale)
Judge: William L. Stocks
Debtor's Counsel: R. Bradford Leggett, Esq.
Allman Spry Leggett & Crumpler, P.A.
Suite 700
380 Knollwood St.
P.O. Box 5129
Winston-Salem, NC 27113-5129
Tel: 336-722-2300
Total Assets: $10,219,400
Total Debts: $7,294,774
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
BB&T Capital Markets Investment Banking $200,000
Services
Michael Burke, Ltd. Royalty $112,060
General Woods & Veneers Trade $107,010
Simex Int'l., Inc. Trade $89,233
Market Square Limited Past Due Rent for $88,237
Partnership HighPoint Showroom Lease
GreatWest Life & Annuity Self Insured Medical Plan $78,000
Insurance Company
Esposito/Wasserstein Deposit $69,905
Y&Y Hardwood Trade $58,899
Hulshof Leather USA Trade $43,064
Uneeda Enterprises, Inc. Trade $41,019
Thomasville Veneer Co. Trade $38,379
Russell McCleary Trade $37,485
Bommer Industries, Inc. Trade $24,904
Duke Power Utility - Electricity $38,999
In Form Design Trade $25,077
Keeler Brass Company Trade $28,057
Lefa International Trade $27,475
Mobarak Alsuwaiket & Deposit $26,146
Partners
Nordisk Lumber Trade $27,564
Valspar Trade $26,837
CRYOPAK: Arranges C$500K Bridge Loan from Claridge Inc. Unit
------------------------------------------------------------
Cryopak Industries Inc. (TSX-V: CII; OTCBB: CYPKF) has secured a
C$500,000 bridge loan from an affiliate of Claridge Inc.
The bridge loan will be made available immediately, bears interest
at 12.5% per annum, and will be due and payable on demand after
March 30, 2004, unless repaid earlier. The bridge loan will be
secured by a charge against the Company's assets which would rank
behind the Company's existing credit facilities with HSBC Bank
Canada. No bonus shares, warrants, finders fees or commissions,
other than a 2.5% placement fee, will be payable in connection
with this loan.
To address the Company's longer term financing needs, the Company
has also received commitments with respect to a non-brokered
private placement to raise up to C$1.5 million, subject to normal
regulatory approval. Under the terms of the proposed private
placement, the Company plans to issue units at a price of C$0.28
per Unit. Each Unit will be comprised of one Common Share and one
half of a Common Share Purchase Warrant, each Warrant entitling
the holder to acquire one additional Common Share at a price of
C$0.37 per share for a period of 24 months from the date of
closing. It is anticipated that the Common Shares and Warrants
will be subject to a four-month hold period. The Company
anticipates completion of this private placement in October, 2003.
The net proceeds from the private placement are expected to be
used for general working capital purposes and to repay the bridge
loan. A finder's fee of up to 5% will be payable in connection
with the private placement.
The bridge loan and a portion of the private placement financing
was made in conjunction with the Company's settlement of a dispute
that arose with the Claridge Inc. affiliate regarding the
February, 2003 private placement. Subject to regulatory approval,
the Company anticipates issuing up to 500,000 Common Shares to
settle that dispute.
Cryopak Industries Inc. develops, manufactures and markets quality
temperature-controlling products such as the premium patented
Cryopak Flexible Ice(TM) Blanket, as well as flexible hot and cold
compresses, gel packs, and instant hot and cold packs.
* * *
Cryopak Industries' March 31, 2003 balance sheet shows that its
total current liabilities outweighed its total current assets by
about $4 million.
The principal and accrued interest owing on the matured $3.6
million Convertible Loan Agreement remains outstanding. The
Company continues to hold discussions with representatives for the
holders of that loan with a view to formalizing an extension of
the loan maturity or other resolution.
The Company also reported that it continues to experience a
challenging market and expects to report a net loss for the
recently completed quarterly period.
CWMBS INC: Fitch Rates Class B-3 and B-4 Certificates at BB/B
-------------------------------------------------------------
CWMBS, Inc.'s Mortgage Pass-Through Certificates, CHL Mortgage
Pass-Through Trust 2003-50 classes A-1, PO and A-R (senior
certificates, $296,250,000) are rated 'AAA' by Fitch. In addition,
class M ($1,800,000) is rated 'AA', class B-1 ($600,000) is rated
'A', class B-2 ($450,000) is rated 'BBB', the privately offered
class B-3 ($300,000) is rated 'BB', and the privately offered
class B-4 ($300,000) is rated 'B'.
The 'AAA' rating on the senior certificates reflects the 1.25%
subordination provided by the 0.60% class M, the 0.20% class B-1,
the 0.15% class B-2, the 0.10% privately offered class B-3, the
0.10% privately offered class B-4, and the 0.10% privately offered
class B-5 (not rated by Fitch). Classes M, B-1, B-2, B-3, and B-4
are rated 'AA', 'A', 'BBB', 'BB' and 'B' based on their respective
subordination only.
Fitch believes the above credit enhancement will be adequate to
support mortgagor defaults as well as bankruptcy, fraud and
special hazard losses in limited amounts. In addition, the ratings
also reflect the quality of the underlying mortgage collateral,
strength of the legal and financial structures and the master
servicing capabilities of Countrywide Home Loans Servicing LP
(Countrywide Servicing) -- rated RPS1 by Fitch, a direct wholly
owned subsidiary of Countrywide Home Loans, Inc.
The certificates represent an ownership interest in a pool of
conventional, fully amortizing, 15-year fixed-rate mortgage loans,
secured by first liens on one-to four-family residential
properties. As of the closing date (September 29, 2003), the
mortgage pool demonstrates an approximate weighted-average loan-
to-value ratio of 61.09%. Approximately 34.53% of the loans were
originated under a reduced documentation program. Cash-out
refinance loans represent 22.52% of the mortgage pool and second
homes 5.76%. The average loan balance is $500,306. The weighted
average FICO credit score is approximately 740. The three states
that represent the largest portion of mortgage loans are
California (41.63%), New Jersey (4.49%) and New York (4.44%). The
deal is 76.88% funded as of the closing date (August 28, 2003).
Fitch ensures that the deposits of subsequent loans conform to
representations made by Countrywide Home Loans, Inc.
None of the mortgage loans are 'high cost' loans as defined under
any local, state or federal laws.
Approximately 94.65% and 5.35% of the mortgage loans were
originated under CHL's Standard Underwriting Guidelines and
Expanded Underwriting Guidelines, respectively. Mortgage loans
underwritten pursuant to the Expanded Underwriting Guidelines may
have higher loan-to-value ratios, higher loan amounts, higher
debt-to-income ratios and different documentation requirements
than those associated with the Standard Underwriting Guidelines.
In analyzing the collateral pool, Fitch adjusted its frequency of
foreclosure and loss assumptions to account for the presence of
these attributes.
CWMBS purchased the mortgage loans from CHL and deposited the
loans in the trust, which issued the certificates, representing
undivided beneficial ownership in the trust. The Bank of New York
will serve as trustee. For federal income tax purposes, an
election will be made to treat the trust fund as a real estate
mortgage investment conduit.
DELTA FINANCIAL: Will Redeem All of Outstanding 9.5% Sr. Notes
--------------------------------------------------------------
Delta Financial Corporation (Amex: DFC) plans to redeem at par all
outstanding 9.5% Senior Notes due 2004 on October 30, 2003.
The aggregate redemption price, including principal and accrued
interest, is expected to be approximately $11 million. In that
regard, Delta has notified The Bank of New York and U.S. Bank
National Association, trustees for the holders of Delta's 9.5%
Senior Notes due 2004 under indentures dated July 17, 1997 and
December 21, 2000, respectively, of its intentions. A notice of
redemption will be mailed by each of the trustees to the
registered holders of the 1997 Notes and the 2000 Notes.
After redeeming the notes, the Company will not have any unsecured
long-term debt on its balance sheet. Warrants that were issued in
connection with the 2000 Notes, and which remain unexercised after
the completion of the planned redemption of the 2000 Notes, will
expire pursuant to their terms.
Founded in 1982, Delta Financial Corporation is a Woodbury, New
York-based specialty consumer finance company that originates,
securitizes and sells non-conforming residential mortgage loans.
Delta's loans are primarily secured by first mortgages on one-to-
four family properties. Delta originates home equity loans
primarily in 26 states. Loans are originated through a network of
approximately 1,500 independent brokers and the Company's retail
offices. Since 1991, Delta has sold approximately $8.9 billion of
its mortgage loans through 37 securitizations.
* * *
In February 2001, DFC proposed an exchange offer in order to deal
with its financial difficulties at that time. Three of DFC's
bondholders - among the most prominent institutional investors in
the marketplace, who together held the majority of DFC's bonds -
hired a leading financial advisor with specific expertise in these
situations, to advise them with regard to protecting their
investment. The bondholders' expert reviewed DFC's financials,
discussed the possibility of DFC filing for bankruptcy or
attempting a workout, and ultimately recommended that the
bondholders enter into the proposed exchange offer with DFC, as a
preferable alternative to forcing DFC into bankruptcy. DFC
provided full disclosure in the exchange offer prospectus filed
with the SEC and the assets were valued as accurately as possible
by Delta as of the date Delta estimated their value, using the
same assumptions that it used to value other similar assets it
owned.
Following the overwhelming acceptance of the exchange offer,
intervening market conditions which were out of the Company's
control - including the events of September 11th, a precipitous
drop in interest rates (to levels not seen in over 40 years),
recession, threat of war and other geopolitical risks -
dramatically lowered the value of interest-rate and credit-
sensitive assets (like those transferred to the LLC in the
exchange offer). In response, in November 2001, DFC lowered its
estimates of the value of the excess cashflow certificates it
held, as it was required to do in accordance with generally
accepted accounting principals. Similar write-downs were taken by
many of DFC's competitors for the same reason and, indeed, by
countless other companies outside our sector which also held
interest-rate and credit- sensitive assets, to account for these
virtually unprecedented events.
DOBSON COMMS: Declares Cash Dividend on 12-1/4% Preferred Shares
----------------------------------------------------------------
Dobson Communications Corporation (Nasdaq:DCEL) declared a cash
dividend on its outstanding 12-1/4% Senior Exchangeable Preferred
Stock. The dividend will be payable on October 15, 2003 to holders
of record at the close of business on October 1, 2003. CUSIPs for
the 12-/4% Senior Exchangeable Preferred Stock are 256 072 30 7
and 256 069 30 3.
Holders of shares of 12-1/4% Senior Exchangeable Preferred Stock
will receive a cash payment of $31.3056 per share held on the
record date. The cash dividend covers the period July 15, 2003
through October 14, 2003. The dividends have an annual rate of
12-1/4% on the $1,000 per share liquidation preference value of
the preferred stock.
Dobson Communications (S&P, CCC+ Senior Debt and B- Corporate
Credit Rating, Stable Outlook) is a leading provider of wireless
phone services to rural markets in the United States.
Headquartered in Oklahoma City, the Company owns wireless
operations in 16 states. For additional information on the Company
and its operations, visit its Web site at http://www.dobson.net
DOBSON COMMS: Will Pay Cash Dividend on 6% Conv. Preferred
----------------------------------------------------------
Dobson Communications Corporation (Nasdaq:DCEL) declared a cash
dividend on its outstanding 6% Series F Convertible Preferred
Stock. The dividend will be payable on October 15, 2003 to holders
of record at the close of business on October 1, 2003. CUSIP for
the Series F Convertible Preferred Stock is 256 069 70 9.
Holders of shares of 6% Series F Convertible Preferred Stock will
receive a cash payment of $9.50 per share held on the record date.
The cash dividend covers the period August 19, 2003 through
October 14, 2003. The dividends have an annual rate of 6% on the
$1,000 per share liquidation preference value of the preferred
stock. Future dividends may be paid, at the Company's option, in
cash or in kind. If paid in kind, the dividend rate is 7%.
The Series F Preferred Stock's public registration on Form S-3 was
declared effective September 17, 2003.
Dobson Communications (S&P, CCC+ Senior Debt and B- Corporate
Credit Rating, Stable Outlook) is a leading provider of wireless
phone services to rural markets in the United States.
Headquartered in Oklahoma City, the Company owns wireless
operations in 16 states. For additional information on the Company
and its operations, visit its Web site at http://www.dobson.net
ENCOMPASS SERVICES: Wants Nod to Sell 3 Non-Core Business Units
---------------------------------------------------------------
The value of several of the Encompass Services Debtors' businesses
has diminished daily through the loss of key employees and
customers. Some of the Encompass business units have lost
projects because of bonding unavailability and because general
contractors on pending projects are terminating Encompass as
subcontractor.
Clearly, the Debtors' Chapter 11 filing has severely damaged
relationships with important vendors and customers, who now
perceive the businesses as incapable of completing new projects,
thereby impacting the business units' ability to bid on projects.
To preserve and maximize the value of these businesses, the
Debtors engaged in marketing efforts for the sale of the business
units.
Subsequently, with the Court's approval, the Debtors sold these
business operations free and clear of all liens, claims,
encumbrances, and other interests:
A. Encompass Electrical Technologies Eastern Tennessee, Inc. to
Bob's Electric/Electronic Service, Inc. for $475,000;
B. Encompass Electrical Technologies of Texas, Inc. to Walker
Acquisition Group, LLC for $7,000,000; and
C. Taylor-Hunt Electric, Inc. to Richard C. Hunt for $515,000
cash.
With respect the sale of Taylor-Hunt Electric, Inc., the Debtors
intend to enter into an accounts receivable collection agreement
with Richard C. Hunt. Pursuant to the Collection Agreement,
Mr. Hunt will collect outstanding accounts receivable on behalf
of the Debtors in exchange for a fee of 20% of any amounts
collected. Notably, Mr. Hunt will only have authority to
discount or settle any outstanding receivables consistent with
any order of the Court. The Collection Agreement terminates by
its own terms on September 30, 2003.
The rest of the sale transactions include the assumption and
assignment to the buyers of the:
-- current liabilities of the company at the time of the
closing, including certain prepetition liabilities; and
-- certain contracts and leases.
The Buyers will also pay outstanding payables to maintain
satisfactory business relationships with vendors, which are
valuable to the business operations going forward. (Encompass
Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
ENRON CORP: Reaches Claims Dispute Settlement with 19 Parties
-------------------------------------------------------------
Pursuant to the Amended Safe Harbor Termination Protocol, the
Enron Debtors inform the Court that they have reached a settlement
with 19 parties with respect to these Contracts:
(a) Purchase and Sale Agreement dated as of October 1, 2001
by and between Enron Energy Services, Inc. and Giant
Eagle, Inc., including the General Terms and Conditions;
(b) Custom ENovative Energy Service Agreement dated as of
October 12, 2001 by and between EESI and Giant Eagle,
Inc., including the General Terms and Conditions;
(c) Gas Sales Agreement dated August 1, 2001, between Enron
North America Corporation and The City of Mesa, Arizona,
which expired by its own terms on July 31, 2002, together
with all related confirmations, transactions and contract
correspondences;
(d) Master Power Purchase and Sale Agreement dated
September 5, 2001, between Enron Power Marketing, Inc.,
and The City of Mesa, which was terminated by the City of
Mesa on February 1, 2002, together with all related
confirmations, transactions and contract correspondences;
(e) Guarantee Agreement dated September 5, 2001, issued by
Enron Corporation as "Guarantor" for EPMI's obligations
to The City of Mesa, which guarantee was issued in favor
of The City of Mesa for an amount not to exceed
$60,000,000;
(f) Enfolio Master Firm Sales Agreement, dated April 30, 2001
by and between Cook Inlet Energy Supply L.L.C. and EESI;
(g) On-Line GTC Gas Long-Term Firm with Collateral dated
December 1, 2001 by and between Cook Inlet and ENA;
(h) Base Contract for Short-Term Sale and Purchase of Natural
Gas dated December 1, 1999 by and between Cook Inlet and
ENA;
(i) Netting Agreement dated June 1, 1998 by and between
Cook Inlet and EPMI;
(j) Master Energy Purchase and Sale Agreement dated
January 1, 1998 by and between Cook Inlet and EPMI;
(k) ISDA Agreement by and between Cook Inlet and ENA dated
March 20, 1998;
(l) Enfolio Master Firm Purchase/Sale Agreement dated
December 1, 1993 by and between Cook Inlet and Enron Gas
Marketing, Inc.;
(m) Interruptible Gas Purchase and Sale Agreement dated
July 1, 1992 by and between Cook Inlet and Enron Gas
Marketing, Inc.;
(n) Enfolio Firm General Terms and Conditions and all
confirmations between ENA and Alliance Energy Services
Partnership;
(o) GISB Base Contract for Short-Term Sale and Purchase of
Natural Gas between Columbia Energy Marketing Corporation
and Alliance Energy dated January 1, 1998 as assigned by
Columbia and ENA and all confirmations;
(p) Enfolio Master Firm Purchase/Sale Agreement dated
December 1, 1998 between EESI and Alliance Energy and all
related confirmations;
(q) Term Natural Gas Sales/Purchase Agreement dated June 22,
1999 between Clinton Energy Management Services, Inc. and
Alliance Energy;
(r) 23 Confirmation Letters between EPMI and Merrill Lynch
Capital Services, Inc., which were all terminated by
Merrill Lynch on December 3, 2001;
(s) Master Power Purchase and Sale Agreement dated May 9,
2001 between EPMI and Old Dominion Electric Cooperative,
as amended on September 9, 2001, along with the eight
Confirmation Letters;
(t) Guaranty Agreement dated May 9, 2001 Enron Corp. issued
in favor of Old Dominion;
(u) Three Confirmation Letters between Great Lakes Chemical
Corporation and ENA that were terminated by Great Lakes
on March 22, 2002;
(v) Base Contract for Short Term Sale and Purchase of Natural
Gas dated March 1, 2000 between ENA and New Jersey
Natural Gas Company;
(w) Enron OnLine General Terms and Conditions between ENA and
New Jersey Natural Gas Company;
(x) ENA Invoices dated January 10, 2000 billed to KN Energy
Gas Marketing;
(y) Coal Sale and Purchase Agreement dated October 22, 2001
by and between ENA and AK Steel Corporation;
(z) EPMI Invoice No. 15287SA and No. 15666SA billed to ONEOK
Energy Marketing and Trading Company LP;
(aa) Enfolio "Spot" General Terms and Conditions between ENA
and PEPCO Energy Services Inc., including all schedules
and exhibits;
(bb) Enfolio Firm General Terms and Conditions between Enron
and PEPCO, including all schedules and exhibits;
(cc) Online General Terms and Conditions between Enron and
PEPCO, including all schedules and exhibits;
(dd) Enfolio "Spot" General Terms and Conditions between EESI
and PEPCO, including all schedules, exhibits and
confirmations;
(ee) Power Master Bilateral Agreement by and between EPMI and
PEPCO;
(ff) Nine Confirmation Letters between ENA and Kern Oil &
Refining Company;
(gg) Collocation Agreement dated as of August 15, 2001 by and
between Enron Broadband Services, Inc. and GlobalNet
International, Inc. with respect to the facility located
at 530 West 6th Street, 3rd Floor, in Los Angels,
California;
(hh) Collocation Agreement dated as of August 15, 2001 by and
between EBSI and GlobalNet with respect to the facility
located at 49 NW 5th Street, in Miami, Florida;
(ii) Master Telecommunications Service Agreement dated as of
October 2001 by and between EBSI and GlobalNet with
respect to the non-exclusive purchase and sale of
telecommunications service;
(jj) Form of Confirmation, together with Service Level
Agreement and the General Terms and Conditions, dated
August 2, 2001 with respect to IP Transport within North
America;
(kk) Telecom Center L.A. Notice and Agreement Regarding
Limited Scope Sublease, License or Co-location Agreement
for Telecommunications Purposes by and between EBSI as
tenant and GlobalNet as licensee, to Telecom Center L.A.
LLC as landlord with respect to tenant's licensee being
granted limited rights to use and access to certain
equipment space at 530 West 6th Street, in Los Angeles,
California;
(ll) Six Invoices EBSI billed to DFH Networks, Inc.
(mm) Sale Purchase and Exchange Agreement between EGLI and
Energy Services Providers LLC, terminated on December 4,
2001;
(nn) General Terms and Conditions of Confirmation between ENA
and Energy Services Providers;
(oo) Eight Confirmation Letter Agreements by and between ENA
and Colonial Energy, Inc.;
(pp) Master Firm Purchase Agreement by and between ENA and
Colonial Energy;
(qq) Guaranty dated march 27, 2001 in an amount not to exceed
$15,000,000 made by Colonial in ENA's favor;
(rr) Base Contract for Short Term Sale and Purchase of Natural
Gas dated effective March 1, 2000, between ENA and NJR
Energy Services Company;
(ss) EnronOnline General Terms and Conditions between ENA and
NJR;
(tt) Enfolio Spot General Terms and Conditions between ENA and
NJR, terminated September 30, 2000;
(uu) Guarantee Agreement dated December 1, 1998 from New
Jersey Resources Corporation in support of NJR for
$20,000,000, as amended; and
(vv) Contract between Enron Nordic Energy and Oresundskraft AB
dated October 24, 2001.
The Settlements provide that:
A. With Giant Eagle
The Debtors will receive payment from the non-debtor parties
that exceeds the amounts Giant Eagle owed EESI under the
Contracts. The Debtors and Giant Eagle will exchange mutual
release of claims under the Contracts, the effect of which is
to allow Giant Eagle to enter into a new contract with a
third party.
B. With The City of Mesa
Mesa will pay the Debtors $1,900,000 and the parties will
exchange mutual release of claims related to the specific
contracts identified in the Settlement.
C. With Cook Inlet Energy Supply L.L.C.
Cook Inlet will pay the Debtors $1,270,074 for the eight
contracts. The Parties will exchange a mutual release of
claims relating to the eight contracts.
D. With Alliance Energy
Alliance will pay the Debtors $490,120 for the four contracts
and the Parties will exchange mutual release of claims
related to the contracts.
E. With Merrill Lynch
Merrill Lynch will pay EPMI $10,625,000. The Settlement
Payment represents a negotiated termination payment for the
discharge of all rights to receive and obligations to pay
any sum with respect to the 23 Confirmation Letters.
F. With Old Dominion Electric Coop
Old Dominion will pay the Debtors $6,700,000 and the
parties will exchange a mutual release of claims related to
the Contracts.
G. With Great Lakes
Great Lakes will pay ENA $25,532 and the parties will
exchange mutual release of claims related to the three
Confirmation Letters.
H. With New Jersey Natural Gas Company
New Jersey will pay ENA $303,109 and the parties will
exchange mutual release of claims related to the terminated
contracts.
I. With KN Energy
ONEOK Energy Marketing and Trading Company LP will pay
ENA $99,725 and the parties will exchange mutual release of
claims related to the Invoices.
J. With AK Steel
AK Steel will pay ENA $632,420 and the parties will
exchange mutual releases of claims related to the Contract.
K. With ONEOK
ONEOK will pay EPMI $1,132,414 and the parties will
exchange a mutual release of claims related to the two
invoices.
L. With PEPCO
PEPCO will pay the Debtors $881,452 and the parties will
exchange a mutual release of claims.
M. With Kern Oil
Kern Oil will pay ENA $51,255 and the parties will
exchange mutual release of claims related to the nine
Confirmations.
N. With GlobalNet
GlobalNet will pay EBSI $25,000 and the parties will
exchange a mutual release of claims related to the five
Contracts.
O. With DFH Network
DFH will pay EBSI $85,000 and the parties will exchange a
mutual release of claims relating to the six invoices.
P. With Energy Services Providers
Energy Services will pay the Debtors $274,189 and the
parties will exchange a mutual release of claims.
Q. With Colonial Energy
Colonial Energy will pay ENA $2,375,800 and the parties
will exchange a mutual release of claims.
R. With NJR Energy
NJR will pay ENA $531,313 and the parties will exchange a
mutual release of claims.
S. With Oresundskraft
Oresundskraft will pay the Debtors NOK1,000,000 and the
parties will exchange a mutual release of claims. (Enron
Bankruptcy News, Issue No. 80; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
FAST FERRY: Court Sets Plan Confirmation Hearing for October 15
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey approved
Fast Ferry Corp.'s Disclosure Statement as containing adequate
information for creditors to accept or reject the plan.
As previously reported in the Troubled Company Reporter's July 28,
2003 issue, the Debtors filed their Amended Liquidating Chapter 11
Plan and Disclosure Statement with the Court.
The Court now schedules the hearing to consider confirmation of
the Debtors' Plan. The Plan Confirmation Hearing will be on
October 22, 2003 at 2:00 p.m. All written objections to the
confirmation of the Plan must be received the Clerk of the
Bankruptcy Court on or before October 15, 2003 to be deemed
timely-filed.
Fast Ferry I Corp., and Fast Ferry II Corp., are affiliates of
Lighthouse Fast Ferry Inc., which are in the business of operating
high-speed, passenger ferry services in the greater New York City
harbor area. The Company filed for chapter 11 protection on
January 10, 2003 (Bankr. N.J. Case No. 03-110303). Daniel Stolz,
Esq., at Wasserman, Jurista & Stolz represents the Debtors in
their restructuring efforts. When the Debtors filed for
protection from its creditors, Fast Ferry I listed $4,840,876 in
assets and $5,318,028 in liabilities while Fast Ferry II listed
$4,841,021 in assets and $5,391,172 in liabilities.
FLEMING COS.: Court Fixes Reclamation Claim Settlement Protocol
---------------------------------------------------------------
To administer their estates and fully consider reorganization
options, the Fleming Debtors and various constituents require
certainty regarding the reclamation claims asserted in their
cases. The Debtors need to understand if there are other
creditors similarly situated or if such creditors intend to pursue
their claims in higher amounts. Reconciliation of a claim is not
possible without supporting documents.
Pursuant to Sections 105(a), 503(b) and 546(c)(2) of the
Bankruptcy Code, the Debtors ask the Court to establish procedures
to disallow reclamation claims without supporting documentation
and to bar the filing of new reclamation claims. The Debtors
propose to implement these procedures:
(a) The portion of the total asserted reclamation claim that
exceeds supporting electronic data will be disallowed
unless further support is provided to the Debtors at
http://www.cms@fleming.comon or before October 17, 2003;
(b) The maximum amount of each reclamation claim will be the
higher amount between what a creditor has stated and the
dollar value of electronic data provided; and
(c) The filing or assertion of any new reclamation claim after
the October 17, 2003 deadline is barred.
Reclamation claimants retain their right to argue that the
supporting documentation for their claim has previously been
submitted or that submission in hard copy satisfies the
requirement. (Fleming Bankruptcy News, Issue No. 13; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
FORMICA CORP: Relocating Global Headquarters to Cincinnati Area
---------------------------------------------------------------
Formica Corporation is relocating its global headquarters from
Warren, New Jersey to an as-yet-undetermined site in the Greater
Cincinnati area.
The decision is part of a strategy to lower costs as Formica
emerges from bankruptcy protection. "Relocating the executive
suite as well as the financial, accounting, tax and legal
departments from New Jersey to the Cincinnati area makes sense
from an operational and historical perspective, said Formica
President and Chief Executive Officer Frank A. Riddick, III.
"There really was no longer any reason to be in New Jersey other
than that's where some of the former corporate executives lived,"
said Riddick, who joined Formica two years ago. "What really makes
sense for the company is to move the headquarters to the
Cincinnati area. The bulk of our North American activity is in
Evendale, and the company was founded in Cincinnati, so it just
seemed more logical to move the headquarters to Cincinnati."
Proximity to Evendale Plant Is Significant Factor
Formica officials will also be closer to one of their largest
plants, a sprawling, one million-square-foot manufacturing
facility on Reading Road in Evendale. "There are naturally
occurring synergies when you get people close to each other. It
aids in communication, changing the corporate culture, and all
those other things we want to do," Riddick said. "I think this is
very exciting for Cincinnati to get one of the most well-known
companies in the world, at least from a visible, brand
perspective. "This has nothing to do with our financial
restructuring, and nothing to do with the relative efficiency of
one plant in North America to another, or our overall need for
low-cost, efficient operations," he said.
Formica manufactures Formica(R), a brand of adhesives and
surfacing materials used in products such as countertops,
cabinets, and flooring. Its trademarked brands include Formica(R),
Formica DecoMetal(R), ColorCore(R) and FormicaSolidSurface(R).
