/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/031006.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, October 6, 2003, Vol. 7, No. 197 Headlines A NOVO: Wants Plan-Filing Exclusivity Extended Until October 30 ACTRADE FINANCIAL: Files Joint Plan and Disclosure Statement AHOLD NV: Full-Year 2002 Net Loss Reaches EUR1.2 Billion Mark AIR CANADA: Canadian Transport Agency Hires Deloitte as Advisor AIRPLANES TRUST: S&P Cuts Ratings on 3 Junk-Rated Note Classes AIRTRAN HOLDINGS: Will Webcast Q3 Conference Call on October 22 AMERCO: Equity Committee Hires Providence Capital as Advisors AMERICA WEST: September Revenue Passenger Miles Slide-Up 5.7% AMERICAN AIRLINES: Overall September 2003 Traffic Tumble 1.7% AMERICAN GREETINGS: Names Catherine M. Kilbane as SVP & Secretary AMN HEALTHCARE: Inks Amendment to BofA-Led Credit Facility ANC RENTAL: Pushing for Approval of MBIA Settlement Agreement ARVINMERITOR: Extends Tender Offer for Dana Until Oct. 30, 2003 AVAYA INC: Completes Acquisition of Certain VISTA Assets BAVARIA SA: S&P Assigns BB Foreign Currency Corp. Credit Rating BAVARIA S.A.: Fitch Rates Planned US$400MM Senior Notes at BB B/E AEROSPACE: Agrees to Sell Senior Notes & Amends Credit Pact BRITEX GROUP: Nova Scotia Business Inc. Appoints Receiver BUCKEYE TECHNOLOGIES: Sets Q1 Conference Call for October 21 CABLE DESIGN: Sinks into Red Ink in Fiscal 2003 Fourth Quarter CALL-NET ENTERPRISES: Completes 1.5-Mil. Class B Shares Offering CELLSTAR CORP: Promotes Robert Kaiser to President and COO CENTERPULSE: BB Ratings Withdrawn Following Zimmer Takeover CHANNEL MASTER: Case Summary & List of Largest Unsec. Creditors CONCERT INDUSTRIES: Court Extends CCAA Order Until December 5 CONNECTICARE INC: BB Ratings Placed on CreditWatch Negative CONSOL ENERGY: RWE Agrees to Sell 27.3 Million CONSOL Shares CONSOLIDATED FREIGHTWAYS: Auctioning-Off Montana Facilities Wed. CONSOLIDATED FREIGHTWAYS: Manfield Facility Up on Auction Block CORRECTIONS CORP: Inks New Contract with U.S. ICE Agency COVANTA ENERGY: Court Fixes Uniform Geothermal Bidding Protocol DANA CORP: Issues Comments on Extended ArvinMeritor Tender Offer DIRECTV LATIN: Wants Nod to Release Confidential Information ECHOSTAR COMMS: DBS Unit Completes $2.5-Bill. Sr. Note Offering ELIZABETH ARDEN: Equity Sale Proceeds will Retire 11-3/4% Bonds ENVOY COMMS: Gets Additional Time Extension to Meet Nasdaq Rules FURR'S RESTAURANT: Completes Asset Sale to Buffet Partners L.P. FURR'S RESTAURANT: Buffet Acquisition Positions Chain for Growth GEORGIA-PACIFIC: Will Publish Third-Quarter Results on Oct. 16 HAYES LEMMERZ: Fred Bentley Named European Wheel Group President HEALTHSOUTH: Makes Semi-Annual Interest Payments to Bondholders HOVNANIAN: Fitch Assigns Initial BB+ Sr. Unsecured Debt Rating IMC HOME: S&P Hatchets Rating on Class B Certificates to BB IMPATH INC: Has Until December 15 to Complete and File Schedules INTERSTATE BAKERIES: Will Close Grand Rapids, Michigan Facility INTRAWEST CORPORATION: US$350 Mill. Unsecured Notes Rated at B+ ITEX CORP: Completes Sale of Sacramento Trade Office for $800K KB HOME: Declares Quarterly Cash Dividend Payable on November 26 KELLSTROM: Delaware Court Confirms Joint Reorganization Plan KINGSWAY FINANCIAL: Completes Trust Preferreds Private Placement KINGSWAY FINANCIAL: Makes Executive Appointments in Two Units LAIDLAW INC: LTI Unit Asks Court to Disallow $8-Mill. IRS Claim LTV: US Trustee Balks at Certain Disclosure Statement Provisions LYONDELL CHEMICAL: Board Declares Regular Quarterly Dividend MAGELLAN HEALTH: Wants Clearance for Justice Dept. Settlement MESA AIR GROUP: September 2003 Traffic Climbs-Up by 55.7% METALS USA: Charles Sanida Discloses Common Stock Ownership MIRANT CORP: Bringing-In Alston & Bird LLP as Special Counsel MISSISSIPPI CHEMICAL: Court OKs $32.5-Mill. DIP Credit Facility MONITRONICS INT'L: June 30 Net Capital Deficit Widens to $40MM MORGAN STANLEY: S&P Keeps Watch on 4 Low-B & Junk Note Ratings NEENAH FOUNDRY: S&P Rates Corporate Debt & Sr. Notes at B/CCC+ NEW WORLD RESTAURANT: Completes Equity Restructuring Transaction NRG ENERGY: Court Okays Bingham McCutchen as Committee's Counsel O'SULLIVAN INDUSTRIES: Closes $140MM Senior Secured Debt Package OWENS CORNING: Wants Nod for Amendments to Plan Voting Protocol OXFORD INDUSTRIES: Q1 Fiscal 2004 Results Reflect Strong Growth PARTNERS MORTGAGE: First Creditors' Meeting Set for October 29 PG&E NATIONAL: Court Allows Committee Members to Trade Securities PILLOWTEX CORP: GGST LLC Pitches Best Bid for Assets at Auction PILLOWTEX: Court Approves Morris Nichols Engagement as Counsel POLAROID CORP: Seeks Nod Allowing Committee to Commence Actions PROXIM CORP: Amends Securities Purchase Pact with Two Investors PW EAGLE: Takes Strategic Initiatives to Enhance Balance Sheet QUEBECOR MEDIA: Videotron Settles Terms of Senior Notes Offering RANGE RESOURCES: Reduces Debt by $88 Million to $380 Million REDBACK NETWORKS: Launches Exchange Offer for 5% Conv. Sub Notes REDDY ICE: $45MM Supplemental Term Loan Facility Rated at B+ RELIANT RESOURCES: Settles Western Market Issues with FERC SAFETY-KLEEN CORP: Wants to Implement Records Management Policy SANMINA-SCI: Set Fourth-Quarter Conference Call for October 23 SEMCO ENERGY: Moody's Revises Low-B Ratings Outlook to Negative SHAW GROUP: Names Tim Barfield President/Chief Operating Officer SIEBEL SYSTEMS: Reports Prelim. Results for September Quarter SPHERION CORP: S&P Affirms B+ Rating with Negative Outlook SOUTHERN UNION: $200MM Preferred Stock Earns S&P's BB+ Rating STARWOOD HOTELS: Will Publish Third-Quarter Results on Oct. 30 TCW LINC: Fitch Slashes Two Note Ratings to Junk and D Levels TECO ENERGY: Completes Sale of Hardee Power Station for $100MM THERMACELL TECH.: Completes Merger Deal with Absolute Industries TOM'S FOODS: Low-B Ratings Lowered on Weak Operating Performance TRANSAX INTERNATIONAL: Pulls Plug on Labonte & Co. Engagement TRENWICK GROUP: Completes Sale of Trenwick International Limited TSI TELSYS: Third Quarter FY2003 Orders Increase by US$1.2 Mil. UNITED AIRLINES: Plan-Filing Exclusivity Intact Until March 8 UNIVERSAL HOSPITAL: S&P Assigns Low-B Ratings to Senior Notes US AIRWAYS: Stipulation Resolves $2MM Wilmington Trust Claim VICWEST CORP: Appoints D. Anthony Molluso as President and CEO WEIRTON STEEL: UST Gets Nod for Bank Account Info. Production WESTMERIA HEALTH: Liquidity Issues Raise Going Concern Doubt WHEREHOUSE: Wants to Stretch Lease Decision Time to December 31 WILLIAMS CONTROLS: Teleflex Buys Passenger & Light Truck Assets W.R. GRACE: Seeks Clearance for KWELMB Confidential Settlement * EPIQ Systems Expands Chapter 7 Product and Service Offerings * BOND PRICING: For the week of October 6 - 10, 2003 ********* A NOVO: Wants Plan-Filing Exclusivity Extended Until October 30 --------------------------------------------------------------- A Novo Broadband, Inc., wants to further stretch the periods within which it has the exclusive right to file a plan and solicit acceptances of that plan from its creditors. The Debtor asks the U.S. Bankruptcy Court for the District of Delaware to extend its exclusive plan filing period through October 30, 2003 and asks that its solicitation period run through December 28, 2003. The Debtor argues that the progress it has attained in this case warrants further extension of it exclusive periods. To date, the Debtor has: i) obtained the consensual use of the Lender's cash collateral to fund ongoing operations; ii) reduced operating costs; iii) maintained its customer base; iv) maintained employee morale; and v) evaluated and rejected certain agreements, and, most importantly, consummated the sale of substantially all of its assets to Teleplan Holding USA, Inc. A Novo Broadband, Inc., a business engaged primarily in the repair and servicing of broadband equipment for equipment manufacturers and operators of cable and other broadband systems in North America, filed for chapter 11 petition on December 18, 2002 (Bankr. Del. Case No. 02-13708). Brendan Linehan Shannon, Esq., M. Blake Cleary, Esq., at Young, Conaway, Stargatt & Taylor represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $12,356,533 in total assets and $10,577,977 in total debts. ACTRADE FINANCIAL: Files Joint Plan and Disclosure Statement ------------------------------------------------------------ As previously disclosed by Actrade Financial Technologies Ltd. on September 3, 2003, the Company received a letter from persons purportedly holding more than twenty percent (20%) of the Company's outstanding capital stock, requesting a special meeting of the shareholders of the Company and requesting that the Secretary of the Company fix and notice the date for such a meeting. The By-laws of the Company provide that such a meeting may be called in the event at least one-fifth of the votes which all stockholders are entitled to cast at the particular meeting make such a request. One of the signatories to the Letter has now withdrawn its request for a shareholder meeting, thereby reducing the percentage of shareholders requesting a meeting to below the one-fifth threshold set forth in the Company's By-laws. Accordingly, the Company will take no further action in respect of the request contained in the Letter. Separately, on September 25, 2003 the Company and one of its direct U.S. subsidiaries, Actrade Capital Inc., filed a joint Chapter 11 plan and related disclosure statement which in general provides for a distribution of the Company's and Capital's assets to creditors and shareholders. No assurance can be given that the Chapter 11 plan will be accepted by the creditors or equity holders of the Company and Capital or approved by the bankruptcy court. AHOLD NV: Full-Year 2002 Net Loss Reaches EUR1.2 Billion Mark ------------------------------------------------------------- Ahold NV (NYSE:AHO) (Other OTC:AHODF) reports audited consolidated 2002 results, with these highlights: -- Net loss for 2002 of Euro 1,208 million -- Operating income for 2002 of Euro 2,145 million before impairment and amortization of goodwill and exceptional loss related to Argentina -- Net loss after preferred dividends per common share for 2002 of Euro 1.34 -- Net cash from operating activities for 2002 of Euro 2,486 million -- Net loss under US GAAP expected to be significantly higher, primarily as a result of additional goodwill impairment of approximately Euro 3.2 billion (unaudited), of which approximately Euro 2.7 billion relates to U.S. Foodservice -- Net sales for 2002 of Euro 62,683 million -- Joint ventures deconsolidated and accounted for using equity accounting method -- Comparable financial information restated for 2001 and 2000 -- Remedial actions taken in 2003: internal controls and corporate governance strengthened Ahold published its audited consolidated 2002 financial statements. Commenting on the announcement, Ahold President & CEO Anders Moberg said: "The publication of these results is a major milestone that draws a line under recent events and enables us to move forward." Ahold also announced that the audited 2002 financial statements were delivered to its syndicate of banks as required under its Euro 2.65 billion credit facility negotiated in March 2003. As a result, Ahold has access to the unsecured tranche of USD 915 million. "Based on our current cashflow projections, we believe that we will not need access to the unsecured tranche," Hannu Ryopponen, Chief Financial Officer said. The findings of forensic and other internal investigations initiated by the company in 2003 required Ahold to restate its consolidated financial statements for 2001 and 2000. These restatements of prior years arose primarily from overstatements of vendor allowance income at U.S. Foodservice and the deconsolidation of joint ventures. The 2002 financial statements reflect all material correcting adjustments that have been identified as a follow-up to the various investigations and the audit by independent auditors Deloitte & Touche. Net income for 2001 and 2000 has been restated resulting in a reduction in the amount of Euro 363 million and Euro 196 million, respectively, of which 59% and 53%, respectively, related to improper accounting for vendor allowances. Correcting adjustments have also been made in the 2002 financial statements. A summary of accounting issues under Dutch GAAP is outlined later on in this release. Net sales were reduced by Euro 12,380 million and Euro 10,709 million for 2001 and 2000, respectively, mainly as a result of the deconsolidation of joint ventures and some other smaller adjustments. Commenting on the 2002 results, Mr Moberg said: "The underlying performance of our operating companies in the aggregate was good in a year of increased competition and a weak economy. We have some very solid operations and strong brands. However, in many ways, it's been a lost year, difficult and negative. With 2002 now behind us, it's time to move forward and rebuild value for our customers and our shareholders," he stated. Copies of the 2002 consolidated financial statements are available on the company's Web site at http://www.ahold.com These financial statements do not completely fulfill the statutory filing requirements pursuant to The Netherlands Civil Code because an annual directors' report and parent company financial statements are not included. In that respect they precede a complete statutory annual report for Dutch law and an annual report on Form 20-F to be filed with the United States Securities and Exchange Commission in order to satisfy the current information needs of our stakeholders. Highlights of the 2002 Results The results for 2001 and 2000 have been restated to reflect the correction of accounting irregularities and errors announced on February 24, 2003 and those found through the subsequent forensic investigations and external and internal audits. The increase in net sales in 2002 was largely attributable to acquisitions, primarily those of Alliant, acquired in November 2001, and Bruno's, acquired in December 2001. In addition, the results of Ahold's subsidiaries Disco and Santa Isabel in South America were consolidated in the course of 2002. The increase in net sales excluding currency impact was 20.8%. Operating income in 2002 amounted to Euro 239 million, a decrease of 87.5% compared to 2001. The decrease was primarily caused by Euro 1,287 million of impairment of goodwill and intangible assets, including Euro 898 million related to Ahold's operations in Spain, Euro 199 million related to the Argentine and Chilean operations, Euro 129 million related to Bruno's in the U.S. and Euro 54 million related to the Brazilian operations. The decrease was also caused by a Euro 372 million exceptional loss on related party default guarantee recorded in 2002 with respect to debt defaults by Velox Retail Holding, Ahold's joint venture partner in Disco Ahold International Holdings N.V. Operating income in 2002 also was adversely affected by a lower U.S. Dollar/Euro exchange rate. Operating income before impairment and amortization of goodwill and exceptional loss in 2002 amounted to Euro 2,145 million, an increase of 4.0% compared to 2001. See table below and the supplemental disclosures to the statements of operations for a reconciliation of this non-GAAP measure. The net loss incurred in 2002 was primarily caused by impairment of goodwill and other intangible assets of in total Euro 1,287 million, goodwill and intangible asset amortization of Euro 433 million and an exceptional loss on related party default guarantee of Euro 372 million. Net sales increased in 2002 compared to 2001 both organically and as a result of the acquisition of Bruno's that took effect in December 2001. Comparable and identical U.S. retail sales growth totaled 1.6% and 0.9%, respectively (2001: 3.1% and 2.6%). Operating income before impairment and amortization of goodwill increased in 2002 compared to 2001 as a result of strong operating performance at Stop & Shop, Giant-Landover and Giant-Carlisle. The increase in net sales in 2002 compared to 2001 was due to the acquisition of Alliant in November 2001. Operating income before impairment and amortization of goodwill in 2002 included a USD 28 million gain relating to excess reserve reversals, and in 2001 included a USD 94 million loss relating to restructuring charges at Alliant. Operating income before impairment and amortization of goodwill as a percentage of net sales for 2002 was 1.7% and, as restated, 0.9% in 2001, a significant decline from the originally reported number for U.S. Foodservice for 2001, reflecting the substantial accounting adjustments related to U.S. Foodservice. Identical sales growth at Albert Heijn was 4.5%. Within Other Europe, Schuitema's net sales increased by 4.5%. In Central Europe and Spain, the net sales increase was mainly attributed to store expansion. In line with the sales growth, Albert Heijn improved its operating income before impairment and amortization of goodwill in 2002 by 6.9%. In Other Europe, the operating income before impairment and amortization of goodwill dropped from Euro 110 million to Euro 32 million, mainly due to the impairment of fixed assets in Other Europe and less favorable business performance in Spain due to integration challenges and start-up costs for newly-opened stores. Net sales at Europe Foodservice declined slightly and operating income before impairment and amortization of goodwill declined as a result of increased pension costs. Net sales in 2002 versus 2001 increased mainly due to the consolidation of Disco and Santa Isabel in the course of 2002. In Brazil, sales in local currency were higher mainly due to the acquisition of G. Barbosa in January 2002. The operating loss before impairment and amortization of goodwill and exceptional loss in 2002 was primarily caused by the consolidation of Disco and Santa Isabel. Difficult trading circumstances impacted operating income before impairment and amortization of goodwill in Brazil in 2002, which was below 2001 levels in local currency. Impairment and amortization of goodwill and intangible assets Mainly as a result of the deteriorating economic conditions in Spain, Argentina and the Southeastern United States, goodwill impairment charges of in total Euro 1,281 million were recorded in 2002 (2001: Euro 0 million). Impairment charges relating to intangible assets amounted to Euro 6 million. Goodwill amortization in 2002 amounted to Euro 253 million (2001: Euro 152 million). The increase is largely caused by the acquisition of Bruno's and Alliant. Amortization of other intangible assets amounted to Euro 180 million (2001: Euro 104 million). Exceptional Loss on Related Party Default Guarantee An exceptional loss was incurred of Euro 372 million in 2002 relating to the fact that the purchase price of the additional shares in Disco Ahold International Holdings in July 2002 exceeded the fair value of the shares acquired by Euro 363 million and a loan to Velox of Euro 5 million had to be written off. Interest expense in 2002 increased to Euro 1,003 million (2001: Euro 921 million), primarily caused by the new debt assumed or incurred in connection with acquisitions and an increase in cash dividends paid. This was partly offset by a favorable currency impact, especially of the U.S. Dollar. Share in Income (Loss) of Joint Ventures and Equity Investees The share in income (loss) of joint ventures and equity investees in 2002 amounted to a net loss of Euro 38 million compared to a net loss of Euro 192 million in 2001. Cash Flow Statement Net cash from operating activities in 2002 amounted to Euro 2,486 million (2001: Euro 1,961 million). Changes in working capital improved compared to the prior year, resulting in a cash inflow of Euro 107 million compared to a cash outflow of Euro 166 million in fiscal 2001. Investments in tangible fixed and intangible assets in 2002 amounted to Euro 2,160 million (2001: Euro 2,459 million). Divestments of tangible fixed and intangible assets amounted to Euro 590 million (2001: Euro 1,134 million), in both years mainly related to sale and leaseback transactions in the U.S. and Europe. The cash outflow related to acquisitions of consolidated subsidiaries of Euro 977 million was primarily for the purchase of the remaining shares in Disco Ahold International Holdings. Shareholders' Equity Shareholders' equity, expressed as a percentage of the balance sheet total, was 10.5% (at year-end 2001: 19.2%). Shareholders' equity at December 29, 2002, was Euro 2,609 million. Long-term financial lease commitments amounted to Euro 2,224 million. US GAAP Reconciliation The Annual Report on Form 20-F that will be filed with the U.S. Securities and Exchange Commission will contain a US GAAP reconciliation of net income and shareholders' equity which is in the process of being audited. The current unavailability of US GAAP figures has no impact on Ahold's credit agreement which required that it delivers audited consolidated financial statements under Dutch GAAP. Under US GAAP, the net loss for 2002 will be significantly higher. In particular, goodwill impairment charges related to the adoption of Statement of Financial Accounting Standards No. 142, Goodwill and Other Intangible Assets ("SFAS 142") on December 31, 2001, will contribute to a higher net loss under US GAAP. This primarily will be caused by an additional goodwill impairment charge of approximately Euro 3.2 billion (unaudited), of which Euro 2.7 billion relates to U.S. Foodservice. Next Steps On September 4, 2003, President & CEO Anders Moberg announced the most important principles of Ahold's strategy going forward. Ahold is now focusing on two key strategic operating priorities: its leading food retail formats in the United States and Europe, and restoring the value of U.S. Foodservice. More details on the new Ahold strategy, together with the company's view on its future financing, are expected to be announced mid-October. * * * As previously reported, Standard & Poor's Ratings Services lowered its long-term corporate credit rating on Netherlands-based food retailer and food service distributor Ahold Koninklijke N.V. to 'BB-' from 'BB+', following the announcement by the group that accounting irregularities at its U.S. Foodservice arm were materially larger than expected. In addition, the senior unsecured debt ratings on Ahold were lowered to 'B+' from 'BB+', reflecting structural subordination. At the same time, Standard & Poor's affirmed its 'B' short-term rating on the group. AIR CANADA: Canadian Transport Agency Hires Deloitte as Advisor --------------------------------------------------------------- David Collenette, Canadian Transportation Agency Minister, confirmed on September 25, 2003 that his department has hired Deloitte and Touche as financial advisor for the federal government in Air Canada's restructuring process. Deloitte will study the viability of the proposed business plan Air Canada provided to potential equity investors. The government also wants Deloitte to deconstruct Air Canada's proposed ownership structure when it files a plan of arrangement. The government wants to ensure that the ownership of Air Canada will be in accordance with foreign ownership regulations. Foreign investors cannot own more than 25% of voting shares in a Canadian Airline pursuant to Canada law. The "effective control" must also be in Canadian hands. Canada's bilateral aviation agreements specify that airlines using Canada's international route rights must be owned and effectively controlled by Canadians. (Air Canada Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 609/392-0900) AIRPLANES TRUST: S&P Cuts Ratings on 3 Junk-Rated Note Classes -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its credit ratings on Airplanes Pass-Through Trust's subclass A-9 and classes B, C, and D certificates. The ratings on the subordinate class B, C, and D certificates remain on CreditWatch. At the same time, Standard & Poor's affirmed its ratings on the subclass A-6 and A-8 certificates. The downgrade of subclass A-9 follows an analysis of the transaction following an amendment to the structure agreed to by certificateholders in recent weeks. It has become clear that there is increased likelihood that more aircraft in the portfolio will be liquidated before they have reached the ends of their previously assumed useful lives. The analysis indicates a low probability of ultimate repayment of principal on subclass A-9 under Standard & Poor's assumed 'A' stress scenario. It has also shown that subclasses A-6 and A-8 are robust, at AA-/Negative and A/Negative, respectively. A deferral of interest on the class B, C, and D certificates is anticipated in the next two to three months. The class B notes were originally placed on CreditWatch July 9, 2002, and the class C and D notes Sept. 27, 2001. The ratings actions are based on in-depth analysis of: -- The asset quality of the aircraft types and the creditworthiness of the airlines currently involved in this portfolio; -- A cash flow analysis under various stress scenarios to reflect the current market environment; and -- The impact of selling higher numbers of aircraft earlier in the transaction than originally assumed. The subclass A-6, A-8, and A-9 certificates receive interest payments at the same level, in no order of priority. A failure to pay interest on any of the certificates in class A will thereby result in a default of all A subclasses. Nevertheless, because of the large liquidity available to class A, no problems of this nature are expected. The principal payments to class A are all currently directed toward subclass A-6, and as such, it will have a materially shorter expected life than the A-8 and A-9 subclasses. When the A-6 certificateholders are fully repaid, the A-8 certificateholders will receive principal payments, and once the A-8 certificateholders are fully repaid, the A-9 certificateholders may begin to receive principal. Standard & Poor's will continue to monitor the transaction accordingly. RATINGS LOWERED Airplanes Pass-Through Trust $2.3 billion floating-rate pass-through certificates* Class Rating To From A-9 BBB-/Negative A/Negative RATINGS AFFIRMED Airplanes Pass-Through Trust Class Rating A-6 AA-/Negative A-8 A/Negative RATINGS LOWERED AND REMAINING ON CREDITWATCH NEGATIVE Airplanes Pass-Through Trust $1.112 billion floating- and fixed-rate pass-through certificates* Class Rating To From B CC/Watch Neg CCC/Watch Neg C CC/Watch Neg CCC/Watch Neg D CC/Watch Neg CCC/Watch Neg * Initial outstanding amount of remaining classes. AIRTRAN HOLDINGS: Will Webcast Q3 Conference Call on October 22 --------------------------------------------------------------- AirTran Holdings, Inc., (NYSE:AAI) will provide an online, real- time webcast of its third-quarter earnings conference call on Wednesday, October 22, 2003, at 10:00 a.m. (EST). Beginning approximately two hours after the initial conference call is completed, a replay of the webcast will be available. To access the webcast, go to the "Investor Relations" area of AirTran Airways' Web site -- http://www.airtran.com-- accessible from the homepage. Once there, click on either the "Overview" or "Calendar" buttons, and follow the prompts for the webcast. The broadcast will also be available at http://www.streetevents.com AirTran Airways (S&P/B-/Negative) is one of America's largest low- fare airlines - employing more than 5,400 professional Crew Members and serving 492 flights a day to 43 destinations. The airline's hub is at Hartsfield Atlanta International Airport, the world's busiest airport (by passenger volume), where it is the second largest carrier operating 189 flights a day. The airline never requires a roundtrip purchase or Saturday night stay, and offers an affordable Business Class, assigned seating, easy online booking and check-in, the A-Plus Rewards frequent flier program, and the A2B corporate travel program. AirTran Airways, a subsidiary of AirTran Holdings, Inc., (NYSE:AAI), is the world's largest operator of the Boeing 717, the most modern, environmentally friendly aircraft in its class. In 2004, the company will begin taking delivery of 100 Boeing 737-700s, one of the most popular and reliable jet aircraft in its class. For more information, visit http://airtran.com AMERCO: Equity Committee Hires Providence Capital as Advisors ------------------------------------------------------------- The Official Committee of Equity Security Holders of the AMERCO Debtors seek the Court's authority, pursuant to Section 1103 of the Bankruptcy Code and Rule 2014 of the Federal Rules of Bankruptcy Procedure, to retain Providence Capital, Inc. as its financial advisors, nunc pro tunc to August 25, 2003. Eric Miller, Chairperson of the Equity Committee, relates that the Equity Committee needs the services of a financial advisor to enable it to evaluate the complex financial and economic issues raised by the Debtors' reorganization proceedings and to effectively fulfill its statutory duties. Providence and its employees have the expertise in providing financial services to debtors and creditors in restructuring and distressed situations. Thus, the Equity Committee selected Providence as its financial advisor. Herbert Denton, President of Providence Capital, Inc., tells Judge Zive that his firm provides a broad range of corporate advisory services to its clients including, without limitation, services pertaining to: (i) general financial advice; (ii) mergers, acquisitions advice; (iii) advice to committees of board of directors; (iv) corporate governance advice; and (v) director search advice. In addition, Providence's employees have sat on numerous board committees and have maximized shareholder value at COMSAT Corporation, the Union Corporation, Banyan Strategic Realty Trust and Capsure Holdings, Inc. Providence and its employees have significant experience in reorganization and restructuring of troubled companies, both out of court and Chapter 11 proceedings, including the cases of Baldwin United Corporation and Penn Central Corporation. In its capacity as the Equity Committee's financial advisor, Providence is ready to: (a) advise the Equity Committee in developing a general strategy for accomplishing the Debtors' reorganization in connection with these Chapter 11 cases; (b) advise the Equity Committee concerning and investigate available options for restructuring in the current market that are beneficial to the Public Equity Holders; (c) assist and advise the Equity Committee in evaluating and analyzing the impact of any proposals or Chapter 11 plan on the existing Public Equity Holders; (d) advise the Equity Committee on the hiring of additional professionals to ensure adequate representation of the Equity Committee in these Chapter 11 cases; (e) assist the Equity Committee and its professionals in communications with other constituencies and serve as a liaison with other financial advisors appointed on behalf of these constituencies; and (f) render other financial advisory services as may from time to time be agreed on by the Equity Committee and Providence. According to Mr. Denton, the principals and professionals of Providence do not have any connection with the Debtors, their creditors or any other party-in-interest, except that from time to time, Providence provided investment banking, financial advisory, brokerage and consulting services to certain creditors and other parties-in-interest in matters unrelated to these cases. Providence promises the Equity Committee that it will not provide services to the Debtors, their creditors or other parties-in-interest in connection with any matters relating to these cases. Thus, Providence is a "disinterested person" under Section 101(14) of the Bankruptcy Code. However, Mr. Denton notes, since Providence has a diverse practice and client base, it may provide service to clients in matters unrelated to these cases who are or become creditors of the Debtors or who may have interests adverse in these cases in unrelated matters. In return for its services, Providence will be paid: (a) a $100,000 monthly cash fee; (b) a five-year warrant to purchase 100,000 shares of Amerco's common stock at a strike price equal to the closing price per common share on the date of the final order either confirming a sale of substantially all of Amerco's assets or a plan confirmation, whichever occurs first; and (c) reasonable out-of-pocket expenses. Objections 1. Debtors The Debtors have serious concerns about the payment of a success fee to Providence. According to Bruce T. Beesley, Esq., at Beesley, Peck & Matteoni, Ltd., in Reno, Nevada, the Debtors are currently in the process of negotiating a plan of reorganization in these cases, and have reached an agreement with certain of the Debtors' key creditor constituencies regarding treatment of their claims under the Plan. At present, Mr. Beesley says, it is contemplated that the Plan will be a full payment plan, that none of the Debtors' creditors will receive any equity interest in the Debtors on account of their claims, and that equity will be unimpaired under the Plan. Moreover, both the Debtors and the Official Committee of Unsecured Creditors appointed in these cases have each retained their own financial advisors to assist in the formulation of the Plan. As a result, the Debtors believe that the retention of Providence will add no value to the ultimate outcome of these cases. Accordingly, Mr. Beesley contends, no Success Fee should be paid to Providence in these cases. There's another problem, Mr. Beesley says. Nobody can determine the value of the Warrant granted to Providence. An increase of $10 per share above the strike price would provide Providence with a $1,000,000 Success Fee, regardless of the amount of time or effort Providence contributes to the Debtors' reorganization. Accordingly, the Debtors ask the Court not to grant any pre- approval of the Success Fee to be paid to Providence, and require Providence to apply with the Court for payment of a reasonable Success Fee in accordance with Section 330 of the Bankruptcy Code upon the effectiveness of the Plan. Furthermore, the Debtors ask the Court to deny approval of any Success Fee that takes the form of a Warrant. The Debtors also object to the retention of Providence to the extent that Providence seeks to be paid for its services other than at hourly rates. All other professionals retained in these Chapter 11 cases, both attorneys and non-attorneys, have agreed to receive payment for their services at hourly rates in accordance with Section 330 of the Bankruptcy Code. Indeed, Mr. Beesley points out, the payment of the Monthly Fee to Providence is inconsistent with retention under Section 330 of the Bankruptcy Code, since the amount of the Monthly Fee will remain constant regardless of the amount of time and effort expended by Providence, and regardless of whether the efforts are duplicative of those provided by other professionals retained in these cases. Moreover, paying Providence the Monthly Fee may unnecessarily reduce the amount of assets available to the estates to resolve claims of creditors. Mr. Beesley notes that Providence agreed to comply with all Court orders and procedures governing the payment of professional fees. The Interim Compensation Order provides that all professionals retained in these cases must submit a statement to the Debtors, the Creditors' Committee, the postpetition lenders and the U.S. Trustee at the end of each month detailing the services provided and the amount of fees and expenses requested for the services. If no objection is filed, the Court would authorize the Debtors to pay 80% of the fees and 100% of the expenses. The Debtors believe that all professionals retained in these cases should be compensated in the manner set forth in the Interim Compensation Order. Accordingly, the Debtors ask Judge Zive that if he authorizes Providence's retention, the Retention Order should provide that: (a) Providence will be entitled to receive compensation for services and reimbursement of expenses only as set forth in the Interim Compensation Order; (b) Providence will only receive 80% of its fees for any given period covered by a Monthly Statement; and (c) Providence will not receive any fees for services in advance, but only after the expiration of the 20-day objection period as set forth in the Interim Compensation Order. While the Application states that Providence seeks to be retained under Section 330 of the Bankruptcy Code, the terms of the Providence Engagement Letter providing for the Monthly Fee and Success Fee appear to contemplate pre-approval of the terms of Providence's retention under Section 328(a) of the Bankruptcy Code. Accordingly, the Debtors ask the Court to retain Providence under Section 330 of the Bankruptcy Code. All compensation to be paid to Providence in these cases must be subject to Court approval to ensure that only reasonable, necessary fees are paid. 2. Creditors' Committee The Creditors' Committee acknowledges that the Equity Committee is entitled to employ its choice of advisors, and does not in any way challenge the skills or credentials of its selected financial advisor, Providence Capital, Inc. However, Paul S. Aronzon, Esq., at Milbank, Tweed, Hadley & McCloy LLP, in Los Angeles, California, points out that, in addition to the proposed monthly compensation, which seems too high, the Equity Committee wants to cause the Debtors to pay Providence a five-year warrant to purchase 100,000 shares of Amerco's common stock. Mr. Aronzon contends that the Warrant Package, at this juncture of the Debtors' bankruptcy case, is both premature and inappropriate. Notwithstanding the Debtors' claims of solvency, the Creditors' Committee is not certain that Amerco is, in fact, solvent. The Committee is in the process of examining this very issue. Moreover, irrespective of whether or not Amerco is solvent, based on its cash flows, business plans and projections, the Committee is certain that Amerco is significantly over- leveraged and that it will have difficulty restructuring its debt. In light of the uncertainties that exist in respect of the Amerco's reorganization, as well as its post-reorganization capital structure, the issuance of the Warrant Package as proposed is imprudent and could adversely effect the reorganization. Certainly, Mr. Aronzon argues, the structure of Providence's success fee should not influence the capital structure eventually proposed under any plan. This component of the proposed retention absolutely should not be allowed. (AMERCO Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-0900) AMERICA WEST: September Revenue Passenger Miles Slide-Up 5.7% ------------------------------------------------------------- America West Airlines (NYSE: AWA) reported traffic statistics for September 2003. Revenue passenger miles for September 2003 were a record 1.6 billion, an increase of 5.7 percent from September 2002. Capacity for September 2003 was 2.3 billion available seat miles. The passenger load factor for September 2003 was a record 72.7 percent, up 5.1 points from September 2002. America West reported record RPMs of 5.6 billion for the third quarter 2003, a 5.2 percent increase from third quarter 2002. ASMs for the third quarter 2003 were 7.1 billion. The airline also reported a record load factor for the third quarter 2003 of 79.8 percent, up 4.9 points over third quarter 2002. America West also reported record year-to-date RPMs of 16.0 billion, a record year- to-date ASMs of 20.9 billion as well as a record load factor of 76.6 percent. "We completed our third quarter by posting our sixth consecutive month of record passenger loads, accompanied by an increase in our yield," said Scott Kirby, executive vice president, sales and marketing. "We were particularly encouraged that our strong load factor and yield performance carried over from the peak summer season into the typically off-peak month of September, primarily due to the continued growth in business traffic generated by our business friendly fare structure. We look forward to inaugurating our new, non-stop, transcon service later this month, which will bring America West's business-friendly fare structure to even more customers." Founded in 1983 and proudly celebrating its 20-year anniversary in 2003, America West Airlines is the nation's second largest low- fare airline and the only carrier formed since deregulation to achieve major airline status. Today, America West serves 90 destinations in the U.S., Canada and Mexico. * * * As reported in Troubled Company Reporter's July 30, 2003 edition, Standard & Poor's Ratings Services assigned its 'CCC' rating to America West Airlines Inc.'s $75 million 7.25% senior exchangeable notes due 2023, offered under Rule 144A with registration rights. The notes are guaranteed by America West Airlines' parent, America West Holdings Corp. (both rated B-/Negative/-). America West Holdings' major subsidiary is America West Airlines Inc., the eighth-largest airline in the U.S, with hubs located at Phoenix and Las Vegas. America West benefits from a low cost structure, among the lowest in the industry. However, it competes at Phoenix and Las Vegas against Southwest Airlines Co., the other major low-cost, low-fare, operator in the industry and financially the strongest. As a result, due to the competition from Southwest, as well as America West's reliance on lower-fare leisure travelers, its revenues per available seat mile also tend to be among the lowest in the industry. In addition, America West Holdings owns the Leisure Co., one of the nation's largest tour packagers. AMERICAN AIRLINES: Overall September 2003 Traffic Tumble 1.7% ------------------------------------------------------------- American Airlines, the world's largest carrier, reported a load factor of 66.7 percent for September, an increase of 2.8 points compared to the same period last year. The average load factor in domestic markets increased 3.8 points year over year to 65.6 percent. International markets operated with a load factor of 69.3 percent -- equal to last year. For the month, overall capacity declined 5.9 percent year over year, yet traffic fell by a much smaller 1.7 percent. Domestic traffic was down 2.5 percent on an 8.2 percent capacity reduction. In International markets, September traffic and capacity were virtually flat year over year. American boarded 6.5 million passengers in September. As reported in Troubled Company Reporter's September 23, 2003 edition, Fitch Ratings assigned a rating of 'CCC+' to the $300 million in convertible unsecured notes issued by AMR Corp. - the parent of American Airlines, Inc. The privately placed notes carry a coupon rate of 4.25%, are guaranteed by American Airlines, Inc., and mature in 2023. The Rating Outlook for AMR and American is Negative. The 'CCC+' rating reflects Fitch's continuing concerns over the airline's ability to meet fixed financing obligations over the next two to three years - even after the successful labor contract restructuring undertaken by AMR this spring. The new labor agreements with all of American's unionized employee groups, ratified in April, are delivering significant unit operating cost savings and allowing American to stake out a much more competitive cost position versus the discount carriers that are encroaching on a larger part of American's route network. Mainline cost per available seat mile in the third quarter is likely to fall to approximately 9.5 cents (compared with 11 cents prior to the labor cost reductions), and additional non-labor savings initiatives should push unit costs even lower during the fourth quarter. AMERICAN GREETINGS: Names Catherine M. Kilbane as SVP & Secretary ----------------------------------------------------------------- American Greetings Corporation (NYSE: AM) has appointed Catherine M. Kilbane to the position of senior vice president, general counsel and secretary. Ms. Kilbane will oversee domestic and international legal affairs, advise management on corporate legal matters and oversee the legal department and outside counsel. Ms. Kilbane comes to American Greetings from Baker & Hostetler LLP, one of the nation's largest law firms, with more than 500 attorneys operating from 10 offices, including more than 185 attorneys in the Cleveland headquarters. Most recently, she chaired the firm's intellectual property transactions group, which consists of approximately 100 attorneys who specialize primarily in commercial and intellectual property issues. She was also a partner in Baker & Hostetler's general business group, where she practiced a broad range of corporate law. "We are happy to have someone with Cathy's expertise in legal management on our team," said Chief Executive Officer Zev Weiss. "With past experience in securities law and a diverse background that includes corporate