/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/031031.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, October 31, 2003, Vol. 7, No. 216 Headlines ADELPHIA BUSINESS: Court Approves 2nd Amended Discl. Statement ADELPHIA COMMS: Wants Lease Decision Period Extended to Feb. 17 ADVANSTAR: Reports Losses & Declining Revenues in Third Quarter AEROGEN: May Seek Bankruptcy Protection if Unable to Raise Funds AIR CANADA: Board Clears Deutsche Bank Rights Offering Agreement AMERCO: Equity Committee Gets Nod to Retain Providence Capital AMERICAN PLUMBING: Signs-Up Winstead Sechrest as Attorneys ANC RENTAL: Wants Court Nod to Modify Ernst & Young's Services ARMSTRONG HOLDINGS: AWI Seeks Clearance for CCR Settlement Pact ATLANTIC COAST: Says Mesa Air's Allegations Are Baseless AVAYA: Names Mario Belanger as President of Canadian Operations BANC OF AMERICA: Fitch Affirms Ratings on Series 2002-2 Notes BOB'S STORES: Wants to Tap FTI Consulting for Financial Advice COGENTRIX ENERGY: Unit Obtains New $192M Bank Credit Facility CONSECO FINANCE: Court Disallows and Expunges 317 Claims CONSECO INC: Stipulations Resolving 5 Claims Get Court Approval CREDIT SUISSE: Fitch Affirms Six Note Classes with Low-B Ratings CREST 2001-1 LTD: Fitch Affirms Class C Notes Rating at BB+ DEAN FOODS: Will Webcast Third Quarter Conference Call on Nov. 5 DOLLAR FIN'L: Proposed $200M Senior Notes Get S&P's B Rating DURA AUTOMOTIVE: Weak Credit Measures Spur S&P to Affirm Rating DURATEK INC: Q3 Liquidity Strained Despite Increasing Net Income ENRON CORP: Auctioning-Off Papiers & St. Aurelie Units on Nov 10 EXIDE TECH: Unsecured Panel Retains Prof. Hotchkiss as Expert FEDERALALPHA STEEL: Sachnoff & Weaver Serves as Attorneys FMC CORPORATION: Posts $3.4 Million Third Quarter Net Loss GENTEK: US Trustee & Latona Ink Pact Re Disgorgement of Payment GLOBAL CROSSING: Seeks to Extend Plan Exclusivity to December 3 IMCO RECYCLING: September Working Capital Deficit Tops $62 Mil. IMPERIAL PLASTECH: Will File Late Fin'l Statements on Nov. 30 INSITE VISION INC: Ernst & Young Cuts Professional Ties IT GROUP: Maxey Flat Seeks Ownership & Access to Records J. CREW INTERMEDIATE: Commences Exchange Offer for Senior Notes KEY ENERGY: Secures New $175 Million Revolving Credit Facility KINGSWAY: Closes $20M Private Placement of Preferred Securities MAGELLAN HEALTH: Asks Court to Disallow & Expunge Various Claims MANITOWOC: Directors Approve $0.28 Dividend Payable on Dec. 10 MERRILL LYNCH: S&P Assigns Prelim. Ratings to 2003-KEY1 Notes METALS USA: Reports Profitable Third Quarter Results MIRANT: Gets Go-Ahead for $500M DIP Financing Facility from GE MOBILE MINI: Reports Improved Third Quarter Operating Results NATIONAL WATERWORKS: Planned Dividend Earns S&P's Negative Watch NBO SYSTEMS: Auditor Resigns over "Estimated Breakage" Concerns NORFOLK SOUTHERN: September Working Capital Deficit Tops $570MM NORTEL NETWORKS: Agrees with BellSouth to Expand Voice Solutions NORTHWEST AIRLINES: Proposes $225MM Convertible Note Offering NRG ENERGY: Creditors' Ballots Due on November 12, 2003 NUTRAQUEST: Has Until November 30 to File Schedules & Statements OWENS CORNING: Wants $34.6Mil. Chase Manhattan Claim Disallowed PAC-WEST TELECOMM: Third Quarter 2003 Net Loss Amounts to $4.3MM PG&E: ET Debtors Ask to Extend Plan Filing Exclusivity to Mar. 5 POLYONE: Low-B Rated Company Reports 3rd Quarter 2003 Results POLYONE CORP: Closes 2 Plants & Restructures Elastomers Business PRIDE INTL: Hosting Third Quarter Earnings Conference Call Today QUINTILES: Signs-Up Francois Charette as Canadian Gen. Manager ROLAND HOUSE: Robert E. Wright, Jr., Joins as New Executive VP ROUGE INDUSTRIES: Seeks Nod to Hire Morris Nichols as Counsel RUSSELL CORP: Realigns to Focus on Athletic and Activewear Biz RUSSELL CORP: Will Pay Regular Quarterly Dividend on November 26 SAFETY-KLEEN: Secures Okay to Hire Morgan Lewis as Counsel SAXON ASSET: Fitch Junks Series 1998-3 Class BF-3 Rating SEMCO ENERGY: 3rd Quarter Earnings Webcast Scheduled on Nov. 12 SHAW GROUP: S&P Affirms & Removes BB Credit Rating from Watch SHAW GROUP: Raises $218 Million from Common Stock Offering SHOPKO STORES: Names Matt Lynch as Senior Vice President & CIO SITEL CORPORATION: Releases Third Quarter 2003 Results TENFOLD CORP: Stockholders' Deficit Narrows to $11.5 Mil. TOBACCO ROW: Hiring LeClair Ryan as Bankruptcy Attorneys TRI-UNION: US Trustee Appoints Official Creditors' Committee TURBOCHEF: Closes $13M Private Placement & Appoints New Mgt. Team ULTRADATA SYSTEMS: Shoos Away Weinberg & Hires Webb as Auditor US AIRWAYS: Asks Court to Compel Limbach to Reimburse Costs US AIRWAYS: Reduces First Class Fares on Select Leisure Routes WALTER IND: Board Declares Quarterly Dividend Payable Dec. 11 WCI STEEL: Bankruptcy Court Grants Final Nod on DIP Financing WEIRTON STEEL: Gets Clearance for Workforce Reduction Program WHEELING-PITTSBURGH: Gets Nod to Modify & Assume AMROX Contracts WORLDCOM: Inks Stipulation Resolving Wells Fargo Claim Disputes WORLDCOM/MCI: Increases Digex Tender Offer Price to $1 Per Share WORLD HEART: Will Hold Q3 Results Conference Call on November 5 * E-Retailer Uses Permission Email Mktg to Get Out of Bankruptcy * New Bankruptcy Court Fee Schedule Effective November 1, 2003 * BOOK REVIEW: Risk, Uncertainty and Profit ********* ADELPHIA BUSINESS: Court Approves 2nd Amended Discl. Statement -------------------------------------------------------------- Chief Financial Officer Ed Babcock reports that the Adelphia Business Solutions Debtors received eight objections to their Disclosure Statement from: (1) Adelphia Communications Corporation; (2) Bank of America, in its individual capacity and as administrative agent under a certain credit agreement dated April 14, 2000; (3) BellSouth Telecommunications, Inc.; (4) CIT Communications Finance Corporation; (4) John Rigas, Timothy Rigas, Michael Rigas, and James Rigas; (5) William Pulos; (6) Qwest Communications Corporation; (7) Verizon (the Telephone Operating Subsidiaries of Verizon Communications, Inc.); and (8) the Office of the United States Trustee. On October 20, 2003, Judge Gerber conducted a hearing on adequacy of the ABIZ Debtors' Disclosure Statement and the merits of the objections. To resolve the objection filed by ACOM, Bank of America, BellSouth, CIT Communications, the Rigases, Qwest and Verizon, the Court asked the ABIZ Debtors to resolve the objections by the inclusion or deletion of language in the Disclosure Statement. Accordingly, the ABIZ Debtors filed their Second Amended Plan and Disclosure Statement on October 22, 2003 to reflect the changes. Copies of the ABIZ Debtors' Second Amended Plan and Disclosure Statement are available at no charge at: http://bankrupt.com/misc/2nd_Disclosure_Statement-Reorganization.pdf and http://bankrupt.com/misc/2nd_Amended_Joint_Plan-Reorganization.pdf Judge Gerber adjourns the U.S. Trustee's objection on consent to the date of the hearing scheduled to consider the confirmation of the Plan to allow discussions to occur that may resolve the objection. On the other hand, Mr. Polus' objection is overruled as a matter of law to the extent it objected to the adequacy of the financial information contained in the Disclosure Statement, and having been preserved for consideration by the Court at the Confirmation Hearing to the extent it raises other issues relevant to the potential confirmation of the Plan; After considering these facts, the Court determines that the Second Disclosure Statement contains adequate information within the meaning of Section 1125 of the Bankruptcy Code. Thus, Judge Gerber rules that the Disclosure Statement and the Motion is approved in its entirety. In particular: (1) For purposes of voting and mailing of notices pursuant to this Order, October 16, 2003 will be the "Record Date" for the holders of claims in Classes 1A, 6, 7A, 7B, 7C, and 7D, as described in the Plan; (2) The Debtors will mail appropriate ballots (with instructions), substantially in the forms of the ballots (with instructions) annexed to the Motion, to each holder of a claim in the Voting Classes under the Plan; (3) Immediately, the Debtors will deposit or cause to be deposited in the United States mail, postage prepaid, a sealed solicitation package which will include: (a) notice of the confirmation hearing and related matters, setting forth the dates established for filing acceptances and rejections to the Plan, and filing objections to confirmation of the Plan, and the date and time of the Confirmation Hearing; (b) a copy of the Disclosure Statement, as approved by this Court; (c) a copy of this Disclosure Statement Order; (d) a Ballot (with instructions), in substantially the form approved by this Court; and (e) a letter from the co-proponents of the Plan, recommending acceptance of the Plan; (4) The Debtors will mail the Solicitation Packages to holders of claims, as of the Record Date, in the Voting Classes; (5) In lieu of mailing the Solicitation Package to holders of claims and equity interests in unimpaired classes or classes that are impaired but will receive no distribution under the Plan, the Debtors will deposit in the United States mail, postage prepaid, a Notice of Non- Voting Status, to each holder of a claim and equity interest in an unimpaired class or in a class that is impaired but will receive no distribution under the Plan; (6) The Debtors will cause the Confirmation Hearing Notice to be published once in The Wall Street Journal and the New York Times on a date not less than 25 calendar days prior to the Confirmation Hearing; (7) All persons and entities entitled to vote on the Plan will deliver their Ballots by mail, hand delivery, or overnight courier no later than 12:00 p.m. Eastern Time on December 1, 2003 to the applicable Voting Agent, or as otherwise indicated on the Ballot: (i) For Classes 6, 7C, and 7D: ADELPHIA BUSINESS SOLUTIONS, INC. INNISFREE M&A INCORPORATED 501 Madison Avenue, 20th Floor New York, New York 10022 (ii) For Classes 1A, 7A, and 7B: ADELPHIA BUSINESS SOLUTIONS, INC. BANKRUPTCY SERVICES, LLC 757 Third Avenue, 3rd Floor New York, New York 10017 Any Ballot received after a time will not be counted other than as provided for herein. Ballots submitted by facsimile will not be counted; (8) The Debtors will have the ability to extend the Voting Deadline at the Debtors' sole discretion; (9) With respect to Ballots submitted by a holder of a claim: (a) any Ballot that is otherwise properly completed, executed, and timely returned to the Voting Agent that does not indicate an acceptance or rejection of the Plan will not be counted; (b) any Ballot that is returned to the Voting Agent indicating acceptance or rejection of the Plan but is unsigned will not be counted; (c) any Ballot transmitted by facsimile or email will not be counted; (d) whenever a creditor casts more than one Ballot voting the same claim prior to the Voting Deadline, only the last timely Ballot received by the Voting Agent will be counted; (e) if a creditor casts simultaneous duplicative Ballots voted inconsistently, then the Ballots will count as one vote accepting the Plan; (f) each creditor will be deemed to have voted the full amount of its claim except a creditor holding an unliquidated or contingent claim will be deemed to have voted in the amount of $1; (g) creditors will not split their vote within a class, thus each creditor will vote all of its claim within a particular class either to accept or reject the Plan; (h) any Ballot that partially rejects and partially accepts the Plan will not be counted; and (i) any Ballot received by the Voting Agent by facsimile, email, or other electronic communication will not be counted. The Confirmation Hearing is scheduled for December 8, 2003 at 9:45 a.m. Eastern Time, at the Bankruptcy Court, Alexander Hamilton Custom House, One Bowling Green, New York, New York. This hearing may be adjourned from time to time without further notice other than an announcement of the adjourned dates at the hearing and at any adjourned hearings. Any objection to confirmation of the Plan must be filed with the Clerk of the Bankruptcy Court, together with proof of service, no later than 4:00 p.m., Eastern Time, on November 26, 2003, and must be served on each of the persons concerned so as to be received by them no later than 4:00 p.m., Eastern Time, on November 26, 2003. Objections to the confirmation of the Plan must be in writing and contain: (1) the name and address of the objecting party and the amount of its claims or the nature of its interest; and (2) with particularity, the nature of its objection. Any confirmation objection not filed and served as under these conditions will be deemed waived and may not be considered by the Bankruptcy Court. (Adelphia Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., 609/392-0900) ADELPHIA COMMS: Wants Lease Decision Period Extended to Feb. 17 --------------------------------------------------------------- Shelley C. Chapman, Esq., at Willkie Farr & Gallagher LLP, in New York, relates that as of the Petition Date, the Adelphia Communications Debtors were party to numerous leases of nonresidential real property. The Unexpired Leases govern property the Debtors used in the operation of their businesses and include leases for office space, warehouses, payment centers, earth stations, head-ends, tower sites and fiber hub sites. The Unexpired Leases may be valuable assets of the Debtors' estates or may be integral to the continued operation of the Debtors' businesses. Since the Petition Date, Ms. Chapman notes that the Debtors have undertaken the process of analyzing their Unexpired Leases and determining which of them are critical to their operations and which are not necessary to their future business needs. To date, the Debtors have rejected 43 Unexpired Leases through six motions. During the coming months, the Debtors will continue to analyze their need for premises covered by the Unexpired Leases. However, the completion of this analysis requires an extension of time which will enable the Debtors to continue to evaluate the need for these locations in the context of the long-range business plan recently developed by senior management. Thus far in these cases, Ms. Chapman relates that many of the Debtors' resources were devoted to moving these cases forward towards emergence from Chapter 11. The Debtors recently prepared a detailed analysis of distribution priorities and a confidential long-range business plan, which, together, will lay the foundation for a plan or plans of reorganization. The Debtors are taking other steps to move these cases along expeditiously. Nonetheless, much work remains to be done before the Debtors can emerge from Chapter 11. To require the Debtors to make significant business decisions as to which of the Unexpired Leases will be needed for their reorganization effort at this time would be impractical and, more importantly, contrary to the best interests of the Debtors' estates and all creditors. "The Debtors should not be forced to choose between losing valuable locations and assuming leases that ultimately should be rejected," Ms. Chapman remarks. Accordingly, the Debtors require an extension to avoid what would be a premature assumption or rejection of the Unexpired Leases. Accordingly, the ACOM Debtors ask the Court to extend their time to assume or reject all unexpired leases of nonresidential real property to February 17, 2004, pursuant to Section 365(d)(4) of the Bankruptcy Code. Ms. Chapman argues that extending the lease decision period would not prejudice the Lessors under the Unexpired Leases because: (a) to the best of their knowledge, the Debtors are substantially current on their postpetition rent obligations under the Unexpired Leases; (b) the Debtors intend to continue to perform timely all of their obligations under the Unexpired Leases as required by Section 365(d)(3); and (c) in all instances, individual Lessors may, for cause shown, ask the Court to fix an earlier date by which the Debtors must assume or reject an Unexpired Lease. Nonetheless, the Debtors reserve all of their rights respecting the Unexpired Leases, including, but not limited to, the right to determine whether or not the Unexpired Leases are in fact true leases. * * * The Court will convene a hearing on November 13, 2003 to consider the Debtors' request. Accordingly, Judge Gerber extends the ACOM Debtors' lease decision period until the conclusion of that hearing. (Adelphia Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., 609/392-0900) ADVANSTAR: Reports Losses & Declining Revenues in Third Quarter --------------------------------------------------------------- Advanstar Communications Inc., a wholly owned subsidiary of Advanstar, Inc., announced unaudited operating results for the third quarter of 2003. The company's publishing properties across most industry sectors continue to show good year over year recovery from the media advertising recession. Publishing for the technology and travel sectors continues to be depressed. Trade shows and conferences are lagging in their recovery from the recession with performance essentially flat through September across most of our industry sectors. Technology events continue to be depressed and in some cases continue to decline. Revenue for the third quarter of $76.1 million declined $5.3 million, or 6.5%, from $81.4 million in the third quarter of 2002. Adjusted EBITDA of $22.4 million declined $6.9 million, or 23.7%, from $29.3 million in the third quarter of 2002. Approximately $3.5 million of the decline in revenue and $1.2 million of the decline in Adjusted EBITDA were the results of changes in the timing of trade shows relative to the timing of these shows in the comparable period of 2002. Adjusting for this timing difference, revenue for the third quarter of 2003 declined $1.7 million, or 2.2%, and Adjusted EBITDA declined $5.8 million, or 20.5%, respectively, from the third quarter of 2002. Revenue for the first nine months of 2003 of $248.9 million declined $5.2 million, or 2.0%, from $254.1 million for the same period in 2002. Adjusted EBITDA in the first nine months of 2003 of $75.2 million declined $3.9 million, or 5.0%, from Adjusted EBITDA of $79.1 million in the first nine months of 2002. Approximately $3.7 million of the decline in revenue and $1.3 million of the decline in Adjusted EBITDA were the results of changes in the timing of trade shows relative to the timing of these shows in the first nine months of 2002. Adjusted for the timing of tradeshow events, revenue for the nine months ended September 30, 2003 declined $1.5 million, or 0.6%, and adjusted EBITDA declined $2.7 million, or 3.4%, respectively, from the comparable period of 2002. Net loss for the third quarter of $18.1 million increased $19.0 million from net income of $0.8 million in the third quarter of 2002. Net loss for the first nine months of $16.8 million, declined $85.5 million from a net loss of $102.2 million in the first nine months of 2002. Operating results including net income and Adjusted EBITDA for the quarter and year-to-date are impacted by three significant items: an insurance recovery of $2.4 million received in the third quarter last year for trade show losses suffered in the terrorist attacks of September 11, 2001; a $2.1 million restructuring charge to consolidate our New York office in September 2003; and the effect of show timing differences between comparable periods ($1.2 million for the third quarter of 2003 and $1.3 million for the nine months of 2003), where several events shifted from the third quarter in 2002 to the fourth quarter in 2003. In aggregate, these items contributed to the period to period decline by $5.7 million for third quarter and $5.8 million for the nine months of 2003. Cash flows provided by operating activities for the third quarter of $8.2 million decreased from $10.9 million in the third quarter of 2002. Cash flows provided by operating activities for the first nine months of $20.6 million increased from $10.7 million in the first nine months of 2002, due largely to a reduction in cash interest expense and a favorable change in the timing of payments on accounts payable, collections on accounts receivable and collections of customer deposits related to future events. In September 2003, we issued $70 million of Second Priority Senior Secured Notes and received $50 million of equity contributions from our parent company, Advanstar Inc., which was generated by the sale of its parent company's common stock to the DLJ Merchant Banking funds. On October 1, 2003 we received an additional $10 million of equity contributions and paid $136 million in cash to complete our acquisition of a portfolio of healthcare industry magazines and related custom service projects from the Thomson Corporation. Quarterly Operating Summary Revenue from trade shows and conferences declined $5.4 million, or 11.5%, to $41.6 million in the third quarter of 2003 from $47.0 million in the third quarter of 2002. The decline in trade show and conference revenue was attributable to a shift in the timing of three events into the fourth quarter of 2003, declines in events that serve the technology market, and the effect of holding four fewer events serving the abilities, license and technology markets. Revenue for our fall MAGIC events increased approximately $0.9 million, or 2.9%, compared to the 2002 events. Total square feet for our fall MAGIC event declined 5.6% compared to the 2002 events, but was offset by increased pricing per square foot, the launch of a new fabric event at our MAGIC show and an increase in ancillary product sales. Adjusted for timing of events, total tradeshow revenue declined $1.9 million due primarily to declines in events serving the technology markets. Contribution margin from trade shows and conferences declined $5.1 million, or 18.2% to $23.0 million for the third quarter of 2003 from $28.1 million in the third quarter of 2002. This decrease was primarily due to the impact of an insurance recovery of approximately $2.4 million we received in the third quarter of 2002 related to trade show losses resulting from the 9/11 terrorist attacks, declines in events serving the technology markets, a shift in the timing of three events discussed above, and the effect of holding four fewer events serving the abilities, license and technology markets. Revenue from publications increased $0.1 million, or 0.3% to $30.7 million in the third quarter of 2003 from $30.6 million in the third quarter of 2002. The increase is due to the strong performance of our publications serving our home entertainment, automotive and beauty markets, our acquisition late in 2002 of Healthcare Traveler and an increase in healthcare custom projects, offset by a decline in advertising revenue for publications serving the technology and travel markets. Advertising pages remained stable while revenue per page declined approximately 2.2% in the third quarter of 2003 compared to the third quarter of 2002. The decline in ad revenue was most heavily concentrated in our magazines serving the technology and travel markets, as they continue to suffer from the overall economic environment. Advertising pages for the third quarter increased 10.6% across all markets other than technology and travel, resulting in a 10.1% increase in revenue in these other markets compared to the third quarter of 2002. Contribution margin from publishing increased $0.8 million, or 9.9%, to $9.1 million in the third quarter of 2003 from $8.3 million in the third quarter of 2002. This increase was primarily due to the strong performance of certain publication groups discussed above, our acquisition of Healthcare Traveler in October 2002 and an increase in our healthcare custom project services, partially offset by declines in our publications serving the technology and travel markets. Revenue from marketing services and other increased to $3.9 million in the third quarter of 2003 from $3.8 million in the third quarter of 2002. Contribution margin from marketing services and other decreased slightly to $0.9 million in the third quarter of 2003 from $1.0 million in the third quarter of 2002. General and administrative expenses increased $0.8 million, or 10.5%, to $8.5 million in the third quarter of 2003 from $7.7 million in the third quarter of 2002. The increase is principally due to the timing of certain compensation accruals between the third quarter of 2002 compared to the third quarter of 2003. In the third quarter 2003 we recorded a restructuring charge of $2.1 million related to the consolidation of our midtown New York leased office space from two floors to one floor. Adjusted EBITDA of $22.4 million declined $6.9 million, or 23.7%, from $29.3 million in the third quarter of 2002. This decrease was primarily due to the impact of an insurance recovery of approximately $2.4 million we received in the third quarter of 2002, the $2.1 million third quarter 2003 charge related to the consolidation of our New York leased office space and the $1.2 million impact of trade show timing discussed above. Year-to-date Operating Summary Revenue from trade shows and conferences declined $6.0 million, or 4.1%, to $139.4 million in the first nine months of 2003 from $145.4 million in the first nine months of 2002. The decline in trade show and conference revenue was partially attributable to a shift in the timing of four events into the fourth quarter of 2003. In 2003 we also held fewer events serving the beauty, e- learning, abilities, licensing and technology markets. These declines were partially offset by strong performances of our trade shows serving the fashion, art, home entertainment and powersports markets, and the launch of new events in the art, beauty and technology markets. Revenue for our spring and fall MAGIC events increased approximately $2.3 million, or 3.8%, compared to the 2002 events. Total square feet for our MAGIC events declined 4.7% compared to the 2002 events but was offset by increased pricing per square foot and an increase in ancillary product sales. Our trade shows serving the technology market continue to suffer from the overall curtailment of marketing spending by technology companies. Revenue from our events serving the technology market declined $8.1 million, or 23.1%, in the first nine months of 2003 compared to the first nine months of 2002. For all of our markets except technology, total tradeshow square feet declined 1.3% and revenue increased 1.5% in the first nine months of 2003 over the same period of 2002. Contribution margin from trade shows and conferences declined $6.2 million, or 7.8%, to $72.7 million for the first nine months of 2003 from $78.9 million in the first nine months of 2002. This decrease was primarily due to the impact of the $2.4 million insurance recovery received in the third quarter of 2002, declines in events serving the technology markets discussed above, a shift in the timing of four events discussed above and the effect of holding fewer events serving the beauty, e-learning, abilities, licensing and technology markets. Revenue from publications increased $1.5 million, or 1.5% to $97.8 million in the first nine months of 2003 from $96.3 million in the first nine months of 2002. The revenue increase was most heavily concentrated in publications serving the beauty, healthcare, home entertainment and automotive markets. Our acquisition in October 2002 of Healthcare Traveler also contributed to this increase. Our magazines serving the technology and travel markets continue to suffer from the overall economic environment as advertising pages continued to decline in these markets. Advertising pages increased 13.0% across all markets other than technology and travel, resulting in a 13.9% revenue increase in these other markets. Contribution margin from publishing increased $3.6 million, or 13.4% to $30.3 million in the first nine months of 2003 from $26.7 million in the first nine months of 2002. This increase was primarily due to the strong performance of certain publication groups discussed above and our acquisition of Healthcare Traveler in October 2002, partially offset by declines in our publications serving the technology and travel markets. Revenue from marketing services and other declined $0.6 million, or 5.2%, to $11.8 million for the first nine months of 2003 from $12.4 million for the first nine months of 2002 due largely to softness in classified and recruitment advertising. Contribution margin from marketing services and other decreased $1.2 million to $2.0 million in the first nine months of 2003 from $3.2 million in the first nine months of 2002 due to the decline in revenue and increases in sales staff resources dedicated to developing our small space advertiser page opportunities. General and administrative expenses declined $0.6 million, or 2.3%, to $26.3 million in the first nine months of 2003 from $26.9 million in the first nine months of 2002. The decline is principally due to cost savings as a result of reductions in personnel costs. EBITDA for the first nine months of 2002 includes a non-cash charge of $37.2 million related to a provision for notes and advances to our affiliated dot.com company. We have excluded this charge in arriving at Adjusted EBITDA. Adjusted EBITDA in the first nine months of 2003 of $75.2 million declined $3.9 million, or 5.0%, from Adjusted EBITDA of $79.1 million in the first nine months of 2002. This decrease was primarily due to the impact of an insurance recovery of approximately $2.4 million we received in the third quarter of 2002, the $2.1 million third quarter 2003 charge related to the consolidation of our New York leased office space and the $1.3 million impact of trade show timing discussed above, partially offset by a reduction in funding of our affiliated dot.com company operations. Advanstar Communications Inc. (S&P, B Corporate Credit Rating, Negative) is a worldwide business information company serving specialized markets with high quality information resources and integrated marketing solutions. Advanstar has 115 business magazines and directories, 78 tradeshows and conferences, numerous Web sites, and a wide range of direct marketing, database and reference products and services. Advanstar serves targeted market sectors in such industries as art, automotive, beauty, collaboration/e-learning, CRM/call center, digital media, entertainment/marketing, fashion & apparel, healthcare, manufacturing and processing, pharmaceutical, powersports, science, telecommunications and travel/hospitality. The Company has over 1,400 employees and currently operates from multiple offices in North America, Latin America, Europe and Asia. For more information, visit http://www.advanstar.com AEROGEN: May Seek Bankruptcy Protection if Unable to Raise Funds ---------------------------------------------------------------- Aerogen, Inc. (Nasdaq: AEGN) announced financial results for the three months and nine months ended September 30, 2003. The net loss for the three months ended September 30, 2003 was $4.4 million, or $0.21 per share, compared with a net loss of $5.7 million, or $0.28 per share, for the same period in 2002. The decrease in net loss for the three months ended September 30, 2003 compared with the same period of 2002 was primarily the result of lower operating expenses and improved product margins, partially offset by lower interest income, increased interest expense and other expense. The net loss for the nine months ended September 30, 2003 was $12.3 million, or $0.60 per share, compared with $19.8 million, or $0.98 per share, for the same period in 2002. The decrease in net loss for the nine months ending September 30, 2003 compared with the same period of 2002 was primarily due to lower operating expenses and increased product margins, partially offset by lower interest income and increased interest expense. Revenues for the three months ended September 30, 2003 were $0.5 million, compared with $0.7 million for the same period in 2002 and $1.1 million for the three months ended June 30, 2003. Product orders were lower for the three month period ending September 30, 2003 than for the prior three month period due to the completion of pipeline stocking during the first six months of 2003, cyclical purchasing patterns of Aerogen distribution partners and to their expressed concerns regarding the Company's near-term financial viability. Revenues for the nine months ended September 30, 2003 were $3.2 million compared with $1.0 million for the same period in 2002. The increase in revenues for the nine month period ending September 30, 2003 was primarily due to the increased sales of the Aeroneb(R) Professional Nebulizer System and higher royalty revenues from a consumer products company that has licensed Aerogen's aerosol generator technology. Cost of products sold for the three months ended September 30, 2003 was $0.2 million, compared with $0.5 million for the same period in 2002. Cost of products sold for the nine months ended September 30, 2003 was $1.7 million, compared with $1.0 million for the same period in 2002. Cost of products sold was 63% of product sales for the three months ended September 30, 2003 and 64% for the nine months ended September 30, 2003. In the three months and nine months ended September 30, 2002, product margins were negative. Research and development expenses for the three months ended September 30, 2003 were $2.9 million, compared with $3.8 million for the same period in 2002. Research and development expenses for the nine months ended September 30, 2003 were $9.1 million, compared with $13.7 million for the same period in 2002. The decrease in research and development spending was primarily due to reduction in payroll expenses resulting from fewer employees, suspension of development on the Aerodose(R) insulin inhaler program, and completion of development of the clinical version of the Aerodose respiratory inhaler, partially offset with spending on a Phase 2 clinical trial in which amikacin was delivered by aerosol to ventilated patients. Selling, general and administrative expenses for the three months ended September 30, 2003 were $1.5 million, compared with $2.2 million for the same period in 2002. Selling, general and administrative expenses for the nine months ended September 30, 2003 were $4.9 million, as compared with $6.5 million for the same period in 2002. The decrease in selling, general and administrative expenses in the three and nine months ended September 30, 2003, as compared with the same periods of 2002, were primarily due to reduction in payroll expenses resulting from fewer employees, decreased expenses associated with marketing and selling products, and reductions in travel, partially offset by increased legal expenses. Financial Outlook As of September 30, 2003, Aerogen had cash, cash equivalents and short- term investments totaling $0.5 million, compared with $8.9 million at December 31, 2002. Cash expenditures for the three months and nine months ended September 30, 2003, net of cash receipts on trade receivables, were