Formica has subsidiaries in Asia, Europe, North America, and South
America. A top laminate supplier, Formica offers its products
globally; North America accounts for approximately half of sales.
CEO Riddick Leading Reorganization Strategy
Mr. Riddick has led Formica management forward with a multi-
million-dollar reorganization plan, spearheaded by Cerberus
Capital Management LP and Oaktree Capital Management LLC. These
firms, formerly two of Formica's largest holders of unsecured
claims, have agreed to invest $175 million in the 90-year-old
company. Formica filed for bankruptcy in March 2002. Under the
company's Plan of Reorganization filed with U.S. Bankruptcy Court
for the Southern District of New York, Formica will emerge with
approximately $160 million in debt, compared with the $540 million
on a consolidated basis when it sought court protection.
Formica has selected the Corporate Services team of Ed Schreyer
and Brad Meyer from the Cincinnati office of CB Richard Ellis to
represent the company in its site search for the new executive
offices, which is encompassing both sides of the Ohio River. The
move is expected to be made by July 2004. Formica is seeking
between 15,000 and 20,000 square feet. The new executive offices
will be completely separate from the Evendale plant.
"The selection of the actual location will most likely boil down
to who is more creative with the incentives necessary to attract
Formica to their state," Schreyer said. "Apart from tax
considerations, by moving to this area from New Jersey Formica
will be able to reduce the real estate costs associated with its
headquarters by about 50 percent," Schreyer added.
"There are tremendous savings opportunities available in the
market today for occupiers of space," said Meyer, "but it is the
combination of our innovative real estate cost savings diagnostic,
and the depth of our company resources, that allows us to evaluate
and execute the best financial strategies for Formica and our
other clients."
GAP INC: Fitch Affirms Senior Unsecured Debt Rating at BB-
----------------------------------------------------------
The Gap, Inc.'s 'BB-' rated senior unsecured debt is affirmed by
Fitch Ratings. Approximately $2.9 billion in debt is affected by
this action. The Rating Outlook is revised to Stable from
Negative.
The rating reflects Gap's brand position, improved cash flow and
strong liquidity. The rating also considers the competitive retail
environment and the historical weakness in Gap's sales trends,
which significantly impaired the company's financial profile. The
Outlook revision to Stable from Negative acknowledges Gap's
turnaround in its comparable store sales performance over the last
11 months. Since October 2002, the total company's monthly same
store sales have been positive, ranging from 4-20%. This
improvement, coupled with increased profitability, has helped
strengthen the company's credit metrics.
From May 2000 through September 2002, Gap reported negative
comparable store sales every month as a result of a troubled
merchandising strategy. Some senior management changes, together
with a significant slowdown in store expansion plans (which
allowed the company to focus on its existing store base) and
return to a more traditional, basic merchandise selection, has led
to an improvement in Gap's sales trends. Fitch's ongoing concern
centers on Gap's ability to sustain strong same store sales
results as comparisons become more difficult. Beginning with
October 2003 sales, Gap will be measured against positive prior
year results. To the extent Gap's sales trends remain strong in
the second half of 2003, the ratings could improve.
Gap's cash flow generation is solid as capital spending remains
conservative - with square footage forecasted to decline for the
first time in 2003 (down about 2%). This has reduced planned
capital expenditures to about $300-325 million in 2003 from $940
million in fiscal 2001 and higher levels in 2000 and 1999. As a
result, net free cash flow (EBITDA less capital expenditures, cash
interest and cash taxes plus changes in working capital) improved
to $1.6 billion in the latest 12 months ended Aug. 2, 2003 from
about $317 million in fiscal 2001.
Strong cash flow generation, combined with proceeds from several
debt offerings, significantly bolstered the company's cash
balances and enhanced its liquidity. As of Aug. 2, 2003 Gap's
unrestricted cash on hand totaled $1.9 billion and restricted cash
(to support letters of credit) totaled $1.2 billion. This compares
to a debt burden totaling $2.9 billion at Aug. 2, 2003. In
addition, Gap's $750 million secured revolving credit facility
remains undrawn.
Gap's operating performance continues to improve, though
profitability remains below levels generated in the late 1990s.
EBITDAR margin in the latest 12 months ended Aug. 2, 2003
increased to 21.4% from 19.2% in fiscal 2002 and a historical low
of 15% in fiscal 2001. Profitability has improved as Gap has
better executed its merchandising strategy and minimized
markdowns. Despite this improvement, Gap maintains a heavy debt
burden, with total adjusted debt (includes 8 times rent expense)
of about $10.8 billion. At Aug. 2, 2003 leverage, (total adjusted
debt /EBITDAR) was 3.3x and EBITDAR coverage of interest and rents
was 2.6x. To the extent Gap continues to successfully execute its
merchandising strategy and cash flow generation remains strong,
Fitch expects Gap's credit profile to improve in 2003 and will
consider further actions at year-end.
Gap, based in San Francisco, operates over 4,200 retail stores
under its Gap, Old Navy and Banana Republic divisions. Of that
total, about 2,300 were domestic Gap stores, 440 Banana Republic,
840 Old Navy and 660 international Gap stores located in Canada,
Japan, the U.K., France and Germany.
GEORGIA-PACIFIC: Files Patent Infringement Suit vs. BPB America
---------------------------------------------------------------
Georgia-Pacific Corp. (NYSE: GP) has filed a patent infringement
lawsuit against BPB America, Inc., in U.S. District Court in
Wilmington, Del., to enforce Georgia-Pacific's U.S. patent rights
relating to its highly successful Dens(TM) family of interior
and exterior gypsum panel products.
The complaint, filed Sept. 25, alleges that BPB makes and sells a
product in the United States that infringes a number of Georgia-
Pacific patents. BPB's accused product is sold under the name
Glasroc(TM). Georgia-Pacific has asked the court to order BPB to
stop its infringing activity and pay damages for past
infringement.
"Georgia-Pacific's pioneering Dens(TM) product lines utilize
patented fiberglass mat-faced gypsum board technologies that have
revolutionized the industry," said Dave Fleiner, Georgia-Pacific's
president -- gypsum. "We have invested a great deal in
development of this line of products, which includes DensGlass
Gold(R) sheathing and a host of other moisture and mildew-
resistant products well-known and well-respected in both
residential and commercial construction markets. We're very proud
of the performance of these products, and we have and will
continue to aggressively defend our patent rights against
infringement."
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
GLOBAL CROSSING: Gets Nod to Up Directors' Fee Cap to $300,000
--------------------------------------------------------------
Michael F. Walsh, Esq., at Weil Gotshal & Manges, LLP, in New
York, relates that the Court granted the Global Crossing Debtors'
request and approved the appointment of three independent
directors, namely, Alice T. Kane, Jeremiah D. Lambert, and Myron
E. Ullman III to serve on:
(i) the Debtors' board of directors;
(ii) the Board's Audit Committee;
(iii) the Board's Compensation Committee; and
(iv) the special committee appointed by the Board to
investigate the allegations of inaccurate financial
reporting made by a former employee of Global Crossing.
The Independent Directors provide services that benefit the
Debtors, their estates, and all parties-in-interest. The
Independent Directors form a majority of the Debtors' Board and,
in the Board's exercise of its fiduciary duties to creditors, the
Board provides critical oversight over the business, legal, and
financial affairs of Global Crossing. Currently, each Independent
Director, as a member of the Board, receives:
(a) a $5,000 fixed fee for each in-person meeting of the
full Board;
(b) $2,500 for each telephonic meeting of the full Board;
(c) $2,500 for each in-person meeting of a committee of the
Board; and
(d) $1,500 for each telephonic meeting of a committee.
In addition, the Independent Directors are compensated at the
rate of $500 per hour for actual time spent in the performance of
the work of the Special Committee. However, Mr. Walsh notes, all
fees the Independent Directors received are subject to a $200,000
annual Fee Cap.
According to Mr. Walsh, the Independent Directors generally
incurred fees in connection with:
(i) regularly scheduled meetings of the Board, the
Compensation Committee and the Audit Committee;
(ii) work the Special Committee performed; and
(iii) additional work and Board meetings arising from the
exigencies of the Debtors' restructuring, including the
withdrawal of Hutchison from the Purchase Agreement and
the receipt of expressions of interest from XO
Communications, Inc.
Mr. Walsh recounts that the Debtors initially requested the
approval of compensation for the Independent Directors subject to
a cap of $100,000. The Court approved and authorized the Debtors
to raise the Fee Cap to $200,000 per Independent Director, in an
order dated December 12, 2002.
However, the Independent Directors have been compelled to spend
significantly more time than originally anticipated in the
performance of their duties. The Independent Directors were
required to dedicate a great deal of time in conducting the
investigation of the Olofson Allegations, including more time
looking into the Allegations and attending more meetings than
originally expected. The Independent Directors have since been
required to cooperate in numerous external investigations into
allegations by government agencies and members of Congress of the
Debtors' inaccurate financial reporting.
In addition, the Independent Directors were required to
participate in the meetings of the Board. To deal with the
exigencies of the Debtors' Chapter 11 cases, these Board meetings
have grown more frequent than originally expected. In fact,
between April 28, 2003 and June 23, 2003, the Board, together
with the Independent Directors met nine times in connection with
the withdrawal of Hutchison from the Purchase Agreement, the
amendment of the Purchase Agreement, and the consideration of
alternatives to the Purchase Agreement.
Furthermore, the replacement of the Debtors' prior auditor with a
new auditor, and complex auditing and accounting issues
associated with the 2001 and 2002 audits, have required more
meetings of the Audit Committee than had been originally
anticipated. The completion of the Debtors' 2001 and 2002
financial statements is a pre-condition to obtaining a listing on
a national securities exchange, and it is therefore, critical
that the Independent Directors continue their work for the Audit
Committee.
As a result, Mr. Lambert, the Chairman of the Special Committee
who performed most of the Committee's director-level work beyond
attending formal meetings, has already earned fees in excess of
the Fee Cap for 2003, and the other two Independent Directors may
earn fees in excess of the Fee Cap in the coming months.
Accordingly, the GX Debtors ask the Court to raise the Fee Cap to
$300,000 per year, per Independent Director, to permit them to
continue serving the vital interests of the Debtors, their
creditors and all parties-in-interest.
Mr. Walsh contends that the request should be granted because the
Independent Directors continue to serve a critical function for
the Debtors, their estates and their creditors. Increasing the
Fee Cap will guarantee that the Independent Directors will
continue to perform their duties. Without effective Independent
Directors, Mr. Walsh points out, the Debtors would be less able
to provide critical and disinterested oversight over the
business, legal and financial affairs of Global Crossing.
Moreover, the Debtors risk losing membership of their Audit
Committee, Compensation Committee and the Special Committee.
* * *
Judge Gerber allows the GX Debtors to increase the Fee Cap to
$300,000 per year per Independent Director. (Global Crossing
Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
HARBISON-WALKER: Court Temporary Restraining Order Expires
----------------------------------------------------------
Halliburton (NYSE: HAL) did not request an extension of the
Harbison-Walker bankruptcy court's temporary restraining order
which expired on September 30, 2003.
The temporary restraining order, which had been extended several
times since it was originally entered on February 14, 2002, has
stayed more than 200,000 pending asbestos claims against DII
Industries. Halliburton said that the stay has been helpful in
providing an opportunity in which to negotiate a settlement of
asbestos and silica claims against the company.
On September 22, 2003, Halliburton announced that DII Industries,
Kellogg Brown & Root, and the other affected subsidiaries have
begun the solicitation process in connection with the planned
asbestos and silica settlement and could be in a position to make
the pre-packaged Chapter 11 filing this November should remaining
conditions be satisfied.
Halliburton also noted that under the terms of the bankruptcy
court's order, DII Industries is not obligated to respond to
discovery concerning any of the stayed claims, including the
Harbison-Walker claims, until November 1, 2003, and trial dates
cannot be set before January 1, 2004. Regardless of the expiration
of the court's temporary restraining order, asbestos and silica
claims will automatically be stayed upon a DII/KBR Chapter 11
filing.
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. Also, 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.
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
HEALTHSOUTH CORP: Taps MedAssets HSCA as Supply Chain Partner
-------------------------------------------------------------
HealthSouth Corporation (OTC Pink Sheets: HLSH), the nation's
largest provider of outpatient surgery, diagnostic imaging and
rehabilitative healthcare services with nearly 1,700 locations in
all 50 states and abroad, has selected MedAssets HSCA as its
exclusive supply chain partner and group purchasing organization.
The five-and-a-half-year relationship is effective Dec. 1, 2003.
HealthSouth is in the process of enhancing its operating systems
and processes to provide greater control and efficiency to its
overall supply chain operation. HealthSouth said that MedAssets
HSCA will assume specific accountabilities to improve the
company's supply chain operation.
MedAssets HSCA has assumed accountability to manage HealthSouth's
supply costs and to provide greater transparency into, and control
for its supply chain procurement processes. MedAssets helps
control supply costs by providing lower pricing on commodities,
pharmaceuticals and physician preference products, and by
improving procurement processes.
MedAssets HSCA is providing HealthSouth a customized version of
its Web-based CDQuick(R) E-catalog, which will house more than
1,100 vendor supply contracts, including unique HealthSouth vendor
agreements, all with HealthSouth's negotiated and pre-approved
pricing. A supply contract formulary will be provided to
HealthSouth's buyers to build purchase orders with approved
suppliers and the lowest available pricing. The custom catalog
also provides price audit capability for pharmaceutical purchases
and provides vendor purchase data reports for other supplies for
tracking of expenditures, pricing and of earned purchase-rebates.
The MedAssets HSCA-HealthSouth custom catalog will be operational
by Dec. 1, 2003.
"The revision of HealthSouth's supply chain should provide us with
greater financial control, and transaction transparency, and help
reduce total supply cost expense, which will allow us to continue
to deliver the high quality of patient care for which HealthSouth
is known in a cost-effective manner," said Bob May, HealthSouth's
interim Chief Executive Officer.
John Bardis, Chairman, President and CEO of MedAssets stated,
"MedAssets is pleased to provide HealthSouth with new supply chain
solutions through our focus on improving healthcare systems'
procurement processes and cash flow. We believe that our systems
and services will give HealthSouth and its healthcare providers
the insight into their contract utilization that they have sought
and will allow them to obtain optimal purchasing power and
capability."
MedAssets HSCA, headquartered in St. Louis, Mo., is the third
largest group purchasing organization in the country, serving more
than 16,000 healthcare providers nationwide with purchasing power
approaching $7 billion in gross throughput. It is MedAssets HSCA's
mission to be the market-leading, customer-oriented supply chain
and contract services company, focused on maximizing the financial
performance of healthcare institutions. MedAssets HSCA's parent
company, MedAssets of Atlanta, Ga., recently acquired OSI Systems,
a leading revenue cycle management company for healthcare
providers enabling cash flow improvement from both revenue and
supply cost improvement. For more information about MedAssets
HSCA, or its parent company MedAssets Inc., go to
www.medassets.com or contact Gary Johnson, Vice President for
Marketing and Marketing Services, at gjohnson@medassets.com.
HealthSouth is the nation's largest provider of outpatient
surgery, diagnostic imaging and rehabilitative healthcare
services, with nearly 1,700 locations in all 50 states and abroad.
HealthSouth can be found on the Web at http://www.healthsouth.com
* * *
As reported in Troubled Company Reporter's September 1, 2003
edition, HealthSouth Corporation said its lending banks had waived
a payment blockage to allow past due interest to be paid to the
holders of the Company's subordinated indebtedness. The banks had
previously issued a payment blockage notice with respect to the
Company's subordinated indebtedness, which blockage would have
precluded holders of those instruments from receiving past due
interest.
The Company also announced that it will transfer sufficient funds
to the trustees for holders of all of its outstanding notes to
permit payment of interest on past due interest owed to these
holders in accordance with the terms of the relevant indentures.
It is expected that payment of the past due interest will be made
to the holders of Company's notes shortly after the record date of
August 29, 2003.
INT'L FIBERCOM: Court Converts Bankruptcy Case to Chapter 7
-----------------------------------------------------------
Upon the Debtors' motion, the U.S. Bankruptcy Court for the
District of Arizona converted International Fibercom, Inc., and
its debtor-affiliates' chapter 11 cases to Chapter 7 liquidation
proceedings under the Bankruptcy Code.
The Debtors tell the Court that they do not have any ongoing
business operations because they have sold substantially all of
their assets on April 2002. Robert J, Miller, Esq., at Bryan Cave
LLP indicates that there are funds available for distribution in a
Chapter 7.
International Fibercom, Inc. resells used, refurbished
communications equipment, including fiber-optic cables. The
Company filed for chapter 11 protection on February 13, 2002
(Bankr. Ariz. Case No. 02-02143). Robert J. Miller, Esq., at
Bryan Cave, LLP represents the Debtors in their restructuring
efforts.
INTERNET SERVICES: Wants Schedule-Filing Deadline Moved to Oct 8
----------------------------------------------------------------
Internet Services of Michigan, Inc., and its debtor-affiliates
want the U.S. Bankruptcy Court for the District of Delaware are
asking for more time from the U.S. Bankruptcy Court for the
District of Delaware to file their schedules of assets and
liabilities, list of equity security holders, schedules of
executory contracts and unexpired leases, and statements of
financial affairs as required under 11 U.S.C. Sec. 521(1).
The Debtors relate that to prepare the required Schedules and
Statements, the Debtors must gather information from books,
records, and documents relating to a multitude of transactions and
reconcile the data as it applies to the various Debtors.
Collection of the necessary information requires an expenditure of
substantial time and effort on the part of the Debtors' employees.
Linda M. Carmichael, Esq., at White and Williams LLP reports that
at 5:00 p.m. on the eve of the Filing Date, the Debtors' Chief
Executive Officer, Tracy Graham, President, Timothy Fischer, and
Chief Financial Officer, Jennifer Hoover, submitted their
resignations. It had been anticipated that Mr. Fischer and Ms.
Hoover would be heavily involved in the preparation of the
Schedules and Statements and Creditor Lists. Given the unexpected
resignation of the Debtors' CEO, President and CFO and the
significant burdens already imposed on the Debtors by the
commencement of these Chapter 11 cases, the Debtors request
additional time to complete and file the required Creditor Lists,
Schedules and Statements.
The Debtors anticipate that they will be able to file their
Creditor Lists on October 8, 2003, and their Schedules and
Statements on October 23, 2003.
Headquartered in Mishawaka, Indiana, Internet Services of
Michigan, Inc., an internet service provider, files for chapter 11
protection on September 23, 2003 (Bankr. Del. Case No. 03-12921).
Linda Marie Carmichael, Esq., at White And Williams, LLP
represents the Debtors in their restructuring efforts. When the
Company filed protection from its creditors, it estimated its
debts and assets of more than $10 million each.
INTERWAVE COMMS: Silicon Valley Bank Ups Credit Line to $2.5MM
--------------------------------------------------------------
interWAVE(R) Communications International, Ltd. (Nasdaq: IWAV), a
pioneer in compact wireless communications systems, announced that
Silicon Valley Bank, a subsidiary of Silicon Valley Bancshares
(Nasdaq: SIVB), provided the Company an increase in its line of
credit from $1.0 million to $2.5 million based on the company's
improving financial performance. The financial terms and
conditions of the increased credit line are essentially unchanged.
interWAVE also disclosed that KPMG LLP, the Company's independent
auditors, has issued a "clean" unqualified opinion on interWAVE's
fiscal 2003 audited financial statements without the prior year's
"going concern uncertainty" explanatory paragraph.
"We are pleased that Silicon Valley Bank has expressed its
confidence in our improving financial performance and have
increased our line of credit facility," stated Erwin Leichtle,
president and chief executive officer of interWAVE. "We are also
pleased that we received from our independent auditors a 'clean'
unqualified opinion without the previous mention of an
uncertainty."
Silicon Valley Bank provides diversified financial services to
emerging growth and mature companies in the technology and life
sciences markets, as well as the premium wine industry. Through
its focus on specialized markets and extensive knowledge of the
people and business issues driving them, Silicon Valley Bank
provides a level of service and partnership that measurably
impacts its clients' success. Founded in 1983 and headquartered
in Santa Clara, Calif., the company serves more than 9,500 clients
across the country through 27 regional offices. More information
on the company can be found at: http://www.svb.com
interWAVE Communications International, Ltd. (Nasdaq: IWAV) is a
global provider of compact network solutions and services that
offer innovative, cost-effective and scalable networks allowing
operators to "reach the unreached." interWAVE solutions provide
economical, distributed networks that minimize capital
expenditures while accelerating customers' revenue generation.
These solutions feature a product suite for the rapid and simple
deployment of end-to-end compact cellular systems and broadband
wireless data networks. interWAVE's highly portable, mobile
cellular networks and broadband wireless solutions provide vital
and reliable wireless communications capabilities for customers in
over 50 countries. The Company's U.S. subsidiary is headquartered
at 2495 Leghorn Street, Mountain View, California, and can be
contacted at http://www.iwv.com
* * *
Liquidity and Capital Resources
In its Form 10-K filed with the Securities and Exchange Commission
on September 30, 2002, interWAVE stated:
"Net cash used in operating activities in 2002, 2001 and 2000
was primarily a result of net operating losses. Net cash used in
operating activities for 2002 was primarily attributable to net
loss from operations, decreases in accounts payable and accrued
expenses and other liabilities, offset by non-cash depreciation
and amortization and losses on asset impairments and sales, as
well as decreases in inventory and trade receivables and
increases in deferred revenue. For 2001, net cash used in
operating activities was primarily attributable to net loss from
operations, increases in inventory and decreases in accounts
payable, offset by non-cash depreciation and amortization and
losses on asset impairments and sales, as well as decreases in
trade receivables and increases in accrued expenses and other
current liabilities and deferred revenue. For 2000, net cash
used in operating activities were primarily attributable to net
loss from operations and increases in trade receivables, offset
by increases in accounts payable.
"Investing Activities. For 2002, the primary source of cash in
investing activities was the sale of short-term investments. For
2001, our investing activities consisted primarily of the sale
of short-term investments offset by cash used in acquisitions
for $18.5 million. Other uses of cash in investing activities
consisted of purchases of $8.2 million in capital equipment and
intangible assets. We expect that capital expenditures will
decrease due to our continued cost-cutting efforts and
conservation of cash resources. For 2000, the primary use of
cash in investing activities were the purchases of short-term
investments and capital equipment.
"Financing Activities. During 2002, we raised $2.5 million from
the sale of shares and the exercise of warrants, options and
ESPPs. In 2001, the primary use of cash in financing activities
were principal payments on notes payable net of receipts on our
issuance of notes receivable to several of our customers. In
January 2000, we completed our initial public offering, which
raised $116.3 million net of costs.
"Commitments. We lease all of our facilities under operating
leases that expire at various dates through 2006. As of June 30,
2002, we had $7.1 million in future operating lease commitments.
In August 2002, we signed a new lease for 2,300 square feet of
facility with Hong Kong Technology Centre. We moved into the new
office at the end of August 2002. The new lease expires in
August 2004. In the future we expect to continue to finance the
acquisition of computer and network equipment through additional
equipment financing arrangements.
"As of June 30, 2002, we have two capital leases with GE
Capital. Aggregate future lease payments are $0.5 million, $0.5
million and $0.3 million for fiscal years 2003, 2004 and 2005,
respectively.
"Summary of Liquidity. There can be no assurances as to whether
our existing cash and cash equivalents plus short-term
investments will be sufficient to meet our liquidity
requirements. We have had recurring net losses, including net
losses of $64.3 million, $94.1 million and $28.4 million for the
years ended June 30, 2002, 2001 and 2000, respectively, and we
have used cash in operations of $28.8 million, $49.4 million,
and $21.8 million for the years ended June 30, 2002, 2001 and
2000, respectively. Management is currently forming and
attempting to execute plans to address these matters. These
plans include achieving revenues and margins that will sustain
levels of spending, reducing levels of spending, raising
additional amounts of cash through the issuance of debt, equity
or through other means such as customer prepayments. If
additional funds are raised through the issuance of preferred
equity or debt securities, these securities could have rights,
preferences and privileges senior to holders of common stock,
and the terms of any debt could impose restrictions on our
operations. The sale of additional equity or convertible debt
securities could result in additional dilution to our
stockholders, and we may not be able to obtain additional
financing on acceptable terms, if at all. If we are unable to
successfully execute such plans, we may be required to reduce
the scope of our planned operations, which could harm our
business, or we may even need to cease operations. In this
regard, our independent auditor's report contains a paragraph
expressing substantial doubt regarding our ability to continue
as a going concern. We cannot assure you that we will be
successful in the execution of our plans."
INTRAWEST CORP: Launches Tender Offer for 9.75% Senior Notes
------------------------------------------------------------
Intrawest Corporation has commenced a tender offer to purchase for
cash all $200 million principal amount of its outstanding 9.75%
2008 Senior Notes due August 15, 2008. Under the terms of the
offer, Intrawest will purchase outstanding 2008 Notes for
$1,048.75 per $1,000 principal amount of the Notes (which includes
the consent fee described below).
In connection with the offer, Intrawest is also seeking the
consent of the holders of the 2008 Notes to certain amendments to
the indenture governing the 2008 Notes, the effect of which
amendments will be to eliminate substantially all of the
restrictive covenants contained in the indenture. The
consideration includes a consent payment of $10.00 per $1,000
principal amount of the 2008 Notes to holders who tender their
2008 Notes and deliver their consent on or prior to 5:00 p.m., New
York City time on October 8, 2003. Holders who tender their 2008
Notes after the Consent Date and on or prior to October 28, 2003
will be entitled to receive $1,038.75 per $1,000 principal amount
of the 2008 Notes. The tender offer is conditioned upon, among
other things, the receipt of the requisite consents to adopt such
proposed amendments.
The tender offer will expire at midnight, New York City time, on
October 28, 2003 unless it is extended or terminated earlier. The
consent solicitation will expire on the Consent Date, unless
extended. Payment for 2008 Notes tendered on or prior to the
Consent Date will be made on October 9, 2003. Payment for 2008
Notes tendered after the Consent Date and on or before the
Expiration Date will be made on the next business day following
the Expiration Date. Tendered Notes may not be withdrawn and
consents may not be revoked subsequent to the Consent Date.
Deutsche Bank Securities Inc. will act as Dealer Manager and
Solicitation Agent for the tender offer and consent solicitation.
The Depositary is JPMorgan Chase Bank and the Information Agent is
MacKenzie Partners of New York.
Persons with questions regarding the tender offer and consent
solicitation should contact Deutsche Bank Securities Inc. at (212)
250-2500 (attention: Dennis Farrell) or the Information Agent at
1-800-322-2885.
Intrawest also intends to sell, on a private placement basis in
the United States under Rule 144A of the Securities Act of 1933,
as amended and in certain Canadian provinces, up to $250 million
aggregate principal amount of senior notes due 2013. The Company
intends to use the proceeds of the offering to pay the
consideration under the tender offer and consent solicitation, and
to reduce other indebtedness. The closing of the offering is
expected to take place on October 9, 2003.
The New Notes have not been and will not be registered under the
Securities Act and may not be offered or sold in the United States
absent registration or an applicable exemption from the
registration requirements under the Securities Act.
Intrawest Corporation (IDR:NYSE; ITW:TSX) (S&P, BB- Long-Term
Corporate Credit Rating, Positive Outlook) is the world's leading
developer and operator of village-centered resorts. The company
owns or controls 10 mountain resorts, including Whistler
Blackcomb, North America's most popular mountain resort. Intrawest
also owns Sandestin Golf and Beach Resort in Florida and has a
premier vacation ownership business, Club Intrawest. The Company
is developing additional resort villages at six resorts in North
America and Europe. The Company has a 45 per cent interest in
Alpine Helicopters Ltd., owner of Canadian Mountain Holidays, the
largest heli-skiing operation in the world. Intrawest is
headquartered in Vancouver, British Columbia and is located on the
World Wide Web at http://www.intrawest.com
J.A. JONES INC: Case Summary & Largest Unsecured Creditors
----------------------------------------------------------
Lead Debtor: J.A. Jones, Inc.
