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/raid1/www/Hosts/bankrupt/TCR_Public/031002.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, October 2, 2003, Vol. 7, No. 195 Headlines ACCLAIM ENTERTAINMENT: Repays $5 Million Loan from GMAC Comm'l AGILENT: Darlene Solomon as VP & Director of Agilent Laboratories AIR CANADA: Wants Green-Light to Renew D&O Liability Insurance AKORN INC: Reaches Settlement of Outstanding Issues with SEC ALASKA AIRLINES: Pilots Offer to Enter Contract Negotiations ALTERRA HEALTHCARE: Plan Confirmation Hearing Set for October 24 AMERCO: Wins Final Approval to Access $300MM of DIP Financing ANC RENTAL: Court Fixes November 18 as Supplemental Bar Date ARMSTRONG HOLDINGS: AWI Enters Stipulation with Liberty Mutual AVISTA CORP: Will Host Q3 2003 Conference Call on October 24 BAM! ENTERTAINMENT: Red Ink Continued to Flow in Fiscal Q4 BAYOU STEEL: Seeking Open-Ended Lease Decision Period Extension BUCKEYE TECHNOLOGIES: Extends $30 Million Credit Facility CALL-NET: Underwriters Exercise Option to Purchase More Shares CELLSTAR CORP: Will Publish Third-Quarter Results on October 15 CENDANT MORTGAGE: Fitch Rates 4 Certs. Classes at Low-B Levels CHARTER COMMS: S&P Rates Subsidiaries' Senior Notes at CCC- CHARTER COMMS: Completes Exchange Offer for Senior Indebtedness CINRAM INTERNATIONAL: S&P Rates $100 Mill. Tranche C Loan at B+ CONSECO INC: SEC Subpoenas Conseco to Provide Documents on Unit CONSTELLATION BRANDS: Reports Weaker Performance for 2nd Quarter CONSUMERS FINANCIAL: Hires Marcum & Kliegman as New Accountants COVANTA ENERGY: Plan-Filing Exclusivity Extended to December 8 DIRECTV: Wants Plan-Filing Exclusivity Extended to October 15 DOW CORNING: Taps WebEx Ent. for Web Communications Services EAGLE FOODS CENTER: Court Approves Sale of Certain Stores ENCOMPASS SERVICES: Court Clears Settlement with Liberty Mutual ENERGY WEST: Arranges New $23M Credit Facility with LaSalle Bank ENERGY WEST: Reports Preliminary Fiscal Year 2003 Fin'l Results GEERLINGS & WADE: Plans to Deregister Common Stock with SEC GENCORP INC: Will Publish Third Quarter Results on October 6 GEO-CON INC.: Case Summary & 20 Largest Unsecured Creditors GOODYEAR TIRE: Look for Third Quarter Results on October 23 GTC TELECOM: June 30 Balance Sheet Upside-Down by $6 Million HOUGHTON MIFFLIN: S&P Rates HM's $150MM Sr. Discount Notes at B HOUSTON EXPLORATION: Names Tim R. Lindsey as VP of Exploration INT'L FIBERCOM: Chapter 7 Trustee Taps Steve Brown as Counsel INTERNATIONAL STEEL: S&P Affirms BB Corporate Credit Rating INVATECH INC.: Case Summary & 24 Largest Unsecured Creditors JARDEN CORPORATION: Completes 3-Million Share Public Offering KINGSWAY FINANCIAL: S&P Keeps Watch on Credit and Debt Ratings KNIGHTHAWK INC: Senior Lender Agrees to Forbear Until October 31 LEAP WIRELESS: Sues Endesa to Recover $35 Million Plus Interest LOUISIANA-PACIFIC: Will Move into New Headquarters in Tennessee LTV STEEL: Plan-Filing Exclusivity Stretched Until December 1 LUCENT TECHNOLOGIES: Hosting Conference Call on October 22, 2003 MAGELLAN HEALTH: R2 Investments Backs Third Amended Reorg. Plan MAGELLAN HEALTH: S&P to Assign B+ Counterparty Credit Rating MAGNUM HUNTER: Provides Fiscal Year 2004 Production Guidance MANITOWOC: Wins Contract to Build 2 Hot Oil Barges for Moran MERRILL LYNCH: Fitch Rates Class B-4 & B-5 Certificates at BB/B+ METALS USA: Judge Greendyke Closes 36 Chapter 11 Cases METROCALL: Deadline for Final Decree Extended to December 31 MIRANT CORP: U.S. Trustee Appoints Official Equity Committee MOVING BYTES: Completes Sale of Telecomm Assets to ComTech21 NATIONSRENT INC: Corporate Credit Receives B+ Rating from S&P NEXTMEDIA: Completes Sale of WJTW-FM to Univision for $21 Mill. NQL INC: Court Schedules Plan Confirmation Hearing for Nov. 18 NRG ENERGY: Court Extends Plan-Filing Exclusivity Until Jan. 9 NUCENTRIX BROADBAND: Wants to Tap Wiley Rein as Special Counsel OAKWOOD MORTGAGE: S&P Takes Rating Actions on Various MH Deals ON COMMAND: Arranges $40MM Subordinated Loan from Liberty Media PARKER DRILLING: Moody's Assigns Low-B and Junk Debt Ratings PHOTOWORKS: Resolves Issues with ITC re $1.6M Penalty Assessment PILLOWTEX: Court Okays CSFB to Provide Fin'l Advisory Services PRIME HOSPITALITY: Promotes Art Manso to SVP of Purchasing RAYOVAC: Completes Acquisition of Remington Products Company SAFETY-KLEEN: Wins Nod to Preserve Avoidance Actions for 90 Days SHAW COMMS: Forges Video-On-Demand Pact with Universal Studios SHAW COMMS: Shaw Family Completes Purchase of Additional Shares SOLUTIA INC: Will Host Q3 Earnings Conference Call on October 24 STONEGATE APARTMENTS: Chapter 11 Case Summary SYMBOL TECHNOLOGIES: Will Publish Q2 2003 Results on Wednesday SYSTECH RETAIL: July 31 Balance Sheet Upside-Down by $83 Million TEAM AMERICA: Chapter 11 Case Summary TEXAS COMMERCIAL: Secures $25-Mill. Financing from Magnus Energy TFM S.A.: Fitch Downgrades Senior Notes Ratings to B+ from BB- UNIVERSAL GUARDIAN: Ability to Continue Operations Uncertain US AIRWAYS: Settles Claim Disputes with Debis & DaimlerChrysler VALCOM INC: Signs Joint Venture with Giants Studios Services VERITAS DGC: Closes Sale of Software Assets of RC2 and Hot Eng'g WEIRTON STEEL: Retirees Committee Hires Klett Rooney as Counsel WHEELING-PITTSBURGH: Repays $5 Million State of Ohio Loan WHEREHOUSE ENTERTAINMENT: Court Okays Asset Sale to Trans World WHEREHOUSE: Files Plan and Disclosure Statement in Delaware WOLFORD CORPORATION: Chapter 7 Case Summary ZIFF DAVIS MEDIA: Appoints Randy Zane Director of Communications * Jefferies Hires Farukh Faroogi as Post-Reorg. Equity Analyst * Justice Leslie Crocker Snyder Joins Kasowitz Benson as Partner * Peter R. O'Flinn Resigns as LeBoeuf Lamb Co-Chairman * Change in S.D.N.Y. Adversary Proceeding Numbering Scheme * DebtTraders' Real-Time Bond Pricing ********* ACCLAIM ENTERTAINMENT: Repays $5 Million Loan from GMAC Comm'l -------------------------------------------------------------- Acclaim Entertainment, Inc. (Nasdaq: AKLM), a global video entertainment software developer and publisher, announced that on September 26, 2003, the Company fully prepaid, out of its working capital, the $5.0 million outstanding balance of its supplemental discretionary loan from its principal lender, GMAC Commercial Finance LLC. Based in Glen Cove, N.Y., Acclaim Entertainment, Inc. -- whose June 30, 2003 balance sheet shows a total shareholders' equity deficit of about $54 million -- is a worldwide developer, publisher and mass marketer of software for use with interactive entertainment game consoles including those manufactured by Nintendo, Sony Computer Entertainment and Microsoft Corporation as well as personal computer hardware systems. Acclaim owns and operates five studios located in the United States and the United Kingdom, and publishes and distributes its software through its subsidiaries in North America, the United Kingdom, Australia, Germany, France and Spain. The Company uses regional distributors worldwide. Acclaim also distributes entertainment software for other publishers worldwide, publishes software gaming strategy guides and issues "special edition" comic magazines periodically. Acclaim's corporate headquarters are in Glen Cove, New York and Acclaim's common stock is publicly traded on NASDAQ.SC under the symbol AKLM. For more information visit http://www.acclaim.com AGILENT: Darlene Solomon as VP & Director of Agilent Laboratories ----------------------------------------------------------------- Agilent Technologies Inc. (NYSE: A) named Darlene Solomon as vice president and director of Agilent Laboratories, its central research facility, effective immediately. She replaces Tom Saponas, who is retiring. Solomon most recently held a dual role as director of the Life Science Technologies Laboratory within Agilent Labs, as well as senior director, research and development/technology, for Agilent's Life Sciences and Chemical Analysis business. At Agilent Labs she has been responsible for addressing the long-range technology strategy in support of Agilent's growing life sciences business, which is aimed at the drug discovery, genomics, proteomics and molecular diagnostics markets. At LSCA, Solomon has managed near-term global, group-level R&D strategy, R&D investments and product development processes. "Darlene has made extraordinary strategic and scientific contributions to the growth and development of Agilent's life sciences business," said Ned Barnholt, Agilent chairman, president and CEO. "She brings a strong technical background, solid business management experience and an enthusiasm for technology that make her an exceptional candidate for this important technology leadership role at Agilent." Solomon joined Hewlett-Packard Laboratories in 1984 as a member of its technical staff, and held increasingly responsible research and management positions there prior to the formation of Agilent Technologies in 1999. From 1978 to 1984, she conducted extensive academic research at Stanford University and at the Massachusetts Institute of Technology. Solomon earned a bachelor's degree in chemistry from Stanford and a doctorate in inorganic chemistry from MIT. With numerous patents and publications to her name, Solomon was inducted into the Women in Technology International's Hall of Fame in 2001. She serves on the External Advisory Board for NSF's (National Science Foundation) Nanobiotechnology Center and the Policy Board for DARPA's (Defense Advanced Research Projects Agency) Center for Biochemical Optoelectronic Microsystems, and she is affiliated with numerous other influential professional associations. Saponas, current director of Agilent Labs and CTO, joined Agilent in 1999 after 27 years with HP, where he served in a number of different positions in R&D. Prior to his current role, he was general manager for HP divisions in Colorado Springs, Colo., and Lake Stevens, Wash., as well as vice president and general manager of the Electronic Instruments Group. Saponas plans to retire in Colorado. Agilent Laboratories, formerly part of Hewlett-Packard Laboratories, is one of the leading technological research centers in the world. Based in Palo Alto, Calif., Agilent Laboratories draws on the talents of more than 300 researchers and support staff. It conducts applied research in communications, electronics, the life sciences and measurement; fundamental research in bioscience, fiber optics, materials, microelectronics, micromechanical systems and optoelectronics; and basic research. Agilent Laboratories is focused on driving growth and profit for Agilent's businesses through technology innovation. Information about Agilent Laboratories can be found at http://www.labs.agilent.com Agilent Technologies Inc. (NYSE:A) (S&P, BB Corporate Credit and Senior Note Ratings) is a global technology leader in communications, electronics, life sciences and chemical analysis. The company's 32,000 employees serve customers in more than 110 countries. Agilent had net revenue of $6 billion in fiscal year 2002. Information about Agilent is available on the Web at http://www.agilent.com AIR CANADA: Wants Green-Light to Renew D&O Liability Insurance -------------------------------------------------------------- Air Canada and its debtor-affiliates maintain a $175,000,000 Directors and Officers liability policy covering the period from October 1, 2002, to October 1, 2003. Murray A. McDonald, Ernst & Young Inc. President, reports that the Applicants have initiated discussions with their insurers to renew the policy for a one-year term. "Given the recent trend of insurers requiring significant increases in D&O premiums coupled with the depressed state of the airline industry and the Applicants' CCAA filing, negotiations to date have indicated that the cost of the renewed D&O coverage will increase substantially to [CND]$9.5 million," Mr. McDonald says. The Applicants have consulted with their insurance brokers to ensure that the proposed premium for the renewed D&O policy is reasonable in the circumstances. The Applicants believe that renewing the D&O policy is essential for them to retain their officers and directors. Accordingly, the Applicants propose to renew their D&O policy notwithstanding the substantial increase in premium. Ernst & Young has reviewed the terms of the policy renewal, including the financial implications. The Court-appointed Monitor supports the Applicants' decision to renew their D&O policy. (Air Canada Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 609/392-0900) AKORN INC: Reaches Settlement of Outstanding Issues with SEC ------------------------------------------------------------ Akorn, Inc. (AKRN) has entered into an administrative cease and desist order with the United States Securities and Exchange Commission. The entry of the Order resolves all outstanding issues arising from the SEC's investigation and proposed enforcement action against the Company, the details of which were previously disclosed in a press release dated April 2, 2002 and in the Company's filings with the SEC. Arthur S. Przybyl, President and Chief Executive Officer of Akorn, commented, "Akorn is pleased to have resolved the outstanding issues with the SEC, and is fully committed to compliance with the requirements set forth in the Order." Under the terms of the Order, the Company, without admitting or denying the findings, consents to a prohibition against further violations of the reporting, books and records, and internal control provisions of the federal securities laws. In addition, the Company has agreed to engage a qualified independent consultant to review its internal controls, practices and policies related to accounts receivable. The Order does not impose any monetary penalties or require any further restatement of the Company's financial statements. Akorn, Inc. manufactures and markets sterile specialty pharmaceuticals, and markets and distributes an extensive line of pharmaceuticals and ophthalmic surgical supplies and related products. Additional information is available on the Company's Web site at http://www.akorn.com * * * Going Concern Uncertainty In Akorn's most recent Form 10-Q filed with SEC, the Company reported: "The [Company's] financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. Accordingly, the financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company experienced losses from operations in 2002, 2001 and 2000 and has a working capital deficiency of $29.4 million as of March 31, 2003. The Company also is in default under its existing credit agreement and is a party to governmental proceedings and potential claims by the Food and Drug Administration that could have a material adverse effect on the Company. Although the Company has entered into a Forbearance Agreeement with its senior lenders, is working with the FDA to favorably resolve such proceeding, has appointed a new interim chief executive officer and implemented other management changes and has taken steps to return to profitability, there is substantial doubt about the Company's ability to continue as a going concern. The Company's ability to continue as a going concern is dependent upon its ability to (i) continue to finance it current cash needs, (ii) continue to obtain extensions of the Forbearance Agreement, (iii) successfully resolve the ongoing governmental proceeding with the FDA and (iv) ultimately refinance its senior bank debt and obtain new financing for future operations and capital expenditures. If it is unable to do so, it may be required to seek protection from its creditors under the federal bankruptcy code. "While there can be no guarantee that the Company will be able to continue to generate sufficient revenues and cash flow from operations to finance its current cash needs, the Company generated positive cash flow from operations in 2002 and for the period from January 1 through April 30, 2003. As of April 30, 2003, the Company had approximately $400,000 in cash and equivalents and approximately $1.4 million of undrawn availability under its second line of credit described below. "There can also be no guarantee that the Company will successfully resolve the ongoing governmental proceedings with the FDA. However, the Company has submitted to the FDA and begun to implement a plan for comprehensive corrective actions at its Decatur, Illinois facility. "Moreover, there can be no guarantee that the Company will be successful in obtaining further extensions of the Forbearance Agreement or in refinancing the senior debt and obtaining new financing for future operations. However, the Company is current on its interest payment obligations to its senior lenders, management believes that the Company has a good relationship with its senior lenders and, as required, the Company has retained a consulting firm, submitted a restructuring plan and engaged an investment banker to assist in raising additional financing and explore other strategic alternatives for repaying the senior bank debt. The Company has also added key management personnel, including the appointment of a new interim chief executive officer and vice president of operations, and additional personnel in critical areas, such as quality assurance. Management has reduced the Company's cost structure, improved the Company's processes and systems and implemented strict controls over capital spending. Management believes these activities have improved the Company's profitability and cash flow from operations and improve its prospects for refinancing its senior debt and obtaining additional financing for future operations. "As a result of all of the factors cited in the preceeding paragraphs, management of the Company believes that the Company should be able to sustain its operations and continue as a going concern. However, the ultimate outcome of this uncertainty cannot be presently determined and, accordingly, there remains substantial doubt as to whether the Company will be able to continue as a going concern. Further, even if the Company's efforts to raise additional financing and explore other strategic alternatives result in a transaction that repays the senior bank debt, there can be no assurance that the current common stock will have any value following such a transaction. In particular, if any new financing is obtained, it likely will require the granting of rights, preferences or privileges senior to those of the common stock and result in substantial dilution of the existing ownership interests of the common stockholders." ALASKA AIRLINES: Pilots Offer to Enter Contract Negotiations ------------------------------------------------------------ Alaska Airlines pilots, represented by the Air Line Pilots Association, International (ALPA), have offered to enter into negotiations with Alaska Airlines (S&P, BB- Corporate Credit Rating, Negative) management in advance of a previously determined contract negotiations time line. "Opening up negotiations now could offer our pilot group an opportunity to find a meaningful way to help Alaska Airlines while also protecting and preserving our pay and working conditions," said Gary Hansen, chairman of the Alaska Airlines pilots' Master Executive Council, a unit of ALPA. "We believe this is the best solution for both our pilots and for Alaska Airlines." Under the terms of their contract, Alaska pilots would have been required to begin negotiations for their next contract in March 2004. If an agreement was reached, it would have been subject to membership ratification with an effective date of May 2005. However, if no agreement was reached, the two parties would have been required to participate in binding interest arbitration, with an arbitration board ruling on contractual issues such as wages. In July, Alaska Airlines management proposed pay and work rule concessions to the pilot group. At that time, ALPA's Economic and Financial Analysis (E&FA) team completed an in-depth review of Alaska's plan and financial outlook. The E&FA team found that although Alaska's cost-reduction strategies were overly ambitious, the Alaska pilot group's participation in negotiations to an appropriate extent could be positive and was recommended. Based on feedback and on results of pilot polling, the MEC agreed with E&FA's recommendations. The MEC will now contact Alaska Airlines management to determine the next steps in the negotiating process. Founded in 1931, ALPA is the world's oldest and largest pilot union, representing 66,000 pilots at 42 airlines in the United States and Canada, including approximately 1,500 Alaska Airlines pilots. Visit the ALPA Web site at http://www.alpa.org ALTERRA HEALTHCARE: Plan Confirmation Hearing Set for October 24 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved Alterra Healthcare Corporation's Disclosure Statement as containing adequate information to help the company's creditors to decide whether to approve or reject the Amended Chapter 11 Plan. On October 24, 2003, at 3:00 p.m., in Wilmington, Delaware, the Bankruptcy Court will convene a hearing to consider confirmation of the Debtors' Amended Plan. All written objections to confirmation of the Plan must be filed so as to be received on or before October 17, 2003 by: Clerk of the U.S. Bankruptcy Court for the District of Delaware 824 Market Street, 5th Floor Wilmington, Delaware 19801 with copies to: a) The Debtor and Counsel for the Debtor Alterra Healthcare Corporation 10000 Innovation Drive Milwaukee, Wisconsin, 53226 Attn: Mark Ohlendorf Young Conaway Stargatt & Taylor, LLP The Brandywine Building 1000 West Street, 17th Floor P.O. Box 391 Wilmington, Delaware 19899-0391 Tel: 302 5716600 Fax: 302 5711253 Attn: Robert S. Brady, Esq. b) The United States Trustee Office of the United States Trustee 844 N. King Street Curtis Center, Room 950W Wilmington, Delaware 19801 Attn: Mark S. Kenney, Esq. c) Counsel to the Buyer Sidley Austin Brown & Wood LLP 787 Seventh Avenue New York NY 10019 Attn: Lee S. Attanasio, Esq. d) Counsel for the Official Committee of Unsecured Creditors Richards, Layton & Finger, PA PO Box 551 One Rodney Square Wilmington, Delaware 19899-0551 Attn: Mark D. Collins, Esq.; and Andrews & Kurth, LLP 805 Third Avenue New York, New York 10022 Attn: Paul N. Silverstein, Esq. 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. AMERCO: Wins Final Approval to Access $300MM of DIP Financing ------------------------------------------------------------- U.S. Bankruptcy Court Judge Zive authorizes the AMERCO Debtors to obtain DIP Financing. Any objections that have not been withdrawn or resolved are overruled. * * * To cash-out the Ten-Lender Consortium and provide on-going liquidity while in chapter 11 AMERCO secured a $300,000,000 debtor-in-possession financing commitment from Wells Fargo Foothill, Inc. The DIP Facility also lays the groundwork for a $650,000,000 Exit Financing Facility backed by Foothill and Credit Suisse First Boston to fund the Reorganized Debtor's obligations under a plan of reorganization as it emerges from chapter 11. The DIP Facility provides AMERCO with access to $200,000,000 of revolving credit ($25,000,000 of which backs letters of credit) and a $100,000,000 term loan, all subject to a Borrowing Base equal to 40% of the fair market value of the Debtor's Real Property. The Exit Facility consists of a $200,000,000 revolver (with a $25,000,000 subfacility for letters of credit), a $350,000,000 amortizing Term Loan A and a $100,000,000 non-amortizing Term Loan B, all subject to a Borrowing Base equal to 50% of the fair market value of the Debtor's Real Property. AMERCO and Amerco Real Estate Company are the direct Borrowers under the DIP Facility, as well as any other wholly owned subsidiaries Foothill may require. All of AMERCO's other U.S. affiliates and subsidiaries will guarantee repayment of AMERCO's obligations. The DIP Facility matures 12 months after entry of a Final DIP Financing Order or 10 days following confirmation of a chapter 11 plan. The Exit Facility contemplates a five-year term (with zero to 2% prepayment penalties for early termination). Subject to a $5,000,000 Carve-Out to permit payment of professional fees and fees owed to the U.S. Trustee and Court Clerk, all of AMERCO's borrowings under the DIP Facility constitute super-priority administrative expenses pursuant to 11 U.S.C. Sec. 364(c) and are secured by super-priority liens on all of the Debtor's otherwise unencumbered assets. The Exit Facility will be secured by first-priority liens on substantially all of the Reorganized Debtor's assets. AMERCO will pay interest on all amounts borrowed under the DIP Facility, at its option, at LIBOR plus 3.0% or the Base Rate plus 1.0%. The interest rate post-emergence will be tied to various performance measures. AMERCO will pay Foothill a variety of fees for the DIP Financing: (a) 0.50% per year on every dollar not borrowed as an Unused Line Fee; (b) customary 3.5% letter of credit fees; (c) $850 per-day per-analyst Field Examination Fees; and (d) other fees set forth in one or more non-public Fee Letters. All Letters of Credit must be cash collateralized at a rate of 105%. (AMERCO Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-0900) ANC RENTAL: Court Fixes November 18 as Supplemental Bar Date ------------------------------------------------------------ ANC Rental Corporation and its debtor-affiliates have identified that certain creditors were not able to receive the Court's October 30, 2002 order establishing January 14, 2003 as the deadline for filing proofs of claim. The Debtors believe that it is proper and fair to provide these Supplemental Creditors with opportunity to assert claims against the estate. At the Debtors' behest, Judge Walrath established November 18, 2003 at 4:30 p.m. (EST) as the last day and time for Supplemental Creditors to file proofs of claim. The Supplemental Creditors are required to file their proofs of claim with the Debtors' Claims Agent: Donlin, Recano & Company, Inc. Agent for the United States Bankruptcy Court Re: ANC Rental Corporation, et al. P.O. Box 2017, Murray Hill Station, New York, New York 10156 These entities are not required to file a proof of claim on or before the Supplemental Bar Date: 1. The Internal Revenue Service is not subject to the terms of the Supplemental Bar Date Order and an additional bar date will be established for the IRS under a separate order; 2. Any Supplemental Creditor that has already properly filed a proof of claim with the Claims Agent or the Clerk of the Court for the United States Bankruptcy Court for the District of Delaware; 3. Any Supplemental Creditor: (a) whose claim is listed in the Debtors' Schedules of Assets and Liabilities, or Schedules of Executory Contracts and Unexpired Leases; (b) whose claim is not described as "disputed", "contingent", or "unliquidated"; and (c) who does not dispute the amount or nature of their claim as set forth in the Debtors' Schedules; (d) any Supplemental Creditor whose claim is an administrative expense in the Debtors' Chapter 11 cases, under Section 507(a) of the Bankruptcy Code; (e) any Debtor having a claim against another Debtor; (f) any direct or indirect non-debtor subsidiary of a Debtor having a claim against a Debtor; and (g) any Supplemental Creditors whose claim against the Debtors has been allowed by a Court order entered on or before the Supplemental Bar Date. (ANC Rental Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service, Inc., 609/392-0900) ARMSTRONG HOLDINGS: AWI Enters Stipulation with Liberty Mutual -------------------------------------------------------------- Armstrong World Industries, Inc., the Future Claimants' Representative and the Asbestos Claimants' Committee ask the Court to approve their stipulation with Liberty Mutual Insurance Company relating to certain disputes arising from these bankruptcy proceedings and a civil action styled "Armstrong World Industries, Inc., v. Liberty Mutual Insurance Company." AWI is represented by William P. Skinner, Esq., at Covington and Burling, in Washington, Kenneth L. Jacobs, Esq., as Deputy General Counsel, and Rebecca L. Scalio, Esq., at Richards Layton & Finger, in Wilmington, Delaware. The Asbestos Claimants' Committee is represented by Aileen F. Maguire, Esq., at Campbell & Levine. The Future Claimants' Representative is represented by Andrew Kress, Esq., at Kaye Scholer LLP. Liberty Mutual is represented by Robert B. Millner, Esq., at Sonnenschein Nath & Rosenthal LLP, in Chicago, Illinois, Stanley J. Samorajczyk, Esq., at Akin Gump Strauss Hauer & Feld LLP, in Washington, A. Hugh Scott, Esq., at Choate Hall & Stewart, in Boston, Massachusetts, and Cynthia R. Koehler, General Counsel. To be effective, the Stipulation must also be approved by District Court Judge Alfred M. Wolin, and District Court Judge R. Barclay Surrick, each presiding over the different issues and suits affected by the Stipulation. The Stipulation (1) Nothing in the Plan or any Confirmation Order entered in the AWI Bankruptcy Case resolves the merits of, including by way of res judicata or collateral estoppel, and the Parties' rights are fully reserved with respect to: -- any claims for coverage that may be made against Liberty Mutual by AWI, Reorganized AWI, the Asbestos PI Trust or anyone else claiming rights under any and all policies issued or allegedly issued by Liberty Mutual to AWI or settlement agreements made with respect to the Policies; or -- any coverage defenses, counterclaims, set-off claims or recoupment claims (whether asserted by counterclaim or otherwise) that Liberty Mutual wishes to assert in response to such claims for coverage. Liberty Mutual, AWI, Reorganized AWI, and the Asbestos PI Trust reserve the right to litigate or arbitrate the merits of such claims, defenses, and counterclaims in an appropriate non-bankruptcy forum. (2) Liberty Mutual consents to the transfer and assignment of the Asbestos PI Insurance Asset to the Asbestos PI Trust pursuant to the Plan insofar as the Asbestos PI Insurance Asset consists of rights under the Policies or settlement agreements made with respect to the Policies. Liberty Mutual, AWI, Reorganized AWI and the Asbestos PI Trust reserve the right to litigate, in any non-bankruptcy forum, whether the Asbestos PI Trust, as a transferee and assignee of rights under the Policies, takes such rights subject to assuming some or all of the continuing obligations and duties arising under the Policies regarding those rights; provided, however, that the Asbestos PI Trust will not litigate, contest or disavow its assumption of the liabilities described in the Plan. By this consent to transfer and assignment, Liberty Mutual does not give up any defense to coverage, counterclaim, or other rights that Liberty Mutual has, except for the defense of lack of consent to the transfer and assignment, which defense Liberty Mutual waives. Liberty Mutual retains the right to contest coverage on any and all other grounds. AWI, on its own behalf and on behalf of the Asbestos PI Trust, agrees that the merits of Liberty Mutual's position on the question of which obligations under the Policies are assumed by the Asbestos PI Trust should be litigated or arbitrated in an appropriate forum other than this Bankruptcy Case. (3) The transfer and assignment of insurance rights, and the assumption by the Asbestos