finance, as well as the negotiation of license and supply agreements, we believe she will be a tremendous resource to American Greetings." Ms. Kilbane is a 1987 cum laude graduate of Case Western Reserve University's School of Law. She earned a Bachelor of Arts degree in English (cum laude) from Case in 1984. American Greetings Corporation (NYSE: AM) (S&P, BB+ Subordinated Debt Rating, Stable) is one of the world's largest manufacturers of social expression products. Along with greeting cards, its product lines include gift wrap, party goods, reading glasses, candles, stationery, calendars, educational products, ornaments and electronic greetings. Located in Cleveland, Ohio, American Greetings generates annual net sales of approximately $2 billion. For more information on the Corporation, visit http://corporate.americangreetings.com AMN HEALTHCARE: Inks Amendment to BofA-Led Credit Facility ---------------------------------------------------------- AMN Healthcare Services, Inc. (NYSE: AHS) entered into an amendment to its existing credit facility with a syndicate of financial institutions led by Bank of America, N.A. The amended credit facility provides for, among other things, the existing $75.0 million secured revolving facility, letter of credit sub-facility and swing-line facility and a new $130.0 million secured term loan facility maturing in October 2008. AMN expects to use cash on hand as well as borrowings under the amended credit facility to complete its previously announced tender offer. Under the terms of the tender offer, AMN may purchase up to an aggregate of $180.0 million of securities, consisting of $175.0 million of shares of its common stock, par value $0.01 per share, and $5.0 million of vested and exercisable stock options with exercise prices of less than $18.00 per share. The completion of the amended credit facility had been a condition to the tender offer. This condition has now been satisfied. AMN (S&P, BB- Corporate Credit Rating, Stable Outlook) is the largest nationwide provider of travel healthcare staffing services. AMN recruits nurses and allied health professionals nationally and internationally and places them on temporary assignments, typically for 13 weeks, at acute-care hospitals and healthcare facilities throughout the United States. ANC RENTAL: Pushing for Approval of MBIA Settlement Agreement ------------------------------------------------------------- ANC Rental Corporation and its debtor-affiliates ask the Court to approve their settlement with MBIA Insurance Corporation. Mark J. Packel, Esq., at Blank Rome LLP, in Wilmington, Delaware, recounts that in February 2002, the Court approved a fleet financing arrangement whereby MBIA allowed the release of certain restricted funds supporting the MBIA-insured outstanding series of medium-term notes for the purchase of new vehicles. The agreement made available up to $1,000,000,000 of previously frozen funds for the acquisition of a new fleet. On May 10, 2002, the Court approved, on a final basis, an agreement with MBIA to allow the Debtors to continue to use the full $2,300,000,000 of capacity under the MBIA insured notes to meet its fleet financing needs. Accordingly, the Debtors were permitted to enter into new master lease agreements and use proceeds received from the disposition of vehicles financed by these facilities to purchase new vehicles. Pursuant to a series of six court orders, the agreement has been amended and extended to September 30, 2003. On August 6, 2003, the Court approved the sale of substantially all of the Debtors' assets to Cerberus under the Asset Purchase Agreement. The parties' settlement provides that if and to the extent that MBIA consents to the assignment to Cerberus of certain new master lease agreements, certain new vehicles transaction documents, the existing master lease agreements and certain of the related transaction documents, together with any modifications to these Lease Documents as are acceptable to MBIA and the Debtors, upon the closing of the Sale and Cerberus' assumption of all of the Debtors' liabilities with respect to the Lease Documents, MBIA will: 1. release claims that it has or may have against the Debtors: and 2. waive its claim with respect to certain unpaid rent under the Existing Master Lease Agreements. In addition, pursuant to the Settlement, the Debtors will release claims that it has or may have against MBIA. According to Mr. Packel, the Settlement is the result of good faith, arm's-length negotiations between the Debtors and MBIA with respect to the resolution and waiver of certain claims. The Settlement, which will become effective upon the consummation of the Sale and the assumption of the Lease Documents by Cerberus, will resolve certain outstanding issues between the Debtors and MBIA. The Settlement will also allow the assignment of the Lease Documents to Cerberus, an integral aspect of the Sale. (ANC Rental Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service, Inc., 609/392-0900) ARVINMERITOR: Extends Tender Offer for Dana Until Oct. 30, 2003 --------------------------------------------------------------- ArvinMeritor, Inc. (NYSE: ARM) has extended its $15.00 net per share offer for all of the outstanding common shares of Dana Corporation's (NYSE: DCN) common stock until 5:00 p.m. Eastern Standard Time (EST), on Oct. 30, 2003, unless further extended. The offer was previously scheduled to expire at 5:00 p.m. EDT, on Oct. 2, 2003. At that time, Dana shareowners had tendered and not withdrawn approximately 2,339,993 shares pursuant to ArvinMeritor's tender offer. ArvinMeritor's offer represents a premium of 56 percent over Dana's closing stock price on June 3, 2003, the last trading day before ArvinMeritor submitted its first proposal to Dana in writing, a premium of 39 percent over Dana's average closing stock price for the 30 trading days before ArvinMeritor publicly announced its intention to commence a tender offer, and a premium of 25 percent over Dana's closing stock price on July 7, 2003, the last trading day before ArvinMeritor publicly announced its intention to commence a tender offer. ArvinMeritor, Inc. is a premier $7-billion global supplier of a broad range of integrated systems, modules and components to the motor vehicle industry. The company serves light vehicle, commercial truck, trailer and specialty original equipment manufacturers and related aftermarkets. In addition, ArvinMeritor is a leader in coil coating applications. The company is headquartered in Troy, MI, and employs 32,000 people at more than 150 manufacturing facilities in 27 countries. ArvinMeritor's common stock is traded on the New York Stock Exchange under the ticker symbol ARM. For more information, visit the company's Web site at: http://www.ArvinMeritor.com The solicitation and offer to purchase is made only pursuant to the Offer to Purchase and related materials that ArvinMeritor and Delta Acquisition Corp. filed with the Securities and Exchange Commission on July 9, 2003. Investors and security holders are advised to read such documents because they include important information. Investors and security holders may obtain a free copy of such documents at the SEC's Web site at http://www.sec.gov from ArvinMeritor at 2135 W. Maple Road, Troy, MI 48084, Attn: Investor Relations, or by contacting Mackenzie Partners, Inc. at 212-929-5500 collect or at 800-322-2885 toll-free or by email at proxy@mackenziepartners.com. ArvinMeritor, Inc. (S&P, BB+ Corporate Credit & Senior Unsecured Debt Ratings, Negative) is a premier $7-billion global supplier of a broad range of integrated systems, modules and components to the motor vehicle industry. The company serves light vehicle, commercial truck, trailer and specialty original equipment manufacturers and related aftermarkets. In addition, ArvinMeritor is a leader in coil coating applications. The company is headquartered in Troy, Mich., and employs 32,000 people at more than 150 manufacturing facilities in 27 countries. ArvinMeritor common stock is traded on the New York Stock Exchange under the ticker symbol ARM. For more information, visit the company's Web site at: http://www.arvinmeritor.com AVAYA INC: Completes Acquisition of Certain VISTA Assets -------------------------------------------------------- Avaya Inc. (NYSE: AV), a leading global provider of communications networks and services for business, has completed the acquisition of service delivery technologies and two business units from VISTA Information Technologies Inc. The acquisitions enhance Avaya Global Services' delivery of end-to-end design, implementation and management services for converged, multi-vendor networks and advanced multimedia contact centers. Financial terms of the agreement were not disclosed. The agreement between the companies, announced on September 25, 2003, calls for members of the former VISTA Professional Services and Managed Services units to join similar groups in Avaya Global Services. VISTA engineers, consulting and sales professionals join Avaya, carrying certifications and qualifications from leading technology companies including Avaya, Cisco, Nortel and Microsoft. "We're pleased to welcome this group of highly trained professionals to Avaya Global Services," said Lou D'Ambrosio, group vice president of Avaya Global Services. "The consultants who join Avaya have extensive qualifications and experience integrating multi-vendor, converged networks and contact centers. Our customers can take advantage of this additional, industry- certified expertise immediately for assistance in designing and implementing business-transforming technology solutions quickly and cost-effectively." Peter Licata, former CEO of VISTA, joins Avaya Global Services as vice president, Multi-Vendor Solutions and Strategy. He will lead and direct Avaya's continuing expansion of service offerings and capabilities to support converged, multi-vendor networks. "We are delighted to join Avaya Global Services," said Licata. "We look forward to helping the team continue to deliver value-based, multi-vendor communications solutions that help companies grow revenue and reduce costs." The acquired VISTA service delivery technology assets expand the range of service tools used by Avaya Global Services, which currently includes technologies such as Avaya ExpertNet(TM) Assessment Tool for Internet Protocol telephony readiness and Avaya EXPERT Systems(SM) Diagnostic Tools, remote network management tools that support resolution of an average of 96 percent of system alarms remotely. The acquired software tools will help streamline integration of complex multi-channel, multi- vendor contact center networks and enhance remote network management capabilities. The acquired service technology tools include: * Java-based software that enables "translation" between contact center platforms (such as Interactive Voice Response systems, communications systems, Customer Relationship Management software and front office and back office applications), enabling streamlined integration across multiple types of hardware systems and software applications in multi-vendor networks. This allows companies to implement more effective and integrated communications strategies and information collection processes for improved customer responsiveness. * A software tool that will offer enhanced remote monitoring capabilities for Avaya Interaction Center, Avaya's flagship solution for multi-channel communications in multi-vendor, multi-protocol contact centers. Avaya Inc., whose March 31, 2003 balance sheet shows a total shareholders' equity deficit of about $25 million, designs, builds and manages communications networks for more than 1 million businesses worldwide, including 90 percent of the FORTUNE 500(R). Focused on businesses large to small, Avaya is a world leader in secure and reliable Internet Protocol (IP) telephony systems and communications software applications and services. Driving the convergence of voice and data communications with business applications -- and distinguished by comprehensive worldwide services -- Avaya helps customers leverage existing and new networks to achieve superior business results. For more information visit the Avaya Web site: http://www.avaya.com Avaya Global Services includes more than 7,000 consultants, professionals and research and development experts, 23 network operations and 13 technical centers worldwide. The Avaya Services team can assess, plan, design, manage and maintain converged voice and data networks, including multi-vendor local area and wide area networks. For more information about all offerings from Avaya Global Services, please visit: http://www1.avaya.com/services VISTA Information Technologies, Inc., is a leader in the emerging field of Customer Interaction Solutions, and an expert in convergence services that unify and build customer relationships across multiple communications channels -- voice, voice over IP, interactive voice recognition, email, Web, fax, speech recognition, wireless, imaging, and e-commerce systems -- while reducing costs and increasing revenues. VISTA is headquartered in Herndon, Virginia, and can be found on the Web at http://www.vistait.com BAVARIA SA: S&P Assigns BB Foreign Currency Corp. Credit Rating --------------------------------------------------------------- Standard & Poor's Rating Services assigned its 'BB' foreign currency corporate credit rating to Bavaria S.A. The outlook is stable. At the same time, Standard & Poor's assigned its 'BB' rating to Bavaria's planned US$400 million senior unsecured notes that mature in 2010 and will have the guarantee of several of its nonrated subsidiaries, which currently generate about 59% of its consolidated revenue. The ratings on Bavaria reflect its leadership in the beer industries of Colombia, Peru, Ecuador, and Panama; the attractive demographics of those countries; the company's well-established brands; and its significant cash flow generation. Nevertheless, Bavaria is still affected by vulnerabilities particular to the countries of operation, such as the volatility of their currencies, strong correlation between the company's sales and the economic performance of these countries; and potential local tax changes, all under a relatively high debt leverage resulting from recent acquisitions. "The stable outlook reflects Standard & Poor's expectation that Bavaria's significant cash flows will continue, along with the ongoing efforts to improve efficiencies and reduce leverage," said Standard & Poor's credit analyst Federico Mora. "The foreign currency rating is limited by the significant transfer and convertibility risk implied by the sovereign ratings assigned to the main countries of operation for Bavaria." BAVARIA S.A.: Fitch Rates Planned US$400MM Senior Notes at BB ------------------------------------------------------------- Fitch Ratings has assigned 'BB' senior unsecured foreign and local currency ratings to Bavaria S.A. The Rating Outlook for Bavaria's foreign currency rating is Negative and the Rating Outlook for its local currency rating is Stable. The Rating Outlook for the foreign currency rating is constrained by Fitch's ratings of the Colombian government at 'BB' Rating Outlook Negative. In conjunction with these ratings, Fitch has assigned a 'BB' rating to Bavaria's proposed US$400 million senior notes due in 2010. The Rating Outlook for these U.S. dollar denominated notes is Negative. Bavaria is a Colombian operating company with breweries and other beverage facilities in Colombia. Bavaria also holds direct and indirect equity interests in several beer companies throughout Latin America. The senior notes will have joint and several financial guarantees from the following subsidiaries of Bavaria: Malteria Tropical S.A., Productora de Jugos S.A., Cerveceria Union S.A., Latin Development Corporation and Cerveceria Nacional de Panama S.A. The 'BB' rating for the proposed senior unsecured notes is supported by the company's leading position in the beer industry of Colombia, Peru, Ecuador and Panama. During 2002, Bavaria had estimated market shares in each of these countries of 98.3%, 99.0%, 94.5% and 80.4%, respectively. These leading positions reflect the high barriers to entry in the Latin American beer market. In addition to cultural reasons, international brewers have shied away from entering the company's markets because of the strong - and almost nationalistic - brand equity of the company's flagship brands, such as Aguila and Cristal. Furthermore, entering a market such as Colombia or Peru would be costly due to the dearth of supermarkets and the prevalence of on-premise consumption of beer in most of Bavaria's key markets. On-premise consumption makes an elaborate distribution system essential, which is difficult and expensive to duplicate. Imports are not a factor in the company's markets due to the low price paid for beer in the region, which is primarily a result of the almost exclusive use of the returnable glass bottle in the region. Similar to most brewers in Latin America, Bavaria generates strong, albeit volatile, free cash flows. Sales are typically on a cash basis. Capital investments will be modest in the future as a result of excess production capacity in the company's key Colombian and Peruvian markets. Unlike Western Europe or the United States, a high percentage of the population in Latin America is under 40 years of age, which is the key target market for beer companies. Bavaria operates in several non-investment grade countries. Fitch's ratings of these countries are as follows: Colombia ('BB', Rating Outlook Negative), Peru ('BB-', Rating Outlook Negative), Ecuador ('CCC+', Rating Outlook Positive) and Panama ('BB+', Rating Outlook Negative). As a result, political and economic risk in the countries in which the company operates is high. Low-rated sovereigns, at times, can have rapid changes in political leadership and economic policies. Bavaria is vulnerable to higher taxes on beer, as the largest taxpayer in the aforementioned countries. Furthermore, with market shares of nearly 100% in its top markets, Bavaria remains susceptible to philosophical changes at anti-trust agencies in the region. Historically, these agencies have been focused on preventing monopolistic behavior, not monopolies per se. Modest increases in competition have been factored into Fitch's ratings. On Feb. 19, 2003, the Brazilian based brewer Companhia de Bebidas das Americas (AmBev) announced plans to start greenfield operations in Lima, Peru, by building a brewery that will have an annual production capacity of one million hectoliters. This plant should be completed during 2004. It is possible that AmBev, which is the largest brewer in Latin America, will also build a plant in Colombia. Fitch does not expect AmBev to dramatically erode Bavaria's market position in Peru and Colombia during the next five to ten years in these markets. The ratings reflect some concern, however, that if AmBev aggressively discounts the prices for its beer in these markets, as it did when it entered the Argentine market, Bavaria's profit margins could be pressured. Fitch views the underlying credit quality of Bavaria to be consistent with a 'BB+' rating. The rating of the senior notes has been notched to the 'BB' level, however, to reflect the structural subordination of the notes to secured loans of US$318 million with the International Finance Corporation and US$100 million of loans with Corporacion Andina de Formento as well as debt at operating companies in Peru (US$281 million as of June 30, 2002) and Panama (US$45 million). In addition, unlike the US$318 million loan from the IFC, the notes do not enjoy a financial guarantee from the company's subsidiaries in Ecuador. The notch from 'BB+' to 'BB' also reflects different recovery rates between the company's secured and unsecured debt. The IFC and CAF loans are secured by Bavaria's breweries in Barranquilla and Itagui, as well as by upstream guarantees from several operating subsidiaries. In spite of owning 74% of the voting shares in its Peruvian subsidiary Union de Cervecerias Peruanas Backus y Johnston S.A.A. (Backus), Bavaria's total economic stake in this company is 38%. Should Bavaria increase its economic stake in Backus to approximately 75%, Fitch may view the company's cash flow and currency diversification from outside Colombia to be sufficient for rating Bavaria's foreign currency debt above the sovereign rating of Colombia. Fitch expects Bavaria to generate approximately US$610 million of operating income plus depreciation and amortization (EBITDA) during 2004. With capital expenditures expected to be approximately US$100 million, taxes projected to be US$150 million, interest expense estimated to be about US$170 million and changes in working capital likely to be around US$30 million, Bavaria should generate approximately US$160 million of free cash flow. With dividends anticipated to be about US$60 million, the company should have about US$100 million that it can use to reduce its debt to less than US$1.8 billion by the end of 2004. These figures translate into a total debt-to-EBITDA ratio of 3.0 times (x) and an EBITDA-to-interest expense coverage of 3.6x, which are both consistent with the rating category. Fitch believes that Bavaria (on an unconsolidated basis) and the financial guarantors of the unsecured notes will generate about US$300 million of EBITDA in 2004 and have about US$1.3 billion of debt. Additional financial support for the bonds could come from the free cash flow of Backus, which should total about US$70 million in 2004. These funds should be available to Bavaria, given its level of ownership in Backus. These figures translate to a total debt-to-EBITDA ratio of 3.5x. As of June 30, 2003, Bavaria had US$341 million of off-balance- sheet guarantees and contingent liabilities. Due to the nature of these liabilities, Fitch believes the financial risk to Bavaria to be approximately US$50 million. Most of these liabilities occurred as a result of the spin off of Bavaria's non beverage businesses into a company called Valores Bavaria S.A. Importantly, Bavaria's loans from IFC have a covenant that prohibits the company from guaranteeing any obligations of VB in the future. B/E AEROSPACE: Agrees to Sell Senior Notes & Amends Credit Pact --------------------------------------------------------------- B/E Aerospace, Inc. (Nasdaq: BEAV-News) has entered into an agreement to sell $175 million aggregate principal amount of 8-1/2% senior notes maturing in 2010 in a previously announced private offering pursuant to Rule 144A of the Securities Act of 1933, as amended. The company plans to use a portion of the proceeds to repay the balance outstanding under its bank credit facility. The remainder of the net proceeds will be added to B/E's cash and cash equivalents, which will be used for working capital, including funding future liquidity requirements, if any, and for general corporate purposes. In connection with the offering, B/E further amended its bank credit agreement to reduce commitments under the credit facility to $50 million, subject to completion of the offering. The offering is expected to close on October 7, 2003, subject to customary closing conditions. B/E Aerospace, Inc. (S&P, B+ Corporate Credit Rating, Negative Outlook) is the world's leading manufacturer of aircraft cabin interior products, and a leading aftermarket distributor of aerospace fasteners. With a global organization selling directly to the world's airlines B/E designs, develops and manufactures a broad product line for both commercial aircraft and business jets and provides cabin interior design, reconfiguration and conversion services. Products for the existing aircraft fleet--the aftermarket--provide about 60 percent of sales. For more information, visit B/E's Web site at http://www.beaerospace.com BRITEX GROUP: Nova Scotia Business Inc. Appoints Receiver --------------------------------------------------------- Nova Scotia Business Inc. (NSBI) and the Department of Economic Development jointly appointed a receiver for Britex Group Ltd. The receiver will manage daily operations at the plant and aggressively seek a qualified buyer. NSBI believes that a profitable business opportunity may exist, under the right circumstances, and hopes that a long-term solution can be identified quickly. The receiver will ensure that operations continue at a level that provides the most attractive business opportunity for a prospective new buyer. Nova Scotia Economic Development authorized a 90-day extension on a $900,000 loan guarantee for Britex to permit time for projected sales to materialize and allow the company to conclude negotiations with Nova Scotia Business Inc., its main creditor. Britex currently owes NSBI approximately $3.6 million in loans and interest. NSBI has been in discussions with company management for the past several months but was unable to reach an acceptable agreement that, in NSBI's opinion, would result in a viable and sustainable long-term solution for the operation. Nova Scotia Business Inc. is the province's business development agency, an organization that works with companies to deliver business solutions. The private sector-led organization works to attract new businesses to the province and help those already in Nova Scotia expand through services such as export development and financing. BUCKEYE TECHNOLOGIES: Sets Q1 Conference Call for October 21 ------------------------------------------------------------ Buckeye Technologies, Inc. (NYSE:BKI), has scheduled a conference call to discuss first quarter results, on Tuesday, October 21, 2003, beginning at 10:30 a.m. Eastern Time. Management participating on the call will include David B. Ferraro, Chief Executive Officer John B. Crowe, President and Chief Operating Officer Kristopher J. Matula, Sr. Vice President, Nonwovens and Corporate Strategy Gayle L. Powelson, Sr. Vice President and Chief Financial Officer Gordon B. Mitchell, Investor Relations Manager All interested parties are invited to listen to the audio conference call live or tape delayed via the Web site http://www.streetevents.comor via the Company's Web site homepage at http://www.bkitech.com The replay will be archived on these websites through November 20, 2003. In addition, persons interested in listening by telephone may dial in at (800) 811-7286 within the United States. International callers should dial (913) 981-4902. Participants should call no later than 10:20 a.m. ET. To listen to the telephone replay of the conference call, dial (888) 203-1112 or (719) 457-0820. The passcode is 637600. The telephone replay will be available until midnight November 10, 2003. A press release will be issued via Business Wire after the market closes on October 20. If you do not receive a copy of this release, please contact Gordon Mitchell at (901) 320-8256. 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. CABLE DESIGN: Sinks into Red Ink in Fiscal 2003 Fourth Quarter -------------------------------------------------------------- Cable Design Technologies (NYSE: CDT) announced results for its fourth quarter ended July 31, 2003. Fred Kuznik, CDT CEO stated, "Except for the writedown of a non-performing business and adjustments to our Canadian pension, the fourth quarter operating results exceeded our expectations." In the fourth quarter, the Company recorded a net loss from continuing operations before the cumulative effect of an accounting change for goodwill of $0.7 million. Included in this loss, was a business restructuring charge of $3.9 million ($2.3 million net of tax), the previously mentioned additional pension cost which was related to the discontinued NORCOM business of approximately $1.4 million ($0.9 million net of tax), and a $1.4 million currency translation impact on operating expenses. Sales for the fourth quarter ended July 31, 2003, were $129.5 million versus $128.0 million last year. A favorable effect of foreign currency translation, primarily on European revenues, positively impacted sales by approximately 6% compared to the fourth quarter last year. Network Communication segment sales for the fourth quarter 2003 were $75.8 million and represented 59% of total company revenues and compares to $75.1 million for last year's fourth quarter. Specialty Electronic segment sales for the fourth quarter 2003 were $53.7 million compared to $52.9 million for the same period last year. Fourth Quarter Highlights - Despite pricing pressures, gross margins remained relatively flat due to cost-cutting measures. Gross margin was 24.6% for the current quarter compared to 24.7% last year. - Selling, general and administrative expenses were $24.7 million for the current quarter compared to $23.1 million last year. The increase in SG&A is primarily attributable to recognition of additional pension costs of approximately $1.4 million associated with a retirement plan of the Company's Canadian operations, which included the discontinued NORCOM business. Additionally, the effect of foreign currency translation increased SG&A by approximately $1.4 million compared to the same period last year. - A business restructuring charge of approximately $3.9 million ($2.3 million net of tax) was incurred as a result of the Company's decision to divest of it's AWI/CDT subsidiary, a manufacturer of connectors and cable assemblies for the telecommunication market. The Company is currently in the process of locating a buyer for this operation. The charge represents a writedown of certain AWI's assets, primarily machinery and intangible assets, to fair value. As of July 31, 2003, AWI/CDT operations did not meet the accounting criteria for treatment as held for sale and accordingly does not qualify as discontinued operations. - During the fourth fiscal quarter 2003, the Company completed a private placement $110 million convertible debt offering, using the proceeds to reduce substantially all bank debt. SFAS No. 142-Goodwill Impairment CDT adopted SFAS No. 142, "Goodwill and Other Intangible Assets," effective August 1, 2002. During the fourth quarter 2003 the Company completed the evaluation of goodwill for impairment and recorded a non-cash charge of $35.7 million, net of tax, of which $30.9 million related to businesses in the Specialty Electronic segment. The charge will be reflected retroactively in the first interim period of the fiscal year as a cumulative effect of an accounting change. Key Fiscal Year Statistics Key financial statistics for the full fiscal year 2003 are: - Sales for the full year were $484.7 million versus $501.6 million last year; - Network Communication segment sales were $283.9 million for fiscal year 2003 compared to $295.4 million last year; - Specialty Electronic segment sales were $200.8 million versus $206.2 million last year; - Gross margin was 23.5% for the year compared to 25.5% last year. The lower gross margin was primarily due to pricing pressures and volume inefficiencies. SG&A as a percentage of revenue decreased slightly to 19.2% for fiscal 2003 compared to 19.5% for fiscal 2002. - Costs associated with business restructuring activities totaled $12.4 million for the year, representing an after tax impact of $0.18 per diluted share. These charges included costs associated with the consolidation of four operations during the first fiscal quarter and severance costs associated with workforce reductions, in addition to the fourth quarter charges discussed above. - The company expects savings to be $25 to $30 million as a result of the streamlining of operations. Kuznik, concluded, "Due to the weak economic and marketplace conditions that were prevalent in fiscal 2003, we took the necessary steps to restructure our business by consolidating regional management and operational functions to eliminate duplication of effort and overhead costs and to more closely associate management and production. We consolidated several under-performing facilities and redirected existing contracts without impacting quality or delivery. We believe the restructuring and retooling will put us in an excellent position to focus our attention on growing the business both organically and through strategic acquisitions." Cable Design Technologies (S&P, BB Corporate Credit Rating, Negative Outlook) -- http://www.cdtc.com-- is a leading designer and manufacturer of high bandwidth network connectivity products used in computer interconnect, switching and wireless applications and electronic data and signal transmission products that are used in automation and process control and specialty applications. CALL-NET ENTERPRISES: Completes 1.5-Mil. Class B Shares Offering ---------------------------------------------------------------- Call-Net Enterprises Inc. (TSX: FON, FON.B) has completed its previously announced offering of 1,500,000 Class B Non-Voting Shares at a price of $3.75 per share for gross proceeds of $5.625 million. The public offering is pursuant to the exercise in full of the over-allotment option granted to the syndicate of underwriters by Call-Net. Call-Net completed a $37.5 million offering of Class B Non-Voting Shares on September 9, 2003. Together with the proceeds from the over-allotment offering, the aggregate gross proceeds of the public offering are $43.125 million. 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: Promotes Robert Kaiser to President and COO ---------------------------------------------------------- CellStar Corporation (Nasdaq: CLST), a value-added wireless logistics and distribution services leader, has promoted chief financial officer Robert Kaiser to the position of president and chief operating officer. The Company also announced that it has named Paul C. Samek as senior vice president and chief financial officer. "Robert has done an outstanding job as CFO," said Terry Parker, chief executive officer of CellStar. "The time has now come to move him into an operating role, where we can capitalize on his tremendous experience in virtually all segments of the wireless communications industry. We look forward to his continued leadership contributions to CellStar." Kaiser has served as senior vice president and chief financial officer of CellStar since December 2001. Prior to joining CellStar, Kaiser served as president and chief executive officer of MobileStar Network Corporation, a provider of broadband wireless Internet access. Prior to joining MobileStar, Kaiser served as CEO of WorldCom Broadband Solutions Group, where he was responsible for numerous broadband services including all domestic wireless broadband efforts. Previously, Kaiser served as CEO and CFO of SkyTel, where he was responsible for the financial restructuring that led to WorldCom's acquisition of the $1 billion wireless messaging company with nearly two million subscribers. Earlier in his career, Kaiser played an integral role in the growth of Southwestern Bell's Mobile Systems where he served for nearly 10 years as CFO. "We are also pleased to announce the appointment of Paul C. Samek as senior vice president and chief financial officer," continued Parker. "Paul is a seasoned finance and accounting executive with a unique blend of high technology, manufacturing, logistics, multi-national and public company experience that complements and adds depth to our executive leadership team." Most recently, Samek was vice president and chief financial officer of The Spectranetics Corporation, a publicly-held developer, manufacturer, marketer and distributor of medical devices. Prior to joining Spectranetics, Samek served as chief financial officer of The Nash Engineering Company, a leader in the design, manufacture and service of vacuum pumping systems, with manufacturing locations in Brazil, Korea, China, Canada and the U.S. Prior to joining The Nash Engineering Company, Samek was vice president, finance and administration, and chief financial officer for Allsteel, Inc., a multi-plant manufacturer of office furniture solutions for global commercial and consumer markets. Previously he held several senior level finance and audit positions at Concurrent Computer Corporation, Motorola and Deloitte & Touche LLP. 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 CENTERPULSE: BB Ratings Withdrawn Following Zimmer Takeover ----------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'BB' long-term corporate credit ratings on Centerpulse Ltd. and its 'BB' bank loan rating on related entity Centerpulse Orthopedics Inc. This follows the completion of the $3.2 billion acquisition of Centerpulse by U.S.-based Zimmer Holdings Inc. (BBB/Stable/--), a leading orthopedic implant manufacturer. Subsequently, all outstanding debt at Centerpulse was repaid. CHANNEL MASTER: Case Summary & List of Largest Unsec. Creditors --------------------------------------------------------------- Lead Debtor: Channel Master Holdings, Inc. 1315 Industrial Park Drive Smithfield, NC 27577 (302) 777-6500 Bankruptcy Case No.: 03-13004-MFW Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Channel Master L.L.C. 03-13005-MFW Channel Master International Holdings, Inc. 03-13006-MFW Chapter 11 Petition Date: October 02, 2003 Court: District of Delaware Judge: Mary F. Walrath Debtors' Counsel: David B. Stratton, Esq. Pepper Hamilton LLP 1201 N. Market Street, Suite 1600 Wilmington, DE 19801 usa 302 777-6500 Fax : 302-656-8865 Email: strattond@pepperlaw.com Estimated Assets Estimated Debts ---------------- --------------- Channel Master Holdings $50-100 Million $10-50 Million Channel Master LLC $50-100 Million $50-100 Million Channel Master Int'l $10-50 Million $10-50 Million List of Debtors' Largest Unsecured Creditors: A. Channel Master Holdings Entity Nature of Claim Claim Amount ------ --------------- ------------ Questor Partners Subordinated loan $24,266,817 2000 Town Center note Suite 2450 Southfield, MI 48075 Contact: Wallace L. Rueckel T: 248-213-2216 F: 248-213-2215 3i Investments plc Subordinated loan $6,488,429 91 Waterloo Road note London SE1 8XP United Kingdom Ian Lobley T: 44-207-975-3436 F: 44-207-975-3241 Bruce Armstrong Subordinated loan $1,414,344 9 Grange Way note Sandbach Cheshire CW11 1ES United Kingdom T: 44-1270-765-548 F: 44-1270-763-157 Ian Radley Subordinated loan $1,015,591 Littlewick Lodge note Jubilee Road, Littlewick Green Berkshire SL6 3QU United Kingdom T: 44-1628-828-431 Robert C.S. Furness Subordinated loan $936,146 Westbrook House note Boxford Berkshire RG20 8DJ United Kingdom T: 44-1488-608-335 F: 44-1488-608-686 Stephen Mitchell Subordinated loan $401,216 Hawthorne Cottage note Winterbourne Berkshire RG20 8BB United Kingdom T: 44-1635-248-782 F: 44-1635-247-840 Gerard King Subordinated loan $267,478 Edglee House note Upper Bucklebury, Nr Reading Berkshire RG7 6QJ United Kingdom T: 44-1635-874-843 Stephen J. Flynn Subordinated loan $266,623 Ashford House, note Ashford Hill Road Headley, Thatcham Berkshire RG19 8AB United Kingdom T: 44-1635-269-155 Gordon Jackson Subordinated loan note $35,058 Harold Mills Subordinated loan note $28,832 Terry Bernander Subordinated loan note $24,444 Richard Derrenbacher Subordinated loan note $20,906 Michael Poe Subordinated loan note $20,561 Andrew Carduner Subordinated loan note $12,573 Jim Gray Subordinated loan note $12,573 Michael P. Schulhof Subordinated loan note $12,573 B. Channel Master LLC Entity Nature of Claim Claim Amount ------ --------------- ------------ Radiance Electronics Co. Ltd. Trade Claim $5,437,429 139 Fu Te Nan Road Wai Gao Qiao Free Trade Zone Pudong, Shanghai 200131 China L C CHEAH T: 86-21-5048-0188 F: 86-21-5048-0189 NEC Electronics Trade Claim $646,668 Cygnus House Linford Wood Bus Sunrise Parkway-Linford Wood Milton Keynes MK14 6NP United Kingdom Contact: Frosa Demetriou T: 44-1908-837-291 F: 44-1908-847-291 Johnston County Tax Collector Property Taxes $422,088 P.O. Box 28008 Raleigh, NC 27611 T: 919-989-5120 F: 919-989-5614 Scotland Container Inc. Trade Claim $386,828 PO Box 1625 Hwy 401 Bypass Laurinburg, NC 28352 Contact: Elizabeth Odem T: 910-277-0400 x. 277 F: 910-277-0221 WKK Technology Ltd. Trade Claim $346,908 WKK Building 12/F 414 Kwun Tong Road Kowloon, Hong Kong Contact: Raymond Tsu T: 852-2357-8888 F: 852-2343-5283 Panalpina Inc. Trade Claim $237,753 Sherwin Williams (Raleigh) Trade Claim $144,583 Industrial River & Fastener Trade Claim $141,693 Co. Welsh Paper Company Trade Claim $125,863 Doral Steel Trade Claim $101,714 Norsat International Trade Claim $96,901 Continental Metals, Inc. Trade Claim $83,364 United Tool & Stamping $78,552 Jebsee Electronics Co. Ltd. Trade Claim $72,051 GSPK Electronics Limited Trade Claim $71,808 Cameron & Barkley Trade Claim $71,378 Toshiba America Electronic Trade Claim $68,187 New York Wire Company Trade Claim $66,821 C&W Transportation Trade Claim $63,472 Chongqing Polycomp Int. Corp. Trade Claim $58,061 CONCERT INDUSTRIES: Court Extends CCAA Order Until December 5 ------------------------------------------------------------- Concert Industries Ltd. (TSX: CNG) has received from the Quebec Superior Court an extension of its initial order under the Companies' Creditors Arrangement Act to December 5, 2003. The Company continues to work diligently with its various stakeholders towards tabling a Plan of Arrangement. Concert also announced that Mr. Raoul Heredia will take on the title of CEO in addition to his current responsibilities as President. Mr. Robert Normand, a director since March 2001, has been elected Chairman of the Board. Mr. Dieter Peter, who is also the founder of Concert Industries Ltd., formerly held both positions. He will continue to serve the Company as a director. The Board of Directors wishes to thank Mr. Peter for his numerous years of service. The entire text of the Court order and the Monitor's report is available through the Company's Web site at http://www.concert.ca Concert Industries Ltd. is a company specializing in the development and manufacture of cellulose fiber based products using airlaid manufacturing technology. Concert's products are key components in a wide range of personal care consumer products, including feminine hygiene and adult incontinence products. Other applications include pre-moistened baby wipes, disposable medical and filtration applications and tabletop products. The Company has manufacturing facilities in Canada, in Gatineau and Thurso, Quebec, and in Germany, in Falkenhagen, Brandenburg. CONNECTICARE INC: BB Ratings Placed on CreditWatch Negative ----------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB' counterparty credit and financial strength ratings on ConnectiCare Inc. on CreditWatch with negative implications after Bank of America announced that it will launch a $115 million bank loan transaction for Carlyle Group-owned ConnectiCare Holdings Inc. on Oct. 2, 2003. The transaction will include a $100 million, six-year, institutional term loan and a $15 million revolver. "The proposed transaction is expected to increase ConnectiCare Holdings Inc.'s debt-to-capital ratio to more than 100% from 42.9% at year-end 2002, which is extremely aggressive," said Standard & Poor's credit analyst Phillip C. Tsang. Moreover, the financial flexibility of ConnectiCare, a wholly owned operating HMO subsidiary of ConnectiCare Holdings Inc., will be significantly reduced because of its role in servicing its parent's debt. Standard & Poor's will meet with ConnectiCare's management to discuss the impact of the transaction on the ratings. CONSOL ENERGY: RWE Agrees to Sell 27.3 Million CONSOL Shares ------------------------------------------------------------ CONSOL Energy Inc.'s (NYSE: CNX) largest shareholder, RWE of Essen, Germany, has agreed to sell 27.3 million shares of its 43.9 million shares of CONSOL Energy common stock in a private placement sale. Following the sale, RWE will hold 16.6 million shares of CONSOL Energy common stock, or 18.5% of the 89.8 million shares of common stock outstanding. On September 23 and 24, 2003, RWE closed on a previously announced sale of 14.1 million shares of CONSOL Energy common stock, reducing its initial majority interest from 73.6% to 48.9%. On the same dates, CONSOL Energy closed on a previously announced sale of 11.0 million primary shares of its common stock, increasing the total shares of common stock outstanding to 89.8 million. The shares of common stock offered have not been registered under the Securities Act of 1933 and may not be offered in the United States absent registration or an applicable exemption from registration requirements. CONSOL Energy Inc. (S&P, BB+/B Corporate Credit Rating, Stable) is the largest producer of high-Btu bituminous coal in the United States, and the largest exporter of U.S. coal. CONSOL Energy has 20 bituminous coal mining complexes in seven states and in Australia. In addition, the company is one of the largest U.S. producers of coalbed