J.A. Jones Drive
Charlotte, North Carolina 28287
Bankruptcy Case No.: 03-33532
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
J.A. Jones Construction Company 03-33540
2001 Construction Company 03-33542
Rea Construction Company 03-33543
William L. Crow Construction Company 03-33544
Carolina Prestress, L.L.C. 03-33545
J.A. Jones Construction Group, L.L.C. 03-33547
Centric/Jones Company LP 03-33549
Nucon Construction Corporation 03-33550
MCS Interiors, LLC 03-33551
Centric-Jones, LLC 03-33552
Equipment Solutions, LLC 03-33553
J.A. Jones/Tompkins Builders, Inc. 03-33554
General Services of PPM, Inc. 03-33556
PPM, Inc. 03-33557
Power Plant Maintenance Company, Inc. 03-33558
PPM Holding, Inc. 03-33559
Type of Business: Founded in 1890 by James Addison Jones, J.A.
Jones is a subsidiary of insolvent German
construction group Philipp Holzmann and a
holding company for several US construction
firms. Efforts by Holzmann to sell J.A. Jones
have failed.
Chapter 11 Petition Date: September 25, 2003
Court: Western District of North Carolina (Charlotte)
Judge: J. Craig Whitley
Debtors' Counsel: John P. Whittington, Esq.
Bradley Arant Rose & White LLP
2001 Park Place,
Suite 1400
Birmingham, AL 35203-2738
Tel: (205) 521-8000
Fax: (205) 521-8800
-and-
W. B. Hawfield, Jr.
Moore & Van Allen
NationsBank Corporate Center
100 North Tryon Street
Floor 47
Charlotte, NC 28202-4003
Tel: 704-331-1000
Estimated Assets: More than $100 Million
Estimated Debts: More than $100 Million
A. J.A. Jones, Inc.'s 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Deutsche Bank AG, New York Bank Loan $100,000,000
Branch, as Admin Agent
31 W. 52nd Street
New York, NY 10019
Tel: 212-250-6159
Attn: Anca Trifan,
Director
American Home Assurance Indemnification $100,000,000
Corp., and each of the obligation under
Applicable member surety bonds
Companies of American
International Group,
Inc.
Tel: 212-458-1262
Attn: David A. Koziel, VP
Bond Claims
Fireman's Insurance Co., Indemnification $100,000,000
and its applicable obligations under
subsidiaries surety bonds
777 San Marin Drive
Novato, CA 94998
Tel: 415-899-2836
Attn: Peter W. Presperin,
Pres./Discontinued
Operations
Pension Benefit Guaranty Required Minimum $4,882,899
Corporation Contribution
1200 K Street N.W.
Washington, D.C. 20005-4026
Tel: 202-326-4020
American Appraisal Trade Debt $184,700
Associates Inc.
Huitt-Zollars Inc. Trade Debt $85,135
Womble, Carlyle, Sandridge Trade Debt $81,940
& Rice
Ernst & Young LLP Consulting Fees $68,930
Wiley Rein & Fielding LLP Professional Fees $54,086
Paul, Hastings, Janofsky Attorney's Fees $41,329
& Walker LLP
KPMG LLP Professional Fees $33,500
Luquire George Andrews Professional Fees $25,582
The McGraw-Hill Companies Trade Claim $10,000
Cromwell & Moring LLP Professional Fees $9,827
Alston & Bird LLP Professional Fees $9,035
Marsh USA Inc. Professional Fees $8,604
Graylyn International Trade Debt $8,210
Conference Center
The Tharpe Company, Inc. Trade Debt $7,031
Provectus Technologies Trade Debt $6,600
Unlimited Inc.
Fleet Business Credit Trade Debt $6,412
Corp.
Ephus Technology Inc. Trade Debt $5,425
B. J.A. Jones Construction Co's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Deutsche Bank AG, New York Bank Loan $100,000,000
Branch, as Admin Agent
31 W. 52nd Street
New York, NY 10019
Tel: 212-250-6159
Attn: Anca Trifan,
Director
American Home Assurance Indemnification $100,000,000
Corp., and each of the obligation under
Applicable member surety bonds
Companies of American
International Group,
Inc.
Tel: 212-458-1262
Attn: David A. Koziel, VP
Bond Claims
Fireman's Insurance Co., Indemnification $100,000,000
and its applicable obligations under
subsidiaries surety bonds
777 San Marin Drive
Novato, CA 94998
Tel: 415-899-2836
Attn: Peter W. Presperin,
Pres./Discontinued
Operations
Pension Benefit Guaranty Required Minimum $4,882,899
Corporation Contribution
1200 K Street N.W.
Washington, D.C. 20005-4026
Tel: 202-326-4020
J Bar B Cattle Company Trade Debt $3,098,990
3245 East Desert Lane
Route 1
Phoenix, AZ 85042
Tel: 602-996-3203
Henard Metal Fabricators, Trade Debt $2,957,126
Inc.
241 East Centers Valley Road
Kingsport, TN 37660
Tel: 602-996-3203
Attn: Paul Young Jr.
McKinney's Inc. Trade Debt $2,450,122
PO Box 406340
Atlanta, GA 30384
Tel: 404-879-0103
Attn: Derek Smith
Enclos Corporation Trade Debt $2,410,658
20501 Earlgate Street
Walnut, CA 91789-2909
Tel: 410-355-4300
Attn: Paul Bailey
The Circle Group LLC Trade Debt $1,772,827
2555 Marconi Drive
Alpharetta, GA 30005
Tel: 704-527-5445
Attn: Frabk Sciullo
University Marelich Trade Debt $1,487,256
Mechanical
3001 Old Highway 99 South
Mount Vernon, Washington,
98273
Attn: 360-424-6602
Attn: Ernie Ward
Pacific Construction Trade Debt $1,356,469
Systems, Inc.
2275 116th Avenue NE
Suite 100
Bellevue, Washington
98004-3084
Tel: 425-455-3000
Attn: Michael Roberts
Hersh, Inc. Trade Debt $1,323,065
1275 Bennett Drive
Longwood, FL 32750
Tel: 407-865-5771
Attn: Isaac Hershkovica
Southern Pan Services Trade Debt $1,255,190
Company
2385 Lithonia Industrial
Blvd.
Lithonia, GA 30058
Tel: 919-773-3000
Attn: Ken Dickey
W.A. Bottling Company Trade Debt $1,194,321
Po Box 1200
Woodinville, WA 98072
Tel: 425-483-7500
Attn: Keith Flowers
Encompass Electrical Trade Debt $1,168,843
Technologies of NC
5900 Harris Technology
Blvd., Suite T
Charlotte, NC 28269
Tel: 704-501-4202
Attn: Randy Sossamon
Bergelectric Corp. Trade Debt $1,120,689
4310 Cameron Street
Suite #9
Las Vegas, NV 89103
Sunbelt Glass & Aluminum Trade Debt $1,097,744
Inc.
790 Pickens Drive Ext.
Marietta, GA 30062
Tel: 770-980-9807
Attn: Johnny Brooks
Morrow-Meadows Corp. Trade Debt $1,052,591
231 Benton Court
Walnut, CA 91789
Tel: 909-598-7700
BCI, Inc. Trade Debt $1,047,629
5147 Clifton Street
Tampa, FL 33634
Tel: 813-886-0240
Attn: Jim Hatton
WGG Enterprises d/b/a Trade Debt $943,910
Pierce Enterprises
11310 Stewart Street
El Monte, CA 91371
C. 2001 Construction Co.'s 2 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Deutsche Bank AG, New York Bank Loan $100,000,000
Branch, as Admin Agent
31 W. 52nd Street
New York, NY 10019
Tel: 212-250-6159
Attn: Anca Trifan,
Director
Fireman's Insurance Co., Indemnification $100,000,000
and its applicable obligations under
subsidiaries surety bonds
777 San Marin Drive
Novato, CA 94998
Tel: 415-899-2836
Attn: Peter W. Presperin,
Pres./Discontinued
Operations
D. Rea Construction Co.'s 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Deutsche Bank AG, New York Bank Loan $100,000,000
Branch, as Admin Agent
31 W. 52nd Street
New York, NY 10019
Tel: 212-250-6159
Attn: Anca Trifan,
Director
American Home Assurance Indemnification $100,000,000
Corp., and each of the obligation under
Applicable member surety bonds
Companies of American
International Group,
Inc.
Tel: 212-458-1262
Attn: David A. Koziel, VP
Bond Claims
Fireman's Insurance Co., Indemnification $100,000,000
and its applicable obligations under
subsidiaries surety bonds
777 San Marin Drive
Novato, CA 94998
Tel: 415-899-2836
Attn: Peter W. Presperin,
Pres./Discontinued
Operations
Pension Benefit Guaranty Required Minimum $4,882,899
Corporation Contribution
1200 K Street N.W.
Washington, D.C. 20005-4026
Tel: 202-326-4020
Citgo Asphalt Refining Co. Trade Debt $4,882,899
PO Box 406212
Atlanta, WA 30384
Tel: 918-495-4285
Atlanta, GA 30384
Attn: Gary Fowler
Martin Marietta Aggreg Trade Debt $1,773,339
71
PO Box 75328
Charlotte, NC 28275
Tel: 704-525-7740
Attn: Larry Ward
F.T. Williams Trade Debt $1,495,032
9500 Statesville Road
Charlotte, NC 28269
Tel: 704-392-0186
Carolina Steel Trade Debt $998,669
Fabrication
PO Box 403047
Atlanta, GA 30384-3047
Tel: 336-275-9711
Vulcan Materials Company Trade Debt $648,552
PO Box 101364
Attn: Martu Easton
Valero Marketing & Supply Trade Debt $573,624
Attn: Credit Dept.
Dallas, TX 75397
Attn: Jerry Spruell
APAC Carolina, Inc. - Dar Trade Debt $509,532
PO Box 521
Darlington, SC 29532
Tel: 704-721-7514
Attn: Kenny Blackwelder
Driggers Electric & Trade Debt $496,455
Contr.
634 Phillip Davis Drive
Charlotte, NC 28217
Tel: 704-527-2811
Koch Trade Debt $351,073
PO Box 905435
Tel: 843-723-3403
Attn: Bill Walker
Jeter, Russell Trade Debt $350,000
7 Egret Court
Beaufort, SC 29902
Tel: 843-525-0129
Concrete Supply Company Trade Debt $260,028
PO Box 65161
Charlotte, NC 28265
Attn: Accts. Receivable
Corbett Concrete Trade Debt $246,142
Constructors
Associated Asphalt Salisb Trade Debt $207,801
McWhirter Grading Company Trade Debt $207,725
Certified Concrete Trade Debt $171,688
Colter Electric Company Trade Debt $134,616
Seaco, Inc. Trade Debt $132,355
Haymes Brothers Trade Debt $123,895
GE Capital Fleet Services Trade Debt $123,025
E. William L. Crow Construction's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Deutsche Bank AG, New York Bank Loan $100,000,000
Branch, as Admin Agent
31 W. 52nd Street
New York, NY 10019
Tel: 212-250-6159
Attn: Anca Trifan,
Director
American Home Assurance Indemnification $100,000,000
Corp., and each of the obligation under
Applicable member surety bonds
Companies of American
International Group,
Inc.
Tel: 212-458-1262
Attn: David A. Koziel, VP
Bond Claims
Fireman's Insurance Co., Indemnification $100,000,000
and its applicable obligations under
subsidiaries surety bonds
777 San Marin Drive
Novato, CA 94998
Tel: 415-899-2836
Attn: Peter W. Presperin,
Pres./Discontinued
Operations
L. Harbert, Inc. Trade Debt $114,178
J United Electrical Trade Debt $97,959
Contracting
DeFillipis Const. & NASUF Trade Debt $75,657
Const. (A.J.V.)
B&J Welding & iron Works Trade Debt $44,216
M&M Consulting & Trade Debt $35,354
Contracting, Inc.
Heritage Air Systems, Inc. Trade Debt $32,917
RCC Concrete Corp. Trade Debt $18,240
Peckar & Abramson Trade Debt $10,436
Aquifer Drilling & Trade Debt $6,750
Testing, Inc.
Pro-Bel Enterprises, Ltd. Trade Debt $4,252
Atlantic Hardware & Supply Trade Debt $1,816
Corp.
Kings County Waterproofing Trade Debt $1,450
Corp.
New York Sales Tax Bureau Trade Debt $1,444
M & T/NAMOW/TCLJV Trade Debt $756
Somerset Wood Products Co. Trade Debt $680
F. Carolina Prestress, LLC's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Deutsche Bank AG, New York Bank Loan $100,000,000
Branch, as Admin Agent
31 W. 52nd Street
New York, NY 10019
Tel: 212-250-6159
Attn: Anca Trifan,
Director
American Home Assurance Indemnification $100,000,000
Corp., and each of the obligation under
Applicable member surety bonds
Companies of American
International Group,
Inc.
Tel: 212-458-1262
Attn: David A. Koziel, VP
Bond Claims
Fireman's Insurance Co., Indemnification $100,000,000
and its applicable obligations under
subsidiaries surety bonds
777 San Marin Drive
Novato, CA 94998
Tel: 415-899-2836
Attn: Peter W. Presperin,
Pres./Discontinued
Operations
Pension Benefit Guaranty Required Minimum $4,882,899
Corporation Contribution
1200 K Street N.W.
Washington, D.C. 20005-4026
Tel: 202-326-4020
Southern Concrete Trade Debt $78,463
Materials
Strand-Tech Martin, Inc. Trade Debt $52,830
Starette Specialized Trade Debt $27,590
Macuch Steel Products Trade Debt $22,134
Presstress Supply, Inc. Trade Debt $17,950
Ralph Whitehead Associate Trade Debt $17,499
Asphalt Materials Co. Trade Debt $8,500
Florence Concrete Product Trade Debt $7,234
Home Depot Trade Debt $4,109
Dillinger, Inc. Trade Debt $4,066
Technical Services Intern Trade Debt $2,995
General Materials, LLC Trade Debt $2,947
Carolina Tractor Trade Debt $1,850
Stephen A. Davis, PE, PC Professional Fees $1,740
Certex Superior Trade Debt $1,561
Purser Oil Co., Inc. Trade Debt $1,543
Holox Ltd. Trade Debt $1,502
M.A. Industries, Inc. Trade Debt $1,208
Precast/Prestressed Trade Debt $960
Concrete
B&M Supplies Trade Debt $913
G. J.A. Jones Construction Group's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Deutsche Bank AG, New York Bank Loan $100,000,000
Branch, as Admin Agent
31 W. 52nd Street
New York, NY 10019
Tel: 212-250-6159
Attn: Anca Trifan,
Director
American Home Assurance Indemnification $100,000,000
Corp., and each of the obligation under
Applicable member surety bonds
Companies of American
International Group,
Inc.
Tel: 212-458-1262
Attn: David A. Koziel, VP
Bond Claims
Fireman's Insurance Co., Indemnification $100,000,000
and its applicable obligations under
subsidiaries surety bonds
777 San Marin Drive
Novato, CA 94998
Tel: 415-899-2836
Attn: Peter W. Presperin,
Pres./Discontinued
Operations
Five Star Electric Corp. Trade Debt $8,265,549
101-32 101st Street
Ozone Park, NY 11416
Tel: 718-641-5000
Pension Benefit Guaranty Required Minimum $4,882,899
Corp. Contribution
1200 K. Street N.W.
Washington, DC 20005-4026
Tel: 202-326-4020
Navillus Contracting Trade Debt $4,229,972
53-18 11th Street
Long Island City, NY 11101
Tel: 718-784-0500
Attn: Donald O'Sullivan
Heritage Air Systems, Trade Debt $2,569,077
Inc.
305 Suburban Avenue
Deer Park, NY 11729
Tel: 631-667-1044
Attn: Don Romano
UAD Group Trade Debt $1,428,661
268 Vanderwood Avenue
Brooklyn, NY 11211
Attn: Wayne Tam
Atlantic Manual Trade Debt $1,319,733
c/o Sunlight Electrical
226 52nd Street
New York, NY 10001
Tel: 718-765-1050
FPC Contracting & Trade Debt $1,258,715
Development Corp.
1174 Commerce Avenue
Bronx, NY 10462
Tel: 718-904-0950
Cord Contracting Company Trade Debt $981,349
213 Roslyn Road
Roslyn Heights, NY 11577
Attn: Harvey Yankstein
Botto Mechanical Corp. Trade Debt $965,228
95 Commercial Street
Plainview, NY 11803
Tel: 516-349-9000
Attn: John Botto
Shroid Construction, Inc. Trade Debt $750,137
46-10 11th Street
Long Island City, NY 11101
Attn: Michael McGary
Prima Paving Corp. Trade Debt $720,665
53-04 97th Place
Corona, NY 11368
Tel: 718-592-0302
Attn: John Bradley
J.M. Botto, Inc. Trade Debt $648,354
95 Commercial Street
Plainview, NY 11803
Tel: 516-349-9000
Attn: John Botto
Post Road Iron Works, Inc. Trade Debt $645,830
345 West Putnam Avenue
Greenwich, CT 06830
Tel: 203-869-6322
F.W. Sims, Inc. Trade Debt $602,054
101 Otis Street
West Babylon, NY 11704
Attn: Joe Simonelli
Saramac Inc. Trade Debt $502,830
3145 Chermin Des 40-Arpents
Lachenaie, Quebec
Canada J6V IA3
Tel: 514-966-1000
Attn: Gary Hetu
Giamboi Trade Debt $474,511
2508 Coney Island Avenue
Brooklyn, NY 11223
Attn: Gary Giamboi
Ametis Industries, Inc. Trade Debt $472,968
130-23 229th Street
Laurelton, NY 11413
Tel: 718-527-6680
Attn: Ruth Harvey
L.K. Cornstock & Co. Inc. Trade Debt $466,250
1 North Lexington Avenue
White Plains, NY 10601
Attn: Matt McSpedon
H. Centric/Jones Company & Centric-Jones, LLC's 20 Largest
Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Deutsche Bank AG, New York Bank Loan $100,000,000
Branch, as Admin Agent
31 W. 52nd Street
New York, NY 10019
Tel: 212-250-6159
Attn: Anca Trifan,
Director
American Home Assurance Indemnification $100,000,000
Corp., and each of the obligation under
Applicable member surety bonds
Companies of American
International Group,
Inc.
Tel: 212-458-1262
Attn: David A. Koziel, VP
Bond Claims
Fireman's Insurance Co., Indemnification $100,000,000
and its applicable obligations under
subsidiaries surety bonds
777 San Marin Drive
Novato, CA 94998
Tel: 415-899-2836
Attn: Peter W. Presperin,
Pres./Discontinued
Operations
Pension Benefit Guaranty Required Minimum $4,882,899
Corporation Contribution
1200 K Street N.W.
Washington, D.C. 20005-4026
Tel: 202-326-4020
Corbins Service Electric, Trade Debt $318,840
LLC
102 S. 28th Street
Phoenix, AZ 85036
Tel: 602-275-8500
Attn: Jim Schanafelt
K.R. Swerdfeger Trade Debt $294,657
Construction Inc.
421 E. Industrial Blvd.
Pueblo West, CO 81007
Tel: 719-547-0242
Attn: Keith Swerdfeger
Dorr-Oliver Eimco USA, Trade Debt $223,189
Inc.
Roberts Water Trade Debt $175,976
Technologies Inc.
Ludvik Electric Company Trade Debt $174,183
Spaans Babcock, Inc. Trade Debt $161,100
Lafarge Trade Debt $158,593
Castle Rock Construction Trade Debt $154,864
Co.
Kip Corporation Trade Debt $151,697
Penhall Company Trade Debt $143,068
Hennesy Mechanical Sales, Trade Debt $102,580
LLC
Kayton Electric Inc. Trade Debt $98,249
Dywidag Systems Trade Debt $89,547
International
Earthworks Southwest LLC Trade Debt $88,082
Rocky Mountain Structures Trade Debt $86,653
Inc.
Complete Mechanical Co., Trade Debt $77,172
Inc.
FWF Steel & Valley Joist Trade Debt $63,933
H. Nucon Construction Corp.'s 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Deutsche Bank AG, New York Bank Loan $100,000,000
Branch, as Admin Agent
31 W. 52nd Street
New York, NY 10019
Tel: 212-250-6159
Attn: Anca Trifan,
Director
American Home Assurance Indemnification $100,000,000
Corp., and each of the obligation under
Applicable member surety bonds
Companies of American
International Group,
Inc.
Tel: 212-458-1262
Attn: David A. Koziel, VP
Bond Claims
Fireman's Insurance Co., Indemnification $100,000,000
and its applicable obligations under
subsidiaries surety bonds
777 San Marin Drive
Novato, CA 94998
Tel: 415-899-2836
Attn: Peter W. Presperin,
Pres./Discontinued
Operations
W.H. Hinton, II Trade Debt $16,120
Flash Fire Protection, Trade Debt $1,606
Inc.
Thomas W. Gordy Trade Debt $1,287
Steven C. Mills Trade Debt $936
Vast-Alpine Trade Debt $501
ET Technologies Trade Debt $495
D-A Lubricant Company Trade Debt $329
Republic Services of Trade Debt $237
Colorado
Carquest Auto Parts Trade Debt $169
Cable Tech Sling & Supply Trade Debt $162
Company
Rene D. Gill Trade Debt $161
Frank Trujillo Trade Debt $107
Ellen Equipment Corp. Trade Debt $107
Home Depot Trade Debt $80
Christopher Dodge Trade Debt $55
E & G Terminal, Inc. Trade Debt $32
I. MCS Interiors, LLC's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Deutsche Bank AG, New York Bank Loan $100,000,000
Branch, as Admin Agent
31 W. 52nd Street
New York, NY 10019
Tel: 212-250-6159
Attn: Anca Trifan,
Director
American Home Assurance Indemnification $100,000,000
Corp., and each of the obligation under
Applicable member surety bonds
Companies of American
International Group,
Inc.
Tel: 212-458-1262
Attn: David A. Koziel, VP
Bond Claims
Fireman's Insurance Co., Indemnification $100,000,000
and its applicable obligations under
subsidiaries surety bonds
777 San Marin Drive
Novato, CA 94998
Tel: 415-899-2836
Attn: Peter W. Presperin,
Pres./Discontinued
Operations
Pension Benefit Guaranty Required Minimum $4,882,899
Corporation Contribution
1200 K Street N.W.
Washington, D.C. 20005-4026
Tel: 202-326-4020
TLC Electric Trade Debt $111,972
Southeastern Window Trade Debt $108,234
Concepts
Preferred Air Services, Trade Debt $95,283
Inc.
Cabinets by Design, Inc. Trade Debt $88,900
D & M Group Enterprise, Trade Debt $84,810
LLC
Ryan Painting Trade Debt $58,870
Otis Elevator Company Trade Debt $55,212
Encompass Mechanical Trade Debt $45,113
Services
Direct South, Inc. Trade Debt $25,098
MLR Printing & Trade Debt $19,829
Wallcovering, Inc.
Gwinnett Sprinkler Co. Trade Debt $16,780
Inc.
Q.C. Interiors Trade Debt $14,260
Putzel Electrical Trade Debt $14,144
Contractors Inc.
Ragan Mechanical Trade Debt $9,861
McIver & Son, Inc. Trade Debt $9,000
The D & D Group Trade Debt $8,836
Enterprises LLC
Q.C. Framing, Inc. Trade Debt $8,100
J. Equipment Solutions, LLC's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Deutsche Bank AG, New York Bank Loan $100,000,000
Branch, as Admin Agent
31 W. 52nd Street
New York, NY 10019
Tel: 212-250-6159
Attn: Anca Trifan,
Director
American Home Assurance Indemnification $100,000,000
Corp., and each of the obligation under
Applicable member surety bonds
Companies of American
International Group,
Inc.
Tel: 212-458-1262
Attn: David A. Koziel, VP
Bond Claims
Fireman's Insurance Co., Indemnification $100,000,000
and its applicable obligations under
subsidiaries surety bonds
777 San Marin Drive
Novato, CA 94998
Tel: 415-899-2836
Attn: Peter W. Presperin,
Pres./Discontinued
Operations
Pension Benefit Guaranty Required Minimum $4,882,899
Corporation Contribution
1200 K Street N.W.
Washington, D.C. 20005-4026
Tel: 202-326-4020
Rental Service Corp. Trade Debt $3,259
US Lawn of North Carolina Trade Debt $2,100
R.S. Braswell Co. Trade Debt $1,815
Mitchell Distributing Co. Trade Debt $1,166
The Carolina Ritchie Co. Trade Debt $1,104
Parker's Crane Service, Trade Debt $1,050
Inc.
Gerrard Tire Co., Inc. Trade Debt $867
CD Capital Trade Debt $796
United Rentals Trade Debt $80
Acme Pest Control Trade Debt $77
United Parcel Service Trade Debt $66
Rental Uniforms Service Trade Debt $50
K. J.A. Jones/Tompkins Builders' 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Deutsche Bank AG, New York Bank Loan $100,000,000
Branch, as Admin Agent
31 W. 52nd Street
New York, NY 10019
Tel: 212-250-6159
Attn: Anca Trifan,
Director
American Home Assurance Indemnification $100,000,000
Corp., and each of the obligation under
Applicable member surety bonds
Companies of American
International Group,
Inc.
Tel: 212-458-1262
Attn: David A. Koziel, VP
Bond Claims
Fireman's Insurance Co., Indemnification $100,000,000
and its applicable obligations under
subsidiaries surety bonds
777 San Marin Drive
Novato, CA 94998
Tel: 415-899-2836
Attn: Peter W. Presperin,
Pres./Discontinued
Operations
Pension Benefit Guaranty Required Minimum $4,882,899
Corporation Contribution
1200 K Street N.W.
Washington, D.C. 20005-4026
Tel: 202-326-4020
Miller & Long Co., Inc. Trade Debt $4,722,244
4824 Rugby Avenue
Bethesda, MD 20814
Tel: 301-657-8000
Attn: Michael Burlas
Owen Steel Company Trade Debt $4,346,743
727 Mauney Drive
Columbia, SC 29201
Tel: 803-251-7680
SMC Concrete Construction, Trade Debt $3,953,596
Inc.
6715 Little River Turnpike
Suire 100
Annandale, VA 22003
Tel: 703-642-0270
Attn: Al Draper
John J. Kirlin, Inc. Trade Debt $4,540,473
515 Dover Road
Suite 2200
Rockville, MD 20850
Tel: 301-424-3410
Attn: Chip Mitchell
JCM Associates, Inc. Trade Debt $2,939,474
301 Prince George's Blvd.
Upper Marlboro, MD 20774
Tel: 301-390-5500
Attn: Jim McCready III
New England Stone, LLC Trade Debt $2,394,667
285 Smith Street
North Kingstown, RI 02852-7730
Tel: 401-294-1200
Attn: Antonio Ramos
Truland Systems Corp. Trade Debt $1,029,187
3330 Washington Blvd.
Arlington, VA 22201
Tel: 703-524-4900
Attn: Mark Freeman
Dynaelectric Company Trade Debt $922,993
22930 Shaw Road
Suite 100
Dulles, VA 20166
Tel: 703-742-3500
Attn: Brian Burns
Manganaro Corp. Trade Debt $828,991
6405-D Ammendale Road
Beltsville, MD 20705
Tel: 301-937-0580
Attn: Thomas Vagrin
PBM Limbach Group Trade Debt $791,438
10110 Senate drive
Lanham, MD 20706
Tel: 301-429-0900
Attn: Charles Boyd
Anning-Johnson Company Trade Debt $748,519
9408-A Gunston Cove Road
Lorton, VA 22079
Tel: 703-643-2800
Attn: David Rankin
Atlas Air-Conditioning Trade Debt $715,019
Co.
4133 Southerland
Houston, TX 77092
Tel: 713-460-7300
Attn: Edwin Aracena
TSI/Exterior Wall Trade Debt $587,140
Systems, Inc.