PI Trust of the liability for Asbestos Personal Injury Claims, do not vitiate coverage under the Policies for AWI, Reorganized AWI or the Asbestos PI Trust, but Liberty Mutual reserves the right to deny coverage on any other grounds. Liberty Mutual may not deny coverage to the Asbestos PI Trust for any claims on the basis that it insured AWI rather than the Asbestos PI Trust or on the basis that the Asbestos PI Trust has assumed certain liabilities of AWI. Liberty Mutual may not deny coverage to AWI or Reorganized AWI for any claims on the basis that certain rights under the Policies or settlement agreements made with respect to the Policies were transferred to the Asbestos PI Trust, except to the extent that: (a) the rights of AWI or Reorganized AWI with respect to coverage for such claims have been transferred to the Asbestos PI Trust pursuant to the Plan, or (b) the Asbestos PI Trust has released the rights of AWI or Reorganized AWI to coverage for such claims pursuant to authority to provide such releases granted to the Asbestos PI Trust in the Plan. (4) Liberty Mutual will not be bound by any finding by the Bankruptcy Court or District Court that the Plan, including the Asbestos PI Trust Distribution Procedures, is fair, equitable, or reasonable; and the issue of whether the Plan, including the Asbestos PI Trust Distribution Procedures, is fair, equitable or reasonable for purposes of disputes under the Policies or for purposes of any disputes between Liberty Mutual and any of AWI, Reorganized AWI or the Asbestos PI Trust is reserved for litigation in a non-bankruptcy forum. In the event that the Confirmation Order contains a finding that the Plan, including the Asbestos PI Trust Distribution Procedures, is fair, equitable or reasonable, Reorganized AWI, and/or the Asbestos PI Trust may elect to inform a fact finder in non-bankruptcy litigation that such a finding exists, but must also inform the fact finder that -- the finding was made solely for purposes of this Bankruptcy Case. By mutual agreement, Liberty Mutual did not and could not participate in those Bankruptcy Case proceedings that generated such finding. By virtue of this Stipulation and Order, the finding is not binding on Liberty Mutual for purposes of disputes under the Policies or for purposes of any disputes between Liberty Mutual and each of AWI, Reorganized AWI or the Asbestos PI Trust. The issue of whether the Plan, including the Asbestos PI Trust Distribution Procedures, is fair, equitable or reasonable for purposes of disputes under the Policies or for purposes of any disputes between Liberty Mutual and AWI, Reorganized AWI or the Asbestos PI Trust is reserved for determination in the non-bankruptcy litigation in the non-bankruptcy forum. Liberty Mutual reserves the right to contend in the non-bankruptcy litigation in the non-bankruptcy forum that there is a question about whether the Plan, including the Asbestos PI Trust Distribution Procedures, is fair, equitable or reasonable for insurance coverage purposes. AWI, Reorganized AWI, and the Asbestos PI Trust reserve the right to contend otherwise, including the right to contend that the question, including for insurance coverage purposes, is whether the Plan, including the Asbestos PI Trust Distribution Procedures, is a reasonable resolution of the liabilities of AWI for Asbestos Personal Injury Claims. (5) Without further Bankruptcy Court order, Liberty Mutual will have the right to file any counterclaims that it may have in the lawsuit currently pending in the United States District Court for the Eastern District of Pennsylvania styled, "Armstrong World Industries, Inc. v. Liberty Mutual Insurance Company," within 20 days of the later of: -- a decision not subject to further ADR appeal or ADR rehearing or ADR trial proceedings in the Wellington Alternative Dispute Resolution Proceeding that commenced in 1996 to which AWI and Liberty Mutual are parties, or -- the receipt of notice from Reorganized AWI that the Effective Date of the Plan has occurred. Neither AWI, Reorganized AWI nor the Asbestos PI Trust may argue, and the Pennsylvania District Court will not find, that Liberty Mutual did not have the right to do so because it did not comply with any of the time limits for filing pleadings that are set forth in the Federal Rules of Civil Procedure. Reorganized AWI and the Asbestos PI Trust reserve the right to oppose all or any portion of such counterclaims on any and all other grounds. (6) The Parties agree not to modify or alter the Plan in a manner that diminishes or impairs Liberty Mutual's rights under the Stipulation and Order and/or the Policies. In the event that any of the Parties takes such action, Liberty Mutual will have the right to object to such action. No change or modification of the Plan will alter the parties' rights under the Stipulation and Order. In the event that the Plan is amended to prevent the Asbestos PI Trust from giving a release of the rights of AWI and Reorganized AWI to coverage for property damage Claims, Liberty Mutual will not object. (7) Upon execution of the Stipulation and Order by the Parties, the Bankruptcy Court, the District Court and the Pennsylvania District Court, Liberty Mutual will promptly withdraw its stated intention to object to confirmation of the Plan. Liberty Mutual will also withdraw its Motion for Relief from Automatic Stay pending before the Bankruptcy Court as moot and its pending discovery requests in the Bankruptcy Court, and agrees not to conduct discovery in the Bankruptcy Case relating to confirmation of the Plan. Liberty Mutual also agrees that it will not file any briefs in the Bankruptcy Case related to confirmation of the Plan, will not present any evidence or otherwise participate in the confirmation hearing and will not appeal the Confirmation Order. Notwithstanding these agreements regarding confirmation inactivity, Liberty Mutual may take any action it deems appropriate if the Plan is amended or modified in a manner which, or one or more of the Parties takes other action, which diminishes or impairs Liberty Mutual's rights under the Stipulation and Order and/or the Policies; provided that such action by Liberty Mutual will relate only to the actions, which diminish or impair its rights under the Stipulation and Order and/or the Policies. Liberty Mutual also reserves the right to take such action it deems appropriate in connection with any dispute between AWI and ACandS that may affect Liberty Mutual's rights, provided that such action by Liberty Mutual will relate only to such disputes between AWI and ACandS. (8) The Parties agree that they do not presently intend to seek any estimation of Asbestos Personal Injury Claims in the Bankruptcy Case and will not do so unless necessary for confirmation of the Plan. In the event that an estimate is made of the amount of AWI's liability for Asbestos Personal Injury Claims, Liberty Mutual will not conduct any discovery in the Bankruptcy Case on such estimation, nor will Liberty Mutual present any evidence or otherwise participate in any hearings or briefing in the Bankruptcy Case relating to such estimation -- or voluntarily provide any information, assistance or cooperation or briefing to anyone that is disputing that issue with AWI. Any such estimation in the Bankruptcy Case, and any ruling in the Bankruptcy Case concerning whether any estimated amount establishes a liability of AWI that is immediately due and owing, will not be binding on Liberty Mutual, will have no effect on rights to coverage under the Policies and will have no bearing on any rights between the Parties. The Parties agree that the results of any such estimation, and any such ruling in the Bankruptcy Case will not be referred to, disclosed, presented for admission into evidence, or used in any manner in any non-bankruptcy forum insofar as disputes between Liberty Mutual and each of AWI, Reorganized AWI or the Asbestos PI Trust are concerned. (9) Liberty Mutual's right to assert that the Confirmation Order does not establish a liability of AWI that is immediately due and owing and its right to assert the effect of any such liability on any obligations under the Policies are reserved for litigation in the non-bankruptcy litigation in a non-bankruptcy forum. The rights of AWI, Reorganized AWI and the Asbestos PI Trust to assert that the Confirmation Order does establish a liability of AWI that is immediately due and owing and their right to assert the effect of any such liability on any obligation under the Policies are fully reserved for litigation in the non-bankruptcy litigation in a non-bankruptcy forum. By this reservation, Liberty Mutual will not contest that the Plan imposes obligations upon AWI and Reorganized AWI to transfer assets to the Asbestos PI Trust. (10) In the event of an inconsistency between, the Plan, the Confirmation Order and the Stipulation and Order, the Stipulation and Order will control insofar as disputes relating to insurance coverage under the Policies or settlement agreements made with respect to the Policies are concerned. (Armstrong Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., 609/392-0900) AVISTA CORP: Will Host Q3 2003 Conference Call on October 24 ------------------------------------------------------------ Avista Corp. (NYSE:AVA) will hold its quarterly conference call to discuss third quarter 2003 results and 2004 outlook on Friday, Oct. 24, 2003, at 10:30 a.m. Eastern Time (7:30 a.m. Pacific Time). This call is being webcast by CCBN and can be accessed at Avista's Web site at http://www.avistacorp.comor you may listen to the call by calling 1.800 884.5695 in the United States, passcode 52628568. The webcast is also being distributed over CCBN's Investor Distribution Network to both institutional and individual investors. Individual investors can listen to the call through CCBN's individual investor center at www.fulldisclosure.com or by visiting any of the investor sites in CCBN's Individual Investor Network. Institutional investors can access the call via CCBN's password-protected event management site, StreetEvents -- http://www.streetevents.com. Avista Corp. (S&P, BB+ Corporate Credit Rating, Stable) is an energy company involved in the production, transmission and distribution of energy as well as other energy-related businesses. Avista Utilities is a company operating division that provides electric and natural gas service to customers in four western states. Avista's non-regulated subsidiaries include Avista Advantage, Avista Labs and Avista Energy. Avista Corp.'s stock is traded under the ticker symbol "AVA" and its Internet address is http://www.avistacorp.com BAM! ENTERTAINMENT: Red Ink Continued to Flow in Fiscal Q4 ---------------------------------------------------------- BAM! Entertainment(R) (Nasdaq: BFUN), a developer and publisher of interactive entertainment software, reported results for its fiscal fourth quarter ended June 30, 2003. The company reported net revenues for the fiscal fourth quarter of $2.1 million, a decrease of 85% from net revenues of $14.0 million for the same quarter of the prior fiscal year. The operating loss for the quarter was $9.3 million and net loss for the quarter was $9.2 million, equivalent to 63 cents per share. In the same quarter of the prior year, the company sustained an operating loss of $5.1 million and a net loss of $5.2 million, equivalent to 35 cents per share. During the quarter ended June 30, 2003, the company did not release any new products. In the same quarter of the prior fiscal year the company released five new products. BAM! Entertainment's June 30, 2003 balance sheet shows that its total current liabilities outweighed its total current assets by about $1.5 million, while its accumulated deficit ballooned to about $60 million whittling down its total net capital to about $3 million from about $38 million a year ago. "The results for the quarter reflect our continued efforts to narrow our product strategy, undertake cost cutting measures and stabilize our fixed expenses and cash outflow," said Ray Musci, Chief Executive Officer of BAM! Entertainment. "Certainly this has been a very difficult and hard fought process. The restructuring we commenced in early November 2002 is substantively complete, which we believe has positioned our company as a leaner organization with a much clearer product focus, and with an eye towards a return to profitability during the holiday period upon the release of our key titles. Our restructuring and our recently completed inventory and receivable financing facility are solid steps in getting BAM! back on a growth track in a very dynamic market and increasingly competitive environment," said Musci. Key titles currently slated for release during the remainder of calendar year 2003 include: Wallace & Gromit in Project Zoo, the first product scheduled for release under the company's agreement with Oscar award-winning Aardman Animation Studios; the first release of Carmen Sandiego for next generation consoles; and an action-adventure game based on the popular Cartoon Network(TM) franchise The Powerpuff Girls(TM). The company has received notice from Nasdaq that the company was now in compliance with all listing requirements of The Nasdaq SmallCap Market and that its securities are no longer subject to delisting. Founded in 1999 and based in San Jose, California, BAM! Entertainment, Inc. is a developer, publisher and marketer of interactive entertainment software worldwide. The company develops, obtains, or licenses properties from a wide variety of sources, including global entertainment and media companies, and publishes software for video game systems, wireless devices, and personal computers. The company's common stock is publicly traded on NASDAQ under the symbol BFUN. More information about BAM! and its products can be found at the company's Web site located at http://www.bam4fun.com BAYOU STEEL: Seeking Open-Ended Lease Decision Period Extension --------------------------------------------------------------- Bayou Steel Corporation, together with its debtor-affiliates, asks for another extension for their lease-related decisions from the U.S. Bankruptcy Court for the Northern District of Texas. The Debtors' previous lease decision extension was until the earlier of: i) August 31, 2003 or ii) confirmation of a plan of reorganization. The Debtors relate that following approval of the extension, they participated in extensive negotiations with its secured lender, the Creditors Committee and other parties-in-interest to extend their exclusive period to file a plan of reorganization, to implement a timeline for the possible sale of the Debtors' assets and to confirm a plan of reorganization. The Court-approved Timeline requires the Debtors to market their assets for sale to potential purchasers, investors and merger partners and file a plan of reorganization by October 2003. It would be premature at this juncture in these cases for the Debtors to assume or reject the Leases until the Debtors and other parties in interest have a clearer idea of the Debtors' future business plan. Because the Debtors are unsure what the ultimate outcome of the disposition of their assets will be, they have determined extending the time to assume or reject the Leases is in the best interests of their creditors and the estates. Consequently, the Debtors ask the Court to extend until the confirmation of a plan of reorganization, as the deadline within which they must decide whether to assume, assume and assign, or reject their unexpired nonresidential real property leases. 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. BUCKEYE TECHNOLOGIES: Extends $30 Million Credit Facility --------------------------------------------------------- Buckeye Technologies Inc.'s (NYSE:BKI) Canadian $16 million credit agreement with The Toronto-Dominion Bank has been extended to mature on November 30, 2004. The interest rate and other terms and conditions remain substantially the same. The proceeds from this facility will continue to be used for general corporate purposes. Buckeye Chairman David B. Ferraro commented that, "This is an attractive credit arrangement. Extending this loan will help ensure that we maintain liquidity with a comfortable margin of safety. We are pleased with our long-term relationship with Toronto-Dominion Bank. Buckeye (S&P, BB- Corporate Credit Rating, Stable), a leading manufacturer and marketer of specialty cellulose and absorbent products, is headquartered in Memphis, Tennessee, USA. The Company currently operates facilities in the United States, Germany, Canada, Ireland and Brazil. Its products are sold worldwide to makers of consumer and industrial goods. CALL-NET: Underwriters Exercise Option to Purchase More Shares -------------------------------------------------------------- Call-Net Enterprises Inc. (TSX: FON, FON.B) announced that the underwriters of its public offering dated September 9, 2003 are exercising the over-allotment option granted to them. The underwriters notified Call-Net that they would be purchasing an additional 1,500,000 Class B Non-Voting Shares at a price of $3.75 per Class B Non-Voting Share for aggregate gross proceeds of $5,625,000. The closing of the over-allotment option is expected to be on or about October 2, 2003. Call-Net completed a $37.5 million offering on September 9, 2003. The Underwriting syndicate for the public offering was led by BMO Nesbitt Burns Inc. and included CIBC World Markets Inc., TD Securities Inc. and National Bank Financial Inc. Call-Net Enterprises Inc. (S&P, B/Negative, LT Corporate Rating) is a leading Canadian integrated communications solutions provider of local and long distance voice services as well as data, networking solutions and online services to households and businesses. It provides services primarily through its wholly- owned subsidiary, Sprint Canada Inc. Call-Net Enterprises and Sprint Canada are headquartered in Toronto and own and operate an extensive national fibre network with over 134 co-locations in nine Canadian metropolitan markets. CELLSTAR CORP: Will Publish Third-Quarter Results on October 15 --------------------------------------------------------------- CellStar Corporation (Nasdaq: CLST), a value-added wireless logistics services leader, plans to release to the wire services its third quarter operating results after the market closes on Wednesday, October 15, 2003, followed by a conference call on the morning of October 16, 2003. The full text of the press release will be available over First Call and on the Company Web site -- http://www.cellstar.com-- after the wire services have published the press release. After the release has been issued, CellStar Investor Relations will not be able to return phone calls until the conclusion of the conference call on October 16th. For those investors who wish to listen to the conference call, the following information is provided: CONFERENCE CALL - THURSDAY, October 16, 2003 11:00 a.m. EASTERN 9:00 a.m. MOUNTAIN 10:00 a.m. CENTRAL 8:00 a.m. PACIFIC To participate in the call, please dial: 877-381-5128 - Domestic Please plan on calling the conference center at least 10 minutes before start time to avoid last minute congestion that may cause you to miss some of the prepared remarks at the beginning of the call. The actual conference call will last approximately 1 hour. Members of the media are again invited to listen to the live conference. Questions, however, will be taken only from members of the investment community. Investors will have the opportunity to listen to the conference call via the link on CellStar's Investor Relations web site, and over the Internet through PR Newswire at http://www.firstcallevents.com/service/ajwz389616708gf12.html This call will also be directly available from the Bloomberg Professional Service, http://www.bloomberg.comand over the First Call Network. To listen to the live call, please go to the web site at least 15 minutes early to register, download and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available for 30 days after the conclusion of the call through the CellStar Investor Relations web site or through PR Newswire. Replay will also be available one hour after the conclusion of the call until 6:00 p.m. on Thursday, October 23rd by dialing 800-642- 1687 (Domestic) and entering the reservation number 3097323. CellStar Corporation (S&P, SD Corporate Credit Rating) is a leading global provider of value-added logistics services to the wireless communications industry, with operations in the Asia- Pacific, North American, Latin American, and European regions. CellStar facilitates the effective and efficient distribution of handsets, related accessories and other wireless products from leading manufacturers to network operators, agents, resellers, dealers and retailers. CellStar also provides activation services in some of its markets that generate new subscribers for wireless carriers. For the year ended November 30, 2002, the Company generated revenues of $2.2 billion. Additional information about CellStar may be found on its Web site at http://www.cellstar.com CENDANT MORTGAGE: Fitch Rates 4 Certs. Classes at Low-B Levels -------------------------------------------------------------- Fitch rates Cendant Mortgage Capital LLC's mortgage pass-through certificates, series 2003-8, as follows: -- $326.5 million classes I-A-1 - I-A-11, II-A-1 - II-A-4, I-P, I-X, R-I, R-II and R-III senior certificates 'AAA'; -- $11.5 million class I-B-1 certificates 'AA'; -- $3.2 million class II-B-1 certificates 'AA'; -- $1.5 million class I-B-2 certificates 'A'; -- $188,743 class II-B-2 certificates 'A'; -- $752,802 class I-B-3 certificates 'BBB'; -- $141,557 privately offered class II-B-3 certificates 'BBB'; -- $501,867 privately offered class I-B-4 certificates 'BB'; -- $94,371 privately offered class II-B-4 certificates 'BB'; -- $376,400 privately offered class I-B-5 certificates 'B'; -- $94,371 privately offered class II-B-5 certificates 'B'. The 'AAA' rating on the Group I senior certificates reflects the 6% subordination provided by the 4.60% class I-B-1, 0.60% class I- B-2, 0.30% class I-B-3, 0.20% privately offered class I-B-4, 0.15% privately offered class I-B-5 and 0.15% privately offered class I- B-6 (which is not rated by Fitch). The 'AAA' rating on the Group II senior certificates reflects the 4% subordination provided by the 3.35% class II-B-1, 0.20% class II-B-2, 0.15% privately offered class II-B-3, 0.10% privately offered class II-B-4, 0.10% privately offered class II-B-5 and 0.10% privately offered class II-B-6 (not rated by Fitch). Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings also reflect the quality of the underlying mortgage collateral, strength of the legal and financial structures and the servicing capabilities of Cendant Mortgage Corporation, rated 'RPS1-' by Fitch. The Group I certificates represent ownership in a trust fund, which consists primarily of 540 one- to four-family conventional, primarily 30-year fixed-rate mortgage loans secured by first liens on residential mortgage properties. As of the cut-off date (Sept. 1, 2003), the mortgage pool has an aggregate principal balance of approximately $250,933,872, a weighted average original loan-to-value ratio (OLTV) of 67.75%, a weighted average coupon of 5.57%, a weighted average remaining term of 358 months and an average balance of $464,692. The loans are primarily located in California (21.85%), New Jersey (16.52%) and Massachusetts (11.21%). The Group II certificates represent ownership in a trust fund, which consists primarily of 198 one- to four-family fixed-rate mortgage loans secured by first liens on residential mortgage properties. Approximately 23.89% and 76.11% of the Group II loans are 30-year relocation mortgage loans and 15- year loans, respectively. As of the cut-off date, the mortgage pool has an aggregate principal balance of approximately $94,371,312, a weighted average OLTV of 63.79%, a WAC of 5.13%, a WAM of 222 months and an average balance of $476,623. The loans are primarily located in California (16.09%), New Jersey (10.6%) and New York (9.95%). None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. All of the mortgage loans were either originated or acquired in accordance with the underwriting guidelines established by Cendant Mortgage Corporation. Any mortgage loan with an OLTV in excess of 80% is required to have a primary mortgage insurance policy. Approximately 1.50% of the Group I pool and 2.61% of the Group II pool contains pledged asset loans. These loans, also referred to as 'Additional Collateral Loans', are secured by a security interest, normally in securities owned by the borrower, which generally does not exceed 30% of the loan amount. Ambac Assurance Corporation provides a limited purpose surety bond, which guarantees that the Trust receives certain shortfalls and proceeds realized from the liquidation of the additional collateral, up to 30% of the original principal amount of that Additional Collateral Loan. Citibank N.A. will serve as trustee. For federal income tax purposes, an election will be made to treat the trust fund as three real estate mortgage investment conduits. CHARTER COMMS: S&P Rates Subsidiaries' Senior Notes at CCC- ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its CCC- rating to the $1.6 billion 10.25% senior notes due 2010 of CCH II, LLC and CCH II Capital Corp., both of which are indirect subsidiaries of cable system operator Charter Communications Inc. (CCC+/Developing/--). The notes were issued in privately negotiated transactions in exchange for $609 million principal amount of convertible debt at Charter Communications Inc., and $698 million principal amount of senior notes and about $560 million in accreted principal amount of senior discount notes debt at intermediate holding company Charter Communications Holdings, LLC. The notes are currently not registered, but the company has agreed to exchange the notes for identical registered securities at a future date. All outstanding ratings on Charter were affirmed. The outlook is developing. Although the CCH II notes are structurally senior to the debt of Holdings, which is also rated CCC-, the substantial amount of priority obligations in the form of secured bank debt ahead of the CCH II notes constrains the rating on these notes to two notches below the CCC+ corporate credit rating. The principal benefit of the exchange offer was a reduction of the 2005 and 2006 convertible debt maturities, which modestly improved the financial profile. Consolidated debt declined minimally, by 2%. The company still faces considerable financial challenges from remaining convertible debt maturities of $500 million in 2005 and $273 million in 2006, as well as pressure from tightening bank covenants and rising amortization. "Ratings on Charter continue to reflect high financial risk from acquisition and capital spending-related debt, significant near- term debt maturities, ongoing basic subscriber losses, limited ability to raise prices in the face of competition from satellite TV providers, and pressure from rising programming costs," said Standard & Poor's credit analyst Eric Geil. "These factors are partly mitigated by a good business risk profile from the company's position as the dominant provider of pay TV services in its markets, strong growth in high-speed data services, opportunities for cash flow growth from digital video services, and scale benefits from a large subscriber base totaling roughly 6.5 million." Although declining capital expenditures are helping to reduce negative discretionary cash flow, Charter still depends heavily on its cash balance and bank borrowing availability to meet a portion of its cash needs, including $152 million of debt maturing in 2003. As of June 30, 2003, Charter had $202 million cash, and about $1.2 billion was available from various credit facilities as limited by financial covenants. These covenants tighten in subsequent quarters and could substantially reduce the company's borrowing availability, depending on operating performance. CHARTER COMMS: Completes Exchange Offer for Senior Indebtedness --------------------------------------------------------------- On September 23, 2003 Charter Communications, Inc., parent company of Charter Communications Holdings, LLC, and its indirect subsidiary, CCH II, LLC closed on the exchange of certain indebtedness, which was previously announced on September 19, 2003. Charter purchased an aggregate of $609 million principal amount of its convertible senior notes and $1.3 billion principal amount of the senior notes and senior discount notes issued by Charter Holdings from a small number of institutional investors in privately negotiated transactions. In consideration for these securities, CCH II issued an aggregate of $1.6 billion principal amount of 10.25% notes due 2010. CCH II also sold an additional $30 million principal amount of 10.25% notes for an equivalent amount of cash. The proceeds were applied to transaction costs and for general corporate purposes. The new notes will not be registered under the Securities Act of 1933, as amended, and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. Charter Communications (S&P, CCC+ Corporate Credit Rating, Developing), A Wired World Company(TM), is the nation's third largest broadband communications company. Charter provides a full range of advanced broadband services to the home, including cable television on an advanced digital video programming platform via Charter Digital Cable(R) brand and high-speed Internet access marketed under the Charter Pipeline(R) brand. Commercial high- speed data, video and Internet solutions are provided under the Charter Business Networks(R) brand. Advertising sales and production services are sold under the Charter Media(R) brand. More information about Charter can be found at http://www.charter.com CINRAM INTERNATIONAL: S&P Rates $100 Mill. Tranche C Loan at B+ --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' rating to Cinram International Inc.'s proposed US$100 million senior secured second lien tranche C term loan due 2010 of its proposed credit facility. At the same time, the 'BB' long-term corporate credit and senior secured debt ratings on Cinram were affirmed. The outlook is stable. Toronto, Ont.