methane, with daily gas production of approximately 135 million cubic feet. The company also produces electricity from coalbed methane at a joint-venture generating facility in Virginia. CONSOL Energy has annual revenues of $2.2 billion. It received a U.S. Environmental Protection Agency 2002 Climate Protection Award, and received the U.S. Department of the Interior's Office of Surface Mining 2002 National Award for Excellence in Surface Mining for the company's innovative reclamation practices in southern Illinois. Additional information about the company can be found at its Web site: http://www.consolenergy.com CONSOLIDATED FREIGHTWAYS: Auctioning-Off Montana Facilities Wed. ---------------------------------------------------------------- As part of the largest real estate sale in transportation history -- 220 total properties with an appraised value over $400 million -- Consolidated Freightways is placing its Butte and Great Falls distribution facilities for sale to the highest bidder, through a reserve auction process scheduled for October 8, 2003. The Butte terminal is located at 2755 Lexington Street and is a 22-door cross-dock distribution facility situated on 6.15 acres. A reserve auction starting price of $330,000 has been established for the Butte property. The Great Falls terminal is a 48-door cross-dock distribution facility situated on 3.65 acres at 305 Sixth Street, NW. A reserve auction starting price of $235,000 has been established. Six CF employees formerly worked at the Great Falls terminal and eight employees worked at Butte. Both facilities have been closed to operations since September 3, 2002, when the 74-year-old company filed for bankruptcy protection. Since then CF has been liquidating the assets of the corporation under orders of the bankruptcy court. Interested parties who would like to participate in the October 8 bankruptcy auction should submit the form Request to be Designated a Qualified Bidder at Auction. That form can be found at http://www.cfterminals.com/Overbidder.htmland must be submitted prior to the date of the auction. The indicated deposit must also be received, via wire or certified check, prior to the date of the auction. To date, 135 CF properties throughout the U.S. have been sold for over $250 million. Potential bidders should direct any questions about the property and the bidding procedures that cannot be answered at the company's Web site - http://www.cfterminals.com- to Transportation Property Company at 800-440-5155 CONSOLIDATED FREIGHTWAYS: Manfield Facility Up on Auction Block --------------------------------------------------------------- As part of the largest real estate sale in transportation history -- 220 total properties with an appraised value over $400 million -- Consolidated Freightways is placing its Mansfield distribution facility located at 515 North Lexington Springmill for sale to the highest bidder, through a reserve auction process scheduled for October 8, 2003. The Mansfield property is a 30-door cross-dock distribution facility situated on 9.83 acres and has been closed to operations since September 3, 2002, when the 74-year-old company filed for bankruptcy protection. Since then, CF has been liquidating the assets of the corporation under orders of the bankruptcy court. Twelve CF employees formerly worked at the Mansfield terminal. A reserve auction price of $900,000 has been established for the CF property. Interested parties who would like to participate in the October 8 bankruptcy auction should submit the form Request to be Designated a Qualified Bidder at Auction. That form can be found at http://www.cfterminals.com/Overbidder.htmland must be submitted prior to the date of the auction. The indicated deposit must also be received, via wire or certified check, prior to the date of the auction. To date, 135 CF properties throughout the U.S. have been sold for over $250 million. Potential bidders should direct any questions about the property and the bidding procedures that cannot be answered at the company's Web site http://www.cfterminals.comto Transportation Property Company at 800-440-5155. CORRECTIONS CORP: Inks New Contract with U.S. ICE Agency -------------------------------------------------------- Corrections Corporation of America (NYSE:CXW) signed a new contract with the United States Immigration and Customs Enforcement agency for up to 905 detainees at its Houston Processing Center located in Houston, Texas. In addition, CCA intens to expand the facility by 494 beds from its current 411 beds to 905 beds. The anticipated cost of the expansion is approximately $29 million and is estimated to be completed during the first quarter of 2005. The expansion is being undertaken in order to handle additional detainee populations that are anticipated as a result of this contract, which contains a guarantee that ICE will utilize 679 beds at such time as the expansion is completed. Commenting on the new contract, President and CEO John Ferguson stated, "As the initial partner selected by what was formerly the Immigration and Naturalization Service, in 1983 CCA became the pioneer of the private correctional industry and continues to be the industry leader today. We are grateful for the confidence placed in CCA's performance over the last two decades by ICE and look forward to an ongoing relationship in meeting its detention needs." Corrections Corporation of America (S&P, B+ Corporate Credit Rating, Positive) is the nation's largest owner and operator of privatized correctional and detention facilities and one of the largest prison operators in the United States, behind only the federal government and four states. The Company currently operates 59 facilities, including 38 company-owned facilities, with a total design capacity of approximately 59,000 beds in 20 states and the District of Columbia. The Company specializes in owning, operating and managing prisons and other correctional facilities and providing inmate residential and prisoner transportation services for governmental agencies. In addition to providing the fundamental residential services relating to inmates, the Company's facilities offer a variety of rehabilitation and educational programs, including basic education, religious services, life skills and employment training and substance abuse treatment. These services are intended to reduce recidivism and to prepare inmates for their successful re-entry into society upon their release. The Company also provides health care (including medical, dental and psychiatric services), food services and work and recreational programs. COVANTA ENERGY: Court Fixes Uniform Geothermal Bidding Protocol --------------------------------------------------------------- Covanta Energy Corporation and its debtor-affiliates sought and obtained the Court's approval of these Bidding Procedures with regard to the sale of the Geothermal Debtor Equity: A. Bid Deadline Bids for the Geothermal Debtor Equity must conform to the requirements and must be filed with the Court and submitted to Covanta Energy Corporation, 40 Lane Road, Fairfield, New Jersey 07004 so as to be received on or before 4:00 p.m., Prevailing Eastern Time, on October 27, 2003. Copies of the complete bids must be submitted to Cleary, Gottlieb, Steen & Hamilton, and Chilmark Partners so as to be received on or before the Bid Deadline. The Bid Deadline may be extended without prior notice. The Debtors will provide Caithness and ArcLight with a copy of all bids as soon as reasonably practicable and in any event at least two days prior to the date scheduled for the Auction. B. Qualified Bids The Purchase Agreement will be deemed to be a Qualified Bid and Caithness and ArcLight will be deemed Qualified Bidders. Only those bids that satisfy these criteria will qualify for consideration by the Debtors: (a) Each bid must be made by a person or persons or an entity or entities satisfying the conditions described. (b) Each bid must be accompanied by a cash deposit at least equal to $8,500,000 -- the Initial Deposit -- and by a duly executed purchase and sale agreement covering substantially all of the Interests or Assets on terms at least as favorable to the Sellers as those set forth in the Purchase Agreement, provided that the proposed purchase price will be not less than $7,375,000 greater than the Purchase Price. (c) Each bid must be submitted in a writing signed by the Qualified Bidder and must include: -- a proposed purchase agreement signed by the Qualified Bidder, including price, conditions and covered assets or interests, that is not less specific than the Purchase Agreement, to be implemented either by way of a Section 363 sale or a plan of reorganization for the Acquired Debtor Companies; and -- a copy of the proposed Court order approving the sale or plan. The bid must be accompanied, for comparison purposes, by a copy of the Purchase Agreement, together with any related Exhibits and Schedules, marked to show any amendments and modifications that the Qualified Bidder proposes. (d) Each bid must be accompanied by satisfactory evidence that a bidder is: -- financially able to consummate the transaction contemplated by the bid, -- able to provide adequate assurances of future performance with respect to the Contracts substantially in the same manner as offered by Caithness and ArcLight, and -- able to consummate the Alternative Transaction on the terms contemplated by the Alternative Transaction. (e) The Initial Deposit must be made by means of certified bank check from a U.S. bank or by wire transfer into an account established by the Debtors for that purpose or in other form of immediately available U.S. funds. The Debtors reserve the right to condition their acceptance of any bid on the provision of an additional deposit or some other form of financial assurance acceptable to the Debtors -- the Additional Deposit. (f) Only those bids that the Debtors determine, in their reasonable discretion, have a value, taking into account the burdens and conditions associated with the proposal, greater than or equal to the sum of the value, as reasonably determined by the Debtors, of the Purchase Agreement, plus the amount of the Break-Up Fee and the Expense Reimbursement, will be considered Qualified Bids. (g) Each bid will remain open and be irrevocable in accordance with its terms through the Sale Hearing. (h) A Qualified Bid must be binding on the bidder, and will not be subject to: -- a condition based on the outcome of due diligence, or similar review, or corporate approval; -- procurement of financing or funding of that financing; and -- conditions, representations or terms that are commercially unreasonable. C. Due Diligence Only those potential bidders whom the Debtors believe, in their reasonable discretion, are likely to be able to consummate their proposed bid within a time frame acceptable to the Debtors if selected will be provided access to due diligence materials, that person being a Potential Bidder. Each Potential Bidder must deliver an executed confidentiality agreement in form and substance satisfactory to the Debtors. The Debtors will make available a proposed confidentiality agreement to Potential Bidders. (a) Due diligence access may include any management presentations that may be scheduled by the Debtors, access to data rooms, on-site inspections and other matters a Potential Bidder may request and to which the Debtors, in their sole discretion, may agree. (b) The Debtors may, in their sole discretion, coordinate diligence efforts so that multiple Potential Bidders have simultaneous access to diligence materials and simultaneous attendance at management presentations or site inspections. Neither the Debtors nor any of their affiliates or representatives, are obligated to furnish any information relating to the Geothermal Debtor Equity to any person other than to Potential Bidders. (c) Each Potential Bidder will be deemed to acknowledge and represent that it has had an opportunity to inspect and examine the Geothermal Debtor Equity and to conduct due diligence prior to making its offer; that it has relied solely upon its own independent review, investigation and inspection of any documents in making its proposal; and that it did not rely upon any written or oral statements, representations, promises, warranties or guaranties whatsoever, whether express, implied, by operation of law or otherwise, regarding the Geothermal Debtor Equity or the completeness of any information provided in connection with the bidding process. E. Auction If there is more than one Qualified Bid that is more favorable than the terms of the Proposed Sale, the Debtors will hold an open and transparent auction at the U.S. Bankruptcy Court for the Southern District of New York, beginning on November 19, 2003 at 2:00 p.m., prevailing Eastern Time. (a) Any bidding or overbidding at the Auction will be in increments of at least $2,000,000, net of the Break-Up Fee and Expense Reimbursement, or in increments as required by the Debtors. No matching bids will be permitted. Only Qualified Bidders will be permitted to submit bids at the Auction. (b) During the Auction, the Debtors may disclose to the Qualified Bidders and the counsels of the Lenders, the Committee and the Informal Committee of Holders of 9.25% Debenture Holders the key terms and conditions of the bids of all other Qualified Bidders as bids are made at the Auction. (c) The Debtors may adopt rules at any stage of the bidding process, that, in their business judgment, will best promote the goals of the bidding process and that are not inconsistent with any of the provisions of the Bidding Procedures, the Bankruptcy Code, or any Court Order. (d) Should overbidding take place at the Auction, Caithness and ArcLight will have the right, but not the obligation, to participate in the overbidding in the Auction and to be approved as the overbidder at the Sale Hearing based upon any overbid. F. Selection of Successful Bid As soon as practicable during or after the Auction, the Debtors, after consulting with their financial advisors, the Committee, the Lenders and the 9.25% Committee, will: (a) review each Qualified Bid on the basis of financial and contractual terms and the other factors relevant to the sale process, including those factors affecting the speed and certainty of consummating transaction contemplated by the Qualified Bid; and (b) identify the Qualified Bids submitted at the Auction to be acceptable and to be the highest or best offers for the Geothermal Debtor Equity. If the Debtors do not receive any Qualified Bids other than the Purchase Agreement, the Debtors may proceed with the Proposed Sale pursuant to the terms of the Purchase Agreement. G. Initial and Additional Deposits After notification that a Qualified Bidder is a Successful Bidder, its Initial Deposit and any Additional Deposit will be non-refundable. Each Initial and Additional Deposit, plus interest, received by the Debtors will be maintained in an interest-bearing account and be subject to the Court's jurisdiction. The Initial and any Additional Deposit will be applied by the Debtors against the purchase price to be paid by the Successful Bidders at the Closing of the transaction approved by the Court. If Caithness and ArcLight are not the Successful Bidders, a portion of the Initial Deposit of the Successful Bidder will be used to pay the Break-Up Fee and Expense Reimbursement, if payable. After the Closing of a transaction pursuant to a Successful Bid, the Debtors will return to each unsuccessful Qualified Bidder, its Initial and any Additional Deposit, together with any interest paid, submitted by the unsuccessful Qualified Bidder. H. Sale Hearing The Debtors may seek the Court's approval of the Successful Bid at a hearing immediately after the conclusion of the Auction on November 19, 2003. At the Sale Hearing, the Debtors may seek entry of an order authorizing and approving the proposed transaction with the Successful Bidder, as determined by the Debtors in accordance with the Bidding Procedures, pursuant to the terms and conditions set forth in the Successful Bid. The Sale Hearing may be adjourned or rescheduled without prior notice. In the event that the Successful Bidder does not consummate the transaction approved by the Court, the Debtors will not be required to hold another auction. The Qualified Bidder that submitted the next to highest or best offer may become the new Successful Bidder and the Debtors will be authorized, but not required, to consummate a transaction with the new Successful Bidder pursuant to the terms of the bid, without further notice. In the event that the new Successful Bidder does not consummate the transaction approved by the Court, the process will repeat so long as any Qualified Bidders remain. (Covanta Bankruptcy News, Issue No. 37; Bankruptcy Creditors' Service, Inc., 609/392-0900) DANA CORP: Issues Comments on Extended ArvinMeritor Tender Offer ---------------------------------------------------------------- Dana Corporation (NYSE: DCN) issued the following statement in response to the announcement by ArvinMeritor, Inc. (NYSE: ARM) that it will extend for a second time the expiration of its tender offer for all outstanding Dana shares. "On July 22, Dana's Board of Directors rejected ArvinMeritor's offer after a thorough review and consultation with its legal and financial advisors," said Bill Carroll, Acting President and Chief Operating Officer. "The Board concluded at that time that the offer was a financially inadequate, high-risk proposal that was not in the best interests of Dana or its shareholders, and nothing has changed with respect to the offer since that time. Dana's restructuring and transformation efforts are producing results and the Board believes that the company's ongoing strategy is a better way to enhance value for our shareholders." Dana Vice President and Chief Financial Officer Bob Richter noted, "It is significant that in the nearly three months since ArvinMeritor originally made this unsolicited offer, it has not yet announced that it has the necessary financing for the transaction. In addition, the major antitrust challenges that Dana's Board noted from the start were underscored by the 'second request' issued by the FTC in early September. Also, ArvinMeritor is now talking about significant potential divestitures of the combined company's commercial vehicle axle assets and other businesses. Significant divestitures of that nature would appear to limit opportunities for synergies and change the strategic premise for the transaction that ArvinMeritor originally proposed to shareholders. For all of these reasons, investors understandably continue to question whether this deal makes sense." Dana's shareholders, and its customers, suppliers and employees, are strongly advised to read carefully Dana's solicitation/recommendation statement regarding ArvinMeritor's tender offer, because it contains important information. Free copies of the solicitation/recommendation statement and the related amendments, which have been filed by Dana with the Securities and Exchange Commission, are available at the SEC's Web site at http://www.sec.govor at the Dana Web site at http://www.dana.comand also by directing requests to Dana's Investor Relations Department or Dana's information agent, D.F. King & Co., Inc., at 1-800-901-0068. Dana -- whose $250 million debt issue is rated by Standard & Poor's at 'BB' -- is a global leader in the design, engineering, and manufacture of value-added products and systems for automotive, commercial, and off-highway vehicle manufacturers and their related aftermarkets. The company employs more than 60,000 people worldwide. Founded in 1904 and based in Toledo, Ohio, Dana operates hundreds of technology, manufacturing, and customer service facilities in 30 countries. The company reported 2002 sales of $9.5 billion. DIRECTV LATIN: Wants Nod to Release Confidential Information ------------------------------------------------------------ Alfred Villoch, III, Esq., at Young Conaway Stargatt & Taylor LLP, in Wilmington, Delaware, recalls that on September 9, 2003, the Court allowed the disclosure of certain contractually protected confidential information to the Creditors Committee's legal and financial advisor. Since then, DirecTV Latin America, LLC determined that there are over 250 additional contracts by and between the Debtor and certain programmers or other third-party entities that contain confidential provisions similar to those detailed in the Original Motion. Indeed, all of the Contracts allow its disclosure and information related thereto only with the written consent of the other party or to the extent necessary to comply with the law or a valid order of a court of competent jurisdiction. Mr. Villoch notes that the Debtor is in the process of developing and presenting to the Committee its post-emergence business plan, which will form the basis for a negotiated plan of reorganization. Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C. requested disclosure of all agreements entered into by the Debtor and its predecessors, local operating companies or wholly owned affiliates. Pachulski's request includes the Contracts and other data related to the Contracts that may fall within the confidential provisions of the Contracts -- the Requested Information. Pachulski asserts that this Requested Information is essential to the evaluation of the Debtor's proposed restructuring. Mr. Villoch reports that the Debtor attempted by letter to secure the written consent of each of the Affected Third Parties to the restricted disclosure of the Requested Information to avoid burdening the Court again on this matter. However, even though it had received written consent from a number of the Affected Third Parties, not all consents haven been received to date. Moreover, there are at least three Affected Third Parties for which the Debtor has no contact information and, despite its good faith efforts, has been unable to uncover any contact information. Accordingly, the Debtor asks the Court to allow the limited release, at its sole discretion, of certain contractually protected confidential information to the Official Committee of Unsecured Creditors' (a) counsel -- Pachulski, Stang, Ziehl, Young, Jones & Weintraub PC; and (b) financial advisor -- Huron Consulting Group, LLC. The Debtor also asks Judge Walsh to: (1) require the disclosure to be made in strict compliance with the Non-Disclosure Agreement; and (2) find that the disclosure to Pachulski and Huron in accordance wit the terms of the Non-Disclosure Agreement is necessary to comply with a valid Court order and therefore is not in violation of the confidential provisions in the Contracts. Mr. Villoch assures the Court that any disclosure of the Requested Information will be in strict compliance with the provisions of the Non-Disclosure Agreement between the parties, including without limitation, access limited to specific professionals. (DirecTV Latin America Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 609/392-0900) ECHOSTAR COMMS: DBS Unit Completes $2.5-Bill. Sr. Note Offering --------------------------------------------------------------- EchoStar Communications Corporation's (Nasdaq:DISH) subsidiary EchoStar DBS Corporation closed its previously announced Rule 144A offering of $2.5 billion aggregate principal amount of Senior Notes. EchoStar Communications Corporation (Nasdaq:DISH) (S&P/BB- /Stable), through its DISH Network(TM), is the fastest growing U.S. provider of satellite television entertainment services with 9 million customers. DISH Network delivers advanced digital satellite television services, including hundreds of video and audio channels, Interactive TV, digital video recording, HDTV, international programming, professional installation and 24-hour customer service. Headquartered in Littleton, Colo., EchoStar has been a leader for 23 years in digital satellite TV equipment sales and support worldwide. EchoStar is included in the Nasdaq-100 Index and is a Fortune 500 company. Visit EchoStar's Web site at http://www.echostar.com ELIZABETH ARDEN: Equity Sale Proceeds will Retire 11-3/4% Bonds --------------------------------------------------------------- Elizabeth Arden, Inc. (NASDAQ: RDEN), a global prestige fragrance and beauty products company, has filed with the Securities and Exchange Commission a preliminary prospectus supplement to its existing shelf registration statement relating to a proposed underwritten public offering of 4,000,000 shares of its common stock. The aggregate amount of common stock consists of approximately 2,666,667 shares offered by the Company and approximately 1,333,333 shares offered by a selling shareholder, Unilever. Unilever intends to convert approximately $16 million of liquidation preference of its Series D Convertible Preferred Stock into common stock to be sold in the offering. It is currently anticipated that the underwriters will be granted an over- allotment option by Unilever for an additional 600,000 shares. The Company intends to use the net proceeds to redeem a portion of its 11-3/4% Senior Secured Notes due 2011. The Company will not receive any of the net proceeds from the sale of the shares by Unilever. Credit Suisse First Boston will be acting as the book running manager for the offering. Morgan Stanley will be acting as a joint lead manager and J. P. Morgan Securities Inc. and SunTrust Robinson Humphrey will be acting as co-managers of the offering. A shelf registration statement related to the foregoing has previously been filed and declared effective by the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time that the prospectus supplement and related prospectus are delivered in final form. Copies of the preliminary prospectus supplement and related prospectus may be obtained from Credit Suisse First Boston by telephone request at 212-325-2580. Elizabeth Arden (S&P, Corporate Credit and Senior Secured Ratings, Stable Outlook) is a global prestige fragrance and beauty products company. The Company's portfolio of leading brands includes the fragrance brands Red Door, Elizabeth Arden green tea, 5th Avenue, ardenbeauty, Elizabeth Taylor's White Diamonds, Passion and Forever Elizabeth, White Shoulders, Geoffrey Beene's Grey Flannel, Halston, Halston Z-14, Unbound, PS Fine Cologne for Men, Design and Wings; the Elizabeth Arden skin care line, including Ceramides and Eight Hour Cream; and the Elizabeth Arden cosmetics line. ENVOY COMMS: Gets Additional Time Extension to Meet Nasdaq Rules ---------------------------------------------------------------- Envoy Communications (NASDAQ: ECGI/TSX: ECG) announced that the Nasdaq Listing Qualifications Hearings Panel has granted Envoy a further extension through December 1, 2003 to allow for further developments in the U.S. Securities and Exchange Commission rule making process. Geoff Genovese, CEO of Envoy Communications Group said, "This extension gives Envoy management further time to meet the minimum bid requirement by increasing shareholder value through further profitability, growth in revenues and other means that should ultimately increase our share price. This is very good news for our shareholders." Envoy Communications Group (NASDAQ: ECGI/TSE:ECG) is an international consumer and retail branding company with offices throughout North America and Europe. For more information on Envoy visit http://www.envoy.to * * * Financial Condition and Liquidity In its Form 10-Q filed on August 30, 2002, the Company reported: "As at June 30, 2002 and September 30, 2001, the Company was not in compliance with its covenant calculations under the terms of its revolving credit facility in respect to 12 month earnings before interest, taxes, deprecation and amortization. The lenders have the right to demand repayment of the outstanding borrowings. Additional borrowings under the facility are subject to the approval of the lenders. The Company is continuing to have discussions with its lenders regarding amendments to the terms of the facility. "The Company is considering all of the options available to it to finance the amounts owing under the restructuring plans and expected cash flow shortfalls in the next three months (or other operating obligations). These options include additional debt or equity financing under private placements, renegotiating its bank facilities and the sale of some of its businesses. In addition, management has made every effort to negotiate the restructuring charges in such a way as to minimize short-term cash requirements. "The ability of the Company to continue as a going concern and to realize the carrying value of its assets and discharge its liabilities when due is dependent on the continued support of its lenders and/or successful completion of the actions discussed above. "During fiscal 2001, the Company established an extendable revolving line of credit under which it can borrow funds in either Canadian dollars, U.S. dollars or U.K. pounds sterling, provided the aggregate borrowings do not exceed $40.0 million Canadian. Advances under the line of credit can be used for general purposes (to a maximum of $2.0 million) and for financing acquisitions that have been approved by the lenders. As at June 30, 2002, approximately $9.8 million had been borrowed under the facility, none of which was used for general corporate purposes. "As at June 30, 2002 the Company had a working capital deficit of $5.4 million compared with a working capital deficit of $430,000 at September 30, 2001. This working capital deficiency arises due to the fact that the borrowings under the bank credit facility must be classified as a current liability as a result of the Company not being in compliance with its covenant calculations. The decrease in working capital in this period was primarily the result of the operating loss during the period. "During the third quarter, the Company negotiated new repayment terms for the Promissory Note due June 30, 2002. The Promissory Note is to be repaid in five monthly installments commencing July 1, 2002 with interest on the principal balance charged at 8%. "On April 29, 2002, the Company issued $1.8 million in convertible debentures. The net proceeds from the sale of the debentures were used for general working capital purposes to support the Company's restructuring activities." FURR'S RESTAURANT: Completes Asset Sale to Buffet Partners L.P. --------------------------------------------------------------- Furr's Restaurant Group, Inc., completed the sale of substantially all of its assets to Buffet Partners, L.P., effective September 30, 2003. The transaction is valued at approximately $29 million, consisting of $25.8 million in cash and the assumption of certain liabilities. Buffet has acquired and will operate 55 restaurants in six southwestern and western states, along with Dynamic Foods, a food preparation, processing and distribution division, located in Lubbock, Texas. More than 3,000 company employees who work in the restaurants, at Dynamic Foods and in administrative and management roles have been employed by Buffet. "This closing marks the successful conclusion of a turnaround and sale process that began over a year ago," said William Snyder, acting CEO of the company and a principal of Corporate Revitalization Partners, L.L.C. of Dallas. "The company's employees and management are to be congratulated for hanging in there and making improvements in the business that no one thought possible when we started. We are particularly appreciative of the hard work Buffet put in to allow this transaction to close successfully on time and at a fair value for the estate." Snyder has been designated the company's corporate responsible officer to complete the wind-down of its remaining assets and liabilities. "It was clear from an early point that Buffet saw a strategic value in the Furr's restaurants, Dynamic Foods commissary operation and prototype buffet restaurant in El Paso," said Mike Tankersley, a partner at Bracewell & Patterson, L.L.P., the company's counsel, in the transaction. "Their vision and purpose provided the momentum that rallied the company's management, secured lenders and unsecured creditors committee to carry this complex transaction through more than the usual number of obstacles. The company will now collect and dispose of its remaining assets, pay the administrative claims incurred during the bankruptcy proceedings and complete its dissolution by the end of the year." The company, together with Cafeteria Operators, L.P. and its other subsidiaries, filed its voluntary petition in the U.S. Bankruptcy Court for the Northern District of Texas in Dallas on January 6, 2003. The Bankruptcy Court confirmed the company's Amended and Restated Plan of Reorganization providing for the sale to Buffet on July 17, 2003. The company was advised by Craig Noell and Matt Sodl of Murphy Noell Capital LLC, a Westlake Village, Calif.-based investment banking firm, in its negotiations with Buffet. Pursuant to the company's Plan of Reorganization, unsecured creditors will share in $1.7 million distributed to a trust for their benefit, along with any proceeds realized by the trust from various bankruptcy causes of action. The balance of the proceeds of the sale to Buffet and the disposition of residual company assets will be paid to the company's senior secured lenders. The trustee of the unsecured creditors trust will be William Kaye with JLL Consultants. The unsecured creditors committee was represented by Holland O'Neil with the law firm of Gardere Wynne Sewell, LLP. Fleet National Bank and the company's secured lenders were represented by William Wallander and James Markus with the law firm of Vinson & Elkins, LLP. Buffet Partners L.P. is a newly organized company affiliated with the Private Equity Group of Cardinal Investment Company, Inc. (Cardinal). Cardinal is an investment firm founded in 1974 and is based in Dallas. Its mission is to successfully invest the capital of the firm's partners and their associates. Cardinal invests in a wide range of public and private securities utilizing a team of professionals dedicated to each market. Its current and former investments in the retail and restaurant industries include Cafe Express, Restoration Hardware, DF&R Restaurants (d/b/a Don Pablo's and Harrigan's) and Ace Cash Express. FURR'S RESTAURANT: Buffet Acquisition Positions Chain for Growth ---------------------------------------------------------------- With the purchase of Furr's Restaurant Group from the bankruptcy court complete on September 30, the new owners at Buffet Partners, L.P., are all about growth. "We see tremendous opportunity in the equity and heritage of the Furr's brand and we're eager to begin anew with this great group of people," Ray Hemmig, Chairman of Buffet Partners said. Hemmig noted that the Furr's system, which now consists of 55 units in six states and three Stevie B's Southern Buffets in Central Florida, has already begun improving its monthly same store sales and guest counts as a more compact chain with a greater focus on store operations and quality. "The value provided to the customer in the Furr's chain is hard to beat, and the current positive trend in same store sales gives us great confidence for future growth in the industry segment," he added. One of the keys to the company's recent success is the strong performance of Dynamic Foods, located in Lubbock, Texas, the company-owned "quick scratch" processing system that was acquired along with the chain in the purchase, according to Hemmig. He said the proven ability of Dynamic's management team to deliver high quality food along with production run cost savings would continue to be a critical competitive advantage for the chain. "Dynamic Foods has an added advantage of excess capacity that allows it to provide high quality products to other customers outside the Furr's chain. It currently sells a variety of food products to a number of well-known food service operations." Furr's new Chief Executive Officer, Steve Barnhill, said that his personal challenge will be to apply his 25 years of restaurant operations experience to help the current team of more than 3,000 employees achieve even greater levels of guest satisfaction. Barnhill has recently relocated to Furr's Richardson, Texas headquarters from Florida to direct the new company, and has folded his previous chain into Buffet Partners, L.P. "I am excited to be a part of Buffet Partners, L.P. and to continue the food service excellence that is so much of the Furr's legacy." Barnhill will be leading the charge to grow the company's scatter- bar buffet concept. Plans are currently underway to rebuild Furr's McAllen, Texas unit, which was damaged earlier this year in a lightning storm. The new unit will closely follow the El Paso, Texas Furr's Family Buffet prototype that the company developed in 2000. "The buffet food delivery system is a proven, efficient store model that has shown strong customer acceptance and is a great strategy for the company to expand," added Barnhill, who has significant experience in this mode of operation. Also joining the Buffet Partners, L.P. team is Monty Standifer, serving as its executive vice president. "Monty brings an impressive 40 years of finance and executive experience to round out our new management group," said Hemmig. Standifer has most recently served as the senior vice president and CFO of Gadzooks, where he was the key financial officer in the growth of that firm from 1992 to 1999. He has also served in the lead financial executive roles in AmeriServ Food Company, BizMart and Tandy Corporation. Standifer said that with the company's new business partners, the chain is well capitalized to take advantage of growth for each of its brands. "We are proud to bring some new financial strength to this great brand, and I am particularly happy to have the powerful support of Cardinal Investment Company of Dallas, and a new credit facility with Wells Fargo Foothill and Chatham Capital." Growing restaurants in this segment of the restaurant industry is familiar territory for Barnhill, who founded Barnhill Country Buffet in 1991. Nation's Restaurant News recognized the chain as one of the "50 Powerhouse Chains" in 2002. Hemmig also brings with him over 30 years of retail and restaurant experience in operations, marketing and senior management for brands such as J.C. Penney, Hickory Farms, Grandy's, On The Border, Restoration Hardware, Party City and Ace Cash Express, among others. He also is an active investor and principal of Retail & Restaurant Growth Capital, L.P. Buffet Partners L.P. is committed to Furr's 56-year history of providing exceptional value and satisfying dining experiences. With the addition of Stevie B's Southern Buffets, the company will serve homestyle fare in seven states in the Midwest and Southwest U.S. and Florida. GEORGIA-PACIFIC: Will Publish Third-Quarter Results on Oct. 16 -------------------------------------------------------------- Georgia-Pacific Corp. (NYSE: GP) will announce third quarter 2003 earnings results Oct. 16, prior to market opening. Following the release of results, Georgia-Pacific management will participate in a live audio Webcast and conference call beginning at 11 a.m. Eastern time. To access the Webcast, visit http://www.gp.com/investoron Oct. 16 and follow the link. The Webcast will contain a supplemental presentation and also will be available for download. Call participants may dial toll-free (800) 305-3098 or (706) 634- 1141 for international callers. No password is needed for this call. Please allow ample time to access the conference call and Webcast. Replay of the conference call will be available until 5 p.m. Eastern time, Nov. 14, by calling toll-free (800) 642-1687 or (706) 645-9291 for international callers. Please reference conference ID number 2962706 when accessing the audioconference replay. The replay also will be available on the Investor Information section of Georgia-Pacific's Web site at http://www.gp.com/investor Headquartered at Atlanta, Georgia-Pacific (S&P, BB+ Corporate Credit Rating, Negative) is one of the world's leading manufacturers of tissue, packaging, paper, building products, pulp and related chemicals. With 2002 annual sales of more than $23 billion, the company employs approximately 61,000 people at 400 locations in North America and Europe. Its familiar consumer tissue brands include Quilted Northern(R), Angel Soft(R), Brawny(R), Sparkle(R), Soft 'n Gentle(R), Mardi Gras(R), So- Dri(R), Green Forest(R) and Vanity Fair(R), as well as the Dixie(R) brand of disposable cups, plates and cutlery. Georgia- Pacific's building products distribution segment has long been among the nation's leading wholesale suppliers of building products to lumber and building materials dealers and large do-it- yourself warehouse retailers. For more information, visit http://www.gp.com HAYES LEMMERZ: Fred Bentley Named European Wheel Group President ---------------------------------------------------------------- Hayes Lemmerz International, Inc. (OTC: HAYZ) announced that Fred Bentley succeeds Giancarlo Dallera, who has retired, as President of Hayes Lemmerz' European Wheel Group, effective October 1, 2003. Mr. Bentley will report directly to Curtis Clawson, Hayes Lemmerz' Chairman of the Board and Chief Executive Officer. Mr. Bentley, 38, joined Hayes Lemmerz in 2001 as President of the Commercial Highway and Aftermarket Group, with manufacturing operations in Akron, Ohio, Berea, Kentucky, Chattanooga, Tennessee, and Mexico City, Mexico. Mr. Bentley will have overall responsibility for the European Fabricated Wheel and the European Cast Aluminum Wheel businesses, and for wheel operations in Brazil, South Africa, Thailand, Turkey, and India. Prior to joining Hayes Lemmerz, Mr. Bentley was located in Manchester, England and was Managing Director for Honeywell's Consumer Products Group-European and South Africa Automotive Aftermarket Operations. Before that, Mr. Bentley successfully led operations for AlliedSignal as General Manager-Heavy Duty and Plant Manager in both Greenville, Ohio and Clearfield, Utah and achieved significant performance improvements at those facilities. Earlier in his career, Mr. Bentley held several different positions in operations at Frito Lay. Throughout Mr. Bentley's career, he has a demonstrated track record of achieving positive results and developing strong teams. Mr. Bentley earned his Bachelor of Science degree in Industrial Engineering from the University of Cincinnati, in Ohio, has an MBA from the University of Phoenix and is also trained as a Six Sigma Black Belt. Mr. Bentley also successfully completed Harvard University's Advanced Management Program. Mr. Dallera, 57, has been an important part of Hayes Lemmerz' success and growth since he joined the Company as President of the European Cast Wheel operations in 1985. In 1996, Mr. Dallera assumed management responsibilities of the Company's Autokola joint venture in the Czech Republic, in addition to continued management responsibilities of the Italian and Spanish operations. In 1997, after the acquisition of Lemmerz Holding, Mr. Dallera continued to serve as President of Hayes Lemmerz' European Cast Wheel Business Unit. In February 2000, Mr. Dallera was appointed President of the European Wheel Group. He had overall responsibility for the European Fabricated and Aluminum Wheel businesses, and for wheel operations in Brazil, South Africa, Thailand, Turkey, Japan, and India. In making the announcement, Mr. Clawson said, "Throughout Giancarlo's 18-year tenure, he has made significant contributions to the Company and has done an incredible job of growing the European wheel business. He has been an integral part of Hayes Lemmerz' success and we will miss him, both as a person and as a businessman." Mr. Clawson added, "Fred's career in the automotive industry and strong educational background will ensure continuity and provide a smooth transition to our many customers and vendors. We believe that Fred and his team will build on Giancarlo's success to propel the growth of the Hayes Lemmerz European Wheel Group." Hayes Lemmerz International, Inc. is a leading global supplier of automotive and commercial highway wheels, brakes, powertrain, suspension, structural and other lightweight components. The Company has 43 plants, 3 joint venture facilities and 11,000 employees worldwide. HEALTHSOUTH: Makes Semi-Annual Interest Payments to Bondholders --------------------------------------------------------------- HealthSouth Corporation (OTC Pink Sheets: HLSH) has paid approximately $39.8 million in semi-annual interest payments to its bondholders. This amount represents all interest due and payable on October 1, 2003. The Company said it presently intends to remain current on all