approximately $2.1 million and $9.3 million, respectively. On September 11, 2003, Aerogen received $950,000 in gross proceeds from SF Capital in connection with the issuance of a convertible debenture and associated warrants. Since September 30, 2003, Aerogen has received an aggregate of $2.5 million in payments from Medical Industries America (MIA) in connection with the agreement announced in October 2003 with MIA in relation to the Aeroneb(R) Go nebulizer. Subject to shareholder approval at the Special Meeting to be held on October 30, 2003, SF Capital has agreed to an additional investment of at least $500,000 up to a maximum of $2 million in a second tranche of convertible debt with warrants on terms fully described in Aerogen's Form 8-K, filed on October 7, 2003. As a result of our continued losses and current cash resources, we will need to raise additional funds through public or private financings, collaborative relationships or other arrangements within the next few months in order to continue as a going concern. Collaborative arrangements, if necessary to raise additional funds, may require us to relinquish rights to either certain of our products or technologies or desirable marketing territories, or all of these. We are pursuing efforts to raise such additional funds; however, if we are not successful, we may have to curtail significantly, or cease entirely, our operations, and/or seek bankruptcy protection. "We are pleased to have announced in recent weeks, completion of a convertible debt financing with SF Capital and a manufacturing and marketing agreement with MIA for our new home nebulizer, the Aeroneb(R) Go, for which 510(k) clearance is pending. We continue to move our commercial, clinical and R&D programs forward," said Jane E. Shaw, Aerogen's Chairman and Chief Executive Officer. Aerogen, a specialty pharmaceutical company, develops nebulizer products based on its OnQ(TM) Aerosol Generator technology to improve the treatment of respiratory disorders in the acute care setting. Aerogen also has development collaborations with pharmaceutical and biotechnology companies for delivery via nebulizers or inhalers of novel compounds that treat respiratory and other disorders. Aerogen currently markets products that include the Aeroneb Professional Nebulizer System, for use in the hospital, and the Aeroneb(R) Portable Nebulizer System, for home use. Aerogen's first drug product candidate in the acute care setting, inhaled amikacin for pulmonary infections, is currently in Phase 2 clinical trials. Additional products are in the feasibility and pre-clinical stages of development. Aerogen is headquartered in Mountain View, California, with a campus in Galway, Ireland. For more information, visit http://www.aerogen.com. AIR CANADA: Board Clears Deutsche Bank Rights Offering Agreement ---------------------------------------------------------------- Air Canada provides the following update on the airline's restructuring under the Companies' Creditors Arrangement Act: Deutsche Bank Rights Offering Agreement Receives Board Approval At a meeting held Wednesday, Air Canada's Board of Directors approved the previously announced agreement reached with Deutsche Bank, whereby the bank will act as standby purchaser of a $350 - $450 million rights offering to Air Canada's creditors conditional on completion of the equity plan sponsor process. Equity Plan Sponsor Process --------------------------- The Company is in the final stages of its equity plan sponsor process and expects to receive binding proposals from Cerberus Capital Management and Mr. Victor T.K. Li during the week of November 3, 2003 with an announcement on the selection of the plan sponsor during the week of November 10, 2003. Pension Deficit Funding Proposal -------------------------------- On October 27, 2003, Air Canada met with its pension stakeholder representatives (ACPA, CALDA, CAW, CUPE, IAMAW, non-unionized employees and all retirees) to present a revised funding proposal for the current approximate $1.5 billion pension deficit. The revised proposal, based on a 10-year repayment schedule, would maintain benefits as they currently exist. At that meeting, which was also attended by creditors, bondholders, representatives from General Electric Capital Aviation Services, the Office of the Superintendent of Financial Institutions (OSFI), the Ministry of Finance, the Monitor and various financial and legal advisors, the Company reiterated its commitment to the preservation of existing defined benefits for beneficiaries. Creditors and bondholders expressed their dissatisfaction with proposals previously made by union representatives as well as the original framework document prepared by OSFI. The Company has asked all stakeholders, including the beneficiary representatives and OSFI, to provide Air Canada with their views on the company's revised proposal by October 31, 2003. Third Quarter Financial Results ------------------------------- The Company is currently completing its review of several complex financial reporting issues, in particular relating to the restructuring, including reorganization charges related to the modification of aircraft leases and will report its financial results once this review is completed. As of October 28, 2003, the Corporation's combined cash balance in its Canadian and U.S. bank accounts amounted to an estimated $893 million not including the US $700 million DIP secured financing facility from General Electric Capital Canada Inc. nor the $80 million from American Express which is part of a commercial agreement still subject to court approval. Both facilities remain undrawn. "While the revenue environment remains weak, forward bookings are encouraging and through aggressive cost-cutting and long-term structural changes we are successfully adapting to the new realities of the marketplace," said Robert Milton, President and Chief Executive Officer of Air Canada. Unsecured Creditors and Shareholders ------------------------------------ The Company reiterates that based on its Restructuring Plan, the rights offering agreement and the equity proposals, it is highly likely that the Company's unsecured debt will be converted to new equity and that there will not be any meaningful recovery to existing equity of the Company. AMERCO: Equity Committee Gets Nod to Retain Providence Capital -------------------------------------------------------------- In response to the objections regarding the Equity Committee's proposed retention of Providence Capital, Inc., David C. McElhinney, Esq., at Beckley Singleton, Chtd., informs the Court that: (a) Providence has revised its requested indemnification language consistent with the language previously approved by the Office of the U.S. Trustee and the Court with respect to the AMERCO Debtors' financial advisors; and (b) With respect to the success fee, Providence agreed to eliminate the request for warrants and to replace it with a request for a success fee equal to $950,000. Providence also agreed to apply against the success fee 50% of all monthly fees paid after the first six full months of its engagement, excluding the last week during August 2003. This proposal is similar, though less expensive than, the fee structure for the financial advisor to the Creditors' Committee. On the Debtors' contention that Providence should only receive straight hourly compensation, Mr. McElhinney points out that this objection misstates the terms of the compensation of the other financial advisors in these cases and alleges that they are being paid hourly, though they are not. Like the other financial advisors, i.e. Jefferies & Company, Inc., Providence agreed to maintain records indicating the extent of the services being provided to the Equity Committee so that the Court can review the extent of the service provided, but proposes to be paid not based on hours worked multiplied by hourly rates. Accordingly, the Equity Committee seeks the Court's permission to retain Providence, at the expense of the bankruptcy estate, with a $100,000 monthly fee and the anticipation of a $950,000 success fee, less 50% of all monthly fee paid after the first six full months of Providence's employment, with the understanding that the Court can revisit the amount of the success fee at the conclusion of the cases. * * * Pursuant to Sections 327(a) and 1103(a) of the Bankruptcy Code, Judge Zive authorizes the Equity Committee to retain Providence Capital, Inc. as financial advisors pursuant to the modified terms and conditions. Judge Zive clarifies that Providence's retention will not be pursuant to Section 328(a) of the Bankruptcy Code. Moreover, the Court permits and directs the Debtors to indemnify and hold harmless Providence and other indemnified persons pursuant to the modified indemnification provisions and subject to these conditions: (a) All requests of indemnified persons for payment of indemnity, contribution or otherwise pursuant to the approved indemnification provisions will be made by means of an interim or final fee application and will be subject to the approval of, and review by, the Court, and is reasonable based on the circumstances of the litigation or settlement in respect of which indemnity is sought, provided, however, that in no event will an indemnified person be indemnified or received contribution in the case of bad faith, self-dealing, breach of fiduciary duty, if any, gross negligence or willful misconduct on the part of that or any other indemnified person; (b) In no event will an indemnified person be indemnified or receive contribution or other payment under the approved indemnification provisions if the Debtors, their estates or the Creditors' Committee asserts a claim for, and the Court determines by final order that the claim arose out of, bad faith, self dealing, breach of fiduciary duty, if any, gross negligence, or willful misconduct on the part of that or any other indemnified person; and (c) In the event an indemnified person seeks reimbursement for attorneys' fees from the Debtors, the invoices and supporting time records from those attorneys will be annexed to Providence's own interim and final fee applications, and the invoices and time records will be subject to the U.S. Trustee's guidelines for compensation and reimbursement of expenses and the approval of the Bankruptcy Court under the standards of Section 330 of the Bankruptcy Code without regard to whether the attorney has been retained under Section 327. Providence will be entitled to a $100,000 monthly cash retainer fee and all other requested compensation, as modified; provided, however that no ruling is now being made on the Success Fee, if any, as Providence may become entitled to should it subsequently seek a Success Fee by noticed motion in these cases; and provided further that the $950,000 cap on Providence's success fee is no longer applicable. (AMERCO Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 609/392-0900) AMERICAN PLUMBING: Signs-Up Winstead Sechrest as Attorneys ---------------------------------------------------------- American Plumbing & Mechanical Inc., and its debtor-affiliates ask permission from the U.S. Bankruptcy Court for the Western District of Texas to retain and employ Winstead Sechrest & Minick PC as attorneys. The attorneys who will be primarily designated to represent the Debtors and their current standard hourly rates are: Berry D. Spears Shareholder $475 per hour Valinda B. Wolfert Shareholder $440 per hour Mark W. Eisenbmun Shareholder $360 per hour C. Mark Brannum Shareholder $350 per hour J. Frasher Murphy Associate $240 per hour Eli O. Columbus Associate $215 per hour Demetra L. Liggins Associate $175 per hour Ishaq Kundawala Associate $160 per hour Victoria A. Cathcart Associate $120 per hour The Winstead Sechrest team of professionals is expected to: a. provide legal advice with respect W the Debtors' powers and duties as debtors-in-possession in the continued operation of their businesses and management of their properties; b. assist the Debtors in maximizing the value of their assets for the benefit of all creditors and other parties in interest; c. pursue confirmation of a plan of reorganization; d. investigate any and all necessary and appropriate actions and/or proceedings on behalf of the Debtors in this Court and other appropriate jurisdictions; e. prepare on behalf of the Debtors all necessary applications, motions, answers, orders, reports, and other legal papers; f. appear in Court to protect the interests of the Debtors and their estates; g. assist the Debtors with the requirements of the Securities & Exchange Commission; and h. perform all other legal services for the Debtors during these Chapter 11 proceedings that may be necessary and proper for the Debtors' general business operations and general financial affairs. Headquartered in Round Rock, Texas, American Plumbing & Mechanical, Inc. and its affiliates provide plumbing, heating, ventilation and air conditioning contracting services to commercial industries and single family and multifamily housing markets. The Company filed for chapter 11 protection on October 13, 2003 (Bankr. W.D. Tex. Case No. 03-55789). Demetra L. Liggins, Esq., at Winstead Sechrest & Minick P.C., represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $282,456,000 in total assets and $256,696,000 in total debts. ANC RENTAL: Wants Court Nod to Modify Ernst & Young's Services -------------------------------------------------------------- ANC Rental Corporation and its debtor-affiliates seek to engage Ernst & Young to perform certain additional services like certain additional audit procedures and interim reviews and agreed upon procedures relating to rental car asset backed notes, nunc pro tunc to August 18, 2003. By reason of Ernst & Young's prior business relationship with the Debtors, Ernst & Young has invaluable knowledge of the Debtors' affairs. According to Elio Battista, Jr., Esq., at Blank Rome LLP, in Wilmington, Delaware, this knowledge would be difficult and expensive for other accounting and tax professionals to acquire. Mr. Bautista asserts that Ernst & Young's additional services is necessary to assist the Debtors with respect to the proposed issuance of $700,000,000 of Series 2003-1 Rental Car Asset Backed Notes, that are concurrent with the closing of the transaction to sell substantially all of the Debtors' assets and the Debtors' certain liabilities to Cerberus Capital Management, L.P. At the Debtors' request, Ernst & Young will: (1) perform additional audit procedures on the Debtors' consolidated financial statements for the year ended December 31, 2002, to: -- review the Debtors' unaudited interim financial information for quarterly periods during the year ended December 31, 2003 before the Debtors file its Forms 10-Q; -- assist the Debtors in the preparation of an Offering Circular for the planned issuance of approximately $700,000,000 2003-1 Rental Car Asset Backed Notes under Rule 144(a); -- read the financial statements included in the Offering Circular to evaluate their conformity with applicable SEC regulations; and -- read the valuations performed by a third party valuation firm and provide comments on them; and (2) perform agreed-upon procedures on revenue earning vehicles as of July 31, 2003, which were agreed to by management of ANC, Lehman Brothers and CDC IXIS Capital Markets North America, Inc., solely to assist the Debtors with respect to the proposed issuance of $700,000,000 of Series 2003-1 Rental Car Asset Backed Notes. Ernst & Young's provision of services to the Debtors is contingent upon the Court's approval of the terms and conditions set forth in the Engagement Letters, which includes that: "Any controversy or claim with respect to, in connection with, arising out of, or in any way related to this Agreement or the services provided hereunder (including any such matter involving parent, subsidiary, affiliate, successor in interest or agent of the Company or of Ernst & Young) shall be brought in the Bankruptcy Court or the District Court if such District Court withdraws the reference and the parties to this Agreement, and any and all successors and assigns thereof, consent to the jurisdiction and venue of such court as the sole and exclusive forum (unless such court does not have or retain jurisdiction over such claims or controversies) for the resolution of such claims, causes of actions or lawsuits. The parties to this Agreement, and any and all successors and assigns thereof, hereby waive trial by jury, such waiver being informed and freely made. If the Bankruptcy Court or the District Court upon withdrawal of the reference does not have or retain jurisdiction over the foregoing claims or controversies, the parties to this Agreement, and any and all successors and assigns thereof, agree to submit first to non-binding mediation, and, if mediation is not successful, then to binding arbitration, in accordance with the dispute resolution procedures set forth in the Addendum to the Agreement. Judgment on any arbitration award may be entered into any court having proper jurisdiction. The foregoing is binding upon the Company, Ernst & Young and any and all successors and assigns thereof." Ernst & Young's fees for the services to be provided pursuant to the Engagement Letters will be based on actual time incurred at Ernst & Young's discounted hourly rates in effect for the professionals assigned to provide the services set forth in the Engagement Letters. The actual time incurred will depend upon the extent and nature of available information, any modifications to the scope of the engagement, and other developments that may occur as work progresses. Additionally, Ernst & Young will request reimbursement of its reasonable actual out-of-pocket expenses incurred in connection with providing services under the Engagement Letters. Currently, the hourly rates for Ernst & Young professionals assigned to provide the services set forth in the Engagement Letters are: Partners and Principals $560 Senior Managers 410 - 470 Managers 340 - 400 Seniors 250 - 305 Staff 170 - 195 Paraprofessional 105 These hourly rates are revised annually, effective July 1st, and the next adjustment will be made on July 1, 2004. Ernst & Young intends to apply to the Court for allowances of compensation and reimbursement of expenses in accordance with applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, and general orders of the Court. David M. Betsill, a partner at Ernst & Young, assures the Court that the firm: (1) does not hold or represent an interest adverse to the Debtors' estates; (2) is a "disinterested person" as defined by Section 101(14) and used in Section 327(a) of the Bankruptcy Code; and (3) has no connection with the Debtors, its creditors or other parties-in-interest in these cases. (ANC Rental Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service, Inc., 609/392-0900) ARMSTRONG HOLDINGS: AWI Seeks Clearance for CCR Settlement Pact --------------------------------------------------------------- Armstrong World Industries engaged in extensive arm's-length negotiations with Center for Claims Resolution, Inc., the CCR Members, the Future Claimants' Representative, the Asbestos Personal Injury Claimants' Committee, Safeco Insurance Company, and the Unsecured Creditors' Committee in an effort to resolve the CCR Disputes on a consensual basis. These efforts have culminated in a settlement agreement, which will dispose of and resolve all of the CCR Disputes. Thus, AWI asks Judge Newsome to approve the CCR Settlement Agreement. The principal terms of the CCR Settlement Agreement are: (1) Contribution by, and Claims of, Safeco: Subject to the terms and conditions of the CCR Settlement Agreement, Safeco will pay $5 million to CCR. In exchange, Safeco will have a $4 million general unsecured claim against AWI's estate, which will be treated in Class 6 of the Plan. (2) Cancellation of Safeco Bond: Upon CCR's receipt of the $5 million payment by Safeco, the Safeco Bond will be deemed cancelled. (3) Allowed General Unsecured Claim Of CCR: CCR asserts a claim against AWI's estate for the costs of CCR's overhead -- both prepetition, as well as costs accruing postpetition -- on account of the claim. CCR will have an allowed unsecured claim for $4 million against AWI's estate, which will be treated under Class 6 of the Plan. (4) Allowed Liquidated Claims of CCR against the Asbestos PI Trust: CCR will have an allowed Prepetition Liquidated Claim against the Asbestos PI Trust for $62.5 million with respect to Existing Resettlements. The CCR Settlement Agreement contains various provisions relating to the treatment of the Existing Resettlement Claim, including a restriction that the maximum distribution payable by the Asbestos PI Trust on account of the Existing Resettlement Claim will not exceed $8 million. In addition, the CCR Settlement Agreement permits CCR to assert a claim against the Asbestos PI Trust with respect to Future Resettlements. For a Future Resettlement Claim to be valid against the Asbestos PI Trust: (i) it may only relate to a Future Resettlement that is listed on the Future Resettlement list provided to AWI and the Future Claimants' Representative in connection with the CCR Settlement Agreement; (ii) CCR must provide to the Asbestos PI Trust -- subject to certain confidentiality provisions information relating to the Future Resettlement; (iii) either: (a) CCR must provide to the Asbestos PI Trust a release of the Asbestos PI Trust by the plaintiff(s), or (b) CCR must assign all its rights to the plaintiff(s)' claim against AWI to the Asbestos PI Trust, which rights must include an assignment of at least 50% of the plaintiff's claim against the Asbestos PI Trust; and (iv) the amount claimed against the Asbestos PI Trust cannot exceed the lesser, of: (a) the face amount of AWI's share as set forth on the Future Resettlement list, and (b) the percentage of AWI's share as set forth on the Future Resettlement list times the total amount paid by CCR under the actual settlement. The CCR Settlement Agreement places limits on the amounts distributable to CCR on account of Future Resettlement Claims, including that the aggregate distributions from the Asbestos PI Trust on account of all Future Resettlement Claims will not exceed $12 million. (5) Withdrawal of Proofs of Claim: On the Settlement Effective Date -- the date the Court enters an order approving the CCR Settlement Agreement -- each of the CCR Proofs of Claim will be deemed withdrawn with prejudice -- but without prejudice to the rights to assert claims against the Asbestos PI Trust to the extent provided in the Agreement -- except that one proof of claim will be deemed amended to provide for the $4 million general unsecured claim. (6) Dismissal of Pending Actions: On the Settlement Effective Bate, these disputes will be dismissed with prejudice: (a) all claims between CCR and AWI in the Century Adversary Proceeding, (b) the Preference Action, and (c) the Safeco Bond Litigation and Appeal. (7) Withdrawal of Confirmation Objections. On the Settlement Effective Date, the objections to confirmation of the Plan filed by the CCR Members, CCR, and Safeco will be deemed withdrawn without prejudice. (Armstrong Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., 609/392-0900) ATLANTIC COAST: Says Mesa Air's Allegations Are Baseless -------------------------------------------------------- Atlantic Coast Airlines Holdings, Inc. ("ACA") (Nasdaq: ACAI) issued the following statement in response to the press release issued by Mesa Air Group, Inc. (Nasdaq: MESA): "ACA has obtained the press release of Mesa Air Group, Inc., indicating that Mesa has filed a lawsuit against ACA and its Board of Directors. ACA has not yet been served with the complaint that was filed in Delaware by Mesa. Therefore, ACA cannot comment specifically on Mesa's complaint at this time. Based on Mesa's press release, however, ACA notes that Mesa's allegations are baseless. ACA, in setting the record date, has acted in accordance with applicable law and with its own by-laws and ACA's Board of Directors has acted consistently with its fiduciary duties. ACA will contest these reported allegations vigorously. ACA currently operates as United Express and Delta Connection in the Eastern and Midwestern United States as well as Canada. On July 28, 2003, ACA announced plans to establish a new, independent low-fare airline to be based at Washington Dulles International Airport. The Company has a fleet of 148 aircraft-including a total of 120 regional jets-and offers over 840 daily departures, serving 84 destinations. ACA employs approximately 4,600 aviation professionals." Atlantic Coast Airlines (S&P, B- Corporate Credit Rating, Developing) employs over 4,800 aviation professionals. The common stock of parent company Atlantic Coast Airlines Holdings, Inc. is traded on the Nasdaq National Market under the symbol ACAI. For more information about ACA, visit the Web site at http://www.atlanticcoast.com AVAYA: Names Mario Belanger as President of Canadian Operations --------------------------------------------------------------- Avaya Inc. (NYSE: AV), a leading global provider of communications networks and services for business, announced that it has appointed Mario Belanger as President of Canadian Operations. Belanger will be responsible for directing Avaya Canada's sales and operations, and providing strategic direction to expand the company's leadership and market share in Canada. An industry veteran with more than 20 years of experience in the Canadian market, Belanger joins Avaya from Paradyne Corporation, where he most recently served as president of Paradyne Worldwide Corporation and vice president of international sales. Before joining Paradyne, Belanger also held management positions at Xerox Canada and Bell Canada. "Mario comes to Avaya Canada with a proven track record of driving revenue growth and excellence in customer service. His extensive experience in the Canadian market will ensure Avaya delivers solutions geared towards the specific needs of our Canadian customers, ultimately helping them to achieve superior business results," said Susan Bailey, Vice President of Sales for the Americas, Global Accounts, Channels & Alliances. "Mario's knowledge of the telecommunications industry and his expertise in building and leading successful organizations will contribute to Avaya's growth in one of our key markets." Belanger is a graduate of Bishop's University. He has received numerous sales excellence and leadership awards over the course of his career. A native of Montreal, Quebec, he currently lives with his family in Markham, Ontario. Avaya is a leader in North American enterprise telephony according to Gartner and number one worldwide in IP telephony according to Synergy Research Group. In addition, Avaya ranks as the worldwide leader in voice messaging according to In-Stat/MDR and in contact centers according to Frost and Sullivan. Avaya is also Canada's top vendor for automatic call distribution/call centres for systems with 75 or more agent positions according to NBI/Michael Sone Associates (all ranks based on 2003 reports). Avaya Inc. (S&P, B+ Corporate Credit Rating) 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. Avaya has Canadian headquarters in Markham, Ontario, and offices across the country. For more information about Avaya, visit its website at http://www.avaya.ca BANC OF AMERICA: Fitch Affirms Ratings on Series 2002-2 Notes ------------------------------------------------------------- Banc of America Commercial Mortgage Inc.'s commercial mortgage pass-through certificates, series 2002-2, are affirmed by Fitch Ratings as follows: -- $92.1 million class A-1 'AAA'; -- $320.7 million class A-2 'AAA'; -- $975.2 million class A-3 'AAA'; -- $1.7 billion class XC 'AAA'; -- $1.5 billion class XP 'AAA'; -- $64.7 million class B 'AA'; -- $17.2 million class C 'AA-'; -- $12.9 million class D 'A+'; -- $17.2 million class E 'A'; -- $21.6 million class F 'A-'; -- $23.6 million class G 'BBB+'; -- $19.4 million class H 'BBB'; -- $21.6 million class J 'BBB-'; -- $36.6 million class K 'BB+'; -- $12.9 million class L 'BB'; -- $12.9 million class M 'BB-'; -- $16.8 million class N 'B+'; -- $6.8 million class O 'B'; The $38.8 million class P is not rated by Fitch. The affirmations follow Fitch's ongoing surveillance of the transaction, which has paid down 1% since issuance. There are no delinquent loans in the portfolio nor have any loans been transferred to the special servicer. The portfolio contains three credit assessed loans whose financial performance has been stable since issuance. The portfolio watchlist report contains seven loans representing only 6% of the outstanding principal balance. Fitch will continue to monitor the transaction, as surveillance is ongoing. BOB'S STORES: Wants to Tap FTI Consulting for Financial Advice -------------------------------------------------------------- Bob's Stores, Inc., and its debtor-affiliates tell the U.S. Bankruptcy Court for the District of Delaware that they need to employ a financial advisor to assist them in their reorganization efforts. In this regard, the Debtors ask for authority to employ and turn to FTI Consulting as Financial Advisors to provide: a) assistance to the Debtors in the preparation of financial related disclosures required by the Court, including the Schedules of Assets and Liabilities, the Statement of Financial Affairs and Monthly Operating Reports; b) assistance to the Debtors with information and analyses required pursuant to the Debtors' Debtor-In-Possession financing including, but not limited to, preparation for hearings regarding the use of cash collateral and DIP financing; c) assistance with the identification and implementation of short-term cash management procedures; d) advisory assistance in connection with the development and implementation of key employee retention and other critical employee benefit programs; e) assistance and advice to the Debtors with respect to the identification of core business assets and the disposition of assets or liquidation of unprofitable operations; f) assistance with the identification of executory contracts and leases and performance of cost/benefit evaluations with respect to the affirmation or rejection of each; g) assistance regarding the valuation of the present level of operations and identification of areas of potential cost savings, including overhead and operating expense reductions and efficiency improvements; h) assistance in the preparation of financial information for distribution to creditors and others, including, but not limited to, cash flow projections and budgets, cash receipts and disbursement analysis, analysis of various asset and liability accounts, and analysis of proposed transactions for which Court approval is sought; i) attendance at meetings and assistance in discussions with potential investors, banks and other secured lenders, the Creditors' Committee appointed in this chapter 11 case, the U.S. Trustee, other parties in interest and professionals hired by the same, as requested; j) analysis of creditor claims by type, entity and individual claim, including assistance with development of a database to track such claims; k) assistance in the preparation of information and analysis necessary for the confirmation of a Plan of Reorganization in this chapter 11 case; l) assistance in the evaluation and analysis of avoidance actions, including fraudulent conveyances and preferential transfers; m) assistance with facilitating matters relating to a potential sale of the Debtors' assets including analysis of assets and liabilities, negotiation with potential acquirers and communication with all parties in interest; n) litigation advisory services with respect to accounting and tax matters, along with expert witness testimony on case related issues as required by the Debtors; and o) render such other general business consulting or such other assistance as Debtors' management or counsel may deem necessary that are consistent with the role of a financial advisor and not duplicative of services provided by other professionals in this proceeding. The Debtors relate that prior to the Petition Date, they engaged to provide financial advisory services. FTI has developed a great deal of institutional knowledge regarding the Debtors' operations, finance and systems. Such experience and knowledge will be valuable to the Debtors in their efforts to reorganize. The customary hourly rates customarily charged by FTI to their clients range from: Senior Managing Director $550 to $625 per hour Director/Managing Directors $395 to $550 per hour Associates/Consultants $195 to $365 per hour Administration/Paraprofessionals $80 to $160 per hour Robert J. Duffy, a Senior Managing Director with FTI Consulting will lead the professionals in this specific engagement. A retail clothing chain headquartered in Meriden, Connecticut, Bob's Stores, Inc., filed for chapter 11 protection on October 22, 2003 (Bankr. Del. Case No. 03-13254). Adam Hiller, Esq., at Pepper Hamilton and Michael J. Pappone, Esq., at Goodwin Procter, LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed debts and assets of more than $100 million. COGENTRIX ENERGY: Unit Obtains New $192M Bank Credit Facility ------------------------------------------------------------- On October 28, 2003, Cogentrix Delaware Holdings, Inc., a wholly- owned subsidiary of Cogentrix Energy, Inc., executed a Credit Agreement with Australia and New Zealand Banking Group Limited and Citigroup Global Markets, Inc. as joint lead arrangers together with a syndicate of lenders. ANZ will serve as the administrative agent under the CDH Credit Facility. The CDH Credit Facility, which has a final maturity date of January 31, 2006, provides CDH an approximately $192.0 million commitment, which commitment consists of a $40.0 million revolving credit facility, $10.0 million of tranche A term loans, $78.7 million of tranche B term loans, $48.1 million of tranche C term loans and $15.2 million of tranche D letters of credit and term loans. The CDH Credit Facility refinances CDH's guarantee of commitments under the Third Amended and Restated Credit Agreement dated September 14, 2000 between CEI, the lenders named therein and ANZ, as lead arranger. The CDH Credit Facility was utilized to prepay in full all obligations outstanding under the CEI Credit Agreement. Concurrently with the execution of the CDH Credit Facility, both the CEI Credit Agreement and the CDH Guarantee were terminated. The CDH Credit Facility is secured by a pledge of the capital stock of, a security interest in the assets of and/or guarantees by certain direct and indirect subsidiaries of CDH, as well as a security interest in the assets of CDH. In connection with the payoff and termination of the CEI Credit Agreement, CEI has provided guarantees of all obligations under the CDH Credit Facility. The CEI Guarantee of the $40.0 million revolving credit and the $10.0 million tranche A term loans is secured by the assets of CEI