-based Cinram is one of the world's largest manufacturers of pre-recorded multimedia products, such as CDs and DVDs. Cinram is currently in the process of syndicating a US$1.2 billion senior credit facility, of which US$1.05 billion is expected to fund the acquisition of certain assets from AOL Time Warner Inc., while the remaining US$150 million is expected to be available for general corporate purposes on a revolving basis. The company recently announced changes to its proposed bank facility, by increasing its term loan A tranche by US$100 million to US$250 million, creating the new term loan C tranche and reducing the term loan B tranche by US$200 million to US$700 million. The total size of the proposed credit facility has not changed. The revolving, term loan A and term loan B tranches of the facility will hold a first priority claim on substantially all of Cinram and its subsidiaries' assets, including the assets being acquired from AOL Time Warner, while the term loan C tranche will hold a second priority pledge. Pro forma the acquisition, operating lease-adjusted total debt is estimated at C$1.5 billion. "The US$100 million term loan C tranche is rated two notches below the long-term corporate credit rating to reflect its junior position in right of payment relative to Cinram's first priority secured credit facility tranches," said Standard & Poor's credit analyst Barbara Komjathy. In particular, priority debt exceeds 30% of Cinram's pro forma goodwill-adjusted asset base. Although lenders of the term loan C tranche will benefit from a second priority claim on the secured assets, Standard & Poor's analysis of the collateral package indicates that in the event of default or bankruptcy, lenders of the first priority tranches could expect only a modest recovery (less than 50%). Thus, the term loan C tranche would be materially disadvantaged in a default scenario. The stable outlook reflects Standard & Poor's expectation that Cinram will successfully integrate its acquired assets in 2004, maintain its strong global market positions, and rapidly reduce debt outstanding. In particular, the company should repay C$400 million-C$500 million of its debt by the end of 2005. CONSECO INC: SEC Subpoenas Conseco to Provide Documents on Unit --------------------------------------------------------------- With the authority from the U.S. District Court for the Southern District of Indiana, the Securities and Exchange Commission subpoenaed Conseco Inc. on September 23, 2003 to produce documents on past accounting of investments related to its former mobile- home lending business unit Green Tree Finance Corporation and its successor, Conseco Finance. The SEC seeks to get hold of documents covering the period from June 1, 1998 to June 30, 2000. In a statement made by Conseco spokesman, Jim Rosensteel, to Bestwire Services on September 24, 2003, "[Conseco] has been officially informed that [it] is not a target in this investigation, and that Conseco is not being investigated." (Conseco Bankruptcy News, Issue No. 34; Bankruptcy Creditors' Service, Inc., 609/392-0900) CONSTELLATION BRANDS: Reports Weaker Performance for 2nd Quarter ---------------------------------------------------------------- Constellation Brands, Inc. (NYSE: STZ), a leading international producer and marketer of beverage alcohol brands, reported record net sales for its second quarter ended August 31, 2003. Net sales increased 32 percent, led by the benefit from the Hardy acquisition, strong top line performance across all segments of the base business and a positive two percent impact from currency. Net sales on a pro forma basis, including prior year period sales from Hardy of $132 million, increased 11 percent, including a positive four percent impact from currency. Net income on a comparable basis increased $17 million, or 34 percent, to reach a record $66 million and diluted earnings per share on a comparable basis increased 21 percent to reach $0.64. For the first six months of fiscal 2004, net income on a comparable basis increased 31 percent and diluted earnings per share on a comparable basis increased 21 percent to reach $1.14. Net income and diluted earnings per share as reported under generally accepted accounting principles ("reported") for the second quarter declined $14 million, or 28 percent, to $36 million and 36 percent to $0.34, respectively. The reported results for the quarter include restructuring and unusual charges of $31 million after tax, or $0.30 per share. For the first six months of fiscal 2004, net income on a reported basis declined 14 percent and diluted earnings per share on a reported basis declined 20 percent to $0.75. The reported results for the first six months include restructuring and unusual charges of $39 million after tax, or $0.39 per share. Chairman and Chief Executive Officer Richard Sands said, "Constellation had a great quarter with sales improving across all categories along with strong contributions from the Hardy acquisition. Our diversity across categories and geographies continues to serve us well, allowing us to make investments where we see the best growth opportunities and returns. Excluding the benefits of currency, pro forma net sales increased seven percent led by double-digit growth in imported beer, solid wine growth in the U.S. and growth in the wholesale business in the U.K. We continued to experience healthy growth in a competitive environment, a testament to our overall organizational strategy and our focus on building long-term brand equity." The Company's measure of segment profitability excludes restructuring and unusual costs, which is consistent with the measure used by management to evaluate results. Consolidated Results For the three months ended August 31, 2003, net sales grew 32 percent, reaching $909 million compared to $690 million in the prior year. Pro forma net sales for the quarter increased 11 percent, including a positive four percent impact from currency. Excluding net sales of $140 million from the Hardy acquisition, organic net sales grew 11 percent. This increase was driven by increased sales across all categories: imported beer, spirits, wine and wholesale and other, and includes a positive two percent impact from currency. Net sales for the six months ended August 31, 2003 increased 25 percent. The increase was driven primarily by the addition of wine sales from the Hardy acquisition, imported beer sales, the U.K. wholesale business and a positive three percent impact from currency. Gross profit on a comparable basis for the quarter increased 37 percent to reach $264 million and gross margin on a comparable basis improved 100 basis points to reach 29.1 percent. The increase in gross profit resulted primarily from higher sales and a favorable mix towards higher margin products, particularly brands from the Hardy acquisition and the spirits portfolio. Reported gross profit, which includes the flow through of inventory step-up associated with the Hardy acquisition of nine million dollars and the write down of $17 million of inventory associated with the Company's decision to exit the commodity concentrate business in the U.S., increased 23 percent to reach $238 million. Reported gross margin declined 180 basis points to 26.2 percent. Gross profit on a comparable basis for Six Months 2004 increased 29 percent to reach $478 million. On a reported basis for the six months, gross profit increased 21 percent to $446 million and includes the flow through of inventory step-up associated with the Hardy acquisition and concentrate inventory write down of $15 million and $17 million, respectively. Second quarter selling, general and administrative expenses on a comparable basis increased $32 million to reach $120 million. The majority of the increase resulted from expenses associated with the Hardy acquisition. As a percent of net sales, SG&A on a comparable basis was 13.2 percent compared to 12.7 percent for the prior year. The increase is due primarily to the Hardy acquisition, which has a higher percentage SG&A than the Company's base business and additional amortization expense associated with the Company's new bank credit agreement. Reported SG&A for the quarter increased $37 million to reach $125 million, and includes five million dollars of financing costs associated with a bridge loan used as financing for the Hardy acquisition. As a percent of net sales, reported SG&A was 13.8 percent, including a 60 basis point impact from the financing costs. SG&A on a comparable basis for Six Months 2004 was $222 million, an increase of 25 percent compared to the prior year. Reported SG&A for Six Months 2004 was $232 million, an increase of 30 percent, and includes nine million dollars of financing costs associated with the Hardy acquisition. Operating income on a comparable basis increased to $144 million in the quarter, an increase of 37 percent versus $106 million in the prior year. Reported operating income was $96 million, a decline of nine percent, and includes: the flow through of inventory step-up of nine million dollars; write down of concentrate inventory of $17 million; financing costs of five million dollars; and restructuring charges of $17 million. Year-to-date, operating income on a comparable basis increased 33 percent to reach $255 million and reported operating income increased two percent to reach $195 million. For the year, operating income on a reported basis includes: the flow through of inventory step-up of $15 million; write down of concentrate inventory of $17 million; financing costs of nine million dollars; and restructuring charges of $19 million. Net interest expense for the quarter increased $14 million to $41 million as a result of higher average borrowings due to the financing of the Hardy acquisition, partially offset by a lower average borrowing rate. For Six Months 2004, net interest expense on a comparable basis was $79 million. On a reported basis, net interest expense was $80 million and includes one million dollars of imputed interest expense incurred in the first quarter related to the Hardy acquisition. As a result of the above factors, net income and diluted earnings per share on a comparable basis for Second Quarter 2004 increased 34 percent and 21 percent, respectively, reaching $66 million and $0.64. On a reported basis, net income and diluted earnings per share for Second Quarter 2004 declined 28 percent and 36 percent, respectively, to $36 million and $0.34. Also as a result of the above factors, net income and diluted earnings per share on a comparable basis for Six Months 2004 increased 31 percent and 21 percent, respectively. Net income and diluted earnings per share on a reported basis for the same period declined 14 percent and 20 percent, respectively. Constellation Beers and Spirits Results Due to strong growth in both imported beer and spirits, net sales for Second Quarter 2004 grew 12 percent to reach $320 million and operating income grew 14 percent to reach $70 million. Driven by double-digit volume gains on Corona Extra, Corona Light, Negra Modelo and Pacifico, imported beer sales increased 13 percent for the quarter. Spirits sales increased nine percent for the quarter, benefiting from healthy industry growth, strong Canadian whisky sales, particularly Black Velvet, and the introduction of several new products, including Beachcomber Rum and Chi-Chi's Mango Margarita. The 14 percent increase in operating income for the quarter resulted from higher sales and a positive mix of spirits sales to higher margin products. Net sales for Six Months 2004 increased seven percent to $597 million and operating income increased 12 percent to reach $130 million for the same period. Constellation Wines Results Net sales for Second Quarter 2004 were $589 million compared to $403 million the prior year, an increase of $186 million, or 46 percent. The increase was driven primarily by the addition of $140 million of sales from the Hardy acquisition, growth in the U.K. Wholesale business, wine sales in the U.S. and a positive four percent impact from currency. Excluding the additional sales from the Hardy acquisition, organic net sales increased 11 percent for the quarter, led by growth in the U.K. wholesale business and wine in the U.S. and a positive four percent impact from currency, partially offset by specialty drinks in the U.K., particularly RTDs, or ready-to-drink products. Pro forma net sales for Second Quarter 2004, which include $132 million of Hardy sales in the prior year period, increased 10 percent and include a positive five percent impact from currency. Operating income for Second Quarter 2004 was $84 million, an increase of 62 percent. The increase was primarily the result of sales derived from the Hardy acquisition. Net sales for Six Months 2004 increased 39 percent to reach $1.1 billion. The increase was driven primarily from additional sales from the Hardy acquisition and a positive six percent impact from currency. Operating income increased 60 percent for Six Months 2004 driven primarily by the additional sales from the Hardy acquisition. Outlook The following statements are management's current diluted earnings per share expectations both on a comparable basis and a reported (GAAP) basis for the third quarter ending November 30, 2003 and fiscal year ending February 29, 2004: -- Diluted earnings per share on a comparable basis for Third Quarter 2004 are expected to be within a range of $0.76 to $0.80 versus $0.69 for Third Quarter 2003. -- Diluted earnings per share on a comparable basis for Fiscal 2004 are expected to be within a range of $2.44 to $2.51 versus $2.07 for Fiscal 2003. -- Diluted earnings per share on a reported (GAAP) basis for Third Quarter 2004 are expected to be within a range of $0.65 to $0.69 versus $0.69 for Third Quarter 2003. -- Diluted earnings per share on a reported (GAAP) basis for Fiscal 2004 are expected to be within a range of $1.89 to $1.96 versus $2.19 for Fiscal 2003. Status of Business Outlook During the quarter, Constellation may reiterate the estimates set forth above under the heading Outlook. Prior to the start of the Quiet Period (described below), the public can continue to rely on the Outlook as still being Constellation's current expectations on the matters covered, unless Constellation publishes a notice stating otherwise. Beginning November 15, 2003, Constellation will observe a "Quiet Period" during which the Outlook no longer constitutes the Company's current expectations. During the Quiet Period, the Outlook should be considered to be historical, speaking as of prior to the Quiet Period only and not subject to update by the Company. During the Quiet Period, Constellation's representatives will not comment concerning the Outlook or Constellation's financial results or expectations. The Quiet Period will extend until the day when Constellation's next quarterly Earnings Release is published, presently scheduled for Tuesday, January 6, 2004, after market hours. Items Affecting Comparability Inventory step-up -- The Hardy acquisition resulted in an allocation of purchase price in excess of book value to certain inventory on hand at the date of purchase. This allocation of purchase price in excess of book value is referred to as inventory step-up. The inventory step-up represents an assumed manufacturing profit attributable to Hardy pre-acquisition. For inventory produced and sold after the acquisition date, the related manufacturer's profit will accrue to the Company. The Company expects flow through of inventory step-up to have an impact of approximately $0.12 per share for the current fiscal year. Financing costs -- In connection with the Hardy acquisition, the Company recorded amortization expense for deferred financing costs associated with non-continuing financing, primarily related to the bridge loan agreement. The Company expects this charge to be approximately $0.05 per share for the current fiscal year. Restructuring charges -- Restructuring charges resulted from the realignment of business operations in the Company's wine division, as previously announced in the fourth quarter of last fiscal year. The Company expects to incur charges of approximately $0.05 per share for the current fiscal year. Imputed interest charge -- In connection with the Hardy acquisition and in accordance with purchase accounting, the Company was required to take a one-time imputed interest charge for the time period between when the Company obtained control of Hardy and the date it paid shareholders. The Company expects this charge to be approximately $0.01 per share for the current fiscal year. Gain on change in fair value of derivative instruments -- In connection with the Hardy acquisition, the Company entered into derivative instruments to cap the cost of the acquisition in U.S. dollars. The Company recorded a gain in the first quarter, which represented the net change in value of the derivative instruments from the beginning of the first quarter until the date Hardy shareholders were paid. The Company expects this gain to be approximately $0.01 per share for the current fiscal year. Exiting U.S. commodity concentrate product line -- The Company has made a decision to exit the commodity concentrate product line -- located in Madera, California. The commodity concentrate product line is facing declining sales and profits and is not part of the Company's core business, beverage alcohol. The Company will continue to produce and sell value-added, proprietary products such as MegaColors. The Company expects this charge to be approximately $0.33 per share for the current fiscal year, of which $0.10 will be charged to cost of product sold and $0.23 will be recorded as restructuring charges. The Company expects the restructuring project to improve overall profitability and asset utilization resulting in increased return on invested capital, and to be immediately cash flow positive. More than half the charges are non-cash charges. Constellation Brands, Inc. (S&P, BB Corporate Credit and Senior Unsecured Debt Ratings) is a leading international producer and marketer of beverage alcohol brands, with a broad portfolio across the wine, spirits and imported beer categories. The Company is the largest multi-category supplier of beverage alcohol in the United States; a leading producer and exporter of wine from Australia and New Zealand; and both a major producer and independent drinks wholesaler in the United Kingdom. Well-known brands in Constellation's portfolio include: Corona Extra, Pacifico, St. Pauli Girl, Black Velvet, Fleischmann's, Mr. Boston, Estancia, Simi, Ravenswood, Blackstone, Banrock Station, Hardys, Nobilo, Alice White, Vendange, Almaden, Arbor Mist, Stowells and Blackthorn. CONSUMERS FINANCIAL: Hires Marcum & Kliegman as New Accountants --------------------------------------------------------------- As of September 18, 2003, Stambaugh Ness, PC resigned as the principal independent accountants for Consumers Financial Corporation. The financial statements audited by Stambaugh Ness, PC for the year ended December 31, 2002 contained an explanatory paragraph pertaining to the Company's ability to continue as a going concern. As of September 23, 2003, Marcum & Kliegman LLP was engaged as the new principal independent accountants, commencing with the interim financial statement review for the third quarter ending September 30, 2003, and the audit for the year ending December 31, 2003. The appointment of Marcum & Kliegman LLP was recommended and approved by the Company's Board of Directors. COVANTA ENERGY: Plan-Filing Exclusivity Extended to December 8 -------------------------------------------------------------- At the Covanta Energy Debtors' request, U.S. Bankruptcy Court Judge Blackshear extends the Debtors' exclusive periods to: -- file a plan through and including December 8, 2003; and -- solicit acceptances of that plan through and including January 7, 2004. (Covanta Bankruptcy News, Issue No. 37; Bankruptcy Creditors' Service, Inc., 609/392-0900) DIRECTV: Wants Plan-Filing Exclusivity Extended to October 15 ------------------------------------------------------------- DirecTV Latin America LLC, the Official Committee of Unsecured Creditors and Hughes Electronics Corporation ask the Court to extend the exclusive period by which the Debtor may file a plan to October 15, 2003 and the exclusive period to solicit acceptances of that plan to December 12, 2003. Joel A. Waite, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, relates that the Debtor, the Committee and Hughes have been engaged in negotiations with respect to valuation and the terms of a plan of reorganization. The parties agree that it would be productive to the plan formulation process, and the Chapter 11 case generally, to extend the Exclusive Periods. The Court will convene a hearing on October 8, 2003 to consider the Debtor's request. By application of Del.Bankr.LR 9006-2, the Debtor's exclusive filing period is automatically extended through the conclusion of that hearing. (DirecTV Latin America Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 609/392-0900) DOW CORNING: Taps WebEx Ent. for Web Communications Services ------------------------------------------------------------ Dow Corning Corp. has chosen WebEx Enterprise Edition from WebEx Communications, Inc. (Nasdaq: WEBX) to provide the Web communications service for Dow Corning's worldwide organization. WebEx Enterprise Edition integrates all of WebEx's specialized Web communications services-WebEx Meeting Center, WebEx Training Center, WebEx Support Center and the new WebEx Event Center-to create a single source for all enterprise Web communications. With WebEx Enterprise Edition, Dow Corning employees can now easily access all of WebEx's customized communications services. For more than two years, Dow Corning's 8,200 worldwide employees have used WebEx Meeting Center service to hold highly interactive Web meetings, increasing productivity and allowing more work to be accomplished while reducing costs. Dow Corning employees use WebEx services for online presentations, training and support. Project teams of employees, customers and partners use WebEx to plan, design and build new products, and coordinate supply chains with distributors and manufacturers. WebEx Event Center helps Dow Corning reduce costs by hosting virtual product rollouts and seminars to replace expensive tradeshow productions. "We had a corporate-wide travel ban throughout the Iraqi war and SARS crisis, but WebEx helped us maintain productive communications with our employees, customers and partners in the Middle East and Asia. Despite the travel ban, WebEx meetings allowed us stay on schedule and continue to support the needs of our 25,000 customers," said Steven J. Hershauer, web collaboration and content management senior specialist at Dow Corning. "We view WebEx as the market and technology leader that continues to provide secure, reliable and functionally rich multimedia communication services." "Dow Corning joins a growing list of enterprises that have discovered WebEx's ability to bridge geographical communication barriers," said Rob Farris, vice president of Worldwide Sales at WebEx Communications. "With WebEx Enterprise Edition, all of Dow Corning's employees now have access to a variety of specialized communication services for making worldwide business run faster, smoother and more efficiently." All of WebEx's services are built on the MediaTone(TM) communications platform and delivered through the WebEx MediaTone Network, the only global network specifically designed for secure, high-speed Web communications. MediaTone's unique information- switching technology allows the WebEx network to manage complex media types, deliver advanced communications functionality, and support a range devices and platforms. For more information about WebEx Enterprise Edition or any of WebEx's services, visit: http://webex.com/services_conferencing-overview.html Dow Corning -- http://www.dowcorning.com-- provides performance- enhancing solutions to serve the diverse needs of more than 25,000 customers worldwide. A global leader in silicon-based technology and innovation, offering more than 7,000 products and services, Dow Corning is equally owned by The Dow Chemical Company (NYSE: DOW) and Corning Incorporated (NYSE: GLW). More than half of Dow Corning's sales are outside the United States. WebEx Communications, Inc. is the world's leading provider of Web communications services. WebEx services are used across the enterprise in sales, support, training, marketing, engineering and product design. WebEx provides carrier-class services using its MediaTone communications platform deployed over the WebEx MediaTone Network, a high-speed global network specifically designed for secure, real-time Web communications. With its unique information-switching technology, multimedia capabilities and standards-based APIs, MediaTone is the dial tone for Web communications. WebEx Communications is based in San Jose, California and has regional headquarters in Europe and Asia. Visit http://www.webex.comfor more information. EAGLE FOODS CENTER: Court Approves Sale of Certain Stores --------------------------------------------------------- Eagle Food Centers, Inc., which owns and operates supermarkets in Illinois and Iowa, announced that the U.S. Bankruptcy Court for the Northern District of Illinois confirmed the sale of certain Eagle stores. The Court approved separate purchase agreements for certain assets related to the following locations: Anticipated Transaction Purchaser Store Location Closing Date --------- -------------- ------------ The Bobak Acquisition Corp. Store # 110 - Oct. 3, 2003 Naperville, IL Crystal Lake L.P. Store # 289 - Oct. 7, 2003 Crystal Lake, IL Jefferson Capital Group, Inc. Store # 111 - Elgin, IL Oct. 10, 2003 Store # 86 - Montgomery, IL Tesbo Conception Store #075 - Rock Island, IL Oct. 8, 2003 Group LLC (including building & land) Downtown Eagle Store# 130 - Dubuque, IA Oct. 14, 2003 Corporation Store #234 - Clinton, IA Store #311 in Belvidere, IL and Store #008 in East Moline, IL have been held over and will be heard by the Court on October 23, 2003. Eagle Foods will continue to market the balance of its stores and infrastructure. If the facilities are not purchased, Eagle Food Centers anticipates closing its remaining facilities by the end of October. ENCOMPASS SERVICES: Court Clears Settlement with Liberty Mutual --------------------------------------------------------------- On October 30, 1998, Group Maintenance American Corp., predecessor-in-interest to Encompass Services Corporation, executed a General Agreement of Indemnity on behalf of Liberty Mutual Insurance Company. Pursuant to the Indemnity Agreement, Group Maintenance agreed to indemnify and save harmless Liberty from any and all loss, damage or expense by reason of Liberty executing or delivering surety bonds on the Debtors' behalf. In reliance on the Indemnity Agreements, Liberty, as Surety, issued various prepetition surety bonds on behalf of certain of the Debtors in connection with various projects and their related contracts. Keith A. Langley, Esq., at Godwin Gruber, PC, in Dallas, Texas, relates that the Debtors' business required, and continues to require, the ongoing effectiveness of existing prepetition Bonds and the issuance of postpetition Bonds called for by various governmental and private entities in support of the Bonded Contracts and Projects, including those assigned to third-parties and those retained by the Debtors. In consideration of Liberty's forbearance from canceling existing postpetition Bonds and to facilitate Liberty's agreement to issue further postpetition surety bond credit so as to allow the Debtors to operate their businesses postpetition and on a going forward basis, Mr. Langley recounts that the Debtors entered into certain postpetition financing agreements with various surety providers including Liberty. The Debtors obtained authority to enter into the Surety Agreements with Liberty by entry of the Interim and Final Surety Orders on November 26, 2002 and January 24, 2003. Pursuant to the Interim and Final Surety Orders: -- The Court found that the Debtors were and are unable to find surety bond credit on terms more favorable than those offered by the sureties, including Liberty. The Court further discovered that the relief granted by the Interim and Final Surety Orders was necessary to avoid immediate and irreparable harm and injury to the Debtors' estates which would otherwise result from a lack of continuing and going forward surety bond credit; -- The Court approved the Debtors' entry into the Surety Agreements, whereby Liberty agreed to extend postpetition surety bond credit to the Debtors, as more fully set forth in the Surety Agreements. In consideration of Liberty's extension of postpetition surety bond credit, the Debtors agreed to provide Liberty with cash and other collateral. Mr. Langley notes that the Debtors have provided Liberty with the cash and other collateral. The collateral was intended to secure Liberty from all loss, damage, costs and expenses, which Liberty may sustain, in connection with the Bonds, Bonded Projects, Indemnity Agreement, or otherwise in relation to these matters -- the Surety Loss; and -- The Debtors assumed each and every Bonded Contract and affirmed the Indemnity Agreement and other obligations of indemnity, and Liberty was granted an administrative class claim for the Surety Loss. Pursuant to the Court's July 2, 2003 Order, the Revolving Lenders agreed to purchase from Liberty for $17,000,000, a $22,000,000 letter of credit provided to Liberty by the Debtors as collateral for the payment of Surety Loss. In connection with the Order, Liberty agreed to look first to the proceeds of the sale of the letter of credit as reimbursement for Surety Loss, and then only to seek recovery from the estate as an administrative expense to the extent that it incurs Surety Loss exceeding $17,000,000. By this motion, Liberty asks the Court to allow it a contingent administrative claim to the extent it may incur Surety Loss in excess of $17,000,000, or to the extent which Liberty determines that the $17,000,000 is otherwise insufficient to repay it for future or additional Surety Loss, whether liquidated or contingent. Liberty further asks the Court for a 120-day extension of time in which to amend and liquidate its administrative claim. Mr. Langley points out that many Bonds remain outstanding in an aggregate penal amount, significantly exceeding $17,000,000 and Liberty could incur future Surety Loss in excess thereof. Thus, Liberty reserves the right to file further applications for administrative expense as necessary to accurately set forth amounts recoverable by it as administrative expenses, pursuant to its rights and remedies under the Bonds, the Indemnity Agreement, the Surety Agreements, the Interim and Final Surety Orders, or otherwise. Liberty has filed 126 General Unsecured Claims in the Debtors' bankruptcy cases. * * * Subsequently, the Debtors and Liberty reached an agreement, which the Court approved, settling Liberty's request and 126 General Unsecured Claims. The parties agreed that: (a) Liberty's 126 General Unsecured Claims are voluntarily withdrawn; (b) any objection by the Debtors to Liberty's General Unsecured Claims is moot and is withdrawn based on Liberty's withdrawal of its General Unsecured Claims; (c) Liberty is granted an Administrative Expense claim for $1, the value of which is contingent on additional Surety Loss, which may be incurred by Liberty; (d) Liberty is granted up to and including December 6, 2003 to file an Amended Administrative Expense Claim to assert the full amount of its liquidated claim or to assert an estimated claim, and nothing will prevent the Debtors from objecting to the value of the claim once filed; and (e) the extended deadline of December 6, 2003 will not be further extended absent a showing of good cause by Liberty or agreement between the parties. (Encompass Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 609/392-0900) ENERGY WEST: Arranges New $23M Credit Facility with LaSalle Bank ---------------------------------------------------------------- Energy West, Incorporated (Nasdaq: EWST) has entered into a $23 million secured revolving credit facility with LaSalle Bank National Association. The credit facility replaces the Company's line of credit with Wells Fargo Bank Montana, and proceeds from the LaSalle facility were used to pay in full the amounts due to Wells Fargo. The Company utilized $2.2 million of the new line of credit to pay the final settlement amount with PPL Montana, LLC, terminating all proceedings in the lawsuit. The terms of the LaSalle credit facility require that the Company restructure its long term debt by March 31, 2004. In connection with that restructuring, the Company will seek to increase the amount of its long term debt by approximately $8 million and the LaSalle credit facility would be correspondingly reduced. The credit facility also provides that the Company must complete the restructuring of its long term debt before reinstating a dividend. Energy West's Interim President and CEO John C. Allen stated, "We are very pleased to announce the completion of this new credit facility with LaSalle. This is a significant step forward in our effort to strengthen the Company's balance sheet and our effort to reinstate a cash dividend. While we are disappointed in our fiscal year 2003 results announced separately [Tues]day, we believe this credit facility, together with substantial cost control measures we have instituted provides a solid foundation for the future of our Company. We look forward to a long and beneficial relationship with LaSalle as our line of credit lender." Allen added, "The immediate effect of completing this deal is to provide a stable lending relationship for our operating cash needs and allow our management team to focus on implementing our business plan to increase shareholder value." Energy West's March 31, 2003 balance sheet shows that its total current liabilities exceeded its total current assets by about $2.4 million. ENERGY WEST: Reports Preliminary Fiscal Year 2003 Fin'l Results --------------------------------------------------------------- Energy West, Incorporated (Nasdaq: EWST) released its preliminary earnings for fiscal year 2003. The Company reported a consolidated net loss of $77,000 or a loss of $.03 per share as compared to net income of $1,401,000 or $.55 per share for the same period in fiscal year 2002. The most significant factor causing the decrease of $1,478,000 from the previous fiscal year was legal costs incurred by the Company's wholly owned subsidiary, Energy West Resources, Inc., in its recently settled contract dispute with PPL Montana, LLC. Under the terms of the settlement, EWR paid PPLM a total of $3,200,000. The final payment of $2,200,000 which was due on September 30 was paid as scheduled. The settlement had minimal impact on fiscal year 2003 earnings due to previously established reserves and various cost cutting measures taken by the Company, including elimination of certain bonuses otherwise scheduled to be paid to executives. The Company's full and complete earnings by segment will be available when it files its annual 10-K with the Securities and Exchange Commission. Energy West's March 31, 2003 balance sheet shows that its total current liabilities exceeded its total current assets by about $2.4 million. GEERLINGS & WADE: Plans to Deregister Common Stock with SEC ----------------------------------------------------------- Geerlings & Wade, Inc. (Nasdaq SmallCap: GEER) -- http://www.geerwade.com-- the nation's largest direct mail and Internet retailer of premium wines and wine-related products to consumers, plans to become a private company by filing a Form 15 with the Securities and Exchange Commission to deregister its common stock and suspend its reporting obligations under the Securities and Exchange Act of 1934. The Company expects that the deregistration will become effective within 90 days of its filing with the SEC. Upon filing of the Form 15, the Company's obligation to file with the SEC certain reports and forms, including Forms 10-K, 10-Q and 8-K, will immediately be suspended. In addition, the common stock of Geerlings & Wade, Inc. will no longer be eligible for quotation on the Nasdaq SmallCap Market. The Company anticipates that its common stock will be quoted on the Pink Sheets following today's Form 15 filing and subsequent delisting from Nasdaq SmallCap Market, to the extent market makers commit to make a market in its shares. However, the Company can provide no assurance that trading in its common stock will continue. Huib Geerlings, President and Chief Executive Officer, stated: "After careful consideration, the Company took this action because the disadvantages to our shareholders of continuing as a public Company far outnumber the advantages to them. The burden placed on the Company, given its size, for maintaining its public status is considerable, from a financial and strategic standpoint. Considering the lack of analyst coverage and the very thinly traded nature of our stock, the Board of Directors believes that the Company and its shareholders are not receiving a meaningful benefit from being publicly traded. We believe that our shareholders are better served with the Company being private, which will allow management to focus all resources on implementing the Company's business plan and thus position the Company to enhance long-term shareholder value. The Company intends to update its shareholders with financial information on an annual basis." Geerlings & Wade, founded in 1986, is America's leading direct retailer of fine wine and wine accessories with retail locations in 15 states, home and office delivery to 27 states, and a devoted following of thousands of regular customers and wine club members. The Canton, MA-based Company has developed a streamlined purchasing system that allows it to source quality wines directly from wineries around the world. G&W has cultivated relationships with hundreds of renowned wineries and negotiants in France, Italy, Australia, Chile and California. Consumers and investors are encouraged to contact Geerlings & Wade at 1-800-782-9463 or on the World Wide Web at http://www.geerwade.com * * * In May 2003, the Company said that as a result of the weaker than expected sales and higher expenses it violated certain financial covenants of the credit agreement with its outside directors in the quarter ended March 31, 2003. The directors agreed to waive these covenant violations and any future financial covenant violations through May 2003 and the Company intended to seek an amendment to the credit agreement to reflect new covenants based on revised financial projections. The Company believed it would have adequate cash flow to repay its loan to the directors upon the credit facility's scheduled termination without significant adjustments to its business plan in 2003. GENCORP INC: Will Publish Third Quarter Results on October 6 ------------------------------------------------------------ GenCorp Inc. (NYSE: GY) announced that its analyst conference call to discuss third quarter 2003 earnings will be broadcast live on the Internet and will be accessible to the public from the Company's Web site -- http://www.GenCorp.com-- at 8:00 AM (PDT) on Monday, October 6, 2003. The Company will release earnings that morning before the open of markets. The broadcast is anticipated to be about one hour in length. Participants will be in a listen mode only and must have WindowsMedia software loaded onto their computers for access. To hear the live or replayed conference call, look for the link on the GenCorp website and simply follow the instructions provided there. GenCorp (S&P, BB Corporate Credit Rating, Stable) is a multi- national, technology-based manufacturer with operations in the automotive, aerospace, defense and pharmaceutical fine chemicals industries. Additional information about GenCorp can be obtained by visiting the Company's Web site at http://www.GenCorp.com GEO-CON INC.: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Geo-Con Inc. 4075 Monroeville Blvd. Monroeville, PA 15146 Bankruptcy Case No.: 03-23652 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: $9,946,978 (as of July 25, 2003) Total Debts: $7,090,001 (as of July 25, 2003) Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Phoenix Construction $240,209 Hertz Equipment $194,799 Financial Federal $130,217 Hine Sitework $126,236 Corporate One $95,112 Wyo-Ben $93,287 Griffen Soil $93,279 Equipment Corp of America $92,954 Selby's Soil $89,065 Kappe Associates $85,543 Dorfman Construction $81,411 Meadville Land Services $79,333 Sunstate Equipment $68,592 Lee Supply $66,677 National City Cor Atin Leasing Dept. $62,144 Beckwith Machinery $61,215 Stapke & Harris $52,120 Godwin Pumps $50,783 Essex Crane $48,136 US Filter $47,885 GOODYEAR TIRE: Look for Third Quarter Results on October 23 ----------------------------------------------------------- The Goodyear Tire & Rubber Company (NYSE: GT) will report third quarter 2003 financial results on Thursday, Oct. 23, to be followed by an investor conference call at 10:00 a.m. EDT. Participating in the conference call will be Robert J. Keegan, chairman and chief executive officer; and Robert W. Tieken, executive vice president and chief financial officer. They will review Goodyear's third quarter results. Prior to the commencement of the call, Goodyear will post financial information, along with other statistical information that will be presented, on its investor relations Web site: investor.goodyear.com Shareholders, members of the media, and other interested persons may access the conference call on the Web site or via telephone by calling (706) 634-5954 before 9:55 a.m. on Oct. 23. A taped replay of the conference call will be available at 2 p.m. that day by calling (706) 634-4556. The call replay will also remain available on the Web site. As previously reported, Fitch Ratings removed the Rating Watch Negative on the 'B+' for the senior secured debt and 'B' for the senior unsecured debt ratings of Goodyear Tire & Rubber Company. The Rating Outlook is Negative. Approximately $5 billion of debt is affected. GTC TELECOM: June 30 Balance Sheet Upside-Down by $6 Million ------------------------------------------------------------ GTC Telecom Corp. (OTCBB:GTCC) announced its audited results for the fiscal year ended June 30, 2003. The company was essentially break-even for the fiscal year ended June 30, 2003, recording a net loss of $29,106. The following information can be viewed in more detail in the company's annual report on Form 10K-SB, which can be found at http://www.sec.gov/edgar Net revenues for the fiscal year ended June 30, 2003 were $15,147,658. The net loss for fiscal 2003 was $29,106 or $0.00 per share. The weighted average number of common shares outstanding for fiscal 2003 was 20,634,314. Eric Clemons, President of GTC Telecom stated: "Fiscal 2003 was a difficult year. The recent entry by Baby Bells such as SBC Communications Inc., Verizon Communications Inc., and others into the long distance market; coupled with the entry of MCI, AT&T, and others into the local market, have resulted in the spread of local/long distance bundled plans. Additionally, we have seen an increasing number of users transition from traditional wire-line service to wireless and Internet telephony services this year. These market changes contributed to a decline in GTC's revenues from the prior year. Despite these challenges, we are pleased with our results and have achieved significant progress." Major company accomplishments during fiscal year 2003 include the following -- GTC's Perfexa Solutions subsidiary opened a call center and IT development center in India on May 1, 2003. -- GTC increased operational efficiency by integrating its customer service and IT development work with Perfexa, thereby reducing U.S. headcount by approximately 50%. -- Perfexa Solutions commenced selling its customer service and IT BPO services to other companies. -- GTC continues progress towards providing local service (licensed as a CLEC in 10 states: California, Colorado, Florida, New York, Massachusetts, New Jersey, Nevada, Ohio, Pennsylvania, and Texas). -- GTC narrows net loss to $29,106 from $1,311,667. Clemons continued: "One of the major accomplishments for the year was the completion of our Perfexa subsidiary's call center and IT development center in India. We believe that despite significant start-up costs, the integration of Perfexa operations will result in significant savings for the company as well as create a more diversified business and provide expanded revenue opportunities for growth in the fast-growing Business Process Outsourcing market." Mr. Clemons concluded: "In an effort to meet new market challenges, we continue our progress towards offering local telecom service. Currently, we are licensed to provide local service in 10 states and have begun development of our local offerings. We hope that our continuing efforts to reduce costs and open new markets will result in increased revenues and profitability in the upcoming year." Founded in 1997, GTC Telecom and its subsidiaries provide long- distance, calling card, conference calling and toll-free services; Internet access to residential customers throughout the United States; as well as Business Process Outsourcing services. GTC provides its services directly to consumers, as well as through affiliate marketing programs with companies like Best Buy Inc. For more information visit http://www.gtctelecom.com In its Form 10-KSB filed with the Securities and Exchange Commission, GTC Telecom's independent accountants Squar, Milner, Reehl & Williamson, LLP reported: "The [Company's] consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has incurred operating losses in the last two years, has a working capital deficit of $3,601,382, liabilities from the underpayment of payroll taxes, an accumulated deficit of $15,248,585, and a stockholders' deficit of $6,392,967 at June 30, 2003. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern." HOUGHTON MIFFLIN: S&P Rates HM's $150MM Sr. Discount Notes at B --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its B rating to Houghton Mifflin Co.'s holding company HM Publishing Corp.'s Rule 144A offering of $150 million senior discount notes due 2013. In addition, Standard & Poor's assigned a BB- corporate credit rating to HM Publishing. At the same time, Standard & Poor's revised its outlook on Houghton Mifflin to negative from stable and affirmed its BB- corporate credit rating. The Boston, Massachusetts-based educational publisher has pro forma total debt of $1.36 billion as of June 30, 2003. Issue proceeds will be used to pay a special dividend to its common stockholders, Thomas H. Lee Partners L.P., Bain Capital Partners LLC, and the Blackstone Group. "The transaction results in a modest increase in financial risk at a time when educational publishing industry trends are under state and local budgetary pressures," said Standard & Poor's credit analyst Hal F. Diamond. The ratings reflect high financial risk resulting from the 2002, $1.66 billion leveraged acquisition of the company and the $150 million special dividend, only partly offset by its strong business position in educational publishing and relatively stable operating performance. Houghton Mifflin is the fourth largest U.S. educational publisher, with long-standing, solid market shares in elementary and secondary school publishing. The industry has significant barriers to entry because high start-up costs and long lead times are required to develop and market educational programs. The company is well positioned to take advantage of increasing school enrollments and textbook adoption opportunities over the intermediate term. The company needs to improve operating performance and generate increasing discretionary cash flow to service the discount notes, which require mandatory cash interest payment in 2009. HOUSTON EXPLORATION: Names Tim R. Lindsey as VP of Exploration -------------------------------------------------------------- The Houston Exploration Company (NYSE: THX) announced that Tim R. Lindsey has joined the company in the newly created position of Vice President of Exploration. Lindsey's primary responsibilities will involve assessing the company's current and future exploration programs and evaluating new regions within the United States for the company to consider for expansion. Lindsey worked for more than 27 years in various capacities at Marathon Oil Company including senior management roles in both domestic and international exploration and business development. Most recently he was Marathon's International Exploration Manager. Nearly 20 years of his career were spent focusing on domestic operations in the Rocky Mountains, onshore Gulf Coast and offshore Gulf of Mexico areas. Lindsey holds a bachelor's degree in geology from Eastern Washington University and completed graduate studies in economic geology at the University of Montana. In addition, he participated in the Advanced Management Program at the Kellogg School of Management at Northwestern University and is a member of the American Association of Petroleum Geologists. The Houston Exploration Company (S&P, BB Long-Term Corporate Credit Rating, Stable) is an independent natural gas and oil company engaged in the development, exploitation, exploration and acquisition of natural gas and crude oil properties. The company's operations are focused in South Texas, the shallow waters of the Gulf of Mexico and the Arkoma Basin with additional production in East Texas, South Louisiana and West Virginia. For more information, visit the company's Web site at http://www.houstonexploration.com INT'L FIBERCOM: Chapter 7 Trustee Taps Steve Brown as Counsel ------------------------------------------------------------- Maureen Gaughan, the duly appointed Chapter 7 Trustee for the estates of International Fibercom, Inc., asks the U.S. Bankruptcy Court for the District of Arizona for permission to hire Steve Brown & Associates, LLC, as her attorneys in this liquidation proceeding. Ms. Gaughan tells the Court that she needs to employ the firm to: a. advise and consult with her concerning questions arising in the conduct of the administration of the estate and concerning her rights and remedies with regard to the estate's assets and the claims of secured, preferred and unsecured creditors and other parties in interest; b. appear for, prosecute, defend and represent her interest in actions arising in or related this case; c. investigate and prosecute preference and other actions arising under the Trustee's avoiding powers; and d. assist in the preparation of such pleadings, motions, notices and orders as are required for the orderly administration and/or liquidation of this estate. Steven J. Brown, Esq., managing member of Steve Brown & Associates, LLC tells the Court that his firm will bill the estates its normal hourly billing rates of: Members $230 per hour Associates, Of Counsel and Contract Attorneys $150 to $190 per hour Salaried and Contract Legal Assistants $75 to $85 per hour International Fibercom, Inc. resells used, refurbished communications equipment, including fiber-optic cables. The Company filed for chapter 11 protection on February 13, 2002 and converted its cases under chapter 7 proceedings of the Bankruptcy Court on August 25, 2003 (Bankr. Ariz. Case No. 02-02143). INTERNATIONAL STEEL: S&P Affirms BB Corporate Credit Rating ----------------------------------------------------------- Standard & Poor's Ratings Services has revised its outlook on integrated steel manufacturer International Steel Group Inc. to developing from positive based on uncertainties regarding the company's integration plan. Standard & Poor's said that it affirmed its BB corporate credit rating on the company. Cleveland, Ohio-based International Steel currently has about $980 million in total debt. The developing outlook means the company's ratings could be raised, lowered, or affirmed. "The outlook revision reflects Standard & Poor's concerns regarding International Steel's ability to execute its integration plans and realize expected improvements from its planned efficiency initiatives while achieving operating performance consistent with the current ratings," said Standard & Poor's credit analyst Paul Vastola. "In addition, the company's liquidity of almost $100 million is far below Standard & Poor's original expectations." The poor financial performance since March also raises uncertainties about the ability of International Steel to successfully complete its planned $250 million initial public offering during the fourth quarter of 2003. Mr. Vastola said that although Standard & Poor's expects the company's financial performance to improve as savings from headcount reductions totaling $280 million annually and recent price increases begin to be realized in the fourth quarter, the immediate improvement in performance may not be sufficient to offset challenging market conditions. INVATECH INC.: Case Summary & 24 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Invatech Inc. 100 Wood Avenue South Iselin, NJ 08830 Bankruptcy Case No.: 03-23650 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: $32,590,860 (as of June 30, 2003) Total Debts: $20,320,480 (as of June 30, 2003) Debtor's 24 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Mathers Associates $400,000 230 Mathers Road Ambler, PA 19002 AFCO $180,928 PricewaterhouseCoopers, LLP $167,683 Gary Koval $100,000 John & Kyriakos Stamatiou $100,000 Greenberg Traurig, LLP $64,943 Dr. Naresh Kumar $50,000 Steven & Maria Kamil $50,000 Eaton & Van Winkle $47,145 Brent Hanratty $39,830 Andrew A. Levy, Esq. $38,180 Sills Cumin Radin et al $31,180 Pravin M. Bhakta $30,000 Jayant Kumar Patel $25,000 Robert T. Hutson $25,000 Jerry Meadows $25,000 David and/or Diane Pape $25,000 Madison Ave. Leasehold LLC $20,896 Kevin Dixon $20,000 Dr. Kumbalatara Siripala $20,000 John Treanor Smith & $20,000 Margaret Bickle Anthony & Kristy Rudel $20,000 Shimone Azulay $20,000 Julius Rudel $20,000 JARDEN CORPORATION: Completes 3-Million Share Public Offering ------------------------------------------------------------- Jarden Corporation (NYSE: JAH) closed its public offering of 3,220,000 shares of common stock at $37 per share, including the 420,000 over-allotment option, which the underwriters exercised yesterday. Including proceeds from the over-allotment, net proceeds from the offering total approximately $112.4 million. The net proceeds are expected to be used for working capital and general corporate purposes, including, but not limited to, potential future acquisitions and debt repayment. CIBC World Markets and Banc of America Securities LLC acted as joint book running managers of the offering. SunTrust Robinson Humphrey and William Blair & Company acted as co-managers of the offering. Copies of the final prospectus supplement and related prospectus may be obtained from CIBC World Markets by facsimile request at 212-667-6136 or by email request at useprospectus@us.cibc.com or from Banc of America Securities LLC by facsimile request at 212- 230-8540 or by email request at DL-ProspectusDistribution@bofasecurities.com. Jarden Corporation (S&P, B+ Corporate Credit Rating, Stable) is a leading provider of niche consumer products used in and around the home under well-known brand names including Ball(R), Bernardin(R), Crawford(R), Diamond(R), FoodSaver(R), Forster(R), Kerr(R), Lehigh(R) and Leslie-Locke(R). In North America, Jarden is the market leader in several consumer categories, including home canning, home vacuum packaging, kitchen matches, branded retail plastic cutlery, toothpicks and rope, cord and twine. Jarden also manufactures zinc strip and a wide array of plastic products for third party consumer product and medical companies, as well as its own businesses. KINGSWAY FINANCIAL: S&P Keeps Watch on Credit and Debt Ratings -------------------------------------------------------------- Standard & Poor's Ratings Services placed its counterparty credit and senior unsecured debt ratings on Toronto, Ont.-based Kingsway Financial Services Inc. (Kingsway; TSE: KFS) on CreditWatch with negative implications. The CreditWatch placement follows the announcement by Kingsway that it had identified a shortfall in its previous years' claims reserving for its Canadian operating company, Kingway General Insurance Co. (Kingsway General). This shortfall will result in the company increasing provisions for unpaid claims occurring before Dec. 31, 2002, by about C$30 million and will reduce net income by about C$20 million in the third quarter of 2003. The adverse development of Kingsway General's previous years' claims for the six months ended June 30, 2003, was approximately C$30 million, reducing net income for the six-month period by C$20 million, which has been accounted for in the company's year-to- date financial statements. These adjustments are mainly a result of Kingsway General's Alberta-based nonstandard automobile business, its Ontario-based commercial automobile business, and its trucking business. Standard & Poor's intends to meet with Kingsway in the upcoming month to further review the company's reserving practices and internal controls, and the reporting structure of Kingsway's operating subsidiaries. The CreditWatch placement is expected to be resolved within a month. If ratings actions are required at the end of this review, Standard & Poor's does not expect more than a one-notch adjustment to the ratings on Kingsway. As previously reported, Standard & Poor's Ratings Services assigned its 'BB+' global scale preferred share rating to Kingsway Financial Services' guarantee of Kingsway Financial Capital Trust I's U.S. trust preferred securities issue of up to US$72 million. The 'BBB' long-term counterparty credit rating on KFS remains unchanged. The outlook is stable. KNIGHTHAWK INC: Senior Lender Agrees to Forbear Until October 31 ---------------------------------------------------------------- KnightHawk Inc. announced its consolidated financial results for the three months ended July 31, 2003 and year to date results. KnightHawk's revenue from continuing operations for the three months ended July 31, 2003 totaled $3,412,000, an increase of 13% from $3,025,000 during the same period in 2002. Net loss from continuing operations for the three month period was $465,000 compared with a net loss of $210,000 during 2002. Net loss for the period including discontinued operations was $711,000. KnightHawk's revenue from continuing operations for the nine months ended July 31, 2003 totaled $9,825,000, a decrease of 1% from $9,887,000 during the same period in 2002. Net loss from continuing operations for the nine months ended July 31, 2003 was $713,000 compared with a net loss of $371,000 during 2002. Net loss for the period including discontinued operations was $1,481,000. Earnings before Discontinued Operations, Interest, Taxes, Depreciation, Amortization and Foreign Exchange Gains on Long Term Debt were $448,000 for the nine months ended July 31, 2003 compared with $1,443,000 during 2002. On June 27, 2003 the Company announced that its wholly owned passenger airline subsidiary, Go Air Express suspended operations. Negative effects of the SARS health issue and the generally soft demand for air passenger services lead to this decision. Subsequent to the end of the quarter, KnightHawk announced that it entered into a Forbearance Agreement with its largest aircraft Secured Lender. The Company had been in default of its agreements with this Secured Lender for several months. Pursuant to the Forbearance Agreement, the Company will present a restructuring plan to the Secured Lender with a view to restructuring operations to provide the Company's future profitability. Unless the indebtedness in favor of the Secured Lender is restructured or the Forbearance Agreement renewed, the Forbearance Agreement will terminate on October 31, 2003. In the event that the Forbearance Agreement terminates, the Secured Lender will be entitled to exercise its remedies with respect to the collateral pledged. KnightHawk provides contract rail and air services, carrying freight both domestically and transborder between Canada and the United States. KnightHawk's rail operations are conducted through its subsidiary the Kelowna Pacific Railway which operates 104 miles of former CN trackage in the Okanagan Valley of British Columbia. KnightHawk's air division operates a fleet of five aircraft, and during the past ten years and over 40,000 flying hours has maintained an on-time performance record of over 99%, a crucial reliability factor for its customers. For further information visit http://www.knighthawk.ca LEAP WIRELESS: Sues Endesa to Recover $35 Million Plus Interest --------------------------------------------------------------- Inversiones Leap Wireless, Chile, S.A. and Endesa, S.A., a Spanish corporation, are parties to a written Share Purchase Agreement dated June 2, 2000. Pursuant to the Agreement, Endesa delivered to the Debtors a Non-negotiable Note in the principal amount of $35,000,000. Under the Note, Endesa agreed to pay on June 2, 2001 the principal plus interest. Inversiones Leap was a wholly owned subsidiary of Leap Wireless International, Inc., until its merger with Leap Wireless in March 2003. Because of the merger, Inversiones Leap's assets are now owned by Leap Wireless International. Endesa, which is organized and existing under the laws of Spain, does business in the U.S. directly and through affiliates. Depository shares of Endesa stock are listed and traded on the New York Stock Exchange. The Debtors complain that Endesa did not pay the principal or interest due under the Note and owes Leap, as Inversiones Leap's successor, the amount of the Note plus interest. Frank E. Rogozienski, Esq., in Coronado, California, asserts that the Debtors are not only entitled to receive the amount due plus interest but also legal fees and other costs incurred in connection with the proceeding. Thus, the Debtors ask the Court to compel Endesa to pay the principal amount of the Note plus interest. (Leap Wireless Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 609/392-0900) LOUISIANA-PACIFIC: Will Move into New Headquarters in Tennessee --------------------------------------------------------------- Louisiana-Pacific Corporation (LP) (NYSE:LPX) will relocate its corporate headquarters to Nashville, Tennessee. The transition is expected to occur over the next 12 to 15 months. The announcement follows a major restructuring in which LP divested non-strategic operations to reduce debt and improve financial flexibility, allowing it to focus on growing its retained, strategic businesses. "Following our asset sales, we are a dramatically different company than we were a couple of years ago -- both in focus and geographic dispersion. In order to grow in the future, it is important we bring our key people together," said Mark Suwyn, LP chairman and chief executive officer. "Nashville is an excellent fit for our company as we concentrate on growing our businesses. It's closer to our mills, customers and financial shareholders, while offering an affordable, good