3705 West Street
Landover, MD 20785
Tel: 301-322-7200
Attn: Vic Cornelleir
Superior Iron Works, Inc. Trade Debt $545,948
45034 Underwood Lane,
Unit 100
Sterling, VA 20166
Tel: 703-471-5500
Attn: Gary Hall
Schnabel Foundation Co. Trade Debt $535,683
5210 River Road
Bethesda, MD 20816
Tel: 301-657-3060
Attn: Harold Ludwig
Essex Construction LLC Trade Debt $522,413
6432 Bock Street
Oxen Hill, Maryland 20745
Tel: 301-839-0451
Attn: Roger Blunt
Berkel & Company Trade Debt $514,769
Contractors
3910 Knowles Avenue
Kensington, MD 20895
Tel: 301-946-0020
Attn: David Weatherer
L. General Services of PPM & Power Plant Maintenance Company's 20
Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Deutsche Bank AG, New York Bank Loan $100,000,000
Branch, as Admin Agent
31 W. 52nd Street
New York, NY 10019
Tel: 212-250-6159
Attn: Anca Trifan,
Director
American Home Assurance Indemnification $100,000,000
Corp., and each of the obligation under
Applicable member surety bonds
Companies of American
International Group,
Inc.
Tel: 212-458-1262
Attn: David A. Koziel, VP
Bond Claims
Fireman's Insurance Co., Indemnification $100,000,000
and its applicable obligations under
subsidiaries surety bonds
777 San Marin Drive
Novato, CA 94998
Tel: 415-899-2836
Attn: Peter W. Presperin,
Pres./Discontinued
Operations
Charlie's Lawn Trade Debt $43,290
Maintenance, Inc.
Mitchell's Sitework Trade Debt $43,165
Services
Carolina Industrial Trade Debt $35,336
Tools, Inc.
Tropical Irrigation, Inc. Trade Debt $32,886
KCM Inc. Trade Debt $26,049
NES Rentals, Inc. Trade Debt $21,346
Safety Products, Inc. Trade Debt $5,623
Stinett, Inc. Trade Debt $5,580
Grainger Trade Debt $5,120
Tri Country Concrete Trade Debt $4,947
Products
JMR Surveying Services, Trade Debt $3,240
Inc.
Conrad Yelvington Trade Debt $2,957
Piedmont Triad Auto Glass Trade Debt $1,600
Inc.
Clinch Co, Inc. Trade Debt $1,455
Better Built/Best Built Trade Debt $1,425
Tol-Co, Inc. Trade Debt $1,412
Staples Trade Debt $1,177
M. PPM, Inc.'s 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Deutsche Bank AG, New York Bank Loan $100,000,000
Branch, as Admin Agent
31 W. 52nd Street
New York, NY 10019
Tel: 212-250-6159
Attn: Anca Trifan,
Director
American Home Assurance Indemnification $100,000,000
Corp., and each of the obligation under
Applicable member surety bonds
Companies of American
International Group,
Inc.
Tel: 212-458-1262
Attn: David A. Koziel, VP
Bond Claims
Fireman's Insurance Co., Indemnification $100,000,000
and its applicable obligations under
subsidiaries surety bonds
777 San Marin Drive
Novato, CA 94998
Tel: 415-899-2836
Attn: Peter W. Presperin,
Pres./Discontinued
Operations
Omega Steel, Inc. Trade Debt $38,001
Coastal Grading & Rental, Trade Debt $38,814
Inc.
Bryant Electric Supply Trade Debt $22,418
Co., Inc.
Graybar Electric Company Trade Debt $18,807
Grainger Trade Debt $11,204
Ferguson Enterprises #41 Trade Debt $10,840
E-Z Parking Inc. Trade Debt $9,770
Sunbelt Rentals Trade Debt $9,458
Coatings, Inc. Trade Debt $8,326
National Welders Trade Debt $7,984
Supply Inc,
Diversified Supply, Inc. Trade Debt $7,395
Rental Service Corp. Trade Debt $7,336
Ferguson Enterprises #36 Trade Debt $5,586
R & S Industrial Supply Trade Debt $4,168
Contractor's Depot Trade Debt $4,168
Bryant Industrial Cont. Trade Debt $4,139
Hughes Supply Trade Debt $3,627
N. PPM Holding, Inc.'s 3 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Deutsche Bank AG, New York Bank Loan $100,000,000
Branch, as Admin Agent
31 W. 52nd Street
New York, NY 10019
Tel: 212-250-6159
Attn: Anca Trifan,
Director
American Home Assurance Indemnification $100,000,000
Corp., and each of the obligation under
Applicable member surety bonds
Companies of American
International Group,
Inc.
Tel: 212-458-1262
Attn: David A. Koziel, VP
Bond Claims
Fireman's Insurance Co., Indemnification $100,000,000
and its applicable obligations under
subsidiaries surety bonds
777 San Marin Drive
Novato, CA 94998
Tel: 415-899-2836
Attn: Peter W. Presperin,
Pres./Discontinued
Operations
KASPER: Has Until Dec. 1 to Exclusively Solicit Plan Acceptances
----------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the Southern District of
New York, Kasper A.S.L., Ltd., and its debtor-affiliates obtained
an extension of their exclusive solicitation period. The Court
gives the Debtors, until December 1, 2003, the exclusive right to
solicit plan acceptances from their creditors.
Kasper A.S.L., Ltd., one of the leading women's branded apparel
companies in the United States filed for chapter 11 protection on
February 05, 2002 (Bankr. S.D.N.Y. Case No. 02-10497). Alan B.
Miller, Esq., at Weil, Gotshal & Manges, LLP represents the
Debtors in their restructuring efforts. When the Company filed for
protection from its creditors, it listed $308,761,000 in assets
and $255,157,000 in debts.
LEAP WIRELESS: Court Approves Sale of 2 PCS Licenses to Edge
------------------------------------------------------------
U.S. Bankruptcy Court Judge Adler permits Cricket Licensee to sell
two personal communication services licenses to Edge Acquisitions,
LLC. As of the September 3, 2003 bidding deadline, Edge presented
the best offer to purchase the licenses for $3,250,000. No other
bids were received. The Licenses will be transferred to Edge free
and clear of any liens.
As previously reported, Cricket Licensee, Inc. purchased certain
personal communications services licenses during the FCC's Auction
22 in April 1999, including these Licenses:
5 Year
Build Exp.
BTA Market Name Frequency MHz Date Date
--- ----------- --------- --- ------ ----
451 Twin Falls, 1895-1902.5 MHz, 15 7/22/04 7/22/09
Idaho 1975-1982.5 MHz
202 Idaho Falls, 1895-1902.5 MHz, 15 7/22/04 7/22/09
Idaho 1975-1982.5 MHz
(Leap Wireless Bankruptcy News, Issue No. 10; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
LEVEL 3 COMMS: Will Publish Third-Quarter Results on October 23
---------------------------------------------------------------
Level 3 Communications, Inc. (Nasdaq: LVLT) will release its Third
Quarter 2003 results on Thursday, October 23, 2003, and will host
a conference call at 11 a.m. Eastern time.
The Third Quarter conference call will be broadcast live on Level
3's Web site at http://www.Level3.com. If you are unable to join
the call via the web, you may access the call at 612-326-1003.
You may also email questions to Investor.Relations@Level3.com.
The call will be archived and available on the Company's Web site
at http://www.Level3.comor you may access an audio replay until
12:00 p.m. Eastern time on October 27, 2003, by dialing 320-365-
3844, access code 696685. For additional information please call
720-888-2502.
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.
LORAL/QUALCOMM: Secures Exclusivity Extension through December 9
----------------------------------------------------------------
By order of the U.S. Bankruptcy Court for the District of
Delaware, Loral/Qualcomm and its debtor-affiliates obtained an
extension of their exclusive periods. The Court gives the
Debtors, until October 10, 2003, the exclusive right to file their
plan of reorganization and until December 9, 2003, to solicit
acceptances of that Plan.
Loral/Qualcomm Satellite Services, LP, along with its four debtor-
affiliates filed for chapter 11 protection on February 15, 2002
(Bankr. Del. Case No. 02-10506). The Debtors are closely related
entities, whose primary assets are their partnership interests in
each other or in Globalstar, LP. The Debtors are one of the
world's leading satellite communications companies with
substantial activities in satellite-based communications services
and satellite manufacturing. As of July 15, 2003, the Debtors
listed $2,654,000,000 in total assets and $3,061,000,000 in total
debts.
LTV CORP: Asks Court to Clear Intercompany Claims Settlement
------------------------------------------------------------
The LTV Corporation, and its debtor-affiliates ask Judge Bodoh to
approve a Settlement and Release Agreement among the LTV Debtors,
the Copperweld Debtors, the VP Debtors, Copperweld Canada,
Copperweld UK, the Copperweld DIP Lenders, the Administrative
Claimants' Committee and the Noteholders' Committee, settling
intercompany claims.
Bruce Bennett, Esq., and Joshua M. Mester, Esq., at Hennigan
Bennett & Dorman LLP, in Los Angeles, California, review the long
and complex series of cash management motions, DIP borrowings,
intercompany use of funds, and orders which permitted the creation
of uncertain intercompany claims.
After the implementation of the APP, the Debtors accomplished the
goal of orderly cessation of its Integrated Steel Business by
segregating the collections of accounts receivable from the Metal
Fabrication Business rather than allowing the commingling of such
funds in the centralized cash management system. The Debtors also
obtained two separate financing facilities for the LTV Tubular
Business and the Copperweld Debtors.
Hennigan Bennett & Dorman, LLP, as special financing and
litigation counsel, analyzed the various orders entered in these
cases and described the nature of the Intercompany Claims of each
estate and their relative priorities. HBD determined that the
scope of the definition of "Intercompany Claim" in the Cash
Management Motion did not clearly include all types of
intercompany transactions. Yet that Motion and Order, by
providing a superpriority status to Intercompany Claims, insured
the return to the appropriate estate of the extension of
intercompany credit, such as the advancement of funds from one
estate to another estate, regardless of the form of the
transaction.
After determining the potential legal claims that could be
asserted by each of the Debtors, HBD and The Blackstone Group, as
financial advisor, worked together with LTV Steel's management to
analyze each of the Debtors' books and records. Their due
diligence revealed the existence of other related transactions or
expenditures made by one Debtor that did not necessarily flow
through the intercompany accounts and cash management system, but
that benefited other Debtors. For instance, certain overhead
expenses, such as Chapter 11 reorganization fees and expenses and
costs of various corporate functions including finance, treasury,
and other functions that benefited each Debtor's estate both
directly and indirectly were paid from LTV Steel accounts. These
payments, arguably, equated to intercompany extensions of credit
that have a superpriority status under the Cash Management Oder.
LTV Steel's management, HBD and Blackstone, prepared a report that
interpreted the analysis of the raw data in accordance with the
provisions in the Cash Management Order, the Chase DIP Order, and
the Ableco DIP Order. The purpose of the Base Case was to
illustrate the types and amounts of claims that each estate may
have against other estates in an objective and evenhanded manner.
Categories of Intercompany Claims
1. Cash Management Claims Use of funds from
concentration accounts;
proceeds of sales;
2. Ordinary Course Claims Settlement of inter-
Debtor purchases with
book entries;
3. Overhead and Other Claims Allocation of overhead
and financing costs;
4. Junior Contribution Liens Created under Chase DIP Order
and Abelco DIP Order.
Base Case Allocations
As to overhead and financing costs, the Debtors' Base Case
ultimately allocated the Chapter 11 reorganization expenses, and
the costs of the finance, treasury and tax, and other functions
that were paid from LTV Steel accounts to the other Debtors' based
upon each Debtor's proportionate share of all of the Debtors' 2001
trade sales. However, the Debtors' Base Case allocated the
interest and expenses for the DIP Facilities to each estate based
on the relationship of each Debtor's inventory and accounts
receivable to the total amount of inventory and accounts
receivable in the borrowing base for the DIP Facilities. Finally,
the Base Case allocated the costs of the Term Loan to the
Copperweld Debtors because their inventory and fixed assets
secured the repayment of the Term Loan.
With regard to Junior Contribution Lien amounts, the Debtors in
their Base Case revealed that VP Buildings, LTV Steel de Mexico
Ltd., LTV Blanking Corporation, LTV-Walbridge Inc., and Dearborn
Leasing Company, made payments under the DIP Facilities from asset
or stock sales that exceeded the amount of borrowings from the DIP
Facilities that these Debtors actually received. Therefore, these
Debtors have Junior Contribution Liens. These Liens, however, are
only secured by the proceeds of the sale of LTV Steel and Georgia
Tubing's accounts receivable and inventory that remain after the
final repayment of the Chase Facility.
Because each Junior Contribution Lien is pari passu with every
other Junior Contribution Lien, the Base Case allocated the
collateral securing the junior Contribution Liens on a pro rata
basis. The Base Case proposes to distribute the proceeds of the
collateral securing the Junior Contribution Liens as:
VP Buildings 88.0%
LTV Steel de Mexico 3.4%
LTV Blanking Corp. 3.9%
LTV-Walbridge 2.6%
Dearborn Leasing 2.1%
The Base Case was then submitted to all of the major
constituencies in these cases -- the Official Committee of
Administrative Creditors, the Noteholders' Committee, the
Copperweld Debtors, and the Copperweld DIP Lenders. Financial
advisors were engaged to assist in the evaluation of Intercompany
Claims on behalf of those constituencies -- Deloitte & Touche for
the Administrative Claimants' Committee, KPMG for the Noteholders'
Committee, and FTI Consulting for the Copperweld DIP Lenders.
Based on their own due diligence and analysis of the rights under
the applicable orders, each constituency prepared its own analysis
of the potential Intercompany Claims.
When LTV Steel's management and advisors compared the
constituencies' analyses to the Base Case, one thing was apparent
-- each party had arrived at different conclusions for almost each
and every category of Intercompany Claim, and saw many critical
issues in a markedly different way.
Net Change in Cash Based on Recovery
Of Intercompany Claims (in millions)
------------------------------------
Debtor Base Admin. Noteholders DIP
Estate Case Comm. Committee Lenders
------ ---- ------ ----------- -------
LTV Corp. ($11.4) ($11.4) $41.3 $37.5
LTV Steel/ Ga. Tubing 30.7 29.0 (118.3) (137.4)
VP Buildings 52.5 56.8 125.7 116.4
Copperweld/ Welded Tube (16.2) (18.1) 0.0 41.9
Other 7.6 6.8 14.4 7.8
The Settlement Rationale
The stark differences between the constituencies' analysis of
Intercompany Claims strongly suggested to all parties that a
judicial determination of the precise amount of each estate's
Intercompany Claims, and the priority of those Intercompany Claims
in relationship to other claims, would necessarily involve
expensive, protracted litigation. This realization sparked
intense negotiations that occurred over several months. The
Debtors acted as brokers in the settlement through several face-
to-face negotiations sessions. The settlement facilitates the
presentation of plans and resultant distributions to creditors,
and avoids the expenses of litigation. At the same time, however,
the Agreement preserves the separateness of the estates by
including provisions that govern the Debtors' intercompany
relationships after implementation of the Agreement, like the
reimbursement for the costs of future administration and winding
down of certain Debtors' estates.
Terms of Settlement and Release Agreement
(1) Releases and Covenants Not to Sue: The LTV Debtors,
VP Buildings and the Copperweld Entities will
exchange mutual releases and covenants not to sue
each other based on the Intercompany Claims. By
way of example only, Copperweld will release any
claims it may have to a Junior Contribution Lien,
while LTV Corp. will release its claims for
reimbursement for unallocated overhead.
(2) Transfers of Assets and Claims: Assignments and
transfers will occur:
(a) A pre-petition accounts receivable owed to LTV
Corp. or LTV Steel by Copperweld Canada will
be transferred to Copperweld;
(b) The LTV Debtors will assign all of their rights
in any claims against Oswego Wire Inc., to
Copperweld; and
(c) LTV International will transfer its interest in
the capital stock of Copperweld Canada to
Copperweld.
(3) Distribution of Junior Contribution Lien Collateral:
The proceeds of the collateral securing the Junior
Contribution Liens will be distributed in these
amounts:
$55,505,501 to VP Buildings;
$2,207,605 to LTV Steel de Mexico;
$2,396,838 to LTV Blanking Corp.;
$1,576,861 to LTV-Walbridge; and
$1,387,638 to Dearborn Leasing
(4) Settlement Payments: In consideration of the (i)
releases, such as Copperweld's release of its claim
to a $42.5 million Junior Contribution Lien; (ii)
covenants not to sue; (iii) payments; and (iv) the
other terms of the Agreement; LTV Steel will pay
$22 million to Copperweld and $5 million to VP
Buildings.
(5) Sharing of Conditional Settlement Proceeds: If the
sum of the net proceeds from (i) the settlement of
certain environmental litigation between LTV Steel
and Baker Environmental Inc.; (ii) certain of LTV
Steel's emissions credits; (iii) the judgment or
settlement of LTV Steel's litigation against General
Electric Company, that is currently pending before
the Court; and (iv) certain tax refunds related to
LTV Steel's former Chicago Coke facility and a refund
claim of the former LTV Aerospace and Defense Company
-- now known as Georgia Tubing Corporation --
exceeds $8,000,000, then LTV Steel will pay:
(a) out of any such excess up to $10,000,000, 20% to
Copperweld and 30% to VP Buildings; and
(b) out of any excess greater than $10,000,000, 10%
to Copperweld and 40% to VP Buildings; however,
in no event will such payments exceed $3,000,000
to Copperweld and $7,000,000 to VP Buildings.
(6) Post-Settlement Case Administration: Because the
Agreement effectuates a total separation of the
estates, the Agreement contains terms governing the
future relationships of the Debtors, including the
reimbursement of various expenses of administration
of these cases. The fees and expenses of the
professionals retained by the Noteholders' Committee
after January 1, 2003, through March 31, 2003, will
be borne solely by LTV Corp., other than fees and
expenses related to the Copperweld Debtors, which
will be borne by Copperweld. Fees and expenses of
professionals for the Noteholders' Committee after
April 1, 2003, will be borne solely by VP Buildings,
other than fees and expenses related to the
Copperweld Debtors, which will be borne by
Copperweld. The Administrative Claimants' Committee
will consent to the salary and healthcare benefits
for one full-time active employee of LTV Steel until
March 31, 2004, and will not seek relief from the
Bankruptcy Court or otherwise cause the termination
of any health care plan. LTV Steel will terminate
all health care plans no later than March 31, 2004,
and provide Copperweld with at least 90 days' notice
of that termination. VP Buildings and certain other
Debtors will reimburse each of the LTV Debtors for
the out-of-pocket expenses of administering such
Debtor's estate paid by the LTV Debtor, as the case
may be, pursuant to a written budget agreed to by
the Noteholders' Committee. The LTV Debtors will be
entitled to reimbursement of the payment of
Copperweld's obligation for the Copperweld Debtors'
and LTV International's United States Trustee fees,
fees and expenses of tax professionals to the extent
related to tax matters concerning one or more
Copperweld Debtors or LTV International, any other
expenses of LTV International, and any similar items
agreed to in writing by Copperweld.
(7) Substantive Consolidation: The LTV Steel and Georgia
Tubing estates will be substantively consolidated.
(8) No Challenge Proceeding: The LTV Debtors, VP
Buildings, the Administrative Claimants' Committee,
and the Noteholders' Committee will agree not to
challenge Copperweld's right to a tax refund
resulting from the carry-back of operating losses
from 2001 and 2002. (LTV Bankruptcy News, Issue No. 55;
Bankruptcy Creditors' Service, Inc., 609/392-00900)
MIRANT CORP: Court Approves Appointment of Equity Committee
-----------------------------------------------------------
Michael Sammons, a significant shareholder in Mirant Corporation,
asks Judge Lynn to establish a Shareholders Committee to
represent the rights and interests of Mirant common stock
holders, pursuant to Section 1102(a)(2) of the Bankruptcy Code.
Mr. Sammons further asks the Court to appoint him to the
Shareholders' Committee as a representative of individual common
shareholders.
On July 25, 2003, Mr. Sammons asked the U.S. Trustee to appoint a
Stockholders' Committee. However, the U.S. Trustee failed to
respond to his letter and presumably declined to appoint a
Shareholders' Committee.
According to Mr. Sammons, he directly or indirectly owns about
80,000 shares of Mirant common stock, as well as additional
option calls. In fact, Mr. Sammons owns more common shares of
Mirant than the MIR CEO or board chairman.
Although now retired, Mr. Sammons has applicable financial
experience, having been previously employed by Merrill Lynch and
two investment banking firms -- Stephens, Inc. in Little Rock,
Arkansas, and First Southwest Company, in Dallas, Texas. Mr.
Sammons also has graduate training in accounting and law.
According to Mr. Sammons, the appointment of a shareholders'
committee is warranted:
(a) The Mirant common stock is widely held and is actively
traded. Approximately 400,000,000 common shares are
outstanding. Mirant also declared that as of the
Petition Date, the shareholders' equity is almost
$9,000,000,000;
(b) Current management failed to protect and enhance the
interest of common shareholders, undertaking actions
which resulted in a $16,000,000 loss in market
capitalization over the past three years. Management's
resistance to change its business plan lends a rigidity
to reorganization efforts at a time when flexibility is
absolutely required to salvage any value for common
shareholders;
(c) Current management's goal and interests are in direct
conflict with the interests of common shareholders. MIR
management, whose primary objective is to retain their
management positions, is seriously entertaining creditor
offers to swap debt for equity, wiping out $9,000,000,000
in common shareholders' equity;
(d) Common shareholders intend to present a reorganization
plan after the exclusive periods, which will certainly be
acceptable to at least 2/3 of all impaired classes of
creditors, while preserving the current equity ownership
structure. However, the plan requires preparation of
extensive documentation, and independent valuations of
certain MIR assets, which can presently be sold at book
value, prior to submission to the Court;
(e) Immediate appointment of a shareholders' committee would
allow the committee to begin the 120-180 days necessary
to prepare the necessary documentation, financial
analysis and conclude discussions with other impaired
class committees and outside investors; and
(f) A delay in appointing a Shareholders' Committee would
significantly delay these proceedings since
reorganization proposals by both the Debtors and their
creditors, both of which intend to swap debt for equity,
will certainly be strenuously contested by common
shareholders.
Accordingly, Judge Lynn grants Mr. Sammons' request. (Mirant
Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc.,
609/392-0900)
MORGAN STANLEY: Fitch Affirms Low-B/Junk Ratings on 5 Classes
-------------------------------------------------------------
Morgan Stanley Capital I Inc.'s commercial pass-through
certificates, Series 1998-WF2, are affirmed by Fitch Ratings as
follows:
-- $91.7 million class A-1 'AAA';
-- $564.9 million class A-2 'AAA';
-- $53.1 million class B 'AAA';
-- Interest only class X 'AAA';
-- $47.8 million class C 'AA';
-- $53.1 million class D 'A';
-- $21.2 million class E 'A-';
-- $21.2 million class F 'BBB+';
-- $23.9 million class G 'BBB-';
-- $10.6 million class H 'BB';
-- $8.0 million class J 'BB-';
-- $8.0 million class K 'B+';
-- $15.9 million class L 'B-';
-- $5.3 million class M 'CCC'.
Fitch does not rate the $8 million class N.
As of the September 2003 distribution date, the pool's aggregate
balance has been reduced by 12%, to $932.7 million from $1.06
billion at closing.
Wells Fargo, the Master Servicer, collected year-end (YE) 2002
financial statements for 89% of the properties by balance. Based
on the information provided, the YE 2002 weighted average debt
service coverage ratio (DSCR) for the pool is 1.70 times (x),
which has increased from 1.56x at issuance. There have been no
delinquent loans since issuance. One loan (1.2%) was transferred
to special servicing after the loan matured in April 2003 and the
borrower has not yet been able to obtain refinancing.
Fitch will continue to monitor this transaction, as surveillance
is ongoing.
MOSAIC GROUP: Board of Directors Resigns Effective September 26
---------------------------------------------------------------
Mosaic Group Inc. (TSX:MGX) announced the resignation of its board
of directors effective September 26.
The Company previously announced, on August 29, 2003, the
appointment of KPMG Inc. as interim receiver of the Company and
its subsidiaries pursuant to an order of the Ontario Superior
Court of Justice under the Bankruptcy and Insolvency Act (Canada).
In December, 2002, the Company and certain of its Canadian
subsidiaries and affiliated companies obtained an order from the
Ontario Superior Court of Justice under the Companies' Creditors'
Arrangement Act (Canada) to initiate the restructuring of its debt
obligations. Additionally, certain of the Company's US
Subsidiaries commenced proceedings for reorganization under
Chapter 11 of the U.S. Bankruptcy Code in the United States
Bankruptcy Court for the Northern District of Texas in Dallas.
Pursuant to these filings and the Interim Receivership Order, the
Company and its relevant subsidiaries continue to operate under a
stay of proceedings.
NAT'L STEEL: Coffee Wants $1MM Claim Allowed for Voting Purposes
----------------------------------------------------------------
Richard P. Coffee holds two claims against the National Steel
Debtors -- Claim No. 1560 for $1,008,719 and Claim No. 2859 for an
undetermined amount.
In one of their omnibus claims objections, the Debtors combined
the two claims. Claim No. 2859 survives as an unliquidated
claim. The Debtors assured Mr. Coffee that the combination of
claims was done simply for administrative convenience. Mr.
Coffee was told that his specific claim represented by Claim No.
1560 would survive intact as part of Claim No. 2859.
On August 29, 2003, Mr. Coffee received Notice of Disputed Claim
Status With Respect to Contingent, Unliquidated or Disputed
Claims and Claims as to which the Debtors Have Filed an
Objection. This Notice informed Mr. Coffee that because his
claim is partially unliquidated, his vote will not be solicited
to accept or reject the Debtors' First Amended Joint Plan of
Liquidation. Mr. Coffee says that had he known that by combining
the claims he would lose the right to vote, he would have asked
to eliminate Claim No. 2859.
Mr. Coffee asserts that he should be permitted to vote to accept
or reject the Plan. Mr. Coffee says that his $1,008,719 specific
provable contractual claim makes him among the 25 largest
unsecured creditors. Mr. Coffee insists that it would be a great
injustice if he is denied the right to vote.
The unliquidated claims for pension and health care that were
represented by Claim No. 2859 are being addressed by the 1114(d)
committee and the PBGC. The fact that the Debtors joined his
unliquidated claims with his $1,008,719 liquidated claim should
not deny Mr. Coffee his right to vote on the Plan.
Accordingly, pursuant to Rule 3018(a) of the Federal Rules of
Bankruptcy Procedure, Mr. Coffee asks the Court to direct the
Debtors to count his vote on the Plan. (National Steel Bankruptcy
News, Issue No. 36; Bankruptcy Creditors' Service, Inc., 609/392-
0900)
NATIONSRENT INC: Terminates Common Stock and 10-3/8% Sr. Notes
--------------------------------------------------------------
NationsRent Inc. Executive Vice President, General Counsel and
Secretary, Joseph H. Izhakoff, advises the Securities and
Exchange Commission that NationsRent's common stock, $0.01 par
value, and 10-3/8% Senior Subordinated Notes due 2008 have been
terminated as provided in the Company's Confirmed Plan.
NationsRent's regulatory report regarding the termination of the
10-3/8% Senior Subordinated Notes and common stock is required by
Rules 12g-4, 12h-3 and 15d-6 of the General Rules and Regulations
under the Securities Exchange Act of 1934. (NationsRent Bankruptcy
News, Issue No. 37; Bankruptcy Creditors' Service, Inc., 609/392-
0900)
NORSTAN: Takes Cost-Cutting Measures to Restore Profitability
-------------------------------------------------------------
Norstan, Inc. (Nasdaq:NRRD) will take more aggressive cost-cutting
measures in its second fiscal quarter beyond those announced in
mid-September. Effective immediately, the company will further
reduce its workforce by approximately 100 personnel, in addition
to the 75-100 previously announced, throughout its U.S. and
Canadian locations.
"We must take these actions to improve our cash position and
profitability in the remaining quarters of this fiscal year," said
James C. (Jim) Granger, Norstan's president and chief executive
officer. "These actions, while difficult, are necessary to adjust
Norstan's cost structure to reflect weaker margins and the decline
in our service utilization rates."
With the addition of these actions, Norstan is revising its
estimate of the charge to be taken in the fiscal second quarter
from $1.5 - $2.0 million to $3.3 - $3.8 million.