and a pledge of the capital stock of its direct subsidiaries, which includes CDH. The CEI Guarantee of the remaining obligations under the CDH Credit Facility is unsecured. Borrowings under the CDH Credit Facility accrue interest at a rate of LIBOR plus 4.75% per annum and the fee for letters of credit outstanding thereunder is 4.75% per annum. The CDH Credit Facility contains certain covenants, one of which triggers an event of default upon a change of control of CEI. On October 17, 2003, CEI and its shareholders entered into an agreement with GS Power Holdings, LLC, a wholly-owned subsidiary of The Goldman Sachs Group, Inc., to sell 100% of the common stock of CEI. The closing of the Goldman Transaction would constitute a change in control within the meaning of the applicable covenant and, as such, would be an event of default under the CDH Credit Facility. * * * As previously reported, Standard & Poor's Ratings Services said that its 'BB' corporate credit and senior unsecured debt ratings on independent power producer Cogentrix Energy Inc., remain on CreditWatch with negative implications following the announcement that The Goldman Sachs Group Inc., reached an agreement to acquire 100% of the stock of Cogentrix for $115 million in equity and $2.3 billion in nonrecourse debt. CONSECO FINANCE: Court Disallows and Expunges 317 Claims -------------------------------------------------------- Conseco Finance Corp. and its debtor-affiliates withdraw without prejudice their objection to these Claims: Claimant Claim No. -------- --------- Chicago Title Insurance Co. 49676-000213 21st Mortgage Corporation 49675-001632 Comdisco, Inc. 49675-000466 Fidelity National Loan Portfolio 49676-000214 Fidelity National Loan Portfolio 49676-000215 Autumn Oaks Manufactured Homes 49676-000043 William Garrett, Jr. 04700-000004 Burley & Myrna Geiger 49676-000013 After giving all parties time to respond, the Court disallows and expunges 317 Claims, among them are: Claimant Claim No. Amount -------- --------- ------ 21st Mortgage Corporation 49675-001632 $16,677,918 State of Texas 49676-000059 397,382 Ray & Ann Miller 04700-000012 500,000 Georgia Department of Revenue 49675-001761 1,055,582 Burley & Myrna Geiger 49675-000024 225,000 Estate of Jimmy and Betty Scott 49676-000479 500,000 Credit Based Asset Servicing 49676-000448 4,247,296 Calvary Mobile Homes, Inc. 49676-000252 5,000,000 Anchorage Police & Fire Retirement 49676-000151 26,315,068 (Conseco Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service, Inc., 609/392-0900) CONSECO INC: Stipulations Resolving 5 Claims Get Court Approval --------------------------------------------------------------- Conseco Inc. and its debtor-affiliates withdraw their objection to these Claims without prejudice: Claimant Claim No. -------- --------- Walter O. Hannowsky 49672-001695 Peter W. Nauert 49674-000119 Nealand L. Ransom 49672-001879 Philip P. Sheridan 49672-004044 For various reasons, Judge Doyle disallows and expunges 185 Claims, including: Claimant Claim No. Amount -------- --------- ------ Weil, Gotshal & Manges LLP 49672-005942 $183,586 Tony Z. Moore Trust 49672-000437 1,000,000 Tony Z. Moore Rev Trust 49672-000435 1,000,000 Kathryn Sniger 49672-000079 1,535,709 Tony Z. Moore 49672-000434 1,000,000 Alex Koyman 49672-000337 250,000 Peter Kolyl-Vuer 49672-003879 255,000 Jerunazargarr LLC 49672-003985 51,000,000 James & Carol Goetz 49672-005062 2,000,000 Donald Beaugez 49672-006643 500,000 BMD&T Adams and John Marks 49672-006657 1,000,000 Billy Adams 49672-006266 1,000,000 Moreover, the Court reclassifies 28 Claims to the case of the Debtor that is allegedly liable to the claims asserted. Judge Doyle also approves the Stipulations the Debtors entered into with five creditors, wherein the parties agree that: A. Keystone Asset Management's Claims Claim No. 49672-003420 is disallowed and expunged for all purposes. Keystone's Claim Nos. 49672-000082 and 49672-000147 are not affected by the Stipulation and the Debtors reserve the right to object to Claim No. 49672-003420 on any grounds. B. Comroe Hing LLP's Claims Claim No. 49672-003480 is disallowed and expunged for all purposes as it relates to Conseco, Inc. and will be listed on the official claims register as a secured non-priority claim for $202,804 against Conseco Finance Servicing Corp. C. Donnelly & Russo P.A.'s Claim Claim No. 49672-003421 will be disallowed and expunged for all purposes as it relates to Conseco, Inc. and will be listed on the official claims register as an unsecured non- priority claim for $15,456 against Conseco Finance Corp. D. Peter W. Nauert's Claim Claim Nos. 49674-000195, 49675-00050, 49674-005252 and 49672-005242 are deemed expunged. Claim No. 49674-000119 against CIHC and the unnumbered proof of claim against CNC for $7,000,000 will be deemed timely filed in the proper location. However, that portion of the claim that Nauert asserts a liquidated claim for $7,000,000 will be deemed to have been filed as a duplicate when the identity of the proper Debtor is finally determined by the Court. E. James F. Bossenbroek and Southern Ave. Associates' Claims Claim No. 49672-003468 is disallowed and expunged for all purposes as it relates to Conseco, Inc. and will be listed on the official claims register as an unsecured non-priority claim for $706,869 against Conseco Finance Corp. Claim No. 79672-003469 will be disallowed as it relates to Conseco, Inc. and will be listed on the official claims register as an unsecured non-priority claim for $$5,919,631 against Conseco Finance Corp. (Conseco Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service, Inc., 609/392-0900) CREDIT SUISSE: Fitch Affirms Six Note Classes with Low-B Ratings ---------------------------------------------------------------- Credit Suisse First Boston Mortgage Securities Corp.'s commercial mortgage pass-through certificates, series 2001-CP4, are affirmed by Fitch Ratings as follows: -- $77.5 million class A-1 'AAA'; -- $86.9 million class A-2 'AAA'; -- $110 million class A-3 'AAA'; -- $611.4 million class A-4 'AAA'; -- Interest-only class A-X 'AAA'; -- Interest-only class A-CP 'AAA'; -- $61.9 million class B 'AA'; -- $45.7 million class C 'A'; -- $22.1 million class D 'A-'; -- $16.2 million class E 'BBB+'; -- $16.2 million class F 'BBB'; -- $11.8 million class G 'BBB-'; -- $22.1 million class H 'BB+'; -- $19.1 million class J 'BB'; -- $10.3 million class K 'BB-'; -- $8.8 million class L 'B+'; -- $7.4 million class M 'B'; -- $5.9 million class N 'B-'. Fitch does not rate the $20.6 million class O certificates. The rating affirmations reflect the consistent loan performance, minimal reduction of the pool collateral balance since issuance and only one loan (0.08%) in special servicing. As of the October 2003 distribution date, the pool's collateral balance has decreased 2% to $1.15 billion from $1.18 billion at issuance. Midland Loan Services, the master servicer, collected year-end 2002 financials for 80% of the mortgage pool. The YE 2002 weighted average debt service coverage ratio is 1.86 times, compared to 1.67x at issuance for the same loans. Fitch reviewed the credit assessments of the Landmark loan (7.9%) and the Parfinco East and West Annex loan (4.6%). The DSCR for each loan is calculated using borrower financials less required reserves and debt service payments based on the current balance with a Fitch stressed refinance constant. The Landmark loan is secured by a 423,677 square foot (sf) office building located on Market Street in the Financial District of Downtown San Francisco. The DSCR for YE 2002 is 1.64x, compared to 1.73x at issuance. The tenants have security deposits in place in the form of letters of credit aggregating approximately $18 million. The Parfinco East and West Annex loan is secured by two eight story office buildings totaling 510,550 sf located in Pasadena, CA. The DSCR for YE 2002 was 1.35x compared to 1.40x at issuance. Based on their stable performance, both loans maintain investment grade credit assessments. Fitch will continue to monitor this transaction, as surveillance is ongoing. CREST 2001-1 LTD: Fitch Affirms Class C Notes Rating at BB+ ----------------------------------------------------------- Fitch Ratings affirms all of the rated notes issued by Crest 2001- 1, Ltd. The affirmation of these notes is a result of Fitch's annual rating review process. The following rating actions are effective immediately: -- $369,082,565 class A notes 'AAA'; -- $30,000,000 class B-1 notes 'A'; -- $35,000,000 class B-2 notes 'A'; -- $30,000,000 class C notes 'BB+'. Crest 2001-1 is a collateralized bond obligation, which closed March 7, 2001, supported by a static pool of commercial mortgage- backed securities (CMBS; 30.9%) and real estate investment trusts (REITs; 69.1%). Fitch has reviewed the credit quality of the individual assets comprising the portfolio, including discussions with Wachovia Securities, the asset manager. According to the Sept. 30, 2003 trustee report, the class A overcollateralization was 132.83%, the class B OC was 112.94% and the class C was 105.64%, relative to test levels of 125%, 107% and 102%, respectively. The report also indicated that the class A notes have paid down approximately 2.90% since closing. The CBO has experienced no significant credit migration with a current weighted average rating factor of 23.1, vs. an initial WARF of 21.9. Based on the stable performance of the underlying collateral and the comfortable cushion on the OC tests, Fitch has affirmed all of the rated liabilities issued by Crest 2001-1. Fitch will continue to monitor this transaction. DEAN FOODS: Will Webcast Third Quarter Conference Call on Nov. 5 ---------------------------------------------------------------- Dean Foods Company (NYSE: DF) will host live audio webcasts of its third quarter earnings conference call and an upcoming investor presentation at the Morgan Stanley Global Consumer Conference. On Wednesday, November 5, 2003 at 9:00 a.m. EST, management will host a webcast to discuss the results for the third quarter and its outlook for the balance of 2003 and 2004. An earnings release will be issued before the market opens on that same date. This webcast will last approximately one hour and will be accessible by visiting www.deanfoods.com and clicking on "Webcasts." Shortly following the event, a webcast replay will be available on the company's site within the Investor Relations section, under Audio Archives. On Thursday, November 6, 2003 from 2:30 p.m. - 3:10 p.m. EST, management will make a presentation at the Morgan Stanley Global Consumer Conference. The webcast can be accessed directly at http://customer.nvglb.com/MORG007/110403a_cf/default.asp?entity=de an or by visiting www.deanfoods.com and clicking on "Webcasts." The associated presentation slides will also be accessible by visiting "Investor Relations" and clicking on "Presentations," and an audio archive will be available for approximately 60 days following the event. In order to listen to the webcasts, users will need to have installed either Real Player or Windows Media Player software, which can be detected and downloaded by visiting the site. Dean Foods Company (S&P, BB+ Corporate Credit Rating, Positive) is one of the nation's leading food and beverage companies. The company produces a full line of company-branded and private label dairy and dairy-related products such as milk and milk-based beverages, ice cream, coffee creamers, half and half, whipping cream, whipped toppings, sour cream, cottage cheese, yogurt, dips, dressings and soy milk. The company is also a leading manufacturer of pickles and other specialty food products, juice, juice drinks and water. The company operates over 120 plants in 36 U.S. states and Spain, and employs approximately 28,000 people. DOLLAR FIN'L: Proposed $200M Senior Notes Get S&P's B Rating ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B' senior unsecured debt rating to Berwyn, Pennsylvania-based Dollar financial Group's proposed issuance of $200 million eight-year senior notes to be issued pursuant to Rule 144A under the Securities Act of 1933, as amended. Concurrently, the outlook on Dollar was revised to stable from negative. The ratings on Dollar, including the company's 'B+' long-term counterparty credit rating, were affirmed. "The issuance of the aforementioned notes will have a marginal impact on the company's leverage position, as it has announced that it will use the proceeds to reduce its borrowings under its existing revolving credit facility and redeem its outstanding 10.875% senior notes due in 2006 and all outstanding 10.875% senior subordinated notes due 2006," said Standard & Poor's credit analyst Steven Picarillo. The outlook revision reflects Dollars' increased funding flexibility as, upon completion of the $200 million issuance, the company will have approximately $48 million of availability under its newly negotiated credit facility. This will reduce the company's dependence on its banking partners to fund its payday lending activities, and as such add a level of funding flexibility should the current funding arrangements through its bank partners be interrupted. "The ratings are based on Dollar's high leverage, limited stockholders' equity, and moderate interest coverage," Mr. Picarillo said. "These factors are somewhat offset somewhat by Dollar's solid market position in both of its business segments." The stable outlook is based on recent operating improvements and the increase in funding flexibility, which is somewhat overshadowed by the continued scrutiny of companies participating in the payday loan market. Standard & Poor's anticipates that the company will continue to realize positive trends in terms of revenues and EBITDA. DURA AUTOMOTIVE: Weak Credit Measures Spur S&P to Affirm Rating --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' rating to Dura Operating Corp.'s new $175 million revolving credit facility, which is guaranteed by parent Dura Automotive Systems Inc. At the same time, Standard & Poor's affirmed its 'BB-' corporate credit rating on Dura, a supplier of driver control systems and structural assemblies for the automotive and recreational vehicle industries. The Rochester Hill, Michigan-based company has total debt of about $1.2 billion. The outlook is negative. "Although we expect Dura to focus on strengthening its balance sheet, we believe the company's credit protection measures will remain weak for the rating for at least the next two years," said Standard & Poor's credit analyst Martin King. "The ratings could be downgraded if market conditions weaken, liquidity tightens, or improvement of the company's credit profile is substantially delayed." The new credit facility is rated one notch above the corporate credit rating, reflecting the strong likelihood of 100% recovery of principal in the event of default or bankruptcy. The new facility matures in 2008 and replaces a $375 million revolving credit facility that was scheduled to mature 2005. Dura's $150 million secured term loan due 2008 will remain in place. The new revolving credit facility will be secured by substantially all domestic assets of Dura and, along with the term loan, will rank senior to Dura's other debt obligations. A substantial proportion of Dura's assets are in overseas affiliates and are not included in the collateral package. Financial covenants have been liberalized, which increases the effective availability under the facility. Standard & Poor's applied an EBITDA multiple to discounted cash flows to determine a distressed enterprise valuation. Potential causes of a default could include a cyclical downturn in demand, intensified pricing pressure, or accelerated customer market share losses. Dura is one of the largest manufacturers of automotive cables, parking brake mechanisms, transmission shifter mechanisms, and complex glass systems. Its products range in complexity from commodity-like to highly differentiated in nature. DURATEK INC: Q3 Liquidity Strained Despite Increasing Net Income ---------------------------------------------------------------- Duratek, Inc. (NASDAQ:DRTK) announced net income of $5.6 million, or $0.29 per diluted share, for the three-month period ended September 28, 2003, as compared to net income of $3.9 million, or $0.20 per diluted share, for the comparable period in 2002. Revenues were $72.5 million for the three months ended September 28, 2003 compared to $72.8 million in the same period in 2002. The increase in net income of $1.7 million, for the quarter, was primarily due to strong performance in the Commercial Services Segment. For the nine month period ended September 28, 2003, net income before cumulative effect of a change in accounting principle was $14.8 million, or $0.77 per diluted share, as compared to net income of $10.5 million, or $0.55 per diluted share, for the comparable period in 2002. Revenues of $213.1 million for the nine months ended September 28, 2003 were comparable to the revenues of $214.4 million achieved during the same period in 2002. The improvement in the year-to-date net income was due to strong performance from the Commercial Services Segment. On a per share basis, net income after cumulative effect of change in accounting principle for the nine months ended September 28, 2003 was $0.64 per diluted share. During the first quarter of 2003 the Company recorded a $2.4 million non-cash charge for the adoption of Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations". Robert E. Prince, President and CEO said, "We are pleased with our achievements in the third quarter. The financial performance was solid from all three of our business segments, but in particular from Commercial Services. Our focus on continuing to provide innovative solutions for our customers appears to be showing results." Robert F. Shawver, Executive Vice President and CFO added, "Our focus on margin improvement and debt pay down has clearly resulted in improved financial performance. This solid financial performance only better positions the Company to achieve longer range growth objectives." As of September 28, 2003, the company's balance sheet shows that total current liabilities of $90,808,000 exceeds total current assets of $76,685,000. Duratek provides safe, secure radioactive materials disposition. ENRON CORP: Auctioning-Off Papiers & St. Aurelie Units on Nov 10 ---------------------------------------------------------------- Pursuant to the contemplated sale of Papiers Stadacona Ltee. and St. Aurelie Timberlands Co., Ltd. businesses, Enron Corporation sought and obtained a Court order that: (a) schedules an Auction on November 10, 2003 at which Enron and the Sellers will solicit bids for the Business; (b) approves the proposed Bidding Procedures; (c) schedules November 13, 2003 as the date for the Sale Hearing to approve the sale of the Business to Purchaser or the Winning Bidder at the Auction; (d) approves the payment of the Break-Up Fee to Purchaser; and (e) approves the form and manner of notice of the Motion, including notice of the Auction, the Bidding Procedures and the Sale Hearing. Bidding Procedures According to Martin A. Sosland, Esq., at Weil, Gotshal & Manges LLP, in New York, to maximize the value of the Business, Enron and the Sellers will implement a competitive bidding process typical for transactions of this size and nature and designed to generate maximum recovers. The Bidding Procedures provides: A. Auction Time and Date The Auction will be held on November 10, 2003, commencing at 10:00 a.m. (New York Time) at the offices of Weil, Gotshal & Manges, 767 Fifth Avenue, New York, New York 10153 for consideration of qualifying offers that may be presented to Enron and the Sellers, or at the time and date as Enron and the Sellers may determine, upon prior consultation with the Creditors' Committee. B. Qualification as Bidder Any entity that wishes to make a bid for the Business must provide Enron and the Sellers with sufficient and adequate information to demonstrate, to the sole and absolute satisfaction of Enron and the Sellers, upon consultation with the Creditors' Committee, that it has the financial wherewithal and ability to consummate the transactions contemplated in the purchase agreement submitted with the Competing Bid including evidence of adequate financing commitments, and including, without limitation, a parent guaranty, if deemed appropriate, each in a form agreed upon by Enron and the Sellers, in consultation with the Creditors' Committee. C. Bid Requirements 1. Enron and the Sellers, upon consultation with the Creditors' Committee, will entertain bids that are on substantially the same terms and conditions as those terms set forth in the Purchase Agreement and the documents set forth as exhibits thereto; 2. Each Competing Bid must be accompanied by a cash deposit at least equal to $6,150,000; 3. Prior to the Bid Deadline, the Earnest Money Deposit is to be delivered to Sellers in the form of a wire transfer to: U.S. Bank, N.A. Corporate Trust Services One California Street, Suite 2550 San Francisco, CA 94111 Attention: Raafat Albert Sarkis Vice President/Business Development Facsimile: (415) 273-4590 Reference: 43889.0003 M. Sosland (Stadacona Deposit) or a cashiers check to: Weil Gotshal & Manges, LLP Attn. Norm LaCroix Director of Accounting 767 Fifth Avenue New York, New York 10153 Reference: Enron/Stadacona Transaction 4. If a bidder, other than Purchaser, is the Winning Bidder, then upon execution of a purchase agreement by Sellers and the bidder, the Winning Bidder will direct Weil Gotshal & Manges to transfer its Earnest Money Deposit into an escrow account as required by the purchase agreement; 5. Competing Bids must be (a) in writing, (b) signed by an individual authorized to bind the prospective purchaser, and (c) received no later than 4:00 p.m. (New York Time) on November 3, 2003, by: (i) Enron Corp. 1400 Smith Street, Houston, Texas 77002 Attention: Lance Schuler, Lance.Schuler-legal@enron.com Facsimile: 281-664-4890; (ii) Weil, Gotshal & Manges LLP 200 Crescent Court, Suite 300, Dallas, Texas 75201 Attention: Martin A. Sosland, Esq. martin.sosland@weil.com Facsimile: 214-746-7777; (iii) The Blackstone Group L.P. 345 Park Avenue, New York, New York 10154, Attention: Stefan Feuerabendt feuerabendt@blackstone.com Facsimile: (212) 583-5707); and (iv) Squire, Sanders & Dempsey L.L.P. 312 Walnut Street, Suite 3500, Cincinnati, Ohio Attention: Stephen D. Lerner slerner@ssd.com Facsimile: 513-607-7199; 6. Any Competing Bid must be presented under a contract substantially similar to the Agreement, marked to show any modifications made to the Agreement, including the amount of consideration, name of purchaser, and other conforming changes that must be made to reflect the purchaser and its bid, and the bid must not be subject to due diligence review, board approval, or the receipt of any non- governmental consents not otherwise required by the Agreement; 7. Initial Overbids. The initial overbid must be at least $7,650,000 greater than the $205,000,000 Preliminary Purchase Price; 8. Parties not submitting Competing Bids by the Bid Deadline may not be permitted to participate at the Auction; and 9 All bids for the purchase of the Business will be subject to Bankruptcy Court approval. D. Due Diligence and Questions Prior to Submitting Bids To conduct due diligence regarding the Business, contact Stefan Feuerabendt, The Blackstone Group L.P., 345 Park Avenue, New York, New York 10154, (212) 583-5866; Facsimile (212) 583-5707; Email: feuerabendt@blackstone.com, for the due diligence procedures. Before a party will be allowed to conduct due diligence, if not previously executed, they must execute the Confidentiality Agreement. E. Auction 1. Evaluation of Highest or Best Offer. Enron and Sellers will, after the Bid Deadline and prior to the Auction, upon consultation with the Creditors' Committee: (i) evaluate all Competing Bids received, (ii) invite all Qualified Bidders to participate in the Auction, and (iii) determine which Competing Bid reflects the highest or best offer for the Business. During the Auction, Enron and Sellers will inform each bidder, which Competing Bid reflects the highest or best offer; 2. Enron and Sellers, in their business judgment and sole absolute discretion, in consultation with the Creditors' Committee, may reject any Competing Bid that is not in conformity with the requirements of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules of the Court, this Procedures Order or that is contrary to the best interests of Sellers, or Enron's estate or creditors; 3. Adjournment of Auction. The Auction may be adjourned as Enron and Sellers, upon consultation with the Creditors' Committee, deem appropriate. Reasonable notice of adjournment and the time and place for the resumption of the Auction will be given to Purchaser, all entities submitting Competing Bids, and the Creditors' Committee; 4. Subsequent Bids. Subsequent bids at the Auction, including those of Purchaser, must be in increments of at least $2,000,000; and 5. Other Terms. All Competing Bids, the Auction, and the Bidding Procedures are subject to other terms and conditions as are announced by Enron and Sellers, in consultation with the Creditors' Committee. This Bidding Procedures may be modified by Enron and Sellers, in consultation with the Creditors' Committee, as may be determined to be in the best interests of Sellers, or Enron's estate or creditors. F. Irrevocability of Certain Bids The bid of the Winning Bidder and the bid of the bidder that submits the next highest or best bid -- the Back-up Bidder -- will each be irrevocable until the earlier to occur of: (i) the consummation of a sale of the Business, and (ii) 60 days after the last date of the Auction; provided, however, if Purchaser is either the Winning Bidder or the Back-up Bidder, then the highest or best bid of Purchaser will remain irrevocable in accordance with the terms of the Purchase Agreement. If Purchaser is neither the Winning Bidder nor the Back-up Bidder, then the highest or best bid submitted by Purchaser will, in addition to the bids of the Winning Bidder and the Backup Bidder, remain irrevocable in accordance with the terms of the Agreement. G. Retention of Earnest Money Deposits The Earnest Money Deposits of the Winning Bidder and the Back-up Bidder will be retained by Enron and Sellers until the earlier to occur of (i) the consummation of a sale of the Business and (ii) 60 days following the last date of the Auction; provided, however, if Purchaser is either the Winning Bidder or the Back-up Bidder, then Purchaser's Earnest Money Deposit will be retained by Enron and Sellers in accordance with the terms of the Agreement. If Purchaser is neither the Winning Bidder nor the Back-up Bidder, then in addition to the retention of the Earnest Money Deposits of the Winning Bidder and the Backup Bidder, Purchaser's Deposit will be retained by Enron and Sellers in accordance with the terms of the Agreement. The Earnest Money Deposits of bidders other than the Purchaser, the Winning Bidder and the Back-up Bidder, will be returned within five business days after the date of the Sale Hearing. H. Failure to Close In the event a bidder, including the Purchaser, is the Winning Bidder and it fails to consummate the proposed transaction by the closing date contemplated in the Purchase Agreement agreed to by the parties for any reason, Enron and Sellers: (i) will retain the Earnest Money Deposit of that bidder to the extent provided in the Purchase Agreement, and reserve the right to pursue all available remedies, whether legal or equitable, available to them, and (ii) upon consultation with the Creditors' Committee, will be free to consummate the proposed transaction with the next highest bidder at the highest price bid by that bidder at the Auction without the need for an additional hearing or order of the Court. I. Non-Conforming Bids Notwithstanding anything to the contrary, Enron and Sellers, in consultation with the Creditors' Committee, will have the right to entertain non-conforming bids. J. Expenses Any bidder presenting bids will bear their own expenses in connection with the sale of the Business, whether or not the sale is ultimately approved. Mr. Sosland contends that the Bidding Procedures provide a fair and reasonable means of ensuring that the Business is sold for the highest or best offer attainable. Moreover, the Bidding Procedures provide flexibility so as to enable a party interested in submitting an offer to modify the terms of the Agreement and submit a greater purchase price, so long as the offer is on substantially the same terms and conditions as those set forth in the Agreement. Furthermore, the time frame allows Enron and the Sellers to consider and evaluate any offer so as to ensure that it satisfies the requirements for Auction participation. Break-Up Fee Pursuant to the Agreement with Peter M. Brant, in the event the Agreement is terminated pursuant to Section 3.2(d), and an Alternative Transaction closes, Sellers agreed to pay Purchaser on the date of the consummation, if any, of the Alternative Transaction equal to 2.5% of the Preliminary Purchase Price, plus all documented out-of-pocket expenses incurred by Purchaser for attorneys, consultants, investment bankers, accountants and due diligence in connection with the transaction contemplated by the Agreement, provided that the expenses will not exceed $1,500,000. In the event the Agreement is validly terminated pursuant to Section3.2(e), Sellers will promptly reimburse Purchaser for all reasonable, documented, out-of-pocket expenses the Purchaser incurred, provided that the expenses will not exceed $1,500,000. According to Mr. Sosland, the proposed Break-up Fee is fair and reasonable because it will initiate an overbid process at the floor that is desirable. Moreover, the Break-up Fee will foster competitive bidding for the Assets and will confer a benefit to the Sellers at least equal to the amount of the Break-up Fee. The Debtors indicate they will advise all parties who submitted a prior bid for the Business and any party who has expressed in writing an interest in the Business of these Bidding Procedures just in case a higher and better offer might emerge. (Enron Bankruptcy News, Issue No. 85; Bankruptcy Creditors' Service, Inc., 609/392-0900) EXIDE TECH: Unsecured Panel Retains Prof. Hotchkiss as Expert ------------------------------------------------------------- At this stage of the Exide Debtors' Chapter 11 cases, the Official Committee of Unsecured Creditors determined that it requires the services of an expert on certain specific issues that will be addressed in the Plan confirmation hearing. Nunc pro tunc to October 2, 2003, the Committee sought and obtained the Court's authority to retain Professor Edith S. Hotchkiss as an Expert. Prof. Hotchkiss is an Associate Professor in Wallace E. Carroll School of Management Finance Department at Boston College. She received a Bachelor of Arts from Darmouth College, Engineering & Economics, and a Ph.D. from New York University Stern School of Business in Finance. The Committee chose Prof. Hotchkiss as an expert based largely upon her research. She has published several studies related to bankruptcy. In particular, she co-authored Valuation of Bankrupt Firms, which analyzed 63 Chapter 11 debtors exiting bankruptcy and determined how they were valued. The Academic Study then evaluated what variables were predictive of whether the proponent of the plan of reorganization is undervaluing a company. The Committee's professionals believe that the Academic Study addresses issues at heart of the Confirmation Hearing and Prof. Hotchkiss' expertise is critical for the hearing. Prof. Hotchkiss will be compensated at $600 per hour for her services to the Committee by the Debtors' estates. Additionally, the Debtors' estates will reimburse Prof. Hotchkiss for her reasonable out-of-pocket expenses related to the services she provides for the Committee. The expenses may include, among other things, travel and lodging expenses, third party vendor costs and other customary expenditures. At Prof. Hotchkiss' end, she ascertains that: -- she does not, to her knowledge, represent any other entity having an adverse interest to the Debtors in connection with the matters for which she is to be retained in these cases; -- she has not represented or been employed by the Debtors, the Debtors' creditors, equity security holders, any other parties-in-interest, their respective professionals, the United States Trustee for the District of Delaware, or any person employed in the office of the United States Trustee in any matters relating to the Debtors or their estates in connection with these Chapter 11 cases; -- while she is employed by the Committee, Prof. Hotchkiss will not represent any other entity having an adverse interest in connection with the Debtors' Chapter 11 cases, in accordance with Section 1103 (b) of the Bankruptcy Code; -- insofar as she has been able to ascertain after due inquiry, Prof. Hotchkiss has no connection with the Debtors, the Debtors' creditors, equity security holders, any other parties-in-interest, their professionals, the United States Trustee for the District of Delaware, or any person employed in the office of the United States Trustee; and -- she does not have any agreement with any other person for the sharing of compensation to be received by Prof. Hotchkiss in connection with services rendered in the cases. (Exide Bankruptcy News, Issue No. 33; Bankruptcy Creditors' Service, Inc., 609/392-0900) FEDERALALPHA STEEL: Sachnoff & Weaver Serves as Attorneys --------------------------------------------------------- FederalAlpha Steel LLC asks the U.S. Bankruptcy Court for the Northern District of Illinois for permission to retain and employ Sachnoff & Weaver Ltd., as counsel in its chapter 11 case. The Debtor selected Sachnoff & Weaver because of the firm's extensive experience and knowledge regarding Chapter 11 business reorganizations, experience practicing before this Court and familiarity with the Debtor's operations. Sachnoff & Weaver will: a. provide legal advice to the Debtor regarding its powers and duties as debtor in possession; b. advise the Debtor in connection with the formulation and negotiation of a plan of reorganization; c. pursue this Court's approval of a disclosure statement and confirmation of a plan of reorganization; d. represent the Debtor in any litigation; e. present all necessary applications, motions, answers, orders, reports, and other legal papers necessary to the administration of the Debtor's estate; f. appear in Court and protecting the Debtor's interests before the Court; g. attend meetings and negotiating with creditors and their representatives and other interested parties; h. take all steps necessary to protect and preserve the Debtors estate; and i. perform all other legal services for the Debtor that may be necessary and proper to this case. Sachnoff & Weaver professionals assigned in this engagement are: Stephen T. Bobo $375 