upcoming interest payments. HealthSouth is the nation's largest provider of outpatient surgery, diagnostic imaging and rehabilitative healthcare services, operating nearly 1,700 facilities nationwide and abroad. HealthSouth can be found on the Web at http://www.healthsouth.com * * * As reported in Troubled Company Reporter's September 1, 2003 edition, HealthSouth Corporation said its lending banks had waived a payment blockage to allow past due interest to be paid to the holders of the Company's subordinated indebtedness. The banks had previously issued a payment blockage notice with respect to the Company's subordinated indebtedness, which blockage would have precluded holders of those instruments from receiving past due interest. The Company also announced that it will transfer sufficient funds to the trustees for holders of all of its outstanding notes to permit payment of interest on past due interest owed to these holders in accordance with the terms of the relevant indentures. It is expected that payment of the past due interest will be made to the holders of Company's notes shortly after the record date of August 29, 2003. HOVNANIAN: Fitch Assigns Initial BB+ Sr. Unsecured Debt Rating -------------------------------------------------------------- Fitch Ratings initiates ratings on Hovnanian Enterprises, Inc. (NYSE:HOV). Fitch assigns a 'BB+' rating to the senior unsecured debt. The rating applies to approximately $390 million in outstanding senior notes, Hovnanian's $165 million term loan as well as the company's revolving credit agreement. A rating of 'BB-' has been assigned to the company's outstanding $300 million senior subordinated notes. The Rating Outlook is Stable. Ratings for Hovnanian are based on the company's successful execution of its business model, conservative land policies and geographic, price point and product line diversity. The company has been an active consolidator in the homebuilding industry which has led to above average growth during the past six years, but has kept debt levels somewhat higher than its peers. Management has also exhibited an ability to quickly and successfully integrate its acquisitions. In any case, now that the company has reached current scale there may be less use of acquisitions going forward and acquisitions are likely to be smaller relative to Hovnanian's current size. Risk factors include the inherent (although somewhat tempered) cyclicality of the homebuilding industry. The ratings also manifest the company's aggressive, yet controlled growth strategy and Hovnanian's capitalization and size. The company's EBITDA and EBIT to interest ratios tend to be similar to the average public homebuilder, while inventory turnover tends to be moderately stronger. Hovnanian's leverage is somewhat higher and debt to EBITDA ratio is slightly below the averages. Although the company has certainly benefited from the generally strong housing market of recent years, a degree of profit enhancement is also attributed to purchasing design and engineering, access to capital and other scale economies that have been captured by the large national and regional public homebuilders in relation to non-public builders. These economies, the company's presale operating strategy and a return on equity and assets orientation provide the framework to soften the margin impact of declining market conditions in comparison to previous cycles. Hovnanian's ratio of sales value of backlog to debt during the past few years has ranged between 1.2 times to 1.9x and is currently 1.9x - a comfortable cushion. Hovnanian employs quite conservative land and construction strategies. The company typically options or purchases land only after necessary entitlements have been obtained so that development or construction may begin as market conditions dictate. Hovnanian extensively uses lot options. The use of non- specific performance rolling options gives the company the ability to renegotiate price/terms or void the option which limits down side risk in market downturns and provides the opportunity to hold land with minimal investment. At present 74.5% of its lots are controlled through options - a higher percentage than most public builders. Total lots, including those owned, were 69,623 at July 31, 2003. This represents a 6.3 year supply based on current production rates. However, the company has one of the lowest owned lot positions in the industry, Typically owning only a one to two year supply. An estimated 85%-90% of its homes are pre-sold. The balance are homes under construction or homes completed in advance of a customer's order. Fitch estimates that in recent years at least half of Hovnanian's growth has resulted from a series of acquisitions (eleven during the past six years). The acquisitions have enabled the company to build its position, often broadening product and customer bases in existing markets. They have also enabled the company to enter new markets. The combinations typically were funded by debt and to a lesser degree by stock. At times there were earn-outs which reduced risk and served to retain key management. In the future Hovnanian's acquisition strategy will focus on purchasing smaller builders and land portfolios in current markets and on making selected acquisitions in new markets if there is a good strategic fit and appropriate returns can be achieved. The key analysis will be return on capital as to whether an acquisition will be executed. Fitch believes that management would balance debt and stock as acquisition currency to maintain current credit ratios. Hovnanian maintains a $590 million revolving and letter of credit facility, all of which was available at the end of the third quarter. The revolving credit agreement matures in July 2006. The company has irregularly purchased moderate amounts of its stock in the past. Share repurchase authorization of 1.14 million shares remains. IMC HOME: S&P Hatchets Rating on Class B Certificates to BB ----------------------------------------------------------- Standard & Poor's Ratings Services lowered its rating on the class B mortgage backed certificates issued by IMC Home Equity Trust 1998-1. In addition, ratings are affirmed on the remaining classes from the same series. The lowered rating is a result of insufficient credit enhancement to support the previously assigned rating due to negative collateral performance. Currently, the class B certificates have credit support of 4.23%, which is only 68% of the original credit support required for the 'BBB-' rating. The current credit support level is more reflective of a 'BB' rating. In the past six months, losses have, on average, surpassed excess interest by 41%. In addition, serious delinquencies (90-plus days, foreclosure, and real estate owned) have averaged 24.04% over the same six-month period. Due to these high levels of delinquencies, the loss trend is expected to continue in the near term. Due to the performance of this pool of mortgage loans, Standard & Poor's will continue to monitor IMC Home Equity Trust 1998-1 on a monthly basis to ensure that the assigned ratings accurately reflect the risks associated with this security. The affirmed ratings reflect sufficient levels of credit support to maintain the current ratings, despite the high delinquencies. The ratio of current credit support to original credit support ranges from 1.68x to 2.32x on the remaining certificates. The underlying collateral for this transaction are fixed-rate, first- and second-lien mortgages on one- to four-family residential properties. RATING LOWERED IMC Home Equity Trust 1998-1 Home equity loan pass-thru certs Rating Class To From B BB BBB- RATINGS AFFIRMED IMC Home Equity Trust 1998-1 Home equity loan pass-thru certs Class Rating A-4, A-5, A-6 AAA M-1 AA M-2 A IMPATH INC: Has Until December 15 to Complete and File Schedules ---------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York gave Impath, Inc., and its debtor-affiliates an extension to file their schedules of assets and liabilities, statements of financial affairs and lists of executory contracts and unexpired leases required under 11 U.S.C. Sec. 521(1). The Debtors have until December 15, 2003, to file these financial disclosure documents. Headquartered in New York, New York, Impath Inc., together with its subsidiaries, is in the business of improving outcomes for cancer patients by providing patient-specific diagnostic and prognostic services to pathologists and oncologists, providing products and services to biotechnology and pharmaceutical companies, and licensing software to hospitals, laboratories, and academic medical centers. The Company filed for chapter 11 protection on September 28, 2003 (Bankr. S.D.N.Y. Case No. 03- 16113). George A. Davis, Esq., at Weil, Gotshal & Manges, LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $192,883,742 in total assets and $127,335,423 in total debts. INTERSTATE BAKERIES: Will Close Grand Rapids, Michigan Facility --------------------------------------------------------------- Interstate Bakeries Corporation (NYSE:IBC) announced plans to close its bread and roll bakery in Grand Rapids, Mich. The closing, scheduled for December 3, 2003, will affect 160 employees. Production from the Grand Rapids bakery, which primarily bakes bread and rolls under the Wonder, Butternut and Home Pride brand names, will be transferred to IBC's bakeries in Columbus, Defiance and Northwood, Ohio; Indianapolis, Ind.; and Hodgkins, Ill. Distribution of IBC products to food stores in Grand Rapids and other markets will not be affected. "The decision to close the Grand Rapids bakery was difficult. Our employees there have been solid contributors and we appreciate their efforts," said James R. Elsesser, IBC's Chief Executive Officer. "However, companywide we are consolidating operations and seeking production efficiencies. The Grand Rapids plant, which we acquired in 1972, is not as efficient as some of our other facilities, and it cannot be economically updated. As a result, we concluded that it was best for the company to close the facility." Most employees affected by this decision are represented by the United Dairy, Bakery and Food Workers Local Union #386 of the Retail, Wholesale and Department Store Union. Severance arrangements for these employees will be guided by IBC's agreements with this union. Interstate Bakeries Corporation (S&P, BB Corporate Credit and Senior Secured Bank Loan Ratings, Negative) is the nation's largest wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names including Wonder, Hostess, Dolly Madison, Merita and Drake's. The Company, with 58 bread and cake bakeries located in strategic markets from coast- to-coast, is headquartered in Kansas City, Missouri. INTRAWEST CORPORATION: US$350 Mill. Unsecured Notes Rated at B+ --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' senior unsecured debt rating to ski resort operator Intrawest Corp.'s US$350 million 7.50% unsecured senior notes due Oct. 15, 2013. At the same time, the 'BB-' long-term corporate credit rating on Intrawest was affirmed. The outlook is positive. The proceeds from this issue are intended to finance a tender offer to purchase US$200 million of existing 9.75% senior unsecured notes that became redeemable on Aug. 15, 2003. In addition, Intrawest intends to pay down other corporate debt with the remaining proceeds after all costs of about US$132.6 million. The offer to purchase the notes outstanding is subject to completion of the new issue. The ratings on Vancouver, B.C.-based Intrawest reflect the cyclical and seasonal resort business, an aggressive financial policy, and continued uncertainty in travel patterns. These weaknesses are offset by Intrawest's leading position and successful track record in owning, operating, and developing village-centered destination resorts across North America; the maturing of the portfolio of resorts into a less capital-intensive stage; and the company's disciplined resort real estate development strategy. "Intrawest's business strategy is sound, with a portfolio of well- positioned resorts and resort accommodation developments that are supported by a strong sales and marketing team," said Standard & Poor's credit analyst Ron Charbon. The company has reduced weather-related risk by diversifying its operations among various geographic markets, offering a variety of leisure activities in a resort village atmosphere. Skier visits are supported by each resort's inventory of "warm beds" and locations that are in close proximity to major population centers. Having completed the majority of the significant capital expenditures required to develop its resort portfolio, Intrawest is now able to focus increasingly on its sales and marketing system to further develop its reputation as a premier resort operator. There are a number of external and uncontrollable risks that create ongoing challenges for Intrawest's resort business. Reduced air travel across North America remains a concern for the leisure industry, which is heavily reliant on discretionary consumer expenditures. Geopolitical uncertainties and continued economic sluggishness continue to dampen consumer spending. Finally, weather variability provides uncertainty in resort performance. The effect of the new issue on Intrawest's coverage measures is slightly positive, given the roughly 225 basis point differential in interest costs. Standard & Poor's pro forma interest coverage is expected to improve slightly to 1.84x from 1.77x. Total debt to EBITDA is expected to rise marginally to 6.0x from 5.9x as approximately US$17.4 million of additional debt is added. Intrawest's level of secured debt is still high and Standard & Poor's will continue to distinguish (via one notch) between the corporate credit rating and the senior unsecured debt rating. The positive outlook reflects the longer term performance prospects in the company's credit measures as the portfolio of ski resorts improves its cash flow, the heavy capital investment period in the resorts is completed, and the debt reduction program is executed. Intrawest has a successful record in its resort real estate business, which continues to have strong prospects. ITEX CORP: Completes Sale of Sacramento Trade Office for $800K -------------------------------------------------------------- ITEX Corporation, (OTCBB:ITEX) a leading business services and payment systems company, has completed the sale of its corporate- owned trade office located in Sacramento, California. The signing of a Letter of Intent was previously announced on September 22. Sale of Corporate-Owned Office Direct Business Exchange of California, Inc., a newly-formed company owned by Ms. Kristen Feuz, is the purchaser of the Sacramento corporate-owned office. Ms. Feuz had been employed by ITEX since 1993. The purchase price was $800,000, with a $100,000 cash down payment. The balance of the purchase price is payable over seven years. The Sacramento trade office will continue operations under a franchise agreement. ITEX retained ownership of the client base and will continue to recognize revenue from the operation. Ms. Feuz has offered employment to the existing employees of the office and will retain office space in its current location. After the sale to Ms. Feuz, ITEX will have two corporate-owned offices in Seattle, Washington and Vancouver, British Colombia. The Company has not determined whether the remaining offices will be sold, but is considering various options. ITEX has an overall Independent Broker Network of approximately 70 offices in the United States and Canada. Steven White, Chairman of the Board stated, "A leading factor in the sale was execution of the ITEX business model which is to support the Broker Network and not to compete with it. Another factor was reducing corporate overhead. Both of these goals have been accomplished." Mr. White further stated, "Ms. Feuz has a broad range of knowledge and experience in working with the ITEX Broker Network and the clients she will manage. Ms. Feuz has demonstrated a high level of dedication and devotion to ITEX and the clients she served throughout her tenure as a senior employee. We welcome Ms. Feuz's desire and ambition to reach new milestones with her new office." Ms. Feuz commented, "By providing superior customer service to over 700 Sacramento clients I am returning home to my passion; working inside an independent ITEX broker office. I look forward to instilling the spirit of entrepreneurship to drive the local trade volume and new member sales. I am very excited to become a key player in the ITEX broker network." Founded in 1982, ITEX Corporation -- http://www.itex.com-- is a business services and payment systems company processing over $150,000,000 a year in transactions between member businesses. ITEX assists its member businesses to increase sales, open new markets and utilize the full business capacity of their enterprises by providing a private currency through the company's broker network and client base. * * * In its Form 10-QSB filed with the Securities and Exchange Commission, ITEX Corporation reported (all amounts are expressed in thousands of US$): Results for the Nine Months Ended April 30, 2003 "During the first nine months of fiscal 2003, we funded our activities through operations. At April 30, 2003, we had approximately $327 in cash and cash equivalents. We operate using four week billing and payroll cycles. The timing difference between the four week cycles and our reporting periods causes fluctuations in cash, accounts receivable and broker commissions. Cash and accounts receivable are primarily affected by the autopay runs created from clients who have allowed us to retain their credit card or checking account information. If an autopay run falls near the end of a reporting period, it is likely our cash balance will be higher and accounts receivable lower. Likewise, if the autopay run falls subsequent to the reporting period, our cash balance will be lower and accounts receivable higher. Similarly, the timing of payroll, based on four week cycles, will affect the balance in broker commissions payable. "During the nine months ending April 30, 2003, we received net cash from our operating activities of $199 as compared to net cash used in operating activities of $360 for the nine months ending April 30, 2002. The increase in net cash provided by our operating activities is largely due to the significant decrease in operating expenditures. "During the nine months ending April 30, 2003, we received net cash from investing activities of $26, resulting from proceeds received from the sale of regional offices of $49, offset by the purchase of fixed assets of $23. During the nine months ending April 30, 2002, we reported net cash provided by investing activities of $28, resulting from proceeds received from the sale of securities of $56, offset by the purchase of fixed assets of $28. "During the nine months ending April 30, 2003, the net cash provided by our financing activities was $5, resulting from the exercise of stock options, compared to net cash used in financing activities for the nine months ended April 30, 2002 of $372 related to payments made to Network Commerce for the purchase of Ubarter.com during the previous fiscal year. "During the nine months ending April 30, 2003 there was net cash provided from the effective exchange rate on cash and cash equivalents of $7 which did not exist in the prior fiscal year. "At April 30, 2003, our working capital deficit was $732 compared to a deficit of $1,328 at July 31, 2002. Management continues to reduce overhead costs through increased operating efficiencies. In addition, by divesting the corporate offices, as outlined in the revenue section above, ITEX expects to yield additional cost savings, which management believes will streamline operations and save the company close to $1 million in overhead per year. Reduction of overhead includes corporate savings with smaller headcount and fewer office leases. In addition, by financing the sale of the existing corporate stores, the company expects to be able to realize an additional positive impact to earnings over the next five years. At April 30, 2003, stockholders' equity increased to $277 from $40 at July 31, 2002 primarily resulting from our net income of $139 in the first nine months of fiscal 2003." KB HOME: Declares Quarterly Cash Dividend Payable on November 26 ---------------------------------------------------------------- The board of directors of KB Home (NYSE: KBH) has declared a quarterly cash dividend of seven and one-half cents ($.075) per share on the company's Common Stock, payable on November 26, 2003 to shareholders of record on November 12, 2003. KB Home (Fitch, BB- Senior Subordinated and BB+ Senior Unsecured Debt Ratings, Stable) is one of America's largest homebuilders with domestic operating divisions in the following regions and states: West Coast -- California; Southwest -- Arizona, Nevada and New Mexico; Central -- Colorado and Texas; and Southeast -- Florida, Georgia and North Carolina. Kaufman & Broad S.A., the Company's majority-owned subsidiary, is one of the largest homebuilders in France. In fiscal 2002, the Company delivered 25,565 homes in the United States and France. It also operates KB Home Mortgage Company, a full-service mortgage company for the convenience of its buyers. Founded in 1957, KB Home is a Fortune 500 company listed on the New York Stock Exchange under the ticker symbol "KBH." For more information about any of KB Home's new home communities, visit the Company's Web site at http://www.kbhome.com KELLSTROM: Delaware Court Confirms Joint Reorganization Plan ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Delaware confirmed KI-1, Inc., formerly known as Kellstrom Industries, Inc.'s Amended Joint Plan of Reorganization after finding that the Plan complies with each of the 13 standards articulated in Section 1129 of the Bankruptcy Code: (1) the Plan complies with the Bankruptcy Code; (2) the Debtors have complied with the Bankruptcy Code; (3) the Plan was proposed in good faith; (4) all plan-related cost and expense payments are reasonable; (5) the Plan identifies the individuals who will serve as officers and directors post-emergence; (6) all regulatory approvals that are necessary have been obtained or are respected; (7) creditors receive more under the plan than they would in a chapter 7 liquidation; (8) all impaired creditors have voted to accept the Plan, or, if they voted to reject, then the plan complies with the absolute priority rule; (9) the Plan provides for full payment of Priority Claims; (10) at least one non-insider impaired class voted to accept the Plan; (11) the Plan is feasible and confirmation is unlikely to be followed by a liquidation or need for further financial reorganization; (12) all amounts owed to the Clerk and the U.S. Trustee will be paid; and (13) Section 1129(a)(13) of the Bankruptcy Code is inapplicable to these Chapter 11 cases. As of the Confirmation Date and the Effective Date, the assets of the estates shall be transferred to the KI Liquidating Trust and the Class 1 Trust. KI-1, Inc., formerly known as Kellstrom Industries, Inc., a leader in the aviation inventory management industry filed for chapter 11 protection on February 20, 2002 (Bankr. Del. Case No. 02-10536). Domenic E. Pacitti, Esq., at Saul Ewing LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $371,249,106 in total assets and $402,400,477 in total debts. KINGSWAY FINANCIAL: Completes Trust Preferreds Private Placement ---------------------------------------------------------------- Kingsway Financial Services Inc. (TSX:KFS, NYSE:KFS) has completed a private placement of trust preferred securities of approximately US$10 million in 30-year floating rate trust preferred securities, with net proceeds of approximately US$9.7 million. The net proceeds of the offering will be used to provide additional capital to Kingsway's subsidiaries to support the growth of our business and for general corporate purposes, which may include the repayment of existing credit facilities. The trust preferred securities have not been registered under the United States Securities Act of 1933 or any state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements under the Securities Act. Kingsway's primary business is trucking insurance and the insuring of automobile risks for drivers who do not meet the criteria for coverage by standard automobile insurers. The Company currently operates through nine wholly-owned insurance subsidiaries in Canada and the U.S. Canadian subsidiaries include Kingsway General Insurance Company, York Fire & Casualty Insurance Company and Jevco Insurance Company. U.S. subsidiaries include Universal Casualty Company, American Service Insurance Company, Southern United Fire Insurance Company, Lincoln General Insurance Company, U.S. Security Insurance Company, American Country Insurance Company and Avalon Risk Management, Inc. The Company also operates reinsurance subsidiaries in Barbados and Bermuda. Kingsway Financial, Lincoln General Insurance Company, Universal Casualty Insurance Company, Kingsway General, York Fire, Jevco and Kingsway Reinsurance (Bermuda) are all rated "A-" Excellent by A.M. Best. The Company's senior debt is rated "BBB" (investment grade) by Standard and Poor's and by Dominion Bond Rating Services. The common shares of Kingsway Financial Services Inc. are listed on the Toronto Stock Exchange and the New York Stock Exchange, under the trading symbol "KFS". 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. KINGSWAY FINANCIAL: Makes Executive Appointments in Two Units ------------------------------------------------------------- William G. Star, President & Chief Executive Officer of Kingsway Financial Services Inc. (NYSE:KFS, TSX:KFS) announced the appointments of John McGlynn to President and Chief Executive Officer of Kingsway General Insurance Company and Roger Beck as President and Chief Executive Officer of American Country Insurance Company. Mr. McGlynn brings over 20 years of insurance experience to his new position. Most recently he was Vice President, Finance of Kingsway Financial Services Inc. Prior to joining Kingsway, Mr. McGlynn was President & Chief Operating Officer of an Ontario based property and casualty insurer and held various executive positions within the property and casualty industry in Canada, the United States and Europe. Mr. Beck brings over 15 years of insurance experience to his new role at American Country. Most recently Mr. Beck was Vice President of Lincoln General responsible for pricing and audit. Prior to joining Lincoln General, Mr. Beck held various managerial positions in marketing, underwriting, pricing and product management with major U.S. based property and casualty insurers. "I am pleased to announce these well deserved promotions for John and Roger", said Bill Star, President & CEO. "I am confident that they will bring their extensive knowledge, expertise and leadership skills to their new roles. It is particularly pleasing to be able to announce these internal promotions from within the Kingsway group, recognizing the depth of executive talent at our disposal." Kingsway's primary business is trucking insurance and the insuring of automobile risks for drivers who do not meet the criteria for coverage by standard automobile insurers. The Company currently operates through nine wholly-owned insurance subsidiaries in Canada and the U.S. Canadian subsidiaries include Kingsway General Insurance Company, York Fire & Casualty Insurance Company and Jevco Insurance Company. U.S. subsidiaries include Universal Casualty Company, American Service Insurance Company, Southern United Fire Insurance Company, Lincoln General Insurance Company, U.S. Security Insurance Company, American Country Insurance Company and Avalon Risk Management, Inc. The Company also operates reinsurance subsidiaries in Barbados and Bermuda. Kingsway Financial, Lincoln General Insurance Company, Universal Casualty Insurance Company, Kingsway General, York Fire, Jevco and Kingsway Reinsurance (Bermuda) are all rated "A-" Excellent by A.M. Best. The Company's senior debt is rated 'BBB' (investment grade) by Standard and Poor's and by Dominion Bond Rating Services. The common shares of Kingsway Financial Services Inc. are listed on the Toronto Stock Exchange and the New York Stock Exchange, under the trading symbol "KFS". LAIDLAW INC: LTI Unit Asks Court to Disallow $8-Mill. IRS Claim --------------------------------------------------------------- On December 6, 2001, the Internal Revenue Service filed Claim No. 907 against Laidlaw Transportation, Inc. for $372,604,887, representing taxes and interest allegedly owed under LTI's 1997 through 2000 tax years. The IRS had since amended its proof of claim on five occasions, ultimately resulting in the current IRS Claim for $8,022,036 -- $742,705 for tax and $7,279,331 for interest, based only on the 1997 tax year: Claim No. Date Filed Tax Yr. Tax Amount Interest Amount ----- ---------- -------- ---------- --------------- 944 12/18/01 1997-2000 $306,842,059 $68,993,717 954 04/11/02 1997 97,374,796 34,135,851 956 08/29/02 1997 53,847,179 18,876,746 963 10/28/02 1997 1,625,667 10,884,128 964 03/06/03 1997 742,705 7,279,331 LTI, as the common parent of a consolidated group of Laidlaw Companies that are U.S. corporations and that file a consolidated income tax return for U.S. federal income tax purposes, has spent enough time talking to the IRS about its claims and now turns to the Bankruptcy Court for a final resolution of how much the Company owes the Government on account of old taxes. Gary Graber, Esq., at Hodgson Russ, LLP, in Buffalo, New York, argues that the IRS is wrong about the substantive determination on which its entire claim hinges. The IRS Claim turns on the circumstances of a transaction that occurred in August 1994. At that time, Mr. Graber recounts, Laidlaw Inc. caused one of its Barbados affiliates to transfer shares of ADT, Ltd., a publicly traded corporation, to LTI to increase LTI's equity, and thereby increasing its borrowing capacity. Because the ADT stock was transferred from one corporation under LINC's control to another, no gain or loss was recognized by any party to the transaction, as expressly provided under Section 351 of the Internal Revenue Code. It is not disputed that this was the proper treatment under Section 351. Consistent with Section 351, LTI's basis in the ADT stock was the same as the basis of the stock in the hands of the transferor. Mr. Graber points out that the IRS now wants to override this treatment by relying on a different provision -- Section 482 of the Internal Revenue Code -- which allows the IRS to allocate income between controlled corporations to prevent evasion of taxes, or clearly reflect income. However, Mr. Graber argues that neither condition is met here. To invoke Section 482 under a tax evasion theory, Mr. Graber notes that the IRS must show that: (a) the transfer was prompted by tax rather than business motives; or (b) at the time of the transfer, there was a plan to sell the ADT shares. Mr. Graber tells the Court that LINC had a valid, non-tax business purpose for having the ADT stock transferred to LTI -- to reduce LTI's debt-to-equity ratio and thereby increase LTI's borrowing capacity. Indeed, LINC caused a substantial amount of other ADT stock that it owned to be transferred to one of its other affiliates for the same business purpose -- to increase that affiliate's equity capital. By any conventional measure, bolstering an affiliate's borrowing capacity is a valid business purpose. Moreover, there was no plan to sell the ADT stock at the time of the transfer. Indeed, a sale was improbable at that time. As a practical matter, Mr. Graber notes that the large block of ADT stock transferred to LTI could not be sold on the open market, and there was no reason to believe that there were any private buyers for it. Thus, since there was a valid business purpose for the transfer of the ADT stock to LTI and no plan to sell the stock at the time it was transferred, the IRS may not invoke Section 482 under a tax evasion theory. Furthermore, Mr. Graber tells the Court that there was no distortion of income as a result of the ADT stock transfer. For a distortion of income to exist in the absence of any tax evasion, the IRS must show that the ADT stock transfer resulted in a mismatching of income and expenses, or improper "transfer pricing" in connection with a transaction between related parties. However, Mr. Graber asserts that neither of these predicates exists in connection with the ADT stock transfer, nor does the IRS allege that they exist. Therefore, Mr. Graber asserts, the IRS's contrary position is without support. The IRS attempts, but ultimately fails, to show a "taint" of tax avoidance. The tax avoidance theory is multi-faceted and highly complex. According to the IRS, LINC had the ADT shares transferred to LTI not to bolster LTI's borrowing capacity, but as part of a plan (a) to have LTI hold the shares for nearly a year and a half; (b) then to sell them at a loss; (c) then, after yet another year had passed, to sell one of LTI's divisions at a gain; (d) then to offset that gain with the earlier loss; and (e) finally, through that offset, to avoid paying taxes on the gain. The IRS's theory is based entirely on hindsight -- that because some two and one-half years after the transfer of ADT stock LTI found itself with a capital gain to offset a capital loss, there must have been tax avoidance. Mr. Graber asserts that this is both legally insufficient and factually wrong. The IRS asserted baldly, during the course of its audit, that the ADT stock transfer resulted in a distortion of income -- but it has made no assertion that the necessary, predicate mismatching of income and expenses or improper transfer pricing existed. Clearly, Mr. Graber maintains that the IRS is trying to invoke Section 482 without any evidence to support its tax avoidance theory or its distortion of income theory. Thus, the IRS Claim should be disallowed. On the other hand, Mr. Graber informs Judge Kaplan that IRS owes LTI a refund. LTI properly accounted for the sale of ADT stock and the IRS is challenging that treatment. The reason that LTI gets a refund if the Court rejects the IRS's Section 482 theory is that there have been other adjustments to LTI's 1997 return since it was filed. Those adjustments put LTI's taxes due for 1997 at $1,702,989. LTI already paid $6,164,217 to the IRS for 1997. Consequently, LTI is entitled to a refund of $4,461,228, which is the amount already paid less the amount actually due, plus interest at the statutory rate. Accordingly, LTI asks the Court, pursuant to Sections 105 and 502 of the Bankruptcy Code and Rules 3007 and 7001 of the Federal Rules of Bankruptcy Procedure, to: (a) disallow the IRS Claim; (b) find that each of the previous claims filed by the IRS has been superseded by the current IRS Claim; and (c) determine that LTI is entitled to a $4,461,228 refund, plus interest at the statutory rate. (Laidlaw Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service, Inc., 609/392-0900) LTV: US Trustee Balks at Certain Disclosure Statement Provisions ---------------------------------------------------------------- Saul Eisen, United States Trustee for Region 9, represented by Andrew R. Vara, Esq., in Cleveland, Ohio, notes that the LTV Debtors' Joint Plan proposes to release from liability and enjoin action against numerous individuals and entities. The breadth of the release provision is extensive. The releases bind all claim and interest holders and, if ratified by the Court, will be effective whether a creditor or interest holder votes in favor of or against the Joint Plan. In fact, these releases purport to bind parties who fail to cast a ballot with respect to the Joint Plan. These provisions broadly extend a release and discharge to non-debtor entities. The U.S. Trustee objects to the inclusion of the release and injunction provisions because the Debtors fail to establish that the non-debtor releases satisfy the seven-part test identified by the Sixth Circuit in the decision "Class Five Nevada Claimants v. Dow Corning" (In re Dow Coming), 280 F.3d 648,658 (6th Cir. 2002). Furthermore, the Debtors fail to allow creditors or interest holders to affirmatively consent to the releases on the confirmation ballot by checking an appropriate box. The releases also impermissibly extend to professionals including attorneys, accountants and financial advisors. Exculpating these professionals ignores and contravenes their fiduciary duties. Moreover, the Joint Plan proposes limitation of the liability of certain parties and professionals relating to actions taken or failed to be taken in connection with the "formulation, preparation, dissemination, implementation, confirmation or consummation" of the Disclosure Statement and Joint Plan. Misconduct by generally identified parties, entities, professionals, or individuals would be shielded by this plan provision. If countenanced by the Court, the proposed limitation of liability will absolve any misdeeds or omissions made in connection with the Disclosure Statement and Joint Plan, except for willful misconduct or gross negligence. This provision of the Joint Plan impermissibly sanctions negligence by parties to the case and their professionals. (LTV Bankruptcy News, Issue No. 55; Bankruptcy Creditors' Service, Inc., 609/392-00900) LYONDELL CHEMICAL: Board Declares Regular Quarterly Dividend ------------------------------------------------------------ On October 2, 2003, the Board of Directors of Lyondell Chemical Company (NYSE: LYO) declared a regular quarterly dividend of $0.225 per share of common stock to stockholders of record as of the close of business on November 25, 2003. Lyondell has two series of common stock outstanding: Common Stock and Series B Common Stock. The regular quarterly dividend on each share of outstanding Common Stock is payable in cash on December 15, 2003. Lyondell has elected to pay the regular quarterly dividend on each share of outstanding Series B Common Stock in kind in the form of additional shares of Series B Common Stock on December 30, 2003. Lyondell Chemical Company (S&P, BB- Corporate Credit Rating, Negative) -- http://www.lyondell.com-- headquartered in Houston, Texas, is a leading producer of: propylene oxide (PO); PO derivatives, including toluene diisocyanate (TDI), propylene glycol (PG), butanediol (BDO) and propylene glycol ether (PGE); and styrene monomer and MTBE as co-products of PO production. Through its 70.5% interest in Equistar Chemicals, LP, Lyondell also is one of the largest producers of ethylene, propylene and polyethylene in North America and a leading producer of ethylene oxide, ethylene glycol, high value-added specialty polymers and polymeric powder. Through its 58.75% interest in LYONDELL-CITGO Refining LP, Lyondell is one of the largest refiners in the United States processing extra heavy Venezuelan crude oil to produce gasoline, low sulfur diesel and jet fuel. MAGELLAN HEALTH: Wants Clearance for Justice Dept. Settlement ------------------------------------------------------------- Before June 17, 1997, Magellan Health Services, Inc. owned and operated numerous psychiatric facilities operating under the name of Charter Behavioral Health Systems. During that time, the Charter Psychiatric Facilities submitted claims for payment to the Medicare program. Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York, recounts that since 2000, the United States Department of Justice, on behalf of the Office of Inspector General of the Department of Health and Human Services, conducted inquires and investigations regarding the Medicare claims and the Debtors' compliance with certain federal laws. As a result of the investigations, the Justice Department asserted certain potential civil and administrative claims against Magellan for improperly admitting patients and submitting claims to Medicare for medically unnecessary treatment of those patients from 1993 to June 17, 1997. The Justice Department asserted potential claims in excess of $4,000,000 against the Debtors. Because there is substantial uncertainty regarding the amount, if any, of the Claims and the extent to which the Justice Department can successfully prosecute the claims, the Debtors believe that litigation of the Claims would necessarily involve substantial time and expense. Consequently, the Debtors engaged in extensive discussions with the Justice Department regarding a possible settlement of the Claims. The discussions culminated in an agreement between the Debtors and the Justice Department to settle the Claims for $1,100,000 cash. Magellan will pay the Settlement Amount on or before the effective date of the Debtors' Plan. In the event that the Bankruptcy Court does not confirm the Plan by November 15, 2003, the Settlement will be null and void unless Magellan pays the Settlement Amount by that date. Subject to certain exceptions, and conditioned on Magellan's payment of the Settlement Amount, the Justice Department will release Magellan and its affiliates from any civil or administrative monetary claim pursuant to the False Claims Act, the Civil Monetary Penalties Law, the Program Fraud Civil Remedies Act or under the common law equitable theories of payment by mistake, unjust enrichment, breach of contract and fraud. By this motion, the Debtors ask the Court to approve the Settlement Agreement. Mr. Karotkin asserts that the Settlement Agreement is the product of good-faith and arm's-length negotiations. Absent the Settlement Agreement, the Debtors and the Justice Department would require protracted and costly litigation to resolve their disputes regarding the existence, and extent, of the Debtors' liability with respect to the Claims. The Debtors also risk paying substantially more money to the Justice Department in the event that the Department is able to prove the full extent of its Claims. The undertaking of costly and risky litigation would be an unnecessary drain on the resources of the Debtors' estates and would divert the attention of their management and legal personnel from the reorganization effort. (Magellan Bankruptcy News, Issue No. 14: Bankruptcy Creditors' Service, Inc., 609/392- 0900) MESA AIR GROUP: September 2003 Traffic Climbs-Up by 55.7% --------------------------------------------------------- Mesa Air Group (Nasdaq: MESA) reported its preliminary traffic figures for September 2003. Year-over-year revenue passenger miles increased 55.7% in September 2003 to 257.3 million, compared to 165.3 million in September 2002. Total available seat miles increased 39.7% in September 2003 to 424.6 million from 303.9 million in September 2002 and passengers carried increased 45.3% to 587,713 from 404,461 a year ago. Load factor increased to 60.6% in September 2003 versus 54.4% in September 2002, an increase of 6.2 points. "Our regional jet expansion continues to move forward with the addition of six jet aircraft in September, the largest single monthly addition in our company's history. Through the course of the month Mesa added one 80 seat, two 64 seat, and three 50 seat regional jets. This would not have been possible without the more efficient training scheduling afforded by our new pilot agreement and the implementation of a "Jets for Jobs" program with United and US Airways. We remain confident that our business plan, based upon revenue -- guarantee codeshare agreements with major airlines, will provide significant additional growth going forward and a firm platform of profitability upon which to build our future. It is also our view that the hub network strategy utilized by our airline partners will, in the long term, prove to be successful once adequate cost restructuring efforts currently underway are fully implemented. I would like to thank all of our hardworking employees for their continued support and dedication," said Jonathan Ornstein, Mesa's Chairman and Chief Executive Officer. Mesa currently operates 149 aircraft with 938 daily system departures to 163 cities, 40 states, the District of Columbia, Canada, Mexico and the Bahamas. It operates in the West and Midwest as America West Express; the Midwest and East as US Airways Express; in Denver as Frontier JetExpress and United Express; in Kansas City with Midwest Express and in New Mexico and Texas as Mesa Airlines. The Company, which was founded in New Mexico in 1982, has approximately 4,000 employees. Mesa is a member of the Regional Airline Association and Regional Aviation Partners. METALS USA: Charles Sanida Discloses Common Stock Ownership ----------------------------------------------------------- Charles P. Sanida, one of Metals USA's directors, informs the Securities and Exchange Commission that he is the beneficial owner of 7,500 shares of Metals USA common stock. Mr. Sanida acquired 2,500 Metals USA shares in a transaction on August 13, 2003. (Metals USA Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service, Inc., 609/392-0900) MIRANT CORP: Bringing-In Alston & Bird LLP as Special Counsel ------------------------------------------------------------- Pursuant to Section 327(e) of the Bankruptcy Code, the Mirant Debtors seek the Court's authority to employ Alston & Bird LLP as their Special Counsel, nunc pro tunc to the Petition Date. According to Ian T. Peck, Esq., at Haynes and Boone LLP, in Dallas, Texas, Alston & Bird has been representing and providing advice to the Debtors in connection with these matters: (a) Alston & Bird represents Mirant Kendall, L.L.C. in connection with a design-build construction project dispute with Dick Corporation involving an upgrade to an existing power plant facility owned by Mirant Kendall -- the Mirant Kendall Action. Mirant Kendall contracted with Dick to perform this work pursuant to an "Engineering, Procurement and Construction Agreement" dated December 22, 2000. On January 13, 2003, Mirant Kendall filed a lawsuit in Massachusetts Federal District Court, Mirant Kendall, L.L.C. v. Dick Corporation, Civil Action File No. 03-CV-10090 GAO, alleging that Dick breached the Contract by, among other things, failing to achieve the required completion dates, failing to complete its work under the Contract, and by failing to correct defective work; (b) Alston & Bird also represents Mirant Kendall in litigation filed by St. Paul Mercury Insurance Company in Massachusetts State Court, involving the very same project that is at issue in the Mirant Kendall Action. The lawsuit is titled St. Paul Mercury Insurance Company, an assignee and subrogee v. Dick Corporation, Mirant Kendall, L.L.C. and National Fire Insurance Company of Hartford, Commonwealth of Massachusetts, Superior Court Department, Civil Action No. 02-5195. St. Paul alleged that it is a performance bond surety to Harding & Smith, one of Dick's subcontractors on the project. St. Paul seeks damages from Dick for claims arising out of the project by virtue of alleged assignment and subrogation rights under an indemnity agreement with Harding. St. Paul included Mirant Kendall as a defendant in the action solely to enforce its mechanic's lien claim against the project; (c) Alston & Bird represents Mirant, S. Marce Fuller, Richard J. Pershing, Raymond D. Hill, and James A. Ward -- the Individual Defendants -- in securities litigation involving allegations that Mirant violated Section 10(b) of the Securities Exchange Act of 1934 and Section 11 of the Securities Act of 1933 and that the Individual Defendants violated Sections 10(b) and 20 of the Exchange Act and Sections 11 and 15 of the Securities Act -- the Securities Litigation. The lawsuit is titled In re Mirant Corporation Securities Litigation, United States District Court for the Northern District of Georgia, Atlanta Division, Civil Action No. 1:02-CV-1467-BBM. The Court recently dismissed all of the Plaintiffs' allegations arising out of the California energy crisis. The Court also dismissed the Plaintiffs' primary liability claims against Mr. Fuller, Mr. Pershing, and Mr. Hill under Section 10(b) and the Plaintiffs' claims against Mr. Pershing under Section 11; (d) Alston & Bird represents A.D. Correll, A.W. Dahlberg, Stuart E. Eizenstat, S. Marce Fuller, Carlos Goshn, David J. Lesar, James F. McDonald and Ray M. Robinson and Mirant Corporation -- the Defendants -- in a derivative litigation arising from allegations that the Defendants breached their fiduciary duties relative to the allegations in the Securities Litigation. The lawsuit is titled Frank Kester, derivatively on behalf of Nominal Defendant Mirant Corporation, Plaintiffs, v. A.D. Correll, A.W. Dahlberg, Stuart E. Eizenstat, S. Marce Fuller, Carlos Goshn, David J. Lesar, James F. McDonald and Ray M. Robinson, Defendants, and Mirant Corporation, Nominal Defendant, Superior Court of Fulton County, State Of Georgia, Civil Action No. 2002 CV-55014. This matter is stayed until discovery begins in the Securities Litigation; (e) Alston & Bird represents Mr. Fuller, Mr. Hill, Mr. Pershing, James A. Ward, Mr. Dahlberg, A.D. Correll, Mr. Eizenstat, Mr. Goshn, Mr. Lesar, Mr. McDonald, Mr. Robinson and Mirant Corporation -- the Defendants -- in a derivative litigation arising from allegations that the Defendants breached their fiduciary duties relative to the allegations in the Securities Litigation. The lawsuit is titled Lewis Pettingill, Eric Pavels, Leo Pavels and Richard J. McGivern derivatively on behalf of Mirant Corporation, Plaintiffs, v. S. Marce Fuller, Raymond D. Hill, Richard J. Pershing, James A. Ward, A.W. Dahlberg, A.D. Correll, Stuart E. Eizenstat, Carlos Goshn, David J. Lesar, James F. McDonald, Ray M. Robinson, Defendants and Mirant Corporation, Nominal Defendant, In the Court of Chancery of the State of Delaware, in and for New Castle County, Civil Action No. 19793NC. This matter is stayed until discovery begins in the Securities Litigation; (f) Alston & Bird represents Mr. Fuller, Mr. Dahlberg, A.D. Correll, Mr. Eizenstat, Mr. Goshn, Mr. Lesar, Mr. McDonald, Mr. Robinson and Mirant Corporation -- the Defendants -- in a derivative litigation arising from allegations that the Defendants breached their fiduciary duties relative to the allegations in the Securities Litigation. The lawsuit is titled Mary Cichocki, derivatively on behalf of Nominal Defendant Mirant Corporation, Plaintiff, v. S. Marce Fuller, A.W. Dahlberg, A.D. Correll, Stuart E. Eizenstat, Carlos Goshn, David J. Lesar, James F. McDonald, Ray M. Robinson, Defendants, and Mirant Corporation, Nominal Defendant, United States District Court for the Northern District of Georgia, Atlanta Division, Civil Action No. 1:02-CV-3022. By the Court's order, the matter was stayed until the Court decided Defendants' Motions to Dismiss in the Securities Litigation; (g) Alston & Bird represents Mr. Fuller, Mr. Dahlberg, A.D. Correll, Mr. Eizenstat, Mr. Goshn, Mr. Lesar, Mr. McDonald, Mr. Robinson and Mirant Corporation -- the Defendants -- in a derivative litigation arising from allegations that the Defendants breached their fiduciary duties relative to the allegations in the Securities Litigation. The lawsuit is titled Esther White derivatively on behalf of Nominal Defendant Mirant Corporation, Plaintiff, v. S. Marce Fuller, A.W. Dahlberg, A.D. Correll, Stuart E. Eizenstat, Carlos Goshn, David J. Lesar, James F. McDonald, Ray M. Robinson, Defendants and Mirant Corporation, Nominal Defendant, Superior Court of Fulton County, State of Georgia, Civil Action No. 2002-CV-56903. The matter is stayed until discovery begins in the Securities Litigation; (h) Alston & Bird represents Mirant Americas Generation LLC, Mr. Pershing, J. William Holden, III, Stephen G. Gillis, Mr. Fuller and Mr. Hill -- the Defendants -- in a securities litigation alleging that Defendants violated Section 11 of the Securities Act and that the individual Defendants are control persons under Section 15 of the Securities Act with respect to those who have allegedly violated Section 11 -- the Bondholder Litigation. The lawsuit is titled Gil Wisniak, on behalf of himself and all others similarly situated, Plaintiff, v. Mirant Americas Generation LLC, Richard J. Pershing, J. William Holden, III, Stephen G. Gillis, S. Marce Fuller and Raymond D. Hill, Defendants, Superior Court of Fulton County, State of Georgia, Civil Action No. 2003CV71095. The Defendants recently removed the case to the United States District Court for the Northern District of Georgia; (i) Alston & Bird represents Mirant, Vance Booker, Mr. Fuller, Mr. Hill, Mr. Ward and A.W Dahlberg -- the Defendants -- in two ERISA class action suits alleging that the Defendants breached their fiduciary duties under ERISA with respect to the investments in employer securities under two of Mirant's defined contribution employee benefit plans. The lawsuits are entitled James Brown, on behalf of himself and all others similarly situation v. Mirant Corporation, The Southern Company, Vance Booker, S. Marce Fuller, Raymond D. Hill, James A. Ward, A.W. Dahlberg, A.D. Correll, Elmer B. Harris, William J. Hierpe, David J. Lesar, W.L. Westbrook, and Unknown Fiduciary Defendants 1-100, Civil. Action No. 1:03-CV-1027-CC United States District Court for the Northern District of Georgia and Greg Waller Sr., on behalf of himself and all others similarly situated v. Mirant Corporation, The Southern Company, Vance Booker, S. Marce Fuller, Raymond D. Hill, James A. Ward, A.W. Dahlberg, A.D. Correll, Elmer B. Harris, William J. Hierpe, David J. Lesar, W.L. Westbrook, And Unknown Fiduciary Defendants 1-100, Civil Action No. 1:03-CV-1558-BBM United States District Court for the Northern District of Georgia. A motion to consolidate the cases is currently pending before the courts; and (j) Alston & Bird currently assists Mirant with severance issues related to their mid-Atlantic region. Additionally, Alston & Bird also assists Mirant Corporation with a Department of Labor wage and hour audit issue in Maryland. Aside from continuing the services on the 10 cases, the Debtors also want to employ Alston & Bird on these matters: (a) general Human Resource advice to Mirant Corporation, including without limitation, all Human Resource matters including wage and hour, Family Medical Leave Act issues, EEO discrimination issues, age discrimination issues, Severance Plan issues and separation agreements for executives and any litigation that arises out of these issues; and (b) corporate licensing matters. The Debtors selected Alston & Bird as their special counsel because of the firm's extensive experience with and knowledge of the Debtors' businesses and financial affairs. Alston & Bird has been rendering advice to the Debtors since August 2000. Due to Alston & Bird's familiarity with the Debtors' financial structure, contractual relationships and business operations and affairs, as well as its recognized national reputation and expertise in the areas for which it is being retained, Mr. Peck contends that Alston & Bird is uniquely qualified to assist them in these matters. William T. Plybon, Esq., a partner at Alston & Bird, assures the Court that Alston & Bird will carefully coordinate their efforts with the bankruptcy counsel and other professionals the Debtors are retaining and clearly delineate their duties to prevent any duplication of efforts. The Debtors believe that rather than resulting in any extra expense to the Debtors' estates, the efficient coordination of efforts of counsel will greatly add to the effective administration of these Chapter 11 cases. Mr. Plybon informs the Court that he, as well as the other partners in, counsel to and associates of Alston & Bird who will be performing services for the Debtors are members in good standing of the Courts in which they are admitted to practice. Moreover, to the best of his knowledge, Mr. Plybon relates that Alston & Bird represents no interest adverse to the Debtors or to their estates in the matters for which the firm is to be retained. In exchange for the services to be performed, Alston & Bird will bill the Debtors its customary hourly rates. Currently, the firm's hourly rates for attorneys and paraprofessionals range from $115 to $600. Alston & Bird will also seek reimbursement of any reasonable out-of-pocket expenses. (Mirant Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-0900) MISSISSIPPI CHEMICAL: Court OKs $32.5-Mill. DIP Credit Facility --------------------------------------------------------------- Mississippi Chemical Corporation (OTC Bulletin Board: MSPIQ) has received court approval for a $32.5 million debtor-in-possession revolving credit facility with a consortium of lenders led by Harris Trust and Savings Bank. In addition to the DIP financing, the company has approximately $11 million cash on hand to fund ongoing operations. The company has recently resumed full production at its ammonium nitrate facility in Yazoo City, Mississippi and West potash facility in Carlsbad, New Mexico. In addition, the East potash facility in Carlsbad, New Mexico is currently in the process of restarting and expects to be fully operational by mid-October. Charles O. Dunn, president and chief executive officer of Mississippi Chemical Corporation, said, "We are pleased to have secured this financing which should be adequate to implement our planned reorganization. The combination of this credit facility, cash on hand and the restart of our key facilities not only strengthens our ability to serve our customers' and suppliers' needs going forward, but also enhances our presence in the marketplace. We will continue to develop our plan of reorganization to exit bankruptcy in a timely manner. This process is advancing well, and our focus going forward will be to realize the best use for each of our assets." Mississippi Chemical Corporation is a leading North American producer of nitrogen, phosphorus and potassium products used as crop nutrients and in industrial applications. Production facilities are located in Mississippi, Louisiana and New Mexico, and through a joint venture in The Republic of Trinidad and Tobago. On May 15, 2003, Mississippi Chemical Corporation, together with its domestic subsidiaries filed voluntary petitions seeking reorganization under Chapter 11 if the U.S. Bankruptcy Code. MONITRONICS INT'L: June 30 Net Capital Deficit Widens to $40MM -------------------------------------------------------------- Monitronics International, Inc., a leading national provider of security alarm monitoring services, announced its financial results for fiscal year ended June 30, 2003 and the fourth quarter of fiscal 2003. Annual Results Total revenues increased $15.1 million, or 14% to $126.4 million in fiscal 2003 from $111.3 million in fiscal 2002. Earnings before interest, taxes, depreciation and amortization ("EBITDA") for fiscal 2003 was $88.8 million, an increase of 16% from $76.7 million for fiscal 2002. The Company restated its historical deferred revenue, resulting in fiscal 2002 a 0.5% revenue reduction from a previously reported $111.9 million to $111.3 million and a 0.7% reduction of EBITDA from $77.3 million to $76.7 million. The Company does not believe the restatement was material to the results of operations for any of the periods presented, nor did the restatement have any impact on cash flow. The restatement properly adjusted the accumulated deferred revenue on the balance sheet. Fourth Quarter Results Total revenue for the fourth quarter of fiscal 2003 was $33.8 million, a 16% increase from $29.2 million for the fourth quarter of 2002. EBITDA for the fourth quarter of fiscal year 2003 was $23.9 million, a 17% increase from $20.4 million for the fourth quarter of 2002. Monitronics International's June 30, 2003 balance sheet shows a working capital deficit of about $12 million, and a total shareholders' equity deficit of about $40 million. Operations Perspective "Monitronics continues to focus on purchasing high quality subscriber accounts and improving our subscriber services. In the last quarter of fiscal 2003, Monitronics implemented a $69 activation fee in the belief that a higher quality account is produced when the subscriber has to pay something at the time of installation. The activation fee collected by the dealer resulted in Monitronics reducing its purchase price of that subscriber account by $69," said James R. Hull, Chief Executive Officer of Monitronics. "Our subscriber services have been improved through the use of upgraded customer service software which has now made it possible to satisfy over the telephone more than 83% of all technical requests for service, resulting in an average home service dispatch of once every six years," added Hull. "We believe the continued progress we have made in these areas combined with the aging of our portfolio has resulted in a decrease in attrition rates from 12.7% for fiscal 2002 to 11.8% for fiscal 2003. These efforts together with the growth of our subscriber base and operating efficiencies were the primary reasons for the increases in revenue and EBITDA," concluded Hull. EBITDA represents a non-GAAP (Generally Accepted Accounting Principles) financial measure. EBITDA is a key performance measure used in the security alarm monitoring industry and is one of the financial measures, subject to adjustments, by which our covenants are calculated under the agreements governing our debt obligations. EBITDA does not represent cash flow from operations as defined by GAAP, should not be construed as an alternative to net income, and is indicative neither of our operating performance nor of cash flows available to fund all of our cash needs. MORGAN STANLEY: S&P Keeps Watch on 4 Low-B & Junk Note Ratings -------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on classes J, K, L, and M of Morgan Stanley Dean Witter Capital I Trust 2000- PRIN on CreditWatch with negative implications. The CreditWatch placement is due to the recent transfer of a 30- day delinquent loan to the special servicer, Principal Capital Management. In addition, class M of the transaction, which is the most subordinate class in the structure, has been shorted interest due to special servicing fees related to the transfer. The loan has a current balance of $6.036 million (1.12% of pool). It is secured by a 125,000-square-foot office building located at 364 Ferguson Drive in Mountain View, Calif. The office building was formerly 100% occupied by Genuity, which rejected the lease in bankruptcy. The current debt amount per square foot is approximately $48, which compares favorably to both an issuer reported value of $116 per square foot at securitization, as well as recent price ranges for office property sales in the surrounding market, as reported by REIS. Due to the recent transfer, however, updated valuations are not available from the special servicer. The CreditWatch placement will remain in effect until more information is available. If it becomes clear that the valuation of the property and time to resolution will be such that the class M interest shortfalls will continue to accumulate for an extended period, the rating may be lowered. Morgan Stanley Dean Witter Capital I Trust 2000-PRIN Commercial mortgage pass-through certs series 2000-PRIN Rating Class To From Credit Support J B+/Watch Neg B+ 0.83% K B/Watch Neg B 0.55% L B-/Watch Neg B- 0.28% M CCC/Watch Neg CCC 0.00% NEENAH FOUNDRY: S&P Rates Corporate Debt & Sr. Notes at B/CCC+ -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Neenah, Wis.-based Neenah Foundry Co. At the same time, Standard & Poor's assigned its 'CCC+' rating to the company's new $133.1 million senior secured second-lien notes. The rating on the senior secured notes incorporates the marginal benefit noteholders will have with a second lien on the same collateral as its senior creditors in a default scenario. In addition, a 'CCC+' rating was assigned to Neenah's new $100 million subordinated notes. Both debt issues are being issued under SEC Rule 144A with registration rights. Proceeds from the notes offering will be used to pay off Neenah's pre-petition debt obligations under the company's prepackaged plan of reorganization. Upon emergence from bankruptcy, Neenah is expected to have total debt of around $280 million. The outlook is stable. Neenah provides a broad line of manhole covers, sewer grates, and other cast iron products to state and municipal customers. Neenah also provides various components to the heavy-duty truck, agricultural, HVAC, and other industrial end-markets. In response to weak market conditions, Neenah has cut back on its capital expenditures to near-maintenance levels to help preserve cash. "We expect Neenah will have to gradually increase capital expenditures as volumes return and in order to remain competitive," said Standard & Poor's credit analyst Eric Ballantine, "which will further limit debt reduction in the near- term." "We expect that Neenah's operating performance will gradually improve as a result of improving end-market conditions and cost- cutting measures the company has implemented and that debt leverage will be in the 4x-5x range," Mr. Ballantine added. NEW WORLD RESTAURANT: Completes Equity Restructuring Transaction ---------------------------------------------------------------- New World Restaurant Group, Inc. (Pink Sheets: NWCI.PK) has completed its previously announced equity restructuring and that it has named a new executive management team. The board of directors has named Paul J.B. Murphy, III, 47, as CEO, Director and acting Chairman; Susan Daggett, 41, as COO; and Richard P. Dutkiewicz, 48, as CFO. Mr. Murphy, who previously served as COO, fills the positions held by Anthony Wedo, 43, who resigned from his positions as Chairman, CEO and Director. Ms. Daggett previously served as Chief Supply Officer. Mr. Dutkiewicz was hired as CFO, a position that has been unfilled since October 2002. "I am excited about the prospect of leading the company into a future of strategic growth and value creation driven by the great people associated with these fantastic brands," said Mr. Murphy. "I would also like to welcome Rick Dutkiewicz to our company, and congratulate Susan Daggett on her new role. Together, they bring strong experience and enthusiasm to our executive team. I would personally like to thank Tony for his service and leadership over the last two years. His knowledge of the restaurant industry and turnaround skills were essential in getting us to where we are today. He will be greatly missed." Mr. Murphy, CEO, served as COO since June 2002, and was responsible for day-to-day operations of all company-owned, franchised and licensed stores across New World's six brands. He joined Einstein/Noah in December 1997 as Senior V.P., Operations, was promoted to Executive V.P. in March 1998 and continued in that position following New World's acquisition of the assets of Einstein/Noah in June 2001. His prior experience in the quick casual restaurant arena includes serving as COO with an Einstein/Noah area developer, and as Director of Operations for R&A Foods, LLC, a Boston Chicken area developer. Mr. Murphy also spent 11 years in operations with S&A Restaurants, the owner and operator of Steak & Ale and Bennigans Restaurants. He holds a BA degree from Washington and Lee University. Ms. Daggett, COO, served as Chief Supply Officer since May 2002, where she had complete responsibility for the manufacturing, distribution and supply functions across all the New World brands. Ms. Daggett joined Einstein/Noah in 1995 and held several executive positions in finance and operations. Earlier in her career, Ms. Daggett served as Director, Financial Planning & Reporting at Arby's Inc., and as Director, Financial Planning & Analysis with Burger King. She began her career at Ernst & Whinney (now Ernst & Young) after graduating from the University of Northern Iowa with a BA degree in Business Administration. Mr. Dutkiewicz, CFO, has over 25 years of experience in finance and accounting. He served as CFO for Vari-L Company, Inc., a publicly traded telecommunications component supplier, and Coleman Natural Products, Inc., a leading supplier of natural beef. Throughout his career, Mr. Dutkiewicz held senior accounting positions with Tetrad Corporation, MicroLithics Corporation, United Technologies, and KPMG. Since May of 2003, he was Vice President of Information Technology for Sirenza Microdevices, which was acquired by Vari-L. Mr. Dutkiewicz received a BBA degree from Loyola University of Chicago in 1977. The equity restructuring agreement entered into on June 26 with holders of Series F preferred stock was approved by shareholders at the company's annual meeting last week. The equity restructuring is effective as of September 30, successfully concluding a year-long effort to rationalize the company's capital structure. "The completion of our equity restructuring goes a long way towards leveling our competitive playing field," said Mr. Murphy. "Completion of the equity restructuring agreement stabilizes our capital structure and allows management to move forward and focus on its plans to strengthen and build upon the company's solid core business." At New World's annual meeting last week, shareholders also elected two new directors and approved seven other proposals, including authorizing an increase in the number of shares of common stock from 150 million to 1.5 billion and a 1.6610444-for-one forward stock split needed to effect the equity restructuring, as detailed in the equity restructuring agreement. Shareholders also approved a one-for-100 reverse stock split, which became effective immediately following implementation of the forward stock split and consummation of the transactions contemplated by the equity restructuring agreement. Further, a proposal to reduce the number of authorized shares from 1.5 billion to 15.0 million following the reverse stock split also was approved. Reducing the number of shares of common stock outstanding should raise the per share price and, consequently, improve the trading liquidity of the common stock. Immediately following the completion of the equity restructuring, New World had 984,182,839 shares of common stock, no shares of Series F preferred stock, 57,000 shares of Series Z preferred stock, and 105,925,675 shares of common stock reserved for issuance pursuant to outstanding options and warrants. Upon completion of the 1:100 reverse stock split, the company had 9,841,828 outstanding shares of common stock and 1,059,257 shares of common stock reserved for issuance pursuant to outstanding options and warrants. Taking into account both the forward and reverse stock splits, shareholders now have 1 share of common stock for every 60.20309 shares previously held. The shareholders elected Lawrence Gelfond, 61, a director of the Financial Advisory and Dispute Resolution Division of Gelfond Hochstadt Pangburn, P.C.; and Mark Kline, 51, president and CEO of Madison Development Group, LLC, a real estate development company, to the New World board of directors. As a result, New World's board has increased in size from three directors to five directors. With the successful completion of the equity restructuring, New York-based investment firm Greenlight Capital beneficially owns approximately 92 percent of the company's outstanding common stock. Josh Clark, of Greenlight Capital and a Director of New World, said on behalf of the Board, "We would like to thank Tony for his extraordinary efforts in bringing the company through a critical time. His leadership was essential in allowing us to complete the equity restructuring, and we wish him well in his future endeavors." "I am pleased to have led New World through a difficult time in its history. I am proud of the many accomplishments we have had over the last two years including the successful integration of the New World and Einstein companies, an operational turnaround and the financial restructuring. I am now confident that the company is poised to resume growth and increase shareholder value," said Mr. Wedo. "Further, I would like to congratulate Paul, Susan and Rick on their appointments and wish them well." Additionally, at the annual meeting, the appointment of Grant Thornton LLP as independent auditors was approved for the fiscal year ending December 30, 2003. Shareholders also approved proposals to eliminate the company's classified board of directors and to permit shareholder action by written consent of holders of at least 80% of the company's outstanding common stock. New World Restaurant Group (S&P, B- Corporate Credit Rating, Negative) is a leading company in the quick casual sandwich industry, the fastest-growing restaurant segment. The company operates locations primarily under the Einstein Bros. and Noah's New York Bagels brands and primarily franchises locations under the Manhattan Bagel and Chesapeake Bagel Bakery brands. The company's retail system currently consists of 455 company-owned locations and 288 franchised and licensed locations in 32 states. The company also operates a dough production facility and a coffee roasting plant. NRG ENERGY: Court Okays Bingham McCutchen as Committee's Counsel ---------------------------------------------------------------- The Official Committee of Unsecured Creditors of the NRG Energy Debtors sought and obtained the Court's authority to retain Bingham McCutchen LLP as its counsel in the Debtors' Chapter 11 cases, nunc pro tunc to May 21, 2003. According to Committee Chairman James Schaeffer, Bingham is well suited for the type of representation required by the Committee because of the firm's extensive bankruptcy experience and knowledge. Bingham was originally retained to represent an ad hoc committee of NRG noteholders, which during the prepetition period held, in the aggregate, in excess of $2,100,000,000 on face amount of NRG's public notes. As counsel to the Ad Hoc Committee, Bingham developed a significant knowledge base regarding the Debtors' capital and corporate structures, the Debtors' commercial relationships with key creditor constituencies, its complex intercompany relationships, including those with the Debtors' parent company, Xcel Energy Inc., and the many numerous legal issues that will drive maximization of values to the Debtors' unsecured creditors. Bingham will render these bankruptcy and restructuring legal services to the Committee: (a) provide legal advice with respect to the Committee's rights, powers, and duties in these Chapter 11 cases; (b) represent the Committee at all hearings and other proceedings; (c) advise and assist in the Committee's discussions with the Debtors and other parties-in-interest, as well as professionals retained by any of the parties, regarding the overall administration of the Debtors' cases; (d) assist the Committee in analyzing the claims of the Debtors' creditors and in negotiating with the creditors; (e) assist with the Committee's investigation of the assets, liabilities, and financial condition of the Debtors and of the operations of the Debtors' businesses; (f) assist the Committee in its analysis of, and negotiations with, the Debtors or any third party concerning matters related to formulating the terms of a plan or plans of reorganization for the Debtors; (g) assist and advise the Committee with respect to its communications with the general creditor body regarding matters in the Debtors' cases; (h) review and analyze all pleadings, orders, statements of operations, schedules, and other legal documents; the preparation on behalf of the Committee of all pleadings, orders, reports and other legal documents as may be necessary in furtherance of the Committee's interests and objectives; and (i) perform all other legal services for the Committee which may be necessary and proper for the Committee to discharge its duties in the Chapter 11 proceedings. In accordance with Sections 330 and 331 of the Bankruptcy Code, Bingham's services will be compensated on an hourly basis according to its customary hourly rates: Partners $340 to 735 Counsel & Associates $195 to 550 Paralegals $90 to 260 The rates may change from time to time in accordance with Bingham's established billing practices and procedures. Bingham will maintain detailed, contemporaneous records of time and any actual and necessary expenses incurred in connection with the rendering of the legal services. Bingham researched its client databases to determine whether it had any current relationships with the Interested Parties. Despite its efforts, given that Bingham operates an international law firm and the Debtors are a multinational enterprise with hundreds of creditors, Bingham is unable to state with certainty that every client representation has been disclosed. In this regard, if Bingham discovers additional information that requires disclosure, Bingham will file a supplemental disclosure with the Court as promptly as possible. Evan D. Flaschen, Esq., a Bingham partner, discloses that Bingham also represents General Electric Capital Corporation in matters unrelated to the Chapter 11 cases. Before the Petition Date, GE Capital provided financing to one or more of the Debtors, and has provided postpetition DIP financing to one or more of the Debtors during these cases. Bingham recognizes that the Committee or one or more of its members may have or take positions that are adverse to GE Capital in connection with these Chapter 11 cases. Because Bingham currently represents and may in the future represent GE Capital in matters unrelated to the Debtors' bankruptcy cases, Bingham obtained from GE Capital a written waiver of any objection to its Committee representation. Pursuant to the waiver, Bingham is authorized to represent the Committee in negotiations with GE Capital on all matters and to review loan and other documents relating to any credit facilities between GE Capital and any of the Debtors. If any litigation arises between the Committee and GE Capital in connection with the Chapter 11 cases, the Committee will be represented by special counsel. In addition, Eleanor Gilbane, Esq., a former associate at Simpson, Thacher & Bartlett joined Bingham's Litigation practice on July 21, 2003. While at Simpson, Ms. Gilbane participated in Simpson's representation of the Global Bank Steering Committee. Accordingly, to screen Ms. Gilbane from any matters regarding Bingham's representation of the Committee in the Chapter 11 cases, Bingham instituted screening procedures and sent written instructions to the entire firm directing that: (a) Ms. Gilbane will not perform work in connection with Bingham's representation of the Committee or access any documents related to the representation in Bingham's computer database; (b) no file related to Bingham's representation of the Committee is to be provided to Ms. Gilbane; (c) no person who has worked on Bingham's representation of the Committee may discuss any information, confidential or otherwise, formally or informally, concerning the matter with Ms. Gilbane; and (d) each of the files for Bingham's Committee representation will have a label affixed to it indicating the file's confidential nature and instructing that its contents is not to be disclosed to Ms. Gilbane. Mr. Flaschen assures the Court that Bingham is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code, and does not hold or represent any interest adverse to the Debtors' estates with respect to the matters for which Bingham is to be employed, as required by Section 328(c) of the Bankruptcy Code. (NRG Energy Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 609/392-0900) O'SULLIVAN INDUSTRIES: Closes $140MM Senior Secured Debt Package ---------------------------------------------------------------- O'Sullivan Industries, Inc., a leading manufacturer of ready-to- assemble furniture, announced the closing of a $100 million senior secured notes offering and a new $40 million senior secured revolving credit facility. The net proceeds of the refinancing transaction were used to pay off O'Sullivan's existing $88.3 million secured credit facility, as well as pay for related fees and expenses. The refinancing transaction includes: -- $100 million in senior secured notes that were issued at a price of 95.0%, mature on October 1, 2008 and pay interest at a rate of 10.63% per annum, payable semi-annually on January 15 and July 15. The notes may be redeemed at any time on or after October 1, 2006. The notes are guaranteed by O'Sullivan Industries Holdings, Inc. (OTC Pinksheets: OSULP), and all of our existing and future domestic subsidiaries. The notes are secured by a first-priority security interest in and lien on substantially all of the assets of O'Sullivan and its subsidiaries other than accounts receivable, inventory, deposit accounts, the capital stock of O'Sullivan's subsidiaries, certain books and records and certain licenses. The notes are also secured by a second-priority security interest in and lien on substantially all of the accounts receivable, inventory, certain books and records and certain licenses of O'Sullivan and its subsidiaries. O'Sullivan Industries Holdings, Inc. also pledged the stock of O'Sullivan Industries, Inc. to secure the notes. -- $40 million revolving credit provided by GE Global Sponsor Finance that is secured by a first-priority security interest in and lien on substantially all of the accounts receivable, inventory, deposit accounts, certain books and records and certain licenses of O'Sullivan and its subsidiaries. The notes are also secured by a second-priority security interest in and lien on substantially all of O'Sullivan's other assets, other than the capital stock of O'Sullivan's subsidiaries. We anticipate that the borrowing base will approximate the $40 million credit line. At closing, the new credit agreement was undrawn; however, we had approximately $14.0 million of letters of credit issued against the credit agreement. Richard Davidson, president and chief executive officer stated, "The refinancing transaction solidifies O'Sullivan Furniture's capital structure, as well as improves our financial flexibility by eliminating our debt amortization under the old credit facility and removing the quarterly financial covenant burdens. Additionally, this transaction increases the amount of credit available from our revolving credit agreement, and extends the maturity date of our indebtedness until 2008." The senior secured notes were offered to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933 and to non-U.S. persons in reliance on Regulation S under the Securities Act of 1933. At the time of the offering, the senior notes were not registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act of 1933 and applicable state securities laws. At June 30, 2003, O'Sullivan Industries' balance sheet shows a total shareholders' equity deficit of about $138 million. OWENS CORNING: Wants Nod for Amendments to Plan Voting Protocol --------------------------------------------------------------- Owens Corning and its debtor-affiliates renew their request for approval of Plan voting procedures to incorporate these changes: (1) Giving a PI Trust Claim attorney 30 calendar days after mailing of the Solicitation Package, a list of the names, addresses and social security numbers of claimants on whose behalf the attorney is not entitled to vote, in which case individual Solicitation will be sent to the claimants; (2) Requiring attorneys of PI Trust Claims to submit a summary sheet that will become an exhibit to the Master Ballot with these entries: (a) Claimant's name; (b) social security number; (c) disease level; and (d) Claimant's vote; (3) Limiting the Publication notice to: (a) the national editions of The New York Times, The Wall Street Journal, USA Today and The Toledo Blade; and (b) at least each of the trade publications as set forth in the proposed Disclosure Statement Order; (4) Assigning a disease level with the lowest possible value for voting purposes to PI Trust Claims that fail to select a Disease Level; and (5) Distributing Solicitation Packages directly to PI Trust Claimants if, among others: (a) the Claimant's attorney's address is unknown; (b) the Claimant has no attorney; and (c) the Claimant's attorney advises the Debtors to do so. (Owens Corning Bankruptcy News, Issue No. 59; Bankruptcy Creditors' Service, Inc., 609/392-0900) OXFORD INDUSTRIES: Q1 Fiscal 2004 Results Reflect Strong Growth --------------------------------------------------------------- Oxford Industries, Inc. (NYSE: OXM) announced financial results for the first quarter ended August 30, 2003. The Company reported that, for the quarter, net sales increased $70 million or 41% to $242 million versus $172 million during the first quarter of fiscal 2003. The acquisition of Viewpoint International, owner of the Tommy Bahama brand, closed on June 13, 2003 and contributed $63 million of the sales growth. Diluted earnings per share for the quarter increased 40% to $0.84 versus $0.60 in the first quarter of fiscal 2003. Included in the Viewpoint segment's operating expenses for the quarter were approximately $1.7 million of non-cash intangible asset amortization expenses associated with the acquisition of Viewpoint International. These expenses amounted to $0.13 per fully diluted share in the first quarter. Under purchase accounting rules, the Company recorded and is amortizing certain identified intangible assets. Approximately $26 million of intangible asset value were ascribed to Viewpoint's customer relationships, license agreements and non-compete agreements and will be amortized over periods ranging from 4 to 15 years. J. Hicks Lanier, Chairman and Chief Executive Officer of Oxford, Inc. commented, "We are off to a strong start for fiscal 2004 and have completed a record first quarter for both revenues and diluted earnings per share. The Viewpoint International business drove these record results, but we were also very pleased with the performance of our historical four operating groups, which showed improvement from both a sales and profitability standpoint, despite a challenging retail environment." Lanier Clothes, the Company's tailored clothing group, reported a 14% sales increase for the quarter versus the first quarter of last year. Oxford Slacks achieved a sales increase of 51% for the first quarter, driven by new programs with major customers. The Oxford Womenswear Group reported a 6% sales decline due to our decision to cease doing business with Kmart. First quarter sales for the Oxford Shirt Group declined 12% from last year's first quarter as a result of planned declines in golf apparel shipments. The Viewpoint business contributed $63 million of revenue during the first quarter. Gross margin for the first quarter increased by 700 basis points to 29.3% versus 22.3% in the year-ago first quarter. The improvement was driven by the Viewpoint business which earns higher gross margins than Oxford's other operating groups. Selling, general and administrative expenses as a percentage of sales increased 410 basis points to 22.1% from 18.0% in the year- ago quarter. The increase was driven by Viewpoint's expense structure and was partially offset by a decline in SG&A expenses for Oxford. Operating expenses also included the $1.7 million of intangible asset amortization associated with the Viewpoint purchase. Inventories at the close of the first quarter were on plan, increasing $28 million to $118 million. Viewpoint contributed $25 million of the $28 million increase. Accounts receivables were also in good shape, increasing $13 million to $134 million. As communicated in the fourth quarter conference call, the Company's previously issued guidance excluded intangible asset amortization expenses because the purchase price allocation analysis would not be conducted until the first quarter. The preliminary purchase price allocation was completed during the first quarter and intangible asset amortization expenses will be included in both reported earnings and guidance for each quarter going forward. Intangible asset amortization expense, on an after-tax basis, is projected to total approximately $0.50 per diluted share for fiscal year 2004 or approximately $0.125 per diluted share for each quarter. Following the strong first quarter results, the Company commented that it was now comfortable with a full year range of fully diluted earnings per share, excluding purchase price accounting entries, of $4.67 to $4.89. This compares to prior guidance of $4.35 to $4.65. However, for purpose of clarity, the company has updated its forward guidance to give effect to both the better than expected results in the first quarter and the amortization of intangible assets under purchase price accounting. For the fiscal year ending on May 31, 2004 the company continues to anticipate sales in the range of $1.05 to $1.1 billion and diluted earnings per share in the range of $4.17 to $4.39. For the second quarter, the Company continues to anticipate sales in the range of $245 to $255 million and earnings per share in the range of $0.75 to $0.80. For the third quarter, the Company continues to believe appropriate targets for sales are in the range of $280 to $295 million and for diluted earnings per share of between $1.08 and $1.15. For the fourth quarter, the Company continues to believe appropriate targets for sales are in the range of $295 to $310 million and for diluted earnings per share of between $1.50 and $1.60. Mr. Lanier continued, "The integration of the Viewpoint business is proceeding smoothly and we are pleased with the significant progress made during the first quarter. The Viewpoint management team has been focused and responsive during this process. We are more enthusiastic than ever about our prospects for continuing growth in sales and earnings over the long term. Viewpoint and Oxford remain quite complementary which should support our ability to generate superior returns for our shareholders." Oxford Industries, Inc. (S&P, BB- Long-Term Corporate Credit Rating, Stable) is a leading producer and marketer of branded and private label apparel for men, women and children. Oxford provides retailers and consumers with a wide variety of apparel products and services to suit their individual needs. Oxford's brands include Tommy Bahama(R), Indigo Palms(TM), Island Soft(TM), Ely & Walker(R) and Oxford Golf(R). The Company also holds exclusive licenses to produce and sell certain product categories under the Tommy Hilfiger(R), Nautica(R), Geoffrey Beene(R), Slates(R), Dockers(R) and Oscar de la Renta(R) labels. Oxford's customers are found in every major channel of distribution including national chains, specialty catalogs, mass merchants, department stores, specialty stores and Internet retailers. The Company's common stock has traded on the NYSE since 1964 under the symbol OXM. For more information, visit its Web site at http://www.oxfordinc.com PARTNERS MORTGAGE: First Creditors' Meeting Set for October 29 -------------------------------------------------------------- The United States Trustee will convene a meeting of Partners Mortgage Corporation's creditors on October 29, 2003, 3:00 p.m., at 1200 Sixth Avenue, Room 614, Seattle, Washington 98101. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Mercer Island, Washington, Partners Mortgage Corporation is a high-yield mortgage backed income fund. The Company filed for chapter 11 protection on September 26, 2003 (Bankr. W.D. Wash. Case No. 03-22404). Shelly Crocker, Esq., at Crocker Kuno LLC represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it estimated its debts and assets of over $50 million each. PG&E NATIONAL: Court Allows Committee Members to Trade Securities ----------------------------------------------------------------- To raise capital for their operations, the PG&E National Energy Group Debtors issued 10.375% senior notes due 2011 in the principal amount of $1,000,000,000. The Senior Notes are securities that are traded on the open market and which continue to be actively trading postpetition. Four of the five members of the Official Noteholders' Committee are large institutional holders of the NEG Debtors' Senior Notes. The fifth member of the Noteholders' Committee, Wilmington Trust Company, is the Indenture Trustee in conjunction with the issuance of the Senior Notes. Members of the Noteholders' Committee are among the largest creditors of the NEG Debtors and bring considerable expertise to the Noteholders' Committee, and have both the incentive and ability to make significant contributions to the prosecution of the NEG Debtors' Chapter 11 cases. Before the Petition Date, one or more Senior Noteholders engaged in the trading of securities to manage their asset portfolios. The Senior Noteholders want to continue the postpetition trading of the Senior Notes. Against this backdrop, the Noteholders' Committee seeks the Court's authority to implement policies and procedures to allow the continued trading of the Senior Notes solely for those Senior Noteholders who engage in the trading of securities in the ordinary course of their business, and to prevent any potential use of non-public information. Joel I. Sher, Esq., at Shapiro Sher Guinot & Sandler, in Baltimore, Maryland, explains that, although there is no legal impediment to the Noteholders' Committee members' trading in the Senior Notes, the very prospect of a potential fiduciary conflict may force potential productive Noteholders' Committee members to choose between membership on the committee and the beneficial investment opportunities for their clients. Such a result contradicts the presumption provided in Section 1102(b)(1) of the Bankruptcy Code that the Noteholders' Committee will "ordinarily" consist of the largest creditors. Considering that the NEG Debtors have over $1,000,000,000 in outstanding Senior Notes, which continues to be actively traded postpetition, Mr. Sher asserts that there is no viable reason, when appropriate procedures are in place, that the Noteholders' Committee members should not be allowed to manage and trade in the Senior Notes. Otherwise, the creditors and the Noteholders' Committee may lose services and experience of valuable committee members. On August 7, 2002, the Court implemented restrictions and procedures with respect to trading in claims against the NEG Debtors to preserve and protect certain built-in losses and net operating losses. According to Mr. Sher, in In re Federated Department Stores, Inc., 1991 WL 79143 (Bankr. S.D. Ohio March 7, 1991), the United States Trustee sent letters to the bondholders' committee stating that members were precluded from trading in the securities of the debtor, claiming that the trading was a breach of their fiduciary duties. Fidelity Management & Research Company, a member of the committee, sought an order from the Federated court to authorize the trading in Federated's securities if procedures, referred to colloquially as an "Ethical Wall" or a "Chinese Wall", were implemented to insulate its trading activities from its committee-related activities. The Federated court agreed and held that the postpetition trading of Federated's securities by a committee member with an Ethical Wall procedure in place does not constitute a violation of a committee member's fiduciary obligations. The Senior Noteholders propose to implement these Screening Wall procedures: (1) A Committee member will have all personnel who have access to non-public information in the bankruptcy proceeding execute a letter acknowledging that they may receive non-public information and that they are aware of the Ethical Wall procedures which are in effect; (2) The Committee personnel will share non-public information with no other employees of the committee member -- except the general counsel, for the purpose of rendering legal advice to Committee personnel, and who will not further share the non-public committee information with other employees; (3) The Committee personnel will maintain all files containing non-public information generated from Committee activities in cabinets inaccessible to other employees; (4) The Committee personnel will receive no information regarding the member's security trades in advance, except that the personnel may receive the usual and customary internal and public reports showing the purchases and sales, including the corresponding amounts, and Senior Notes owned by the Committee member; and (5) The Committee member's compliance department personnel will review trades of the NEG Debtors' securities to confirm that the trades were made in compliance with the Ethical Wall procedures and will keep and maintain records of their review. U.S. Trustee Objects W. Clarkson McDow, Jr., United States Trustee for Region 4, asserts that the Noteholders' Committee merely made conclusory allegations that "one or more" of its members regularly trade securities, leaving this determination to the conscience of the individual committee member. Mr. McDow advises the Court to be cautious before approving the request. Mr. McDow contends that the Noteholders' Committee failed to articulate what harm will befall its members if they are not allowed to trade. The Committee provided no declarations or other evidence of the Ethical Walls that have been implemented. Mr. McDow asserts that specific information and evidence should be provided to the Court before any consideration or ruling is made. Mr. McDow does not object to the Committee members' intention to sell, in whole or in part, the NEG Debtors' Senior Notes and the trading of the NEG Debtors' securities by a Committee member on its client's accounts upon implementation of the appropriate Ethical Walls. Mr. McDow explains that the purchase of the NEG Debtors' securities by a Committee member carries with it the appearance of self-dealing. Mr. McDow reminds the Court not to underestimate human nature in its ability to ascertain information from behavior of persons on the "other side" of an Ethical Wall. Even if an Ethical Wall perfectly protects the NEG Debtors from engaging in self-dealing, active trading by a Noteholders' Committee member will influence members of the public who look for "insider" activity but who are unaware of the existence of an Ethical Wall. Mr. McDow also notes that the Committee members were all members of an ad hoc group of noteholders that obtained an order from the Court directing the United States Trustee to appoint an Official Noteholders' Committee. Now, these same members inform the Court that the Official Committee "may lose the services and experience of valuable committee members" if it does not grant the Request. Mr. McDow points out that this change of behavior by the Noteholders' Committee, from insistence on a separate committee to apparent unwillingness to serve unless its further demands are met, should not be countenanced by the Court. * * * Judge Mannes rules that any member of the Official Noteholders' Committee may engage in securities trading subject to the implementation of strict Screening Wall and information-blocking procedures. (PG&E National Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-0900) PILLOWTEX CORP: GGST LLC Pitches Best Bid for Assets at Auction --------------------------------------------------------------- Pillowtex Corporation announced that a bid by GGST, LLC proposing $128.0 million for certain of the Company's assets has been designated the successful bid during a court-approved auction for the Company's assets. GGST's offer is for substantially all of Pillowtex's remaining assets including plants, equipment, and brands, and exceeds the original offer tendered by GGST of $56 million submitted with the Company's Chapter 11 Bankruptcy filing on July 30, 2003. The auction was conducted in accordance with Section 363 of the U.S. Bankruptcy Code. The next highest bid submitted at the auction was by a joint venture formed by PT Partners, LLC and The Petters Company, Inc. in the amount of $127.5 million. The closing of the sale is contingent upon Bankruptcy Court approval at a sale hearing in the Bankruptcy Court in Delaware scheduled for October 7, 2003 at 3:30 p.m. Pillowtex Corporation, headquartered in Kannapolis, N.C., was a leading designer, marketer and producer of home fashion products including towels, sheets, rugs, blankets, pillows, mattress pads, feather beds, comforters and decorative bedroom and bath accessories. On July 30, 2003, the Company closed substantially all of its operations and filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. PILLOWTEX: Court Approves Morris Nichols Engagement as Counsel -------------------------------------------------------------- Pillowtex Corporation and its debtor-affiliates obtained permission from the U.S. Bankruptcy Court to retain and employ Morris, Nichols, Arsht & Tunnel, in Wilmington, Delaware as their local bankruptcy attorneys. Pillowtex retained Morris Nichols in connection with the prosecution of their prior bankruptcy proceeding. In that regard, Morris Nichols represented the Debtors as co-counsel with respect to all aspects of those proceedings, both before and after the effective date of the plan of reorganization filed in those cases. Morris Nichols will render these professional services: (a) perform all necessary services as the Debtors' counsel in connection with the Chapter 11 cases, including, without limitation, providing the Debtors with advice concerning their rights and duties as debtors-in-possession, representing the Debtors, and preparing all necessary documents, motions, applications, answers, orders, reports and papers in connection with the administration of the Chapter 11 cases on behalf of the Debtors; (b) take all necessary actions to protect and preserve the Debtors' estates during the pendency of their Chapter 11 cases, including: -- prosecute actions by the Debtors; -- defend any actions commenced against the Debtors; -- negotiate concerning all litigation that the Debtors are involved; and -- object to claims filed against the estates; and (c) represent the Debtors at hearings, meetings, conferences, and others, on matters pertaining to the affairs of the Debtors as debtors-in-possession. The Debtors will pay Morris Nichols its customary hourly rates in effect from time to time, plus reimbursement of actual, necessary expenses incurred by Morris Nichols on the Debtors' behalf. These are Morris Nichols' customary hourly rates that are subject to periodic adjustments to reflect economic and other conditions: Professional Rates ------------ ------------ Partners $360 - 525 Associates 220 - 330 Paraprofessionals 155 File Clerks 80 The cost cannot be estimated with certainty because it is probable that the Debtors will require Morris Nichols to render extensive legal services. It is necessary and essential that the Debtors, as debtors-in-possession, employ attorneys under a general retainer to render the services. In anticipation of the Prior Bankruptcy Filing, Morris Nichols received $100,000 from the Debtors as a retainer for legal services rendered and expenses incurred in contemplation of the preparation, commencement and prosecution of the cases. (Pillowtex Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., 609/392- 0900) POLAROID CORP: Seeks Nod Allowing Committee to Commence Actions --------------------------------------------------------------- Mark L. Desgrosseilliers, Esq., at Skadden, Arps, Slate, Meagher & Flom, in Wilmington, Delaware, recounts that pursuant to the Sale Order, the Official Committee of Unsecured Creditors of the Polaroid Debtors has the authority to select the Plan Administrator while under the terms of the Third Amended Plan, on the Effective Date, the Plan Administrator, can pursue causes of action on behalf of the Debtors' estates. By this motion, the Debtors and the Official Committee of Unsecured Creditors ask the Court to allow the Committee to commence and prosecute any actions under Chapter 5 of the Bankruptcy Code on behalf of the Debtors' estate, pursuant to Sections 105(a), 542, 547, 548, 549, 550, 1103(c) and 1109(b) of the Bankruptcy Code. Since the Closing Date, Mr. Desgrosseilliers relates, the Committee has investigated the causes of actions and is now prepared to begin filing lawsuits on the Debtors' behalf. However, because of the delay occasioned by the examination, the Debtors have been unable to pursue confirmation of the Third Amended Plan. Although the Committee has been investigating causes of action available under Chapter 5 of the Bankruptcy Code since the Closing Date, and although the Debtors have consented to the Committee's investigation and pursuit of these actions, there is no Court Order confirming the Committee's standing to pursue these actions. Requiring the Debtors to bring causes of action available to them under Chapter 5 of the Bankruptcy Code at this stage of the bankruptcy cases would unnecessarily increase the administrative expenses of the Debtors' estates. Mr. Desgrosseilliers explains that: (a) it is likely that the Debtors would be compelled to retain outside counsel to file the Actions; and (b) upon confirmation of any plan, the Debtors would likely turn over the pursuit of each of the Actions to the Plan Administrator. The Plan Administrator would then have to become familiar with each Action, resulting in additional unnecessary expenses for the Debtors' estates. However, because the Committee's counsel is already familiar with the Actions, it would be more efficient for the Court to grant the Committee standing to pursue the Actions on the Debtors' behalf. (Polaroid Bankruptcy News, Issue No. 45; Bankruptcy Creditors' Service, Inc., 609/392-0900) PROXIM CORP: Amends Securities Purchase Pact with Two Investors --------------------------------------------------------------- Proxim Corporation (Nasdaq: PROX), a global leader in wireless networking equipment for Wi-Fi and wide area networks, has agreed to amended terms of the securities purchase agreement with Warburg Pincus and Broadview Capital Partners and the $30 million secured promissory notes issued to these investors in July 2003. Proxim will postpone the special meeting of stockholders scheduled for tomorrow to a date to be announced and will circulate updated proxy materials for the special meeting of stockholders to consider the amended financing terms. Proxim anticipates that this meeting will take place in late October or November 2003. The parties anticipate that the $30 million secured promissory notes issued to Warburg Pincus and Broadview Capital Partners will be amended to extend the due date from December 31, 2003 to September 30, 2004. In addition, the terms previously providing for automatic exchange of the notes, upon stockholder approval, for shares of Series B convertible preferred stock will be modified to provide for exchange at the investors' sole discretion following stockholder approval. The secured promissory notes will continue to bear interest at the original rate of 25 percent per annum until the earlier of the due date or exchange, if any, for shares of Series B preferred stock. The Series B preferred stock issuable upon exchange of the secured promissory notes, if any, will be convertible into shares of Proxim's Class A common stock at a conversion price of $1.15 per share, as previously agreed. Pursuant to the amendments to the securities purchase agreement, the Series B preferred stock will have rights to a 14 percent cumulative dividend, compounding quarterly for seven years, with acceleration upon a change of control. In addition, the investors have agreed to make available to the Company an additional $10 million, issuable in exchange for additional secured promissory notes on the amended terms applicable to the original $30 million investment. Of this amount, the investors have agreed to permit the Company to call an investment of $5 million prior to stockholder approval and the balance of $5 million following stockholder approval for a period of 90 days. Upon receipt of stockholder approval, the Company will issue to the investors warrants to purchase an aggregate of 18,000,000 shares of common stock with an exercise price of $1.46, as previously agreed, plus additional warrants to purchase an aggregate of 6,000,000 shares of common stock with an exercise price equal to the weighted average closing price of Proxim's common stock for the five trading days prior the date of this announcement. As previously announced on September 15, 2003, a jury has rendered a verdict in the first phase of the patent suit between Proxim and Symbol Technologies, finding certain of Proxim's products infringe on two Symbol Technologies patents. A final judgment on this matter has not been entered by the court and proceedings on the matter will continue. The court is to conduct a bench trial on Proxim's remaining equitable defenses not addressed by the jury in its September 15 verdict. In light of these developments, the parties will modify the definition of material adverse change that triggers an event of default under the notes to include any further material adverse rulings or judgments made against the Company in this litigation or other litigations. The parties intend to enter into definitive documents setting forth the amended financing terms as soon as reasonably practicable. "We are pleased with Warburg Pincus' and Broadview Capital Partners' continued financial support of the Company," said Frank Plastina, Chief Executive Officer and President of Proxim. Proxim Corporation is a global leader in wireless networking equipment for Wi-Fi and wide area networks. The company is providing its enterprise and service provider customers with wireless solutions for public hot spots, voice and data backhaul, enterprise campuses, security and surveillance, last mile access and mobile professionals. This press release and more information about Proxim can be found on the Web at http://www.proxim.com Warburg Pincus is a global private equity firm and has been a leading private equity investor since 1971. Over the last 30 years, the firm has invested more than $16 billion in approximately 480 companies in 30 countries. Today, the firm has approximately $9 billion under management, plus an additional $5 billion available for investment. The company invests in a range of industry sectors including information and communications technology, healthcare, business services, financial services and technology, media, energy and real estate. Working in partnership with management teams, Warburg Pincus has taken an active role in building market-leading businesses with sustainable value. That includes companies such as BEA Systems, VERITAS Software Corp., United Healthcare, RenaissanceRe Holdings Ltd., Dime Bancorp, Inc., Mellon Bank Corporation and Knoll, Inc. Warburg Pincus invests at all stages of a company's life cycle, from founding start-ups and providing growth capital to leading restructurings, recapitalizations and buy-outs. For more information please visit http://www.warburgpincus.com Broadview Capital Partners is a $250 million private equity investment firm located in Silicon Valley, California. Broadview Capital Partners' principal investment objective is to fund the growth of later stage private technology companies. Broadview Capital Partners also consider transactions which involve recapitalizations and management buyouts of divisions of public technology companies. Broadview Capital Partners is sponsored by Broadview, a leading global M&A advisor and private equity investor focused on the IT, communications, healthcare technology and media industries. PW EAGLE: Takes Strategic Initiatives to Enhance Balance Sheet -------------------------------------------------------------- PW Eagle, Inc. (Nasdaq:PWEI) announced various comprehensive strategic developments to increase the value of the Company. The announcements regard certain changes to improve operating efficiencies and reduce costs, and to various financial transactions and initiatives to improve the Company's balance sheet. The Company also announced that it has completed several objectives in connection with this initiative and that it was confident that it will complete the remainder of the goals of this initiative over the next several months. The anticipated operational changes include centralizing and integrating the management team, integrating the PW Pipe and Extrusion Technologies business units and focusing on its core PVC pipe business by divesting and spinning off its non-core businesses. The strategy is designed in part to strengthen PW Eagle's balance sheet by reducing debt through the sale of non-core assets, raising additional equity, and reducing or eliminating the Company's subordinated debt. The Company also anticipates increasing its liquidity through a revised, enhanced senior credit facility. Taking these actions will deleverage the Company and provide the Company with increased operational flexibility to pursue growth opportunities in its core PVC pipe business. Single Integrated Management Team PW Eagle has combined the management teams of its PWPipe and ETI business units into a single operating management team. Effective October 1, 2003, Jerry Dukes (formerly Senior Vice President, Operations, for ETI) will serve as President. Jack Cobb will continue as Executive Vice President, Operations, responsible for all plant operations. Roger Robb has decided to leave the Company to pursue other interests, but he will remain with the Company for a transition period. He will be sorely missed. Former ETI president Scott Long will succeed Mr. Robb as Chief Financial Officer. The other officers of the Company will remain in their present positions. Both Jerry Dukes and Scott Long will relocate to our operating headquarters, which will remain in Eugene, Oregon. In announcing these changes, Chief Executive Officer William Spell said, "One of the real strengths of PW Eagle is the breadth and depth of its senior management team. We are very pleased with the unified team that we now have in place to focus on our strategy of growing our sales and making PW Eagle an even more efficient and low cost producer of PVC pipe. Jerry Dukes, our new President, has had a long and successful career in the PVC pipe industry, including 15 years at ETI. We believe that he is a strong leader who can successfully integrate PW Pipe and ETI and lead PW Eagle forward. We are also pleased that Scott Long is available to move into the CFO position. Both Jerry and Scott have experience in all aspects of our business including sales, operations and finance." PW Eagle also anticipates that after a transition period during which the new management team completes the integration of the businesses, many of the day-to-day responsibilities of Mr. Spell, and Dobson West, the Chief Administrative Officer and General Counsel, will be transferred to the operating management team. While the membership of the Company's Board of Directors will remain unchanged, Mr. Spell will become Co-Chairman with Harry Spell, the current Chairman. In that capacity Mr. Spell will focus on monitoring the management team, maintaining critical financial and other relationships and addressing strategic matters. Mr. West will continue as the Secretary advising the Board and assisting with various issues and special projects. After a transition period, PW Eagle expects that its corporate headquarters will also move to Eugene, Oregon. In commenting on these management changes, Mr. Spell said, "By integrating the management teams and centralizing both the operational and corporate headquarters functions in Eugene, PW Eagle will be a stronger, more efficient company. These changes will not only reduce expenses but we believe they will also accelerate the decision making process and improve the Company's performance. My future role and the activities that I will be involved with are consistent with those functions in other companies where I am a board member and significant shareholder." Integration of the PW Pipe and ETI Business Units When PW Eagle acquired ETI in March 2003, the PW Pipe and ETI business units were left intact to operate cooperatively but separately. In order to become more efficient, to cut costs and to accelerate the potential synergies from combining the two businesses, the new management team will fully integrate the two business units. The management team believes that integration plans will be completed this fall and should be fully executed during early 2004. Sale of MidStates Plastics, Inc. As part of the Company's strategy of reducing its debt and focusing on its core PVC pipe business, PW Eagle announced the sale of the assets of its subsidiary, MidStates Plastics, Inc., a manufacturer of plastic water meter boxes, to Carson Industries, LLC. This transaction permitted the Company to reduce its senior bank debt by over $4 million. Additional Potential Asset Sales As previously announced, the Company has signed an agreement to sell its idled facility in Phoenix, Arizona that has been closed since November 2001. The closing of the sale is still pending. The cash proceeds from this sale are expected to be approximately $2.3 million. In addition, the Company will no longer incur the expenses of holding and maintaining this property. The Company is in discussions with a potential buyer for a sale/leaseback transaction for the PW Eagle facilities located in Visalia, California and Sunnyside, Washington. The Company believes that it will be able to complete this transaction in the fourth quarter of 2003. PW Eagle is also in discussions with a potential buyer for the Hastings, Nebraska and Baker City, Oregon facilities that have been leased to PW Poly. The Company believes that it will be able to conclude the sales of these properties in the fourth quarter of 2003. These sales will all provide additional cash that will be used to reduce the Company's senior bank debt. Separation of the Polyethylene Pipe Business PW Eagle has transferred its polyethylene pipe business to a separate wholly owned subsidiary, PW Poly Corp. In the transaction, PW Eagle transferred the machinery and equipment, inventory and intangibles related to its polyethylene pipe business to PW Poly, and PW Poly assumed certain payables related to that business. PW Eagle retained the accounts receivable and will retain the proceeds resulting from their collection. In addition, PW Poly paid PW Eagle $1.5 million in cash upon transfer of the assets. PW Poly has established a separate credit facility with Wells Fargo Business Credit that provided the funds for the cash payment to PW Eagle and will provide working capital financing for the business. PW Poly is leasing the polyethylene pipe facilities in Hastings, Nebraska and Baker City, Oregon from PW Eagle on a triple net basis. PW Eagle is seeking buyers for those two properties. If PW Eagle is successful at selling those properties, it will retain the proceeds from those sales, and the buyer will become the landlord under the leases. PW Poly's Board of Directors will consist of William Spell, Harry Spell and Bruce Richard, all members of the Board of PW Eagle. Larry Fleming, who has been the President of the PW Poly division, will be the President of our new PW Poly subsidiary. The PW Eagle employees who worked in the PW Poly division have become employees of PW Poly. In addition, PW Poly has established its own administrative infrastructure to operate as a stand-alone entity, although it will continue to share some functions with PW Eagle for a period of time. PW Poly, together with an affiliate of William Blair Mezzanine Capital Partners and members of the management team of the acquired company, has acquired the business of W.L. Plastics, LLC. In the transaction, PW Poly will receive an equity interest in W.L. Plastics and will have the right to increase its equity ownership in W.L. Plastics to approximately 30% on a fully diluted basis by acquiring additional equity between now and January 16, 2004. PW Poly focuses on extruding small diameter polyethylene pipe in sizes up to 8 inches in diameter. While there is some overlap in sizes, W.L. Plastics focuses primarily on extruding larger diameter polyethylene pipe with the bulk of its products currently in the 8-inch to 24-inch diameter sizes. While the two businesses do not have common ownership, they do anticipate cooperating in ways that should benefit both companies. In order to maximize the value of PW Poly, including its investment in W.L. Plastics, management believes that it is important that it be separated entirely from the PVC pipe business. As a result, PW Eagle intends spin-off the PW Poly shares to the PW Eagle shareholders. PW Eagle anticipates that it will distribute one share of PW Poly stock for each share of PW Eagle stock held by those shareholders of PW Eagle who beneficially own 8,000 shares or more of PW Eagle stock. Those shareholders of PW Eagle who beneficially own less than 8,000 shares will receive a cash distribution for each of their shares of PW Eagle stock in an amount equal to the value of a share of PW Poly stock. The exact amount of the cash dividend has not been finalized. The Company expects to announce the full details of the transaction later this fall and expects that the distribution will occur most likely during January 2004. To raise the funds necessary to make the cash dividend, PW Eagle intends to sell shares of PW Poly to a limited number of accredited investors in a private sale. As a result, those shareholders of PW Eagle who beneficially own at least 8,000 shares of PW Eagle will own the same percentage of PW Poly on a fully diluted basis as they own of PW Eagle on a fully diluted basis. Those shareholders of PW Eagle who beneficially own less than 8,000 shares of PW Eagle will not own any portion of PW Poly, but will receive a cash dividend with a value on a per share basis equal to the value of a share of PW Poly. The holders of warrants to acquire PW Eagle stock will receive shares of PW Poly on the same basis they would have received if they had already exercised the warrants. The holders of options to acquire PW Eagle stock will receive an option to acquire a similar number of shares of PW Poly. This distribution of PW Poly shares or cash to the shareholders of PW Eagle stock is subject to final approval by an independent committee of the Board of Directors of PW Eagle, the issuance of an opinion as to the PW Eagle independent committee as to the value of PW Poly by an independent investment banker, the approval of the transaction by PW Eagle's lenders and certain governmental approvals and the private sale of some of the shares of PW Poly by PW Eagle to raise the cash necessary to make the cash distribution. The Company anticipates that all of these conditions will be satisfied and the distribution of PW Poly shares and cash will occur within 90 to 120 days. A record date for this transaction has not yet been established. This transaction will be a taxable event for PW Eagle and will also be a taxable event for the PW Eagle shareholders. Mr. Spell in commenting on the PW Poly transaction said, "Although our polyethylene pipe business is a very nice small business, we do not believe that its value will be fully recognized as long as it is a part of PW Eagle. By making it a stand-alone business with its own management team, credit facility and infrastructure, it will have the ability to grow and prosper. The Board plans to grow PW Poly both organically and through acquisition in the small diameter polyethylene pipe business. This segment of the industry is very fragmented and provides a good opportunity to grow through acquisition. The distribution to the shareholders of PW Eagle will permit all PW Eagle shareholders to recognize the current value of PW Poly either by receiving shares of its stock or receiving an immediate cash distribution. This value is greatly enhanced by PW Poly's interest in W.L. Plastics, which provides participation in the growing large diameter segment of the polyethylene pipe industry." Amended Credit Facilities The Company has entered into amendments to its credit agreements with both its senior and subordinated debt lenders. These amendments positively adjust the financial covenants for the balance of 2003 to reflect the difficult economic environment in which the Company has been operating this year. As a result, the Company was in compliance with all of its credit agreements at the end of the third quarter, ending September 30, 2003, and expects to remain in compliance through the end of the year. These amendments should provide the Company with ample time to further adjust its balance sheet and revise its loan arrangements so as to avoid future covenant defaults. Mr. Spell commented, "I am pleased that both our senior and subordinated debt lenders have been willing to work with us through what has been a very difficult economic environment in our industry. While the economic conditions in our industry in the second and much of the third quarter have been at least as bad as those we faced in 2001, we have been able to maintain significant positive cash flow as a result of our restructuring and cost saving efforts in 2001 combined with our ongoing focus on improving our efficiency and reducing our costs." Additional Balance Sheet Plans The proceeds to the Company from many of the transactions announced and discussed today will reduce the Company's senior debt. This debt reduction together with the synergies from combining the PW Pipe and ETI businesses and the improving economic environment may make it possible for PW Eagle to repay some or all of its subordinated debt. In order to accomplish this repayment, the Company has retained an investment banker to seek additional equity for the Company. PW Eagle is also currently in discussions with its senior lenders with respect to entering into a revised, enhanced credit facility that would dramatically reduce the fixed charges and provide increased liquidity to the Company. Obtaining this revised credit facility and paying off the subordinated debt will be conditioned on completing some or all of the additional transactions discussed above as well as obtaining all or a portion of the equity infusion that the Company is seeking. Mr. Spell concluded, "I am very excited about these strategic developments and am very optimistic about the future of PW Eagle. With the transactions and management changes that we announced today, we have made significant progress towards our goals of deleveraging the Company, strengthening our balance sheet, focusing on our core PVC pipe business, becoming an even more efficient and low cost producer and increasing our operational flexibility. We will continue to work to implement this strategy by pursuing the additional transactions that were announced today. Our plan for eliminating the subordinated debt, providing additional equity footing for the Company and entering into a senior credit facility will provide us with significantly more financial flexibility and should make PW Eagle a stronger company. We are confident that PW Eagle is positioned to take advantage of the improvement in the general economy and the continuing recovery in the plastic pipe industry." Conference Call and Webcast PW Eagle will hold a webcast and conference call today at 2:30 p.m. Central Time to discuss this strategic initiative. The conference call will be available live on the Internet at http://www.pweagleinc.com The call will also be archived at that location for one week following its original webcast. The conference call telephone number is 1-800-946-0719. Use 100268 as the confirmation code to access the call and please call a few minutes before the beginning of the call. PW Eagle, Inc. is a leading producer of PVC pipe and also produces polyethylene pipe through its PW Poly subsidiary. The Company operates eleven manufacturing facilities in the United States. PW Eagle's common stock is traded on the Nasdaq National Market under the symbol "PWEI." The Company's periodic reports filed with or furnished to the Securities and Exchange Commission are available on their Web site at http://www.pweagleinc.comunder the heading "Investor Relations." * * * Liquidity and Capital Resources In its recent Form 10-Q filed with the Securities and Exchange Commission, the Company reported: "We had negative working capital of $2.8 million and excess borrowing capacity under our Revolving Credit Facilities of $12.5 million at June 30, 2003. "Cash provided by operating activities was $1.6 million in the first 6 months of 2003 compared to $16.1 million in the first six months of 2002. The primary use of cash was funding the increase in inventory. "Investing activities utilized $28.4 million primarily for the purchase of Uponor ETI Company in the first quarter of 2003. "Financing activities provided $28.0 million during the first six of 2003. The primary source of cash in the first and second quarter of 2003 was borrowings under the Senior Credit Facility of ETI and the Revolving Credit Facility of PW Eagle. The Company made a final payment of $0.6 million to the original owners of our previously owned Hillsboro, Oregon manufacturing facility. Debt issuance and financing costs of $0.5 million were incurred in connection with the establishment of ETI's Senior Credit Facility. Financing activities used $17.1 million in 2002. In 2002, we entered into a sale-leaseback transaction, generating $13.4 million in proceeds. We used the proceeds to reduce term debt by $8.8 million. The remaining sale-leaseback proceeds were applied to the Revolving Credit Facility. Debt issuance and financing costs of $0.9 million were incurred to complete these transactions. These costs will be amortized and expensed as interest expense over the life of the respective loans. "We had commitments for capital expenditures of $0.6 million at June 30, 2003, which we intend to fund from operating profits. Additional sources of liquidity, if needed, include our revolving credit line. We believe we have the financial resources needed to meet our current and future business requirements, including working capital requirements. "As of June 30, 2003, the Company was in violation of certain financial institution loan covenants on its PW Eagle senior debt, including the funded debt to EBITDA and the net worth covenants. The financial institutions have since waived the condition of non- compliance with these covenants at June 30, 2003. Under current industry conditions and debt structure, it is likely that the Company will be in violation of these same covenants in future periods. Therefore, the Company has reclassified a portion of its long term debt from long term to current as of June 30, 2003, in accordance with Emerging Issues Task Force No. 86-30, 'Classification of Obligations When a Violation is Waived by the Creditor.' It is also likely under current industry conditions and debt structure that the Company will be in violation of financial covenants related to its subordinated debt and ETI senior debt in future periods. As the Company was in compliance with the covenants related to its subordinated debt and ETI senior debt at June 30, 2003, the long term portion of these debts are not reclassified to current in accordance with EITF 86-30. There is no assurance that our lenders, note holders and lessors will waive any future default or agree to any future amendments of our credit facilities and leases. If we fail to obtain a waiver or amendment, we would be required to obtain new financing from alternative financial sources. There is no assurance that we could obtain new financing, and if we did, there is no assurance that we could obtain terms as favorable as our current credit facilities." QUEBECOR MEDIA: Videotron Settles Terms of Senior Notes Offering ---------------------------------------------------------------- Quebecor Media Inc. announced that its wholly-owned subsidiary, Videotron Ltee, has settled the terms of its previously announced private placement of Senior Notes. The offering will consist of US$335.0 million aggregate principal amount of 6-7/8% Senior Notes due January 15, 2014. The Senior Notes will be sold at a discount to their face amount, which will yield net proceeds of approximately US$332 million (or approximately C$446 million) before transaction fees. The closing date of this offering is scheduled for October 8, 2003. The completion of the offering is subject to certain conditions including Videotron amending the terms of its bank credit facilities to create a new five-year term loan of approximately C$368 million. The net proceeds from the sale of the Senior Notes and the new term loan will be used to repay in full Videotron's current term loans of approximately C$770 million (including amounts payable under related derivative instruments) and its revolving borrowings of approximately C$30 million. The Senior Notes have not been, and will not be, registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. * * * As reported in Troubled Company Reporter's February 13, 2003 edition, Standard & Poor's Ratings Services removed its ratings on diversified media company, Quebecor Media Inc., from CreditWatch with negative implications, where they were placed on Sept. 16, 2002, following the completion of Sun Media's refinancing that was carried out largely as expected. In addition, outstanding ratings on Quebecor Media, including the 'B+' long-term corporate credit rating, along with all ratings on subsidiaries Sun Media Corp., and Videotron Ltee, were affirmed. The outlook is stable. At the same time, ratings on Sun Media's US$97.5 million 9.5% senior subordinated notes due February 2007, and US$53.5 million 9.5% senior subordinated notes due May 2007, were withdrawn to reflect Sun Media's intention to call these notes in the near term. RANGE RESOURCES: Reduces Debt by $88 Million to $380 Million ------------------------------------------------------------ Range Resources Corporation (NYSE:RRC), in the first nine months of 2003, reduced its debt by $88 million or roughly 24%. At September 30, 2003, debt stood at $280 million, down from $368 million at year-end 2002. During the period, bank debt fell $26 million while subordinated notes and convertible debt dropped $62 million. Approximately $18 million of the reduction was attributable to the application of excess cash flow to debt repayment and $20 million resulted from retiring convertible debt at a