quality of life for our employees and a positive business climate." Nashville was one of four cities being considered for LP's headquarters. The other cities under consideration were Charlotte, North Carolina; Richmond, Virginia; and Portland, Oregon, the location of LP's current headquarters. Suwyn continued, "All four cities demonstrated their desire to attract or retain our headquarters. Each provided extensive information and unique proposals that assisted us tremendously in our study. We truly appreciate each locations' efforts and cooperation throughout the process." As part of this announcement, LP stated it intends to retain a significant presence in the Portland, Oregon, area. "Our people enjoy living in Portland. While there will be various positions that will transition over time to our new headquarters in Nashville, we will retain approximately 130 positions in the Portland area and are developing plans to move approximately 15 additional positions to the Northwest as part of the overall consolidation," said Suwyn. Additionally, LP will consolidate employees from other administrative offices to its new headquarters. In addition to the Portland metro area, LP currently has administrative offices in Hayden Lake, Idaho; Conroe, Texas; Charlotte, North Carolina; Montreal, Quebec; Schaumburg, Illinois; and Troy, Michigan. "The impact on our various administrative offices will differ by location," said Suwyn. "Some will see minimal impact while others will consolidate in greater numbers to the new headquarters. We are in the process of communicating the extent of these changes to our employees." LP is a premier supplier of building materials, delivering innovative, high-quality commodity and specialty products to its retail, wholesale, homebuilding and industrial customers. Visit LP's Web site at http://www.lpcorp.comfor additional information on the company. * * * Since May 2002, Louisiana-Pacific Corp.'s debt ratings fell into the low-B levels: Debt Obligation S&P Moody's Fitch --------------- --- ------- ----- Senior Secured Debt BB+ Ba1 NR Senior Unsecured Debt 8-1/2% Notes due 2005 BB- Ba1 NR 8-7/8% Notes due 2010 BB- Ba1 NR Subordinated Debt 10-7/8% Notes due 2008 B+ Ba2 NR "Management's desire to significantly reduce debt and focus on businesses in which the company has competitive market and cost positions should help stabilize credit quality and result in acceptable performance throughout the business cycle," S&P said last year. LTV STEEL: Plan-Filing Exclusivity Stretched Until December 1 ------------------------------------------------------------- LTV Steel Company Inc., and its liquidating debtor-affiliates sought and obtained a Court order extending their exclusive periods to file a Chapter 11 plan until December 1, 2003 and to solicit acceptances of that plan until February 4, 2004. The Copperweld Debtors currently expect to complete solicitation of their Plan by November 30, 2003, but they reserve all of their rights to seek an extension of their exclusive periods in the future if necessary or appropriate. David G. Heiman, Esq., Heather Lennox, Esq., and Nicholas M. Miller, Esq., at Jones Day Reavis & Pogue, in Cleveland, Ohio, and Jeffrey B. Ellman, Esq., in Columbus, Ohio, tell Judge Bodoh that the Debtors have continued to advance the processes for resolving their Chapter 11 cases under two discrete paths. First, Copperweld Corporation and its affiliates, which are the only remaining operating Debtors, filed their joint plan of reorganization for their Chapter 11 cases on August 5, 2003. Second, LTV Corporation and the liquidating Debtors have liquidated their operating assets and are in the process of determining the appropriate means by which their Chapter 11 cases may be concluded. A critical element of the Debtors' cases is stability. Maintaining the status quo will preserve the extant knowledge base of the Debtors' current management, which, in turn, will promote the most efficient, economic and timely resolution of these cases. Today, no other constituency is in as good a position as the Debtors to complete the resolution process. Concurrently with these activities, the Liquidating Debtors are addressing the numerous day-to-day administrative matters in these Chapter 11 cases, which, considering the more than 6,000 pleadings filed in these cases to date, is a substantial task in and of itself. In addition, the Liquidating Debtors have worked diligently to take the steps that they determined in their business judgment were necessary to preserve the value of their assets. Accordingly, at this stage in the Liquidating Debtors' Chapter 11 cases, any plan that may be proposed by the Liquidating Debtors -- or any other party -- would be premature. Any clarity will only be possible after the intercompany claims settlement has been approved and the Copperweld Debtors' Joint Plan has been confirmed. (LTV Bankruptcy News, Issue No. 55; Bankruptcy Creditors' Service, Inc., 609/392-00900) LUCENT TECHNOLOGIES: Hosting Conference Call on October 22, 2003 ---------------------------------------------------------------- Lucent Technologies (NYSE: LU) invited investors and others to listen to its quarterly results conference call to be broadcast live over the Internet on Wednesday, Oct. 22, 2003, at 8:30 a.m. EDT. What: Lucent Technologies Fourth Fiscal Quarter 2003 Results Conference Call When: Wednesday, Oct. 22, 2003, at 8:30 a.m. EDT Where: http://www.lucent.com/investor/conference/webcast How: Simply log on to the Web at the address above, then click on the "audio" button The call will be available for replay on Lucent's Web site through Oct. 29, 2003, at http://www.lucent.com/investor/conference/webcast Lucent Technologies (S&P, B- Corporate Credit Rating, Negative Outlook), headquartered in Murray Hill, N.J., USA, designs and delivers networks for the world's largest communications service providers. Backed by Bell Labs research and development, Lucent relies on its strengths in mobility, optical, data and voice networking technologies as well as software and services to develop next-generation networks. The company's systems, services and software are designed to help customers quickly deploy and better manage their networks and create new, revenue-generating services that help businesses and consumers. For more information on Lucent Technologies, visit its Web site at http://www.lucent.com MAGELLAN HEALTH: R2 Investments Backs Third Amended Reorg. Plan --------------------------------------------------------------- Magellan Health Services, Inc. (OCBB:MGLH) has gained the support of its largest unsecured creditor, R2 Investments LDC, for the Company's Third Amended Plan of Reorganization as modified in documents filed Thursday, September 25, 2003 with the U.S. Bankruptcy Court for the Southern District of New York and that R2 has indicated its intention to vote in favor of the Plan. The Official Committee of Unsecured Creditors appointed in Magellan's Chapter 11 case has already endorsed the Plan and has strongly recommended that all creditors vote in favor of it. The deadline for voting on the Plan was September 30, 2003. A hearing on confirmation of the Plan is scheduled for October 8, 2003. The Plan, if consummated, will result in a reduction in debt of approximately $600 million and $150 million of new equity invested in Magellan. If the Plan is approved by all classes of creditors, all aspects of the Plan can be implemented, including provision of 1.3% and 0.3% of the new common stock in reorganized Magellan to the Company's existing preferred and common stockholders, respectively, which would not be permitted if the Plan were to be approved over the objection of any creditor class. In order to address R2's concerns, Magellan agreed to make certain non-material modifications to the Plan, including expanding the Board of Directors of reorganized Magellan from seven to nine members. Three of the nine initial members will be appointed by the Official Committee of Unsecured Creditors, two of whom have already been selected by the Committee and are acceptable to R2; four will be appointed by Onex Corporation, which is investing or backstopping the $150 million equity investment; and two will be members of management. In addition, stockholders of reorganized Magellan will be afforded certain tag-along rights and R2 was granted rights to participate in certain future investments in Magellan by Onex, if any. The details of the modifications to the Plan have been filed with the Bankruptcy Court of the Southern District of New York. R2 has agreed to withdraw all objections to the Plan and its recent appeal of the Bankruptcy Court's decision denying termination of Magellan's exclusivity period. R2 holds $212.5 million in 9% senior subordinated notes and $29.8 million in 9-3/8% senior notes. Steven J. Shulman, chief executive officer of Magellan, said, "We are very pleased to have gained the support of R2 for our Plan of Reorganization. This development clearly paves the way for full acceptance of our Plan, and for all of the Company's creditor classes to receive the full benefits of the Plan. Magellan is positioned to exit bankruptcy with a stronger balance sheet, greater financial flexibility and the support and involvement of sophisticated business partners who share our confidence in Magellan's future as the leader of its industry." Gleacher Partners LLC is serving as financial advisor to Magellan Health Services, and Weil, Gotshal & Manges LLP is bankruptcy counsel to Magellan Health Services. Houlihan Lokey Howard & Zukin is serving as financial advisor to the Official Committee of Unsecured Creditors and Akin, Gump, Strauss, Hauer & Feld, L.L.P. is serving as counsel to the Committee. Headquartered in Columbia, Md., Magellan Health Services (OCBB: MGLH), is the country's leading behavioral managed care organization. Its customers include health plans, corporations and government agencies. MAGELLAN HEALTH: S&P to Assign B+ Counterparty Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services commented on Magellan Health Services Inc. Magellan is in the process of emerging from bankruptcy, and its plan of reorganization is presently being solicited for creditor approval. The voting deadline for the reorganization plan has been set for today. "Based on an evaluation of the plan, Standard & Poor's expects to assign its 'B+' counterparty credit rating to Magellan, assuming that the plan is adopted substantially in its current form," said Standard & Poor's credit analyst Joseph Marinucci. "The outlook is expected to be stable." Standard & Poor's also expects to assign its 'B+' rating to loans under Magellan's $230 million bank facility, which is being arranged in connection with the company's emergence from bankruptcy. In addition, Standard & Poor's expects to assign its 'B+' rating to Magellan's $245.5 million senior unsecured notes due November 2008, which are to be issued as part of the plan of reorganization. "Magellan's key near-term challenges will include establishing a more stable and consistent earnings stream, fully implementing its operational improvement plan initiatives, and improving the quality of its balance sheet," Mr. Marinucci added. Magellan is currently the largest provider of behavioral health services in the U.S. Upon exit from bankruptcy, Standard & Poor's believes that Magellan's capital structure will be more financially sound as a result of significantly diminished financial leverage, improved liquidity, and enhanced financial flexibility. Assuming Magellan's adjusted pretax earnings targets are met, Standard & Poor's expects Magellan's debt leverage (debt divided by total capitalization) and debt service ratio (adjusted EBITDA divided by interest and principle due) to be 50%-55% and 3x-4x, respectively, for the year ended 2003 and 45%-50% and 2x-3x for 2004. Although these are considered marginal, they are conservative for the rating assignments. Standard & Poor's believes that Magellan, upon exit from bankruptcy, will have a much better capital structure. Nonetheless, Standard & Poor's views the company's balance sheet as weak because goodwill and intangibles are expected to account for more than 150% of shareholders' equity for the years ended 2003 and 2004. However, Standard & Poor's could revise its balance-sheet assessment over the next 12-18 months if Magellan fully implements and derives meaningful benefit from its operations enhancement plan and establishes a more stable and consistent earnings pattern. Standard & Poor's, a division of The McGraw-Hill Companies, provides widely recognized financial data, analytical research and investment, and credit opinions to the global capital markets. With more than 5,000 employees located in 19 countries, Standard & Poor's is an integral part of the global financial infrastructure. Additional information is available at http://www.standardandpoors.com MAGNUM HUNTER: Provides Fiscal Year 2004 Production Guidance ------------------------------------------------------------ Magnum Hunter Resources, Inc. (NYSE: MHR) filed with the Securities and Exchange Commission a Form 8-K providing production guidance for fiscal year 2004. In providing this estimated 2004 production forecast, the Company utilized approximate averages within a realm of various assumptions. Magnum Hunter currently estimates that total daily production equivalents should average in a range of 205 - 235 MMcfe per day for calendar 2004. Annual production for 2004 should range from 74.8 Bcfe to 85.8 Bcfe. Oil production should average approximately 10,800 - 11,700 barrels per day for 2004. Natural gas production should average 140 - 165 MMcf per day for the year 2004. The foregoing 2004 production estimates do not imply any further accuracy regarding production estimates than any other estimates within a realm of various assumptions, but are exhibited as arbitrary estimates within a vicinity of diverse assumptions. Magnum Hunter Resources, Inc. (S&P, BB- Corporate Credit and B+ Senior Unsecured Debt Ratings) is one of the nation's fastest growing independent exploration and development companies engaged in three principal activities: (1) the exploration, development and production of crude oil, condensate and natural gas; (2) the gathering, transmission and marketing of natural gas; and (3) the managing and operating of producing oil and natural gas properties for interest owners. MANITOWOC: Wins Contract to Build 2 Hot Oil Barges for Moran ------------------------------------------------------------ The Manitowoc Company, Inc. (NYSE: MTW) through its subsidiary, Bay Shipbuilding Co., part of Manitowoc's Marine Group, has been awarded a contract from Moran Towing Corporation to build two ocean-class, double-hull, hot oil tank barges. The first barge is scheduled for delivery in the fourth quarter of 2004, and the second in the second quarter of 2005. Other contract terms were not disclosed. Each of the 110,000-barrel capacity barges will measure 425 feet in length by 78 feet in width and will be configured with 10 cargo compartments serviced by three diesel-driven, deep-well cargo pumps. The barges will also feature a stern notch and an Intercon coupling system, which will link the units to customer-supplied tugs. In addition, the barges will be equipped with an onboard heating system to maintain consistent cargo temperatures of 135 degrees F. Both vessels will be ABS, U.S. Coast Guard, and OPA-90 compliant. "This contract award is another indication that the pace of orders for OPA-90 class vessels is increasing," said Dennis McCloskey, president of Manitowoc's Marine Group. "We are also pleased to be Moran's yard of choice for this project. While these barges will be the fifth and sixth OPA-90 vessels built by Bay Shipbuilding, this is our first opportunity to serve Moran as a customer. Upon completion, these tank barges will be among the most sophisticated petroleum carriers in Moran's growing fleet of ocean-class vessels." Earlier this month, Manitowoc announced that Bay Shipbuilding Co., had won a contract for construction of a 140,000-barrel, double- hull, hot oil tank barge from Penn Maritime, Inc. This contract also includes a high-horsepower, ocean-class tug, which BSC will build at its Sturgeon Bay facility. Moran Towing Corporation, based in Greenwich, CT, has a 150-year heritage of serving the maritime industry. With a fleet of 85 tugs and 26 barges, Moran serves 13 ports along the Atlantic and Gulf coasts. Its range of services includes ship docking, general towing, marine transportation of petroleum and dry bulk products, as well as contract and specialty towing. The Manitowoc Company, Inc. (S&P, BB- Corporate Credit Rating, Stable Outlook) is one of the world's largest providers of lifting equipment for the global construction industry, including lattice- boom cranes, tower cranes, mobile telescopic cranes, and boom trucks. As a leading manufacturer of ice-cube machines, ice/beverage dispensers, and commercial refrigeration equipment, the company offers the broadest line of cold-focused equipment in the foodservice industry. In addition, the company is a leading provider of shipbuilding, ship repair, and conversion services for government, military, and commercial customers throughout the maritime industry. MERRILL LYNCH: Fitch Rates Class B-4 & B-5 Certificates at BB/B+ ---------------------------------------------------------------- Fitch rates Merrill Lynch Mortgage Investors, Inc.'s, $1.32 billion mortgage pass-through certificates, series MLCC 2003-F, as follows: -- $1.3 billion class A-1 - A-3, X-A-1, X-A-2, X-B and A-R senior certificates 'AAA'; -- $13.9 million class B-1 certificates 'AA+'; -- $10.6 million class B-2 certificates 'A+'; -- $6 million class B-3 certificates 'BBB'; -- $3.3 million class B-4 certificates 'BB'; -- $2.7 million class B-5 certificates 'B+'. The $4.6 million class B-6 is not rated by Fitch. The 'AAA' rating on the senior certificates reflects the 3.10% subordination provided by the 1.05% class B-1, 0.80% class B-2, 0.45% class B-3, 0.25% privately offered class B-4, 0.20% privately offered class B-5, and 0.35% privately offered class B-6 certificates. Fitch believes the above credit enhancement will be adequate to cover credit losses. In addition, the ratings also reflect the quality of the underlying mortgage collateral, strength of the legal and financial structures and the primary servicing capabilities of Cendant Mortgage Corporation, rated 'RPS1-' by Fitch. Generally, with certain limited exceptions, distributions to the class A-1 and A-R certificates (and to the components of the class X-A-1 and X-A-2 certificates related to pool 1) will be solely derived from collections on the pool 1 mortgage loans. Distributions to the class A-2 certificates (and to the components of the class X-A-1 and X-A-2 certificates related to pool 2) will be solely derived from collections on the pool 2 mortgage loans. Distributions to the class A-3 certificates will solely be derived from collections on the pool 3 mortgage loans. Aggregate collections from all three pools of mortgage loans will be available to make distributions on the class X-B certificates and the subordinate certificates. In certain very limited circumstances relating to a pool's experiencing either rapid prepayments or disproportionately high realized losses, principal and interest collected from the other pools may be applied to pay principal or interest, or both, to the senior certificates of the pool experiencing such conditions. The Pool 1 mortgage loans consist of 2,192 conventional, fully amortizing, primarily 25-year adjustable-rate mortgage loans secured by first liens on one to four-family residential properties, with an aggregate principal balance of $865,841,677 as of the cut-off-date (Sept. 1, 2003). Each of the mortgage loans are indexed off the one-month LIBOR or six-month LIBOR, and all of the loans pay interest only for a period of ten years following the origination of the mortgage loan. The average unpaid principal balance as of the cut-off-date is $395,001. The weighted average original loan-to-value ratio is 65.88%. The weighted average effective LTV is 62.81%. The weighted average FICO is 732. Cash- out refinance loans represent 37.01% of the loan pool. The three states that represent the largest portion of the mortgage loans are California (20.65%), Florida (10.25%) and New York (8.60%). The Pool 2 mortgage loans consist of 729 conventional, fully amortizing, primarily 25-year adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties, with an aggregate principal balance of $278,637,930 as of the cut-off-date. Each of the mortgage loans are indexed off the six-month LIBOR, and all of the loans pay interest only for a period of ten years following the origination of the mortgage loan. The average unpaid principal balance as of the cut-off-date is $382,219. The weighted average OLTV is 66.71%. The weighted average effective LTV is 63.60%. The weighted average FICO is 736. Cash-out refinance loans represent 31.87% of the loan pool. The three states that represent the largest portion of the mortgage loans are California (17.13%), Florida (9.49%) and New York (8.30%). The Pool 3 mortgage loans consist of 433 conventional, fully amortizing, primarily 25-year adjustable-rate mortgage loans secured by first liens on one- to four-family residential properties, with an aggregate principal balance of $180,598,562 as of the cut-off-date. Each of the mortgage loans are indexed off the six-month LIBOR, and all of the loans pay interest only for a period of ten years following the origination of the mortgage loan. The average unpaid principal balance as of the cut-off-date is $417,087. The weighted average OLTV is 66.93%. The weighted average effective LTV is 63.45%. The weighted average FICO is 728. Cash-out refinance loans represent 34.21% of the loan pool. The three states that represent the largest portion of the mortgage loans are California (22.42%), Florida (7.71%) and Texas (6.95%). All of the mortgage loans were either originated by Merrill Lynch Credit Corporation pursuant to a private label relationship with Cendant Mortgage Corporation, or acquired by MLCC in the course of its correspondent lending activities, and underwritten in accordance with MLCC underwriting guidelines as in effect at the time of origination. Any mortgage loan with an OLTV in excess of 80% is required to have a primary mortgage insurance policy. There are loans referred to as 'Additional Collateral Loans', which are secured by a security interest, normally in securities owned by the borrower, which generally does not exceed 30% of the loan amount. Ambac Assurance Corporation provides a limited purpose surety bond, which guarantees that the Trust receives certain shortfalls and proceeds realized from the liquidation of the additional collateral, up to 30% of the original principal amount of that Additional Collateral Loan. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. MLMI, the Depositor, will assign all its interest in the mortgage loans to the trustee for the benefit of certificate holders. For federal income tax purposes, an election will be made to treat the trust fund as multiple real estate mortgage investment conduits. Wells Fargo Bank Minnesota, National Association will act as trustee. METALS USA: Judge Greendyke Closes 36 Chapter 11 Cases ------------------------------------------------------ At the Metals USA Debtors' behest, Judge Greendyke closes 36 Chapter 11 cases that are currently being jointly administered under Case No. 01-42530-H4-1. Johnathan C. Bolton, Esq., at Fulbright & Jaworski LLP, in Houston, Texas, explains that closing 36 Chapter 11 cases is necessary because each of the Debtors are paying U.S. Trustee Quarterly Fees that continue to accrue under Section 1930 of the Judiciary Procedures Code so long as their cases remain pending. Closing the cases will save considerable cost to the Debtors' estates by stopping the unnecessary accrual of U.S. Trustee Quarterly Fees. Mr. Bolton relates that the 36 Debtors do not have any claims pending against them in their Chapter 11 cases and there is no further need for Court administration and U.S. Trustee supervision of their cases: Debtor Case Number ------ ----------- Metals USA Management Co., LP 01-42531-H4-11 Three Riverway, Suite 600 Houston, Texas, 77002 MUSA GP, Inc. 01-42532-H4-11 Three Riverway, Suite 600 Houston, Texas 77002 MUSA LP, Inc. 01-42533-H4-11 Three Riverway, Suite 600 Houston, Texas 77002 Metals USA Finance Corp. 01-42534-H4-11 Three Riverway, Suite 600 Houston, Texas 77002 Metals USA Realty Company 01-42535-H4-11 Three Riverway, Suite 600 Houston, Texas 77002 Metals Receivables Corporation 01-42536-H4-11 Three Riverway, Suite 600 Houston, Texas 77002 Jeffreys Real Estate Corporation 01-42537-H4-11 Three Riverway, Suite 600 Houston, Texas 77002 Aerospace Specification Metals, Inc. 01-42538-H4-11 1384 McNab Road, Ft. Lauderdale, Florida 33309 Aerospace Specification Metals-U.K. Inc. 01-42539-H4-11 1384 McNab Road, Ft. Lauderdale, Florida 33309 Allmet Building Products, LP 01-42540-H4-11 227 S. Town East Blvd. Mesquite, Texas 75185-0163 Allmet GP, Inc. 01-42541-H4-11 227 S. Town East Blvd. Mesquite, Texas 75185-0163 Allmet LP, Inc. 01-42542-H4-11 227 S. Town East Blvd. Mesquite, Texas 75185-0163 Cornerstone Building Products, Inc. 01-42543-H4-11 1440 S. Balboa Ave. Ontario, California 91761-7609 Cornerstone Metals Corporation 01-42544-H4-11 5421 East Cheyenne Ave. Las Vegas, Nevada 89115-3536 Cornerstone Patio Concepts LLC 01-42545-H4-11 11385 Sunrise Park Drive #200 Rancho Cordova, California 95742 Harvey Titanium, Ltd. 01-42546-H4-11 1330 Colorado Ave. Santa Monica, California 90404 i-Solutions Direct, Inc. 01-42548-H4-11 1300 Virginia Drive, Suite 320 Fort Washington, Pennsylvania 19034 Metalmart, Inc. 01-42549-H4-11 12225 Coast Drive Whittier, California 90601 Metals Aerospace International, Inc. 01-42550-H4-11 1300 Colorado Ave. Santa Monica, California 90404 Metals USA Building Products Southeast 01-42551-H4-11 7815 American Way Groveland, Florida 34736 Metals USA Carbon Flat Rolled Inc. 01-42552-H4-11 1070 W. Liberty St. Wooster, Ohio 44691 Metals USA Flat Rolled Central, Inc. 01-42553-H4-11 1020 Neidringhaus Granite City, Illinois 62040 WSS Transportation, Inc. 01-42555-H4-11 999 W. Armour Ave. Milwaukee Wisconsin 53221 Levinson Steel GP, Inc. 01-42557-H4-11 2025 Greentree Road Pittsburgh, Pennsylvania 15220 Levinson Steel LP, Inc. 01-42558-H4-11 2025 Greentree Road Pittsburgh, Pennsylvania 15220 Queensboro, LLC 01-42561-H4-11 2925 Highway, 421 North Wilmington, North Carolina 28401 Intsel GP, Inc. 01-42563-H4-11 11310 W. Little York Houston, Texas 77041 Intsel LP, Inc. 01-42564-H4-11 11310 W. Little York Houston, Texas 77041 Metals USA Specialty Metals Northwest 01-42565-H4-11 3400 S. W. Bond Ave. Portland, Oregon 97201 National Manufacturing, Inc. 01-42568-H4-11 811 Atlantic N. Kansas City, Missouri 64116-3718 Texas Aluminum Industries, Inc. 01-42569-H4-11 2900 Patio Drive Houston, Texas 77017 Valley Aluminum 01-42570-H4-11 3602 W. Lincoln St. Phoenix, Arizona 85009 Valley Aluminum of Nevada, Inc. 01-42571-H4-11 2020 Mendenhall Dr., Suite A North Las Vegas, Nevada 89031 Western Awning Co., Inc. 01-42572-H4-11 218 Stewart Road S. E. Pacific, Washington 98047 Wilkof-Morris Steel Corporation 01-42573-H4-11 6991 Freedom Ave., N. W. Canton, Ohio 44720 Metals USA Plates and Shapes Northcentral 01-42554-H4-11 999 W. Armour Ave. Milwaukee Wisconsin 53221 Mr. Bolton also notes that 12 of the Debtors have been merged into two surviving legal entities pursuant to the Plan: * Metals USA Building Products LP; and * Metals USA Contract Manufacturing Inc. Nine legal entities were merged into Metals USA Building Products as of December 31, 2002: (1) Cornerstone Building Products, Inc., (2) Cornerstone Metals Corporation, (3) Cornerstone Patio Concepts, LLC, (4) Metals USA Building Products Southeast, (5) National Manufacturing, Inc., (6) Texas Aluminum Industries, Inc., (7) Valley Aluminum Co., (8) Valley Aluminum Company of Nevada, Inc., and (9) Western Awning Co. In May 2003, three legal entities were merged into Metals USA Contract Manufacturing: (1) Metals USA Plates and Shapes Northcentral, Inc., (2) WSS Transportation, Inc., and (3) Metals USA Specialty Metals Northwest, Inc. Judge Greendyke rules that these eight cases will remain open and pending until all claims against the Debtors are finally resolved or adjudicated: Debtor Case Number ------ ----------- Metals USA, Inc. 01-42530-H4-11 Three Riverway, Suite 600 Houston, Texas 77002 Metals USA Plates and Shapes Northeast LP 01-42530-H4-11 Greentree Road Pittsburgh, Pennsylvania 15220 Metals USA Plates and Shapes Southcentral 01-42559-H4-11 101 E. Illinois Enid, Oklahoma 73701 Metals USA Plates and Shapes Southeast 01-42560-H4-11 210 St. Joseph Street Mobile, Alabama 36602 Metals USA Plates and Shapes Southwest 01-42562-H4-11 11310 W. Little York Houston, Texas 77041 Metals USA Contract Manufacturing, Inc. 01-42566-H4-11 Rt. 663 Perrowville Rd. Forest, Virginia 24551 Metals USA Specialty Metals Northcentral 01-42567-H4-11 2275 Half Day Road, Suite 126 Bannockburnk, Illinois 60015 Interstate Steel Supply Company of Maryland 01-42547-H4-11 1600 Cherry Hill Drive Baltimore, Maryland 21230 There are few remaining claims pending against these Debtors that must be finally adjudicated. Metals USA, Inc., Metals USA Plates and Shapes Northeast LP, Metals USA Plates and Shapes Southcentral Inc., Metals USA Plates and Shapes Southeast, Metals USA Plates and Shapes Southwest and Metals USA Contract Manufacturing have not yet resolved Dongkuk International Inc.'s claims against each of them. Metals USA also has not resolved the claims filed by Adbar Company LC, Banc of America Securities LLC and AIG Claim Services, Inc. In addition, Metals USA Plates and Shapes Southeast has not resolved Lift-All Company Inc.'s claim. Metals USA Plates and Shapes Southwest also has not settled AIG Claim Services' claim. Metals USA Contract Manufacturing has not settled Megal Construction Company's claim. Metals USA Specialty Metals Northcentral has not yet resolved the claims filed by Adbar Company and Jimmy Lee Ware. Interstate Steel Supply Company of Maryland has not settled the City of Philadelphia's tax claim. (Metals USA Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service, Inc., 609/392-0900) METROCALL: Deadline for Final Decree Extended to December 31 ------------------------------------------------------------ Metrocall, Inc., and its debtor-affiliates sought and obtained an extension from the U.S. Bankruptcy Court for the District of Delaware of their time to file final reports and to delay automatic entry of a final decree. This is the Debtors' second request to delay entry of a final decree. As previously reported in the Troubled Company Reporter on September 27, 2002, the Court confirmed the Company's Chapter 11 Plan. Since then, the Debtors have devoted their time to reviewing and reconciling approximately 4,300 claims. The Debtors tell the Court that process is taking longer than expected. Consequently, the Court extended the deadline for entry of the final decree in these Chapter 11 Cases, to December 