per hour Joel R. Schaider $390 per boar Charles P. Schulman $360 per hour Arlene N. Gelman $295 per hour Erich S. Buck $225 per hour Headquartered in Chicago, Illinois, FederAlpha Steel LLC is Leroux Steel and Alpha Steel Corp.'s joint venture in the Midwest. Headquartered in Peotone, the company is one of the largest structural steel supplier in the region. The Company filed for chapter 11 protection on October 21, 2003 (Bankr. N.D. Ill. Case No. 03-43059). Stephen T. Bobo, Esq., at Sachnoff & Weaver, Ltd., leads the engagement to represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated assets and debts of over $10 million each. FMC CORPORATION: Posts $3.4 Million Third Quarter Net Loss ---------------------------------------------------------- FMC Corporation (NYSE: FMC) reported a net loss of $3.4 million for the third quarter of 2003, or $0.10 per share loss on a diluted basis, versus net income of $28.2 million in the third quarter of 2002, or $0.79 per diluted share. The net loss for the current quarter included charges of $20.2 million after-tax, or $0.57 per diluted share, relating primarily to the previously announced Astaris restructuring program, partially offset by the gain on the sale of real estate. Excluding these charges, earnings were $0.47 per diluted share for the third quarter of 2003. Third quarter revenue of $470.5 million was down 1 percent as compared with $476.6 million in the prior-year quarter. According to William G. Walter, FMC chairman, president and chief executive officer: "We made steady progress on all our objectives. We delivered earnings before restructuring charges at the mid- point of our previous guidance of $0.45 to $0.50 per share despite the unfavorable impact on our Agricultural Products business of weak pest pressure in selected North American crop markets. We followed through on our commitment to take aggressive actions in Industrial Chemicals by obtaining the agreement of our joint venture partner and Astaris' lenders to implement a significant restructuring plan in Astaris that should result in $40-50 million in total annual cost savings for the phosphorus chemicals venture once fully implemented. We are ahead of our cash flow objectives and expect to generate $30-40 million of free cash in 2003. In summary, while the external business environment remains challenging particularly in Industrial Chemicals, we continue to meet or exceed our commitments and expect to do so for the balance of the year." Revenue in Agricultural Products was $154.1 million, a decrease of 9 percent from the prior-year quarter. This decline was driven by lower sales in the North American crop business, where weak pest pressure in the corn mite and cotton worm markets resulted in lower insecticide volumes, and by an earlier decision to exit lower margin third party products in Brazil. These declines were partially offset by higher sales in the European crop market and favorable foreign currency translation. Segment earnings before interest and taxes ("segment earnings") of $24.1 million were up 16 percent from the third quarter of 2002 due to a more profitable sales mix and more efficient plant operations. Revenue in Specialty Chemicals was $125.6 million, an increase of 2 percent from the prior-year quarter. In the BioPolymer business, higher sales of microcrystalline cellulose into the pharmaceutical market and the favorable impact of foreign currency translation were partially offset by lower North American sales into the nutritional beverage market. In the lithium business, increased sales into the battery market were partially offset by weaker specialty organic sales into the pharmaceutical market. Segment earnings of $23.3 million were essentially flat with the third quarter of 2002. Revenue in Industrial Chemicals was $192.0 million, an increase of 4 percent from the prior-year quarter. Foret drove the overall increase due to higher peroxygen volumes and selling prices and favorable foreign currency translation. In the alkali business, lower soda ash selling prices in export markets were largely offset by higher selling prices in caustic and bicarbonate. In the peroxygens business, decreased hydrogen peroxide volumes in the pulp market were partially offset by higher selling prices. Segment earnings of $7.9 million were down $12.4 million from the third quarter of 2002. Lower segment earnings were largely the result of weaker affiliate earnings from Astaris as well as higher manufacturing costs in the alkali business resulting from scheduled mine maintenance. Weaker affiliate earnings from Astaris were the result of the absence of a power resale contract as well as decreased selling prices due to competitive rivalry and excess phosphorus chemicals capacity. Corporate expense of $9.3 million was up from $8.6 million in the third quarter of 2002 due largely to higher insurance costs. Interest expense, net, was $23.0 million, up from $15.7 million in the prior-year period due to higher interest rates following the October 2002 refinancing. On September 30, 2003, gross consolidated debt was $1,083.8 million and debt, net of cash, was $793.3 million. For the quarter, depreciation and amortization was $31.3 million, and capital expenditures were $20.2 million. Nine-Month Results Revenue of $1,414.5 million was up 2 percent as compared with $1,393.2 million in the prior-year period. Net income of $20.2 million decreased from $56.4 million in the year-earlier period. Net income included charges of $20.2 million after-tax largely for restructuring within Industrial Chemicals in this year and $8.8 million after-tax for restructuring within Agricultural Products, Industrial Chemicals and Corporate in the prior year. Revenue in Agricultural Products was $457.3 million, a decrease of 4 percent from the prior-year period. Lower North American sales resulting from weak pest pressure and distributor channel inventory reductions were partially offset by strong Latin American sales, particularly in herbicides. Segment earnings were $56.6 million, up 11 percent from the prior-year period due to improved product mix and lower production costs. Revenue in Specialty Chemicals was $391.3 million, an increase of 8 percent from the prior-year period. Higher BioPolymer and lithium sales into the pharmaceutical market, increased lithium sales into the battery market and the favorable impact of foreign currency translation were partially offset by lower BioPolymer sales in the nutritional beverage segment. Segment earnings were $77.7 million, an increase of 18 percent from the prior-year period due to higher sales, favorable foreign currency translation and improved productivity. Revenue in Industrial Chemicals was $569.2 million, an increase of 2 percent from the prior-year period. Lower soda ash export prices and weaker hydrogen peroxide volumes in the pulp market were offset by favorable foreign currency translation at Foret. Segment earnings of $25.2 million were down $30.4 million from the prior-year period. Lower segment earnings were largely the result of weaker affiliate earnings from Astaris as well as lower alkali and peroxygen sales. Weaker affiliate earnings from Astaris were primarily the result of the absence of a power resale contract and decreased selling prices. Corporate expense of $26.2 million was down slightly from $27.9 million in the prior-year period due primarily to the absence of transition costs associated with the spin-off of FMC Technologies, Inc. Interest expense, net, was $71.7 million, up from $48.1 million in the prior-year period. For the first nine months of 2003, depreciation and amortization was $92.7 million, and capital expenditures were $59.2 million. Outlook Regarding outlook and guidance, Walter added: "We remain confident about the earnings outlook for the full year and expect fourth quarter earnings to be in the range of $0.65 to $0.70 per share before restructuring or other charges. Stronger Industrial Chemicals earnings and lower interest expense will drive the sequential improvement in fourth quarter earnings. Industrial Chemicals earnings will benefit from improved operating performance in the alkali business and lower costs at Astaris. Interest expense will improve following the retirement of FMC's September 2003 bond maturities with restricted cash already on the balance sheet. We continue to believe that 2003 represents the low point of our earnings. For 2004, an improved outlook for Industrial Chemicals and lower interest expense, partially offset by continued cost escalation in energy, insurance and pensions, should result in 2004 earnings per share before restructuring and other charges at the low end of analysts' current projections." Additional details on the FMC's outlook and guidance can be found in the Outlook Statement available on the web at http://ir.fmc.com on the Conference Call page. FMC Corporation (S&P, BB+ $300 Million Senior Secured Notes Rating, Negative) is a diversified chemical company serving agricultural, industrial and consumer markets globally for more than a century with innovative solutions, applications and quality products. The company employs approximately 5,500 people throughout the world. FMC Corporation divides its businesses into three segments: Agricultural Products, Specialty Chemicals and Industrial Chemicals. GENTEK: US Trustee & Latona Ink Pact Re Disgorgement of Payment --------------------------------------------------------------- Latona Associates Inc. asks the Court to dismiss as moot the U.S. Trustee's request to compel the GenTek Inc. Debtors to seek disgorgement of improper postpetition payments to Latona. Latona argues that the U.S. Trustee seeks relief that is unwarranted by the facts, the applicable law and the equitable principles underlying the Bankruptcy Code. The Debtors were authorized by the Bankruptcy Code and the Court to pay Latona for postpetition services, and thus, would be unsuccessful in attempting to avoid the transfers. Furthermore, rather than disadvantaging other creditors, Latona's agreement to continue providing postpetition services allows the Debtors to operate and, therefore, facilitate their reorganization. Latona agreed to continue with its services under the GenTek Agreement for only three-fourths of the fees that it is owed under that agreement. Moreover, all the facts were disclosed from the start of the case. The Debtors disclosed their relationship with Latona in virtually all "first day motions." In addition, numerous securities filings provided even greater detail and were readily available to the U.S. Trustee and other parties-in-interest. John C. Phillips, Esq., at Phillips, Goldman & Spence, P.A., in Wilmington, Delaware, asserts that although Latona is not a "professional" within the meaning of Section 327 of the Bankruptcy Code, litigating the issue by filing an adversary proceeding would not serve the best interests of the Debtors and their estates given the additional costs and expenses that it will require. Mr. Phillips tells Judge Walrath that even though the U.S. Trustee's request has no basis in fact or law, in order to save the estates the enormous costs that would be incurred in litigation, Latona voluntarily agreed to repay the postpetition amounts it received from the Debtors so as to prevent any delay in the Debtors' reorganization. Mr. Phillips clarifies that this voluntary undertaking does not constitute an admission of any liability, non-disclosure, or wrongdoing on Latona's part. Mr. Phillips relates that Latona's agreement not only obviates the need for the Debtors to file and prosecute an adversary proceeding against Latona, it also grants the Debtors 100% of the relief that the U.S. Trustee believes the Debtors should seek. Parties Stipulate In a Court-approved stipulation, the U.S. Trustee and Latona agree that: (a) Latona will disgorge, on or before the Effective Date of the Plan, all sums paid to it by the Debtors since the Petition Date; (b) Latona will waive all claims against the Debtors arising from the Latona Agreement, including all administrative claims relating to services provided under the Latona Agreement and any claims relating to any assertion that the Latona Agreement was rejected, and Latona will have no right to recover, directly or indirectly, from the Debtors on account of any waived claims; (d) Upon Latona's compliance of the disgorgement, it will promptly provide proof of its disgorgement to the Office of the United States Trustee. Upon Latona's provision of the proof, the Motion to Compel will be dismissed by the U.S. Trustee; (e) Latona will not enter into any agreements with any person or entity that would reimburse Latona for its services to the Debtors during the pendency of the bankruptcy cases or the sums disgorged; (f) Latona will retain the right to offer and negotiate for the provision of post-Effective Date services to the new Board of Reorganized GenTek on whatever terms and conditions Latona deems appropriate, subject to the approval of the new Board of Reorganized GenTek; and (g) Notwithstanding any releases that may be granted to Latona in the Plan, Latona will not be released from the obligations undertaken in the stipulation. As agreed, any future contractual relationships between Latona and Reorganized GenTek will be determined through arm's-length negotiations between Latona and GenTek's new Board of Directors. No arrangements, agreements, or understandings, verbal or written, exist tying Latona's decision to make the repayment with any post-Effective Date relationship with the Debtors. (GenTek Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., 609/392-0900) GLOBAL CROSSING: Seeks to Extend Plan Exclusivity to December 3 --------------------------------------------------------------- Pursuant to Sections 105(a), 363(b)(1) and 1121 of the Bankruptcy Code, the Global Crossing Debtors sought and obtained a Court order extending their Exclusive Periods to: (a) file a Chapter 11 Plan on the earlier of: -- December 3, 2003; or -- in the event the Purchase Agreement is terminated by its own terms, two weeks from the date of termination; and (b) solicit acceptances of the Plan until February 1, 2004. Although the Debtors have received all the necessary regulatory approvals for the Sale Transaction with ST Telemedia, the Parties need additional time to prepare the Closing. In the unlikely event that the Parties cannot close the Transaction, Michael F. Walsh, Esq., at Weil, Gotshal & Manges LLP, in New York, says, the Debtors will need additional time to formulate and file a new plan of reorganization without having the destabilizing effects of competing plans. "The Exclusivity Periods have permitted the Debtors to negotiate and reach reasonable agreement with the Creditors' Committee and the Agent," Mr. Walsh remarks. If the Debtors do not maintain the exclusive right to present and file a plan and solicit acceptances thereof, the Debtors will lose the benefit derived from these negotiations that have permitted the parties-in- interest to amicably work together in the absence of competing plans to form reasonable terms of reorganization. (Global Crossing Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., 609/392-0900) IMCO RECYCLING: September Working Capital Deficit Tops $62 Mil. --------------------------------------------------------------- IMCO Recycling Inc. (NYSE: IMR) reported a net loss of $342,000 or $.02 per common diluted share for the third quarter of 2003. In the same period of 2002 the company recorded net earnings of $2.5 million or $.17 per share. The major factors affecting IMCO's financial results in the third quarter of 2003 are as follows. -- The company began reporting separate segment results for its aluminum-international activities in 2003 because of the March 1 acquisition of effective full ownership in VAW-IMCO of Germany whose financial results had previously been reported under the equity method of accounting but are now consolidated into the company's accounts. Third quarter income of the aluminum- international segment was $2.4 million including a mark- to-market aluminum hedge loss of $1.3 million. This unrealized loss was recorded because the LME aluminum price and the relative value of the dollar both declined at the end of the third quarter. VAW-IMCO's metal hedging program does not currently qualify for hedge accounting under FAS 133 and therefore the subsidiary was required to mark its aluminum hedge contracts to market. At the current LME price and foreign exchange rate the unrealized hedge loss would not have occurred. Third quarter 2003 income of the aluminum-international segment decreased by $3.9 million or 62 percent compared with that of the second quarter due to a decline in processing volume caused by seasonal shutdowns of customers' manufacturing facilities and to the unrealized hedge loss. -- Income of the company's aluminum-domestic segment was $3.8 million, a decrease of 63 percent compared with 2002's third quarter. This decline was due to a 16 percent decrease in processing volume at U.S. aluminum recycling and specialty alloys plants, to a reduction in profit margins that mainly resulted from the scarcity and high cost of scrap, and to greater natural gas costs. Processing volume at IMCO's aluminum recycling facilities has been depressed for nearly three years by the continued low level of U.S. industrial activity, a decrease in the beverage can recycling rate and other factors. -- Income of the company's zinc segment was $1.6 million, an increase of 87 percent compared with 2002's third quarter. This improvement occurred because processing volume at these facilities rose and the zinc price moved higher. Don V. Ingram, chairman and chief executive officer, said he believes that in the third quarter IMCO's aluminum-domestic segment "reached a bottom in terms of both volume and profitability and that we are seeing improvement in aluminum industry conditions. Aluminum and zinc commodity prices have moved higher in recent weeks indicating a strengthening market. We also expect better results from our European and Latin American operations in the fourth quarter. "Going forward, we will benefit from the recent refinancing of virtually all of our outstanding debt because it simplifies our capital structure, consolidates our debt into a long-term arrangement and makes funds available for future growth." Mr. Ingram said the anticipated improvement in the company's operating profitability in the current period is likely to be offset by higher interest costs resulting from the refinancing and that IMCO's fourth quarter per share results are expected to be similar to those of the third quarter. In the fourth quarter of 2002 the company had net earnings of $1.5 million or $.10 per share. In the third quarter and first nine months of 2003, IMCO Recycling's processing volume, revenues, cost of sales, selling, general and administrative expense and borrowing costs all increased from year ago-levels because of the consolidation of VAW-IMCO's operations and greater production at the company's Brazilian and Mexican facilities. Revenues rose more than processing volume because the majority of VAW-IMCO's volume is based on product sales that include the cost of metal purchased, processed and sold. Total third quarter processing volume was 741.5 million pounds, 14 percent above volume of 651.0 million pounds in the same period last year. Revenues rose 21 percent to $219.6 million from $180.9 million in the third quarter of 2002. IMCO Recycling's net earnings in the first nine months of 2003 totaled $3.4 million or $.24 per share. In the same period of 2002, net earnings were $5.4 million or $.37 per share before the cumulative effect of a required accounting change regarding valuation of goodwill that was adopted effective January 1, 2002. After the effect of the accounting change, the company recorded a net loss of $53.3 million or $3.63 per share for the first three quarters of 2002. Processing volume in the first nine months of 2003 increased 15 percent to 2.17 billion pounds from 1.88 billion pounds in the same period last year. Revenues rose 26 percent to $654.1 million from $519.3 million in the first three quarters of 2002. As of September 30, 2003, IMCO Recycling Inc. records total current assets of $174,516,000 as compared to total current liabilities of $236,748,000 IMCO Recycling Inc. is one of the world's largest recyclers of aluminum and zinc. The company has 22 U.S. production plants and five international facilities located in Brazil, Germany, Mexico and Wales. IMCO Recycling's headquarters office is in Irving, Texas. IMPERIAL PLASTECH: Will File Late Fin'l Statements on Nov. 30 ------------------------------------------------------------- Imperial PlasTech Inc. (TSX: IPQ) announced that it is working with its auditors, Deloitte Touche, to complete its interim financial statements for the three months ended August 31, 2003. On September 23, 2003 Imperial PlasTech announced that it would be late in filing its interim financial statements for its third quarter. Imperial PlasTech is required to file its third quarter financial statements by October 30, 2003. Imperial PlasTech continues to anticipate that its interim financial statements will be filed on or prior to November 30, 2003. This announcement is being made in accordance with the Alternate Information Guidelines of the Ontario Securities Commission, whereby Imperial PlasTech is required to update the market every two weeks so long as it is in default of filing its interim financial statements. The PlasTech Group is a diversified plastics manufacturer supplying a number of markets and customers in the residential, construction, industrial, oil and gas and telecommunications and cable TV markets. Currently operating out of facilities in Atlanta Georgia, Peterborough Ontario and Edmonton Alberta, the PlasTech Group is focusing on the growth of its core businesses and continues to assess its non-core businesses. For more information, please access the groups website at http://www.implas.com * * * Liquidity and Capital Resources The Company had a cash flow deficiency from operations during the quarter ended May 31, 2003, before changes in non-cash working capital, of negative $4.8 million compared to negative $1.3 million for the same quarter of fiscal 2002. The increase in outflow reflects the financial condition of the Company, including the payment of suppliers on a cash on delivery basis, and the payment of $0.3 million in insurance premiums, payments for work fees related to potential refinancing and payments for relocation costs related to the relocation of the Company's premises in Atlanta, Georgia in December 2002. After changes in non-cash working capital, cash used in operations during the quarter ended May 31, 2003 was negative $0.4 million compared to negative $3.0 million during the same quarter of fiscal 2002. The changes in non-cash working capital reflected a write-down of current assets, including an inventory write-down of $1.9 million and an additional allowance for doubtful accounts of $0.3 million. The Company had a working capital deficiency of $11.5 million as at May 31, 2003 compared to positive working capital of $7.4 million as at May 31, 2002. The working capital deficiency increased from the amount reported at the end of the previous quarter as a result of long-term debt being reclassified as current debt combined with the inventory write-down of $1.9 million and an additional allowance for doubtful accounts of $0.3 million. Accounts receivable of $2.2 million as at May 31, 2003 reflected a reduction of $0.9 million in accounts receivable during the second quarter of fiscal 2003 compared to an increase of $2.9 million in accounts receivable during the second quarter of fiscal 2002. The reduction of accounts receivable during the second quarter of fiscal 2003 reflects a 57% decrease in sales compared to the same quarter of fiscal 2002. As at May 31, 2003, the Company completed a review of accounts receivable that resulted in an additional allowance for doubtful accounts of $0.3 million for the quarter ended May 31, 2003. In addition, the Company made concerted efforts to collect all accounts receivable over 60 days from December 2002 to May 31, 2003, which resulted in a reduction of accounts receivable. The collection proceeds were used for general corporate purposes. In addition, the Ameriplast operations were suspended, the Petzetakis operations were discontinued and PVC, ABS and Hose businesses were discontinued. INSITE VISION INC: Ernst & Young Cuts Professional Ties ------------------------------------------------------- On October 21, 2003, Ernst & Young LLP notified InSite Vision Incorporated that it would resign as the Company's independent public accountants effective following the completion of its review of the Company's Form 10-Q for the Quarter ended September 30, 2003. The Company anticipates filing its Form 10-Q for the quarter ended September 30, 2003 on or before November 14, 2003. The Audit Committee of the Company's Board of Directors was informed of, but did not recommend or approve, Ernst's resignation. Ernst & Young's report on the financial statements for the year ended December 31, 2002 contained an explanatory paragraph expressing substantial doubt about the Company's ability to continue as a going concern. IT GROUP: Maxey Flat Seeks Ownership & Access to Records -------------------------------------------------------- Maxey Flats Site, IRP, LLC is an entity formed for the purpose of supervising the remediation of a large radioactive waste Superfund site located in Fleming County, near Morehead, Kentucky. Pursuant to a Consent Decree entered in litigation relating to the site, Robert S. Goldman, Esq., at Phillips, Goldman & Spence, PA, in Wilmington, Delaware, relates that Maxey Flats was required to design and construct a project to remediate the site, consistent with the requirements of the United States Environmental Protection Agency. In connection with its obligations under the Consent Decree, Maxey Flats engaged IT Corporation to serve as the primary provider of engineering and construction services in connection with the remediation effort at the site. That engagement is reflected in an Engineering and Construction Services Agreement between Maxey Flats and IT Corp. dated May 15, 1995. In addition to engineering and construction duties, the Agreement requires IT Corp. to deliver to Maxey Flats, on Maxey Flats' request: "[A]ll originals and all copies of documents, drawings, designs, specifications, notes and notebooks, tracings, photographs, negatives, maps, computer, programs/memories, calculations, working papers and worksheets, reports, findings, recommendations, data, minutes of meetings, memoranda and any other information generated in the performance of the Services. . . ." The Agreement also requires IT Corp. to deliver to Maxey Flats a monthly progress report and other progress reports as are required. All of the documents and records described, Mr. Goldman asserts, are property of Maxey Flats, and not of IT Corp.'s bankruptcy estate. Maxey Flats is the owner of the documents and records upon their creation -- there are no contingencies to Maxey Flats' ownership interests. Maxey Flats' right to possession is immediate. Furthermore, Mr. Goldman contends that Maxey Flats does not require relief from the automatic stay because none of the documents to which it seeks access are property of IT Corp. Maxey Flats asked IT Corp. to turn over any and all documents and records that, pursuant to the Agreement, are property of Maxey Flats. Maxey Flats also asked IT Corp. to provide Maxey Flats with access to the documents and records so that it may recover them. However, IT Corp. refused to cooperate. Although IT Corp. refused to turn over the documents and records or grant Maxey Flats access to them, Mr. Goldman remarks that IT Corp. did not contend that it or any other third party is the owner of the documents and records or that the documents and records are otherwise property of the estate. Mr. Goldman points out that the Court has broad equitable power to declare the rights of the parties and to compel IT Corp. to deliver or to provide Maxey Flats with access to the documents and records, which will relieve the estate of the burden of retaining and storing documents and records that are useless to it. Maxey Flats' request is not inconsistent with the Bankruptcy Code, nor does it impair or otherwise affect any rights IT Corp. may have as a debtor-in-possession. Accordingly, Maxey Flats asks the Court to: (a) declare that Maxey Flats is the owner of any and all documents set forth in the Agreement; (b) direct IT Corp. to provide access to the documents and records to Maxey Flats; and (c) permit Maxey Flats to retain the documents and records. (IT Group Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 609/392-0900) J. CREW INTERMEDIATE: Commences Exchange Offer for Senior Notes --------------------------------------------------------------- J.Crew Intermediate LLC announced that it has commenced an offer to exchange $193,346,138 aggregate principal amount of its registered 16% Senior Discount Contingent Principal Notes due 2008 for an equal principal amount of its outstanding unregistered 16% Senior Discount Contingent Principal Notes due 2008. A written prospectus providing the terms of this exchange offer may be obtained through the exchange agent, U.S. Bank National Association, Corporate Trust Department, 60 Livingston Avenue, St. Paul, Minnesota 55107. This exchange offer commenced on October 29, 2003 and will expire at 5 p.m., New York City time, on December 1, 2003. On May 6, 2003, J.Crew Group, Inc. had exchanged the unregistered 16% Senior Discount Contingent Principal Notes due 2008 of Intermediate for approximately 85% of the aggregate principal amount of its then outstanding 13 1/8% Senior Discount Debentures due 2008 as part of an exchange offer and consent solicitation. J.Crew Group, Inc., whose August 2, 2003 net capital deficit amounts to $415 Million, is a leading retailer of men's and women's apparel, shoes and accessories. As of August 2, 2003, the Company operated 155 retail stores, the J.Crew catalog business, jcrew.com, and 42 factory outlet stores. KEY ENERGY: Secures New $175 Million Revolving Credit Facility -------------------------------------------------------------- Key Energy Services, Inc. (NYSE: KEG) announced its operating results for the quarter ending September 30, 2003, which represented both a sequential improvement over the June 2003 quarter and a significant improvement over the prior year period. Net income before discontinued operations for the September 2003 quarter was approximately $6.3 million, compared to approximately $6.2 million for the June 2003 quarter and a loss before discontinued operations and the cumulative effect of adoption of SFAS 143 of approximately $2.3 million for the September 2002 quarter. Earnings per diluted share before discontinued operations for the September 2003 quarter were approximately $0.05, compared to earnings per diluted share of approximately $0.05 for the June 2003 quarter and a loss before discontinued operations and the cumulative effect of adoption of SFAS 143 of approximately $0.02 for the September 2002 quarter. Net income for the September 2003 quarter was impacted by an increase in income tax expense as the Company's effective tax rate increased from the prior quarter. During the September 2003 quarter, industry conditions improved modestly. Pricing for well service equipment and drilling rigs remained constant. Rig hours for the September 2003 quarter totaled approximately 618,400, representing a 2.8% increase over total rig hours of approximately 601,800 for the June 2003 quarter and a 12.2% increase over total rig hours of approximately 551,100 for the September 2002 quarter. In late September and through October to date, activity has moderated in the U.S. land market in several of the Company's operating regions, with several major and large independent producers having reduced production services spending. Total weekly rig hours are currently averaging approximately 46,300 per week compared to approximately 48,400 in August. Our customers have indicated that if commodity prices remain near or above current levels they intend to moderately increase capital spending for production services in early-to-mid-2004. In addition, the Company announced that it has received or expects to receive commitments from certain members of its current bank group to provide a new four-year $175 million revolving credit facility to replace the Company's current $150 million revolver set to mature in July 2005. The new credit facility, which is expected to close in November, will feature a lower interest rate, an enhanced covenant package designed to accommodate the Company's growth strategy and an extended term. The Company intends to use this new facility to provide short-term working capital, letters of credit and flexibility to reduce/refinance higher cost debt, all at reduced interest rates relative to the current facility. The Company completed the previously announced sale of its oil and natural gas properties during the September 2003 quarter. As stated in the Company's last conference call, these assets were not core to its production services focus. The Company received net cash proceeds of approximately $7.2 million after repaying the Company's volumetric production payment and related costs. As a result of the sale, the Company will treat its oil and natural gas production business as a discontinued operation for all periods and has recorded an after-tax charge to discontinued operations of approximately $7.4 million, or $0.06 per diluted share, during the September 2003 quarter. Francis D. John, Chairman and CEO, stated, "While current activity levels have moderated, the Company is exceptionally well positioned and is in fact executing on its near-term and three- year stated objectives. During the quarter and year to date, our strong cash flow after capital expenditures, supported by our strong maintenance base of business, has allowed us to continue to reduce debt, expand our rental tool and international operations, as well as launch our technology initiatives. Specifically, earlier this month, we introduced our KeyViewT system. This system will allow Key to capture job site operating data that can create significant efficiency improvements for both Key and our customers as well as provide a safer work environment. Further, the system provides Key an opportunity to capture additional revenue. Thus far, we have commitments, or expressions of interest, for approximately 60 units and expect to have 250 units installed by the end of 2004." Mr. John continued, "We have seen significant strengthening in our international operations in Egypt and Argentina and are currently evaluating specific opportunities to expand our international presence. Discussions are ongoing in Russia, Mexico and South America that, if