discount. The final $50 million was achieved through the exchange of a new issue of 5.9% convertible preferred stock for debt. The preferred stock has no redemption requirements and is therefore included in stockholders' equity. During the third quarter, the Company also issued $100 million of 7.375% Senior Subordinated Notes to redeem higher cost debt which had a shorter maturity. In combination, debt retirement and the refinancing reduced the Company's annual fixed charges by approximately $4 million. Commenting, John H. Pinkerton, the Company's President, said, "In nine months, we reduced debt by 24% while increasing stockholders' equity by more than $70 million. At September 30, our debt-to- capitalization ratio fell to approximately 50%, the first time in several years we have achieved this key financial metric. With lower debt and growing cash flow, the Company's debt has fallen to less than two times current cash flow. This translates into added financial flexibility and enhances our ability to pursue our strategy of drill bit growth coupled with complementary acquisitions." Range Resources Corporation (NYSE: RRC) (S&P, B+ Corporate Credit Rating, Stable) is an independent oil and gas company operating in the Permian, Midcontinent, Gulf Coast and Appalachian regions of the United States. REDBACK NETWORKS: Launches Exchange Offer for 5% Conv. Sub Notes ---------------------------------------------------------------- Redback Networks Inc. (Nasdaq:RBAK), a leading provider of advanced telecommunications equipment, has launched an offer to exchange shares of its common stock for all of its outstanding 5% Convertible Subordinated Notes due 2007 in connection with Redback's proposed out-of-court financial restructuring. Under the terms of a lock-up agreement between Redback and certain holders of the notes, holders of approximately 67 percent in principal amount of the notes have already agreed to tender in the offer. Holders of notes will receive approximately 101.6 shares of common stock, after giving effect to an approximate 73.39:1 reverse stock split, for each $1,000 of principal amount of notes and related accrued interest exchanged. Completion of the exchange offer is conditioned upon, among other things, receipt of valid tenders from not less than 98 percent in aggregate principal amount of notes outstanding. Under the terms of the lock-up agreement, this minimum condition may not be reduced without the consent of the holders of at least two-thirds of the notes. The exchange offer will expire at 12:00 midnight, New York City time, on October 30, 2003, unless extended. The terms and conditions of the exchange offer and other important information are contained in Redback's Preliminary Prospectus/Disclosure Statement dated October 1, 2003. The dealer manager for the exchange offer is UBS Securities LLC. Holders of notes may request additional copies of the Preliminary Prospectus/Disclosure Statement and the related Letter of Transmittal by contacting The Altman Group, the information agent, at (800) 467-0671. Holders of notes may also obtain copies of the Preliminary Prospectus/Disclosure Statement at the Securities and Exchange Commission's Web site at http://www.sec.gov Separately, Redback announced that a Preliminary Proxy/Prospectus/Disclosure Statement dated October 1, 2003, is being mailed to its stockholders commencing today, October 2, 2003 in connection with a special meeting of stockholders to be held on October 30, 2003 to approve certain matters related to Redback's proposed financial restructuring. Redback (S&P, CCC+ Corporate Credit Rating, Negative) enables carriers and service providers to build profitable next-generation broadband networks. Redback's User Intelligent Networks(TM) product portfolio includes the industry-leading SMS(TM) family of subscriber management systems, and the SmartEdge(R) Router and Service Gateway platforms, as well as comprehensive User-to- Network operating system software, and a set of network provisioning and management software. Founded in 1996 and headquartered in San Jose, Calif., with sales and technical support centers located worldwide, Redback maintains a growing and global customer base of more than 500 carriers and service providers, including major local exchange carriers (LECs), inter-exchange carriers (IXCs), PTTs and service providers. REDDY ICE: $45MM Supplemental Term Loan Facility Rated at B+ ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B+' rating to packaged ice manufacturer Reddy Ice Group Inc.'s proposed $45 million supplemental term loan facility maturing 2009. Proceeds from the new facility, along with cash and $10 million of new equity, will be used to finance the company's recently announced acquisitions of Triangle Ice Co. Inc. and Service Ice. Total consideration for the transactions has not been publicly disclosed. At the same time, Standard & Poor's affirmed all outstanding ratings on Reddy Ice, including the 'B+' corporate credit rating. The outlook is stable. Standard & Poor's estimates that Dallas, Texas-based Reddy Ice would have about $332 million of total debt outstanding at closing of the transaction. The proposed supplemental term loan will be an add-on to the existing senior secured bank loan, which continues to be rated the same as the corporate credit rating. Standard & Poor's believes that lenders could expect substantial, but less than full, recovery of principal in a distressed scenario. (The rating on the proposed supplemental term loan is based on preliminary terms and is subject to review upon final documentation.) "The ratings affirmation reflects Standard & Poor's expectation that Reddy Ice will not face significant integration issues with the announced acquisitions, particularly with Triangle Ice," said credit analyst David Kang. "The purchases, providing Reddy Ice with leading market positions in North and South Carolina and Orlando, Fla., extend Reddy Ice's current business footprint in the southeast U.S. Although the transaction adds about $45 million of incremental debt, Standard & Poor's does not expect this amount to have a significant impact on credit protection measures. Nor does Standard & Poor's anticipate additional sizable acquisitions after these in the intermediate term." The speculative-grade ratings on Reddy Ice continue to reflect its narrow product focus, its participation in the highly fragmented and competitive packaged ice industry, and its leveraged financial profile. Somewhat offsetting these factors are the company's strong EBITDA margins, established infrastructure, and solid regional market positions. Reddy Ice is a leading U.S. manufacturer and distributor of packaged ice, serving more than 73,000 customer locations in 31 states and the District of Columbia. RELIANT RESOURCES: Settles Western Market Issues with FERC ---------------------------------------------------------- The Federal Energy Regulatory Commission issued an order today approving an agreement with subsidiaries of Reliant Resources, Inc. (NYSE: RRI) to settle all inquiries, investigations, and proceedings instituted by FERC involving the company in connection with FERC's ongoing review of western energy markets. The settlement does not address the pending FERC refund proceeding (Docket No. EL00-95-000). Reliant has established a reserve, totaling $103 million as of June 30, 2003, for the purposes of covering potential liability under the refund proceeding. Thursday's settlement, and the settlement with FERC trial staff announced several weeks ago regarding the so-called "Enron gaming practices," if approved by FERC, close out all outstanding FERC- initiated proceedings and investigations with regard to Reliant arising from the California and West-wide energy crisis. "Reliant must assume responsibility for its actions," said Joel Staff, Reliant's chairman and chief executive officer. "We intend to conduct our business in a fashion that not only meets the letter and spirit of the law, but also sets a standard of excellence based on the highest ideals of corporate responsibility. To this end, we have implemented a comprehensive set of reforms aimed at ensuring that all of our activities are consistent with a corporate philosophy based on these principles." According to Staff, "Resolving the issues related to California continues to be a major goal of Reliant. We are committed to cooperating with those remaining agencies that are continuing to review the events of 2000 and 2001 in an effort to resolve any other outstanding issues." Earlier this year, Reliant announced a settlement with the United States Securities and Exchange Commission and another California-related settlement with FERC. The settlement resolves all outstanding issues with respect to Reliant of FERC's western markets investigation (Docket No. PA02- 2-000), including: the show cause proceeding instituted in March, 2003, regarding certain trades that had been conducted with BP Energy (Docket No. EL03-59-000); an investigation being conducted by FERC into allegations of anomalous bidding behavior (Docket No. IN03-10-000); and an investigation being conducted by FERC into allegations of physical withholding of power. The settlement, a complete copy of which is available on the company's Web site at http://www.reliantresources.comgenerally provides that: -- All proceeds under the settlement, which could total $50 million, will be paid into a fund established at the U.S. Treasury for the benefit of California and Western electricity consumers. -- Reliant will make three settlement payments, totaling $25 million. Within 30 days of the effective date of the settlement, Reliant will pay $15 million into the fund described above. Additional payments of $5 million each shall be made on September 30, 2005 and September 30, 2006. -- In addition to the settlement payments, Reliant will also offer capacity from a portion (totaling 824 megawatts) of its generation portfolio in California to the market for 2004, 2005, and 2006 on a unit-contingent, gas-tolling basis. Reliant will pay the difference, up to $25 million, between the collected auction revenues and Reliant's projected cash costs to generate the power into the fund described above. The requirement to offer this capacity to the market ceases at the earlier of three years, or the point in time when projected auction revenues less Reliant's cost to generate power reach $25 million. -- For a period of 12 months following the effective date of the settlement, Reliant's sales in the Western power market will be subject to review, and Reliant will report sales data to FERC on a transaction-by-transaction basis. Reliant has also made other commitments in the settlement regarding providing information to FERC upon request. Under the terms of the settlement, Reliant will continue to retain the ability to make sales of power at market-based rates. FERC also found no reason to investigate Reliant further with respect to physical withholding of power. In addition, the FERC order issued Thursday in connection with the settlement clarified that portion of the FERC Staff Report issued earlier this year regarding Reliant's gas trading activities at the Topock trading hub. Thursday's order acknowledges that the investigation found no evidence that Reliant had any intent to manipulate gas prices and that Reliant's trading activities were subject to FERC's jurisdiction and were not prohibited by FERC regulations or Reliant's blanket gas marketing certificate. The Commission explicitly found that no remedy was appropriate. Reliant Resources, Inc. (NYSE: RRI) (Fitch, B+ Senior Secured Debt Ratings), based in Houston, Texas, provides electricity and energy services to retail and wholesale customers in the U.S. and Europe, marketing those services under the Reliant Energy brand name. The company provides a complete suite of energy products and services to approximately 1.7 million electricity customers in Texas ranging from residences and small businesses to large commercial, industrial and institutional customers. Reliant also serves large commercial and industrial clients in the PJM (Pennsylvania, New Jersey, Maryland) Interconnection. The company has approximately 22,000 megawatts of power generation capacity in operation, under construction or under contract in the U.S. and nearly 3,500 megawatts of power generation in operation in Western Europe. For more information, visit http://www.reliantresources.com SAFETY-KLEEN CORP: Wants to Implement Records Management Policy --------------------------------------------------------------- Safety-Kleen Corp. and its direct and indirect debtor-subsidiaries seek the Court's authority to implement a records management policy. Implementing a comprehensive records management policy is an important step in the Debtors' emergence from Chapter 11. Currently, the cost of retaining and storing historical documents exceeds $250,000 per year. In addition, costs continue to rise as the Debtors are required to store more current documents in the absence of a comprehensive records management policy to permit the destruction of appropriate records. The proposed Records Management Policy will result in significant savings for the Debtors and allow them to effectively manage their records in compliance with applicable business, regulatory and legal requirements. Why The Debtors Have So Many Records The Debtors are the product of numerous successive business combinations. SKC was incorporated in Delaware in 1978 as Rollins Environmental Services, Inc. On May 15, 1997, pursuant to a stock purchase agreement among Rollins, Laidlaw Inc., a Canadian corporation, and subsidiary, Laidlaw Transportation Inc., Rollins acquired the hazardous and industrial waste operations of Laidlaw. At the same time, the continuing legal entity changed its name from Rollins to Laidlaw Environmental Services, Inc. At that time, most of the records in the former Rollins headquarters in Wilmington, Delaware were shipped to the LESI headquarters in Columbia, South Carolina. These documents are currently stored in offsite warehouses in Columbia, South Carolina at a significant cost. Many of these records are obsolete and have remained undisturbed since arriving from Delaware in 1997. On May 26, 1998, LESI completed the acquisition of the former Safety-Kleen Corp., a Wisconsin corporation. In that connection, Old Safety-Kleen changed its name to Safety-Kleen Systems, Inc. Effective July 1, 1998, LESI began doing business as the current SKC. Prior to the Safety-Kleen Acquisition, both LESI and Old Safety-Kleen had been aggressive acquirers of other companies. Primarily, the records of an acquired company would be boxed up and shipped to a warehouse for future handling. Thousands of Boxes of Documents As a result of these business combinations, the Debtors have tens of thousands of boxes of documents from their predecessors-in- interest stored in various warehouses. Many of these historic documents do not relate to the Debtors' current business. There also are additional storage costs for magnetic and electronic media. In addition to these historic documents and electronic media, the Debtors continue to produce and receive numerous documents in the ordinary course of their business. It is critical that the Debtors have the ability to systematically and efficiently manage these records. There is simply no reason for the Debtors to continue to incur the costs of maintaining and storing obsolete documents. The proposed Record Management Policy will provide the Debtors with a carefully designed template to control the organization, dissemination, retention and ultimate disposition of their records. Records Management Policy Should Be Approved The purpose of the Records Management Policy is to provide uniform guidelines and procedures for the maintenance, retention and reduction of the Debtors' records in accordance with operational, corporate and legal requirements. The Records Management Policy applies to all records the Debtors or their employees create or receive within the scope of the Debtors' business. The Records Management Policy is carefully designed to ensure that the Debtors: (i) comply with federal, state and local laws and regulations with respect to retention and management of records; (ii) have a system for efficiently filing, storing and retrieving information; and (iii) can efficiently dispose of records that are no longer needed for a legal or business purpose. The Records Management Policy will enhance the Debtors' ability to manage their documents and eliminate the cost of storing obsolete documents. The Records Management Policy has been designed to comply with all laws relating to the retention of documents. In addition, the Records Management Policy addresses the need to maintain and preserve those documents needed for the Debtors to finally and fully resolve any disputed claims in these Chapter 11 cases. The Debtors believe that they may implement the Records Management Policy in the ordinary course of their business. However, out of an abundance of caution, the Debtors seek Court approval of the proposed Records Management Policy. In this Circuit, a debtor's sale or use of assets outside the ordinary course of business should be approved by the Bankruptcy Court when the debtor has demonstrated a sound business justification for the proposed transaction. In Safety-Kleen's case, the "sound business justification" test is satisfied. First, the Records Management Policy benefits the Debtors by: (i) providing uniform guidelines and procedures for the maintenance, retention and reduction of the Debtors' records, and (ii) reducing the number of unnecessary documents stored in third party warehouses, thus resulting in significant annual savings in storage costs. Second, the Debtors believe that by implementing the Records Management Policy, they will be able to more efficiently control the dissemination, retention and ultimate disposition of their records. The Records Management Policy Company employees will be appointed to serve as Records Manager and Records Custodians. The Debtors' Legal Department will research, approve and periodically revise the records policy as appropriate. The Internal Audit Department will likewise verify on a regular basis that the records policy is being maintained. All company employees are directed not to take notes of meetings for which formal minutes are prepared. Other than files approved for an employee working at home from an approved home office, no company files are to be maintained in an employee's home. All drafts of documents are to be discarded. Personal files are not to be maintained on company computers. If any employee becomes aware of a subpoena for company records, or of any threatened, imminent or pending government or regulatory investigation, litigation or claims brought by or against the Debtors, the employee is to immediately contact the Legal Department and take immediate action to preserve all potentially responsive or relevant documents. The Debtors will retain those records indefinitely, or until the Legal Department advises otherwise, whether or not the Debtors' record retention policy would otherwise provide for the deletion or destruction of those records in the ordinary course of business. The Debtors' policy directs that records should never be selectively destroyed. Only entire groups or classes of records should be routinely destroyed in accordance with the policy and in the ordinary course of the Debtors' businesses. Records that have been sent to the Records Custodians, are held in storage, and have met their retention period, will be destroyed on a regular basis. Records Custodians and the Legal Department will be advised of any scheduled destruction of records at least 90 days before destruction. Objections (1) Shell Oil Company, Shell Chemical Company, Shell Offshore, Inc., SWEPI and Syngenta Crop Protection formerly known as Novartis Crop Protection formerly known as Ciba Geigy Corporation Brian A. Sullivan, Esq., at Werb & Sullivan, in Wilmington, Delaware, relates that a civil action was filed on May 10, 1996 in the 18th Judicial District Court in the Parish of Iberville, State of Louisiana, entitled "Carton Gene Rineheart, et al v. Ciba-Geigy Corporation, et al." This action was subsequently removed to the United States District Court for the Middle District of Louisiana. On August 4, 2000, Chief Judge Frank J. Polozola of the Middle District of Louisiana assigned the case to District Judge Richard Haik of the Western District of Louisiana. This civil proceeding was transferred to the United States District Court for the Western District of Louisiana on January 2, 2001. A second civil action was filed on October 1, 1999 in the 15th Judicial District Court in the Parish of Lafayette, State of Louisiana, entitled "Bryson Adams, et al. v. Environmental Purification Advancement Corporation, et al." This action was removed to the United States District Court for the Western District of Louisiana. On January 2, 2001, the case was transferred to the United States District Court for the Western District of Louisiana and assigned to District Judge Richard Haik of the Western District of Louisiana. These two civil proceedings -- Rineheart and Adams -- have been pending for several years. Due to the large number of plaintiffs and defendants involved in these matters and the complexity of the issues involved in these proceedings, a time frame as to the resolution of the litigation is unknown. Therefore, all environmental documents and/or reports of any nature must be retained until the completion of the Bryson Adams Litigation due to the uncertainty as to the amount and extent of the alleged personal injuries, alleged property damage arising out of operation of certain waste disposal facilities in Louisiana, and alleged failure of the defendants to properly store, dispose, transport or treat materials which were stored and disposed of at the Environmental Purification and Advancement, Inc., and the Clean Land, Air and Water, Inc. sites. In addition, the contamination through release of hazardous materials allegedly began as early as 1976 and has continued through the present date. There are open issues as to the extent and area contaminated either by air, water supply, or by the transporting of hazardous materials from the site. There is no proposed resolution or trial date set in the Bryson Adams Litigation yet. Therefore, the Records Management Policy should not apply to any and all environmental documents and reports relating to, effecting, or in any way pertaining to Bryson Adams Litigation. Therefore, Shell and Syngenta ask Judge Walsh not to approve the Debtors' Records Management Policy as it relates to any and all environmental documents and reports relating to, effecting, or in any way pertaining to the Bryson Adams Litigation. Alternatively, Shell and Syngenta ask the Court to exclude from the scope of the Records Management Policy any and all environmental documents and reports relating to, effecting, or in any way pertaining to the Bryson Adams Litigation. (2) PricewaterhouseCoopers LLP (Canada) According to Kathleen M. Miller, Esq., at Smith Katzenstein Furlow LLP, in Wilmington, Delaware, and Richard Cashman, Esq., at Heller Ehrman White & McAuliffe LLP, in New York, while PwC Canada is sympathetic to the Debtors' desire to reduce its document storage costs, PwC Canada objects to the proposed policy because Safety- Kleen has brought a lawsuit against PwC Canada, and, unless clarified, the proposed Records Management Policy may permit Safety-Kleen to destroy business records necessary and relevant to PwC Canada's defense of the pending litigation. PwC Canada is a limited liability partnership organized under the laws of the Province of Ontario, Canada. It provides auditing services in Canada. Safety-Kleen and others filed a lawsuit against PwC Canada in October 2001 in the Circuit Court of South Carolina, Richland County. The lawsuit is captioned "Safety-Kleen Corp. et al. v. PricewaterhouseCoopers LLP and PricewaterhouseCoopers LLP (Canada)." The Litigation is currently in the pre-trial discovery stage, with trial scheduled for the Spring of 2004. It is not an inconsequential matter. It involves complex business transactions and Safety-Kleen is seeking damages of no less than $1 billion. Safety-Kleen asserts in the Litigation claims against PwC Canada for negligent misrepresentation and professional negligence. Those claims involve, among others, 1996 financial statements issued by Laidlaw Environmental Services, Inc., in connection with the acquisition of LESI in 1997 by Rollins Environmental Services, Inc. While Safety-Kleen already has produced many documents in connection with the Litigation, more and more documents are being produced as discovery continues. By way of example, as a result of deposition testimony, Safety-Kleen recently reported that it had found 58 boxes of additional materials stored in a warehouse that had to be produced for the parties' review. Those documents related to the Rollins transaction and, though called for by previous document demands, had never been produced. Apparently, Safety-Kleen had not even thought to look for those documents until after the deposition had occurred. By way of further example, Safety-Kleen has been asked to produce still more documents relating to the Rollins transaction, including documents maintained by Rollins itself, like Rollins' loan documents, and documents pertaining to Rollins' due diligence efforts and negotiation of the transaction with LESI. Whether additional documents responsive to these requests will be produced is still to be determined. In any event, discovery is continuing and all documents relevant to the case must be maintained in their original state if the parties are to be able to present the case fairly at trial. Although PwC Canada does not believe that the proposed Records Management Policy was intended to permit the destruction of documents relevant to litigation already pending, the proposed Policy is ambiguous in this regard. For example, while the proposed Policy requires the retention of documents newly subpoenaed in connection with a litigation that a Safety-Kleen employee becomes aware of after adoption of the Policy, the Policy is silent about the need to retain documents relevant to litigation that an employee was aware of before the adoption of the policy. That is PwC Canada's concern. While PwC Canada does not object to the implementation of a records management policy by Safety-Kleen, PwC Canada objects to the extent that the proposed Records Management Policy does not adequately protect its interest in the preservation of documents relevant to the Litigation. Given that Safety-Kleen also should be concerned with preserving all such documents, it should have no objection to a revision to its proposed order, which states that: "The [granting of the Motion] notwithstanding, the Debtors shall retain all documents in their possession relevant to the issues in the action filed by Safety-Kleen Corp. in the Circuit Court of South Carolina, Richland County, captioned Safety-Kleen Corp., et. al. v. PricewaterhouseCoopers LLP and PricewaterhouseCoopers LLP (Canada), Case No. 01-CP-40-4213, pending the final outcome of that litigation." Ms. Miller explains that this new paragraph actually does no more than restate Safety-Kleen's existing obligations under the law -- to preserve all documents relevant to a lawsuit it itself has brought. PwC Canada is concerned that without the insertion of this language, documents needed for its defense of the Litigation may be destroyed. (Safety-Kleen Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service, Inc., 609/392-0900) SANMINA-SCI: Set Fourth-Quarter Conference Call for October 23 -------------------------------------------------------------- In conjunction with Sanmina-SCI Corporation's (Nasdaq: SANM) Fiscal 2003 Fourth Quarter earnings elease, you are invited to listen to its conference call that will be broadcast live over the Internet on Thursday, October 23, 2003 at 5:00 PM EDT. Mr. Jure Sola, Chairman and Chief Executive Officer of Sanmina-SCI Corporation will lead the call. What: Sanmina-SCI Corporation's Fiscal 2003 Fourth Quarter Earnings When: Thursday, October 23, 2003 at 5:00 PM EDT Web Link: http://www.firstcallevents.com/service/ajwz389714523gf12.html Teleconference Dial in Number: 877-273-6760 - Domestic Information: 706-634-6605 - International Contact: Sanmina-SCI's Investor Relations at 408-964-3610 Sanmina-SCI Corporation is a leading electronics contract manufacturer serving the fastest-growing segments of the global electronics manufacturing services market. Recognized as a technology leader, Sanmina-SCI provides end-to-end manufacturing solutions, delivering unsurpassed quality and support to large OEMs primarily in the communications, defense and aerospace, industrial and medical instrumentation, computer technology and multimedia sectors of the market. Sanmina-SCI has facilities strategically located in key regions throughout the world. More information regarding the company is available at http://www.sanmina-sci.com * * * As reported in Troubled Company Reporter's August 21, 2003 edition, Fitch Ratings initiated coverage of Sanmina-SCI Corp. The company's first-lien senior secured bank facility is rated 'BB+', the second-lien senior secured notes are rated 'BB', and senior subordinated notes are rated 'B+'. The Rating Outlook is Stable. Approximately $2.1 billion of debt is outstanding. The ratings reflect customer and industry concentration, pricing pressures including for printed circuit board fabrication, lower but improved capacity utilization levels, and execution risk relating to the company's various restructuring programs. Also considered are the company's leading position in the Electronics Manufacturing Services industry, consistent operating cash flow and free cash flow, improved capital structure and working capital metrics, and unique operating model and strong long-term management team. The Stable Rating Outlook reflects the company's consistent revenue base, stabilizing but still challenging demand environment for its end markets, and cost cutting initiatives, especially for the PCB segment, which continues to experience operating losses but is generating cash. Even though Fitch expects third quarter weakness for the European market as well continued pressure on telecommunications capital spending, Sanmina has flexibility within the current ratings for moderate operational and industry shortfalls. SEMCO ENERGY: Moody's Revises Low-B Ratings Outlook to Negative --------------------------------------------------------------- Moody's Investors Service confirmed the ratings of Port Huron, Michigan-based diversified natural gas distribution company SEMCO Energy, Inc. (Ba2 senior unsecured) and changed the outlook to negative. Affected ratings are: SEMCO Energy, Inc. - senior unsecured Ba2, - subordinated Ba3, - shelf (P)Ba2 senior unsecured/(P)Ba3 subordinated SEMCO Capital Trust I -- trust preferred Ba3. The change in outlook reflects continuing profit pressures from the underperformance of SEMCO's construction business ($9 million negative EBIT from construction vs. $49 million consolidated EBIT in the last twelve months ended 6/30/03), relates Moody's. The business is suffering from a cyclical slump and difficult competitive conditions, and it is uncertain when it might turn around. If negative operating earnings in the construction segment persist, they will depress SEMCO's debt coverages and could test its cushion under its credit facility covenants, particularly if the company decides to take impairment charges. Moody's says it will closely monitor the performance of SEMCO's construction business and its success in curtailing capital expenditures in order to minimize cash losses for the segment. "We will also monitor the progress in selling APC. Further deterioration in construction, potential for covenant violations, and inability to consummate the APC sale in a timely manner would result in a rating downgrade," according to Moody's. SHAW GROUP: Names Tim Barfield President/Chief Operating Officer ---------------------------------------------------------------- The Shaw Group Inc. (NYSE: SGR) has expanded its executive management team. Tim Barfield, currently President of Shaw Environmental and Infrastructure, Inc., has been named President and Chief Operating Officer of The Shaw Group Inc. Mr. Barfield will also serve on the Company's Board of Directors. J.M. Bernhard, Jr. will continue as the Company's Chairman and Chief Executive Officer. Diana Severs Ferguson succeeds Mr. Barfield as President of Shaw E&I. "Tim has played a key role in Shaw's growth and success during his nine-year tenure. He has consistently demonstrated the ability to execute strategically, manage effectively and deliver solid results," stated J.M. Bernhard, Jr. "Tim has been instrumental in helping shape the Company's vision and has earned the respect of industry peers as well as Shaw's management and employees. I look forward to working closely with Tim as Shaw continues efforts to streamline operations and expand our global market penetration," Bernhard added. Mr. Barfield joined The Shaw Group in 1994 and has served in various roles within the organization including Secretary and General Counsel, Managing Director of Shaw U.K., President of Shaw APP, and Senior Vice President of Special Projects. He has served as President of Shaw E&I since Shaw acquired The IT Group, Inc. in May 2002 and has directed and managed the integration of The IT Group's operations into Shaw. Prior to his role as President of Shaw E&I, Mr. Barfield was Senior Vice President of Special Projects and Assistant to J.M. Bernhard, Jr. In this position, Mr. Barfield was responsible for Shaw's strategic initiatives and projects, including mergers and acquisitions, post-merger integration, financial transactions, strategic customer alliances, and operations oversight. Prior to joining Shaw, Mr. Barfield practiced law with Vinson & Elkins LLP concentrating in securities, financing, and mergers and acquisition matters. Mr. Barfield holds a Bachelor of Science in Business Administration and Juris Doctorate from Louisiana State University. Prior to joining Shaw, Diana Severs Ferguson served as President, Defense Group at Fluor Corporation. The position charged her with the business responsibilities for all of Fluor's defense business with the federal government, including business unit operational and financial performance, customer relationship management, business development, sales and strategic planning. Ms. Severs Ferguson comes to Shaw following a 23-year career with Fluor in which she moved up the ranks from project management positions to executive positions in consumer products, sales, marketing and strategic planning. Ms. Severs Ferguson holds a Bachelor of Science in Civil/Structural Engineering from the University of California, Irvine. "We are fortunate to have someone of Diana's professional stature on our executive management team," said Mr. Barfield. "Diana has a proven track record of delivering on strategy and generating results. She brings a wealth of experience and expertise to Shaw and will help us move forward strategically using new implementation tactics." The changes that come along with Mr. Barfield's move to President and COO and Ms. Severs Ferguson's arrival at Shaw bring an expansion to the Company's executive team, including some shifts in responsibility and new placements. Richard F. Gill, who previously served as the Company's COO, will continue in his role as Executive Vice President, now with a primary focus on leading and coordinating certain key strategic initiatives and customer relationships. Mr. Gill has also been named Chairman of the Executive Committee, whose primary objective is to coordinate the implementation of the Company's strategic plan, with a particular emphasis on Shaw's interdivisional initiatives. The Company has also appointed Chief Information Officer G. Patrick Thompson, Jr. to Senior Vice President of Administration. In his expanded role with Shaw, Mr. Thompson will continue as CIO and will oversee business integration opportunities as well as key administrative areas of the Company including facilities management, risk management and insurance. "Expanding Shaw's leadership team is part of our strategic plan," said Mr. Bernhard. "Streamlining our operations, focusing on profitability and adding depth to our management team provides us with a solid platform on which to build for our future and realize our full potential in the marketplace." The Shaw Group Inc. (S&P, BB Corporate Credit and Senior Unsecured Bank Loan Ratings, Negative) is a leading global provider of engineering, procurement, construction, maintenance, fabrication, manufacturing, consulting, remediation, and facilities management services for government and private sector clients in the power, process, environmental, infrastructure and homeland defense markets. The Company is headquartered in Baton Rouge, Louisiana and employs approximately 17,000 people at its offices and operations in North America, South America, Europe, the Middle East and the Asia-Pacific region. For further information, visit the Company's Web site at http://www.shawgrp.com SIEBEL SYSTEMS: Reports Prelim. Results for September Quarter ------------------------------------------------------------- Siebel Systems, Inc. (Nasdaq:SEBL), a leading provider of eBusiness applications software, announced preliminary results for the quarter ended September 30, 2003. The company expects total revenues for the third quarter of 2003 to be in the range of $320 million to $322 million and license revenues to be in the range of $109 million to $110 million. The company's estimated cash, cash equivalents, and short-term investments were approximately $2.024 billion as of September 30, 2003, the net result of approximately $30 million in cash generated from operations during the quarter offset by a reduction of $308 million from the redemption of convertible debt. The redemption of convertible debt eliminated substantially all of the company's debt as of September 30, 2003. The company expects its net loss for the third quarter, including restructuring and other charges, to be approximately $0.12 per share. These charges relate to the company's previously announced restructuring and debt repurchase. The company expects its earnings per share for the third quarter of 2003, excluding restructuring and other charges, to be approximately $0.03 per share. Specifically, the company expects to report the following restructuring and other charges for the third quarter of 2003: - Restructuring and other related charges of approximately $107 million. - Debt retirement and associated costs of approximately $11 million incurred in connection with the repurchase of the company's $300 million convertible subordinated debentures. This charge will be recorded against Other Income. - A tax benefit associated with both of these charges of approximately $42 million. With the completion of these restructuring activities, the company is on track to achieve its previously stated goals of $30 million per quarter in savings in the fourth quarter of 2003 and $40 million per quarter in savings by the second half of 2004 compared with Q2 2003 expenses prior to the initiation of this restructuring. Headcount as of September 30, 2003 was 4,984. Siebel Systems, Inc. (Nasdaq:SEBL) (S&P, BB Corporate Credit and B+ Subordinated Ratings), is a leading provider of eBusiness applications software, enabling corporations to sell to, market to, and serve customers across multiple channels and lines of business. With more than 3,500 customer deployments worldwide, Siebel Systems provides organizations with a proven set of industry-specific best practices, CRM applications, and business processes, empowering them to consistently deliver superior customer experiences and establish more profitable customer relationships. Siebel Systems' sales and service facilities are located in more than 28 countries. SPHERION CORP: S&P Affirms B+ Rating with Negative Outlook ---------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on Spherion Corp. to negative from stable and affirmed its 'B+' corporate credit rating. Standard & Poor's withdrew its ratings on Spherion, reflecting the relatively small amount of debt and a low level of market visibility. The Ft. Lauderdale, Fla.