31, 2003. Metrocall, Inc. is a nationwide provider of one-way and two-way paging and advanced wireless data and messaging services. The Company filed for chapter 11 protection on June 3, 2002 (Bankr. DE. Case No. 02-11579). Laura Davis Jones, Esq. at Pachulski Stang Ziehl Young Jones & Weintraub, PC represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $189,297,000 in total assets and $936,980,000 in total debts. MIRANT CORP: U.S. Trustee Appoints Official Equity Committee ------------------------------------------------------------ Pursuant to Section 1102(a) of the Bankruptcy Code, the U.S. Trustee for Region 17, William T. Neary, appoints these Mirant Debtors' shareholders as members of the Official Committee of Equity Security Holders: (1) Joann McNiff Phaeton International/Phoenix Partners 33 S. Franklin Avenue Bergenfield, NJ 07621 (201) 385-2933 Fax: (201) 385-2933 jmcniff@optonline.net (2) Elizabeth Pierce Smith Management, LLC 885 Third Avenue, 34th Floor New York, NY 10022 (212) 888-8252 Fax: (212) 751-9503 bpierce@smithmgmtllc.com (3) Morris Weiss John Gorman Tejas Securities Group, Inc. 112 E. Pecan, Suite 1510 San Antonio, Texas 78205 (210) 226-1555 Fax: (210) 226-7571 mdweiss@tejassec.com (4) Dana Messina Aria Partners 11100 Santa Monica Blvd., Suite 825 Los Angeles, CA 90025 (310) 445-6511 Fax: (310) 445-6522 dmessina@ariapartners.com (5) Roger B. Smith 301 Kemp Road Suwanee, GA 30024-1607 (700) 418-1818 Fax: (404) 842-4523 rbsmith@bear.com (6) L. Matt Wilson 950 E. Paces Ferry Road, Suite 3250 Atlanta, GA 30326 (404) 364-2240 Fax: (404) 266-7459 Matt@wiHaw.com (7) Andres Forero 705 E, 43rd Street Austin, TX 78751 (512) 380-7057 Fax: (512) 380-7057 aforero@mail.utexas.edu (8) Michael Sammons 4114 Medical Drive, #19018 San Antonio, TX 78229 (210) 286-0073 Fax: (210) 614-4546 michaelsammons@yahoo.com (9) Michael Willingham 9202 Meaux Drive Houston, TX 77031 (713) 270-8740 Fax: (866) 876-5362 mwillingham1@yahoo.com (Mirant Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-0900) MOVING BYTES: Completes Sale of Telecomm Assets to ComTech21 ------------------------------------------------------------ Moving Bytes Inc. (OTCBB:MBYTF), a Web-based provider of document processing services, has closed the sale of its telecommunications assets to ComTech21 of Wallingford, Conn. The sale constituted all of the Company's telecommunications- related assets, including the customer base, customer contracts and accounts receivable. Revenues and gross profit generated by the assets sold represented 83% of revenues and 71% and gross profits in the fiscal quarter ended June 30, 2003 and 84% of revenues and 70% of gross profits year-to-date through June 30, 2003. Because the assets sold did not constitute substantially all of the company's assets no shareholder approval of the sale was required. Total proceeds from the sale include $575,000 in consideration for the telecommunications assets, not including accounts receivable, and $291,168.05 for the accounts receivable. Accounts receivable were sold at a 10% discount to actual balances which were outstanding less than 90 days at August 31, 2003. In addition the Company may receive reimbursement of up to $25,000 as a result of a possible credit due from Qwest Communications and an additional 2.5% of the accounts receivable balance at August 31, 2003 depending upon actual collections made through November 30, 2003. The Company anticipates it will use approximately $550,000 of the proceeds from the transaction immediately to pay debts and other costs, including costs of winding up its telecommunications operations. Non operating expenditures related to the consummation of the transaction included $100,000 paid to Joseph Karwat to pay debt and to secure release of a security lien which resulted from the company's Settlement Agreement with Karwat and $44,550 to be paid to the KDW Group of Washington, D.C. as a finders fee related to the transaction. A director of the Company is a consultant to the KDW Group. The Company further disclosed that it has received $90,205 from its EPLI insurance carrier related to the Karwat arbitration matter and has reduced its debt to Karwat under the Karwat settlement agreement to $58,551 as of September 30, 2003. Payments made to Karwat year to date include $50,000 from the payment received from the EPLI carrier and $100,000 from proceeds of the sale of the Company's telecommunications assets. The Company believes that it will enter into a mediation proceeding with its EPLI insurance carrier in the fourth quarter of 2003 which may result in a final settlement of the Company's claim. If the Company is unsuccessful in settling the claim as a result of the mediation it will then evaluate its options including the filing of a lawsuit to enforce its rights under its EPLI insurance policy. During the fourth quarter of 2003, the Company intends to assess the viability of continuing its document processing solutions business if financing is unavailable. Moving Bytes is a Web-based provider of document and file processing solutions, to businesses worldwide. For more information, visit http://www.movingbytes.com * * * As reported in Troubled Company Reporter's June 20, 2003 edition, Moving Bytes reached a settlement in the Karwat arbitration matter on behalf of itself and its wholly owned subsidiary Moving Bytes, Inc., a Nevada corporation. The Company believed that the compromise would provide the company with the ability to meet its obligations to its customers and suppliers without reorganizing the company or seeking protection from its creditors. On May 12, 2003, the Company received the final Arbitration Award related to the termination of Joseph Karwat in the amount of $287,500, including an award of $191,500 for breach of contract, $96,000 in legal fees and costs, expenses and interest. Under the terms of the settlement, the company agreed to pay Karwat $292,953.63 as follows: an initial payment of $50,000, an additional $30,000 in ninety days and monthly installment payments of $12,304.57 for eighteen months beginning July 16, 2003. The company's obligations were secured by a security interest granted in the Company's and its subsidiary's assets. The settlement agreement provides for accelerated payment of the obligation under certain circumstances, including the sale of certain assets or receipt of funds other than in the ordinary course of its operations. The Company plans to vigorously pursue all of its rights against its insurance carrier for bad faith denial of the coverage of the arbitration award and it will seek both compensatory and punitive damages. NATIONSRENT INC: Corporate Credit Receives B+ Rating from S&P ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its B+ corporate credit rating to new NationsRent Cos. Inc., which will become the name of NationsRent Inc. upon the closing of a proposed note offering. At the same time, Standard & Poor's assigned its BB- secured debt rating to the proposed offering of $225 million senior secured notes due 2010 (under Rule 144A with registration rights). The proposed financing for Fort Lauderdale, Florida-based NationsRent will be used to repay debt incurred in the formation of its capital structure following its emergence from bankruptcy on June 13, 2003. The outlook is stable. NationsRent is a large provider of rental equipment in a large number of high-growth markets to diverse customers. "The secured notes are rated one notch higher than the corporate credit rating because of the strong likelihood of full recovery of principal from the net proceeds on the sale of the equipment in the event of a default," said Standard & Poor's credit analyst John Sico. The $225 million senior secured notes due in 2010 will be secured by a first-priority lien on all of NationsRent subsidiaries' rental equipment, other than titled vehicles and rental equipment released from the collateral in accordance with the indenture governing the notes. Collateral for these notes is the equipment rental fleet, while other assets, such as accounts receivable, may be used as collateral for other debt, including the proposed working capital facility. Standard & Poor's simulation reflects a default scenario with severely distressed asset values. A default scenario envisions that a more severe industry downturn in the equipment rental industry occurs with further deterioration in the industrial economy and further declines in the nonresidential construction sector. Fleet age is acceptable at 44 months, but it will need to be replenished and maintained in order to preserve the rental equipment collateral value that will be required to be at least 2x the amount of secured debt. The equipment rental industry will remain challenging for fiscal 2003, with limited near-term rental revenue growth rates expected and with the potential for low- to mid-single-digit growth beyond fiscal 2003. The potential growth reflects the continued outsourcing trends and efforts by customers to reduce fixed- capital investments. No major recovery in the U.S. economy is assumed. NEXTMEDIA: Completes Sale of WJTW-FM to Univision for $21 Mill. --------------------------------------------------------------- NextMedia Group, Inc. has completed its previously announced sale of radio station WJTW-FM, serving Joliet/Chicago, Illinois. The station was sold to Univision Radio for $21 million in cash. Following this transaction, NextMedia now owns and operates 10 radio stations in the greater Chicago market. NextMedia Operating, Inc. (S&P, B+ Corporate Credit Rating, Negative) is a diversified out-of-home media company headquartered in Denver, Colorado. NextMedia, through its subsidiaries and affiliates, owns and operates 60 stations in 15 markets throughout the United States and more than 5,600 bulletin and poster displays. Additionally, NextMedia owns advertising displays in more than 5,300 retail locations across the United States. Investors in NextMedia's ultimate parent entity, NextMedia Investors, LLC, include Thomas Weisel Capital Partners, Alta Communications, Weston Presidio Capital and Goldman Sachs Capital Partners, as well as senior management. NextMedia was founded by veteran media executives Carl E. Hirsch, Executive Chairman, and Steven Dinetz, President and CEO. NQL INC: Court Schedules Plan Confirmation Hearing for Nov. 18 -------------------------------------------------------------- The Honorable Judge Novalyn L. Winfield of the U.S. Bankruptcy Court for the District of New Jersey approved NQL, Inc.'s Disclosure Statement. As previously reported in the Troubled Company Reporter's August 12, 2003 issue, the Debtor filed its Chapter 11 Reorganization Plan and Disclosure Statement with the Court. Judge Winfield approved the Plan Disclosure Statement as containing adequate information for all creditors to decide whether to accept or reject the Debtor's Chapter 11 Plan. A hearing to consider confirmation of the Plan is currently scheduled to commence on November 18, 2003, at 10:00 a.m., before Judge Winfield at the United States Bankruptcy Court, Martin Luther King Jr. Federal Building, 50 Walnut Street, 3rd Floor, Newark, New Jersey 07102. Any written objections to confirmation of the Debtor's Plan must be filed with the Clerk of the Bankruptcy Court, with a copy furnished to: i) Angel & Frankel, P.C. Attn.: Bonnie L. Pollack, Esq. 460 Park Avenue, New York, NY 10022-1906; ii) Lowenstein Sandler P.C. Attn.: Ira M. Levee, Esq. 65 Livingston Avenue, Roseland, NJ 07068-1791; iii) Ravin Greenberg Attn.: Morris Bauer, Esq. 101 Eisenhower Parkway Roseland, NJ 07068; and iv) the Office of the U.S. Trustee One Newark Center Suite 2100, Newark, NJ 07102 so as to be actually received on or before October 29, 2003 at 4:00 p.m. Eastern time. NQL INC., through its DCi division, provides professional services including Internet and intranet consulting, network design, installation and maintenance as well as onsite support for customers located primarily in the northeastern U.S. The Company filed for chapter 11 protection on February 15, 2002 (Bankr. N.J. Case No. 02-31661). Bonnie L. Pollack, Esq., at Angel & Frankel, P.C., represents the Debtor in its restructuring efforts. NRG ENERGY: Court Extends Plan-Filing Exclusivity Until Jan. 9 -------------------------------------------------------------- NRG Energy, Inc., and its debtor-affiliates obtained an extension of their Exclusive Periods. The Court extends the Exclusive Periods for: (i) filing a plan or plans of reorganization through January 9, 2004; and (ii) soliciting acceptances of that plan through March 10, 2004. (NRG Energy Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 609/392-0900) NUCENTRIX BROADBAND: Wants to Tap Wiley Rein as Special Counsel --------------------------------------------------------------- Nucentrix Broadband Networks, Inc., and its debtor-affiliates are seeking permission from the U.S. Bankruptcy Court for the Northern District of Texas to employ Wiley Rein & Fielding LLP as their Special Counsel. Most specifically, the Debtors aver that Wiley Rein is well qualified to represent them in the FCC Matters. Moreover, Wiley Rein has become quite familiar with the Debtors' licenses and operations during the course of past work performed for the Debtors. Requiring the Debtors to find other comparable representation would result in substantial delay and undue expense to the estates. The Debtors agree, subject to the Court's approval, to pay fees to Wiley Rein at the same hourly rates that Wiley Rein charges its other clients for similar work. Peter D. Shields, Esq., an attorney at Wiley Rein discloses that the hourly rates of the firm's attorneys expected to perform legal services range from partners $450 to $325 associates $175 to $295 paraprofessionals $85 to $150 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. OAKWOOD MORTGAGE: S&P Takes Rating Actions on Various MH Deals -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on 16 classes from three Oakwood Mortgage Investors Inc.-related manufactured housing transactions issued in 2002 and removed them from CreditWatch with negative implications, where they were placed Dec. 6, 2002. Concurrently, ratings on four classes from two of the transactions are affirmed and removed from CreditWatch negative, where they were also placed Dec. 6, 2002. RATINGS LOWERED AND REMOVED FROM CREDITWATCH OMI Trust 2002-A Rating Class To From A-2 AA- AAA/Watch Neg A-3 AA- AAA/Watch Neg A-4 AA- AAA/Watch Neg M-1 A- AA/Watch Neg M-2 BB+ A/Watch Neg B-1 B BBB/Watch Neg OMI Trust 2002-B Rating Class To From A-2 AA- AAA/Watch Neg A-3 AA- AAA/Watch Neg A-4 AA- AAA/Watch Neg M-1 A- AA/Watch Neg M-2 BBB- A/Watch Neg B-1 BB- BBB/Watch Neg OMI Trust 2002-C Rating Class To From A-1 A+ AAA/Watch Neg M-1 BBB+ AA/Watch Neg M-2 BB+ A/Watch Neg B-1 B+ BBB/Watch Neg RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH OMI Trust 2002-A Rating Class To From A-1 AAA AAA/Watch Neg A-IO AAA AAA/Watch Neg OMI Trust 2002-B Rating Class To From A-1 AAA AAA/Watch Neg A-IO AAA AAA/Watch Neg OMI Trust 2002-C Rating Class To From A-IO AAA AAA/Watch Neg The lowered ratings reflect the poor performance of the underlying pools of manufactured housing contracts and the resulting deterioration of credit enhancement. The ratings on the class A-1 certificates for both OMI Trust 2002- A and OMI Trust 2002-B are affirmed and removed from CreditWatch based on the transactions' sequential pay structures and the remaining credit support available. In addition, the ratings on the class A-IO certificates from both OMI Trust 2002-A and OMI Trust 2002-B are affirmed and removed from CreditWatch. The class A-IO certificates in each transaction benefit from the senior position of A-IO interest in the transactions' cash flow allocation, the fact that the class A-IO's notional balance is not tied to a class, and the absence of a remedy allowing for the liquidation of the receivables following a monetary or non-monetary event of default. With pool factors ranging from 82% to 90%, cumulative net loss rates are trending higher than originally expected. In addition, total delinquency levels have steadily increased during the past few months and repossession inventory rates remain high. Furthermore, since Oakwood has transitioned toward a wholesale liquidation strategy after suspending its manufactured home repossession-refinance business in November 2002 (following its bankruptcy filing), recovery rates on liquidated collateral have plummeted, with cumulative recovery rates on the three transactions currently ranging between 17.5% and 24%. Standard & Poor's has taken rating actions on Oakwood-related manufactured housing transactions on several occasions during the past year. Most recently, Standard & Poor's raised its ratings on 10 classes, affirmed its ratings on 24 classes, and lowered its ratings on 27 classes from Oakwood-related manufactured housing transactions on May 16, 2003. ON COMMAND: Arranges $40MM Subordinated Loan from Liberty Media --------------------------------------------------------------- On Command Corporation (OTC Bulletin Board: ONCO), a leading provider of in-room interactive entertainment for the hotel industry and its guests, closes a $40 million subordinated loan from Liberty Media Corporation (NYSE: L) as well as the closing of its Amended and Restated Credit Agreement with its bank lenders. On Command and its bank lenders executed an Amended and Restated Credit Agreement on April 17, 2003 to replace the Company's existing revolving credit facility. The old facility provided for aggregate borrowings of $275 million, of which $265.6 million had been drawn as of June 30, 2003. The Amended and Restated Credit Agreement provides for, among other things, a $235 million senior secured credit facility, consisting of a $50 million revolving credit facility and a $185 million term loan facility. The Amended and Restated Credit Agreement provides for scheduled amortizations commencing September 30, 2003, with both facilities maturing on December 31, 2007. Closing of the Amended and Restated Credit Agreement was conditioned on the contribution of $40 million by Liberty Media to On Command to be used to repay principal due, and permanently reduce lender commitments, pursuant to the Amended and Restated Credit Agreement. The subordinated loan from Liberty Media provides for an interest rate of 10% per annum, matures on December 31, 2008, and is unsecured. On September 9, 2003, On Command announced that it had entered into a definitive merger agreement with Liberty Media, through which Liberty Media would acquire approximately 26% of the issued and outstanding shares of On Command common stock not already owned by Liberty Media and its affiliates. Consummation of the merger is subject to the approval of the merger agreement by the shareholders of On Command and the satisfaction of certain closing conditions. On Command Corporation -- http://www.oncommand.com-- is a leading provider of in-room entertainment technology to the lodging and cruise ship industries. On Command is a majority-owned subsidiary of Liberty Satellite & Technology, Inc. (OTC Bulletin Board: LSTTA, LSTTB). On Command entertainment services include: on-demand movies; television Internet services using high-speed broadband connectivity; television email; short form television features covering drama, comedy, news and sports; PlayStation video games; and music-on-demand services through Instant Media Network, a majority-owned subsidiary of On Command Corporation and the leading provider of digital on-demand music services to the hotel industry. All On Command products are connected to guest rooms and managed by leading edge video-on-demand navigational controls and a state-of-the art guest user interface system. The guest menu system can be customized by hotel properties to create a robust platform that services the needs of On Command hotel partners and the traveling public. On Command and its distribution network services more than 1,000,000 guest rooms, which touch more than 300 million guests annually. On Command's direct served hotel properties are located in the United States, Canada, Mexico and Spain. On Command distributors serve cruise ships operating under the Royal Caribbean, Costa and Carnival flags. On Command hotel properties include more than 100 of the most prestigious hotel chains and operators in the lodging industry: Accor, Adam's Mark Hotels & Resorts, Fairmont, Four Seasons, Hilton Hotels Corporation, Hyatt, Loews, Marriott (Courtyard, Renaissance, Fairfield Inn and Residence Inn), Radisson, Ramada, Six Continents Hotels (Inter-Continental, Crowne Plaza and Holiday Inn), Starwood Hotels & Resorts (Westin, Sheraton, W Hotels and Four Points), and Wyndham Hotels & Resorts. At June 30, 2003, On Command's balance sheet shows a total shareholders' equity deficit of about $34 million. PARKER DRILLING: Moody's Assigns Low-B and Junk Debt Ratings ------------------------------------------------------------ With approximately $885 million of debt securities and credit facilities affected, Moody's rated Houston, Texas-based Parker Drilling's pending senior unsecured notes B2 and secured bank debt offerings B1 which will fund a tender for a 2006 note maturity and back-up fund a 2004 subordinated maturity. Accordingly, the ratings assume early receipt of satisfactory asset appraisals. The ratings and negative outlook reflect: 1) high debt relative to earnings power; 2) negative cash flow after capital outlays; 3) weak demand in the Gulf of Mexico (GOM) market; 4) an aggressive GOM competitor; value implications of long- delayed asset sales; 5) and foreign market political and fiscal risk. This is tempered by firmer pro-forma liquidity; Quail Tools' (30% of EBITDA) rising results; the sector's relocation of GOM jack-up rigs to foreign markets; and new contracts in Turkmenistan, Sakhalin Island, Bangladesh, and New Zealand, says Moody's. With a negative outlook, Moody's assigned the following ratings: i) B2 rating to PKD's proposed $175 million of ten year senior unsecured notes. ii) B1 ratings to PKD's $150 million of proposed secured bank debt, consisting of a $50 million first secured three year revolver and $100 million first secured delayed-draw four year Term Loan B. Moody's also confirmed the following ratings: i) B2 rating for $235 million of 10.125% senior unsecured notes due 2009 ii) B2 rating for $215 million of 9.75% senior unsecured notes due 2006. iii) Caa1 rating on $110 million of 5.5% Convertible Subordinated Notes due 2004. iv) B2 senior implied rating. Parker Drilling principally does business in the Gulf of Mexico, Kazakhstan, Turkmenistan, Latin America, Russia, Asia Pacific, and Africa/Middle East. Its rig fleet includes seven GOM jack-up drilling rigs, twenty-two GOM coastal barge rigs, four GOM platform rigs, forty international land rigs, and six international barge rigs. PHOTOWORKS: Resolves Issues with ITC re $1.6M Penalty Assessment ---------------------------------------------------------------- On September 25, 2003, PhotoWorks, Inc., and the International Trade Commission reached a settlement agreement regarding a penalty assessment of $1.6 million against the Company for violation of a prior cease and desist order involving patents owned by Fuji Photo Film Co. Ltd. for single-use cameras. Under the terms of the settlement agreement, in full and final settlement of any claims asserted against PhotoWorks by reason of the Commission's enforcement determination orders, PhotoWorks and the Commission agree as follows: Payment. PhotoWorks will pay the sum of $1,000,000 in four installments of $250,000 each, with payments to be made on July 1 of each of the years 2004, 2005, 2006 and 2007. Dismissal of Petition for Review. PhotoWorks agrees to withdraw its petition for review in the United States Court of Appeals for the Federal Circuit within 5 business days of the effective date of the agreement. Satisfaction of Penalty Payment. The Commission agrees that PhotoWorks' agreement to dismiss its petition for review and make four payment of $250,000 each as set forth above will constitute full satisfaction of the $1.6 million penalty imposed against PhotoWorks in the enforcement determination orders in the Investigation and discharge PhotoWorks from any monetary liability related to this matter. No Admission of Liability or Wrongdoing. The parties agree that, by entering into this Agreement, PhotoWorks admits no wrongdoing or liability and desires to settle and compromise these disputes solely to avoid the costs, disruption and uncertainty of further litigation. The Company will recognize $600,000 of income resulting from the settlement agreement in its financial statements in the fourth quarter ending September 27, 2003, which reflects the reversal of a portion of the amounts accrued in the third quarter of fiscal 2003. PhotoWorks, Inc., is a leading photo services company dedicated to providing its customers with innovative ways to create and tell the stories of their lives through photos. The Company offers an array of complementary services and products primarily under the brand names PhotoWorks(R) and Seattle FilmWorks(R). * * * Liquidity and Capital Resources As of February 1, 2003, the Company's principal source of liquidity included approximately $3,934,000 in cash and cash equivalents, which includes the $1,808,000 tax refund received in January 2003. In addition, in the first quarter of fiscal 2003, the Company generated cash from operating activities of $880,000 compared to $48,000 in the first quarter of fiscal 2002. The increase was due to certain expenditures made in September 2002 of $3,455,000, primarily for prepayment of postage amounts, which is being utilized in fiscal 2003. As of December 28, 2002, approximately $1,747,000 of the prepaid expenditures remain. The decrease in prepaid expenses of $1,899,000 was partially offset by a decrease in accounts payable of $430,000, a decrease in accrued compensation of $346,000 and an increase in net loss. The Company currently anticipates that existing cash and cash equivalents and projected future cash flows from operations will be sufficient to fund its operations, including any capital expenditures, through at least December 31, 2003. However, if the Company does not generate sufficient cash from operations to satisfy its ongoing expenses, the Company may be required to seek external sources of financing or refinance its obligations. Possible sources of financing include the sale of equity securities or bank borrowings. There can be no assurance that the Company will be able to obtain adequate financing in the future. PILLOWTEX: Court Okays CSFB to Provide Fin'l Advisory Services -------------------------------------------------------------- Pillowtex Corporation and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court to employ Credit Suisse First Boston LLC to provide financial advisory and restructuring services pursuant to a November 8, 2002, engagement letter. The Engagement Letter describes: (a) the various services that Credit Suisse has performed, and will continue to perform for the Debtors in the Chapter 11 cases; and (b) the terms and conditions of Credit Suisse's engagement by the Debtors. Credit Suisse will assist the Debtors by: (a) analyzing and evaluating the Debtors' business, operation and financial position; (b) preparing and implementing a marketing plan; (c) screening interested prospective purchasers and investors; (d) coordinating the data room and with the potential purchasers' and investors' due diligence investigations; (e) evaluating proposals that were received from potential purchasers and investors; (f) structuring and negotiating a potential Sale or a Restructuring Transaction; (g) presenting the Debtors' Board of Directors with information relative to a proposed Sale or a Restructuring Transaction and the financial implications thereof; and (h) advising the Debtors regarding the terms and timing of potential Sale or a Restructuring Transaction. The Debtors will pay Credit Suisse for its services: (a) a $150,000 monthly non-refundable cash fee; (b) in connection with any Sale, a transaction fee equal to the greater of: -- 1.0% of the Aggregate Consideration; and -- $2,000,000, payable upon consummation of the Sale; (c) in connection with any Restructuring Transaction, a completion fee equal to $2,000,000, payable upon consummation thereof; and (d) reimbursement for all reasonable out-of-pocket expenses resulting from or arising out of the engagement and incurred prior to its termination. Judge Walsh further orders that any Transaction Fee or Completion Fee will be paid to CSFB as described in the Application and the Engagement Letter, provided however that: (a) the Transaction Fee or Completion Fee and the other fees and expenses described in the Application and the Engagement Letter in all cases will be subject to Court approval upon proper application by CSFB; (b) the payment of Monthly Advisory Fees and any other fees and expenses in addition to any Transaction Fee or Completion Fee during the cases will be made to CSFB upon Court approval in accordance with any other procedures for the compensation of professionals established by the Court in these cases and in accordance with the Carve-Out and Subordination provisions as approved by the Court in these cases; and (c) any fees or expenses paid to CSFB during these Chapter 11 cases but not ultimately approved by the Court will be promptly returned by CSFB to the Debtors. (Pillowtex Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., 609/392-0900) PRIME HOSPITALITY: Promotes Art Manso to SVP of Purchasing ---------------------------------------------------------- Prime Hospitality Corp. (NYSE: PDQ), has promoted Art Manso has to Senior Vice President of Purchasing. As senior Vice President, Mr. Manso will continue to be responsible for supervising the purchasing, supply management, and formulating and implementing corporate procurement policies and procedures for all Prime owned, franchised, and managed properties. Mr. Manso joined Prime in May 2002 as Vice President of Purchasing. "This promotion recognizes the important contributions Art has made to the improvements in our business during this challenging environment," said A.F. Petrocelli, Prime's Chairman and Chief Executive Officer. Prime Hospitality Corp. (S&P, BB- Corporate Credit Rating, Negative Outlook), one of the nation's premiere lodging companies, owns, manages, develops and franchises more than 240 hotels throughout North America. The Company owns and operates three proprietary brands, AmeriSuites(R) (all-suites), Prime Hotels & Resorts(SM) (full-service) and Wellesley Inns & Suites(R) (limited service). Also within Prime's portfolio are owned and/or managed hotels operated under franchise agreements with national hotel chains including Hilton, Radisson, Sheraton and Holiday Inn. Prime can be accessed over the Internet at http://www.primehospitality.com RAYOVAC: Completes Acquisition of Remington Products Company ------------------------------------------------------------ Rayovac (NYSE: ROV) of Madison, Wis., has completed its previously announced (August 22, 2003) acquisition of Remington Products Company, LLC. Rayovac