successful, could allow Key to deploy idle rigs and related assets in these markets, resulting in increased revenue and margin contribution from international operations. In addition, with our strong cash position, new bank facility and improved safety performance, we expect to see a substantial decrease in our fixed cost structure in 2004. We plan to retire the $97 million of 14% notes currently outstanding on January 14, 2004, resulting in approximately $14 million of reduced annual interest expense from today's run rate. In addition, we expect that at current activity levels, operating costs should decrease between $5 and $10 million annually as a result of reduced insurance and workers compensation costs as well as improved operating efficiencies anticipated from our technology initiatives and preventive maintenance programs." Mr. John concluded, "As we have consistently stated, Key is committed to achieving its three stated objectives over the next two to three years which are as follows: (1) reduce net debt to total capitalization to less than 25% through further debt reduction; (2) grow through our rental tool and international operations and through the introduction of technology; and (3) be in a position to implement a share repurchase and/or dividend program. Even if market conditions remain sluggish over the next several quarters, we are confident that we will meet these objectives." Key Energy Services, Inc. is the world's largest rig-based, onshore well service company and owns and/or operates approximately 1,498 well service rigs, 2,448 oilfield service vehicles, as well as 76 drilling rigs. The Company provides diversified energy operations including well servicing, contract drilling, pressure pumping, fishing and rental tool services and other oilfield services. The Company has operations in all major onshore oil and gas producing regions of the continental United States and internationally in Argentina, Egypt and Canada. * * * As reported in the Troubled Company Reporter's May 12, 2003 edition, Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on Key Energy Services Inc. Standard & Poor's also assigned it 'BB' rating to Key's proposed $150 million senior unsecured notes due 2013. The outlook is stable. KINGSWAY: Closes $20M Private Placement of Preferred Securities --------------------------------------------------------------- Kingsway Financial Services Inc. (TSX:KFS, NYSE:KFS) announced the completion of a private placement of trust preferred securities of approximately US$20 million in 30-year floating rate trust preferred securities, with net proceeds of approximately US$19.4 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. MAGELLAN HEALTH: Asks Court to Disallow & Expunge Various Claims ---------------------------------------------------------------- Stephen Karotkin, Esq., at Weil, Gotshal & Manges LLP, in New York, informs the Court that 4,075 proofs of claim have been filed against the Magellan Health Services, Inc. Debtors with Bankruptcy Services LLC, the Court-appointed claims agent in these Chapter 11 cases. The Debtors commenced the claims reconciliation process and identified particular categories of proofs of claim for disallowance and expungement or reclassification. In addition, the Debtors currently are in the process of reconciling the claim amounts set forth in the Schedules of Liabilities with the amounts asserted in the corresponding proofs of claim. Duplicate Claims Mr. Karotkin reports that 48 claims aggregating $8,458,091 are duplicative of claims made against the same Debtors for the same dollar amount and in respect of the same obligation. These claims include: Duplicate Surviving Claimant Claim Amount Claim -------- --------- ------ --------- Allegheny General Hospital 1748 $1,534,926 1742 Berry Ma, Joy D 3717 58,169 3297 Buchalter, Nemer & Fields 1568 72,066 1567 Fanning, Joyce 932 1,000,000 522 Kime, Margie 2861 3,000,000 2860 New England Medical Center 3216 527,092 3215 Pennsylvania Dept. of Revenue 536 26,935 230 Rubert, Sandra 934 1,000,000 523 Seaboard Surety Company 1570 950,000 1422 Southwester Bell Telephone Co. 169 22,291 164 Thus, it appears that the claimant erroneously filed the same proof of claim more than once. In the event duplicate claims are not formally disallowed and expunged, Mr. Karotkin says, the creditors that filed the duplicative proofs of claim could potentially receive a double recovery. Moreover, elimination of redundant claims will enable the Debtors to maintain a claims register that more accurately reflects the claims that have been asserted against them, Mr. Karotkin contends. Accordingly, the Debtors ask the Court to disallow and expunge the 48 Duplicate Claims. Late-Filed Claims According to Mr. Karotkin, these proofs of claim were not filed on or before the Bar Date or other deadline to file claims as authorized by the Bankruptcy Code or prior Court order: Claimant Late-Filed Claim Amount -------- ---------------- ------ Skinner, Crystal 4195 undetermined Southwestern Bell Telephone Co. 4075 $22,292 Wheatley-Terry, Laverne 4065 300,000 Zaccagnini, Jennifer 4213 180,000 These claimants are not otherwise excused from filing a proof of claim pursuant to the deadline established by the Bar Date Order. Section 502(b)(9) of the Bankruptcy Code provides that a claim will not be allowed if "proof of such claim is not timely filed," Mr. Karotkin asserts. Accordingly, the Debtors ask the Court to disallow and expunge the four Late-Filed Claims. Claims Already Paid On March 11, 2003, the Court entered a series of "first-day orders" authorizing the Debtors to pay certain prepetition claims, including, but not limited to, those prepetition claims related to: (1) employee wages, compensation, and benefits; (2) workers' compensation programs and insurance policies; (3) regulatory fees; (4) use taxes; (5) certain customer obligations; and (6) certain claims of providers and physician advisors. Hence, Mr. Karotkin relates that 313 proofs of claim aggregating $1,967,160 have been paid in full after the Petition Date, pursuant to the Court orders. These claims include: Claimant Claim No. Amount -------- --------- ------ Gibson, Norman scheduled $5,000 Hamlin MD, Thomas scheduled 2,715 Healthcare Service Corporation 3116 1,360,281 Helping Hand House scheduled 1,500 Internal Revenue Service scheduled 364,794 Krajewski MD, Thomas scheduled 1,032 Lovelace PHD, Richard 751 2,310 Peters, Marsha scheduled 11,277 Shred-It scheduled 10,903 Sungard Recovery Services scheduled 9,008 Accordingly, the Debtors object to the allowance of the 313 Paid Claims and ask the Court to disallow and expunge them all. Duplicate Claims of Individual Noteholders Magellan Health Services, Inc. issued two series of notes, each of which is being administered by an indenture trustee pursuant to an indenture trust agreement. Pursuant to each of the Indenture Trust Agreements, the Indenture Trustees have the right to assert all claims on behalf of their noteholders. Indeed, for each series of notes outstanding: (1) the appropriate Indenture Trustee filed a proof of claim; or (2) Magellan scheduled the Indenture Trustee's claim in its Schedules as undisputed, in each case for the total amount due on each series of notes. Thus, any Claims asserted by or on behalf of individual noteholders are duplicative of the global claim filed by the appropriate Indenture Trustee or scheduled by Magellan. Mr. Karotkin states that 11 noteholders filed proofs of claim aggregating $317,162,431 that were already included as part of one of the Indenture Trustee Claims: Duplicate Surviving Claimant Claim Amount Claim -------- --------- ------ --------- Bea CBO 1998-1 Ltd. 2375 $750,000 567, 2067 Elf Funding Trust I 2330 2,318,756 567, 2067 High Yield Income Fund, Inc. 2741 440,000 567, 2067 Long Lane Master Trust IV 2332 8,805,874 567, 2067 ML CBO IV (Cayman) Ltd. 2331 1,257,801 567, 2067 Pequot Capital Management 3213 49,585,000 567, 2067 Prudential High Yield Fund 2742 4,755,000 567, 2067 Prudential Series Fund 2737 6,770,000 567, 2067 Prudential Series Fund 2739 100,000 567, 2067 R2 Investments, LDC 1740 242,250,000 567, 2067 Strategic Ptnrs Asset Allocatn 2740 130,000 567, 2067 Mr. Karotkin asserts that the Debtors should not be required to pay twice on the same obligation. Moreover, elimination of redundant claims will enable the Debtors to maintain a claims register that more accurately reflects the Claims that have been asserted against them. The Debtors object to the allowance of each of the Noteholder Claims and ask Judge Beatty to disallow and expunge the Noteholder Claims in their entireties. Litigation Claims According to Mr. Karotkin, 196 claims aggregating $351,355,438 were filed against the Debtors for various alleged legal liabilities, which the Debtors determined is not properly allowable because they have no liability under the claim. Thus, the Debtors ask the Court to disallow and expunge the 196 Litigation Claims, which include: Claimant Claim No. Amount -------- --------- ------ Davidson, Robert M. 2987 $75,000,000 Gonzales, Diane, Estate of 3528 5,000,000 Kime, Margie 2861 3,000,000 Komar, Vanessa E. 2988 75,000,000 Motley, Kevin 1035 4,500,000 Riddle, John Randolph 3136 5,000,000 Rubin-Schneiderman, Eric 444 10,000,000 Steadfast Insurance 2918 7,921,265 Varughese M. 2168 10,000,000 Wachovia Bank, NA 221 39,904,453 Claims Not Consistent with the Debtors' Books and Records After a review of their books and records, the Debtors determined that they do not have any obligation owing to these entities asserting claims aggregating $9,470,338: Claimant Claim No. Amount -------- --------- ------ Arboretum Properties 532 $8,798 Brandywine Operating Partnership, LP 1791 2,133 Co-Solarium LLC 1181 7,721 Detroit-Wayne County Community Mental 3663 1,075,000 Docsley Associates Limited Partnership 3329 5,068,860 Information Leasing Corp. 60 40,319 Information Leasing Corp. 71 22,198 IOS Capital 20 149,696 Law Office of Jane Cohen 516 2,458 Mid a Terrace LLC 2040 591,600 Patel, Dilip 2043 1,500,000 Southern Pine Plantation Comm 1184 180,960 Southern Pine Plantation Comm 635 11,188 Tenet Healthcare Corp. 1213 267,684 Tierone Bank 3086 484,866 Trizechahn Gateway LLC 1218 40,085 W9/LWS II Real Estate Ltd. Partnership 3223 16,951 Accordingly, the Debtors ask the Court to disallow and expunge these 17 claims. Claims to be Reduced and Allowed Mr. Karotkin asserts that 18 proofs of claim aggregating $6,933,207 are not properly allowable because the amounts of those claims are greater than the amounts actually owed by the Debtors to the claimants. According to the Debtors' books and records, each of these claimants has an allowed claim against the Debtors in these amounts: Claim Allowed Claimant Claim No. Amount Amount -------- --------- ------ ------- Amalgamated Gadget, L.P. 3214 $2,100,000 $1,750,000 Humana Insurance Company 2639 9,120,780 3,638,968 Information Leasing Corp. 64 54,035 6,487 65 97,726 5,161 68 134,145 6,673 69 96,449 3,207 74 384,010 41,502 75 274,651 6,110 Parkway Properties 1195 34,488 34,009 Physicians Health Plan 3087 161,158 114,275 Powers Ferry Landing West 215 1,131,217 827,727 Reckson Operating Partnership 80 83,607 56,417 Southwest Michigan Health 2716 226,085 75,251 State of Maryland 2809 193,624 97,136 486 140,784 10,265 Venus LP 1631 225,775 94,117 Westage Realty LLC 1236 100,354 73,325 Zulu, Inc. 16 384,027 95,577 The Debtors ask the Court to reduce and allow these claims in the proposed amounts. Improperly Classified Claims Mr. Karotkin relates that 539 claims amounting to $156,684,798 were filed as unsecured claims entitled to priority status under Section 507(a) of the Bankruptcy Code. Section 507(a) entitles certain unsecured claims to priority status over other general unsecured claims. However, the 539 Claims are not entitled to priority under any of the subsections of Section 507(a). Accordingly, the Debtors object to the classification of the 539 Claims as priority claims and ask the Court to reclassify each of these claims as a general unsecured claim. Among the Improperly Classified Claims are: Claimant Claim No. Amount -------- --------- ------ Butler Hospital Providence 2976 $267,597 Davidson, Robert 2987 75,000,000 Detroit Receiving Hospital 1497 612,804 Epotec, Inc. 2063 700,000 Ferguson, Theresa 1111 1,500,000 Komar, Vanessa 2988 75,000,000 Mt. Carmel Guild Behavioral 3248 269,986 Norwalk Hospital Assoc. 2786 131,233 Seaboard Surety Company 1422 950,000 Sinai-Grace Hospital 1496 220,708 Sonan, Joan 755 200,000 Summer Sky 305 106,737 Weschester Medical Center 2913 794,386 Administrative Claims Nextira One, LLC filed two claims for administrative expenses under Section 503(b) of the Bankruptcy Code. The Debtors argue that these claims should have been filed as general unsecured claims. Mr. Karotkin notes that Section 503(b) entitles certain costs and expenses of the estate to be accorded administrative expense priority under Section 507(a)(1). However, Nextira's Claims do not fall within any of the categories of administrative expenses listed in Section 503(b). Accordingly, the Debtors object to these claims and ask Judge Beatty to reclassify them as general unsecured claims: Claimant Claim No. Amount -------- --------- ------ Nextira One, LLC 3121 $47,448 3118 3,137 (Magellan Bankruptcy News, Issue No. 17: Bankruptcy Creditors' Service, Inc., 609/392-0900) MANITOWOC: Directors Approve $0.28 Dividend Payable on Dec. 10 -------------------------------------------------------------- The Board of Directors of The Manitowoc Company, Inc. (NYSE: MTW), declared a cash dividend of $0.28 per share of common stock to shareholders of record as of the close of business on December 1, 2003, payable on December 10, 2003. The Manitowoc Company, Inc. (S&P, BB- Corporate Credit Rating, Stable Outlook) is one of the world's largest providers of lifting equipment for the global construction industry, including lattice- boom cranes, tower cranes, mobile telescopic cranes, and boom trucks. As a leading manufacturer of ice-cube machines, ice/beverage dispensers, and commercial refrigeration equipment, the company offers the broadest line of cold-focused equipment in the foodservice industry. In addition, the company is a leading provider of shipbuilding, ship repair, and conversion services for government, military, and commercial customers throughout the maritime industry. MERRILL LYNCH: S&P Assigns Prelim. Ratings to 2003-KEY1 Notes ------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary ratings to Merrill Lynch Mortgage Trust 2003-KEY1's $1.0 billion commercial mortgage pass-through certificates series 2003-KEY1. The preliminary ratings are based on information as of Oct. 29, 2003. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect the credit support provided by the subordinate classes of certificates, the liquidity provided by the trustee, the economics of the underlying loans, and the geographic and property type diversity of the loans. Classes A-1, A-2, B, C, D, and E are currently being offered publicly. Standard & Poor's analysis determined that, on a weighted average basis, the pool has a debt service coverage of 1.86x, a beginning loan-to-value of 78.2%, and an ending LTV of 66.5%. PRELIMINARY RATINGS ASSIGNED Merrill Lynch Mortgage Trust 2003-KEY1 Commercial mortgage pass-thru certs series 2003-KEY1 Class Rating Amount ($) A-1* AAA 201,373,000 A-2* AAA 521,502,000 B* AA 34,305,000 C* AA- 15,834,000 D* A 25,069,000 E* A- 10,555,000 A1-A AAA 179,617,000 F BBB+ 11,875,000 G BBB 7,917,000 H BBB- 10,555,000 J BB+ 5,278,000 K BB 5,278,000 L BB- 3,958,000 M B+ 6,597,000 N B 2,639,000 P B- 1,320,000 Q N.R. 11,874,925 WW-X N.R. 21,000,000 WW-1 N.R. 4,134,000 WW-2 N.R. 4,145,000 WW-3 N.R. 12,721,000 XC AAA 1,055,546,925 XP AAA 1,026,249,000 * Classes A-1 through E are offered publicly. Interest-only class. Notional amount. N.R. -- Not rated. METALS USA: Reports Profitable Third Quarter Results ---------------------------------------------------- Metals USA, Inc. (Amex: MLT), a leader in the metals processing and distribution industry, announced results for the three and nine months ended September 30, 2003. Net income in the third quarter of 2003 was $2.8 million, or $0.14 per share, compared to a net loss for the predecessor company of $5.0 million, or a $0.14 loss per share for the third quarter of 2002, and a $0.11 income per share reported in the second quarter of 2003. Sales for the third quarter of 2003 were $245.1 million, compared to sales for the predecessor company of $238.8 million reported for the third quarter of 2002, and above sales of $242.3 million reported in the second quarter of 2003. Operating income for the second quarter of 2003 was $5.9 million, compared to operating income for the predecessor company of $7.2 million reported in the third quarter of 2002, and better than the operating income of $5.0 million reported in the second quarter of 2003. Sales for the first nine months of 2003 were $713.7 million, compared to sales for the predecessor company of $732.8 million reported for the first nine months of 2002. Net income in the first nine months of 2003 was $4.9 million, or $0.24 per share, compared to net loss of $19.2 million or $0.53 per share for the first nine months of 2002. C. Lourenco Goncalves, President and CEO stated, "We are pleased to announce Metals USA's third consecutive quarterly improvement in profitability. We have taken significant strides toward the improvement of our relationship with both our suppliers and customers. Nothing is more important than that. We are focusing much of our efforts to being the best customer for the domestic steel and aluminum mills in order to build as strong a relationship as possible. A strong partnership with the domestic mills should benefit ourselves, the mills and our customers. I believe that the metals business is relationship driven, and that is one of the keys for the present and future success of Metals USA." Metals USA, Inc. is a leading metals processor and distributor in North America. Metals USA provides a wide range of products and services in the heavy carbon steel, flat-rolled steel, specialty metals, and building products markets. For more information, visit the company's website at http://www.metalsusa.com. Metals USA, Inc. a has completed its financial restructuring and has emerged from Chapter 11 proceedings. Its Plan of Reorganization, which was confirmed by the United States Bankruptcy Court for the Southern District of Texas on October 18, 2002, became effective on October 31, 2002. MIRANT: Gets Go-Ahead for $500M DIP Financing Facility from GE -------------------------------------------------------------- Judge Lynn grants the Mirant Corp. Debtors' request to obtain DIP Financing from General Electric based on the terms and provisions of the DIP Facility Documents, provided that: * the aggregate principal amount of all outstanding Revolving Loans under the DIP Facility Credit Agreement will not exceed $200,000,000 -- the Initial Borrowing Sublimit; * when the Debtors, the Mirant Creditors' Committee and the MAGI Creditors' Committee agree on a Risk Management Policy, the Initial Borrowing Sublimit will be increased to an aggregate principal amount equal to $300,000,000, which increase will remain in full force until the effective date of a confirmed plan of reorganization; * unless ordered by the Court or agreed to in writing by the Creditors' Committees, the Debtors' use of the DIP Facility will be limited to the issuance of Letters of Credit: (a) for the benefit of any third party to whom the Debtor have posted cash to support their obligations to the third party, in exchange for the repayment by the third party to the Debtors, of cash held in support of the obligations, provided that at no time will the aggregate principal amount of all Letters of Credit Obligations exceed $150,000,000; provided further that the Debtors will not request the issuance of Letters of Credit to replace letters of credit issued under prepetition credit facilities, exchanging a Letter of Credit for cash collateral that constitute the proceeds of a prepetition letter of credit, except to the extent that the Debtors determine in their reasonable business judgment that a counterparty holding the cash proceeds of a prepetition letter of credit poses an unacceptable credit risk to them; and (b) in respect of Trading Activities, provided that at no time will the aggregate principal amount of all Letter of Credit Obligations exceed $50,000,000; provided further, however, that when a Risk Management Policy is in place, the Debtors may utilize any available amounts under the DIP Facility for any purposes otherwise permitted under the DIP Facility Credit Agreement; * at no time will the aggregate principal amount of the Revolving Loans incurred by or on behalf of the Mirant Sub-Group and Mirant Americas Energy Marketing LP collectively, exceed $200,000,000. Each of these Debtors, for the purposes of the Order, constitute a separate Subgroup: (a) Mirant Mid-Atlantic LLC and any of its subsidiaries -- the MIRMA Sub-Group; (b) Mirant Americas Generation LLC and any of its subsidiaries, other than the MIRMA Sub-Group -- the MAG Sub-Group; (c) Mirant Americas Energy Marketing, LP; and (d) Mirant Corporation and any of its subsidiaries, other than the MIRMA Sub-Group, the MAG Sub-Group and MAEM; * the Debtors will, except to the extent as may be waived by the DIP Facility Agent, establish and maintain the cash management system described in the DIP Facility Credit Agreement; and * the aggregate principal amount of borrowing in respect of any Intercompany Loans incurred by each Sub-Group may not exceed: Sub-Group Amount --------- ------ MIRMA Sub-Group $200,000,000 MAG Sub-Group 150,000,000 MAEM 100,000,000 Mirant Sub-Group 100,000,000 provided that certain Intercompany Loans with MAEM will not be part of the calculation The approval of the DIP Facility Credit Agreement, the DIP Facility Documents and the transactions contemplated thereby, pursuant to the terms of the Order, will be subject to the completion of satisfactory final form documentation -- the Amended DIP Facility Documents -- modifying the terms of the DIP Facility Agreement, including documentation of the DIP Facility as it relates to the Debtors other than the MIRMA Sub-Group and MAG Sub-Group. The Court will hold a hearing on October 29, 2003 to consider any dispute arising as a result of the implementation of the DIP Modifications pursuant to the Amended DIP Facility Documents. Notwithstanding anything to the contrary, the Court reserves all power to authorize the use of cash collateral upon appropriate showing. (Mirant Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 609/392-0900) MOBILE MINI: Reports Improved Third Quarter Operating Results ------------------------------------------------------------- Mobile Mini, Inc. (NASDAQ National Market: MINI) reported its financial results for the third quarter ended September 30, 2003. Business Overview Steven Bunger, Chairman, President & CEO of Mobile Mini, stated, "Our third quarter performance was in line with our expectations, with lease revenue, average utilization, and containers on lease showing good growth versus the same period last year as well as over the second quarter. With the third quarter, we are again starting to see some of the dynamics of our business model in action. As we increase containers on lease while growing our average utilization rate, operating income and EBITDA rise at a faster rate." Discussing the Company's operating margin, Mr. Bunger continued, "Our third quarter pro forma operating margin was 33.5% compared to 32.3% (pro forma) one year ago, and 29.1% in the second quarter of 2003. The improvement was a function of higher lease revenues and gains in our utilization rate. It is again important to point out that the pro forma operating margin expanded because Mobile Mini did not enter a new market until October of this year; and new markets initially have lower operating margins. Also of note, we resumed experiencing higher year-over-year quarterly operating margin comparisons, due to internal growth, specifically by increasing containers on lease at existing branches, while closely monitoring and controlling operating costs. The margin gain was also accomplished despite higher insurance expenses this year, as well as the inclusion this year of the full effect of marketing and ramp-up expenses at branches in 2002. In other words, these factors had less influence on our operating margin than containers on lease." He continued, "Our internal growth rate of 6% is quite respectable in light of the continued softness in the economy in general, and the non-residential construction sector, in particular. That sector, which continues to show no signs of recovery, is having less of an impact on our average utilization rate and yield, particularly now as we begin our busiest quarter. As has been the case in past years, our average utilization rate should be at its highest level during the fourth quarter." Mobile Mini's business model involves the expenditure of substantial fixed costs at all of its 47 locations in order to develop an infrastructure to support growth. Operating margins then increase when containers on lease at existing locations increase. Newer locations invariably produce lower operating margins until they increase their containers on lease. Historically, newer branches are the catalyst for growth in lease revenue and earnings as they mature. The table below shows operating margins and the return on the invested capital at our various branches sorted by the year they began operations. It illustrates the profitability of branches once they are firmly established. It also shows that older branches produced healthy returns on invested capital. Larry Trachtenberg, Executive Vice President & CFO noted, "Earlier this month, we entered the Portland, Oregon market through an asset purchase. This gives Mobile Mini contiguous coverage along with West Coast and places us in a very promising mid-size market. As there are only two months left in the year, it is likely that our new market total for '03 will at best be two locations, including Portland." He went on to say, "Internally generated cash is financing virtually all of our growth. As of the close of business yesterday, our borrowings under our line of credit were only $2 million more than at the end June. As we look over the past four years, capital expenditures that are not funded by operations have been steadily declining, from about $70 million in calendar year 2000 to around $14 million for the trailing twelve months ended September 30, 2003. As we become more profitable, we require less borrowings to fund our business. Having successfully tapped into the high yield market during the summer with a 10-year fixed rate, $150 million senior note offering, our capital structure is the strongest it has been in our 20-year history. Under the tightest covenant of our credit agreement, we currently have $82.9 million of additional borrowing availability under our $250 million credit facility. In addition to financial flexibility, we also have the infrastructure in place at all our branches, but especially at newer branches, to grow containers on lease. As we add container leasing revenues to existing branches, we enjoy 73% EBITDA margins and 59% pretax margins on incremental leasing revenues. For that reason, the 6% increase in leasing revenues in the third quarter, produced a 9.1% increase in pro forma EBITDA, despite higher insurance, fuel, marketing and other non-discretionary operating costs." Concluding, Mr. Trachtenberg noted, "With internal growth up 6% and 7%, over the respective third and second quarters of last year, our business continues to grow at a steady, although not robust pace. We feel that we will achieve pro forma diluted earnings per share of between $.37 and $.39 for the fourth quarter of 2003, which approximate analysts' estimates, but a slight fine- tuning from our earlier guidance. This equates to EBITDA for 2003 of approximately $57 million. We are now in the process of completing our internal projections for 2004, and by early December, we plan to provide guidance for the coming year." Legal Proceedings Mobile Mini stated that there are no further developments to report with regard to its appeal of the Florida jury verdict finding against Mobile Mini and in favor of Nuko Holdings. The case is currently before the Florida appellate court. In the separate case regarding the indemnification claim Mobile Mini is pursuing against A-1 Trailer Rental, the organization from whom it purchased portable storage assets in Florida in 2000, the court has determined that A-1 is not responsible for indemnifying Mobile Mini, a decision which Mobile Mini has petitioned the court to reconsider. The effect of this ruling, should it not be overturned, is that $1.9 million of the $2.2 million that had been held in escrow, would be released to A-1, with Mobile Mini retaining the $300,000 balance for indemnification claims the court determined are due to Mobile Mini. For accounting and reporting purposes, this decision has no current or prospective impact on Mobile Mini as the Company has expensed all litigation costs and other expenses related to these Florida litigation matters, as if indemnification from A-1 was not available, as is required by GAAP. Mobile Mini is not reasonably able to estimate the ultimate loss, if any, in connection with the primary litigation against Nuko, although in the absence of a new trial, Mobile Mini's maximum liability remains the $7.2 million judgment, plus interest and legal fees. While Mobile Mini continues to disclose the litigation and related expenses, it has not accrued a loss contingency in connection with these litigation matters, and such non-accrual is in accordance with applicable accounting principles. The Company intends to continue to provide quarterly updates on these legal proceedings. Mobile Mini, Inc. is North America's leading provider of portable storage solutions through its total fleet of approximately 91,000 portable storage units and portable offices. The Company currently has 47 branches and operates in 27 states and one Canadian province. For three consecutive years, Mobile Mini was named to Forbes Magazine's list of the 200 Best Small Companies in America. Mobile Mini is included on the Russell 2000r and 3000r Indexes and the S&P Small Cap Index. As previously reported in the June 16, 2003 edition of the Troubled Company Reporter, Standard & Poor's Ratings Services assigned its 'BB' corporate credit rating to Tempe, Arizona-based Mobile Mini Inc. In addition, Standard & Poor's assigned its 'BB-' rating to Mobile Mini's proposed $150 million of senior notes due 2013. The ratings outlook is stable. "The corporate credit rating is based on Mobile Mini's leading market position as a lessor of portable storage units and its respectable credit profile," said Standard & Poor's credit analyst Betsy Snyder. "However, this is offset by the company's small revenue base and the relatively small size of the mobile storage leasing sector in which Mobile Mini operates," the analyst continued. The rating on the senior notes is one notch lower than the corporate credit rating based on a considerable amount (approximately 25%) of secured debt in the company's capital structure. NATIONAL WATERWORKS: Planned Dividend Earns S&P's Negative Watch ---------------------------------------------------------------- Standard & Poor's Ratings Services placed its 'BB-' corporate credit rating, its 'BB-' senior secured bank loan rating, and its 'B' subordinated debt rating on water and wastewater transmission distributor National Waterworks Inc. on CreditWatch with negative implications. The action reflects the company's planned dividend payout of $110 million to equity sponsors. Pending bondholder approval, NWI's senior secured term loan B will increase to $325 million from $245 million. Proceeds, along with cash on hand, will be used to fund the special dividend. "If the transaction is completed as proposed, the corporate credit rating and bank loan rating on NWI will be lowered to 'B+' and the subordinated debt ratings lowered to 'B-', reflecting the increased leverage. The outlook at that time would likely be stable," said Standard & Poor's credit analyst Linli Chee. Although the ratings are supported by NWI's average business position, the special dividend would result in a significant increase in NWI's debt load, further exacerbating an aggressive financial profile. While cash flow generation has remained relatively stable, the company has not met Standard & Poor's expectations for debt reduction, as the special dividend will likely curtail balance-sheet improvement for several quarters beyond Standard & Poor's original expectations. NWI will be aggressively leveraged. Standard & Poor's believes the company may pursue niche acquisitions to broaden its geographic reach and expand the customer base, which will likely be funded from a moderate free cash flow base and external financing. NBO SYSTEMS: Auditor Resigns over "Estimated Breakage" Concerns --------------------------------------------------------------- In a letter dated October 3, 2003, Grant Thornton LLP gave notice of its resignation as NBO Systems, Inc.'s independent accountants. On October 9, 2003, Grant Thornton LLP provided another letter with additional detail surrounding its resignation. The Company's consolidated financial statements for the fiscal year ended March 31, 2002, was unqualified except that the audit report had an additional paragraph related to the substantial doubt about the Company's ability to continue as a going concern. Grant Thornton LLP submitted its resignation prior to the completion of the audit of the Company's consolidated financial statements for the fiscal year ended March 31, 2003. The Company's Audit Committee is comprised of the Board of Directors as a whole. As Grant Thornton LLP resigned, there was no need for approval. During the Company's two most recent fiscal years and the subsequent interim period preceding such resignation, the Company had notification from Grant Thornton LLP of the following: Grant Thornton LLP advised the Company that information has come to Grant Thornton LLP's attention that has led it to no longer be able to rely on management's representations, or that has made it unwilling to be associated with the financial statements prepared by management. Grant Thornton LLP questioned the Company's use of "estimated breakage", that is, an estimated amount of gift certificate sales the Company believes will never be redeemed and thus will ultimately be abandoned. The Company accounts for actual "breakage", that is, the amount of gift certificates that have expired or reached their legal statute of limitations, by moving that amount from gift certificates payable and restricted cash to unrestricted cash, where it is used in the Company's operations. At that time said "breakage" is also recorded