Norstan, Inc. (Nasdaq:NRRD), the technology services people who
improve the way their customers communicate. A full-service
telecommunications solutions company that delivers voice and data
technologies and services, and remanufactured equipment to select
corporate end-users and channel partners. Norstan offers a full
range of technologies for call center design, messaging,
infrastructure, conferencing and mobility. Norstan has offices
throughout North America. To learn more, visit the Norstan Web
site at http://www.norstan.com
* * *
As reported in Troubled Company Reporter's September 18, 2003
edition, Norstan's August 2, 2003 balance sheet shows that its
total current liabilities exceeded its total current assets by
about $18 million.
Norstan's first quarter results placed the company out of
compliance with one specific covenant contained in the agreement
governing the company's primary credit facility. Norstan's lenders
have waived this covenant violation. The anticipated restructuring
charge and a continuation of the factors contributing to Norstan's
first quarter loss will cause the company to be out of compliance
with its lending agreement in the second fiscal quarter of 2004.
Norstan's management is engaged in discussions with the company's
current lenders regarding these matters. Additionally, the company
is conducting discussions with other financial institutions
concerning Norstan's long-term credit financing needs.
NORTHWESTERN: Fitch Junks $388-Million Secured Term Loan at CCC
---------------------------------------------------------------
Fitch Ratings has raised NorthWestern Corp.'s outstanding first
mortgage bonds, secured pollution control obligations, and secured
medium term notes to 'CCC' from 'DDD'. In addition, Fitch has
assigned a 'CCC' rating to NOR's outstanding $388.1 million senior
secured term loan facility due 2006. NOR's outstanding 'DD' rated
$865 million senior unsecured notes and debentures and 'D' rated
$370 million trust preferred securities are not affected by
today's action.
Today's rating action is consistent with Fitch's policy to move a
rating out of the default category when there is a reasonable
expectation that the underlying security may continue to pay its
debt service obligations. Subsequent to NOR's filing for
bankruptcy protection on Sept. 15, 2003, the company received an
interim court order permitting it to make adequate protection
payments under its outstanding senior secured obligations,
including non-default interest and principal.
At the time of its bankruptcy filing, NOR reported total secured
debt obligations of approximately $865 million consisting of
$272.2 million first mortgage bonds, $191.6 million secured
pollution control bonds, $13 million of secured medium term notes,
and approximately $388 million outstanding under a secured term
loan facility (as of June 30, 2003). Fitch estimates annual
interest expense on these obligations of approximately $60
million. It is still early in NOR's bankruptcy. Fitch will
continue to monitor NOR's cash from operations and ability to
maintain current payments on its secured obligations. NOR's
secured rating could return to the default category if the company
is unable to continue such payments over the full course of the
proceedings.
NRG ENERGY: Urges Court to Approve Recapitalization Financing
-------------------------------------------------------------
According to Michael A. Cohen, Esq., at Kirkland & Ellis, in New
York, the collective amount to be repaid by the three groups of
NRG Energy, Inc., and its debtor-affiliates is $1,713,750,000:
(a) NRG Northeast Debtors currently has $556,500,000 in
outstanding principal and interest debt obligations under
the Northeast Notes;
(b) NRG South Central Debtors currently has $750,750,000 in
outstanding principal and interest debt obligations under
the South Central Notes; and
(c) NRG Mid-Atlantic Debtors currently has $406,500,000 in
outstanding principal and interest debt obligations to
certain lenders pursuant to the terms of a loan agreement.
As part of its restructuring efforts, the Debtors requested a
number of investment banks to make proposals regarding the
potential placement of the new debt. In early July 2003, the
Debtors' representatives and the Committee received detailed
proposals from six nationally recognized investment banking firms
relating to the placement by the Debtors of new indebtedness.
After a careful review, the Debtors and the Committee determined
that it was in the estates' best interest to simultaneously
pursue the competitive negotiation of recapitalization financing
with Credit Suisse First Boston, acting through its Cayman
Islands branch, and Lehman Brothers Inc. and Lehman Commercial
Paper Inc. Subsequently, the Debtors, the Committee, CSFB,
Lehman, and their counsels, engaged in five weeks of good faith,
arm's length negotiations to reach agreement on the comprehensive
terms of a letter engaging CSFB and Lehman to be retained as
primary placement agents for:
-- the Recapitalization Financing Facility;
-- a Commitment Letter in which CSFB and Lehman agree to
function as primary bank arrangers and, in that capacity,
access the relevant debt markets for the distribution of
debt securities issued pursuant to the recapitalization
financing facility; and
-- a Fee Letter specifying fees and expenses to be paid by the
Debtors to CSFB and Lehman in connection with the proposed
recapitalization financing facility transactions.
Accordingly, the Debtors sought and obtained the Court's
authority to accept and perform all of their obligations under
each of the Commitment Letter, the Fee Letter and the Engagement
Letter, along with any other documents necessary or appropriate
to effectuate the transactions contemplated.
Pursuant to the terms of the Commitment Letter, CFSB and Lehman
will commit to provide up to $2,215,000,000 in funds -- the
Recapitalization Financing. The key terms of the proposed
Recapitalization Financing Facility includes:
A. Senior Credit Facility
Borrower NRG Energy, Inc. and with respect to the
revolving credit facility, NRG Power Marketing,
Inc. or a successor
Type and Up to a $932,500,000 to $1,032,500,000 term loan
Amount facility (including a $250,000,000 to 350,000,000
letter of credit facility), and a $150,000,000 to
$250,000,000 revolving credit facility, subject
to a borrowing base formula
Duration Three years for the revolving credit facility
Seven years for term loan facility
Guarantors NRG Power Marketing Inc. or its successor, NRG
South Central, NRG Northeast, NRG Mid-Atlantic
and other existing or subsequently acquired or
organized subsidiaries of NRG to be agreed upon
Security Revolving credit facility to have first priority
lien on the inventory and accounts receivable of
NRG and NRG Power Marketing Inc
Term loans to be secured by first priority lien
on substantially all of the assets of NRG and
each of the guarantors and on the stock of all
subsidiaries
Indicative Term loans: LIBOR + 3.00% or Base Rate + 2.00%
Interest Revolving loans: LIBOR + 2.75% or Base Rate +
Rates 1.75%.
Mandatory On receipt of funds from transactions as asset
Prepayments sales, equity offerings or debt issuances, or
from insurance proceeds and excess cash flow
Representations Customary
& Covenants
Events of Customary
Default
Fees Customary fees, including, upon closing, payment
of:
(1) 1/2 of the Commitment Fee attributable to the
Senior Credit Facility,
(2) a Closing Fee, and
(3) an Administrative Agent Fee which, in some
cases, are subject to reduction or credits
depending upon the credit rating of the
reorganized company and the time of closing.
B. Interim Loans or High Yield Notes
Borrower NRG Energy, Inc.
Type Up to $1,032,500,000 of interim term loans
& Amount
Duration One year with conversion feature
Mandatory If interim term loans are not paid in full on
Conversion maturity and no defaults exist at that time, the
Feature interim term loans automatically convert to term
loans, which may be exchanged for exchange notes,
maturing in 10 years from the closing of the
Interim Loans
Indicative 8% per annum with, at least a 50 basis point
Interest increase every three monyhs, with a maximum
Rates interest of 16% (or 17% based on ratings)
Guarantors Same guarantors as under the Senior Credit
Facility
Security Second lien on collateral under the term loan
portion of the senior credit facility
Terms of Upon mandatory conversion, the interest on the
Rollover rollover loans will be a floating rate, will be
Loans determined quarterly, and will equal the sum of:
(1) LIBOR,
(2) a spread determined so that, on the maturity
date of the Interim Loans, the sum of the
spread and LIBOR will equal the interest rate
in effect on the maturity date, and
(3) 0.50% initially and increasing by 50 basis
points every three months.
The maximum interest rates will not exceed 16%.
Fees Customary fees in the event the Interim Loan
is funded, including:
(1) on closing, a Bridge Closing Fee and 1/2 of
the Commitment Fee attributable to the
Interim Loan,
(2) in the event of a conversion to a term loan,
a Rollover Fee, and
(3) in the event the Interim Loans are repaid or
redeemed, a Refinancing Fee.
If the High Yield Notes are issued in lieu of the
Interim Loan, there will be a Placement Fee for
the issuance of the notes which will be subject
to reduction or a credit depending on the credit
rating of the reorganized company and the time of
closing.
NRG, NRG Northeast and NRG South Central, and certain of their
subsidiaries, will also enter into definitive documentation
evidencing the Senior Credit Facility and Interim Loan or High
Yield Notes and grant the liens and security interests required
as a part of the Recapitalization Financing transactions. On the
satisfaction of all conditions of funding, CSFB and Lehman will
fund to the Debtors an aggregate of $2,215,000,000, which will be
used by the Debtors as:
(a) $556,500,000 to satisfy the applicable Debtors'
obligations due under the Northeast Notes;
(b) $750,750,000 to satisfy the applicable Debtors'
obligations due under the South Central Notes;
(c) $406,500,000 to satisfy the applicable Debtors'
obligations due under the Mid-Atlantic Term Loan;
(d) $500,000,000 in the form of a revolving credit facility
and letter of credit facility, both of which will be
available to the Debtors to fund working capital and
trading operations.
Furthermore, CSFB and Lehman require the payment of certain fees
and the reimbursement of expenses associated with the negotiation
and documentation of the commitment:
(a) The Recapitalization Financing Commitment provides for a
commitment fee of 0.875% of the aggregate commitments,
which will result in a Commitment Fee of $19,381,250;
(b) One half of the Commitment Fee is due upon the approval of
the Debtors' request. The remainder of the Commitment Fee
will be due on the Closing Date;
(c) The Recapitalization Financing Commitment obligates the
Debtors to reimburse the expenses of CSFB and Lehman, and
their advisors. The Debtors will reimburse the Expense
Reimbursements on at least a monthly basis. The Debtors
estimate that the Expense Reimbursements could total
$6,000,000 through the closing of the commitments; and
(d) The Debtors would be obligated to pay a bank closing fee
and placement fee -- the Closing Fees -- projected at an
aggregate amount of $41,530,000 or 1.875% of the aggregate
commitments, subject to reduction based on the final
credit rating of the Debtors and the actual closing date.
The commitment of CSFB and Lehman under the Commitment Letter
will expire on December 31, 2003. The Debtors anticipate that
the NRG Plan and the Northeast/South Central Plan will both go
effective on or before December 15, 2003. However, NRG will have
the option to extend the commitments to March 31, 2004, by paying
an additional fee 50% of the aggregate commitments -- $11,075,000
-- pro rated for the number of months extended. The Debtors seek
the Court's authority to pay the Extension Fee if they determine
to extend the containment.
The Recapitalization Financing Commitment also obligates the
Debtors to indemnify CSFB and Lehman and certain other parties
for claims and causes of action arising out of the
Recapitalization Financing Commitment or the Debtors' bankruptcy
cases.
Assuming a year-end effextive date, the Debtors forecast that the
revised capital structure will release for general corporate
use approximately $200,000,000 in cash that is currently subject
to project level restrictions. The Debtors also projects that,
on a going forward basis, the new capital structure will prevent
upwards of $139,000,000 from becoming subject to project level
cash restrictions through 2005. This cash would remain available
to the Debtors for general corporate purposes.
Mr. Cohen maintains that the proposed Recapitalization Financing
Facility is attractive because:
-- it requires no amortization until debt maturity,
-- substantially extends the maturity date for the outstanding
debt obligations of NRG Mid-Atlantic,
-- reduces the Debtors' exposure to commercial bank debt,
-- consolidates the Debtors' various core projects under a
single corporate financing package,
-- streamlines public company reporting and other accounting
matters, and
-- standardizes the power marketing arrangements and
operations of the Debtors and its subsidiaries. (NRG Energy
Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service,
Inc., 609/392-0900)
NUCENTRIX BROADBAND: Contract Staff Attorney as Special Counsel
---------------------------------------------------------------
Nucentrix Broadband Networks, Inc., and its debtor-affiliates are
seeking approval from the U.S. Bankruptcy Court for the Northern
District of Texas to employ and retain Robert W. Taylor, Esq., as
Special Counsel to the Debtors.
Prior to the Petition Date, the Debtors consulted with and
retained Mr. Taylor to provide advice and representation
concerning general legal matters. In essence, Mr. Taylor serves as
a contract staff attorney to the Debtors. The Debtors, as debtors
in possession, desire to employ Mr. Taylor as special counsel to
continue to give the Debtors legal advice and to provide legal
services with respect to general matters.
The Debtors wish to retain Mr. Taylor as counsel nunc pro tunc as
of the Petition Date. The Debtors selected Taylor as special
counsel because the Debtors believe that he is well qualified to
represent the Debtors in this capacity. Moreover, Mr. Taylor is
familiar with the Debtors' operations from past work he performed
for the Debtors. Requiring the Debtors to find other comparable
counsel would result in an increase of expenses to the estates.
The services to be provided by Mr. Taylor to the Debtors will be
limited to services in connection with general legal matters.
Although Mr. Taylor's standard hourly rate is $150, he currently
charges the Debtors the lower hourly rate of $100 for legal
services.
Headquartered in Carrollton, Texas, Nucentrix Broadband Networks,
Inc., provides broadband wireless Internet and subscription
television services using radio spectrum. The Company, together
with its 18 affiliates, filed for chapter 11 protection on
September 5, 2003 (Bankr. N.D. Tex. Case No. 03-39123). John E.
Mitchell, Esq., Josiah M. Daniel, III, Esq., and Todd C. Crosby,
Esq., at Vinson and Elkins, LLP represent the Debtors in their
restructuring efforts. As of March 31, 2003, the Debtors, listed
$69,452,000 in total assets and $31,676,000 in total debts.
PACIFIC GAS: Evidentiary Hearings on Proposed Settlement Conclude
-----------------------------------------------------------------
Pacific Gas and Electric Company has reached a significant
milestone in its Chapter 11 case, with the conclusion of the
public evidentiary hearings on the proposed settlement agreement
between PG&E and the California Public Utilities Commission staff.
The CPUC hearings were completed on Friday, September 26, 2003, on
the schedule established by Administrative Law Judge Robert
Barnett.
On Thursday, PG&E and a number of organizations representing
federal, state and local governments, environmental groups,
resource conservation, agricultural and water organizations
entered into a comprehensive stipulation, which resolves most, if
not all, of the environmental issues pertaining to the proposed
settlement agreement.
During the nine days of hearings, the witnesses presented by PG&E
and the CPUC staff testified extensively about the structure,
benefits and financing aspects of the proposed settlement
agreement.
PG&E completed extensive cross-examination of the TURN witnesses
who were suggesting an alternative plan involving a designated
rate component. PG&E maintains that the proposed alternative is
not feasible as a practical matter, will not generate savings for
ratepayers commensurate with the added cost of delay and risk of
non-execution, and cannot be done in any case without specific
statutory authorization. The company feels its position on this
matter was borne out in the hearings.
In response to comments by ALJ Barnett at the close of the
hearings that he did not believe the CPUC can bind future
Commissions and that it should not subject itself to Bankruptcy
Court on-going jurisdiction -- two elements of the settlement
agreement -- the company believes that this legal issue already
has been resolved by the CPUC and the Bankruptcy Court in previous
decisions.
Significantly, the CPUC has previously asserted, in filings and
sworn testimony in federal Bankruptcy Court, that the Commission
could and would bind itself to any agreement implementing a plan
of reorganization. Bankruptcy Judge Dennis Montali agreed with the
Commission's position on this issue in a ruling last November. The
California Supreme Court recently affirmed that the CPUC has
authority under state law to enter into a binding settlement
agreement, in the Southern California Edison case.
In addition, during the just-concluded evidentiary hearings, the
CPUC staff and TURN witnesses testified that the CPUC does have
the legal authority to bind itself and future commissions to
implement a plan of reorganization.
Finally, inasmuch as this issue is fundamental to the CPUC's
ability to propose any plan of reorganization, PG&E believes the
Commission will resolve this issue favorably.
The CPUC approval process is expected to proceed on schedule, with
briefs due on October 10, a proposed decision by the ALJ on
November 18, 2003 and a final Commission decision in late December
2003.
PARAGON FIN'L: Inks Letter of Intent to Make Third Acquisition
--------------------------------------------------------------
Paragon Financial Corporation (OTC Bulletin Board: PGNF) has
signed a letter of intent to acquire its third mortgage company.
The transaction will provide the Company with a local operating
presence in Central Florida in the region commonly referred to as
the "Space Coast." This latest transaction is part of a number of
planned purchases the company expects to close in its pursuit of
an aggressive acquisition strategy. The transaction is expected to
close within 90 days and is subject to customary conditions,
including regulatory approval.
"I'm very pleased to announce this latest acquisition," said Steve
Burleson, Chief Executive Officer of Paragon Financial. "Now that
our senior management team is firmly in place we've been able to
shift our corporate focus to growth through acquisition."
"Furthermore, we're looking forward to making additional similar
announcements in the near future so as to add additional loan
volume to our existing business base," he added.
Paragon Financial Corporation is a financial services company that
is currently approved to operate in 27 states. 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.
PATHMARK STORES: James L. Moody Named to Board of Directors
-----------------------------------------------------------
Pathmark Stores, Inc. (Nasdaq:PTMK) a regional supermarket
operator in the New York-New Jersey and Philadelphia metropolitan
areas, announced the addition of James L. Moody to the Company's
Board of Directors. This appointment increases the size of the
Board to seven members.
Eileen Scott, Pathmark's Chief Executive Officer, said, "We are
very pleased to add an industry leader with the experience and
knowledge that Jim possesses to our Board."
James Moody, 71, spent most of his career with Hannaford Bros.
Co., a food retailer based in Portland, Maine. He served as Chief
Executive Officer of Hannaford Bros. from 1973 to 1992 and
Chairman of the Board from 1984 to 1997 when he retired. Mr. Moody
serves on several Boards (both profit and non-profit), including
Staples, Inc., Idexx Laboratories, Inc., and Empire Company
Limited.
Pathmark Stores, Inc. (S&P, BB- Corporate Credit Rating, Stable)
is a regional supermarket currently operating 143 supermarkets
primarily in the New York-New Jersey and Philadelphia metropolitan
areas.
PILLOWTEX: Intends to Sell Columbia and Phenix City Facilities
--------------------------------------------------------------
Pillowtex Corporation and its debtor-affiliates seek the Court's
authority to sell the Columbia and Phenix City Facilities, free
and clear of all liens, claims and encumbrances; and consummate
other transactions contemplated by the sale.
The Facilities are located in Columbus, Georgia and Phenix City,
Alabama, on opposite banks of the Chattahoochee River. Prior to
March 2002, the Facilities were utilized in the Debtors'
integrated towel manufacturing operations. The Columbus Facility
was used in connection with yarn spinning, wet finishing, and
slashing operations while the Phenix City Facility was used in
connection with cutting, sewing, packaging and distribution of
towel finished goods.
Christopher M. Winter, Esq., at Morris, Nichols, Arsht & Tunnel,
in Wilmington, Delaware, relates that the Debtors have entered
into certain incentive arrangements with local development
authorities, which provided cost-saving and other benefits in
connection with the construction and development of the
Facilities. These arrangements required the Debtors to transfer
nominal title in and to the Facilities to local industrial
development boards in exchange for bonds issued to the Debtors by
the IDBs.
The IDBs lease the Facilities to the Debtors using the rental
stream generated under the leases to satisfy their obligations to
the Debtors under the bonds, pursuant to:
(i) the Lease Agreement, dated December 30, 1981, between the
Industrial Development Board of the City of Columbus, GA
and Fieldcrest Cannon, Inc.; and
(ii) the Lease Agreement, dated July 1, 1994, between the
Industrial Development Board of the City of Phenix City,
Alabama and Fieldcrest Cannon, Inc.;
Under the incentive arrangements and leases, the Debtors may
exercise an option to regain title to the Facilities by tendering
these bonds and paying certain related fees and expenses -- the
IDB Payments. The Debtors anticipate that the amount required of
the IDB Payments to regain title to the Facilities will not
exceed $15,000 in the aggregate.
Marketing Efforts
Mr. Winter further relates that on March 2002, the Debtors
discontinued their operations at the Facilities and retained
Gordon Simmering of Corporate Properties, Inc., to market and
sell the Facilities and certain other facilities used in their
towel manufacturing operations.
Pursuant to a standard brokerage and listing agreement, the
Debtors agreed to pay Gordon Simmering 6.76% of the gross
purchase price paid by a buyer of the Columbus Facility, and 6%
of the gross purchase price paid by a buyer of the Phenix City
Facility.
Subsequently, Gordon Simmering approached a wide range of parties
interested in buying the Facilities who have a realistic chance
of consummating the sales. The Debtors entered into agreements
that represent the highest and best offers for the Facilities
that can be obtained for comparable real property. The Debtors
entered into an option agreement with Eagle Phenix Partners, LLC
for the Columbus Facility and a sale agreement with John M.
Dudley, Jr., for the Phenix City Facility.
The Agreements
A. The Columbus Facility Option Agreement
Under the Columbus Facility Option Agreement, Eagle Phenix
Partners has until September 26, 2003 to exercise its option
to buy the Columbus Facility. On exercise of the option, the
Columbus Facility Option Agreement will become a binding sale
agreement without execution of further instruments. Once the
option is exercised, the Debtors will convey good and
marketable fee simple title to Eagle Phenix by limited
warranty deed in exchange for a purchase price of $7,100,000.
If Eagle Phenix fails to exercise its option on or before
September 26, 2003, the Columbus Facility Option Agreement
will become null and void and Eagle Phenix will forfeit its
option money for $10,000. In that case, the Debtors will
withdraw their request with respect to the Columbus Facility.
However, if Eagle Phenix exercises its option, the Debtors
will proceed with the sale subject to the proposed Bidding
Procedures and Auction.
B. The Phenix City Facility Sale Agreement
Pursuant to the Phenix City Facility Sale Agreement, at the
closing, Mr. Dudley will pay the Debtors $3,000,000 in cash
and the Debtors will convey the Phenix City Facility to Mr.
Dudley by deed with special or limited warranty with good and
marketable title in fee simple, free from all encumbrances,
including any environmental violations, except as otherwise
provided. Upon Mr. Dudley's completion of environmental
study, should there be any environmental defects, Mr. Dudley
will have an option to void the Phenix City Facility Sale
Agreement and receive a refund of the earnest money for
$10,000 or allow the Debtors to cure the defects. All unpaid
assessments against the property for paving curb, gutters and
sewers will be paid by the Debtors at the closing.
If the sales of the Facilities are consummated under the terms
contemplated by the Agreements, then the Debtors estimate that
Gordon Simmering will be entitled to payment of Broker Fees,
totaling $659,960, broken down as:
(i) $479,960 in respect of the Columbus Facility sale; and
(ii) $180,000 in respect of the Phenix City Facility sale.
Bidding Procedures and Auction
The Debtors also propose these supplements and modifications to
the Global Bidding Procedures:
(a) The deadline for submission of competing bids for the
Facilities is September 29, 2003 at 4:00 p.m., prevailing
Eastern Time;
(b) The Initial Overbid Increment and successive bidding
increments for competing bids for the Columbus Facility
will be $355,000;
(c) The Initial Overbid Increment and successive bidding
increments for competing bids for the Phenix City Facility
will be $150,000;
(d) The Auction for the Facilities will be held on October 2,
2003, at 9:00 a.m., prevailing Eastern Time, at the
offices of Debevoise & Plimpton or other place as the
Debtors will notify GGST and all Qualified Bidders. If
no Qualified Competing Bid is received by the bid
deadline, then the proposed Buyers will be the successful
bidders for the Facilities, the Agreements will be the
successful bids, and, at the Sale Hearing, the Debtors
will seek approval of and authority to consummate the
transactions contemplated by the Agreements; and
(e) The hearing to consider the sale of the Facilities to the
prevailing bidders will be held on October 7, 2003, at
3:30 p.m., prevailing Eastern Time, or as soon as counsel
and interested parties may be heard.
In sum, the Auction for the sale of the Facilities will be held
concurrently with, and as a part of, the previously scheduled
Auction for the proposed sale of the Assets and other Excluded
Assets. The schedule for the timing of competing bids and
auction date are thus modified slightly from those contemplated
by the Global Bidding Procedures. Mr. Winter notes that no
prospective bidder will be prejudiced by these slight variations,
and that the interests of efficiency and judicial economy will be
best served by simultaneously conducting the auctions of the
Assets, the Facilities and the other Excluded Assets.
Under the Columbus Facility Option Agreement, the closing must
occur within 30 days after the exercise of the option. In
addition, under the Phenix City Facility Sale Agreement, the sale
must be consummated within 120 days from the execution date of
the Phenix City Facility Sale Agreement.
Mr. Winter asserts that the Debtors' request to enter into the
agreements is warranted because:
(a) the proposed sales are supported by sound business
judgment;
(b) pursuant to Section 363(b) of the Bankruptcy Code, clear
business reasons exist to justify the Debtors' sales of
the Facilities;
(c) the sales of the Facilities are consistent with the
Debtors' plan to effect the orderly liquidation of their
estates;
(d) in satisfaction of Rule 2002 of the Federal Rules of
Bankruptcy Procedure, the Debtors will provide reasonable
and adequate notice of the proposed sales to interested
parties;
(e) the purchase prices provided in the Agreements represent
fair and reasonable purchase prices for the Facilities;
and
(f) the Agreements are the product of good faith, arm's-length
negotiations between the Debtors and the Buyers.
Mr. Winter adds that the Debtors are not aware of the existence
of any liens on the Facilities, other than those of the Debtors'
secured lenders, and certain municipal taxing authorities. In
this regard, the Debtors believe that their secured lenders and
the Taxing Authorities will affirmatively consent to the sales of
the Facilities.
Mr. Winter assures the Court that any holders of interests in the
Facilities will be adequately protected because their interests
will attach to the proceeds of the Facility sales, subject to any
claims defenses that the Debtors may possess. Accordingly, Mr.
Winter contends that the proposed sales of the Facilities should
be approved free and clear of claims and interests under Section
363(f) of the Bankruptcy Code.
With regards to the Broker Fees and IDB Payments, Mr. Winter
insists that the Debtors' request for these payments in
connection with the consummation of the Agreements should be
granted since:
(a) the Broker fees are fair and reasonable based on the
customary brokerage commissions for these types of
property; and
(b) the payment of the IDB Payments is necessary to regain
title to the Facilities, which is a prerequisite to their
sales to the Buyers. (Pillowtex Bankruptcy News, Issue No.
51; Bankruptcy Creditors' Service, Inc., 609/392-0900)
RESIDENTIAL ACCREDIT: Low-B Level Ratings Assigned to 2 Classes
---------------------------------------------------------------
Fitch rates Residential Accredit Loans, Inc., series 2003-QS18, as
follows:
-- $157.3 million classes A-1, A-P, A-V and R mortgage
pass-through certificates 'AAA';
-- $2.5 million class M-1 certificate 'AA';
-- $315,200 class M-2 certificate 'A';
-- $472,800 class M-3 certificate 'BBB';
-- $236,400 privately offered class B-1 certificate 'BB';
-- $157,600 class B-2 certificate 'B'.
Fitch does not rate the privately offered $236,780 class B-3
certificate.
The 'AAA' ratings on senior certificates reflect the 2.50%
subordination provided by the 1.60% class M-1, 0.20% Class M-2,
0.30% class M-3, 0.15% privately offered class B-1, 0.10%
privately offered class B-2 and 0.15% privately offered class B-3
(not rated by Fitch). Fitch believes the above credit enhancement
will be adequate to support mortgagor defaults as well as
bankruptcy, fraud and special hazard losses in limited amounts. In
addition, the ratings reflect the quality of the mortgage
collateral, strength of the legal and financial structures, and
Residential Funding Corp.'s servicing capabilities (rated 'RMS1'
by Fitch) as master servicer.
As of the cut-off date, Sept. 1, 2003, the mortgage pool consists
of 993 conventional, fully amortizing, 15-year fixed-rate,
mortgage loans secured by first liens on one- to four-family
residential properties, with an aggregate principal balance of
$157,586,251. The mortgage pool has a weighted average original
loan-to-value ratio of 64.86%. The pool has a weighted average
FICO score of 727, and approximately 57.05% and 4.11% of the
mortgage loans possess FICO scores greater than or equal to 720
and less than 660, respectively. Loans originated under a reduced
loan documentation program account for approximately 65.45% of the
pool, equity refinance loans account for 50.45%, and second homes
account for 1.75%. The average loan balance of the loans in the
pool is $158,697. The three states that represent the largest
portion of the loans in the pool are California (33.36%), Texas
(14.87%) and Florida (5.22%).