also closed its previously disclosed private placement of $350 million of 8-1/2% senior subordinated notes due 2013. Rayovac also announced that it is calling for redemption all of the 11% Series B and Series D Senior Subordinated Notes issued by Remington Products Company and Remington Capital Corp. which have not been tendered by the close of Rayovac's outstanding offer to purchase the notes. With close to $1 billion in sales, Rayovac (S&P, BB- Corporate Credit and Senior Secured Debt Ratings, Negative) has more than doubled its revenues over the last six years and has evolved from a predominantly North American company into a global organization with approximately 60 percent of its sales generated from outside the U.S. In 1999, Rayovac acquired ROV Ltd., a Latin American battery company that held the rights to the Rayovac name in Latin America (except Brazil) and certain countries in the Middle East and Africa. This acquisition consolidated Rayovac's rights to the Rayovac brand around the world (except Brazil), gave the company a powerful market presence in Latin America and opened the doors to new distribution. In October 2002, Rayovac further expanded its global presence by acquiring the worldwide consumer battery business of VARTA AG, a German company with significant market positions throughout Europe and in Latin America. Today, Rayovac is one of the world's leading battery and lighting device companies. The Company also markets the number one selling rechargeable brand of battery in the U.S. and Europe and is the world leader in hearing aid batteries. Rayovac trades on the New York Stock Exchange under the ROV symbol. Remington products are sold in more than 20,000 retail outlets in the United States. More than 70 percent of Remington's sales are in North America. Remington's core North American shaving and grooming products business has grown 18 percent per year from 1998 through 2002. Internationally, Remington products are sold through a network of subsidiaries and distributors in more than 85 countries. The Remington product line includes electric rotary and foil dry shavers for men and women, beard and moustache trimmers and haircut kits. They also offer personal grooming products for men and women and small electronic appliances such as hair dryers, stylers, hot rollers and lighted mirrors. Remington branded products are sold in the U.S. and internationally through mass merchandisers, catalog showrooms, drug stores, department stores, television direct to consumers, online retailing and through the company's network of service stores. SAFETY-KLEEN: Wins Nod to Preserve Avoidance Actions for 90 Days ---------------------------------------------------------------- Reorganized Safety-Kleen Services, Inc. and its affiliate debtors obtained U.S. Bankruptcy Court Judge Walsh's approval extending the time to effect service of original process for the Avoidance Actions, by 90 more days. To recall, Safety-Kleen Services, Inc. and its affiliate debtors are plaintiffs in 421 adversary proceedings to avoid and recovery property. Before initiating the Avoidance Actions, Jeffrey C. Wisler, Esq., at Connolly Bove Lodge & Hutz LLP, relates that Safety-Kleen sought and obtained a Procedures Order which decreed that, "[n]otwithstanding Bankruptcy Rule 7004(e), no Initial Summons or Amended Summons shall be deemed stale until the expiration of the 120-day period following the filing of the Complaint." None of the Complaints filed in the Avoidance Actions have been served. However, Safety-Kleen has sent a letter to each of the defendants explaining the status of the Avoidance Actions, advising them that "until you have been served with a Summons and Complaint, you are not required to take any action," and offering to provide each defendant with any additional information that may be needed. The Debtors' counsel has responded to dozens of telephone calls from defendants and has repeated this advice. As a result of the two-year statute of limitations to commence certain causes of action, the Debtors were required to commence avoidance actions by June 9, 2002 or potentially forfeit such causes of action. The Debtors' confirmed Plan provides that, on the Effective Date, the Avoidance Actions will be assigned to the Safety-Kleen Creditor Trust for the benefit of the unsecured creditors. The Creditor Trust will have full discretion to pursue and settle the Avoidance Actions. Safety-Kleen recognizes that the Creditor Trust will need time to evaluate the Avoidance Actions and determine the best course to maximize recoveries. Accordingly, Safety-Kleen asks the Court to maintain the current status quo of the Avoidance Actions pending completion of the Creditor Trust's evaluation process -- a process Safety-Kleen believes will take at least an additional 90 days. The Debtors believe that they have neither acted negligently nor acted in bad faith in not serving the Complaints to this point. The Debtors further believe that good cause exists to grant the requested extension. It has been in the best interest of the Debtors' reorganization process to delay the service of the Complaints, because serving the Complaints prior to the completion of the reorganization process against a potentially significant percentage of the Debtors' current vendors could have resulted in substantial harm to the estates and the Debtors' ability to complete the reorganization. Further, it is in the best interest of the Debtors' creditors to allow additional time for the Creditor Trust to evaluate the Avoidance Actions in order to maximize its recovery from these Actions. Moreover, no Defendant has been or will be prejudiced by not requiring service at this time. In the event the Debtors or the Creditor Trust determine it is appropriate to pursue an Avoidance Action, an Amended Summons will be issued and the Complaint, Amended Summons, and a copy of the Procedures Order will be served on each Defendant consistent with applicable rules. The defendant will be afforded every protection and applicable time period as if the Complaint was first filed on the day the Amended Summons is issued. (Safety-Kleen Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service, Inc., 609/392-0900) SHAW COMMS: Forges Video-On-Demand Pact with Universal Studios -------------------------------------------------------------- Shaw Communications Inc. announced a long-term licensing agreement with Universal Studios Pay-Per-View to provide major Hollywood movies and other programming content for Shaw's Video-on-Demand and Pay-Per-View services. This deal represents another significant step in expanding the variety and quality of content available to Shaw's VOD customers from one of Hollywood's major studios. Shaw's VOD service provides consumers with unprecedented choice and control when watching movies and other programming at home. Customers can choose from a growing selection of major motion pictures, TV series and other content from the convenience of their homes. Shaw's VOD service gives customers the ability to view a program for a period of up to 24 hours with full DVD-like functionality, including pause, rewind and fast forward features. "Universal Studios is very pleased to partner with Shaw on this new and exciting home entertainment service. Shaw's position in the Canadian market gives us an excellent opportunity to provide our product via VOD for our current feature films and extensive library," said Holly Leff-Pressman, senior vice-president, worldwide pay-per-view and video-on-demand, Universal Television Distribution. "Universal's impressive line-up of current feature films and extensive library of motion pictures and other content is a tremendous addition to our VOD product offering" said Michael D'Avella, Senior Vice President of Planning, Shaw Communications Inc. "Our customers will now be able to expand their viewing options with an outstanding selection of titles from one of the top Hollywood studios. We now have product from studios representing about half of Hollywood's motion picture output." Universal will supply Shaw with current releases, including 2 Fast 2 Furious, and the summer blockbuster Hulk. Current features on the VOD service will be available at the same time as traditional PPV. Library product will include Back To The Future, The Mummy Returns, American Pie, Erin Brockovich and The Sting. Universal Studios Pay-Per-View licenses and markets its movies to pay-per-view and video-on-demand distributors on a worldwide basis. USPPV is a part of the Universal Television Group, a division of Vivendi UNIVERSAL Entertainment -- http://www.universalstudios.com-- the U.S.-based film, television and recreation entity of Vivendi Universal, a global media and communications company. Shaw Communications Inc. (S&P, BB+ Corporate Credit Rating, Stable} is a diversified Canadian communications company whose core business is providing broadband cable television, Internet and satellite direct-to-home services to approximately 2.9 million customers. Shaw is traded on the Toronto and New York stock exchanges and is included in the S&P/TSX 60 index. (Symbol: TSX - SJR.B, NYSE - SJR). SHAW COMMS: Shaw Family Completes Purchase of Additional Shares --------------------------------------------------------------- Shaw Communications Inc. has been advised that the Shaw Family, and entities owned or controlled by them, completed the purchase of an additional 300,000 Class B Non-Voting Shares of the Company during the week ended September 26, 2003. According to information provided to the Company, the Shaw Family, and entities owned or controlled by them, holds 18,188,803 shares of the Company. The family also advised the Company it would continue its practice of purchasing shares on a regular basis. Shaw Communications Inc. (S&P, BB+ Corporate Credit Rating, Stable} is a diversified Canadian communications company whose core business is providing broadband cable television, Internet and satellite direct-to-home services to approximately 2.9 million customers. Shaw is traded on the Toronto and New York stock exchanges and is included in the S&P/TSX 60 index. (Symbol: TSX - SJR.B, NYSE - SJR). SOLUTIA INC: Will Host Q3 Earnings Conference Call on October 24 ---------------------------------------------------------------- Solutia Inc. (NYSE: SOI) will hold its third quarter earnings conference call on Friday, Oct. 24, 2003 at 9 a.m. central time (10 a.m. eastern). The earnings report will be released at approximately 6 p.m. eastern time on Thursday, Oct. 23, 2003. A live, listen-only webcast of its conference call will be available on its Web site at http://www.solutia.com under the presentation and speeches tab in the investor relations section. A replay of the conference call and the question and answer session will be available at the site for approximately five days following the call. 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. STONEGATE APARTMENTS: Chapter 11 Case Summary --------------------------------------------- Debtor: Stonegate Apartments LLC 711 Hazel St Auburn, IN 46706 Bankruptcy Case No.: 03-bk-64860 Chapter 11 Petition Date: September 29, 2003 Court: Southern District of Ohio (Columbus) Judge: Barbara J. Sellers Debtor's Counsel: Robert E Bardwell, Jr., Esq. 995 South High Street Columbus, OH 43206 (614) 229-4100 SYMBOL TECHNOLOGIES: Will Publish Q2 2003 Results on Wednesday -------------------------------------------------------------- Symbol Technologies, Inc., announced that on October 8, 2003, it will release unaudited results for its 2003 second quarter. At that time, the Company also will announce unaudited results for the 2003 first quarter, reflecting the impact of the pending restatement, as well as unaudited results for the years 1998 through 2002, also reflecting the impact of the pending restatement. The Company also announced the postponement of its annual meeting of shareholders due to the delay in completing the restatement of prior period financial statements. The date of the meeting, which had been scheduled for October 20, 2003, will be set upon completion and filing of the 2002 Annual Report on Form 10-K. The previously reported investigations by the Securities and Exchange Commission and the U.S. Attorney's office are ongoing. As stated previously, the Company's external auditors are continuing their audit of Symbol's 2002 financial results. Upon completion of the audit by the Company's external auditors, the Company intends to file its Annual Report on Form 10-K and, subsequently, Forms 10-Q for the 2003 first and second quarters. The Company at this point cannot estimate when those documents will be filed. The Company will issue a news release that will detail the financial results and include selected financial tables. In addition, the Company will host both a web conference, which will include financial tables, and a simultaneous teleconference at 5 p.m. ET, October 8, 2003, to discuss the financial results. Because the audit of the Company's financial results has not been completed, these financial results and selected financial tables are subject to change. Information for those interested in participating in the teleconference or the webcast presentation will be released separately and will be available on the Symbol Web site, http://www.symbol.com/investors 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. SYSTECH RETAIL: July 31 Balance Sheet Upside-Down by $83 Million ---------------------------------------------------------------- Systech Retail Systems Corp., a leading provider of technology solutions for the retail industry, reported FY2004 results for the quarter and 6 months ended July 31, 2003. Revenue for the quarter was $12.6 million, representing a 44.3% decrease from the second quarter of FY 2003 when revenue was $22.6 million. The Company reported income of $1.1 million before amortization, interest and financing costs and restructuring charges. The net loss of $881 thousand represents a significant improvement from the $5.6 million loss reported for the second quarter of last year. The restructuring cost for the second quarter was $997 thousand. The basic and fully diluted net loss per share was $.02, compared with a basic and fully diluted net loss per share of $.16 for the second quarter of last year. Cash used in operations was $339,000 compared to $4.6 million in Q2 of FY 2003 which represents a decrease of 93%. Revenue for the first six months ending July 31, 2003 was $29.1 million representing a 37.1% decrease from the second quarter of last year when revenue was $46.2 million. The net loss was $1.2 million as compared to a net loss of $10.9 million for the second quarter of last year. The restructuring cost for the first six months was $1.9 million. The basic and fully diluted net loss per share was $.03, compared with a basic and fully diluted net loss per share of $.31 for the first six months of last year. Cash used in operations for the first six month of the year was $1 million versus $8.49 million in the same period last year which represents a decrease of 88%. At July 31, 2003, the Company's balance sheet shows a total shareholders' equity deficit of about $83 million and a total shareholders' equity deficit of about $83 million. "Systech's aggressive restructuring efforts, under bankruptcy protection, have begun to produce tangible results. Management has been provided with the time and opportunity to right-size the business to current revenue levels" said Richard Adair, Systech's Interim Chief Financial Officer. Highlights of the Quarter - Management focused its efforts on maintaining service levels and fulfilling its installation commitments with existing customers despite a lack of adequate working capital in the company. As a result of these efforts, the majority of the company's customers continued to support the company through the reorganization process. - The hardware solutions group experienced lower sales versus Q1 as a result of delays in customer programs and lack of working capital to fund orders. During the period, the Company was able to complete the majority of the rollout of the IBM 4694 POS terminals and associated software for Gabriel Brothers. The backlog of booked solutions orders currently stands at approximately $5 million, with a number of large orders pending completion of the restructuring. - The software services group continues to perform well as it rolls-out its flagship Openfield product to new customers. During the quarter, the Company installed Openfield into three stores of a regional grocer as part of a $3 million order to provide POS solutions to the customer. The Company completed all testing and implementation of The North West Company pilot stores and the rollout is scheduled to begin in Q3. This will bring the total number of Openfield installations to more than 150 stores by the end of FY 2004. - The hardware services group experienced lower revenues versus Q1 as it began to feel the impact of the reductions in the Company's service contract with a major customer, a reduction in seasonal installation work and the rejection of a contract with another customer during the restructuring process. The personnel and infrastructure costs to support the revised level of service agreements were reduced appropriately. During the second quarter, the Company's cost cutting program was completed: - The Company's workforce was reduced from 350 at April 30, 2003 to 299 at the end of the quarter. This included the reductions associated with the hardware services contracts (see above). - Management's facilities consolidation strategy was completed. The closure of the Dallas operation brings the remaining number of facilities to five. Total savings associated with the Company's facility consolidation strategy are expected to exceed $95,000 per month. - The 30% reduction in the hardware services vehicle fleet was completed. Management expects that this will result in significant savings for vehicle leases, insurance, repairs and maintenance with total annualized savings exceeding $1,100,000. - All redundant leases and contracts were rejected during the period which reduced overhead costs by $70,000 per month. - As a result of the cost-cutting program, during the quarter ended July 31, 2003, there was a reduction in operating losses of 84.2% despite a decrease in revenue of 44.3%. If the foreign exchange gain is factored out, operating losses were reduced by 66.9%. Material Events - Subsequent to the end of the Second Quarter The Company's consolidated amended plan of reorganization, as modified, was confirmed on August 28, 2003 by the United States Bankruptcy Court for the Eastern District of North Carolina - Raleigh Division. The Ontario Superior Court of Justice sanctioned and approved the Amended Plan under the Companies' Creditors Arrangement Act on September 9, 2003. All conditions precedent to the implementation of the Amended Plan have now been satisfied. The Amended Plan became effective on September 10, 2003 and the Company and its subsidiaries have emerged successfully from Chapter 11 and CCAA protection. Under the Amended Plan, the Secured Lenders converted approximately $59.3 million in secured debt into common shares of the Company representing 80% of the Company's restructured equity and $12 million in secured debt which will remain on the restructured balance sheet. As required under the Amended Plan, the Company issued an additional 1,908,329,606 common shares and 136,148,285 warrants to the creditors and shareholders of the Company. The warrants are issued to the common shareholders with a term of 5 years and a strike price of $.025. In accordance with the terms of the Amended Plan, the Company also concluded its exit financing arrangements with a fund managed by Argosy Partners. Proceeds from the exit financing totaling $5.0 million are now available to the Company providing it with additional resources to compete in the marketplace. In connection with the exit financing, 69,630,123 warrants were issued to the lender with a term of three years and a strike price of $.10. Outlook Management believes that emergence from the Chapter 11/CCAA reorganization process is a tremendous achievement. The Company has shifted its focus from restructuring operations to growing its franchise in the retail technology sector. - At current revenue levels, the business is operating at breakeven on a normalized operating cash-flow basis. - The reorganized Company will have a reduced debt load and a significantly improved balance sheet. - By acquiring the exit financing, the Company will now have the working capital resources required to fund customer requirements and operate the business in a much more efficient manner. The Company has emerged from bankruptcy protection with a strong customer base and a streamlined operation and management believes that the outlook for the Company is positive. Systech is the retail industry's premier independent developer and integrator of retail technology, including software, systems and services to supermarket, general retail and hospitality chains throughout North America. Its open architecture solutions enable e-commerce and other powerful new technology to be applied in the retail environment. The Company's significant cross-platform capability and considerable technical service force allow it to address any in-store systems requirements regardless of project size or scope. Shares of Systech Retail Systems are traded on the Toronto Stock Exchange under the symbol (SYS). TEAM AMERICA: Chapter 11 Case Summary ------------------------------------- Debtor: Team America Inc 130 E Wilson Bridge Rd Suite 25 Worthington, OH 43085 Bankruptcy Case No.: 03-bk-64789 Chapter 11 Petition Date: September 26, 2003 Court: Southern District of Ohio (Columbus) Judge: Charles M. Caldwell Debtor's Counsel: Lloyd D. Cohen, Esq. 824 S High St Columbus, OH 43206 (614) 444-4211 Total Assets: $54,191,000(as of June 28, 2003) Total Debts: $37,150,000 (as of June 28, 2003) TEXAS COMMERCIAL: Secures $25-Mill. Financing from Magnus Energy ---------------------------------------------------------------- Texas Commercial Energy has entered into a $25 million power purchasing agreement and credit facility with Magnus Energy Marketing, LTD. The agreement has been previously approved by the bankruptcy court overseeing TCE's reorganization. "Securing approval of a major financing and credit agreement is a critical step for TCE's successful reorganization," said Mike Shirley, president of TCE. "This agreement meets TCE's needs to grow and secures the financial infrastructure of our company." "Magnus provides TCE extended credit and ample resources to immediately start growing our business and paying our creditors back faster than other types of financing would have allowed," Shirley noted. TCE has continued serving over 1,100 business customers statewide throughout its reorganization, but has pursued only modest growth until able to secure a credit facility. Shirley commented, "The relationship with Magnus also insures TCE's future ability to manage our customers' contracts and energy buying during variable market conditions." "As a result of the Magnus agreement, TCE expects to be able to complete its reorganization shortly," Shirley added. Magnus Energy Marketing, LTD., is a privately-held, Corpus Christi, Texas-based partnership that manages marketing agreements for large volumes of natural gas on behalf of gas production companies. Texas Commercial Energy provides electricity to business and industrial customers throughout Texas as a leading Retail Electric Provider launched in January 2002 in response to deregulation of Texas energy markets. On March 6, 2003, after becoming a victim of market power abuses, TCE sought voluntary reorganization to protect its customers and to remain a viable company. On July 7, 2003, TCE filed an anti-trust lawsuit accusing a number of energy companies of illegally manipulating Texas' electricity market and fraudulently inflating prices. TFM S.A.: Fitch Downgrades Senior Notes Ratings to B+ from BB- -------------------------------------------------------------- Fitch Ratings downgraded the foreign and local currency senior unsecured debt ratings of TFM, S.A. de C.V to B+ from BB- with stable Rating Outlook. The rating action applies to TFM's $150 million senior notes due 2007, $443 million senior notes due 2009 and $180 million senior notes due 2012. The rating action reflects the combination of the termination of the announced acquisition of TFM, S.A de C.V by Kansas City Southern and TFM's weaker than expected financial performance. Originally, the transaction was viewed as a mild positive to the extent that it would ultimately have replaced controlling shareholder Grupo TMM, S.A., which is currently under financial distress, with KCS, which is financially stronger albeit highly leveraged. TMM is currently in payment default as it did not pay its $177 million bullet maturity on May 15, 2003 after failing to complete a bond exchange offering. Fitch does not currently rate TMM's outstanding bonds. In August 2003, TMM announced that its board of directors notified KCS of the termination of the acquisition transaction after its shareholders voted not to approve the sale of its controlling stake in TFM to KCS. KCS is proceeding with legal action against TMM as the controlling TMM shareholders had agreed to the acquisition and de facto voted for the transaction; the outcome of the litigation is uncertain. The current conflict between TFM's shareholders holds the potential to distract and divert management time attention away from operating the railroad as well as negotiating the best possible outcome with the Mexican government regarding the pending value-added tax payment to TFM and the government's sale of its stake in TFM. The challenges facing TFM shareholders, such as TMM's default and the potential legal battle between TMM and KCS also could lower financial flexibility and liquidity at the operating company, due to the greater perceived risks associated with the disputing shareholder groups. Positively, TFM does not have significant financing needs until 2007. TFM's financial performance has deteriorated over the past several quarters. TFM's gross interest coverage, as measured by EBITDA/Interest, declined to about 2.0 times (x) during the first six months 2003 compared to 3.0x during the first six months 2002. During the same period, Debt/EBITDA weakened to 4.6x from 4.2x. The decline in credit protection measures is a result of weaker profitability caused by weak cargo demand from the Mexican automotive sector and higher fuel costs, and the depreciation of the Mexican peso against the U.S. dollar. In April 2003, TMM had announced an agreement to sell its 41% economic stake and controlling interest in TFM to minority shareholder KCS to generate much-needed cash. KCS and the Mexican government currently own 39% and 20% economic stakes in TFM, respectively. Under the proposed structure, TFM and KCS would have been held by a new holding company named NAFTA Rail. According to the terms of the agreement, TMM would have received $200 million in cash and a 22% economic stake (20% voting stake) in NAFTA Rail. In addition, TMM could have received an incremental payment of between $100 million and $180 million based on the resolution of a tax-related legal dispute between TFM and the Mexican government. The transaction was subject to approval by the appropriate regulatory agencies, TMM bondholders, and TMM/KCS shareholders and was initially expected to close in 6 to 9 months. TFM has a solid business position as the largest railroad in Mexico, long term growth opportunities in the North American market, and a moderate financial position. Five years after privatization, TFM has improved the operating efficiency of its rail network and achieved relatively high profitability margins. During 2002, TFM had revenues of $712 million and EBITDA of $259 million. TFM had total debt of $966 million at June 30, 2003. TFM has little refinancing risk as more than 90% of debt is long term. UNIVERSAL GUARDIAN: Ability to Continue Operations Uncertain ------------------------------------------------------------ Universal Guardian Holdings, Inc. states it is committed to the protection of human life and military, government and commercial assets by providing services, systems and technologies to detect, assess, prevent, and mitigate security and terrorist threats worldwide. Its management, Board of Directors and Advisory Board have an extensive depth of experience in various areas of the military, counter terrorism, law enforcement, advanced security technologies, intelligence, White House administration, and international business. With this uniquely qualified team working in concert, the Company believes it has the strategic access necessary to develop products and services to meet the highly specialized needs of city, state, national and international organizations responsible for critical infrastructure and asset protection. In turn, management will implement the commercial applications of those systems, technologies, and weapons. However, Universal Guardian Holdings, Inc. has incurred a net loss since its inception, as of June 30, 2003, had a working capital deficit, is in default on certain notes payable and is involved in certain litigation. In addition, the Company was informally notified by the U.S. Navy's prime-contractor that certain of its backlog purchase orders were in the process of being cancelled, thereby potentially negatively impacting future revenue. These matters raise substantial doubt about the Company's ability to continue as a going concern. In August 2003, three members of the Company's senior management, including the Chief Financial Officer, resigned their positions with the Company. Also, in August 2003, the Company signed a letter of intent to sell its non-lethal division for $100,000. The Company's operations have been negatively impacted by the slow payment on its invoices by its major customer. As a result, it has not been able to pay its vendors on a current basis. The Company's major customer obtained certain contracts with the U.S. Navy and Universal Guardian operates as a subcontractor to its major customer. The Company currently has approximately $2.6 million due it from its major customer. It has been in close contact with this customer regarding payment of these invoices and expects to receive payment on the full amount within 30 days. To continue in existence, the Company will have to raise additional capital through the sale of equity or debt or generate sufficient profits from operations, or a combination of both. It plans to continue the development of its next generation security platform, market its Maritime Port Security system, and finalize its Petroleum Security and Asset Management system. The Company's revenue is principally from contracts for the installation of its proprietary security systems in eight of the U.S. Navy's critical harbors. But as mentioned above, the Company was informally notified by the Navy's prime-contractor (Universal Guardian is a subcontractor to the prime-contractor) that certain of the Company's backlog purchase orders were in the process of being