as revenue in accordance with the Company's Revenue Recognition Policy as stated in the Company's Financial Statements. In addition, the Company withdraws cash reflecting "estimated breakage", and makes use of it as operating capital. From the outset, the Company assured Grant Thornton LLP that its contracts with its customers permit the withdrawal and use of "estimated breakage" as well as "breakage", that its customers permit the withdrawal and use of "estimated breakage" as well as "breakage", and further, that its customers know of and acquiesce in this practice. To gain assurance with respect to NBO's contractual rights and obligations, Grant Thornton LLP asked that the Company seek an independent legal analysis of this issue. That analysis concluded, however, that the contracts do not expressly allow for the practice regarding "estimated breakage" as employed by NBO, and may be ambiguous and therefore open to multiple interpretations. In an effort to confirm the Company's assertion that its customers were aware of and approved its practices, Grant Thornton LLP determined that confirmations should be sent to selected accounts. Grant Thornton LLP believes that its efforts were at first vigorously resisted by the Company. The Company ultimately agreed to permit the confirmation procedure. To facilitate a timely response, Grant Thornton LLP requested only that the Company's Chief Executive Officer advise the recipients that the confirmation letter was being sent to them by express carrier. Subsequently, through conversations with the Company's counsel, Grant Thornton LLP became aware that the Company's Chief Executive Officer had replied to contacts made by certain recipients of the confirmations. Grant Thornton LLP has advised the Company that whether and how this contact may have influenced the recipients' responses is unclear to Grant Thornton LLP. Grant Thornton LLP believes that the confirmations that were returned to Grant Thornton LLP did not clearly support NBO's representations about its customers' understanding of the contracts. In view of this sequence of events, Grant Thornton LLP determined that it could not continue with the audit. At the present time, Grant Thornton LLP cannot agree with the Company's treatment of "estimated breakage". As such, Grant Thornton LLP would not be able to issue an unqualified report on the Company's financial statements for the fiscal year ended March 31, 2003. Management's representations to Grant Thornton LLP at the outset appear to Grant Thornton LLP to be questionable, its conduct in initially resisting Grant Thornton LLP's efforts in contacting the recipients of the confirmations, and management's involvement in the confirmation process cause Grant Thornton LLP to no longer be able to rely on the representations of management. Grant Thornton LLP is no longer willing to be associated with the financial statements prepared by management. The Company disagrees with Grant Thornton LLP's judgments in this matter. The Company believes that the contracts, although containing some ambiguity, do permit the current use of estimated breakage, and that this interpretation is the more reasonable interpretation, particularly in light of the disclosure of such use in the Company's financial statements and the course of conduct of the Company and the customers subsequent to the execution of the contracts. The independent third party legal analysis of the contracts also states that while ambiguity does exist in the contracts, that the Company's interpretation is reasonable. The Company believes that its contacts with its customers regarding the confirmation letters were in the nature of ministerial contacts and did not influence the nature of the customers' responses. Of the four confirmations letters sent, four were returned. The Company believes that one customer clearly supported the Company's representations. One confirmation letter referred to the contract and said that the contract "speaks for itself". A third confirmation indicated that the customer could not give the requested confirmation, but referred to the contract itself. The Company does not have a copy of the fourth confirmation letter in its possession. Accordingly, the Company believes its representations to Grant Thornton LLP are reliable and the Company disagrees with Grant Thornton LLP's judgment. The Company's Board of Directors has discussed these disagreements with Grant Thornton LLP. The Company has authorized Grant Thornton LLP to respond fully to the inquiries of any successor accountant concerning the subject matter of such disagreements. Grant Thornton LLP has advised the Company that information has come to its attention during the time period covered by the fiscal year ended March 31, 2002, fiscal year ended March 31, 2003, and the period subsequent thereto, that has caused Grant Thornton LLP to be unwilling to rely on management's representations or to be associated with the registrant's financial statements. Grant Thornton LLP has determined that its report on the Company's financial statements for the year ended March 30, 2002, can no longer be relied upon. As of December 31, 2002, and March 31, 2003, the advance on restricted cash representing "estimated breakage" was $1,894,902 (unaudited) and $4,605,918, (unaudited), respectively. The Company has not yet finished compiling the "estimated breakage" advance on restricted cash for the interim periods of June 30, 2003 and September 30, 2003 due to the delay in filing the Form 10-KSB for the fiscal year ended March 31, 2003 as a result of the events leading to the resignation of the Company's accountants. Additionally, the Company has not provided for any potential claims and there would be additional disclosure requirements if the method of accounting for "estimated breakage" that Grant Thornton LLP apparently would have concluded was required. NORFOLK SOUTHERN: September Working Capital Deficit Tops $570MM --------------------------------------------------------------- Norfolk Southern Corporation (NYSE: NSC) reported third-quarter net income of $137 million, or $0.35 per diluted share, compared with net income of $126 million, or $0.32 per diluted share, in the third quarter of 2002. "Despite a challenging environment, we managed to improve our net income and earnings per share and at the same time post the best operating performance metrics in our history, positioning ourselves for the future by improving service consistency, asset utilization and efficiency," said David R. Goode, chairman, president and chief executive officer. For the first nine months, income from continuing operations, before required accounting changes, was $359 million, or $0.92 per diluted share, compared with net income of $331 million, or $0.85 per diluted share, for the same period in the prior year. Net income during the first nine months was $483 million, or $1.24 per diluted share, and included a $114 million, or $0.29 per diluted share, gain largely due to a required change in accounting for the cost of removing railroad crossties, and a $10 million, or $0.03 per diluted share, gain from discontinued operations resulting from the 1998 sale of a former motor carrier subsidiary. Third-quarter railway operating revenues of $1.60 billion were even with third quarter 2002. Year-to-date railway operating revenues of $4.79 billion were up $103 million, or two percent, compared to the same period a year earlier and established a new nine-month record. Intermodal revenues in 2003 set a third-quarter record at $315 million and also a record for the first nine months, increasing three percent to $904 million compared to the same period a year earlier. The revenue growth reflects increases in converting traffic from the highway to the railroad. Coal revenues improved slightly to $372 million in the quarter and increased three percent to $1.12 billion for the first nine months compared to the same period a year earlier, primarily due to increases in utility and export coal shipments. Third-quarter general merchandise revenues declined one percent to $911 million compared to the same period of 2002. Automotive revenues decreased 11 percent, primarily due to slowed manufacturing and model changeovers, while agricultural, paper and forest products and chemicals reported increased revenues. For the first nine months, general merchandise revenues rose one percent to $2.77 billion compared with the year-earlier nine-month period. Railway operating expenses for the quarter remained unchanged at $1.29 billion compared to third quarter 2002 but were up three percent to $3.95 billion for the first nine months compared to the same period last year largely due to lower pension income and increases in employee wages and medical benefits, as well as higher diesel fuel prices. For the quarter, the railway operating ratio remained unchanged at 80.5 percent compared with the same period of 2002. For the first nine months, the operating ratio rose from 81.4 percent to 82.5 percent. As of September 30, 2003, Norfolk Southern Corporation's balance sheet shows a working capital deficit of $570 million compared to a $554,000,000 deficit as of December 31, 2002. Norfolk Southern Corporation is one of the nation's premier transportation companies. Its Norfolk Southern Railway subsidiary operates 21,500 route miles in 22 states, the District of Columbia and Ontario, serving every major container port in the eastern United States and providing superior connections to western rail carriers. NS operates the most extensive intermodal network in the East and is the nation's largest rail carrier of automotive parts and finished vehicles. NORTEL NETWORKS: Agrees with BellSouth to Expand Voice Solutions ---------------------------------------------------------------- Nortel Networks (NYSE:NT)(TSX:NT) has extended its relationship with BellSouth to supply IP (Internet Protocol) telephony solutions to mid-market customers. Through a packaged offering, Nortel Networks and BellSouth will provide small- and medium-sized businesses and branch offices with flexible, cost-effective voice and data convergence options that will offer both investment protection and customer choice in migrating to IP communications infrastructures. "For 21 years, BellSouth and Nortel Networks have worked together to provide business customers with comprehensive voice solutions," said Dick Anderson, president, Customer Networks, BellSouth. "Now we are offering an expanded portfolio that allows customers to utilize their communications investments and migrate toward converged networks at their own pace as their business needs dictate. Every business is at various stages of technology adoption within their operations, and BellSouth's robust offerings provide multiple options that can be customized according to specific requirements." Included in BellSouth's packaged IP migration solution are Nortel Networks Business Communications Manager converged voice and data platform and Nortel Networks Norstar Integrated Communications Systems. Together, these products give the small and medium-sized business community and enterprise branch offices a choice of pursuing either an IP-enabled or pure IP convergence strategy. In addition, these solutions offer unified messaging capabilities, multimedia contact center options, integrated security, firewall measures and wireless capabilities. "With pre-configured, pre-packaged solution offerings, our allies can help small- and medium-sized business customers implement IP- based telephony easily and cost-effectively with minimal disruption to their business," said Malcolm Collins, president, Enterprise Networks, Nortel Networks. "By joining forces, BellSouth and Nortel Networks will deliver networking solutions and quality customer service so that customers can benefit from our combined, industry-recognized expertise in voice, data and converged IP solutions." "This supports the Nortel Networks enterprise vision of 'One network. A world of choice.', offering enterprises deployment choices in converged solutions while allowing our customers to focus on what is most important to them -- their business," Collins said. The combined networking capabilities of these solutions from BellSouth and Nortel Networks create an integrated, centralized platform for voice and data communications, messaging and management. As a result, enterprises of all sizes can benefit from a solution that is more cost effective than running multiple, overlay networks. Nortel Networks Norstar Integrated Communications Systems, ideal for small- to medium-sized businesses and branch offices, are fully digital telephony systems that integrate many communications platforms directly to the desktop computer of the end user, including voice mail, fax, e-mail and telephone service. Nortel Networks Business Communications Manager delivers to small- and medium-sized business and branch offices all of the capabilities and benefits of Norstar, along with converged voice and data capabilities on a single platform. Business Communications Manager also provides advanced features like universal Internet access; support for intra-site virtual private networks; secure connectivity for remote and mobile users; full redundancy; and browser-based management. These features result in a powerful communications network that is simple to deploy and manage. BellSouth and Nortel Networks have jointly deployed over 40,000 small- to medium-size business equipment solutions, supported by BellSouth's 900 Nortel Networks certified technicians. Nortel Networks (S&P, B Corporate Credit Rating, Stable) is an industry leader and innovator focused on transforming how the world communicates and exchanges information. The company is supplying its service provider and enterprise customers with communications technology and infrastructure to enable value-added IP data, voice and multimedia services spanning Wireless Networks, Wireline Networks, Enterprise Networks and Optical Networks. As a global company, Nortel Networks does business in more than 150 countries. More information about Nortel Networks can be found on the Web at http://www.nortelnetworks.com NORTHWEST AIRLINES: Proposes $225MM Convertible Note Offering ------------------------------------------------------------- Northwest Airlines Corporation (Nasdaq: NWAC) announced that it intends to offer, subject to market and other conditions, approximately $225 million aggregate principal amount of Convertible Notes due 2023 through an offering to qualified institutional buyers. The interest rate, conversion rate and offering price are to be determined by negotiations between Northwest and the initial purchasers of the notes. Northwest stated that it expects to grant the initial purchasers a 30-day option to purchase up to an additional $45 million principal amount of notes. Northwest plans to use the net proceeds of the offering for general corporate purposes. Northwest also intends to use approximately $10 million of the proceeds to enter into call spread options on its common stock to limit exposure to potential dilution from conversion of the notes. In connection with the call spread options, the initial purchasers are expected to take positions in Northwest's common stock in secondary market transactions and/or enter into various derivative transactions both in anticipation of and after the pricing of the notes. Northwest Airlines (S&P, B+ Corporate Credit Rating) is the world's fourth largest airline with hubs at Detroit, Minneapolis/St. Paul, Memphis, Tokyo and Amsterdam, and approximately 1,500 daily departures. With its travel partners, Northwest serves nearly 750 cities in almost 120 countries on six continents. In 2002, consumers from throughout the world recognized Northwest's efforts to make travel easier. A 2002 J.D. Power and Associates study ranked airports at Detroit and Minneapolis/St. Paul, home to Northwest's two largest hubs, tied for second place among large domestic airports in overall customer satisfaction. Readers of TTG Asia and TTG China named Northwest "Best North American airline." For more information pertaining to Northwest, visit Northwest's Web site at http://www.nwa.com NRG ENERGY: Creditors' Ballots Due on November 12, 2003 ------------------------------------------------------- On July 2, 2003, NRG Energy, Inc., and its debtor-affiliates filed their Third Amended Disclosure Statement for their Joint Plan of Reorganization. At the July 24, 2003 hearing, the Court approved the Third Amended Disclosure Statement for purposes of submission to the Securities Exchange Commission. The Court sets November 12, 2003 as the Voting Deadline. The Debtors may extend the Voting Deadline for all creditors from time to time without further Court order by giving notice of the extension to all parties-in-interest, as well as issuing a press release to the Dow Jones Newswire and publishing the notice in The Wall Street Journal. The Court also sets November 12, 2003 as the Confirmation Objection Deadline. Pursuant to Rule 3018(a) of the Federal Rules of Bankruptcy Procedure, the Record Date for purposes of determining which creditors are entitled to receive Solicitation Packages and vote on the Plan is September 29, 2003. (NRG Energy Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 609/392-0900) NUTRAQUEST: Has Until November 30 to File Schedules & Statements ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey gave Nutraquest, Inc., 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 Debtor has until November 30, 2003 to file these financial disclosure documents. Headquartered in Manasquan, New Jersey, Nutraquest, Inc. markets the ephedra-based weight loss supplement, Xenadrine RFA-1. The Company filed for chapter 11 protection on October 16, 2003 (Bankr. N.J. Case No. 03-44147). Andrea Dobin, Esq., and Simon Kimmelman, Esq., at Sterns & Weinroth, P.C. represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated assets of over $10 million and estimated debts of over $50 million. OWENS CORNING: Wants $34.6Mil. Chase Manhattan Claim Disallowed --------------------------------------------------------------- The Owens Corning Debtors ask the Court to disallow and expunge Claim No. 11883 filed by Chase Manhattan Bank for $34,620,000. Claim No. 11883 is based on certain Owens Corning bonds or other securities allegedly owned by Chase and Sun Life of Canada. The bonds and securities are identified in attachments to the Claim: (1) CUSIP 69073FAB9 (7.5% Notes due May 1, 2005); (2) CUSIP 69073FAC7 (7.7% Bonds due May 1, 2008); (3) CUSIP 69073FAE3 (7% Notes due March 15, 2009); and (4) CUSIP 69073FAD5 (7.5% Notes August 1, 2018). Wilmington Trust, the trustee with respect to each security, has filed timely proofs of claim on account of the amount due: Claim Amount Security ----- ------ -------- 7913 $309,625,000 7.5% Notes due August 1, 2005 9133 258,234,722 7.7% Notes due August 1, 2008 7537 259,673,611 7% Notes due March 15, 2009 7452 417,833,333 7.5% Notes due August 1, 2018 Norman L. Pernick, Esq., at Saul Ewing LLP, in Wilmington, Delaware, asserts that the Chase Claim is wholly duplicative of the four claims listed. To the extent Chase holds the securities, it will be permitted to vote on the Debtors' plan and receive distributions through the appropriate indenture trustees. Mr. Pernick also notes that the Chase Claim was filed after the Court-approved Claims Bar Date, and thus is disallowable as a matter of law. (Owens Corning Bankruptcy News, Issue No. 60; Bankruptcy Creditors' Service, Inc., 609/392-0900) PAC-WEST TELECOMM: Third Quarter 2003 Net Loss Amounts to $4.3MM ---------------------------------------------------------------- Pac-West Telecomm, Inc. (Nasdaq: PACW), a provider of integrated communications services to service providers (SPs) and small and medium-sized enterprises (SMEs) in the western U.S., announced its results for the third quarter ended September 30, 2003. Hank Carabelli, Pac-West's President and CEO, said, "I would like to refer back to my comments from last quarter where I cautioned investors to anticipate volatility in our reported financial performance due to a recurring pattern of incumbent local exchange carriers (ILECs) forcing competitors to pursue legal actions to enforce agreements and collect revenues. This pattern repeated itself in the third quarter of 2003 with Verizon initiating new efforts to withhold revenues. This revenue volatility obscures the fact that Pac-West continued its volume growth in the third quarter, with 5% line growth and 12% minutes of use growth from the previous quarter, while controlling costs and improving our ability to provide industry leading customer service and retention rates. We believe our strong fundamentals have positioned us to accelerate market share growth through organic and acquisitive means in both mature product lines as well as emerging markets." Revenues Our total revenues for the third quarter of 2003 were $30.3 million, a decrease of $15.4 million or 33.7% from revenues of $45.7 million in the second quarter of 2003, and a decrease of $3.9 million or 11.4% from revenues of $34.2 million in the third quarter of 2002. Total revenues for the third quarter of 2003 declined relative to total revenues for the second quarter of 2003 despite sequential growth in lines in service and minutes of use, primarily due to a $16.0 million decline in reciprocal compensation revenues in the third quarter of 2003, as compared to the second quarter of 2003. Included in the second quarter of 2003 reciprocal compensation revenues are $10.0 million in reciprocal compensation revenues previously earned by us, but withheld by certain ILECs. The remaining $6.0 million decline in reciprocal compensation revenues in the third quarter of 2003 primarily resulted from lower per minute reciprocal compensation rates paid by ILECs and the withholding of reciprocal compensation payments by Verizon for approximately two months of the quarter. The year over year decrease in revenues in the third quarter of 2003 from revenues in the third quarter of 2002 is primarily due to a $4.3 million decline in reciprocal compensation from lower per minute reciprocal compensation rates paid by ILECs and the withholding of reciprocal compensation payments by Verizon for approximately two months of the third quarter of 2003. These declines were partially offset by increased DS-0 lines in service and total minutes of use on a year over year basis. As previously announced, both Verizon and SBC have attempted to adopt the Federal Communications Commission's (FCC) Intercarrier ISP Compensation Order. In particular, the FCC Order introduced a series of declining reciprocal compensation pricing tiers for minutes of use, at rates starting below the rates previously negotiated in our interconnection agreements with both carriers. The lowest pricing tier specified by the order was reached on June 15, 2003, which will remain in effect until such time that a replacement FCC Order may be introduced. Additionally, the FCC Order introduced artificial annual growth limits on compensable minutes of use subject to reciprocal compensation based on the composition and balance of traffic between carriers. Based on Verizon's interpretation of the growth cap formula, Verizon commenced withholding reciprocal compensation payments to us during July 2003, and has indicated its intention to withhold any further reciprocal compensation payments for the duration of 2003. If other significant carriers that we exchange traffic with, such as SBC, were to adopt a similar interpretation of the growth cap formula, we could experience further significant reductions in reciprocal compensation revenue as a result of payment withholdings for the balance of 2003. Furthermore, ILECs that withhold reciprocal compensation payments for 2003 based on their interpretation of the FCC Order may also withhold reciprocal compensation payments in 2004 and beyond. Pac-West is disputing these withheld reciprocal compensation revenues and has challenged the legality of the growth caps as well as Verizon's and SBC's implementation of the FCC Order. There are no assurances that we will ever receive any disputed past or future reciprocal compensation payments. Expenses Cost of sales were $8.8 million in the third quarter of 2003, an increase of $1.8 million or 25.7% from $7.0 million in the second quarter of 2003, and a decrease of $3.7 million or 29.6% from $12.5 million in the third quarter of 2002. Cost of sales for the third quarter of 2003 were inclusive of $2.0 million in negotiated supplier credits recognized during the period. Similarly, cost of sales for the second quarter of 2003 were inclusive of $4.1 million in negotiated supplier credits for the period. These supplier credits are a result of the resolution of disputes with suppliers, and there can be no assurance that we will continue to receive supplier credits in the future. Selling, general and administrative expenses were $15.2 million in the third quarter of 2003, an increase of $1.0 million or 7.0% from $14.2 million in the second quarter of 2003, and a $0.3 million or 2.0% increase from $14.9 million in the third quarter of 2002. The $1.0 million increase in the third quarter of 2003 from selling, general and administrative expenses for the second quarter of 2003 is primarily the result of a negotiated supplier credit of approximately $0.8 million recognized during the second quarter. Net Income (Loss) Net loss for the third quarter of 2003 was ($4.3) million, compared to net income of $9.2 million for the second quarter of 2003 and net income of $4.9 million for the third quarter of 2002. Net income for the second quarter of 2003 was inclusive of $10.0 million in revenues earned by Pac-West for services rendered in prior periods, but withheld by certain ILECs, and $4.1 million in negotiated supplier credits. Net income for the third quarter of 2002 included a gain on repurchase of bonds of $14.9 million relating to open market purchases undertaken in the quarter to retire $22.8 million in principal amount of senior notes at a significant discount from face value. Basic and diluted net loss per share for the third quarter of 2003 was ($0.12), as compared to basic and diluted net income per share of $0.25 in the second quarter of 2003, and basic and diluted net income per share of $0.13 in the third quarter of 2002. EBITDA EBITDA (earnings before interest expense, net; income taxes; depreciation and amortization) for the third quarter of 2003 was $6.3 million, a decrease of $18.0 million or 74.1% from $24.3 million for the second quarter of 2003, and a decrease of $15.4 million or 71.0% from $21.7 million in the third quarter of 2002. The $18.0 million decline in EBITDA in the third quarter of 2003 compared to the second quarter of 2003 was primarily due to a $16.0 million decline in reciprocal compensation revenues and an increase of $1.8 million in cost of sales. The $15.4 million decline in EBITDA in the third quarter of 2003 as compared to the third quarter of 2002 was primarily due to a $14.9 million gain on repurchase of bonds in the second quarter of 2002. Liquidity As of September 30, 2003, we had cash, cash equivalents and short- term investments totaling $61.3 million, an increase of $7.3 million from $54.0 million at the end of the second quarter of 2003, and an increase of $4.0 million from $57.3 million as of December 31, 2002. These cash increases resulted primarily from operating cash flow offset by interest expense in the periods. Lines in Service and Minutes of Use Total DS-0 equivalent lines in service (lines), which include SP and on- network SME line equivalents, were 425,070 in the third quarter of 2003, an increase of 21,319 lines or 5.3% sequentially from 403,751 lines at the end of the second quarter of 2003, and an increase of 100,970 lines or 31.2% from 324,100 lines at the end of the third quarter of 2002. Total minutes of use were 11.2 billion in the third quarter of 2003, an increase of 1.2 billion minutes or 12.0% from 10.0 billion minutes in the second quarter of 2003, and an increase of 3.0 billion minutes or 36.6% from 8.2 billion minutes in the third quarter of 2002. Founded in 1980, Pac-West Telecomm, Inc. is one of the largest competitive local exchange carriers headquartered in California. Pac-West's network carries over 100 million minutes of voice and data traffic per day, and an estimated 20% of the dial-up Internet traffic in California. In addition to California, Pac-West has operations in Nevada, Washington, Arizona, and Oregon. For more information, please visit Pac-West's website at http://www.pacwest.com. * * * As reported in Troubled Company Reporter's May 1, 2003 edition, Standard & Poor's Ratings Services lowered its corporate credit rating on Pac-West Telecomm Inc. to 'D' from 'CC'. The rating on the 13.5% senior notes due 2009 was lowered to 'D' from 'C'. S&P explained, "Given the company's significant dependence on reciprocal compensation (the rates of which the company expects to further decline in 2003) and its limited liquidity, Pac-West will likely find the implementation of its business plan continue to be challenging." PG&E: ET Debtors Ask to Extend Plan Filing Exclusivity to Mar. 5 ---------------------------------------------------------------- As part of their overall restructuring efforts, the NEG Debtors are in the process of winding down their energy trading and marketing operations. The NEG Debtors will no longer engage in proprietary trading business. The services provided by the energy trading debtors in support of the NEG Debtors' physical assets -- primarily the generating facilities -- have been moved from the ET Debtors' operations to other parts of the Company. In some cases, these affiliate support services have been contracted for from independent third parties. Going forward, the NEG Debtors contemplate that the functions of the ET Debtors will be limited to winding down their businesses and addressing the claims resulting from the termination of certain trading contracts and other agreements associated with the wind down of their operations. But unlike National Energy & Gas Transmission, Inc., formerly known as PG&E National Energy Group, Inc., which filed a restructuring plan on the Petition Date, Matthew A. Feldman, Esq., at Willkie Farr & Gallagher LLP, in New York, relates that the ET Debtors have not yet formulated or filed a plan. The ET Debtors are still in the early stages of sorting through the myriad complex contracts and energy trading agreements and numerous other business and liquidation issues associated with their Chapter 11 cases. Accordingly, the ET Debtors require additional time to formulate and file a Plan. By this motion, the ET Debtors ask the Court to extend their Exclusive Plan Filing Period to and including March 5, 2004, and the Exclusive Solicitation Period to and including May 5, 2004. Mr. Feldman tells the Court that an extension of the ET Debtors' Exclusive Periods is warranted because: (a) The ET Debtors are part of a large and complex business enterprise. As of March 31, 2003, the ET Debtors comprise 190 subsidiaries of which NEG is the parent with $7,900,000,000 in collective assets and $8,980,000,000 in aggregate liabilities. The ET Debtors on their own represent a significant business enterprise with a complex financial structure, which, at year end 2002, had $3,100,000,000 total assets, $2,500,000,000 total liabilities, and employed 230 persons. The ET Debtors' energy marketing and trading operations generated $14,500,000,000 in revenues during 2002; (b) The ET Debtors and the Official Committee of Unsecured Creditors need time to negotiate a Plan and prepare adequate information for the disclosure statement. The ET Debtors and the Committee are at an early stage of working together to formulate a Plan; (c) The ET Debtors are making good faith progress towards reorganization. The ET Debtors have been working diligently to review each of their contracts and to reject unprofitable contracts. The ET Debtors have put together a detailed outline of the mechanism to liquidate the long- term contracts, which is a critical part of any Plan they would file; (d) The ET Debtors have numerous long-term contracts that must be carefully evaluated, whereupon the ET Debtors must devise a mechanism to reduce the contracts to present value for Plan purposes; (e) Since the ET Debtors' energy trading and marketing operations will be wound-down and liquidated in an orderly manner, the ET Debtors are incurring little in the way of postpetition obligations. However, the postpetition obligations that are being incurred are being paid as they become due. (f) There has been no previous request to extend the ET Debtors' Exclusive Periods; (g) There have been no breakdowns in Plan negotiations such that continuation of the ET Debtors' Exclusivity would result in the ET Debtors having an unfair bargaining position over creditors. Contrary to any breakdown in negotiations, the ET Debtors are at the starting point of building a relationship with the Creditors' Committee and negotiating a Plan and ultimately reaching a consensus for a Plan; (h) The ET Debtors' winding-down and liquidation does not relate to any failure to resolve fundamental reorganization issues, but rather reflects sound business judgment and a proper exercise of fiduciary duties. Given the collapse of the energy trading industry and the financial status of the ET Debtors, winding-down and liquidating these Debtors' operations is the only prudent course. Thus, in the ET Debtors' cases, the fundamental reorganization matters are those involved in expeditiously and efficiently winding down and liquidating operations to minimize costs and maximize values; and (i) The ET Debtors are aware of no credible allegations of debtor misconduct in connection with the NEG Debtors' Chapter 11 cases. (PG&E National Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392-0900) POLYONE: Low-B Rated Company Reports 3rd Quarter 2003 Results ------------------------------------------------------------- PolyOne Corporation (NYSE: POL), a leading global polymer services company, reported sales of $630.3 million for the quarter ended September 30, 2003, a decrease of $20.6 million, or 3 percent, from the 2003 second quarter. PolyOne had operating income of $6.9 million for the 2003 third quarter compared with operating income of $10.8 million in the second quarter. For third-quarter 2002, PolyOne reported sales of $650.7 million and operating income of $26.3 million. Operating income before special items was $16.3 million in the third quarter of 2003 compared with $14.2 million in the 2003 second quarter and $31.6 million in the third quarter of 2002. Excluding special items, operating income in third-quarter 2003 improved from the 2003 second quarter by $2.1 million, despite softer sales. A schedule of special items and a reconciliation of operating income before special items to operating income are included in the attached Exhibit 1 and Exhibit 2. The 2003 