None of the Mortgage Loans are 'high-cost' home loans as defined
in the Georgia Fair Lending Act, as amended, the New York
Predatory Lending Law, the Arkansas Home Loan Protection Act, as
amended, or Kentucky Revised Statutes, as amended, or the Florida
Home Loan Protection Act, or the District of Columbia Home Loan
Protection Act.
All of the mortgage loans were purchased by the depositor through
its affiliate, Residential Funding, from unaffiliated sellers
except in the case of 37% of the mortgage loans, which were
purchased by the depositor through its affiliate, Residential
Funding, from HomeComings Financial Network, Inc., a wholly-owned
subsidiary of the master servicer. No other unaffiliated seller
sold more than approximately 7.8% of the mortgage loans to
Residential Funding. Approximately 90.8% of the mortgage loans are
being subserviced by HomeComings Financial Network, Inc. (rated
'RPS1' by Fitch).
Approximately 12.3% of the mortgage loans were originated by
Capitol Commerce Mortgage Co. which closed its offices and ceased
originating loans on or about Aug. 14, 2003. Residential Funding
represents and warrants to the trust in the Assignment and
Assumption Agreement that it has good title to and is the sole
owner of each mortgage loan, free and clear of any pledge, lien,
encumbrance and security interest, as of the cut-off date.
Residential Funding confirmed to Fitch that this representation
and warranty is also applicable on loans originated by Capitol
Commerce Mortgage Co.
The mortgage loans were originated under GMAC-RFC's Expanded
Criteria Mortgage Program (Alt-A program). Alt-A program loans are
often marked by one or more of the following attributes: a non-
owner-occupied property; the absence of income verification; or a
loan-to-value ratio or debt service/income ratio that is higher
than other guidelines permit. In analyzing the collateral pool,
Fitch adjusted its frequency of foreclosure and loss assumptions
to account for the presence of these attributes.
Deutsche Bank Trust Company Americas will serve as trustee. RALI,
a special purpose corporation, deposited the loans in the trust,
which issued the certificates. For federal income tax purposes, an
election will be made to treat the trust fund as a real estate
mortgage investment conduit.
RICA FOODS: Repays All Outstanding Indebtedness to Pacific Life
---------------------------------------------------------------
Rica Foods, Inc. (Amex: RCF) has repaid to Pacific Life Insurance
Company the entire amount of the Company's outstanding
indebtedness to PacLife.
During the first quarter of 1998, the Company completed a private
placement with PacLife of $20 million in notes payable, $8 million
of which was outstanding prior to the repayment, bearing an annual
interest rate of approximately 12%. In connection with the
private placement of the Notes, the Company entered into certain
negative covenants, restricting, among other things, the Company's
ability to provide collateral to other existing or potential
lenders. These restrictive covenants limited the Company's
ability to obtain additional financing from third parties.
To continue to allow the Company to fund its operations through
the use of debt financing and eliminate the restrictive covenants,
on September 24, 2003, the Company repaid the Outstanding PacLife
Indebtedness. The Company was not required to pay a prepayment
penalty to PacLife.
In order to obtain the necessary funds to repay PacLife, the
Company borrowed an aggregate of approximately $8.2 million,
denominated in dollars from a financial institution in return for
a promissory note payable on March 19, 2004. The New Loan bears
interest at an annual rate of prime plus 4.5%. The New Loan is
unsecured and does not impose upon the Company any material
restrictions on its business operations.
Although the Company has been exploring more cost-efficient and
longer-term sources of capital, the Company has not yet secured an
alternative long-term financing source that will insulate it from
the risks associated with the loss of one of its short-term
capital sources.
As reported in Troubled Company Reporter's September 1, 2003
edition, Rica Foods received a conditional waiver, effective as of
August 19, 2003, from Pacific Life Insurance Company with respect
to the Company's breach, during the fiscal quarter ended June 30,
2003, of certain negative covenants entered into in connection
with a private placement with PacLife of notes during the first
quarter of 1998.
As a condition of the waiver, the Company agreed that the
aggregate amount of loans to affiliates shall not be increased at
any time, and, if any of such loans are repaid, neither the
Company nor any of its subsidiaries shall make any additional
affiliate loans.
RIVERSTONE NETWORKS: Searching for New Chief Financial Officer
--------------------------------------------------------------
Riverstone Networks, Inc. (RSTN.PK) has commenced a search for a
new chief financial officer.
Robert Stanton, the Company's current executive vice president,
chief financial officer and secretary, has been with the Company
since August 2000 and will remain in his current role until the
new chief financial officer is in place.
Oscar Rodriguez, Riverstone's president and CEO, said, "I would
like to thank Bob for ongoing assistance through the transition."
Riverstone Networks, Inc. (RSTN.PK) provides carrier class
switches and routers for mission critical networks. From the
metropolitan edge to the campus network, Riverstone's advanced
technology delivers the control and reliability carriers,
government organizations, educational institutions and large
corporations require. Worldwide, operators of mission critical
networks trust Riverstone. For more information, visit
http://www.riverstonenet.com
As previously reported, the trustee for the Company's 3.75%
convertible subordinated notes due 2006 asserted that an event of
default had occurred under the Indenture and purported to declare
all amounts owing on the notes and under the Indenture to be
immediately due and payable. Riverstone disputed the trustee's
position and had notified the trustee that the trustee failed to
provide proper notice to commence the 60-day period, and that
therefore an event of default had not occurred and the trustee is
not entitled to declare any amounts to be immediately due and
payable.
ROBOTIC VISION SYSTEMS: Closes $4.75 Million Private Placement
--------------------------------------------------------------
Robotic Vision Systems, Inc. (NasdaqSC: RBVEC) has completed a
private placement of common stock, raising $4.75 million in gross
proceeds. The proceeds of the financing will be used for general
corporate purposes, including working capital to support growth.
A total of 9.5 million shares of common stock was sold at $0.50
per share. The private placement also includes warrants to
purchase up to 4.75 million shares at $0.61 per share on or before
September 26, 2008.
These securities, which have been purchased by accredited
investors, including certain of RVSI's current shareholders, have
not been registered under the Securities Act of 1933, as amended,
and may not be offered or sold in the United States absent
registration under the Securities Act and applicable state
securities laws or an applicable exemption from those registration
requirements. This press release shall not constitute an offer to
sell or the solicitation of an offer to buy any of these
securities.
Robotic Vision Systems, Inc. (NasdaqSC: ROBVE) -- whose June 30,
2003 balance sheet shows a total shareholders' equity deficit of
about $13 million -- has the most comprehensive line of machine
vision systems available today. Headquartered in Nashua, New
Hampshire, with offices worldwide, RVSI is the world leader in
vision-based semiconductor inspection and Data Matrix-based unit-
level traceability. Using leading-edge technology, RVSI joins
vision-enabled process equipment, high- performance optics,
lighting, and advanced hardware and software to assure product
quality, identify and track parts, control manufacturing
processes, and ultimately enhance profits for companies worldwide.
Serving the semiconductor, electronics, aerospace, automotive,
pharmaceutical and packaging industries, RVSI holds approximately
100 patents in a broad range of technologies. For more information
visit http://www.rvsi.com
ROBOTIC VISION SYTEMS: Names Jeff Lucas Chief Financial Officer
---------------------------------------------------------------
Robotic Vision Systems, Inc. (RVSI) (NasdaqSC: RBVEC) has named
Jeffrey P. Lucas as the company's Chief Financial Officer. The
appointment is effective immediately.
Mr. Lucas has served in a financial advisory capacity to the
company since May 2003.
"Jeff brings a wealth of experience in the financial management of
technology companies, as well as in financial turn-around
situations," said RVSI Chairman and Chief Executive Officer Pat V.
Costa. "In the past several months he has amply demonstrated that
his skills are well matched to RVSI's needs."
Mr. Lucas, 43, was previously Chief Financial Officer and Senior
Vice President at Micro Networks Corporation. Prior to that, he
was an audit manager with PricewaterhouseCoopers LLC. Mr. Lucas is
a Certified Public Accountant and a Chartered Financial Analyst
and holds an MBA from Harvard Business School.
Robotic Vision Systems, Inc. (NasdaqSC: RBVEC) has the most
comprehensive line of machine vision systems available today.
Headquartered in Nashua, New Hampshire, with offices worldwide,
RVSI is the world leader in vision-based semiconductor inspection
and Data Matrix-based unit-level traceability. Using leading-edge
technology, RVSI joins vision-enabled process equipment, high-
performance optics, lighting, and advanced hardware and software
to assure product quality, identify and track parts, control
manufacturing processes, and ultimately enhance profits for
companies worldwide. Serving the semiconductor, electronics,
aerospace, automotive, pharmaceutical and packaging industries,
RVSI holds more than 100 patents in a broad range of technologies.
For more information visit http://www.rvsi.com
ROGERS COMMS: Will Publish Third-Quarter Results on October 17
--------------------------------------------------------------
Rogers Communications Inc. (NYSE: RG; TSX: RCI.A and RCI.B) and
Rogers Wireless Communications Inc. (NYSE: RCN; TSX: RCM.B) plan
to release third quarter 2003 results prior to the market opening
the morning of Friday, October 17, 2003. The companies will host a
conference call with the financial community at 10:00 a.m. EST the
same day to discuss their operating results and outlook.
Those wishing to listen to the conference call should access the
live webcast on the Investor Relations section of Rogers' Web site
at http://www.rogers.comor http://www.rogers.com/webcast The
webcast will be available on Rogers' Web site for re-broadcast
following the conference call for approximately two weeks.
Members of the financial community wishing to ask questions during
the call may access the conference call by dialing (416) 641-6711
or (800) 440-1782 ten minutes prior to the scheduled start time
and requesting Rogers' third quarter 2003 earnings conference
call. A re-broadcast will be available following the conference
call by dialing (402) 977-9141 or (800) 633-8625, pass code
21161365.
To automatically receive Rogers' news releases by email, visit the
Investor Relations section of http://www.rogers.comand subscribe
to Email Alerts.
Rogers Communications Inc. (TSX: RCI.A and RCI.B; NYSE: RG)
(S&P/BB+ L-T Corporate Credit Rating/Negative) is Canada's
national communications company, which is engaged in cable
television, Internet access and video retailing through Rogers
Cable Inc.; digital PCS, cellular, and wireless data
communications through Rogers Wireless Communications Inc.; and
radio, television broadcasting, televised shopping, and publishing
businesses through Rogers Media Inc.
RURAL/METRO: Bank Agreement Extended Until December 31, 2003
------------------------------------------------------------
Rural/Metro Corporation (Nasdaq:RUREC) announced the extension of
its bank agreement through December 31, 2006, as well as
preliminary, unaudited results for the year ended June 30, 2003
and restatement adjustments on prior financial statements.
Summary of Unaudited 2003 Full-Year Results
For the full year fiscal 2003, the company reported unaudited net
revenue of $496.0 million, net income of $9.0 million, and
earnings per fully diluted share of $0.33, after the accretion of
preferred stock. By comparison, for the full year of fiscal 2002,
the company reported unaudited restated net revenue of $469.2
million, a net loss of $48.2 million, and a net loss per fully
diluted share of $3.17. The improvement in net income between
years is attributable to the $12.5 million gain on the sale of the
company's Latin American operations that occurred in the first
quarter of fiscal 2003 as well as the inclusion in fiscal 2002 of
a $49.5 million cumulative effect charge relating to the adoption
of Financial Accounting Standard No. 142, "Goodwill and Other
Intangible Assets," as of the beginning of fiscal 2002.
The company has released its unaudited fiscal 2003 results at this
time due to the timing of negotiations of the amendment to its
credit agreement as well as complexities relating to the
restatement of prior period financial statements, both of which
are discussed in more detail below. The company's consolidated
financial statements and related disclosures are not yet complete,
and there is a possibility that the accompanying preliminary
unaudited results will require revision. The company intends to
file its Form 10-Q for the three months ended March 31, 2003 and
Fiscal 2003 Form 10-K on or before October 14, 2003.
On July 17, 2003, the company received a letter from NASDAQ
indicating that, in addition to other requirements, the company's
March 31, 2003 10-Q and fiscal year ended 2003 10-K must be filed
by September 30, 2003 for continued listing of the company's
securities on the NASDAQ SmallCap Market. The company is working
with NASDAQ to extend that date to October 14, 2003 to coincide
with the SEC's filing requirements.
Restatement of Prior Financial Statements
During the third quarter of fiscal 2003, the Company determined
that collections of accounts receivable relating to medical
transportation revenue, primarily revenue recognized prior to
fiscal 2001, were substantially less than originally anticipated.
As a result, the related provisions for Medicare, Medicaid and
contractual discounts and doubtful accounts were inadequate. The
inadequacy of such provisions caused the Company's period-end
allowance for Medicare, Medicaid and contractual discounts and
doubtful accounts through March 31, 2003 to be understated. The
Company also determined that this situation was primarily caused
by inaccurate assumptions utilized in the provision estimation
process in use prior to fiscal 2001, as well as in the process
utilized to subsequently assess the adequacy of such allowance.
As a result of these matters, the Company determined that its
consolidated financial statements for prior periods required
restatement. The accompanying preliminary unaudited financial
information for the fiscal years ended June 30, 2003 and 2002 has
been restated for these matters. Additionally, the unaudited net
effect of the restatement adjustments for periods prior to July 1,
2001 was a reduction of accounts receivable and a corresponding
increase in accumulated deficit of $36.6 million.
Jack Brucker, President and Chief Executive Officer said, "This
was a complicated matter that required significant testing and
analysis to assure a complete and accurate accounting. We are
confident that we have implemented processes and procedures to
ensure that our future provisions for Medicare, Medicaid and
contractual discounts and doubtful accounts as well as the related
period-end allowance are adequate."
The company also has determined that $1.6 million of professional
fees incurred in the first quarter of fiscal 2003 in connection
with the September 2002 modification to its credit facility should
have been expensed rather than amortized over the term of the
facility. The related adjustments have been reflected in the
unaudited results for fiscal 2003.
Summary of Key Business Trends
The company reported continued positive trending within its key
operating statistics during the fiscal 2003. For the three months
ended June 30, 2003, same-service-area revenues increased by 5.1%
over the corresponding period in fiscal 2002. For the full year,
same-service-area revenues in fiscal 2003 increased by 5.9% over
the corresponding period in the prior year.
Cash collections also trended positively for fiscal 2003, showing
a 4.8% improvement over fiscal 2002 levels. For fiscal 2003, cash
collections averaged $1.8 million per day, compared to an average
of $1.7 million per day for fiscal 2002, representing an increase
in annual cash receipts of $25 million. Additionally, cash flow
provided by operating activities increased by 27.5% to $11.9
million in fiscal 2003 from $9.3 million in fiscal 2002.
Capital expenditures for fiscal 2003 increased by 37.1%, from $6.9
million in fiscal 2002 to $9.4 million in fiscal 2003. "We were
very pleased to make a significant capital investment in our
business this year as we sought to enhance and renew our national
fleet of ambulances in new and existing service areas," Brucker
said.
During the fourth quarter of fiscal 2003, the company continued to
win important renewal contracts for both medical transportation
and specialty fire protection services. These contracts included
long-term commitments for emergency and non-emergency ambulance
services in the communities of Aurora, Colo.; Tucson, Ariz.; and
Shelby County (Memphis area), Tenn. The company also entered into
renewal agreements to continue as the longstanding provider of
emergency medical services to the Indianapolis Motor Speedway in
Indiana, as well as airport fire protection services to the
Morristown Municipal Airport in New Jersey.
Amendment of Bank Agreement
As previously reported, the effect of the previously mentioned
restatement adjustments caused the company to be out of compliance
with the minimum tangible net worth covenant contained in its
amended credit facility. The company announced today that it has
reached an agreement with its lenders to further amend and extend
the credit facility, thereby returning the company to full
covenant compliance.
Specifically, the newly amended credit facility includes the
following key provisions: maturity date extended to December 31,
2006; no required principal payments until maturity; retention of
its LIBOR-based interest rate, currently set at 8.125%; and,
lenders received an 11% equity stake in the company through a
grant of Series C preferred shares that are convertible into the
Company's common shares, pending stockholder approval of an
increase in the number of authorized common shares. The
outstanding principal balance of the loan is $152.5 million.
Brucker continued, "We are very pleased to extend the loan through
2006 and believe that our banks have demonstrated a vote of
confidence in the long-term strategies of our business. As equity
investors in the company, our lenders continue to support our
efforts to enhance the company's performance and investment
value."
"We look forward to moving ahead during fiscal 2004 to demonstrate
our ability to achieve our financial goals and objectives. Our
near-term growth strategy continues to target expansion in
existing service areas as well as select opportunities in new
markets," he said.
Brucker added, "Another significant component of our business
strategy is to further strengthen cash collections while reducing
bad debt expenses through new, billing-oriented initiatives. We
have been successful in enhancing the capabilities of our
proprietary ambulance billing system, and we believe new
initiatives planned for the coming year will result in a greater
return for our stakeholders."
Rural/Metro Corporation provides emergency and non-emergency
medical transportation, fire protection, and other safety services
in 26 states and more than 400 communities throughout the United
States. For more information, visit the company's Web site at
http://www.ruralmetro.com
At June 30, 2003, Rural/Metro Corp.'s balance sheet shows a total
shareholders' equity deficit of about $209 million.
SAFETY-KLEEN: EPA Demands $1.6MM Pospetition Penalties Payment
--------------------------------------------------------------
Debtor Safety-Kleen Systems, Inc. owns and operates a facility
located at 1722 Cooper Creek Road in Denton, Texas. The Denton
facility is a solvent recycling and processing facility and is
permitted as a "Hazardous Waste Treatment Storage and Disposal
Facility." As a permitted facility engaged in the recycling of
hazardous wastes, it is a highly regulated business subject to
federal and state statutes and regulations designed to protect
human health, welfare and the environment. Hazardous waste
materials, including spent solvents, are brought to the facility
in individual containers and by tank truck. They are blended or
distilled and sold to cement kilns and industrial furnaces. The
Denton facility was inspected by the United States Environmental
Protection Agency from March 11 to March 15, 2002. The EPA
discovered 21 violations of the Clean Air Act and the Resource
Conservation and Recovery Act.
A. Clean Air Act Violations
(1) Failure to perform a work practice requirement --
Safety-Kleen failed to maintain 12 lines, in
volatile organic compound service, with dual valves,
plugs, caps, or blind flanges. Safety-Kleen also
operated multiple affected equipment without
required legible identification in the Fuel Blending,
Gun Cleaner, and "LUWA-1 " units of the facility,
in accordance with National Emissions Standard for
Hazardous Air Pollutants;
(2) Failure to operate and maintain required monitoring
equipment -- Safety-Kleen failed to continuously
record data from a continuous pressure monitor on
the closed vent system;
(3) Failure to submit complete reports -- Safety-Kleen
failed to submit complete Startup, Shutdown, and
Malfunction reports. Periodic excess emissions
reports were submitted by Safety-Kleen, but did not
meet the requirements for Startup, Shutdown, and
Malfunction Reports;
(4) Failure to keep required records -- Safety-Kleen
failed to maintain records of the planned routine
maintenance to be performed on the control device,
a regenerative thermal oxidizer;
(5) Failure to report or notify -- Safety-Kleen failed
to submit upsets reports detailing multiple
excursions (RTO temperatures) below required permit
limits, in accordance with a permit issued by the
State of Texas;
(6) Failure to make a required notification and failure
to keep required records -- Safety-Kleen failed to
notify the EPA Administrator of construction of a
New Source Performance Standards Subpart DC boiler,
and failed to maintain records of fuel combusted
each day;
(7) Failure to perform a work practice requirement --
Safety-Kleen failed to perform repairs of affected
leaking equipment, in VOC service, within the
regulatory time frame;
(8) Failure to perform a work practice requirement --
Safety-Kleen failed to mark each affected piece of
equipment in VOC service;
(9) Failure to keep required records -- Safety-Kleen
failed to record dates of each repair attempt, or
the repair methods applied in each attempt to repair
leaks on affected equipment in VOC service;
(10) Failure to perform a work practice requirement --
Safety-Kleen failed to conduct leak detection and
monitoring practices;
(11) Failure to perform a work practice requirement --
Safety-Kleen failed to calibrate the leak detection
monitoring instrument with proper calibration gas.
Zero gas was not used and the 500 ppm calibration
gas was + 5% accurate rather than + 2% accurate;
(12) Failure to keep complete records -- Safety-Kleen
failed to maintain complete records of Method 21 leak
detection monitoring, including background readings
and maximum concentrations indicated for each leak;
(13) Failure to respond to request for information --
Safety-Kleen failed to respond to a verbal request
for information related to a "self-audit; and
(14) Failure to perform a work practice standard --
Safety-Kleen failed to properly purge sample points
in VOC service.
B. Resource Conservation And Recovery Act Violations
(1) Failure to use appropriate test methods and
procedures when performance-testing the thermal
oxidizer -- Documents reviewed at the facility
indicated that Safety-Kleen used Method 4 and
Method 26A when performance-testing the thermal
oxidizing unit. The appropriate methods to use
in a performance test on a control device are
Method 2 and Method 18;
(2) Failure to appropriately distinguish equipment, which
relates to subpart BB -- Safety-Kleen failed to mark
all equipment (to which Subpart BB applies) in a
manner, which makes it readily distinguishable from
other pieces of equipment;
(3) Failure to equip open-ended valves with closure
devices -- In the Fuel Blending, Gun Cleaner, and
distillation areas of the facility, several
open-ended valves were not equipped with a cap,
blind flange, plug, or a second valve; or the
second valve was not kept closed when not in use;
(4) Failure to comply with test methods and procedures
for equipment leak detection -- Safety-Kleen's
monitoring method under Subpart BB was inadequate,
because Safety-Kleen:
a. failed to use zero air to calibrate the
instrument;
b. did not monitor long enough to meet the
response time of their instrument; and
c. utilized a monitoring instrument that was
equipped with a filter on the end of the
line that prevented close contact with the
sampling areas;
(5) Failure to repair leaks detected within a 15-day time
period -- Several leaking valves were discovered
which were not repaired within the 15-day time
period. For example, Work Order 27095 shows a valve
that was allowed to leak for 29 days;
(6) Failure to record first attempt to repair equipment
leak -- At the time of the investigation,
Safety-Kleen was not recording the date it made the
first attempt at repair; and
(7) Failure to maintain record keeping requirements for
tank inspection -- Safety-Kleen failed to maintain an
inspection log for each tank.
The Penalties
The maximum penalty for violations of the Clean Air Act and the
Resource Conservation and Recovery Act is $27,500 per day of
violation. Each day of violation is a separate violation. The
amount of civil penalties to be assessed for the violations
alleged is committed to the "informed discretion" of the presiding
Court. With respect to the alleged CAA violations, Congress has
provided guidance to the Courts in assessment of civil penalties.
In addition to such factors as justice may require, the Court
should take into consideration:
(1) the size of the business;
(2) the economic impact of the penalty on the business;
and
(3) the violator's full compliance history and good faith
efforts to comply, the duration of the violations, the
economic benefit of noncompliance and the seriousness
of the violations.
Unlike the CAA, RCRA does not contain statutory "Penalty
Assessment Criteria," but there is a body of case law on
assessment of civil penalties. Like the Clean Air Act, under
RCRA, the amount of a civil penalty assessment is committed to the
informed discretion of the Court. However, in exercising
discretion, the court should give effect to the major purpose of a
civil penalty -- deterrence. When assessing civil penalties,
courts seek to deter both the individual defendant and other
potential violators. One court assessing civil penalties under
the Clean Air Act stated:
Civil penalties are imposed "first, to discourage the
offender himself from repeating his transgression; and
second, to deter others from doing likewise." They
"should be large enough to hurt, and to deter anyone in
the future from showing as little concern as [the
defendant] did for the need to [comply]."
In short, civil penalties under RCRA are "essentially regulatory,
seeking to enhance compliance with RCRA rather than impose penal
sanctions on those who violate the statute." The underlying
purpose of deterrence informs the amount of the civil penalty to
be assessed. As one court assessing civil penalties under RCRA
noted:
To serve a deterrent function, the penalty must be high
enough so that noncompliance presents a substantial
monetary risk for the polluter. In addition, the civil
penalty must be large enough to ensure that polluters
cannot simply absorb the penalty as a cost of doing
business.
To ensure that a civil penalty cannot be absorbed as a cost of
doing business, courts have generally set civil penalties high
enough to recapture the economic benefit, which a defendant gained
from violating the law. Economic benefit "should serve as a floor
below which the civil penalty will not be mitigated."
Drawing from the criteria enumerated in other environmental
statutes, courts assessing civil penalties under RCRA have
generally considered these factors:
(1) the seriousness of the harm caused by a defendant's
violations;
(2) the scope of the violations;
(3) a defendant's good faith in attempting to
rectify the violations; and
(4) the economic benefit accrued by a defendant.
Evidence of a defendant's conduct should be considered after the
maximum statutory penalty has been determined. As the Fifth
Circuit recently stated, "we note that when imposing penalties
under the environmental laws, courts often begin by calculating
the maximum possible penalty, then reducing that penalty only if
mitigating circumstances are found to exist."
In Safety-Kleen's case, the EPA does not believe that it can parse
out specific dollar amounts which measure the economic benefit
Safety-Kleen realized through its violations, but it will argue
that in the highly regulated business of solvent recovery, the
avoidance of regulatory requirements results in a competitive
advantage to the violator which its law-abiding competitors do not
enjoy.
It is self-evident that failing to maintain records saves the cost
of hiring a new employee or training a current employee to do
perform that task. Similarly, there is a clear saving in not
acquiring proper testing equipment and not training employees in
the operation of that equipment. Not testing for leaks saves the
time involved in testing and the costs associated with fixing such
leaks. Failing to install required valves saves money.
In short, Safety-Kleen's violations are the kinds of maintenance
expenditures, which hazardous waste recycling facilities are
required to make, and not having the equipment or properly trained
personnel to do them or simply not performing them confers an
economic advantage on the violator.
Postpetition Civil Penalties are Administrative Expenses
Section 959(b) of Title 28 United States Code (1982)
provides that:
(b) Except as provided in section 1166, a trustee,
receiver or manager appointed in any cause pending in
any court of the United States, including a debtor in
possession, shall manage and operate the property in
his possession as such trustee, receiver or manager
according to the requirements of the valid laws of the
State in which such property is situated, or in the
same manner that the owner or possessor thereof would
be bound to do if in possession thereof.
The debtor-in-possession is required to comply with laws to
protect the environment, and the Supreme Court has made it clear
that the debtor must comply with federal as well as state
statutes. When, a debtor-in-possession pursuant to a Chapter 11
reorganization has violated environmental laws postpetition, civil
penalties can be assessed and these penalties are entitled to
administrative expense status.
The alleged postpetition violations and the penalty amounts have
not been litigated in any other forum. The violations can be
adjudicated in the Bankruptcy Court and the penalty amounts are
committed to the informed discretion of the Court. EPA has
calculated an estimated civil penalty equal to $1,653,902. Of
this total, $1,566,402 arises from the 14 alleged violations of
CAA and $97,500 arises from the seven alleged RCRA violations. In
determining penalty amounts, courts generally look to the
statutory maximum and adjust the amount by factors set forth in
the statute or as articulated in the body of case law. EPA wants
Judge Walsh to assess the maximum penalty.
On the EPA's behalf, Thomas L. Sansonetti, Esq., Assistant
Attorney General, Environment and Natural Resources Division of
the U.S. Department of Justice, acting through W. Benjamin
Fisherow, Esq., Deputy Section Chief, Paul J. Schaeffer, Esq., and
Alan S. Tenenbaum, Esq., with the Environmental Enforcement
Section in Washington, D.C., and Richard G. Andrews, Esq., Acting
United States Attorney for the District of Delaware, represented
by Ellen Slights, Esq., Assistant United States Attorney in
Wilmington, ask Judge Walsh to allow and compel the Debtors to pay
the postpetition penalties as administrative expenses. (Safety-
Kleen Bankruptcy News, Issue No. 65; Bankruptcy Creditors'
Service, Inc., 609/392-0900)
SOLUTIA INC: Receives Commitment to Refinance Credit Facility
-------------------------------------------------------------
Solutia Inc. (NYSE: SOI) has received a firm commitment from a
lender to refinance its existing revolving credit facility and
anticipates finalizing the transaction shortly.