cancelled. If these purchase orders are officially cancelled, the Company's future revenue will be negatively impacted. US AIRWAYS: Settles Claim Disputes with Debis & DaimlerChrysler --------------------------------------------------------------- On November 4, 2002, Debis Financial Services, Inc. and DaimlerChrysler Services, North America, LLC, filed Claim Nos. 4339, 4340 and 4341 for $19,253,417 in the aggregate. The Claims asserted tax indemnities relating to certain aircraft bearing Tail Nos. N702UW and N703UW. On January 24, 2003, the Reorganized US Airways Debtors objected to these Claims. The parties now agree that Claim No. 4341 will be reduced and allowed as a general unsecured Class USAI-7 Claim for $6,338,346. Debis and DaimlerChrysler will receive distributions under the Plan. Claim Nos. 4339 and 4340 are withdrawn. (US Airways Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., 609/392-0900) VALCOM INC: Signs Joint Venture with Giants Studios Services ------------------------------------------------------------ Vince Vellardita, President and CEO of ValCom, Inc. (OTCBB:VACM) (Frankfurt XETRA:VAM) announced the signing of an agreement with Giants Studios Services, Inc. -- http://giantsfilms.com/www/docs_ht/profile.html ValCom will lease over $7 million in film and television rental equipment, including picture cars, lighting and grip trucks, cameras and editing production equipment from Giants Studios at the cost of $1.00 for five years. After expenses, all profits will be divided equally between Giants Studios and ValCom, Inc. "This is a great opportunity for ValCom, adding revenue to the core of its business through the equipment rental division. With Paramount and CBS spending over $50 million dollars in production of its two primetime TV shows ('JAG' & 'NCIS') at the Company's studio facility, this joint venture will enable the Company to follow its business plan to capture approximately 35% of its existing client's production budgets, as well as enabling the Company to gain new clientele for all types of production on films and television projects, adding to the bottom line. Through this venture, the Company anticipates an additional 5-6 cents per share in earnings," said Vellardita. "Over the past several years, having produced 18 films, Giants Studios Services has accumulated a great deal of equipment that is now sitting idle. Venturing with a top rated studio facility operation in the Hollywood community will provide the marketing needed to bring in significant revenue dollars to both parties," said David Dadon, Chairman of the Board of Giants Studios Services, Inc. Giants Studios Services is a subsidiary of Giant Entertainment Inc., which produces feature films and motion pictures. Giants Studios owns approximately 100 vehicles, lighting and grip trucks, cameras and editing production equipment, valued at over $7 million. Giants purchased this equipment for production purposes on 18 films produced by Giants and David Dadon. Based in Valencia, California, ValCom, Inc. is a diversified and vertically integrated, independent entertainment company. ValCom, Inc. through its operating divisions and subsidiaries plans to create and operate full service facilities that accommodate film, television and commercial productions with its four divisions that are comprised of: studio, film and television, camera/equipment rentals, and broadcast television ownership. The Company owns/operates 12 acres of land and approximately 200,000 square feet of commercial building space with 12 film and television production sound stages. ValCom maintains long-term contracts with Paramount Pictures for their hit CBS series "JAG" and "NCIS." ValCom's equipment/camera and personnel rental business, Half-day Video, is a leading competitor in the Hollywood community. The Company and its partnership operate ValCom Broadcasting KVPS-TV Channel 8 in Palm Springs, CA. * * * Liquidity and Going Concern Uncertainty In its Form 10-QSB filed with the Securities and Exchange Commission, ValCom reported: "The Company's condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has a net loss of $1,823,954 and a negative cash flow from operations of $405,019 for the nine months ended June 30, 2003, and a working capital deficiency of $8,602,508 and an accumulated deficit of $9,950,145 at June 30, 2003. These conditions raise substantial doubt about the Company's ability to continue as a going concern." VERITAS DGC: Closes Sale of Software Assets of RC2 and Hot Eng'g ---------------------------------------------------------------- Veritas DGC Inc. (NYSE & TSE: VTS) and Seismic Micro-Technology, Inc. of Houston, Texas, have closed on the sale of the software assets and related trade names and trademarks owned by Veritas' Reservoir Characterization Research and Consulting, Inc., subsidiary and (RC)2's subsidiary, HOT Engineering GmbH of Austria. Veritas will continue to offer reservoir consulting and training services to the petroleum industry worldwide through its Veritas Exploration Services and HOT affiliates. Veritas has also entered into a Sales Agreement with SMT to market SMT software, including its newly acquired (RC)2 and HOT software. Veritas DGC Inc. (Fitch, BB Senior Secured Debt Rating, Negative), headquartered in Houston, Texas, is a leading provider of integrated geological and reservoir technologies to the petroleum industry worldwide. Seismic Micro-Technology, Inc., headquartered in Houston, Texas is the founder and leader of Windows based exploration and reservoir management software. SMT's software is known for its robust functionality, ease of use, true integration, and affordability. Now, with the acquisition and implementation of geo-cellular modeling (RC2) and advanced reservoir simulation (HOT Engineering), SMT now boasts the only "seismic through simulation workflow" that runs entirely on a PC. SMT's KINGDOM of software consists of a seismic interpretation module for 2D and/or 3D data; an intuitive geological interpretation and field management module; a three-dimensional interpretation and visualization module; a 3D solid earth modeling module for complex structural and stratigraphic reservoirs; an advanced reservoir simulation module; and risk assessment tools such as advanced attribute analysis, synthetic generation; and post stack processing. WEIRTON STEEL: Retirees Committee Hires Klett Rooney as Counsel --------------------------------------------------------------- The Official Committee of Retirees of Weirton Steel Corporation sought and obtained the Court's authority to retain Klett Rooney Lieber & Schorling as its counsel in the Debtor's cases, effective as of September 2, 2003. George Lacik, a member of the Retirees' Committee, relates that they selected Klett Rooney as their counsel because of the firm's extensive general experience and knowledge, with particular emphasis on its national expertise in the field of debtor and creditor law and business reorganizations under Chapter 11. Klett Rooney is a full service firm with an extensive reorganization practice, with experience in all aspects of the law, which may arise in the context of the Chapter 11 case. As counsel, Klett Rooney will: (a) advise the Retirees' Committee with respect to its powers and duties pursuant to Section 1114 of the Bankruptcy Code; (b) assist the Retirees' Committee in investigating the Debtor's acts, conduct, assets, liabilities and financial Condition; the operation of the Debtor's business and the desirability of the continuance of the business; and any other matters related to the case or the formation of a plan of reorganization; (c) assist the Retirees' Committee in negotiating and formulating a plan for retiree benefits; (d) prepare, on behalf of the Retirees' Committee, necessary applications, responses, orders, reports and other legal documents; (e) appear before the Bankruptcy Court to protect the interests of the Retirees' Committee and the constituents it represents in all matters pending before the Bankruptcy Court; and (f) perform all the legal services for the Retirees' Committee as may be necessary in the Chapter 11 case and pursuant to Section 1114 of the Bankruptcy Code. William H. Schorling and James D. Newell, shareholders of Klett Rooney, will be the primary counsels involved in representing the Retirees' Committee. Their standard hourly billing rates are: William H. Schorling $495 James D. Newell 325 Klett Rooney will charge for its legal services on an hourly basis in accordance with its ordinary and customary rates in effect on the date services are rendered. The present billing rates for other attorneys and professionals at Klett Rooney are: Shareholders $235 - 495 Associates 130 - 275 Paralegals 90 - 135 These rates may change from time to time in accordance with Klett Rooney's established billing practices and procedures. Klett Rooney will maintain detailed, contemporaneous records of time and any actual and necessary expenses incurred in connection with the rendering of legal services by category and nature of the service rendered. James D. Newell, Esq., assures the Court that Klett Rooney: (a) has no connection with the Debtor, its creditors or other parties-in-interest in the Chapter 11 case, (b) does not hold any interest adverse to the Debtor's estate, and (c) is a "disinterested person" as defined within Section 101(14) of the Bankruptcy Code. Furthermore, Klett Rooney will conduct an ongoing review of its files to ensure that no conflicts or other disqualifying circumstances exist or arise. If any new facts or circumstances are discovered, Klett Rooney will supplement its disclosure to the Court. (Weirton Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 609/392-0900) WHEELING-PITTSBURGH: Repays $5 Million State of Ohio Loan --------------------------------------------------------- Wheeling-Pittsburgh Steel Corporation disclosed on September 17, 2003 that it repaid $5,000,000 to the State of Ohio, which had made an emergency loan to WPSC in January 2002. (Wheeling- Pittsburgh Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Service, Inc., 609/392-0900) WHEREHOUSE ENTERTAINMENT: Court Okays Asset Sale to Trans World --------------------------------------------------------------- Trans World Entertainment Corporation (Nasdaq: TWMC), a leading retailer of entertainment products, announced that the U.S. Bankruptcy Court for the District of Delaware has approved the Company's bid to acquire substantially all of the assets of Wherehouse Entertainment, Inc. The transaction is scheduled to close on October 2, 2003 and represents total consideration of $35.6 million in cash and $5 million in assumed liabilities. Wherehouse, currently operating in Chapter 11 bankruptcy, owns and operates 145 specialty music retail stores located primarily in the western United States. Trans World expects to retain 111 of Wherehouse's best performing stores and liquidate the remaining 34 stores through a joint venture with Hilco Merchant Resources, LLC, Gordon Brothers Retail Partners, LLC and The Ozer Group LLC. In addition, the U.S. Bankruptcy Court for the District of New Jersey approved Trans World's previously announced agreement to acquire substantially all of the assets of CD World, Inc. CD World owns and operates 13 freestanding specialty music stores in New Jersey and Missouri. The transaction is scheduled to close on October 6, 2003. Trans World Entertainment is a leading specialty retailer of music and video products. The Company currently operates 831 retail stores in 46 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and an e-commerce site, http://www.fye.com In addition to its 209 freestanding locations under the names Coconuts Music and Movies, Strawberries Music, Spec's, Planet Music and Second Spin, the Company also operates 622 mall locations, primarily under the "FYE" (For Your Entertainment) brand. WHEREHOUSE: Files Plan and Disclosure Statement in Delaware ----------------------------------------------------------- Wherehouse Entertainment, Inc., and its debtor-affiliates filed their Joint Chapter 11 Plan and an accompanying Disclosure Statement with the U.S. Bankruptcy Court for the District of Delaware. A full-text copy of the Debtors' Plan is available for a fee at: http://www.researcharchives.com/bin/download?id=030929212846 The Plan contemplates a substantive consolidation of the Debtors estates into a single entity solely for the purposes of all actions under the Plan. The Plan groups each claims and interests into 5 classes for distribution and treatment under the Plan: Class Description Treatment ----- ----------- --------- n/a Administrative and Unimpaired; Are not classified for Priority Claims the purposes of voting or receiving distributions under this Plan. Rather, all such Claims will be treated separately as unclassified Claims 1 Other Priority Unimpaired; Will receive, in full Claims satisfaction: i) Cash in an amount equal to the amount of such Allowed Other Priority Claim or ii) such other treatment as to which the Debtors and such Claimholder have agreed upon. 2 Other Secured Impaired; Will receive, in full Claims satisfaction Cash payments on the last Business Day of each three- month period following the Effective Date, not to exceed six years after the Effective Date 3 Secured Trade Impaired; Will receive, in full Claims satisfaction its Pro Rata Share of New Secured Convertible Notes in the principal amount of $33,810,000, which shall be convertible to 91.77% of the New Common Stock. 4 General Unsecured Impaired; Will be entitled to Claims receive, in full satisfaction, its Pro Rata Share of payments from the General Unsecured Creditors' Liquidating Trust from the proceeds of New Secured Convertible Notes in the principal amount of $1,190,000, which shall be convertible to 3.23% of the New Common Stock. 5 Interests and Deemed to reject; Will be Interest Related cancelled on the Effective Date Claims 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. WOLFORD CORPORATION: Chapter 7 Case Summary ------------------------------------------- Debtor: Wolford Corporation PO Box 6025 Des Moines, IA 50309 Bankruptcy Case No.: 03-05764-rjh7 Debtor affiliate filing separate chapter 7 petition: Wolford Group, Inc. - Case No. 03-05765-rjh7 Chapter 7 Petition Date: September 29, 2003 Court: Southern District of Iowa (Des Moines) Judge: Russell J. Hill Debtors' Counsel: Anita L. Shodeen, Esq. Beving, Swanson & Forrest, P.C. 321 E. Walnut Street Suite 200 Des Moines, IA 50309 515-237-1186 Fax : 515-288-9409 Email: ashodeen@bevinglaw.com Total Assets Total Debts Wolford Corporation $395,536 $4,078,142 Wolford Group, Inc. $5,519 $822,739 ZIFF DAVIS MEDIA: Appoints Randy Zane Director of Communications ---------------------------------------------------------------- Ziff Davis Media, the leading special interest media company, promoted Randy Zane to Director of Corporate Communications. In his new role, Mr. Zane will manage Ziff Davis Media's external and internal communications efforts. Mr. Zane brings to the position over 10 years of public relations, public affairs and marketing communications experience. He will report directly to Robert F. Callahan, Chairman and CEO of Ziff Davis Media and Bart W. Catalane, COO/CFO. In his most recent assignment as Public Relations Manager, Mr. Zane was responsible for the day-to-day publicity efforts on behalf of the company including its market-leading publications, websites, eSeminars, eNewsletters, events, conferences and research. In this role, Mr. Zane developed and implemented powerful public relations programs that effectively communicated brand identity, market position and value proposition for the company's core audiences -- customers, prospects, influencers, enthusiasts, investors and the media. "Randy is smart, focused and driven," said Robert F. Callahan. "His unbridled energy and enthusiasm will continue to serve Ziff Davis Media well in the years to come." Mr. Zane has held senior-level public relations positions at leading high-technology firms and media companies. As Account Manager at FitzGerald Communications, he conducted media relations for Sirius Satellite Radio, one of the most innovative technology companies. Prior to this position he served as Public Relations Manager for PC Expo, one of the largest technology trade shows in the United States. Mr. Zane has also held communications and writing positions at Empire Blue Cross & Blue Shield and The Insurance Information Institute. Mr. Zane began his career as a communications associate for Governor William F. Weld of Massachusetts. Mr. Zane holds a Master of Arts degree in Communications from Emerson College and a Bachelor of Science degree in Business Administration from Towson University. Ziff Davis Media Inc. (S&P, CCC Corporate Credit Rating) -- http://www.ziffdavis.com-- is a special interest media company focused on the technology and electronic video game markets. In the United States, the company publishes 10 industry leading business and consumer magazines: PC Magazine, eWEEK, Baseline, CIO Insight, Electronic Gaming Monthly, Computer Gaming World, Official U.S. PlayStation Magazine, GameNow, Xbox Nation and GMR. There are 39 foreign editions of Ziff Davis Media's publications produced and distributed in over 70 countries worldwide. In addition to producing Web sites for all of its magazines, the Company develops tech enthusiast sites such as ExtremeTech.com. Ziff Davis Media provides custom publishing and end-to-end marketing solutions through its Integrated Media Group, industry analyses through Ziff Davis Market Experts and produces eSeminars and webcasts. For more information, visit http://www.ziffdavis.com * Jefferies Hires Farukh Faroogi as Post-Reorg. Equity Analyst -------------------------------------------------------------- Jefferies & Company, Inc., the principal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF), hired Farukh Z. Farooqi, Post- Reorganization Equity Analyst. Mr. Farooqi will follow post-reorganization equity securities as part of the firm's overall focus on the restructuring area. The creation of this position will enable Jefferies to leverage the insights and relationships gained from the firm's strong standing in special situations and Bulletin Board trading. The addition of a post-restructuring equity specialist extends Jefferies' commitment to distressed middle-market companies for the benefit of institutions that invest in them. In the fall of 2002, Jefferies added a Bulletin Board desk to its equity trading platform to better serve clients focused on special situations and the securities of distressed companies in or out of the bankruptcy process. "We are extremely pleased to announce the hiring of Farukh Farooqi as a new analyst focusing on post-restructured equities," commented Richard B. Handler, Chairman and Chief Executive Officer of Jefferies. "The creation of this position is the logical expansion of our efforts to integrate our equity and debt capital markets capabilities as we institutionalize the investment process in the distressed arena." "With Jefferies' status as a leading trader of distressed and post Chapter 11 debt and equity securities, this hire will help to combine the resources of our powerful high yield and equity trading operations in the form of a research product to assist both fixed income and equity investors," said John C. Shaw, Jr., President of Jefferies. "Our clients will benefit from a better understanding of the opportunities in post-restructured equities as we continue to provide them with substantial liquidity through Jefferies' leading market making and trading of these equities." Mr. Farooqi, age 38, was most recently at Merrill Lynch for four years, where he followed conglomerate companies as a Senior Analyst in the Multi-Industry Sector. Previously, he was an analyst at Lehman Brothers where he also followed conglomerates. Mr. Farooqi will report to Steven R. Black, Director of Equity Research, and will work closely with Jefferies' High Yield professional Joseph P. von Meister, Senior Analyst of Distressed and Special Situations. He will be based in the firm's Short Hills, New Jersey office. Jefferies & Company, Inc., the principal operating subsidiary of Jefferies Group, Inc. (NYSE: JEF), is a full-service investment bank and institutional securities firm focused on the middle market. Jefferies offers financial advisory, capital raising, mergers and acquisitions, and restructuring services to small and mid-cap companies. The firm provides outstanding trade execution in equity, high yield, convertible and international securities, as well as fundamental research and asset management capabilities, to institutional investors. Additional services include correspondent clearing, prime brokerage, private client services and securities lending. The firm's leadership in equity trading is recognized by numerous consulting and survey organizations, and Jefferies' affiliate, Helfant Group, Inc., executes approximately eleven percent of the daily reported volume on the NYSE. Through its subsidiaries, Jefferies Group, Inc. employs more than 1,350 people in 20 offices worldwide, including Atlanta, Boston, Chicago, Dallas, London, Los Angeles, New York, Paris, San Francisco, Tokyo, Washington and Zurich. Further information about Jefferies, including a description of investment banking, trading, research and asset management services, can be found at http://www.jefco.com * Justice Leslie Crocker Snyder Joins Kasowitz Benson as Partner ---------------------------------------------------------------- Kasowitz, Benson, Torres & Friedman LLP announced that Justice of the Supreme Court for the State of New York, County of New York, Leslie Crocker Snyder will be joining the law firm as Partner effective October 6, 2003. A distinguished judge and founder of the nation's first sex crimes unit, Snyder has served for 20 years on the New York Supreme Court bench. "For years, we have admired Leslie's extraordinary achievements as a prosecutor and on the bench, and we're thrilled to welcome her to Kasowitz, Benson, Torres & Friedman," said Marc E. Kasowitz, the firm's chairman. "The addition of such an exceptional jurist is consistent with our mission to assemble the highest caliber attorneys at the firm." Leslie Crocker Snyder stated: "I am delighted to be joining Kasowitz, Benson, Torres & Friedman, one of the country's premier litigation firms. While I will continue to stay active in many areas of public service, I look forward to the many challenges and opportunities that will come with my new position." Snyder was the first female homicide prosecutor in New York City and founder of the Manhattan District Attorney's Sex Crimes Division. She co-wrote New York's "rape shield" statute to protect victims of sexual abuse and was integral in developing the modern day prosecution of sex crimes. Snyder began her judicial tenure in 1983, presiding over thousands of criminal trials, including the complex, multidefendant trials during the height of the crack cocaine epidemic in New York in the 1980s. Snyder is author of "25 to Life: The Truth, the Whole Truth, and Nothing but the Truth," published in 2002. A graduate of Radcliffe College and the Harvard-Radcliffe Program in Business Administration, she received her L.L.B. from Case Western Reserve Law School in 1966. Kasowitz, Benson, Torres & Friedman LLP, founded in 1993, specializes in litigation and bankruptcy and numbers over 160 lawyers in its New York, New Jersey, Atlanta, San Francisco and Houston offices. * Peter R. O'Flinn Resigns as LeBoeuf Lamb Co-Chairman ------------------------------------------------------ Peter R. O'Flinn to step down as co-chairman; Steven H. Davis to continue as chairman LeBoeuf, Lamb, Greene & MacRae, L.L.P. announced that Peter R. O'Flinn will step down from his role as co-chairman at the conclusion of his current term in December, and will continue to be involved with the Firm. Steven H. Davis, who was appointed co- chairman with Mr. O'Flinn in 1999, will continue as chairman, through 2008. Under their leadership, LeBoeuf, Lamb, Greene & MacRae has grown to become one of the world's largest law firms, with more than 650 lawyers practicing in 14 U.S. cities and in nine other countries around the globe. "Peter has made many outstanding contributions to LeBoeuf during his tenure as co-chairman and throughout his 26-year career," said Mr. Davis. "I have had the privilege of working closely with Peter in leading this Firm to many great successes, and I look forward to his continuing support in the future." In addition to serving as co-chairman, Mr. O'Flinn has also headed the Firm's corporate department. "By relinquishing my duties as co-chairman, I am hoping to devote more time to my family and my personal interests," said Mr. O'Flinn. "I am fully confident that the Firm will continue to flourish under the leadership of Steve Davis." The Firm also announced the appointment of four new members to its steering committee, as well as a number of management changes that will take effect in 2004. LeBoeuf has appointed the following four partners to the steering committee: -- Jeffrey Mace, who manages our Lloyds of London business, resident in New York; -- John M. Schwolsky, who will co-head the corporate practice in New York. -- Peter J. Sharp, who co-heads litigation and serves as managing partner in London; and -- James A. Thompson, who heads the environmental practice in Hartford, CT. "These changes to the steering committee mirror the Firm's growing footprint across a number of practice areas and geographic regions," said Mr. Davis. "The goal is to ensure that our various practices and regions are represented on the steering committee, and that the committee itself is a nimble management body that can make decisions quickly, communicate them clearly and implement them effectively." LeBoeuf also announced that the following partners will serve in departmental management roles starting in 2004: -- Jane Boisseau will join James R. Woods as co-head of insurance; -- Peter S. Britell appointed head of real estate; -- Alexander M. Dye and John M. Schwolsky appointed co-heads of corporate; -- Cecelia Kempler will retire as an insurance partner but will continue as a business development consultant for the Firm. -- John G. Klauberg and William S. Lamb appointed co-heads of energy; and -- Lawrence W. Pollack and Peter J. Sharp appointed co-heads of litigation. The following office management changes will also take effect in 2004: -- John C. Cleary and Margaret A. Keane have been appointed co- heads of the Pittsburgh, PA office; -- Mary A. Lopatto will join Brian D. O'Neill as co-head of the Washington, DC office; -- John P. Mulhern will join Lawrence E. Miller as co-head of the Newark, NJ office; -- Kevin R. Murray will join Ralph R. Mabey as co-head of the Salt Lake City, UT office; and -- Thomas G. Rohback appointed head of the Hartford, CT office. Founded in 1929, LeBoeuf, Lamb, Greene & MacRae is recognized as one of the preeminent legal services providers to the energy, utilities and insurance industries. The Firm's experience in these fields has in turn made it a leader in corporate and financial services, bankruptcy, and litigation practice in the Untied States and around the world. LeBoeuf represents a diverse range of clients in such areas as banking, finance, insurance, energy, telecommunications, e-commerce, transportation, manufacturing, real estate and entertainment. The Firm also provides legal services to a number of trade associations and government agencies. * Change in S.D.N.Y. Adversary Proceeding Numbering Scheme ---------------------------------------------------------- United States Bankruptcy Court Southern District of New York One Bowling Green, Room 615 New York, NY 10004-1408 Kathleen Farrell-Willoughby Clerk of Court Telephone: (212) 668-2870 Fax (212) 668-2878 October 1, 2003 Due to the high volume of adversary proceedings being filed this year in the Bankruptcy Court of the Southern District of New York, it has become necessary to change the format for the numbering of adversary proceedings that are filed in the Manhattan Divisional Office (the change does not apply to adversary proceedings filed in the White Plains and Poughkeepsie Divisional Offices). While the adversary proceeding number will still begin with two digits indicating the current year followed by a hyphen (for example, "03-"), there will now be five digits following the hyphen, the first of which will be a nine (for example, "03- 91234"). The use of five digits is a departure from the Court's longstanding use of four digits for adversary proceedings. This migration from four to five digits will take place at some point during the month of October 2003 and will remain in effect for the duration of 2003. The current plan, which is subject to change, is to return to the use of four digits beginning in January 2004. The Clerk's Office appreciates your understanding in this matter and apologizes for any inconvenience this change in numbering may cause. /S/ Kathleen Farrell-Willoughby This notice is available in PDF format at http://www.nysb.uscourts.gov/pdf/apnumber.pdf * DebtTraders' Real-Time Bond Pricing ------------------------------------- Issuer Coupon Maturity Bid - Ask Weekly change ------ ------ -------- --------- ------------- Federal-Mogul 7.5% due 2004 14.5 - 16.5 0.0 Finova Group 7.5% due 2009 43.5 - 44.5 +0.5 Freeport-McMoran 7.5% due 2006 102.5 - 103.5 0.0 Global Crossing Hldgs 9.5% due 2009 4.5 - 5.0 +0.25 Globalstar 11.375% due 2004 3.0 - 3.5 -0.5 Lucent Technologies 6.45% due 2029 68.25 - 69.25 -0.75 Polaroid Corporation 6.75% due 2002 11.0 - 12.0 0.0 Westpoint Stevens 7.875% due 2005 20.0 - 22.0 0.0 Xerox Corporation 8.0% due 2027 84.0 - 86.0 -1.5 Bond pricing, appearing in each Thursday's edition of the TCR, is provided by DebtTraders in New York. DebtTraders is a specialist in global high yield securities, providing clients unparalleled services in the identification, assessment, and sourcing of attractive high yield debt investments. For more information on institutional services, contact Scott Johnson at 1-212-247-5300. To view our research and find out about private client accounts, contact Peter Fitzpatrick at 1-212-247-3800. Real-time pricing available at http://www.debttraders.com ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Bond pricing, appearing in each Thursday's edition of the TCR, is provided by DebtTraders in New York. DebtTraders is a specialist in global high yield securities, providing clients unparalleled services in the identification, assessment, and sourcing of attractive high yield debt investments. For more information on institutional services, contact Scott Johnson at 1-212-247-5300. To view our research and find out about private client accounts, contact Peter Fitzpatrick at 1-212-247-3800. Real-time pricing available at http://www.debttraders.com/ Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard Group, Inc., Washington, DC USA. Yvonne L. Metzler, Bernadette C. de Roda, Donnabel C. Salcedo, Ronald P. Villavelez and Peter A. Chapman, Editors. Copyright 2003. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $675 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***