-based personnel services provider had total debt of $98 million and $90 million in cash as of June 27, 2003. "The outlook revision reflects poor profitability, and Standard & Poor's concern that cash balances may be reduced should staffing industry conditions remain depressed over the near-intermediate term," said Standard & Poor's credit analyst Hal Diamond. EBITDA was minimally positive for the six months ended June 30, 2003, reflecting declining demand, pricing pressures, and higher payroll costs. The company has not achieved profitable business diversity, as earnings are weak in all of the company's three staffing segments. Recruitment revenues (70% of the total) decreased 3% in the first half of 2003 on lower demand and pricing pressures. The staffing business incurred a $2.5 million operating loss compared to segment operating profit of $3.8 million in the prior year. Technology revenues (15% of total) decreased 19% due to continued lower demand for IT staffing services, while segment operating profit fell 78% due to unabsorbed overhead. Outsourcing revenues decreased 10% primarily due to the loss of customer contracts, and segment operating profit decreased 37%. Spherion has implemented a number of cost-containment initiatives, including staff reductions and office consolidations. However, these measures are offset by the weak staffing industry environment, strained information technology budgets, and the company's goal to rapidly grow its outsourcing business. Spherion has expanded its selling organization, but Standard & Poor's is concerned about future returns on this investment. SOUTHERN UNION: $200MM Preferred Stock Earns S&P's BB+ Rating ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB+' rating to the Southern Union Co.'s $200 million 7.55% noncumulative preferred stock. The outlook is stable. Pennsylvania-based Southern Union had $2.6 billion of total debt outstanding as of June 30, 2003. The preferred stock is callable in five years. Ownership of the preferred stock is represented by depositary shares, each equal to 10% of a $250 preferred share. Proceeds will be used to redeem the company's $100 million 9.48% trust originated preferred shares. Remaining funds will be used to pay down other debt. "The stable outlook reflects management's commitment to substantial debt reduction following the acquisition of Panhandle Eastern Pipe Line," said Standard & Poor's credit analyst Judith Waite. "Using cash from operations and the proceeds from asset sales, Southern Union's consolidated debt will be lowered to around 55% of capital within the next 12 to 18 months, a level that is more appropriate for the current 'BBB' corporate credit rating," added Ms. Waite. STARWOOD HOTELS: Will Publish Third-Quarter Results on Oct. 30 -------------------------------------------------------------- Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) will release the Company's third quarter financial results prior to market open on Thursday, October 30, 2003, followed by a conference call at 10:30 a.m. (eastern). The conference call will include a brief discussion of the quarter followed by questions and answers. The call will be moderated by Dan Gibson, Senior Vice President, Corporate Affairs and will include remarks by Barry Sternlicht, Chairman and Chief Executive Officer and Ron Brown, Executive Vice President/Chief Financial Officer. Participants may listen to the simultaneous webcast of the conference call by logging onto the company website http://www.starwood.com choosing "Press Releases" within the Investor Relations section of the website at 10:30 a.m. eastern. In addition, a replay has been arranged, which will air from Thursday, October 30 at 1:30 p.m. (eastern) through Thursday, November 6 at 8:00 p.m. The replay will be available on the Company's website or by dialing 719-457-0820 (access code is 636297). Starwood Hotels & Resorts Worldwide, Inc. (Fitch BB+ Convertible Debt Rating, Negative) is one of the leading hotel and leisure companies in the world with 740 properties in more than 80 countries and 105,000 employees at its owned and managed properties. With internationally renowned brands, Starwood is a fully integrated owner, operator and franchisor of hotels and resorts including: St. Regis, The Luxury Collection, Sheraton, Westin, Four Points by Sheraton, W brands, as well as Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts. For more information, visit http://www.starwood.com TCW LINC: Fitch Slashes Two Note Ratings to Junk and D Levels ------------------------------------------------------------- Fitch Ratings downgrades two tranches of notes issued by TCW Leveraged Income Trust, L.P. (TCW LINC) and takes them off Rating Watch Negative. At this time the senior secured credit facility has been paid in full. The following rating action is effective immediately: --$70,500,000 senior secured notes due Sept. 30 2003 to 'DDD' from 'BB'; --$105,000,000 subordinated secured notes due March 31, 2004 to 'CC' from 'CCC'. TCW LINC, a market value collateralized debt obligation that closed on March 26, 1997, is managed by TCW Investment Management Company. The legal final maturity date of the senior secured notes was Sept. 30, 2003. The rating of the senior secured notes addressed the full payment of interest and principal by the legal final maturity date. The original balance of the senior secured notes was $150,000,000. On Sept. 30, 2003, the senior secured notes were not paid in full and the notes are currently in payment default. The issuer's failure to redeem the senior secured notes on the legal final maturity date triggered the further downgrade of these notes. As of the latest valuation report available, Sept. 12, 2003, the overcollateralization ratio of the senior secured notes was 141%. Given this asset coverage and the ability to realize value on the portfolio investments through an orderly liquidation over time, full recovery is expected on the remaining balance of the senior secured notes. Furthermore, the subordinated secured notes are downgraded to 'CC' and removed from Rating Watch Negative at this time. These notes are not in payment default, as their legal final maturity date is March 31, 2004. Fitch will continue to monitor and review this transaction for future rating adjustments. TECO ENERGY: Completes Sale of Hardee Power Station for $100MM -------------------------------------------------------------- TECO Energy's (NYSE: TE) TECO Power Services subsidiary reported that it completed the sale of Hardee Power Partners, Ltd., the owners of the Hardee Power Station effective September 30th to an affiliate of Invenergy LLC and GTCR Golder Rauner LLC. The sale, originally announced August 26, 2003, will generate cash proceeds of about $100 million, inclusive of escrowed amounts. In addition, the purchasers assumed all project-related debt including the synthetic lease associated with the facility. The transaction resulted in a pretax book gain of more than $60 million to be recorded in the third quarter. Proceeds from the sale are expected to be used to repay short-term indebtedness and for general corporate purposes. TECO Power Services is a subsidiary of TECO Energy -- http://www.tecoenergy.com-- a diversified, energy-related holding company headquartered in Tampa. Its principal businesses are Tampa Electric, Peoples Gas, TECO Power Services, TECO Transport, TECO Coal and TECO Solutions. * * * As reported in Troubled Company Reporter's April 29, 2003 edition, Fitch Ratings downgraded the outstanding ratings of TECO Energy, Inc. and Tampa Electric Company as shown below. The Rating Outlook for both issuers has been revised to Negative from Stable. TECO Energy, Inc.: -- Senior unsecured debt lowered to 'BB+' from 'BBB'; -- Preferred stock lowered to 'BB' from 'BBB-'. TECO Finance (guaranteed by TECO) -- Medium term notes lowered to 'BB+' from 'BBB'; -- Commercial paper withdrawn. Tampa Electric Company: -- First mortgage bonds lowered to 'A-' from 'A'; -- Senior unsecured debt lowered to 'BBB+' from 'A-'; -- Unsecured pollution control revenue bonds (Hillsborough County, Florida IDA for Tampa Electric) lowered to 'BBB+' from 'A-'; -- Commercial paper unchanged at 'F2'; -- Variable rate mode unsecured pollution control revenue bonds (Hillsborough County, Florida IDA for Tampa Electric) unchanged at 'F2'. The downgrade of TECO Energy's ratings reflect the higher-than- expected debt leverage on a cash flow basis (gross debt measured against earnings before interest taxes depreciation and amortization), and the negative impact on earnings and cash flow measures from increased interest expense, weaker projected earnings and higher-than-anticipated capital expenditures. THERMACELL TECH.: Completes Merger Deal with Absolute Industries ---------------------------------------------------------------- On August 23, 2003, ThermaCell Technologies Inc. closed on an Agreement and Plan of Merger with Absolute Industries, LLC, a Texas limited liability company. Absolute is engaged in pickup, disposal, remediation and transportation of waste for residential and commercial companies, primarily in South Texas. In addition, Absolute rents containers for waste storage and disposal. Absolute had audited gross revenues of approximately $4.4 million for fiscal year ended December 31, 2002. The merger with Absolute is ThermaCell's initial step to effect a consolidation of small to medium size businesses in the solid waste disposal industry. Pursuant to the terms of the Merger Agreement, Absolute merged into a newly formed Texas corporate subsidiary of ThermaCell with ThermaCell's subsidiary being the surviving entity. As such, the prior business and operations of Absolute are now contained in ThermaCell's wholly owned Texas subsidiary. In accordance with the terms of the Merger Agreement, 100% of the equity interests of Absolute were exchanged for 27,000,000 shares of ThermaCell's Class A Convertible Preferred Stock. Each share of preferred stock is convertible into one (1) share of common stock and entitled to three (3) votes. Prior to the Merger, ThermaCell Technologies had 10,000,000 new common shares outstanding which were approved for issuance under its Plan of Reorganization, which was confirmed in August, 2002. All of such shares have been issued to the existing shareholders, creditors and debtor in possession funding source. As part of the Merger with Absolute, an additional 10,000,000 new restricted common shares were issued. 4,000,000 of such new restricted common shares were issued to Private Capital Group, Inc. - one of the managers of Pac Funding, LLC, the debtor in possession funding source. 1,000,000 new restricted common shares were issued to Thomas F. Duszynski, who is an affiliate of Augustine Fund, LP, the other co-manager of Pac Funding, LLC. 3,000,000 new restricted common shares were issued to The Harrelson Group, which acted as a finder and facilitator for this Merger. 2,000,000 new restricted common shares were issued as consideration for additional capital. Accordingly, after the Merger the issuer has 20,000,000 common shares outstanding and 27,000,000 preferred shares outstanding, each of which is converted into one (1) common share. ThermaCell changed its name to Absolute Waste Services, Inc., and increased its authorized capital stock to consist of 150,000,000 authorized common shares and 50,000,000 authorized preferred shares. As part of the Merger, the Board of Directors and officers were reconstituted to consist of James D. Wright, William M. Davis, Lawrence A. Woods, and Thomas F. Duszynski. Mr. Huggins and Mr. Hinsley resigned as directors and officers of the Company. The Company agreed not enter into any reverse stock splits until its stock is closed at or above $3.00 per share for 90 consecutive trading days, or until August 24, 2004, whichever occurs first. In connection with the Merger Agreement, Thomas F. Duszynski and Don Huggins entered into an Inducement/Indemnity Agreement, which requires Pac Funding, LLC to indemnify the Company for any liabilities, debts and obligations of the Company that existed prior to the closing date or were not otherwise discharged as part of the bankruptcy proceeding. The estimated amount of assumed liabilities by Pac Funding, LLC is approximately $340,000. In addition, Pac Funding, LLC is obligated to pay the professional fees and other expenses in connection with the Company's Form 15c2-11 application with the NASD and EDGAR filing costs through September 30, 2004. The indemnity obligations are not personal obligations or guaranties of Mr. Duszynski and Mr. Huggins, rather obligations of Pac Funding, LLC. Mr. Duszynski, Mr. Huggins and Absolute make certain other representations and warranties as is more fully set forth in the Inducement/Indemnity Agreement. In light of the Absolute merger, management of the Company is currently evaluating the alternatives that may be available relating to the future of ThermaCell Industries, Inc., a wholly owned subsidiary of the Company. ThermaCell Industries, Inc. is currently the owner of the Company's evacuated microsphere technologies. These assets are carried at a nominal value on the Company's financial statements. The physical plant and assets for microsphere evacuation is in a warehouse located in Deland, Florida. The Company is currently negotiating with other parties to potentially divest itself of such assets in order to obtain additional capital. The new CUSIP number for the Company's common shares is 00387L 10 6. On September 3, 2003 the NASD released the Company's new call symbol "ABWS", which replaces the prior call symbol "VCLL". The Company has filed a Form 15c2-11 to trade the common shares on the pink sheets and intends to submit a further application in the near future to trade on the OTC electronic bulletin board. TOM'S FOODS: Low-B Ratings Lowered on Weak Operating Performance ---------------------------------------------------------------- Standard & Poor's Ratings Services lowered its corporate credit rating on regional snack food manufacturer Tom's Foods Inc. to 'B' from 'B+' and its senior secured debt rating on Tom's Foods' 10.5% senior secured notes due Nov. 1, 2004, to 'B-' from 'B'. At the same time, Standard & Poor's revised its outlook on Tom's Foods to negative from stable. "The rating actions reflect the company's weak operating performance for the 24-week period ended June 14, 2003, and Standard & Poor's expectation of weaker credit protection measures for the full fiscal year 2003," said credit analyst David Kang. "The decline in profitability is due largely to decreased contract pack production and increased energy and commodity costs. Standard & Poor's is concerned that Tom's Foods' financial performance will continue to be pressured by challenging business conditions in the intermediate term. Moreover, the timing of any recovery in credit protection measures is uncertain." The rating actions also reflect Standard & Poor's concerns that continued deterioration in operating performance could hurt the company's ability to refinance its credit facility, which matures in August 2004, and its 10.5% senior secured notes due Nov. 1, 2004. Total debt outstanding (including outstanding borrowings on the revolving credit facility) at June 14, 2003, was about $66.5 million. The ratings on Tom's Foods Inc. reflect the company's participation in the highly competitive snack food industry and its weak financial profile. These factors are partially mitigated by the company's regional brand name, diverse product offerings, and niche distribution strategy. Columbus, Ga.-based Tom's Foods is a regional snack food manufacturing and distribution company. Its product categories include chips, sandwich crackers, baked goods, nuts, and candy. Tom's Foods competes with larger, financially stronger players in the competitive snack food industry by focusing marketing and distribution efforts in the southern U.S. Unlike most of its competitors, Tom's Foods distributes primarily through small, independent retail outlets and vending machines, rather than large national supermarket chains, mass merchants, and convenience stores. TRANSAX INTERNATIONAL: Pulls Plug on Labonte & Co. Engagement ------------------------------------------------------------- On September 22, 2003, the Board of Directors of Transax International Limited, a Colorado corporation, terminated the services of LaBonte & Co., Chartered Accountants as principal independent accountants for the Company. The termination of LaBonte is a result of the consummation of a merger between Transax Limited and Vega-Atlantic Corporation and the subsequent decision by the Board of Directors that it would be in the best interests of the Company to effect a change in auditors to the current auditors of Transax Limited. The report of LaBonte for fiscal year ended March 31, 2003 indicated the following: "In the United States, reporting standards for auditors would require the addition of an explanatory paragraph following the opinion paragraph when the financial statements are affected by conditions and events that cast substantial doubt on the Company's ability to continue as a going concern, such as those described in Note 1. Our report to the stockholders and Board of Directors dated June 3, 2002 is expressed in accordance with Canadian reporting standards which do not permit a reference to such conditions and events in the auditors' report when these are adequately disclosed in the financial statements." On September 22, 2003, the Board of Directors of the Company approved and authorized the engagement of Moore Stephens, P.C., 331 Madison Avenue, New York, New York 10017-5102 as the principal independent auditors for the Company. TRENWICK GROUP: Completes Sale of Trenwick International Limited ---------------------------------------------------------------- Trenwick Group Ltd. (in Provisional Liquidation), announced that its subsidiary Trenwick Holdings Limited has completed the previously announced sale of all of the capital stock of Trenwick International Limited, Trenwick's London-based specialty insurance and reinsurance subsidiary, currently in runoff, as well as all of the capital stock of Trenwick Management Services Ltd and Specialist Risk Underwriters Limited, to LCL Acquisitions Ltd, an associated company of the Litigation Control Group. TMS is Trenwick International's management services company. SRU is a company that has carried out underwriting agency services for Trenwick International and other entities. The Financial Services Authority of the United Kingdom has approved the transaction. Background Information Trenwick is a Bermuda-based specialty insurance and reinsurance underwriting organization with subsidiaries located in the United States, the United Kingdom and Bermuda. Trenwick's operations at Lloyd's, London underwrite specialty insurance as well as treaty and facultative reinsurance on a worldwide basis. Trenwick's United States specialty program business and its United States reinsurance business through Trenwick America Reinsurance Corporation are now in runoff. In 2002, Trenwick sold the in-force business of LaSalle Re Limited, its Bermuda based subsidiary. On August 20, 2003, Trenwick and its affiliates LaSalle Re Holdings Limited and Trenwick America Corporation, as a step in its previously announced restructuring and in accordance with its August 6, 2003 letter of intent with creditors, filed for protection under chapter 11 of the United States Bankruptcy Code with the United States Bankruptcy Court for the District of Delaware. Additionally, Trenwick and LaSalle Re Holdings filed proceedings in the Supreme Court of Bermuda, known under Bermudian law as "winding up", as a further step in the restructuring and in accordance with the previously announced Letter of Intent. Trenwick's insurance company subsidiaries, Trenwick America Reinsurance Corporation, The Insurance Corporation of New York and LaSalle Re Limited, all of which are in runoff, and its Lloyd's operations are not subject to the proceedings in the Bankruptcy Court or the Supreme Court of Bermuda and their operations continue. TSI TELSYS: Third Quarter FY2003 Orders Increase by US$1.2 Mil. --------------------------------------------------------------- TSI TelSys Corporation announced that its operating subsidiary, TSI TelSys Inc., has booked US$1.2 million in new orders in the third quarter of FY2003. This brings the Company's order total for FY2003 to date to US$4.1 million. The order total for the third quarter, which ended on September 26, 2003, included several additional orders for TSI TelSys telemetry systems, spare parts and maintenance to support the U.S. Department of Defense's Space Based Infrared Systems program. The total also includes orders from an existing aerospace customer to provide transceiver development support, as well as the renewal of several maintenance contracts with existing customers to provide continued support for TSI TelSys systems that have already been deployed. As was previously announced on September 15, 2003, during the third quarter TSI TelSys also received the first order for its new Compact Telemetry Receiver. Jim Chesney, TSI TelSys' President/CEO said "I am very pleased to note that bookings in the first three quarters of 2003 have already exceeded the bookings total for all of 2002." The Company also announced that its operating subsidiary, TSI TelSys Inc., has promoted John P. Welch to the position of Chief Technology Officer and that TSI TelSys Corporation has appointed Gary L. Bohlke to serve as Company Secretary and to serve as legal counsel. Mr. Welch joined TSI TelSys Inc. in 1996, initially as a Senior Design Engineer, and has held positions of increasing responsibility ever since. Prior to joining TSI TelSys, he worked at NASA Goddard Space Flight Center as an electronics engineer for close to a decade. He graduated with a BSEE degree from George Washington University in 1988. Mr Chesney added "John Welch has long been playing a major role in the development of our technology here, most recently he has been critical in developing key elements of a transceiver used in unmanned aerial vehicles for wireless networking. In his new position, he will be even more broadly involved the development and maintenance of TSI TelSys' technology base." Mr. Bohlke returns to TSI TelSys' service, having served as general counsel to the Company during 1996-1998. Mr. Bohlke is a member of the District of Columbia Bar and Maryland Bar and the American Society of International Law and has been admitted to practice in the District of Columbia and Maryland. He is a graduate of the University of London, London School of Economics and Political Science, the London Institute of World Affairs, the American University Washington College of Law, and the University of Washington. Headquartered in Columbia, Maryland, TSI TelSys designs, manufactures and markets high-performance range data receivers, data acquisition, simulation and communication systems for the test range and aerospace communities and provides related engineering services. The Company has been a pioneer in utilizing reconfigurable architectures (Adaptive Computing) for communications and data processing, and has incorporated this technology into its product line since 1996. The Company is a leader in providing multi-mission satellite communications systems adaptable to virtually any protocol format and that support data rates up to a gigabit per second (Gbps). At June 27, 2003, the company's balance sheet discloses a working capital deficit of about $991,000 and net capital deficit of about $521,000. UNITED AIRLINES: Plan-Filing Exclusivity Intact Until March 8 ------------------------------------------------------------- U.S. Bankruptcy Court Judge Wedoff extends the United Airlines Debtors' exclusive period to file a reorganization plan through and including March 8, 2004. The Debtors' exclusive solicitation period is also extended through and including May 7, 2004. (United Airlines Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., 609/392-0900) UNIVERSAL HOSPITAL: S&P Assigns Low-B Ratings to Senior Notes ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' senior secured debt rating to Universal Hospital Services Inc.'s proposed $100 million credit facility and its 'B-' senior unsecured debt rating to the company's proposed $250 million senior unsecured note offering. At the same time, Standard & Poor's affirmed the 'B+' corporate credit rating. The outlook was revised to stable from negative. The newly rated debt, along with $55 million of new equity provided by UHS' financial sponsors J.W. Childs Associates L.P. and The Halifax Group, will constitute a leveraged recapitalization of the company. Proceeds from the proposed senior notes will be used to refinance existing debt, and the new credit facility will replace the company's current $87.5 million facility. Standard & Poor's expects $25 million of the revolving credit facility to be drawn at closing. While the transaction increases overall debt somewhat, the recapitalization addresses more significant issues by considerably improving liquidity and extending near-term maturities--two key concerns of Standard & Poor's. Pro forma for the transaction, UHS will have approximately $275 million of debt outstanding. "The speculative-grade ratings reflect Universal Hospital Services Inc.'s dependence on its narrow but relatively predictable business of providing movable medical equipment and support on a supplemental or outsourced basis, as well as its heavy debt burden," said Standard & Poor's credit analyst Jordan C. Grant. Bloomington, Minn.-based Universal is one of the two leading moveable medical equipment-outsourcing companies in the U.S. The company rents or leases movable equipment for critical care, respiratory therapy, patient monitoring, and newborn care to an extensive roster of more than 5,600 hospital and alternate site customers in all 50 states and the District of Columbia. Its longstanding relationships, high client retention rates, and agreements with group purchasing organizations provide revenue predictability and act as a barrier to competitor entry into the market. US AIRWAYS: Stipulation Resolves $2MM Wilmington Trust Claim ------------------------------------------------------------ On November 4, 2002, Wilmington Trust Company, as Security Trustee, filed Claim No. 3428, which alleged claims relating to two Aircraft bearing Tail Nos. N462PS and N463PS. The Trustee subsequently amended it on April 29, 2003, by filing Claim No. 5511. Wilmington and US Airways agree that Claim No. 5511 is allowed as a general unsecured Class PSA-6 claim for $2,010,312. All other Wilmington Claims relating to Tail Nos. N462PS and N463PS are disallowed. Claim No. 3428 is withdrawn. (US Airways Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., 609/392- 0900) VICWEST CORP: Appoints D. Anthony Molluso as President and CEO -------------------------------------------------------------- The board of directors of Vicwest Corporation announce the appointment of D. Anthony Molluso to the position of interim President and Chief Executive Officer. Mr. Molluso will report directly to the Corporation's board of directors and will be responsible for managing the day to day operations of Vicwest and its wholly-owned subsidiary, Westeel Limited. This will allow the Corporation to continue to provide its customers with high quality products and services. Mr. Molluso brings with him over 30 years of management experience, including interim assignments of this nature. In conjunction with Mr. Molluso' s appointment, the board also announces that a formal search process has been initiated to identify a permanent chief executive officer following the Corporation's reorganization which was completed in mid-September. Financial Reporting Update The board of directors of Vicwest has established an audit committee which includes all five members of the board of directors. The audit committee will address, on a priority basis, the Corporation's outstanding financial statements, which consist of the annual statements for the year ended December 31, 2002 and the interim statements for the quarters ended March 31, 2003 and June 30, 2003. Ernst & Young, LLP, the Corporation's auditors, have completed their field work for the year end financial statements, subject to those additional procedures needed to confirm subsequent events, including the Corporation's restructuring, which has had a significant positive impact on the Corporation's balance sheet. The interim statements for the quarters March 31, 2003 and June 30, 2003 will be reviewed by the auditors prior to finalization and filing. The board expects that the Corporation will be in a position to file its outstanding financial statements prior to the end of October 2003. Further, the directors are not aware of any issues that would delay the filing of the Corporation's interim third quarter statements, which will be the first statements that reflect the completion of the restructuring transactions. The statements for the third quarter are expected to be released in mid November. Vicwest Corporation, with corporate offices in Oakville, Ontario, is Canada's leading manufacturer of metal roofing, siding and other metal building products. Westeel Limited, the Corporation's wholly-owned subsidiary based in Winnipeg, is Canada's foremost manufacturer of steel containment products for the storage of grain, fertilizer and petroleum products. * * * As reported in the Troubled Company Reporter's September 19, 2003 edition, Vicwest Corporation completed its restructuring under the Companies' Creditors Arrangement Act. Vicwest's Plan of Compromise and Reorganization pursuant to the CCAA, which was approved by the Ontario Superior Court of Justice on August 14, 2003, was implemented Wednesday, September 17. On implementation all of the outstanding shares in the capital of Vicwest were cancelled and all of the holders of Vicwest's senior subordinated notes, formerly listed on the TSX Venture Exchange under the symbol MGT.DB, and certain affected creditors were issued new common shares of Vicwest. WEIRTON STEEL: UST Gets Nod for Bank Account Info. Production ------------------------------------------------------------- Pursuant to Section 345 of the Bankruptcy Code, the U.S. Trustee monitors estate bank accounts and has established procedures to ensure estate funds are protected from loss. The U.S. Trustee requires every Chapter 11 Debtor to provide it with a list of all of its bank and other depository accounts and an authorization permitting the financial institution to release information regarding the accounts to the U.S. Trustee. Although the U.S. Trustee has asked the Debtor to provide information regarding the bank accounts, the Debtor has failed to do so. Debra A. Wertman, Esq., on behalf of W. Clarkson McDow, Jr., U.S. Trustee for Region 4, asserts that Weirton Steel Corporation must provide the U.S. Trustee with a verified list of depositories and release of bank information. Without this information, the U.S. Trustee cannot perform his duties under Section 345. Accordingly, the U.S. Trustee sought and obtained the Court's authority to compel the Debtor to provide it with the bank account information. (Weirton Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 609/392-0900) WESTMERIA HEALTH: Liquidity Issues Raise Going Concern Doubt ------------------------------------------------------------ Malone & Bailey, PLLC, of Houston, Texas has audited the balance sheet of Westmeria Health Care Limited as of January 31, 2003 and the related statements of operations, stockholders' deficit and cash flows for each of the two years then ended. Westmeria incurred a net loss of $181,035 during the year ended January 31, 2003, and, as of that date, Westmeria's current liabilities exceeded its current assets by $121,987. These factors raise substantial doubt about Westmeria's ability to continue as a going concern. Westmeria Health Care Limited was incorporated in England and Wales in 1996. Westmeria rents and sells equipment to hospitals, clinics and nursing homes. The equipment includes orthopedic mattresses, cushions, bed hoists, pumps and other bed accessories. Beginning in fiscal 2003, Westmeria also began placing and leasing radiographers (radiologists) with hospitals and clinics. From February 2003 through July 2003, Westmeria raised additional funding from stockholders of $111,171 to fund additional cash requirements of losses in the first 6 months of fiscal 2004. However, according to the Company sales have increased almost 400% from the same period in fiscal 2003, and management expects profits in the second half of the year. Westmeria agreed to a reorganization with an inactive publicly- traded United States corporation, True Health, Inc. on June 27, 2003. In this transaction, True Health announced that it had issued 40,485,000 shares to Westmeria shareholders. Immediately prior to this transaction, there were 7 key Westmeria employees who received 37,500,000 shares. The other 2,985,000 shares were issued to consultants. This common stock was issued in exchange for 100% of Westmeria's outstanding shares, with another 7,123,750 shares issued to consultants, or a total of 10,108,750 shares issued to consultants. Immediately prior to this transaction, there were 259,126 shares outstanding in True Health. After this transaction, and as of both June 27 and September 3, 2003, True Health now has 47,867,876 total shares outstanding. Westmeria became a wholly-owned subsidiary of True Health. WHEREHOUSE: Wants to Stretch Lease Decision Time to December 31 --------------------------------------------------------------- Wherehouse Entertainment, Inc., and its debtor-affiliates wants more time to decide whether to assume, assume and assign, or reject their unexpired nonresidential real property leases. WEI asks the U.S. Bankruptcy Court for an extension through Dec. 31, 2003. The Debtors report that they have made extensive efforts to include all Real Property Leases, but given the substantial size of their operations, the current extension will not give them ample time to arrive at a reasoned decision. To date, much of the Debtors' time and attention has been devoted to stabilizing their business operations, negotiating and obtaining approval for use of cash collateral and debtor-in- possession financing, preparation of their schedules of assets and liabilities and their statements of financial affairs, and preparation of a plan of reorganization and disclosure statement. In addition, the Debtors are in the process of soliciting votes for their Plan while simultaneously accepting bids for a possible sale of substantially all of the Debtors' assets. The Debtors also have made significant progress in the evaluation of their Real Property Leases. To date, they have rejected approximately 284 nonresidential real property leases. The Debtors intend to engage in negotiations with lessors of many of the remaining Real Property Leases to determine if the rental rates for those leases can be reduced over the next several months, and will also further review each of the Real Property Leases and determine the appropriate course of action with respect to each during that period of time. Nevertheless, the Debtors submit that it would be imprudent to require them to elect whether to assume or reject the remaining Real Property Leases while they are in the process of soliciting votes to confirm a plan of reorganization and in the alternative, implementing bidding procedures for a possible sale of substantially all of the Debtors' assets. 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. WILLIAMS CONTROLS: Teleflex Buys Passenger & Light Truck Assets --------------------------------------------------------------- Teleflex Incorporated (NYSE: TFX) and Williams Controls, Inc. (OTC Bulletin Board: WMCO) has acquired the Williams passenger and light truck electronic throttle control business located in Sarasota Florida. In 2002, Williams had passenger and light truck sales in these product lines of approximately $5 million. The terms of the agreement were not disclosed. With this acquisition, Teleflex Automotive, a division of Teleflex Incorporated, will expand its technology and ability to expedite the future development of innovative products. Teleflex Automotive is a leading global supplier of driver control systems, including ETC's for fixed and adjustable pedal systems. "We are excited about the synergies and potential created by adding Williams' products and technology to our industry-leading ETC offerings for the automotive market," stated Jeffrey P. Black, Teleflex President and CEO. Gene Goodson, Williams President and CEO stated, "This is an excellent transaction for Williams and enables us to focus our energies and resources on pursuing the opportunities in our core businesses." Williams Controls, Inc. headquartered in Portland, Oregon, is a leading designer, manufacturer and integrator of sensors and controls for the motor vehicle industry. For more information you can find Williams Controls on the Internet at http://www.wmco.com Williams Controls, Inc.'s June 30, 2003 balance sheet shows a total shareholders' equity deficit of about $13 million. Teleflex Incorporated is a diversified industrial company with annual revenues of more than $2 billion. The company designs, manufactures and distributes quality-engineered products and services for the marine, industrial, automotive, aerospace and medical markets worldwide. Teleflex employs more than 18,000 people worldwide who focus on providing innovative solutions for customers. More information about Teleflex is available at http://www.teleflex.com W.R. GRACE: Seeks Clearance for KWELMB Confidential Settlement -------------------------------------------------------------- The KWELMB Companies subscribed to the H.S. Weavers Underwriting Agency Limited Underwriting Stamp and in the case of the related company named The Bermuda Fire & Marine Insurance Company, to the Bermuda London Underwriting Agency Limited Underwriting Stamp. These underwriting stamps underwrote certain policies of insurance in favor of W.R. Grace & Co. The KWELMB Companies each severally subscribed to the Subject Insurance Policies. The KWELMB Companies are insolvent and are bound by Schemes of Arrangement pursuant to Section 425 of the Companies Act 1985 of Great Britain and, in the case of Mutual Reinsurance Company Limited and BFMIC, Section 99 of the Companies Act 1981 of Bermuda. KWELMB Management Services Limited was appointed by the Scheme Administrators to manage the insolvency runoff for the KWELMB Companies under the Schemes of Arrangement. The United States Bankruptcy Court for the Southern District of New York has issued Permanent Injunction Orders, pursuant to Section 304 of the United States Bankruptcy Code, which, among other things, enjoin the commencement or continuation of any judicial action or proceeding against the KWELMB Companies except in accordance with the provisions of their Schemes of Arrangement. The Original Settlement Agreement Grace entered into a Settlement Agreement effective September 26, 1996, placed under seal, with the London Market Insurers as a compromise of present and future claims brought by Grace in respect of liabilities, expenses and losses related to Environmental Property Damage Pollution Claims allegedly covered by the Subject Insurance Policies. Grace entered into the Original Settlement Agreement, in part, because of uncertainty regarding its ability to collect against the insurers under the Subject Insurance Policies. After execution of the Original Settlement Agreement, the settling insurers paid Grace approximately $3 million, which represented the settling companies' share of an agreed amount of $7.99 million. Because of their insolvency, the KWELMB Companies were unable to enter into the settlement, in which their ratable share of the Original Agreed Amount would have been approximately $4.3 million. As a result of progress in their insolvency proceedings, the KWELMB Companies are now in a position to accept their several shares of the Original Agreed Amount, as contemplated by the Original Settlement Agreement. Grace has concluded that this basis for settlement is fair and reasonable given the circumstances of the KWELMB Companies. The New Settlement Agreement Accordingly, the Grace Debtors ask Judge Fitzgerald to approve a Privileged and Confidential Settlement Agreement and Mutual Release between W.R. Grace & Co., now known as Fresenius Medical Care Holdings, Inc., Debtor W. R. Grace & Co.-Conn, one of the Debtors, and the KWELMB Companies. By the new Settlement Agreement, Grace and the KWELMJ Companies intend to adopt, by way of compromise, and without prejudice to or waiver of their positions in other matters, without further trial or adjudication of any issues of fact or law, and without the KWELMB Companies' admission of liability or responsibility under the Subject Insurance Policies, a full and final settlement that releases and terminates all rights, obligations and liabilities of the Parties with respect to any of the Environmental Property Damage Pollution Claims under the Subject Insurance Policies, without prejudice to their positions on policy wordings or any other issues, or any other actions, and further without prejudice to any claim against any person not a Party to the KWELNB Settlement Agreement. The Agreed Claim Amount Without prejudice to or waiver of any position or right under the Subject Insurance Policies or in any other matter, Grace and the KWELMB Companies have agreed for purposes of the Settlement Agreement to allow Grace's claims against the KWELMB Companies for an aggregate amount of $4,337,182.73. These payments will be subject to the terms and conditions of the Schemes of Arrangement. After execution and approval of the Settlement Agreement, Grace will be able to recover the percentages of the Agreed Amount allowable by the Schemes of Arrangement. The Debtors have been advised that, under the Schemes of Arrangement, Grace should receive initial payments of approximately $1.8 million, and could receive additional payments in the future if the percentages payable under the Schemes of Arrangement are increased. As part of the compromise and the Settlement Agreement, the Parties desire to confer on the KWELMB Companies substantially the same rights, obligations and duties as the London Market Insurers, which are parties to the Original Settlement Agreement, notwithstanding the fact that the KWELMB Companies did not participate in the settlement of the claims set out in the Original Settlement Agreement, subject to certain modifications. Settlement Should be Approved Paula A. Galbraith, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub PC, in Wilmington, Delaware, contends that a payment of approximately $1.8 million, with the possibility of additional payments in the future, is fair and reasonable under the circumstances. The fairness of the Settlement Agreement is also reflected in the settlements with the solvent London Market Insurers. The terms agreed to in the settlements with the solvent insurers -- long before the Debtors' commencement of their Chapter 11 cases --- are still deemed fair and reasonable by the Debtors now that the KWELMB Companies are in a position to settle on those terms. The proposed transaction does not adversely affect the Debtors' creditors. In the absence of the Settlement Agreement, the Debtors would be unlikely to soon receive any payment from the KWELMB Companies on account of the Subject Insurance Policies. (W.R. Grace Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., 609/392-0900) * EPIQ Systems Expands Chapter 7 Product and Service Offerings -------------------------------------------------------------- EPIQ Systems, Inc. (Nasdaq: EPIQ) announced new developments in its product and service offerings in the Chapter 7 bankruptcy market which will enhance the company's leadership position in the industry. The company also confirmed that third quarter earnings projections continue to be on target with management comments on the last earnings conference call. Effective April 1, 2004, EPIQ Systems and Bank of America have agreed to convert their exclusive marketing arrangement to a non- exclusive arrangement, which will provide EPIQ Systems with the flexibility to extend its distribution reach and evaluate new partnership opportunities with additional banks. To ensure full stability for existing trustee clients, both EPIQ Systems and Bank of America have extended their commitment to providing their combined products and services to clients for an additional three years, through September 30, 2006. While trustee clients need not make any change to their current arrangements, they will now have increased choices. At the recent annual meeting of the National Association of Bankruptcy Trustees (NABT), EPIQ Systems demonstrated TCMS 9.0, the ninth major release of its market-leading software for Chapter 7 case administration. TCMS 9.0 introduces important new functionality including extended integration for electronic court filing with bankruptcy courts. TCMS 9.0 is scheduled for distribution to all customers in the first quarter of 2004. Additionally, EPIQ Systems announced the development of TCMS Web -- a new web-based case management software application for Chapter 7 bankruptcy that assists trustees with their administrative and regulatory responsibilities. This new product has a separate architecture from the current TCMS product (including TCMS 9.0) and will be provided in a centrally hosted environment, enabling trustee clients to access their databases of case information securely over the Internet. TCMS Web is currently in customer-site beta testing and is scheduled for general availability in early 2004. EPIQ Systems will continue to invest in both products (TCMS and TCMS Web) and provide ongoing upgrades and enhancements in both environments. There will be no required changes for clients who wish to remain on TCMS, and the company has reiterated its long- term commitment to the existing product platform. TCMS Web provides an option for trustees who wish to leverage the expanded capabilities of a web-based solution. The company also confirmed that it has concluded a strong third quarter with a robust level of bankruptcy activity and reiterated that quarterly projections continue to be on target with management comments on the last earnings conference call. The company plans to announce third quarter financial performance in a regularly scheduled quarterly conference call later this month. EPIQ Systems, Inc. is a national leader in providing technology- based products and services throughout the federal bankruptcy system. For more information, visit http://www.epiqsystems.com * BOND PRICING: For the week of October 6 - 10, 2003 ---------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- Adelphia Communications 9.875% 03/01/07 68 Adelphia Communications 10.875% 10/01/10 68 American & Foreign Power 5.000% 03/01/30 66 AMR Corp. 9.000% 09/15/16 72 Aurora Foods 9.875% 02/15/07 57 Burlington Northern 3.200% 01/01/45 55 Calpine Corp. 7.875% 04/01/08 69 Calpine Corp. 8.500% 02/15/11 69 Calpine Corp. 8.625% 08/15/10 70 Calpine Corp. 8.750% 07/15/07 74 Century Communications 8.875% 01/15/07 69 Cincinnati Bell Telephone 6.300% 12/01/28 74 Coastal Corp. 6.950% 06/01/28 70 Coastal Corp. 7.420% 02/15/37 73 Comcast Corp. 2.000% 10/15/29 33 Continental Airlines 7.033% 06/15/11 74 Cox Communications Inc. 0.348% 02/23/21 72 Cox Communications Inc. 2.000% 11/15/29 34 Crown Cork & Seal 7.500% 12/15/96 73 Cummins Engine 5.650% 03/01/98 67 Dan River Inc. 12.750% 04/15/09 68k Delta Air Lines 7.900% 12/15/09 75 Delta Air Lines 8.300% 12/15/29 65 Delta Air Lines 9.000% 05/15/16 68 Elwood Energy 8.159% 07/05/26 70 Enron Corp. 7.875% 06/15/03 19 Fibermark Inc. 10.750% 04/15/11 65 Finova Group 7.500% 11/15/09 51 Gulf Mobile Ohio 5.000% 12/01/56 63 IMC Global Inc. 7.300% 01/15/28 73 Internet Capital 5.500% 12/21/04 63 Level 3 Communications Inc. 6.000% 09/15/09 62 Level 3 Communications Inc. 6.000% 03/15/10 61 Liberty Media 3.500% 01/15/31 73 Liberty Media 3.750% 02/15/30 61 Liberty Media 4.000% 11/15/29 65 Loral Cyberstar 10.000% 07/15/06 60 Lucent Technologies 6.450% 03/15/29 69 Lucent Technologies 6.500% 01/15/28 69 Mirant Corp. 2.500% 06/15/21 48 Mirant Corp. 5.750% 07/15/07 48 Missouri Pacific Railroad 4.750% 01/01/30 71 Missouri Pacific Railroad 5.000% 01/01/45 63 Northern Pacific Railway 3.000% 01/01/47 52 Northwest Airlines 7.875% 03/15/08 74 NTL Communications Corp. 7.000% 12/15/08 19 Revlon Consumer Products 8.625% 02/01/08 53 Universal Health Services 0.426% 06/23/20 65 US Timberlands 9.625% 11/15/07 56 Viropharma Inc. 6.000% 03/01/07 51 Worldcom Inc. 6.250% 08/15/03 33 Worldcom Inc. 6.400% 08/15/05 33 Worldcom Inc. 6.950% 08/15/28 33 Xerox Corp. 0.570% 04/21/18 65 ********* 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 ***