Further information regarding the company's new credit facility
will be provided at the time the transaction is consummated. In
the interim, to facilitate the finalization of legal
documentation, the company sought and received, at no additional
fee, an amendment granting relief from certain financial covenants
in its existing $300 million revolving credit facility for the
period of Sept. 30, 2003 through Oct. 8, 2003.
Solutia -- http://www.Solutia.com-- (Fitch, B- Senior Secured
Bank Facility and CCC Senior Secured Notes Ratings, Negative) uses
world-class skills in applied chemistry to create value-added
solutions for customers, whose products improve the lives of
consumers every day. Solutia is a world leader in performance
films for laminated safety glass and after-market applications;
process development and scale-up services for pharmaceutical fine
chemicals; specialties such as water treatment chemicals, heat
transfer fluids and aviation hydraulic fluid and an integrated
family of nylon products including high-performance polymers and
fibers.
SPIEGEL INC: FCNB Unit's Floating Rate Note Ratings Downgraded
--------------------------------------------------------------
Fitch Ratings downgrades First Consumers Credit Card Master Note
Trust, Series 2001-A class A, class B, and class C notes as
indicated below. All ratings are removed from Rating Watch
Negative.
-- $272 million outstanding Class A Floating Rate Asset Backed
Notes to 'BB' from 'A'.
-- $63 million outstanding Class B Floating Rate Asset Backed
Notes to 'CCC' from 'BB+'.
-- $36 million outstanding Class C Floating Rate Asset Backed
Notes to 'B-' from 'BB+'.
The rating actions result from the ongoing deterioration of master
trust performance variables during the early amortization period,
which commenced in March 2003. Fitch previously downgraded the
ratings on series 2001-A on February 24, 2003 and they have
remained on Rating Watch Negative since that date. The OCC issued
First Consumers a Temporary Cease and Decist Order on March 13,
2003 and the bank subsequently undertook actions to exit the card
business and transfer servicing of the portfolio. First National
Bank of Omaha was appointed successor servicer on June 30, 2003
and the servicing fee was elevated to 4.35%. As anticipated,
performance variables exhibited heightened volatility during the
period when FNBO assumed servicing although the September
servicing report indicates some stabilization.
The class A certificates have $272 million remaining principal
outstanding from an initial $462 million. The 'BB' rating on the
class A certificates indicates there is a possibility of credit
risk developing although available enhancement is deemed
sufficient to address that risk at this time. The two notch
difference between the class C and class B note ratings indicates
the severity of principal loss is expected to be worse for the
class B notes. Class C noteholders benefit from a dedicated spread
account that is fully funded with $36 million at present and will
be available to cover current interest and principal shortfalls at
maturity for class C only. All classes benefit from subordination
of an unrated collateral interest which has been written down to
$17.7 million from its initial $39 million.
Performance deteriorated rapidly since charging privileges were
revoked and the trust entered early amortization in March after
breaching its base rate trigger. Chargeoffs are expected to worsen
going forward as a result of adverse selection and a trend toward
higher late stage delinquencies. Likewise monthly payment rates
have slowed significantly and are expected to decrease further as
more of the higher quality borrowers pay off their balances,
leaving investors exposed to a growing proportion of lower quality
minimum payors.
On March 17, 2003 Spiegel, Inc., FCNB's parent company, filed for
bankruptcy protection under Chapter 11.
SYMBOL TECHNOLOGIES: Receives Favorable Verdict in Patent Case
--------------------------------------------------------------
Symbol Technologies, Inc. (NYSE:SBL) received a favorable verdict
on counterclaims filed against it by Proxim Corp. in a patent
lawsuit between these two companies. The jury found that the
Symbol products did not infringe the Proxim patent, which relates
to wireless medium access control protocols.
The verdict, which was announced Monday in the United States
District Court for the District of Delaware, was part of a larger
patent case involving wireless local area networking technology.
On September 15, as part of that case, a different jury found that
Proxim products infringed certain Symbol patents. In the earlier
verdict, the jury awarded Symbol six percent royalties on Proxim's
past sales of infringing products for an approximate total of $23
million, before interest. Now that this countersuit has been
decided, Symbol will ask the court to enter a judgment on the jury
verdicts.
"We are pleased with the jury's verdict as we believed all along
that our products did not infringe any Proxim patent," said
Richard Bravman, Symbol chief executive officer and acting
chairman.
Symbol Technologies, Inc. delivers enterprise mobility solutions
that enable anywhere, anytime data and voice communication
designed to increase productivity, reduce costs and realize
competitive advantage. Symbol systems and services integrate
rugged mobile computing, advanced data capture, wireless
networking and mobility software for the world's leading
retailers, transportation and logistics companies and
manufacturers as well as government agencies and providers of
healthcare, hospitality and security. More information is
available at http://www.symbol.com
As reported in Troubled Company Reporter's September 19, 2003
edition, Symbol Technologies reached agreement with its bank group
to extend the Company's credit facility waiver for 60 days. The
waiver allows Symbol additional time to become current with its
periodic filings with the Securities and Exchange Commission.
As part of the agreement, Symbol reduced the credit facility from
$350 million to $100 million. The credit agreement originally was
signed in late 1998 and will expire by its terms in January 2004.
The previously reported investigations by the SEC and the U.S.
Attorney's office are ongoing. The Company intends to file with
the SEC its 2002 Annual Report on Form 10-K as well as Forms 10-Q
for the 2003 first and second quarters upon the completion of
their audits by the Company's external auditors.
TRANSMONTAIGNE INC: Files Annual Report on SEC Form 10-K
--------------------------------------------------------
TransMontaigne Inc. (AMEX:TMG) announced financial results for the
three months and the fiscal year ended June 30, 2003. The Company
today filed its Annual Report on Form 10-K with the Securities and
Exchange Commission.
Net earnings for the fiscal year ended June 30, 2003, were $6.8
million compared to $8.6 million for the fiscal year ended 2002.
Net earnings in the current fiscal period were impacted by
inventory gains recognized, gains deferred, and lower of cost or
market write-downs, which affects comparability amongst the
periods. TransMontaigne believes that Operating results for debt
covenant compliance, which eliminates the impact of these
inventory adjustments, is a useful measure to evaluate and compare
performance between reporting periods.
Operating results for debt covenant compliance for the fiscal year
ended June 30, 2003, were $61.5 million, as compared to $64.3
million during the fiscal year ended June 30, 2002. Operating
results for debt covenant compliance for the first through fourth
quarters of the current fiscal year were $8.5 million, $14.9
million, $16.3 million and $21.8 million, respectively. The $2.8
million decrease for the current fiscal year was due to the
combination of lower light oil marketing margins during the first
fiscal quarter offset by increased terminaling and heavy oil
marketing margins in the third and fourth quarters, primarily
related to our February 28, 2003, Coastal Fuels acquisition.
Reported sales for the fiscal year ended June 30, 2003, were $8.3
billion, up from $6.1 billion for the prior year. For the three
months ended June 30, 2003, gross sales revenues were $2.2 billion
as compared to $2.0 billion for the prior comparable period.
Revenues from deliveries of physical product are now being
presented on a gross basis on the face of the Statement of
operations in accordance with EITF 02-03. In the prior fiscal
year, the Company had been reporting sales revenues net of product
costs on the Statement of operation in accordance with the initial
consensus on EITF 02-03. Effective this current fiscal year, sales
again are reported on a gross sales basis and have been recast for
all previous reporting periods.
Prior to October 1, 2002, the Company marked to market its
discretionary inventory volumes held for immediate sale or
exchange in accordance with the Emerging Issues Task Force
guidance issued in EITF 98-10. On October 25, 2002, new guidance
was issued in EITF 02-03 that rescinded the guidance provided in
EITF 98-10 and requires that our discretionary inventories be
carried at the lower of cost or market effective October 1, 2002.
During periods of rising product prices, such as the quarter ended
June 30, 2003, losses on our risk management activities from
hedging our discretionary inventory would be recognized in periods
preceding the actual sale of that inventory. EITF 02-03 requires
that the current $5.9 million excess market value over cost of our
discretionary inventory held for immediate sale or exchange on
June 30, 2003, be deferred until that inventory is sold to our
customers, thereby lowering reported operating income during the
fourth fiscal quarter. Correspondingly, our first quarter of 2004
fiscal year, will benefit from these lower cost inventories being
sold into a higher priced market. This transfer of net operating
margins between reporting periods, caused by the new EITF 02-03
guidance, will only be significant if the value of petroleum
products is rising at the end of our reporting periods. During
periods of stable or declining product prices, period over period
GAAP operating income results will more closely reflect the
reported Operating results for debt covenant compliance.
During this current fiscal year, we have significantly
restructured our working capital facility, our long-term debt
facility and redeemed our Series A Convertible Preferred Stock.
Specifically, on February 28, 2003, we executed a new credit
agreement with UBS AG that provides for a $275 million working
capital credit facility, secured only by our current accounts
receivable and inventory, and entered into a $200 million Senior
Secured Term Loan. Proceeds from the Senior Secured Term Loan were
used to consummate the previously mentioned acquisition of the
Coastal Fuels assets. On May 30, 2003, we consummated the issuance
of $200 million aggregate principal amount of 9-1/8% unsecured
Senior Subordinated Notes due 2010 and utilized these proceeds to
repay the $200 million Senior Secured Term Loan to UBS AG leaving
our terminals and pipelines unencumbered. Then, on June 30, 2003,
the Company redeemed the remaining outstanding shares of Series A
Convertible Preferred Stock for approximately $24.4 million in
cash. In combination, these new credit facilities and the
preferred stock redemption provide the Company considerable
financing flexibility for future growth and expansion.
Attached is supplemental information regarding the reconciliation
of our operating results for debt covenant compliance to EBITDA
and net earnings before change in accounting principle.
CONFERENCE CALL
TransMontaigne Inc. also announced has scheduled a conference call
for Wednesday, October 1, 2003, at 11:00 a.m. (EDT) regarding the
above information. Analysts, investors and other interested
parties are invited to listen to management's presentation of the
annual results and the supplemental financial information by
accessing the call as follows: 888-273-9887 Ask for:
TransMontaigne
A playback of the conference call will be available from 12:30
p.m. (MDT) on Wednesday, October 1, 2003, until 11:59 p.m. (MDT)
on Wednesday, October 8, 2003 by calling: USA: 800-475-6701
International: 320-365-3844 Access Code: 700433
TransMontaigne Inc. (S&P, BB Corporate Credit Rating, Stable
Outlook) is a refined petroleum products distribution and supply
company based in Denver, Colorado, with operations in the United
States, primarily in the Gulf Coast, Midwest and East Coast
regions. The Company's principal activities consist of (i)
terminal, pipeline, and tug and barge operations, (ii) supply,
distribution and marketing and (iii) supply management services.
The Company's customers include refiners, wholesalers,
distributors, marketers, and industrial and commercial end-users
of refined petroleum products. Corporate news and additional
information about TransMontaigne Inc. is available 24 hours a day,
7 days a week on the Company's Web site:
http://www.transmontaigne.com
UNUMPROVIDENT CORP: Names Thomas Watjen Company President & CEO
---------------------------------------------------------------
UnumProvident Corporation (NYSE: UNM) announced that its Board of
Directors has appointed Thomas R. Watjen president and chief
executive officer. Watjen has been serving as the company's
president and CEO on an interim basis since March 2003.
"After a thorough external search, the Board of Directors has
unanimously approved Tom Watjen as president and chief executive
officer of UnumProvident," said C. William Pollard, co-chairman of
the Office of Chairman of the Board. "He is an experienced leader
with knowledge and understanding of the company and also has
proved his ability to execute. During the past six months, Tom
has led in improving the financial strength of the company and has
developed a momentum and direction for the future. Under his
leadership, the company raised more than $1 billion in new capital
and initiated changes to improve the quality of our investments.
He also has provided an open environment within the company that
encourages confidence and trust among our people. We are
confident Tom is the right leader for UnumProvident."
UnumProvident's board of directors initiated the search for a new
chief executive in March 2003, naming outside director John W.
Rowe to lead a search committee assisted by executive recruiting
firm Heidrick & Struggles. At that time, the board said it would
consider Watjen as well as external candidates.
"We conducted an exhaustive search and after considering a number
of outstanding executives, the Board concluded that nobody is
better qualified than Tom Watjen to lead this company," added
Lawrence R. Pugh, co-chairman of the Office of Chairman of the
Board. "In addition to being an outstanding leader, Tom is a man
of strong values and high integrity, a combination that will
continue to serve UnumProvident and its stakeholders well."
"I am both excited and honored to have earned the support and
confidence of our board of directors," said Watjen.
"UnumProvident is an outstanding company with a sound business
model, strong customer base and more than 13,000 dedicated
employees. While undoubtedly there will be more challenges ahead,
I am confident we can enhance our market leadership position for
the benefit of our customers and employees while creating long-
term value for our shareholders."
Watjen added, "My primary goal is to position UnumProvident to
consistently meet or exceed the expectations of our key
constituents, including shareholders, customers and of course our
employees. We will continue to build upon and execute a business
plan focused on our strengths. We have instilled, and will
continue to instill, stronger financial discipline in all that we
do to further improve the company's profitability and overall
financial position. At the same time, we will operate with the
highest ethical standards.
"We have made great strides over the past six months, and I look
forward to building off this momentum in the months ahead," he
said. "As we deliver on these commitments, I am certain we will
continue to earn the full confidence of all of our key
constituents."
Watjen, 49, joined Provident Companies Inc. in 1994 as executive
vice president and chief financial officer. In March 1997 he was
named vice chairman and a director. In June 1999, following the
merger of Unum Corporation and Provident, Watjen became executive
vice president, finance and risk management, for UnumProvident.
In May 2002, he was named vice chairman and chief operating
officer and elected to the board of directors. He was appointed
president and chief executive officer on an interim basis in
March 2003.
Prior to joining Provident, Watjen was a managing director at
Morgan Stanley and Company. He also worked as a partner with
Conning & Company and in corporate finance at Aetna Life and
Casualty. Watjen earned a bachelors degree in economics from the
Virginia Military Institute and a master of business
administration degree from the Darden School at the University of
Virginia.
Both Pollard and Pugh will continue in their roles as co-chairmen
of the Office of Chairman of the Board. The company established
the Office of the Chairman of the Board in March 2003 to increase
the exchange of information between the CEO and the Board. "We
have found this arrangement to be very useful," said Watjen.
"Information is exchanged on a more continuous and timely basis,
and we have the benefit of the experience of two former CEOs of
public companies. Additionally, this structure is consistent with
the trends in corporate governance to separate the position of
Chairman of the Board from that of the CEO. I look forward to
working closely with both Larry and Bill as co-chairs."
UnumProvident is the largest provider of group and individual
disability income protection insurance in North America. Through
its subsidiaries, UnumProvident insures more than 25 million
people and paid $4.8 billion in total benefits to customers in
2002. With primary offices in Chattanooga, Tenn., and Portland,
Maine, the company employs more than 13,000 people worldwide. For
more information, visit http://www.unumprovident.com
* * *
As previously reported, Standard & Poor's Ratings Services
affirmed its ratings on various UnumProvident Corp.-related
synthetic transactions and removed them from CreditWatch where
they were placed Feb. 18, 2003.
These rating actions follow the affirmations of the ratings on
the related securities, and their removal from CreditWatch. A
copy of the UnumProvident Corp.-related summary analysis, dated
May 8, 2003, can be found on RatingsDirect, Standard & Poor's
Web-based credit analysis system, at www.ratingsdirect.com.
RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH
CorTS Trust for Provident Financing Trust I
$52 million corporate-backed trust securities certificates
Rating
Class To From
Certs BB BB/Watch Neg
CorTS Trust II for Provident Financing Trust I
$87 million corporate-backed trust securities certificates
Rating
Class To From
Certs BB BB/Watch Neg
CorTS Trust III for Provident Financing Trust I
$26 million corporate-backed trust securities certificates
Rating
Class To From
Certs BB BB/Watch Neg
CorTS Trust for Unum Notes
$25 million corporate-backed trust securities certificates
Rating
Class To From
Certs BBB- BBB-/Watch Neg
PreferredPLUS Trust Series UPC-1
$32 million PreferredPLUS trust series UPC-1 certificates
Rating
Class To From
Certs BBB- BBB-/Watch Neg
UPC DISTRIBUTION: S&P's Watch Implications Revised to Positive
--------------------------------------------------------------
Standard & Poor's revised the CreditWatch implications of Denver,
Colo.-based European cable operator UGC Europe Inc.'s (formerly
United Pan-Europe Communications N.V.) funding entity, UPC
Distribution Holding B.V., to positive from developing to reflect
parent UGC Europe's emergence from bankruptcy on Sept. 3. The
corporate credit rating on UPC Distribution Holding B.V. is
'C'.
UGC Europe filed for bankruptcy in December 2002; however, UPC
Distribution Holding B.V. was able to obtain waivers and
amendments that eliminated the cross-default provision under the
bank agreement, and UPC Distribution Holding continues to service
the bank facility, which totaled $3 billion at June 30, 2003.
US AIRWAYS: Seeks Clearance for Settlement with Lump Sum Parties
----------------------------------------------------------------
The Reorganized US Airways Debtors and the Lump Sum Settling
Parties have agreed to resolve their disputes. By this motion,
the Debtors ask the Court to approve their settlement agreement.
The Lump Sum Settling Parties include Mardi LoFaso and 18 Lump
Sum Pilots who are members of US Airways' Air Line Pilots
Association, International:
1. William Bowen,
2. Donald Bullerdick,
3. Howard Collins,
4. Al Dasher,
5. Angelo Funicello,
6. Carl Gamble,
7. Darrell Giffin,
8. Gary Gronewald,
9. Virgil Harris,
10. Gerald Hartman,
11. Oliver Holmes,
12. Earl Kramer
13. Joseph LoFaso,
14. Theodore Restel
15. David Robbins,
16. Stephen Rohl,
17. Larry Stotts, and
18. Victor Ventura.
According to John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate,
Meagher & Flom, in Chicago, Illinois, the Settlement relates to
the Debtors' pension plans, including:
* the Target Benefit Plan for pilots of US Airways, Inc.,
* the non-qualified "Pilot Top Hat Plan", and
* the Retirement Income Plan for Pilots of US Airways, Inc.
-- the DB Pension Plan.
Without the Settlement, the parties will remain embroiled in
disputes concerning, among other things, the grievances against
US Airways under its Collective Bargaining Agreement with ALPA
relating to US Airways' action to terminate the DB Pension Plan,
an appeal on the order approving the distress termination of the
DB Plan and claims under the Target Plan and Top Hat Plan. The
costs of these continued disputes could be excessive for both
parties.
The Settlement provides in part that:
(i) US Airways will pay to the Settling Parties $4,000,000;
(ii) US Airways will cause the trustee of the Target Plan to
pay to Donald Bullerdick and Gerald Hartman their
current account balances;
(iii) US Airways will pay to Brown Rudnick Berlack Israels LLP
$200,000 for attorney's fees and costs, and the costs
other professionals incurred in connection with the
Lump Sum Grievances and related matters; and
(iv) The Lump Sum Settling Parties will release, absolve
and discharge US Airways, the DB Pension Plan, the
Target Plan and Pilot Top Hat Plan, Pension Benefit
Guaranty Corporation, and ALPA with respect to and from
any and all claims. The Lump Sum Settling Parties
reserve any rights that they may have against PBGC
pursuant to Title IV of ERISA and regulations thereunder
for benefit payments in respect of the terminated DB
Pension Plan.
On the Petition Date, Mr. Butler relates that Debtors maintained
seven tax-qualified defined benefit pension plans, including the
DB Pension Plan, each of which was covered by the pension plan
termination insurance program established under Title IV of
ERISA. Under the Internal Revenue Code and ERISA, the Debtors
could incur certain minimum funding obligations to the pension
plans each year.
By November 2003, the combination of decreased revenue and
increased pension obligations made it impossible for the Debtors
to support their pension contributions and also meet the terms of
their emergence business plan. To address the pension funding
issue, the Debtors were forced to revise their business plan to,
among other things, project reduced contributions to the DB
Pension Plan.
The Debtors' ability to access their $1,240,000,000 exit
financing and equity investments became conditioned on resolution
of the pension funding issue. Mr. Butler relates that the Air
Transport Stabilization Board conditioned its approval of a
$1,000,000,000 loan guarantee on a requirement that the Debtors'
pension funding issue be resolved. Similarly, the Debtors could
not obtain access to their $240,000,000 equity investment or
obtain financing for the acquisition of regional jets -- a
critical component of their revised business plan -- absent
resolution of the pension funding issue. After exploring every
legal option reasonably available to address the pension funding
issue, the Debtors concluded that the only viable option was to
seek a distress termination of the DB Pension Plan.
On January 30, 2003, the Debtors gave all the participants in the
DB Pension Plan, including the Lump Sum Pilots, notice of their
intent to terminate the DB Pension Plan. The Debtors proposed to
establish a new Defined Contribution Plan for their pilots.
In response, the Lump Sum Pilots immediately filed Lump Sum
Grievances against US Airways. On February 21, 2003, the Court
began a four-day evidentiary hearing on the Debtors' Distress
Termination request. At the conclusion of the hearing, the Court
issued an oral ruling from the bench finding that the Debtors
satisfied the financial requirements for a distress termination
of the DB Pension Plan and authorizing the termination of the DB
Pension Plan, subject to a determination that doing so would not
violate the Collective Bargaining Agreement. Consistent with its
ruling, the Court entered the Distress Termination Order on
March 2, 2003, and later issued a supplemental Memorandum Opinion
on March 7, 2003.
The Lump Sum Pilots filed a notice of appeal on March 11, 2003,
seeking reconsideration of the Distress Termination Order.
On March 21, 2003, ALPA and the Debtors reached an agreement to
terminate the DB Pension Plan effective March 31, 2003. The
agreement amends the parties' Collective Bargaining Agreement to
permit the completion of the distress termination of the DB
Pension Plan and to implement a defined contribution replacement
plan for the pilots. Six days later, the Lump Sum Pilots filed a
complaint before the United States District Court for the Eastern
District of Virginia seeking to enjoin PGBC from terminating the
DB Pension Plan until the appeal of the Distress Termination
Order was resolved.
On March 28, 2003, the PBGC entered into an agreement with US
Airways terminating the DB Pension Plan. The parties established
March 31, 2003 as the Termination Date. PBGC was appointed
trustee of DB Pension Plan.
With the Settlement, Mr. Butler asserts, the Reorganized Debtors
ensure themselves that the Lump Sum Grievances and other claims
of the Lump Sum Settling Parties do not affect the distress
termination of the DB Pension Plan or otherwise impose additional
costs on their estates. Through the distress termination, the
Debtors were able to resolve the pension funding issue, which was
a condition to their ability to access the $1,240,000,000 exit
financing and equity investments, as well as a condition to the
consummation of their Plan. While the Debtors have defenses to
the Lump Sum Grievances and other claims, the likelihood of
success of litigation always is uncertain and requires additional
expenditures of time and resources. (US Airways Bankruptcy News,
Issue No. 38; Bankruptcy Creditors' Service, Inc., 609/392-0900)
U.S. RESTAURANT: Gets Commitment for Credit Facility & Term Loan
----------------------------------------------------------------
U.S. Restaurant Properties, Inc. (NYSE:USV) announces it:
-- has obtained commitments for a new credit facility and a term
loan,
-- is providing an update on various business developments,
-- will modify its method for calculating its Funds From
Operations and
-- confirms FFO guidance for the remainder of the year.
New Revolving Credit Facility
The Company has received a commitment letter for a new $50.0
million secured revolving credit facility of which Bank of
America, N.A., the lead lender, has committed to provide $30.0
million. The remainder will be syndicated on a best efforts basis.
With successful syndication, the term of the facility will be
three years with no renewal options; otherwise the term would be
two years with a one-year extension option. The annual interest
rate will be LIBOR plus 300 basis points. The credit facility
provides that up to $5.0 million may be used for letters of
credit. Borrowings under the revolving credit facility will be
secured by certain assets of the Company and its subsidiaries.
Borrowings under the new credit facility would be used to fund
property acquisitions and for general corporate purposes. The
commitment letter contains customary closing conditions.
Hawaii Term Loan
The Company has also received a non-binding indication of interest
from, and is in the process of negotiating definitive documents
with, First Hawaiian Bank for a $12.0 million secured term loan
facility. Borrowings under this facility would bear interest at
LIBOR plus 250 basis points. Principal amounts outstanding would
amortize over a 15-year period, but would mature on the eighth
anniversary. This facility would be secured by certain of the
Company's properties in Hawaii as well as a pledge of the
Company's equity interests in its Hawaii operations. Proceeds from
this facility would be used to fund new property acquisitions and
for general corporate purposes.
Other Business Developments
Highland Joint Venture and Term Loan
The Company plans to redeem the $52.8 million partnership interest
in one of its operating partnerships, USRP/HCI Partnership 1,
L.P., that is owned by an affiliate of Bank of America. In
conjunction with the proposed new revolving credit facility, the
commitment letter from Bank of America also provides for a term
loan facility in the amount of $35.0 million to partially fund the
redemption of the partnership interest. Borrowings under this term
loan facility will bear interest at LIBOR plus 350 basis points
and will mature on the fifth anniversary. The remaining $17.8
million required to redeem the interest would be paid by a
combination of cash and/or the sale of additional shares of our
series A preferred stock to an affiliate of Bank of America, which
sale is anticipated to take place in the fourth quarter of 2003,
subject to various closing conditions.
Shoney's Transaction
USV has also negotiated to sell its equity interest in Shoney's,
Inc. to Shoney's largest shareholder, an affiliate of Lone Star
Funds and the Company's largest shareholder. The purchase price
will be $7.5 million, resulting in a gain to the Company in excess
of $2.0 million. The Special Committee of the Board of Directors,
comprised of independent board members, has approved the sale of
the Company's equity interest in Shoney's. The Company anticipates
that this transaction will close in October.
Acquisitions and Dispositions
On September 17, 2003, USV acquired seven Shoney's properties for
an aggregate purchase price of approximately $6.4 million. The
purchase price was funded using internally generated cash flows
and borrowings under the Company's existing revolving credit
facility. The Special Committee of the Board of Directors also
approved these property acquisitions. Regarding dispositions, from
July 1, 2003 through September 15, 2003, the Company disposed of
19 properties for net cash proceeds of approximately $12.6
million, resulting in a gain of $2.1 million.
The Company believes that the changes in the corporate capital
structure will provide growth capital needed to pursue its
acquisition strategy. The Company's CFO, Stacy Riffe, commented,
"The increased size of our revolver, combined with the borrowing
power of our Hawaii assets, will provide us with the flexibility
and liquidity we need to continue our acquisition strategy.
Additionally, our investment in Shoney's proved to be beneficial
both financially, based on the anticipated gain on our investment,
and strategically, as an avenue to strong acquisition
opportunities."
FFO Modification
The Securities and Exchange Commission has informed the Company
that the SEC's application of the NAREIT definition of FFO to the
Company differs from the Company's current calculation. The SEC's
interpretation is that recurring impairments taken on real estate
property may not be added back to net income in the calculation of
FFO. Based on the SEC's interpretation, the Company will modify
its FFO calculation. Going forward, the Company will calculate FFO
for all periods presented as net income (computed in accordance
with generally accepted accounting principles), excluding gains
(or losses) from sales of property, plus depreciation and
amortization, and after adjustments for unconsolidated
partnerships and joint ventures. This modification of the
Company's FFO calculation will not affect USV's net income, will
not affect USV's cash available for dividends, will not affect
USV's current dividend rate, and will not affect USV's dividend
policy going forward. USV CEO, Bob Stetson commented, "The change
in this calculation does not represent a change in the economics
of our Company, rather, merely a change in the mechanics of our
FFO computation. We have always reported, and will continue to
report, the detail behind our FFO calculation so that investors
can perform their own assessment of our operating performance.
Given the redeployment of our portfolio over the last 18 months,
the anticipated improvement in economic conditions, and the strong
credit-worthiness of the majority of our tenants, we expect asset
impairment charges going forward to be generally less than in
previous years. Additionally, the offset to asset impairments,
which is capital gains, has been and is anticipated to continue to
be greater than asset impairment charges. Capital gains and losses
are not included in FFO."
Based on its previous method of calculating FFO, the Company
confirms its 2003 FFO guidance of $1.40 - $1.50 per share.
Conforming to the SEC's interpretation, the modified FFO
calculation would be reduced $0.12 per share for impairment
charges taken during the first six months of the year, plus any
additional per share amounts for impairment charges to be taken in
the second half of the year. In addition, the Company announced
that it expects to maintain its current dividend level for the
remainder of the year.
U.S. Restaurant Properties, Inc. is a fully-integrated, self-
administered and self-managed real estate investment trust (REIT).
Our strategy focuses primarily on acquiring, owning and leasing
restaurant properties. We also own and lease a number of service
station properties, most of which include convenience stores
(referred to as C&Gs). At August 31, 2003, our portfolio consisted
of 789 properties. We lease our properties on a triple-net basis
primarily to operators of quick-service and full-service chain
restaurants affiliated with major national or regional brands such
as Applebee's(R), Arby's(R), Burger King(R), Captain D's(R),
Chili's(R), Dairy Queen(R), Hardee's(R), Pizza Hut(R),
Popeye's(R), Schlotzsky's(R), Shoney's(R) and Taco Cabana(R). Our
C&G tenants are affiliated with major oil brands such as Fina(R),
Phillips 66(R) and Shell(R).
* * *
Liquidity and Capital Structure
Outstanding debt at December 31, 2002, totaled $353 million, or
46.6% of total capitalization. The Company's interest expense
coverage ratio for the quarter was 2.6 times FFO. The average
interest rate declined to just over 5% for the quarter. Other than
regularly scheduled debt amortization, the Company must reduce its
line of credit by $5.0 million by May 31, 2003, and has $47.5
million in senior notes that are due August 1, 2003. In
anticipation of these maturities, management is discussing various
financing alternatives with its creditors.
VALENTIS INC: Independent Auditors Air Going Concern Uncertainty
----------------------------------------------------------------
Valentis, Inc. (Nasdaq: VLTS) provided a corporate update and
announced fiscal 2003 financial results for the fourth quarter and
fiscal year ended June 30, 2003.
Year in review
Last year was a period of significant transition for Valentis. We
focused our development efforts, improved our cash position,
stabilized our business and during this period continued to
execute an aggressive action plan to advance our lead product in
clinical trials. We are pleased to announce that we achieved the
following milestones:
-- Advanced our Del-1 angiogenesis product through a Phase I
clinical trial and into Phase II for peripheral arterial
disease
-- Completed a corporate reorganization and substantially reduced
our cash burn rate
-- Settled our patent infringement lawsuit with Johnson & Johnson,
which provided Valentis with a $6.5 million cash payment
-- Signed license agreements to validate our technologies and
provide additional revenue
-- Completed a significant capital restructuring
Del-1 Phase I clinical data
In June, we presented initial data from our Phase I clinical trial
at the American Society for Gene Therapy. There were no observed
severe adverse drug related side effects and the Del-1 therapeutic
was well tolerated at all dose levels. While the trial was
designed to demonstrate safety, we were pleased to report that
there appeared to be evidence of dose and dosing pattern-related
product efficacy. We designed efficacy indicators into the end
points in the Phase I trial to evaluate exercise tolerance and
ankle brachial index. Data from the trial demonstrated that
patients who received higher doses of the product showed
improvement in the specified endpoints. Some of the detailed data
are out now and we expect to present fully audited Phase I data
over the next 6 months.
Looking Forward
We believe the milestones we achieved, and the changes we
implemented, position us for future growth. The positive clinical
data on our lead Del-1 product provide a strong foundation for the
future including applications for the Del-1 product in other major
cardiovascular diseases. The Phase II clinical trial for the Del-1
product to treat PAD is currently underway and we expect to
complete enrollment of this trial in the first quarter of 2004. We
currently anticipate announcing the results of the Phase II trial
in the third quarter of 2004.
At June 30, 2003, we had $3.3 million in cash. In July 2003,
Valentis received $6.5 million as a result of the settlement of
our lawsuit with ALZA/Johnson & Johnson. Our current cash burn
rate is approximately $3 million a quarter. We continue to
actively seek additional strategic collaborations in addition to
the sale and license of our proprietary technologies.
Summary
In summary, we are pleased to announce that we successfully
achieved our established milestones. We focused our effort on our
Del-1 angiogenesis product, improved our cash position, stabilized
our business and advanced Del-1 in the clinic. In the future, we
intend to continue achieving our milestones including the
completion of our Phase II clinical trial.
Fiscal 2003 Financial Results
Valentis reported a net loss applicable to common stockholders for
the year ended June 30, 2003 of $43.0 million, or $13.86 per basic
and diluted share, on revenue of $4.0 million, compared to a net
loss applicable to common stockholders of $37.2 million, or $33.61
per basic and diluted share on revenue of $3.8 million for fiscal
2002.
For the quarter ended June 30, 2003, Valentis recorded a net loss
applicable to common stockholders of $2.1 million, or $0.37 per
basic and diluted share, on revenue of $1.3 million, compared to a
net loss applicable to common shareholders of $7.6 million, or
$6.24 per basic and diluted share, on revenue of $76,000, for the
quarter ended June 30, 2002.
On June 30, 2003, Valentis had $3.3 million in cash, cash
equivalents and short-term investments compared to $6.0 million on
March 31, 2003 and $19.1 million on June 30, 2002. The decreases
of $2.7 million and $15.8 million in cash, cash equivalents and
short-term investments balances for the quarter and the year,
respectively, reflect the funding of the company's operations.
Since June 30, 2003, Valentis received a $6.5 million from
ALZA/Johnson & Johnson for the settlement of a lawsuit in July
2003.
Research and development expenses for the fiscal year ended
June 30, 2003, decreased to $10.0 million from $23.7 million in
fiscal 2002. For the fourth quarter ended June 30, 2003, research
and development expenses decreased to $2.2 million from $5.0
million in the corresponding period in fiscal 2002. The decreases
were attributable primarily to staff reductions, savings resulting
from the reduction of preclinical product development efforts, and
suspension of clinical programs in oncology.
General and administrative expenses for the fiscal year ended
June 30, 2003, increased to $8.9 million from $7.9 million in
fiscal 2002. The increase was attributable primarily to increased
professional fees resulting from the company's capital
restructuring efforts, the patent infringement lawsuit with
ALZA/Johnson & Johnson, and lease exit expenses. The increase was
partially offset by savings resulting from the reduction of
general and administrative staff associated with our restructuring
actions. General and administrative expenses for the quarter ended
June 30, 2003, decreased to $1.6 million from $1.8 million in the
corresponding period in fiscal 2002. The decrease was attributable
primarily to staff reductions and savings resulting from the
reduction of preclinical product development efforts and
suspension of clinical programs in oncology. The decrease was
partially offset by one time lease exit expenses incurred in June
2003.
Restructuring charges for the fiscal year ended June 30, 2003 were
$832,000, which was associated with staff reductions in October
2002. Restructuring charges for the fiscal year and quarter ended
June 30, 2002 were $1.8 million and $87,000, respectively, which
were associated with staff reductions in January 2002.
Amortization expense for goodwill and other intangibles, which was
associated with the acquisitions of GeneMedicine, Inc. in fiscal
1999 and PolyMASC Pharmaceuticals plc in fiscal 2000, for fiscal
year ended June 30, 2002 was approximately $4.9 million. As of
June 30, 2002, we had approximately $409,000 of goodwill, which is
no longer being amortized but is subject to an impairment analysis
on at least an annual basis. We completed impairment analyses as
of July 1, 2002, December 31, 2002 and June 30, 2003, and
determined in each case that goodwill was not impaired.
Upon conversion of the Series A preferred stock to common stock in
January 2003, the remaining $3.5 million of unaccreted deemed
dividend representing the balance of amounts attributed to common
stock purchase warrants, beneficial conversion feature, and
issuance costs related to the Series A preferred stock was fully
accreted and recorded as a deemed dividend. This, along with a
deemed dividend of $200,000 accreted during January 2003, was
included in the calculation of net loss applicable to common
stockholders for the fiscal year ended June 30, 2003.
Additionally, as a result of the simultaneous conversion of the
Series A preferred stock to common stock, and the reduction in the
Series A preferred stock conversion price, the excess of the fair
value of the common stock issued to the Series A preferred
stockholders over the fair value of the common stock issuable
pursuant to the original conversion terms of the preferred stock
was approximately $22.3 million. This amount also was included in
the calculation of net loss applicable to common stockholders for
the fiscal year ended June 30, 2003.
Liquidity
Valentis has received a report from our independent auditors
covering the consolidated financial statements for the fiscal year
ended June 30, 2003, which includes an explanatory paragraph that
states that the financial statements have been prepared assuming
Valentis will continue as a going concern. The audit report issued
by our independent auditors may adversely impact our dealings with
third parties, such as customers, suppliers and creditors, because
of concerns about our financial condition. The explanatory
paragraph states the following conditions that raise substantial
doubt about our ability to continue as a going concern: (i) we
have incurred losses since inception, including a net loss of
$14.9 million for the year ended June 30, 2003, and our
accumulated deficit was $207.1 million at June 30, 2003 and (ii)
our cash and cash equivalents balance at June 30, 2003 was $3.3
million. Management's plans as to these matters are also described
in Note 1 to the consolidated financial statements filed with the
SEC on Form 10-K.
In addition to the $3.3 million cash balance at June 30, 2003,
Valentis received $6.5 million as a result of the settlement of
its lawsuit with Alza/Johnson & Johnson in July 2003. Valentis
plans to build on its current cash reserves by pursuing strategic
alternatives, which includes actively seeking additional
development collaborations, the sale and license of our
proprietary technologies, as well as sales of common stock.
Valentis is converting biologic discoveries into innovative
products. The company's lead product is a Del-1 therapeutic to
treat peripheral arterial disease and is currently in Phase II
clinical trials. The company has additional products and
technologies in various stages of development through partnerships
with pharmaceutical and biotechnology companies.
For additional information regarding our business and financial
results for the period ended June 30, 2003, including forward-
looking statements, risks and uncertainties, please refer to our
Annual Report on Form 10-K as filed with the Securities and
Exchange Commission.
Additional information about Valentis can be found at
http://www.valentis.com
WEIRTON STEEL: Wants to Pull Plug on Solid Waste & Valero Pacts
---------------------------------------------------------------
Mark E. Freedlander, Esq., at McGuireWoods, in Pittsburgh,
Pennsylvania, recounts that the Weirton Steel Debtor is a party to
two agreements:
(a) The Industrial Waste Stabilization, Transportation and
Disposal Agreement with Solid Waste Services, Inc. doing
business as J.P. Mascaro & Sons dated September 24, 1998,
pursuant to which Solid Waste agreed to provide the Debtor
for a period of 10 years, with the facilities, equipment,
and manpower necessary for the disposal, stabilization,
and transportation of certain non-hazardous industrial
waste material generated by the Debtor in the normal
course of its operations; and
(b) A Lease Agreement for Dedicated Disposal Cell with Valero
Terrestrial Corporation dated October 1, 1998, pursuant to
which Valero, an affiliate of Solid Waste, agreed to lease
the Debtor for a period of 10 years, a dedicated cell at
the Brooke County Landfill for the disposal of non-
hazardous industrial solid waste generated in connection
with the Waste Agreement.
On August 27, 2003, Solid Waste sought to compel the Debtor to
assume or reject the Lease Agreement.
Mr. Freedlander reports that there are significant disputes
between the Debtor, on one hand, and Solid Waste and Valero, on
the other, arising prior to the Petition Date and continuing
after the Petition Date. These disputes:
(a) primarily relate to Solid Waste's effort to impose
excessive stabilization charges on the Debtor. Solid
Waste asserts prepetition claims under the Waste Agreement
of approximately $6,587,408 and postpetition claims of
approximately $604,873, plus unliquidated amounts; and
(b) include disagreements regarding required disposal volumes
and transportation charges.
Mr. Freedlander notes that the disputes intensified when the
Debtor filed for protection under Chapter 11. The Debtor tried
but failed to negotiate a resolution of its significant disputes
with Solid Waste after the Petition Date.
Accordingly, the Debtor now seeks the Court's authority to reject
the Industrial Waste Stabilization Transportation and Disposal
Agreement with Solid Waste Services, Inc. and the related Lease
Agreement for Dedicated Disposal Cell with Valero Terrestrial
Corporation.
The Debtor has recently reached an agreement with Waste
Management of West Virginia, Inc. to replace Solid Waste in
providing non-hazardous waste stabilization, transportation and
disposal services. The agreement, which is to take effect
immediately on the Debtor's rejection and termination of the
Waste Agreement with Solid Waste and Lease Agreement with Valero,
provides the Debtor significant waste disposal cost savings,
particularly considering that as of July 28, 2003, Solid Waste
sought to impose additional fees on the Debtor. Pursuant to
Section 7(e) of the Waste Agreement, Solid Waste is required to
cooperate and participate in the orderly transition of Agreement,
to the new third party contractor selected by the Debtor.
Now that the Debtor has negotiated a more favorable waste
disposal agreement with Waste Management of West Virginia,
neither the Waste Agreement nor the Lease Agreement provides a
benefit to its estate. Rejection of the Agreements will
eliminate:
-- the Debtor's ongoing disputes with the Solid Waste entities
regarding waste disposal charges and other contractual
requirements, and
-- any obligation to cure significant prepetition claims
which, although disputed, may have ultimately been required
in some amount to assume the Agreements. (Weirton Bankruptcy
News, Issue No. 10; Bankruptcy Creditors' Service, Inc.,
609/392-0900)
WHEELING-PITTSBURGH: Court Approves Six Settlement Agreements
-------------------------------------------------------------
Wheeling-Pittsburgh Steel Corp., and its debtor-affiliates
obtained Court approval of these six settlement agreements:
1) Ray Livingston
Ray Livingston's claim arises from his complaint against WPSC
currently pending in the United States District Court for the
Southern District of Ohio, Eastern Division, alleging wrongful
termination and employment discrimination.
Mr. Livingston of Steubenville, Ohio, and Wheeling-Pittsburgh
Steel Corporation, represented by Karen A. Visocan, Esq., at
Calfee Halter & Griswold LLP, in Cleveland, Ohio, now agree that:
(1) Mr. Livingston has an allowed, general, unsecured
claim against WPSC for $40,000;
(2) The claim will be paid pursuant to the terms of
WPSC's Plan and treated as a Class 7 claim. The
claims in Class 7 are payable only in WPSC
stock;
(3) Mr. Livingston agrees to dismiss the state court
action against all named defendants with prejudice
to its re-filing; and
(4) Except for the Allowed Claim, Mr. Livingston gives
the Debtors a general release of liability.
2) R&M Fluid Power
Wheeling-Pittsburgh Steel Corporation and R&M Fluid Power agree
that:
(a) R&M has an allowed claim against WPSC which is
bifurcated into:
(i) a secured claim for $18,394.73; and
(ii) an unsecured claim for $167,043.77.
(b) R&M's claim was erroneously included in the Order
disallowing and reclassifying claims as including
a secured claim for $18,394.73 and an unsecured
claim in that same amount. The unsecured portion
should be $167,043.77.
R&M Fluid Power is represented by Jerry M. Bryan, Esq., at
Henderson Covington Messenger Newman & Thomas Co., LPA, in
Youngtown, Ohio.
3) Diamond Power International, Inc., Export Development
Corporation, and TYK America, Inc.
By prior Order, the proofs of claim filed Diamond Power and Export
Development were each disallowed, and the scheduled amount for TYK
was disallowed. However, James M. Lawniczak, Esq., at Calfee
Halter & Griswold LLP, in Cleveland, Ohio, reports that the
Reorganized Debtors were aware that there were two claims under
each claim number and the scheduled claim, and there was no
intention to disallow both claims under each number and on the
schedules -- only one in each instance.
After entry of the Order, the Reorganized Debtors were informed by
Poorman Douglas Corporation, the Court-appointed notice agent in
these bankruptcy proceedings, that because the Order referred to
each pair of claims only by one number, all claims under that
number were disallowed. To remedy this, the Reorganized Debtors
and the claimants stipulate and agree that:
(1) One claim of Diamond Power for $74,745.64 is allowed
as an unsecured claim against WPSC;
(2) One claim of Export Development for $2,559.71 is
allowed as an unsecured claim against WPSC; and
(3) One claim of TYK is allowed in the full scheduled
amount of $199,995.
4) Mingo Junction Energy
The Reorganized Debtors and Mingo Junction Energy agree that Mingo
Junction Energy will have an allowed unsecured claim against WPSC
for $1,165,443.97. All other claims by Mingo Junction Energy are
disallowed.
5) United Steelworkers of America
James M. Lawniczak, Esq., at Calfee Halter & Griswold LLP, in
Cleveland, Ohio, relates that USWA's claim for $6,409,653.94,
which relates to pending grievances, is withdrawn based on an
understanding with the Reorganized Debtors that the Reorganized
Debtors will process those grievances under the grievance and
arbitration procedures of the applicable collective bargaining
agreement, and will pay in full any amount awarded by an
arbitrator acting under the collective bargaining agreement.
6) Steven E. Benash
Mr. Benash brought a personal injury action against WPSC and has
indicated that he intends to ask for stay relief to continue that
action that is currently pending in the Circuit Court of Cook
County, Illinois. Mr. Benash promises to proceed only against the
Reorganized Debtors' insurance, and that the continuation of his
state court proceeding would not impact the WPSC estate
unfavorably.
The parties agree that the stay is lifted with respect to Mr.
Benash's suit so he can continue the litigation solely as to the
insurance proceeds, and for no other purpose.
Furthermore, the parties agree that any settlement or verdict
ultimately rendered in the litigation will be limited solely to
the proceeds of insurance available to WPSC -- to the extent the
settlement or judgment is in excess of the self-insured retention
-- to the extent that such insurance coverage exists and is
applicable to Mr. Benash's claim.
Mr. Benash withdraws any claim or right to a claim against WPSC.
(Wheeling-Pittsburgh Bankruptcy News, Issue No. 46; Bankruptcy
Creditors' Service, Inc., 609/392-0900)
WHEREHOUSE: Seeks Solicitation Period Extension through Jan. 26
---------------------------------------------------------------
Wherehouse Entertainment, Inc., and its debtor-affiliates ask the
U.S. Bankruptcy Court for the extension of their exclusive time to
solicit acceptances of their plan of reorganization.
The Debtors submit that the size and complexity of their cases
alone may constitute cause for the extension of their exclusive
periods. As of the Petition Date, the Debtors were one of the
largest music retailers in the United States - with over 5,000
employees. The Debtors have commenced a massive operational
restructure-reducing the size of the chain significantly. In
addition to closing stores, rejecting leases and negotiating and
obtaining debtor-in-possession financing, the Debtors have focused
their efforts on stabilizing their post-petition business
operations and their relationships with their primary customers,
vendors, service providers and other key constituencies, and have
made significant progress in this regard.
In the months following the commencement of these cases, the
Debtors' focus was on the creation of a business plan for the
restructured enterprise. As a result, the Debtors have developed
two primary alternatives for emerging from chapter 11:
i) a standalone plan of reorganization and
ii) a possible sale of substantially all of the Debtors'
assets to a third party.
The Debtors currently are exploring and preparing for both
scenarios. Consequently, the Debtors submitted with the Court
their Disclosure Statement and proposed Plan. The Debtors tell
the Court that the requested January 26, 2003 extension will give
them ample time to reach their creditors and solicit plan
acceptances from them.
Wherehouse Entertainment, Inc., sells prerecorded music,
videocassettes, DVDs, video games, personal electronics, blank
audio cassettes and videocassettes, and accessories. The Company
filed for chapter 11 protection on January 20, 2003, (Bankr. Del.
Case No. 03-10224). Mark D. Collins, Esq., and Paul Noble Heath,
Esq., at Richards Layton & Finger represent the Debtors in their
restructuring efforts. When the Company filed for protection from
its creditors, it listed $227,957,000 in total assets and
$222,530,000 in total debts.
YOUTHSTREAM MEDIA: Sells Patent and Related Rights for $700K
------------------------------------------------------------
YouthStream Media Networks, Inc., a Delaware corporation (OTC
Bulletin Board: YSTM), announced that effective September 23, 2003
it had sold its interest in U.S. Patent No. 6,175,831 entitled
"Method and apparatus for constructing a network database and
system", also known as the "Six Degrees Patent", and certain
related intellectual property rights, including computer source
and object code files, software assets and other digital assets,
documentation and rights, to an unrelated party for a cash payment
of $700,000.
The Company is not utilizing this technology in its current
business operations.
For further information, contact the Company's investor relations
at 212-622-7300.
* * *
Recent Developments
During January 2003, the Company completed a debt restructuring,
resolving default claims by the holders of the Company's
outstanding notes, in the aggregate principal amount of
$18,000,000, to exchange those notes, including approximately
$2,100,000 of accrued interest, for a cash payment of $4,500,000,
preferred stock with a face value of $4,000,000, 3,985,000 shares
of common stock, and $4,000,000 principal amount of promissory
notes issued by the Company's retail subsidiary and secured by the
Company's pledge of all of its stock in the subsidiary. During
June 2003, the $4,000,000 principal amount of promissory notes was
restructured into unsecured debt obligations of the Company. The
Company recognized a gain from this debt restructuring, which
qualified as a "troubled debt restructuring" pursuant to Statement
of Financial Accounting Standards No. 15, "Accounting for Debtors
and Creditors for Troubled Debt Restructurings", of $2,754,000,
which was classified as a part of continuing operations. The gain
from this transaction was $0.07 per common share for the three
months and nine months ended June 30, 2003.
At the conclusion of the debt restructuring, the Company's
existing board of directors resigned and was replaced by three new
directors, Jonathan V. Diamond, Hal G. Byer and Robert Scott
Fritz. Jonathan V. Diamond was named Chief Executive Officer and
Robert N. Weingarten was named Chief Financial Officer.
The Company's new management intends to continue efforts to settle
the Company's outstanding obligations and reduce operating costs.
The Company believes that its current cash resources, combined
with revenues from continuing operations and borrowings from
related parties, will be adequate to fund its operations during
the remainder of fiscal 2003. However, to the extent the Company's
estimates are inaccurate and/or the Company is unable to
successfully settle outstanding obligations and reduce operating
costs, the Company may not have sufficient cash resources to
maintain operations. In such event, the Company may be required to
consider a formal or informal restructuring or reorganization.
The Company's new management is exploring various strategic
alternatives, including the sale of the Company's remaining
business operations and the acquisition of one or more new
business opportunities. However, there can be no assurances that
such efforts will be successful. The Company may finance any
acquisitions through a combination of debt and/or equity
securities.
* Peter S. Heinecke Joins Kirkpatrick & Lockhart in San Francisco
-----------------------------------------------------------------
The national law firm of Kirkpatrick & Lockhart LLP is pleased to
announce that Peter S. Heinecke, a leading corporate and
securities lawyer, has joined K&L's San Francisco office as Of
Counsel.
Mr. Heinecke, who is a member of the California bar, concentrates
his practice in corporate and securities matters, with a focus on
emerging growth companies. Mr. Heinecke has expertise in
corporate formation, venture capital financing, public securities
offerings, and mergers and acquisitions. He counsels and
represents both public and private companies in a number of
different industries including software, semiconductors,
telecommunications, and life sciences.
Peter W. Sheats, the firm's Administrative Partner in San
Francisco, noted that, "Peter's practice keenly focuses on the
needs of both emerging growth and public companies and he brings a
wealth of counseling and transactional expertise for both."
In the three years since it opened, K&L's San Francisco office has
expanded to 30 attorneys practicing in a broad spectrum of legal
specialties, including the areas of investment management,
securities enforcement and broker-dealer regulation, corporate
law, mortgage banking, consumer and commercial finance, public
sector technology and government contracts, civil litigation,
employee benefits including ESOPs, and project finance. The
office currently has 13 partners, 2 of counsel and 15 associates.
Kirkpatrick & Lockhart is a national law firm with more than 700
lawyers in Boston, Dallas, Harrisburg, Los Angeles, Miami, Newark,
New York, Pittsburgh, San Francisco and Washington. K&L serves a
dynamic and growing clientele in regional, national and
international markets, currently representing over half of the
Fortune 100. The firm's practice embraces three major areas --
litigation, corporate and regulatory -- and related fields.
* Sheppard Mullin Signs-Up Craig Cardon as San Francisco Partner
----------------------------------------------------------------
Sheppard, Mullin, Richter & Hampton LLP announced that Craig
Cardon has joined the firm as partner in the Intellectual Property
Practice Group in the San Francisco office, effective today.
Cardon, most recently with Squire Sanders & Dempsey in San
Francisco, focuses his practice on intellectual property,
e-commerce, media, entertainment and advertising counseling and
litigation.
Tim Epp, Chair of the Intellectual Property Practice Group, said,
"We're extremely pleased that Craig will be joining us, and he
will be a superior strategic fit with our existing intellectual
property practice. We are now able to offer our Bay Area clients a
full-service intellectual property practice. Additionally, Craig's
addition in our San Francisco office serves as an extension of our
Southern California-based entertainment and media practice."
Offered Cardon, "I'm thrilled to be joining Sheppard Mullin's
robust and expanding intellectual property practice. I couldn't
ask for a better platform, with the premier institutional
entertainment and media practice. It didn't take me long to
conclude that Sheppard Mullin was the right place for my
intellectual property, media, entertainment and advertising
practice. Lawyering is about expertise and a client service
culture. Sheppard Mullin clearly exemplifies this."
With extensive experience in domestic and international
intellectual property, advertising and e-commerce matters, Cardon
has counseled clients on a variety of technology, Internet and
content disputes, as well as online business structures. In
concentrating on the unique issues of technology-based startup
companies, he has advised on a variety of matters, including
copyright, trademark, patent, and anticounterfeiting.
Additionally, Cardon has wide-ranging experience with
entertainment and media entities. His practice includes film,
television and music ownership, financing, production, and
licensing matters and disputes, as well as traditional and new
media advertising issues.
Cardon has worked with most of the major film studios, major U.S.
and European satellite broadcasters, and clients such as Pedro
Almodovar, Canal Satelite, Ameriquest, Williams-Sonoma,
ViaDigital, Blumberg Capital, Best Western, BCBG, Media Pro,
Multivision, Blacklist Films, and Esperanza Films.
Cardon has handled production matters or disputes for a variety of
feature films and television programs, including the recent Oliver
Stone documentaries "Persona Non Grata" and "Comandante," Pedro
Almodovar's "Talk to Her," "All About My Mother" and "Women on the
Edge of a Nervous Breakdown," this fall's "My Life Without Me,"
Academy Award-nominated director Dee Mosbacher's "Radical
Harmonies" and "No Secret Anymore," as well as films currently in
production.
Cardon received his law degree from Loyola Marymount University in
1993, and his undergraduate degree from the University of
California, Los Angeles in 1989. He is admitted to practice in
California, Colorado, the United States Court of Appeals for the
Ninth Circuit and the United States District Courts, District of
Colorado and the Northern, Eastern, Southern and Central Districts
of California. Additionally, Cardon is a frequent speaker on the
delivery of advertising, media and entertainment content via new
technologies.
Sheppard Mullin has more than 380 attorneys among its eight
offices in San Francisco, Santa Barbara, West Los Angeles, Los
Angeles, Orange County, Del Mar Heights, San Diego and Washington,
D.C. The full-service firm provides counsel in Antitrust and Trade
Regulation; Business Litigation; Construction, Environmental, Real
Estate and Land Use Litigation; Corporate; Entertainment and
Media; Finance and Bankruptcy; Financial Institutions; Government
Contracts and Regulated Industries; Healthcare; Intellectual
Property; International; Labor and Employment; Real Estate, Land
Use, Natural Resources and Environment; Tax, Employee Benefits,
Trusts and Estates; and White Collar and Civil Fraud Defense. The
Firm celebrated its 75th anniversary in 2002.
* 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 ***