third- quarter operating results, excluding the effects of special items, are in line with PolyOne's July 29, 2003, outlook for third- quarter results. "We are encouraged that we were able to improve operating margins through our internal efforts to lower costs and cash flow, primarily through a significant reduction in our inventory," said Thomas A. Waltermire, PolyOne chairman and chief executive officer. "Our lower cost structure, coupled with improved sales demand toward the end of the quarter, made us profitable in September and is providing some momentum as we move into the fourth quarter." Beginning late in the second quarter of 2003 and continuing into the third quarter, the Company took additional actions to streamline and simplify operations and to raise manufacturing operating rates. As a result, the 2003 third quarter includes special charges of $9.4 million pre tax for employee separations and plant closing costs. During the 2003 third quarter, the Company recognized certain tax items that affect income tax expense and shareholders' equity, but do not impact PolyOne's net cash flow or liquidity. In accordance with Statement of Financial Accounting Standards No.109, "Accounting for Income Taxes," the Company determined that it must reduce the value of its tax credits because it has been losing money in the United States operations. As a result, the Company recognized non-cash income tax expense of $9.0 million, or $0.10 per share, in the 2003 third-quarter results to reduce the value of its tax credits. The accumulated valuation allowance for income taxes was $41.4 million at September 30, 2003. Once the Company returns to profitability in the U.S., the credits will be restored. In addition, during the 2003 third quarter, the Company recorded a federal tax expense of $24.0 million, or $0.26 per share, for dividends to be paid by foreign subsidiaries as a result of certain tax planning strategies. This provision relates to repatriation of funds to the U. S., and should have no significant impact on PolyOne's overall liquidity. Third-Quarter 2003 Business Highlights - Strengthened balance sheet: PolyOne made solid progress in reducing inventories and working capital investment. The result was a reduction of $25.4 million in net borrowing under the receivables sale facility in the third quarter of 2003. - Debt reduction: PolyOne announced in October 2003 that its future focus would be on its global Plastics Compounding and Color & Additive Masterbatch business operations and its Distribution business. These operations have the strongest market synergies and potential for success. PolyOne's other business operations -- Elastomers and Performance Additives, Engineered Films and Specialty Resins -- are being considered for divestment. Proceeds from the sales of these businesses would be used to reduce debt. The Company has set no deadline for divesting these business operations, which in 2002 had $617 million of PolyOne's $2.5 billion in sales. For the first nine months of 2003, these businesses had an operating loss before special charges of $7.2 million. - Improving business margins: During the 2003 third quarter, management accelerated a number of programs to improve the performance of the North American operations. These programs included: segmenting the customer base to improve service and profitability, focusing sales resources more effectively on customers who can drive growth, streamlining costs for smaller transactions and emphasizing individual performance in sales force compensation. Further, as part of the ongoing effort to reduce PolyOne's selling and administrative costs to less than 10 percent of sales, approximately 170 positions were eliminated in a number of business operations and functional support departments. - Alignment of capacity with demand: As part of an objective to reduce costs through improved manufacturing efficiencies, PolyOne closed its color additives plant in Fort Worth, Texas, in August 2003 and transferred production to other color plants with available capacity. The Company also reduced the work schedule from seven to five days at most of its vinyl compounding plants. Additionally, PolyOne closed two production lines at its Macedonia, Ohio, engineered materials plant. Altogether, these actions reduced PolyOne's workforce by approximately 100 employees. - Expansion approved for China: To further strengthen PolyOne's global position, the Board of Directors recently approved plans to build a new masterbatch and compound plant in China - the Company's third plant in China and fifth in Asia. PolyOne anticipates that the facility will begin operations in late 2004. Currently, Asia accounts for about 3 percent of PolyOne's sales. Business Segment Performance Highlights Performance Plastics: Third-quarter 2003 operating income, excluding special charges, improved $3.6 million, or 49 percent, compared with the second quarter of 2003, principally as a result of previous cost reduction actions. This improvement occurred despite a sales decrease of 3 percent over the same period. Overall, shipments decreased 2 percent in the third quarter compared with the second quarter as strong demand in September only partially offset lackluster business in July and August. The exception was the Asian operations, which recovered from SARS- related issues in the second quarter of 2003 and increased shipments 9 percent from the second quarter. Elastomers and Performance Additives: Sales and shipments decreased 3 percent and 1 percent, respectively, in the third quarter of 2003 compared with the 2003 second quarter, principally because of a decline in automotive demand. Customer sales, however, improved during September from July and August levels. Distribution: A slow July and August resulted in a 4 percent decline in sales from the 2003 second quarter to the third quarter of 2003. Shipments, however, were unchanged over the same period. Product mix contributed to the difference as shipments of lower- priced commodity-grade resins improved in the third quarter. Resin and Intermediates: Earnings from equity affiliates were essentially flat in the third quarter of 2003 compared with the 2003 second quarter. These better-than-anticipated results were driven principally by strong sales demand for polyvinyl chloride (PVC) resin, which boosted shipments from Oxy Vinyls, LP by approximately 16 percent over the previous quarter. Fourth-Quarter 2003 Business Outlook In North America, where there are modest signs of economic recovery, customer sales demand strengthened in September from weakness in July and August. This improved sales demand carried over to early October. While sales demand in the second half of the fourth quarter is very difficult to project, PolyOne estimates that North American 2003 fourth-quarter sales will be seasonally slower and could approximate 2002 fourth-quarter levels. International sales are expected to increase 10 to 15 percent over the same period, driven principally by the Transcolor acquisition. For PolyOne's operating businesses (total Company less the Resin and Intermediates segment), 2003 fourth-quarter prices and raw material costs are expected to remain unchanged from the third quarter of 2003. Selling and administrative costs are expected to be lower in the fourth quarter versus the previous quarter. PVC resin sales demand in the 2003 fourth quarter is forecasted to be seasonally lower than 2003 third-quarter levels, but ahead of fourth-quarter 2002 levels. Average industry PVC resin selling prices are projected to approximate the 2003 third quarter. As a result of projected raw material increases, PVC resin industry spreads could decrease compared with the third quarter of 2003. Chlor-alkali demand is also projected to be seasonally down in the 2003 fourth quarter compared with the third quarter of 2003. The combination of anticipated lower sales demand and resin spreads results in a projected reduction of $3 million to $5 million in operating income before any special items for the Resin and Intermediates segment in the fourth quarter compared with the third quarter of 2003. Special items pre-tax expense in the fourth quarter of 2003 is projected to be approximately $12 million for restructuring actions initiated to date, including the Elastomers and Performance Additives plant closings. For the three non-core businesses that may be divested, an assessment of potential asset impairment will occur in the 2003 fourth quarter; results are unknown at this time. Also, the fourth-quarter after-tax special items will include a tax valuation allowance related to the fourth- quarter domestic operating losses. The cumulative result of these factors (seasonally lower revenues and projected lower Resin and Intermediates equity earnings, partially offset by reduced overhead costs) is that PolyOne expects a fourth-quarter 2003 loss of $0.32 to $0.42 per share, and a loss before special items of $0.08 to $0.14 per share. Before special items, the 2003 fourth-quarter operating loss is expected to be from $0.02 to $0.08 per share better than the comparable 2002 fourth-quarter amount. Despite this earnings outlook, the Company expects to generate positive cash flow in the 2003 fourth quarter, largely as a result of ongoing efforts to further reduce its working capital and reduced seasonal requirements. "Because we remain cautious about a rebound in the economy, we are taking additional cost reduction actions that should benefit the 2003 fourth quarter and return the overall business to profitability in 2004," said Waltermire. "We are taking the necessary steps to bring our cost structure in line with current demand and to reduce our working capital needs structurally. These steps, plus our recent decision to make available for divestment businesses totaling more than $600 million in sales, are being taken to focus our Company on its strengths, improve our operating results and strengthen our balance sheet." About PolyOne PolyOne Corporation, with 2002 annual revenues approximating $2.5 billion, is an international polymer services company with operations in thermoplastic compounds, specialty resins, specialty polymer formulations, engineered films, color and additive systems, elastomer compounding and thermoplastic resin distribution. Headquartered in Cleveland, Ohio, PolyOne has employees at manufacturing sites in North America, Europe, Asia and Australia, and joint ventures in North America, South America, Europe and Asia. Information on the Company's products and services can be found at http://www.polyone.com * * * As reported in Troubled Company Reporter's May 27, 2003 edition, Fitch Ratings affirmed PolyOne Corporation's senior unsecured debt rating at 'B' and assigned a 'B' rating to the new 10.625% senior unsecured notes. The senior secured rating related to the credit facility was upgraded to 'BB-' from 'B'. The Negative Rating Watch was removed. The Rating Outlook is Negative. The ratings reflect PolyOne's continued weak financial performance. POLYONE CORP: Closes 2 Plants & Restructures Elastomers Business ---------------------------------------------------------------- PolyOne Corporation (NYSE: POL) announced that it will close two manufacturing plants within its Elastomers and Performance Additives business segment as it acts on restructuring initiatives to reduce costs and bring capacity in line with sales demand. PolyOne's DeForest, Wisconsin, and Wynne, Arkansas, plants are to close around the end of 2003. The Company also plans to reduce the number of sales and administrative positions within the business. These combined moves will translate into the reduction of approximately 230 positions across the business. "While this business has maintained profitability and positive cash flow, the effects of raw material inflation, offshore competition and geographic movement of some key markets have decreased operating margins," said Thomas A. Waltermire, chairman and chief executive officer. "We are determined to reduce excess production capacity and continue to realign our cost structure in order to improve our profitability." On October 21, PolyOne announced that Elastomers and Performance Additives was one of three business operations being considered for divestment. The Company has set no deadline for divesting the business. Elastomers and Performance Additives had 2002 sales of $364 million, representing 14 percent of total Company sales. The DeForest and Wynne plants manufacture a variety of products, including compounded elastomers and dispersed rubber chemicals. PolyOne intends to carefully transition these products to other elastomer manufacturing facilities with excess capacity at Burton, Ohio; Dyersburg, Tennessee; and Kennedale, Texas. PolyOne projects that this restructuring action in Elastomers and Performance Additives will yield annualized pre-tax earnings improvement of $7.5 million. Total restructuring expense is projected to approximate $15 million, of which approximately $7.5 million will be non-cash and related to asset write-offs. Estimated 2003 fourth-quarter restructuring expense is $11.5 million, with minimal funding of the cash closure costs anticipated in 2003. Employees affected by the plant closings will be eligible for severance benefits and outplacement services, and will be able to apply for job openings at other locations within the Elastomers business group. About PolyOne PolyOne Corporation, with 2002 annual revenues approximating $2.5 billion, is an international polymer services company with operations in thermoplastic compounds, specialty resins, specialty polymer formulations, engineered films, color and additive systems, elastomer compounding and thermoplastic resin distribution. Headquartered in Cleveland, Ohio, PolyOne has employees at manufacturing sites in North America, Europe, Asia and Australia, and joint ventures in North America, South America, Europe and Asia. Information on the Company's products and services can be found at http://www.polyone.com * * * As reported in Troubled Company Reporter's May 27, 2003 edition, Fitch Ratings affirmed PolyOne Corporation's senior unsecured debt rating at 'B' and assigned a 'B' rating to the new 10.625% senior unsecured notes. The senior secured rating related to the credit facility was upgraded to 'BB-' from 'B'. The Negative Rating Watch was removed. The Rating Outlook is Negative. The ratings reflect PolyOne's continued weak financial performance. PRIDE INTL: Hosting Third Quarter Earnings Conference Call Today ---------------------------------------------------------------- In conjunction with Pride International, Inc.'s (NYSE: PDE) Third Quarter Earnings Release, you are invited to listen to its conference call that will be broadcast live over the Internet on Friday, October 31, 2003 9:00 AM Central US. What: Pride International, Inc. Third Quarter Earnings Release Conference Call When: Friday, October 31, 2003 9:00 AM Central US Where: http://www.prideinternational.comor http://www.firstcallevents.com/service/ajwz391051328gf12.html How: Live over the Internet -- Simply log on to either web address above. Contact: Investor Relations of Pride International, Inc. (713) 789-1400 Pride International, Inc., headquartered in Houston, Texas, is one of the world's largest drilling contractors. The Company provides offshore drilling, land drilling, and related services in more than 30 countries, operating a diverse fleet of 329 rigs, including two ultra-deepwater drillships, 11 semisubmersible rigs, 35 jackup rigs, and 29 tender-assist, barge and platform rigs, as well as 252 land rigs. If you are unable to participate during the live webcast, the call will be archived on the Pride International, Inc. Web site at http://www.prideinternational.com. To access the replay, click on Investor Relations and then Calendar of Events. * * * As reported in the Troubled Company Reporter's September 17, 2003 edition, Fitch Ratings has assigned Pride International Inc. a senior unsecured debt rating of 'B+'. Fitch has also assigned a 'BB' rating to the U.S. senior secured credit facility and a 'BB-' rating to the non-U.S. senior secured credit facility. The Rating Outlook is Stable. The ratings reflect Pride's relatively weak credit profile, the regions where Pride operates and the company's competitive position in the oil and gas drilling market. These ratings were initiated by Fitch as a service to users of its ratings. The ratings are based on public information. QUINTILES: Signs-Up Francois Charette as Canadian Gen. Manager --------------------------------------------------------------- Quintiles Transnational Corp. announced the appointment of Francois Charette, M.D., as General Manager, Senior Vice President, Quintiles Canada. In this newly created position, Dr. Charette will have responsibility for Quintiles' full line of clinical research services throughout Canada. Dr. Charette has an extensive background in the pharmaceutical industry and medical administration, most recently serving as Vice President, Scientific Affairs, for Berlex Canada. His previous experience includes positions as Director, Professional and Hospital Services at Centre Hospitalier Anna-Laberge in Chateauguay, Quebec; Director of Research for Bristol-Myers Squibb, Canada; Associate Director of Research for Hoechst Canada; and head of the Department of General Medicine at Centre Hospitalier Guy-Laporte. Dr. Charette will lead Quintiles Canada from the company's office in Montreal, where nearly 200 Quintiles employees provide biostatistics, clinical monitoring, data management and regulatory services. Quintiles (S&P, BB- Corporate Credit Rating, Stable) helps improve healthcare worldwide by providing a broad range of professional services, information and partnering solutions to the pharmaceutical, biotechnology and healthcare industries. Headquartered near Research Triangle Park, North Carolina, and with offices in more than 40 countries, Quintiles is a leading global pharmaceutical services organization and a member of the Fortune 1000. For more information visit the company's Web site at http://www.quintiles.com. ROLAND HOUSE: Robert E. Wright, Jr., Joins as New Executive VP -------------------------------------------------------------- Roland House, a world leader in high definition technology and post-production work, has hired a new executive vice president even as it begins countdown to a November 10 sealed-bid auction sale handled by one of the country's largest accelerated marketing/auction firms, Tranzon LLC. Robert E. Wright, Jr. has joined the Roland House team, according to company CEO Fritz Roland, whose company is located near Washington, D.C. at 2020 N. 14th St. in Arlington, VA. "I've known Bobby for a long time and he is uniquely qualified to come on board at this all-important juncture in Roland House's history. He is well respected in the industry, knows the ins and outs of post production, is a superb marketer and very much a 'people person,' a quality that is also a trademark of Roland House," says Roland, 76, who in "semi-retirement" formed the company in 1983 after a long career as an award-winning independent filmmaker. A native Baltimorean, Wright was instrumental in steering Henninger Media Services, in Arlington, VA through several successful corporate acquisitions. He joined Henninger -- also a post-production company -- in 1993 as general manager of Henninger Capitol with the task of accelerating the transition to new ownership. He shifted attention to the sales side in 1994, leading the sales effort increasing billings from $10 million to $25 million in two years. In the late '90s, with economic factors creating global market instability, he again assumed more management responsibilities and focused on maintaining balance at Henninger through "right sizing" and continued attention to the bottom line. Says Wright, "This is a perfect time for me to become affiliated with Roland House, a company I've long admired. Fritz, who's just a giant in the field, is again being innovative in his desire to catapult Roland House into the next stage of its development by seeking a new buyer and using the auction process to achieve it. It's an accelerated way of accomplishing a sale and more U.S. companies are using this method to get more value for their investments in a consolidated amount of time," according to Wright who also worked in management from 1981 - 1986 at the now-defunct Flite Three Recordings in Baltimore, MD, ending in the post as executive vice president of production. Roland, who filed for Chapter 11 bankruptcy protection this past August "to give me some room to find a buyer," believes the new owner will reap the rewards of acquiring one of the most creative teams assembled in the business, Roland House's cutting edge equipment and a balance sheet without the usual long line of creditors. Says Roland, "I'm heading towards 80 and I'm slowing down. I want to see Roland House thrive far beyond me. What our industry requires are investments by people with the vision, time, talent and capital to see us through the transition to when high definition becomes the norm, more financially accessible to those who want to harness this magic." Steve Holloway, a Roland House client who heads Steven Holloway Films, Inc., says, "It's a natural transition. We can only hope he finds someone who can carry forth his vision. We need a post house like Roland House here. There is nothing else like it: the compassion, the dedication, the innovation and overall love of the craft. It's far above the rest." Roland House has won every major award there is to win, and Fritz Roland will be honored in Washington, D.C. this November 7 at International Television Assoc. - DC Chapter's annual PEER Awards as one of three recipients of the 2003 Distinguished Achievement Award. Held at the National Press Club, the event starts at 6:00 p.m. Currently, Roland House employs nearly three dozen professionals known to excel in the field of high definition and for their creativity and abilities to meet tight deadlines in a highly complex field - qualities that attract such devoted name clients as the Discovery Channel, PBS, National Geographic, Time-Life, as well as numerous political consultants, ad agencies, independent producers and a host of multi-national corporations. The all-component, digital, NTSC and PAL, film and tape facility has seven AVID suites; six On-line suites; Design and Effects including 3-D animation and motion control; four digital audio suites - two with Surround Sound; a Foley stage; two film-to-tape suites; and two tape-to-tape suites. Roland House also handles quality control, standards conversion, duplication, rentals and open- and closed-captioning. Babar Ahmed, with Cambridge Feature Film Productions, wrote and directed the critically acclaimed feature film Genius, and credits Roland House with some of the film's success. Ahmed, who did pre- production and filming in New York, intended to do the post in The Big Apple, too, until Tim Lorenz, one of Roland House's sales directors, convinced him of Roland House's talent in Ahmed's own backyard (he lives in a Maryland suburb of DC). Roland House did the editing, special effects, color correction, and sound design on the movie which tells the story of a high school boy who can only get the girl of his dreams if he becomes a genius. "When the producers saw the first rough cut, they doubled the budget," largely because of the effects they saw, and wanted more of, according to Ahmed, who says the popular industry website Filmthreat.com "ranked us over Terminator III and Chicago, especially praising Genius for its visual look and production values. I believe (Roland House's) work helped us get shown in the 2003 Sedona International Film Festival - one of the most competitive in North America in terms of acceptances." Steve Burns, senior vice president and general manager for The Science Channel, agrees that Roland House brings added value to projects. "From editing and graphics to audio, and especially in recent years with the launch of our emerging HD technology, Roland House has provided terrific support to help bring our quality programming to air," says Burns. Tranzon LLC, which specializes in accelerated marketing services as well as providing real estate, business asset and liquidation auction expertise to clients throughout the U.S., is handling the November 10 sale of Roland House through a sealed-bid process. According to Tranzon Executive Vice President Stephen Karbelk, Roland House inspections will continue to be held by appointment through November 7. Bids are due by 2:00 p.m. (EST) on November 10. For more information about the sale contact Karbelk at (703) 927-6838 or skarbelk@tranzon.com or visit the Tranzon website at http://www.tranzon.com. ROUGE INDUSTRIES: Seeks Nod to Hire Morris Nichols as Counsel ------------------------------------------------------------- Rouge Industries, Inc., and its debtor-affiliates wish to retain and employ Morris, Nichols, Arsht & Tunnel as Bankruptcy Counsel. Accordingly, the Debtors ask for authority from the U.S. Bankruptcy Court for the District of Delaware to hire the Firm. The Debtors expect Morris Nichols to: a. perform all necessary services as the Debtors' counsel in connection with these 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 paper in connection with the administration of these Chapter 11 cases on behalf of the Debtors; b. take all necessary actions to protect and preserve the Debtors' estates and assets during the pendency of their Chapter 11 cases, including facilitate the sale of any or all of the Debtors' assets, if necessary to the organization process, prosecute actions the Debtors, defend any actions commenced against the Debtors, negotiate concerning all litigation in which the Debtors are involved and object to claims filed against the estates; c. represent the Debtors at hearings, meetings, conferences, etc., on matters pertaining to the affairs of the Debtors as debtors-in-possession; and d. perform all other necessary legal services. Robert J. Dehney reports that Morris Nichols will bill the Debtors its customary hourly rates, which range from: Partners $360 to $525 per hour Associates $220 to $330 per hour Paraprofessionals $155 per hour Case Clerks $80 per hour Headquartered in Dearborn, Michigan, Rouge Industries, Inc., an integrated producer of flat-rolled steel, filed for chapter 11 protection on October 23, 2003 (Bankr. Del. Case No. 03-13272). Donna L. Harris, Esq., Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $558,131,000 and total debts of $558,131,000. RUSSELL CORP: Realigns to Focus on Athletic and Activewear Biz -------------------------------------------------------------- Russell Corporation (NYSE: RML) will realign its operations to increase focus on both its athletic and activewear businesses. Under this structure, manufacturing, distribution and some administrative functions will be combined with sales and marketing to create a separate Athletic Group and an Activewear Group. "This alignment creates two groups of businesses that need two different approaches for their operations," said Jack Ward, chairman and CEO. "The new structure allows us to differentiate the operations between products that are more branded and athletic focused and those that are more cost sensitive." "The Athletic Group will be able to better pursue the most cost effective means of developing products and sales plans for their brands and the Activewear Group can use company-owned manufacturing facilities to generate the economies of scale they need to compete in their markets," Ward added. All of the branded athletic products will be part of the Athletic Group. As they expand their product lines, they will move toward a more sourcing- based model for manufacturing. In some cases, they will source from the Activewear Group. This structure allows the athletic business to focus on brand building by leveraging our authentic heritage and also creating synergies among the Russell Athletic, Moving Comfort and Bike brands within their markets that include department stores, sports specialty stores, teamwear, catalog and college bookstores. Spalding, the Women's organization and Mossy Oak Apparel also will be part of this group. The Activewear Group will focus on the JERZEES brand for the mass retail market and the JERZEES, Bike, Cross Creek and Three Rivers brands for the artwear channel. Production will primarily be through internal manufacturing operations and strategic partnerships since that is the most cost-effective model for those product lines. "We will continue to focus on building our athletic and outdoor businesses while at the same time ensuring a competitive model for our basic products," Ward said. "By operating as two separate businesses, we believe we increase the growth potential for both the athletic and activewear sides of Russell which is important to our overall success." Jon Letzler will serve as CEO for the Athletic Group in addition to his duties as president and COO of the Company. As announced last week, Julio Barea has joined Russell to head the Activewear Group, reporting to Letzler. Barea, an experienced CEO, spent nearly 20 years with Sara Lee Corporation's apparel group. Additionally, Russell will support the realignment with a new, fully- integrated textile facility in Choloma, Honduras for the Activewear Group. The plant will produce both jersey and fleece fabrics to support the Company's four sewing operations and 4,000 employees already in Honduras. "Our new Merendon Plant in Choloma will play an important role in our efforts to continue to lower costs in this highly competitive portion of our business," said Ward. "Our strategy is to continue to offer products that are an excellent value for the consumer, whether manufactured internally or sourced from other suppliers. We believe the low cost model for the Activewear business is based on internal manufacturing and strategic partnerships." "We evaluated many options before deciding on Choloma," added Ward. "With the support of President Ricardo Maduro Joest and our existing partnership with Elcatex in Honduras, the Merendon Plant will be on a rapid start-up schedule." Construction of the $50 million facility is scheduled to be completed by late 2004 and production will begin by early 2005. The vertical textile operation will employ up to 700 people. Once fully operational in 2006, the projected annual pre-tax savings for phase one of this project should be approximately $15 to $20 million. Russell Corporation (S&P, BB+ Corporate Credit Rating, Negative) is a leading branded athletic, outdoor and activewear company with over a century of success in marketing athletic uniforms, apparel and equipment for a wide variety of sports, outdoor and fitness activities. The company's brands include: Russell Athletic(R), JERZEES(R), Mossy Oak(R), Cross Creek(R), Discus(R), Moving Comfort(R), Bike(R), Spalding(R), and Dudley(R). The company's common stock is listed on the New York Stock Exchange under the symbol RML. The company's Web site address is http://www.russellcorp.com RUSSELL CORP: Will Pay Regular Quarterly Dividend on November 26 ---------------------------------------------------------------- The Board of Directors of Russell Corporation (NYSE: RML) declared its regular quarterly dividend of $.04 per common share, payable November 26, 2003, to shareholders of record on November 12, 2003. This represents the 162nd consecutive quarterly dividend paid by the Company. Russell Corporation (S&P, BB+ Corporate Credit Rating, Negative) is a leading branded athletic, outdoor and activewear company with over a century of success in marketing athletic uniforms, apparel and equipment for a wide variety of sports, outdoor and fitness activities. The company's brands include: Russell Athletic(R), JERZEES(R), Mossy Oak(R), Cross Creek(R), Discus(R), Moving Comfort(R), Bike(R), Spalding(R), and Dudley(R). The company's common stock is listed on the New York Stock Exchange under the symbol RML. The company's Web site address is http://www.russellcorp.com SAFETY-KLEEN: Secures Okay to Hire Morgan Lewis as Counsel ---------------------------------------------------------- The Safety-Kleen Debtors sought and obtained the Court's authority to employ Morgan Lewis & Bockius LLP under a general retainer as their Special Insurance Litigation Counsel, nunc pro tunc to October 1, 2003, in connection with certain insurance recovery projects for: (1) non-product liability environmental, toxic tort, and similar or related claims, losses and liabilities; and (2) product-liability toxic tort and similar or related claims, losses and liabilities. These insurance recovery projects were not yet completed at the time the attorneys and paraprofessionals that had been working on these projects joined Morgan Lewis. Morgan Lewis will provide: (a) Recovery efforts related to the Insurance Recovery Project for non-product-liability environmental, toxic tort and similar or related claims, losses and liabilities; and (b) Recovery efforts related to the Insurance Recovery Project for product liability toxic tort and similar or related claims, losses and liabilities, including: (i) analysis and advice in connection with the Debtors' solvent-related product liability suits, claims and losses; and (ii) efforts to collect from various insurance carriers sums owed to the Debtors under various insurance contracts as a result of sums paid or incurred by the Debtors in connection with product liability toxic tort and similar or related claims, losses and liabilities. The professionals and paraprofessionals presently expected to work on the insurance projects, and their hourly rates, are: Paul A. Zevnik $350 Michel Y. Horton 350 John D. Shugrue 350 Charles J. Malaret 275 Jeffrey S. Raskin 275 David A. Luttinger 275 Lisa M. Campisi 225 Christopher C. Loeber 225 Laura R. Ramos 175 Renier P. Pierantoni 175 Toni Y. Long 175 E. Tracy Brown 150 Elisabeth E. Chapman 150 Melody Simpson 150 Laura H. Taylor 90 Narine Rampersad 90 Senior Associates 225 Junior Associates 175 Senior Legal Assistants 90 Junior Legal Assistants 75 These hourly rates are subject to periodic adjustment to reflect economic and other conditions. Other attorneys and paralegals from Morgan Lewis may from time to time in the future serve the Debtors in connection with these engagements. (Safety-Kleen Bankruptcy News, Issue No. 67; Bankruptcy Creditors' Service, Inc., 609/392-0900) SAXON ASSET: Fitch Junks Series 1998-3 Class BF-3 Rating -------------------------------------------------------- Fitch Ratings has taken rating actions on the following Saxon Asset Securities Trust issues: Series 1998-3 GROUP 1: -- Class AF-5 affirmed at 'AAA'; -- Class AF-6 affirmed at 'AAA'; -- Class MF-1 affirmed at 'AA'; -- Class MF-2 affirmed at 'A'; -- Class BF-1 affirmed at 'BBB'; -- Class BF-2 rated 'BB' is placed on Rating Watch Negative; -- Class BF-3 downgraded to 'CCC' from 'B'. Series 1998-3 GROUP 2: -- Class MV-1 affirmed at 'AA'; -- Class MV-2 affirmed at 'A'; -- Class BV-1 rated 'BBB' is placed on Rating Watch Negative; -- Class BV-3 downgraded to 'CCC' from 'B'. Series 2001-1 GROUP 1: -- Class AF-4 affirmed at 'AAA'; -- Class AF-5 affirmed at 'AAA'; -- Class AF-6 affirmed at 'AAA'; -- Class A-IO affirmed at 'AAA'; -- Class MF-1 affirmed at 'AA'; -- Class MF-2 affirmed at 'A'; -- Class BF-1 rated 'BBB' is placed on Rating Watch Negative. Series 2001-1 GROUP 2: -- Class AV-1 affirmed at 'AAA'; -- Class MV-1 affirmed at 'AA'; -- Class MV-2 affirmed at 'A'; -- Class BV-1 affirmed at 'BBB'. Series 2001-3 GROUP 1: -- Class AF-3 affirmed at 'AAA'; -- Class AF-4 affirmed at 'AAA'; -- Class AF-5 affirmed at 'AAA'; -- Class AF-6 affirmed at 'AAA'; -- Class A-IO affirmed at 'AAA'; -- Class X-IO affirmed at 'AAA'; -- Class M-1 affirmed at 'AA'; -- Class M-2 affirmed at 'A'; -- Class B affirmed at 'BBB'. Series 2001-3 GROUP 2: -- Class AV-1 affirmed at 'AAA'; -- Class AV-2 affirmed at 'AAA'; -- Class S-1 affirmed at 'AAA'; -- Class S-2 affirmed at 'AAA'. The negative rating action is taken due to the level of losses incurred and the high delinquencies in relation to the applicable credit support levels as of the October 2003 distribution date. SEMCO ENERGY: 3rd Quarter Earnings Webcast Scheduled on Nov. 12 --------------------------------------------------------------- SEMCO ENERGY, Inc. (NYSE: SEN) announces the following Webcast: What: SEMCO ENERGY, Inc. Third Quarter Earnings Webcast When: 11/12/03 at 8:30 a.m. Eastern Time Where: http://www.firstcallevents.com/service/ajwz392740267gf12.htmlor http://www.semcoenergy.com(Click on the Webcast button) How: Live over the Internet -- Simply log on to the web at the address above. Contact: Thomas Connelly, Director, Investor Relations Telephone: 248-702-6240 Fax: 248-702-6303 Email: thomas.connelly@semcoenergy.com If you are unable to participate during the live webcast, the call will be archived on the Web site http://www.semcoenergy.com. To access the Web site replay, go to Investor Info and click on Conference Calls. SEMCO ENERGY, Inc. is a diversified energy company that distributes natural gas to more than 385,000 Customers in Michigan and Alaska. It also owns and operates businesses involved in pipeline construction services, propane distribution, intrastate pipelines and natural gas storage in various regions of the United States. In addition, it provides information technology and outsourcing services, specializing in the mid-range computer market. * * * As reported in Troubled Company Reporter's October 6, 2003 edition, 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. SHAW GROUP: S&P Affirms & Removes BB Credit Rating from Watch ------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating and its other ratings on The Shaw Group Inc. and removed the ratings from CreditWatch, where they had been placed on July 15, 2003. The outlook is now stable. At Shaw's Aug. 31, 2003, fiscal year-end, the Baton Rouge, Louisiana-based provider of engineering and construction (E&C) services had approximately $703 million of total debt outstanding. The rating action follows Shaw's completion of a $200 million common equity offering and its planned repurchase of its remaining $253 million LYON debt issue. "The resulting financial profile should be adequate for the rating, assuming the company is able to come close to meeting its publicly stated financial targets for 2004, which we view as reasonable," said Standard & Poor's credit analyst Joel Levington. The ratings incorporate the expectation that, in the near term, Shaw will pursue mostly an internal growth strategy, with an emphasis on new contract awards and improving its cost structure. As such, Standard & Poor's expects some operating margin recovery in the intermediate term and a modest amount of free cash flow generation during that period. Demand for new power plants is expected to be quite limited through the remainder of 2003 and throughout 2004. However, Shaw's remaining backlog for power projects appears to be solid, given the satisfactory creditworthiness of customers of its largest remaining projects. SHAW GROUP: Raises $218 Million from Common Stock Offering ---------------------------------------------------------- The Shaw Group Inc. (NYSE:SGR) announced that it has completed the sale of 23,000,000 shares of common stock at a public offering price of $10.00 per share. This amount includes the exercise of the underwriters' option to purchase an additional 3,000,000 shares. Net proceeds from the common stock offering were approximately $218 million. Shaw intends to use the net proceeds of this offering together with cash on hand to repurchase all of its outstanding Liquid Yield Option(TM) Notes due 2021 (Zero Coupon - Senior). As a result of the equity offering and the exercise of the option to purchase additional common stock, the Company has approximately 61 million shares outstanding. Copies of the final prospectus relating to these securities may be obtained from Credit Suisse First Boston LLC, Eleven Madison Avenue, New York, New York, 10010-3629, or Merrill Lynch & Co., Prospectus Department, Four World Financial Center, New York, NY 10080. Any offering shall be made only by means of a final prospectus. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. The Shaw Group Inc. 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 14,800 people at its offices and operations in North America, South America, Europe, the Middle East and the Asia-Pacific region. For further information, please visit the Company's Web site at http://www.shawgrp.com. SHOPKO STORES: Names Matt Lynch as Senior Vice President & CIO -------------------------------------------------------------- ShopKo Stores, Inc., (NYSE: SKO) has named Matt Lynch senior vice president and chief information officer. Lynch is responsible for the vision, strategy, implementation and continuing successful operations of information technology programs and initiatives at ShopKo and Pamida stores. Lynch, 44, joined ShopKo in 1998 as vice president, operations and technology services. He has nearly 20 years of experience in information technology, starting his career as a software engineer with Sperry Aerospace. Lynch has held information systems management positions at America West Airlines, Air Wisconsin and Runzheimer International. He is a graduate of the College of Engineering and Technology at Northern Arizona University. "We are delighted to be able to promote Matt from the strong team of information technology professionals within our organization," said Jeff Girard, ShopKo vice chairman, administration and finance. "Since joining ShopKo five years ago, Matt has demonstrated both excellent management skills and technological expertise. This promotion fills an important and strategic leadership role in our company." ShopKo Stores, Inc., a Fortune 500 company headquartered in Green Bay, Wis., is a customer-driven retailer of quality goods and services in two distinct market environments. The company operates 361 stores in 23 states throughout the Midwest, Western Mountain and Pacific Northwest. One hundred forty-one multi- department ShopKo stores are located in mid-sized to larger cities and 220 convenient one-stop Pamida stores provide Hometown Values to customers in smaller communities of rural America. For more information about ShopKo or Pamida visit http://www.shopko.com * * * As previously reported, Fitch Ratings affirmed its ratings on Shopko Stores Inc.'s bank credit facility at 'BB-' and senior notes at 'B'. The Rating Outlook remains Negative, reflecting the company's weakened financial profile and competitive challenges longer term. Approximately $550 million of debt is affected. SITEL CORPORATION: Releases Third Quarter 2003 Results ------------------------------------------------------ SITEL Corporation (NYSE: SWW), a leading global provider of outsourced customer support services, announced its financial results for the third quarter and nine months ended September 30, 2003. Third quarter 2003 financial results SITEL's third quarter of 2003 revenue was $208.8 million as compared to revenue of $190.7 million in the third quarter of 2002. In the third quarter of 2003, the Company reported an operating loss of $396,000 and a net loss of $3.9 million, or a loss of $0.05 per diluted share. This compares to operating income of $2.6 million, breakeven net income and zero cents earnings per share for the third quarter of 2002. Revenue of $208.8 million for the third quarter of 2003 increased $29.0 million or 16.1% from comparable revenue of $179.8 million in the third quarter of 2002, which excludes $10.9 million revenue from the Company's joint venture for certain Latin American countries that ceased to be consolidated effective October 1, 2002. Commenting on the third quarter results, Jim Lynch, Chairman and CEO of SITEL Corporation, stated, "This record revenue quarter reflects the efforts we have been making to enhance our strength in local markets while continuing to expand our leading position as the multi-country service provider to global companies. Our multiple offshore offerings continue to expand and offer the most comprehensive value proposition for our local and global clients. These efforts over the past year position us for profitable growth." Lynch further stated, "During the quarter, we placed key executives as chief operating officers over groups of business units to oversee the profitability and growth, ensuring that the business units find more efficient ways to serve clients while continuing to maintain our high service quality standards and grow revenue. We began initiatives during the quarter to improve margins and reduce overhead costs. I am confident that our focused organizational structure will continue to identify and execute on ways to improve profitability. I would also like to welcome Jorge Celaya to SITEL, as announced last week. Jorge has joined us as Chief Financial Officer and a member of the executive committee." Nine month 2003 financial results For the first nine months of 2003, the Company reported revenue of $607.4 million and a net loss of $7.1 million, or a loss of $0.10 per diluted share. This compares to revenue of $580.4 million and net income before change in accounting method of $6.3 million, or $0.08 per diluted share, for the first nine months of 2002. Operating income was $2.1 million for the first nine months of 2003, compared to $19.2 million for the same period of 2002. Cash flow from operations for the first nine months of 2003 was $14.1 million and capital expenditures were $22.9 million. At September 30, 2003, the Company had $27.6 million in cash and $43.8 million available credit under our credit facility. Business unit highlights for the third quarter of 2003 The Company was awarded three new client programs, with a combined total of 600 workstations, in Mumbai, India. One program is for a leading computer hardware and software provider, which has awarded SITEL 300 workstations of customer care and technical support to be operational in the fourth quarter of this year. The second program represents 200 workstations of customer service support for a leading travel organization, to commence in the first quarter of 2004. The third program is for a large financial institution representing 100 workstations which commenced operations in the fourth quarter of this year. In Panama SITEL was awarded business from a large insurance company to provide customer support for their U.S. customers. In North America, the Company was awarded business representing 250 workstations to expand an existing relationship with a leading wireless provider to provide customer care to its customers from two contact centers commencing in the fourth quarter of 2003. SITEL also has expanded relationships with the U.S.'s largest cable and Internet provider, a leading global provider of computing and imaging solutions and services, and two leading financial institutions for a total of 400 workstations. The Company signed agreements with our largest client, General Motors, extending until January 2005 two of our primary contracts with General Motors. Mr. Lynch concluded, "I am encouraged by our organizational efforts to find ways to increase efficiencies, reduce costs and drive profitability while maintaining our growth. Our entire organization is committed to leveraging our growth and positioning SITEL for consistent profitability." Outlook For the fourth quarter of 2003, the Company expects revenue to be within a range of $210 million to $218 million and earnings per share of $0.01 to $0.02. The above comments are based on current expectations, exclude any non-recurring items, and supersede any prior outlook provided by the Company. About SITEL SITEL, a leading global provider of contact center services, empowers companies to grow by optimizing contact center performance and unlocking customer potential. SITEL designs, implements and operates multi-channel contact centers to enhance company performance and growth. SITEL manages nearly 2.0 million customer contacts per day via the telephone, web, e-mail, fax and traditional mail. SITEL employees operate contact centers in 22 countries, offering services in 25 languages and dialects. Please visit SITEL's website at http://www.sitel.comfor further information. * * * As previously reported, Moody's Investors Service lowered the ratings of Sitel Corporation. The outlook is negative. * $100 million 9.25% senior subordinated notes, due 2006 to Caa2 from B3 * Senior unsecured issuer rating to Caa1 from B2 * Senior implied rating to B3 from B1 TENFOLD CORP: Stockholders' Deficit Narrows to $11.5 Mil. --------------------------------------------------------- TenFold(R) Corporation (OTC Bulletin Board: TENF), provider of the EnterpriseTenFold(TM) platform for building and implementing enterprise applications, announced its financial results for its third quarter of 2003 ended September 30, 2003. For the third quarter of 2003, TenFold reported revenues of $4.6 million, operating income of $469,000, net income of $472,000, and diluted earnings per share of $0.01. "Our Q3 results demonstrate sound operating performance and a modest operating profit -- even as we continue to transition to a technology company model," said Dr. Nancy Harvey, TenFold's President and CEO. "Q3 was an important, exciting quarter for TenFold. We successfully expanded access to our Tsunami(TM) technology; released the most powerful version of our EnterpriseTenFold technology ever; began to build our direct sales force; closed small, promising deals; and, continued to meet the needs of our demanding, market-leading customers." Among the announcements made by TenFold during Q3 of 2003 were: -- TenFold announced and delivered a Universal Application(TM) release that contained new features such as ShowMe, CascadingZooms, and MySQL support. -- TenFold demonstrated its Tsunami product in several venues, released several beta versions, and began releasing Tsunami in quantities. -- TenFold announced a new San Francisco office location. -- TenFold expanded its sales force by hiring two seasoned industry sales professionals. -- TenFold announced new customer relationships with Better Practices, LLC, Rand Technology, Inc., and Agilix. -- TenFold announced a new Value Added Reseller program. -- TenFold announced an expanded relationship with its UK distributor. -- TenFold announced the two-year production anniversary of iplan Networks, an international telecommunications provider, using the mission-critical, TenFold Enterprise Relationship Manager application. -- TenFold announced the automation of TenFold CardioTrac Data Quality Management. -- TenFold announced support for the 64-bit IBM AIX operating system in conjunction with 64-bit Oracle RDBMS support. -- TenFold announced that a BYU computer-science professor had successfully used Tsunami to build a new, knowledge management application in record time. -- TenFold announced its EnterpriseTenFold brand and then announced the release and availability of a major new version of its EnterpriseTenFold software. TenFold's results for Q3 2003 compare to revenues of $8.1 million, an operating loss of $14,000, a net loss of $77,000, and a diluted loss per share of $0.00 for the same period of 2002. For the nine months ended September 30, 2003, TenFold reported revenues of $23.5 million, operating income of $10.5 million, net income of $12.8 million, and diluted earnings per share of $0.28. This compares to revenues of $19.9 million, an operating loss of $5.7 million, a net loss of $5.5 million, and a diluted loss per share of $0.15 for the same period of 2002. Tenfold Corporation's September 30, 2003 balance sheet shows total stockholders' deficit of $11,510,000 compared to a deficit of $25,225,000 as of December 31, 2002 About TenFold TenFold (OTC Bulletin Board: TENF) licenses its breakthrough, patented technology for applications development, EnterpriseTenFold(TM), to organizations that face the daunting task of replacing obsolete applications or building complex applications systems. Unlike traditional approaches, where business and technology requirements create difficult IT bottlenecks, EnterpriseTenFold technology lets a small, team of business people and IT professionals design, build, deploy, maintain, and upgrade new or replacement applications with extraordinary speed and limited demand on scarce IT resources. For more information about TenFold or about the exciting new features of EnterpriseTenFold technology, call (800) TENFOLD or visit us at http://www.10fold.com. TOBACCO ROW: Hiring LeClair Ryan as Bankruptcy Attorneys -------------------------------------------------------- Tobacco Row Phase IA Development, LP seeks to retain LeClair Ryan PC to prosecute its chapter 11 restructuring case. The Debtor tells the U.S. Bankruptcy Court for the Eastern District of Virginia that LeClair Ryan has one of the largest bankruptcy practices in Virginia, with a local, regional practice, and has experience in all aspects of the law that may arise in this chapter 11 case. In particular, LeClair Ryan has substantial bankruptcy and restructuring, corporate, finance, litigation, securities and tax expertise. LeClair Ryan also is familiar with the Debtor's business and financial affairs. Prior to the Petition Date, LeClair Ryan advised the Debtor and assisted the Debtor in its contemplation of filing a bankruptcy petition and other alternatives In this retention, the Debtors expect LeClair Ryan to provide: a) preparation for the filing of the chapter 11 case, including review of relevant documents, drafting of voluntary petition and relevant "first day" pleadings, and advice concerning the same; b) preparation of debtor-in-possession and/or cash collateral pleadings, including negotiation and drafting of any financing arrangements and/or related orders; c) assistance in completing any statement of affairs and all relevant schedules of assets, liabilities and financial disclosure; d) advice concerning the assumption and/or rejection of any executory contracts and/or unexpired leases and concerning the sale of any assets; e) analysis, advice and, to the extent necessary, the filing of pleadings to enforce the automatic stay, to determine the amount of any secured claims and to provide adequate protection of any person's interest in any property of the estate; f) the development, and prosecution to confirmation, of a plan of reorganization, including all related notices and any required disclosure statement; g) the analysis and prosecution, if appropriate, of any avoidance actions and other litigation claims; h) review and allowance of administrative, priority and unsecured claims; and i) other general advice and/or services concerning the progress and completion of the chapter 11 case. Professionals who will be in-charge in this engagement are: Bruce H. Matson Attorney $310 per hour Christopher A. Jones Attorney $195 per hour Katherine M. Mueller Attorney $180 per hour Troy Savenko Attorney $180 per hour John R. Bollinger Attorney $165 per hour Brooke A. Schmerge Paralegal $ 80 per hour Headquartered in Richmond, Virginia, Tobacco Row Phase 1a Development, L.P. owns the Tobacco Row apartment buildings, which are in three former tobacco warehouse buildings, called the Cameron, Cameron Annex and Kinney buildings. The Company filed for chapter 11 protection on October 22, 2003 (Bankr. E.D. Va. Case No. 03-40033). When the Company filed for protection from its creditors, it listed estimated assets and debts of over $10 million. TRI-UNION: US Trustee Appoints Official Creditors' Committee ------------------------------------------------------------ The United States Trustee for Region 7 appointed 9 members to an Official Committee of Unsecured Creditors in Tri-Union Development Corp.'s Chapter 11 cases: 1. Forest Oil Corporation, Attn: Cyrus D. Marter IV 1600 Broadway, Ste. 2200 Denver, CO 80202 Tel: (303) 812-1701, Fax; (303) 812-1445 e-mail: smarter@forestoil.com 2. Devon Energy Corporation Attn: Brandon McGinley 20 North Broadway, Oklahoma City, OK 73102-8260 Tel: (405) 552-8127, Fax: (405) 552-4648 e-mail: brandon.mcginley@dvn.com 3. Fairways Offshore Exploration, Inc. Attn: Michael Rauch 9800 Northwest Fwy., Ste. 500, Houston, TX 77092 Tel: (713) 622-3492, ex. 420, Fax: (713) 622-3474 e-mail: miker@osfifw.com 4. Key Energy Services, Inc. Attn: Robert McKenzie, 6 Desta Dr. Ste. 5900, Midland, TX 79705 Tel: (915) 498-0342, Fax: (915) 620-0453 e-mail: rmckenzie@keyenergy.com 5. Hawkins Lease Service, Inc. Attn: R.J. Hawkins POB 1699, Alvin, TX 77512-1699 Tel: (281) 331-2739, Fax: (281) 585-4295 e-mail: jay@hawkinsleaseservice.com 6. Sour Lake Contracting, Inc. Attn: Guy Gatewood POB 2027, Sour Lake, TX 77659 Tel: (409)287-2734, Fax (409) 287-4143 e-mail: guyg3003@cmaaccess.com 7. Oil & Gas Rental Services, Inc. Attn: Brad A. Adams 228 St. Charles Ave., Ste. 814, New Orleans, LA 70130 Tel: (504) 522-6257, Fax: (504) 522-0748 e-mail: bradadams@oilgasrental.com 8. T&L Lease Service Attn: A.L. Martin III POB 760, Alvin, TX 77512 Tel: (281) 331-8221, Fax: (281) 585-5383 e-mail: nyost8221@aol.com 9. Hunt Cheiftan Development, LP Attn: John H. Blair 1445 Ross @ Field, Dallas, TX 75202-2785 Tel: (214) 978-8573, Fax; (214) 978-8575 e-mail: jblair@huntoil.com Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Houston, Texas, Tri-Union Development Corporation is an independent oil and natural gas company engaged in the acquisition, development, exploration and production of oil and natural gas properties. The Company filed for chapter 11 protection on October 20, 2003 (Bankr. S.D. Tex. Case No. 03- 44908). Charles A Beckham, Jr., Esq., Eric B. Terry, Esq., JoAnn Lippman, Esq., and Patrick Lamont Hughes, Esq., at Haynes & Boone represent the Debtors in their restructuring efforts. As of March 31, 2003, the Debtors listed $117,620,142 in total assets and $167,519,109 in total debts. TURBOCHEF: Closes $13M Private Placement & Appoints New Mgt. Team ----------------------------------------------------------------- TurboChef Technologies, Inc. (OTC Bulletin Board: TRBO.OB) announced that it has completed a private placement of 2,132,650 shares of its new Series D Preferred Stock to OvenWorks, LLLP and other investors. The shares of Series D Preferred Stock, which are initially convertible into an aggregate of 42,653,000 shares of TurboChef Common Stock, represent approximately 58% of TurboChef's total equity on a fully diluted, as converted basis. Gross proceeds to TurboChef totaled approximately $13,080,000, and will be used to satisfy existing obligations and to fund TurboChef's working capital needs, including product development and manufacturing, sales and marketing and other general corporate purposes. OvenWorks is a newly formed limited partnership of which Oven Management, Inc., a company controlled by Richard E. Perlman, serves as general partner. Mr. Perlman served as Chairman of the Board of PracticeWorks, Inc. from August 2000 until the sale of that company in October 2003. In connection with the private placement, Mr. Perlman was appointed Chairman of the Board of TurboChef, James K. Price, PracticeWorks' former President and Chief Executive Officer, was appointed President and Chief Executive Officer of TurboChef, and Al Cochran, PracticeWorks' former Chief Financial Officer, was appointed Chief Financial Officer of TurboChef. In addition to Messrs. Perlman and Price, William A. Shutzer and Raymond H. Welsh were appointed to TurboChef's Board of Directors. Mr. Shutzer is a Managing Director of Lehman Brothers, Inc. and is currently a director of Tiffany & Co., Blount International, Inc., JupiterMedia Corp. and American Financial Group. Mr. Welsh is a Senior Vice President of UBS Financial Services Inc. Mr. Welsh is a trustee of the University of Pennsylvania, Penn Medicine and Bancroft Neurohealth. Mr. Welsh is also a director of the United Way of Southeastern Pennsylvania. TurboChef expects to add two additional board members in the near future. Jeffrey Bogatin and Donald Gogel resigned from their board and officer positions with TurboChef. Mr. Perlman, TurboChef's new Chairman said, "We are very excited about the future of TurboChef. We believe that the combination of unparalleled technology, more than adequate funding and a proven management team will finally realize TurboChef's goal of becoming the world leader in rapid cook technologies." Sands Brothers International Limited was retained by TurboChef's Board of Directors prior to the closing to render an opinion as to whether the transaction was fair to TurboChef and its stockholders. On October 27, 2003, Sands Brothers delivered its oral opinion to TurboChef's Board of Directors, subsequently confirmed in writing, to the effect that, as of that date, the transaction was fair to TurboChef and its stockholders. Shares of the Series D Preferred Stock rank senior to all other classes of stock of TurboChef as to liquidation, dividends, redemption and other payments or distributions. Holders of Series D Preferred Stock also have redemption rights (to the extent they are unable to convert all or part of their shares to common stock of TurboChef), preemptive rights, and demand and piggy-back registration rights with respect to their shares. Holders of Series D Preferred Stock are entitled to vote as a class in connection with certain matters, are generally entitled to vote together with the holders of TurboChef common stock on an as converted basis, and are also entitled to elect two-thirds of the members of TurboChef's Board of Directors. After the closing, an additional 6,000,000 shares of TurboChef's Common Stock will be reserved for issuances of options to the officers, directors, employees and consultants of TurboChef. In connection with the private placement, Mr. Bogatin was granted the right to nominate and elect one member of TurboChef's Board of Directors, subject to the reasonable approval of TurboChef's Board of Directors. Messrs. Bogatin and Gogel agreed to a general 18- month prohibition on the transfer of their shares of capital stock of TurboChef, and to a right of first refusal in favor of TurboChef and OvenWorks, subject to a monthly trading allowance based on the average daily trading volume of TurboChef's common stock. Messrs Bogatin and Gogel also have entered into a voting agreement pursuant to which they agreed to vote all their shares of TurboChef common stock in favor of, among other things, any proposal to amend TurboChef's Certificate of Incorporation to increase the amount of TurboChef's authorized capital stock. Mr. Gogel exercised his right to convert all of his shares of TurboChef's Series C Preferred Stock, plus all accrued and unpaid dividends thereon, into 803,565 shares of TurboChef common stock. Messrs. Bogatin and Gogel also have each entered into a non- competition agreement and a release agreement in favor of TurboChef in consideration for which Messrs. Bogatin and Gogel received an aggregate of 2,433,333 and 366,667 shares of TurboChef common stock, respectively. Prior to the private placement, Messrs. Bogatin and Gogel agreed to the termination of all of their outstanding options to purchase TurboChef common stock. Additionally, TurboChef agreed to cancel the obligations of Messrs. Bogatin and Gogel to pay TurboChef $2,000,000 and $100,000, respectively, under certain promissory notes delivered by them to TurboChef in connection their exercise of stock options in 1999 and 2000. In return, Messrs. Bogatin and Gogel agreed to the cancellation of the 840,000 shares of TurboChef common stock acquired by them in connection with such option exercises. Contemporaneously with the closing of the private placement, TurboChef also entered into an agreement with Grand Cheer Company Limited pursuant to which Grand Cheer agreed to cancel TurboChef's $1,000,000 promissory note (which had been in default since October 2002) and to release all collateral thereunder, reduced from 1,000,000 to 800,000 the number of shares of TurboChef common stock issuable upon exercise of Grand Cheer's warrants, released TurboChef from any and all liability to Grand Cheer through the closing of the transaction, exercised its rights to convert all its shares of TurboChef Series B Preferred Stock, plus all accrued and unpaid dividends thereon, into 2,024,986 shares of TurboChef Common Stock and executed a voting agreement substantially identical to the voting agreement signed by Messrs. Bogatin and Gogel. In exchange, TurboChef agreed to pay Grand Cheer $1,200,000 in cash from the proceeds of the transaction, and agreed to issue to Grand Cheer 652,288 shares of its Common Stock. About TurboChef TurboChef is engaged primarily in designing, developing and marketing its proprietary rapid cook technologies. TurboChef's proprietary rapid cook ovens, which require no ventilation, employ a combination of high speed forced air and microwave energy to "cook to order" a variety of food products at faster speeds and to quality standards comparable, and in many instances superior to, other conventional commercial and residential ovens currently available. With its superior technology and new management team, TurboChef seeks to become the world leader in rapid cook technologies. ULTRADATA SYSTEMS: Shoos Away Weinberg & Hires Webb as Auditor -------------------------------------------------------------- On October 21, 2003 Ultradata Systems Inc. dismissed Weinberg & Company, P.A., C.P.A. from its position as Ultradata's principal independent accountant. The decision to change accountants was approved by Ultradata's Board of Directors, upon recommendation by its Audit Committee. The audit reports of Weinberg on Ultradata's financial statements for the years ended December 31, 2002 and 2001 contained a modification expressing substantial doubt about Ultradata's ability to continue as a going concern. On October 24, 2003, Ultradata retained the firm of Webb & Company, P.A. to audit Ultradata's financial statements for the year ended December 31, 2003. US AIRWAYS: Asks Court to Compel Limbach to Reimburse Costs ----------------------------------------------------------- In a Memorandum of Law, the Reorganized US Airways Debtors seek to bolster their case for dismissing Limbach's Claims. The Reorganized Debtors want to partially dismiss, as unjustified, inequitable and overreaching, certain damage elements totaling $9,500,000 of the nearly $15,000,000 in claims asserted by the Limbach Parties. John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, informs Judge Mitchell that, before the Petition Date, USAir terminated for convenience the two fixed-price construction contracts with the Limbach Parties that are now in dispute. Through a tortured reading of the termination for convenience clauses of the contracts, the Limbach Parties have asked the Court to ignore the fixed prices on which they agreed to perform the work and instead, award full reimbursement for all costs they allegedly expended, plus more than $8,000,000 in profits. Many of the costs were attributable to the Limbach Parties' own inefficiencies and deficiencies. Mr. Butler emphasizes that the Limbach Parties now seek to be absolved from their obligations under the contracts they freely signed. According to Mr. Butler, the issue is simple -- can the Limbach Parties convert two lump sum, fixed-price contracts, into time and material, cost-reimbursable contracts through their interpretation of the "Termination for Convenience" clause of the contracts? Mr. Butler does not believe so and insists that the Reorganized Debtors are entitled to summary judgment partially dismissing the Limbach Parties' "grossly excessive claims". The Reorganized Debtors are entitled to partial summary judgment as a matter of law dismissing $9,500,000 of the Limbach Parties' claims, resulting from their misinterpretation of the contracts. The Reorganized Debtors ask the Court to issue a summary judgment dismissing the Limbach Parties' claims to the extent that they seek reimbursement of their total costs incurred on the Project, plus their profits on those costs. (US Airways Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., 609/392-0900) US AIRWAYS: Reduces First Class Fares on Select Leisure Routes -------------------------------------------------------------- US Airways has dramatically reduced First Class fares on flights to Las Vegas, Montego Bay and Grand Bahama Island, for travel through Jan. 31, 2004. "First Class customers can check in at exclusive counters, enjoy priority boarding, relax in roomy leather seats and enjoy complimentary cocktails and other amenities," said Steve Tracas, US Airways vice president of sales and marketing. "Whether headed to the Caribbean or the casinos, customers can now make their entire vacation extraordinary by flying First Class for less." For more information on these discounts, call US Airways toll-free at 866- 204-7804 or visit usairways.com/firstclass. Roundtrip Destination First Class Fares Las Vegas $498 Grand Bahama Island $400-$500 Montego Bay $500-$600 Fares are based on required roundtrip First Class travel through Jan. 31, 2004. Depending upon travel needs, part of the service may be provided at the same fare in coach class on regional aircraft operated by US Airways Express carriers Allegheny, Air Midwest, Chautauqua, Colgan, Mesa, Midway, Piedmont, PSA, Shuttle America or Trans States. Depending on the itinerary, some or all flight segments may be operated by United Airlines(R). Fares to international destinations not valid on codeshare flights. Tickets must be purchased at least seven days in advance of travel and within 24 hours of making the reservation. Tickets become non-refundable 24 hours after making initial reservation. Wholly unused tickets may be changed for one year after the original issue date of the ticket for a minimum $100 fee, if they are cancelled on or before the departure date of each flight segment. If changes are not made on or before the departure date of each flight, the entire remaining ticket will have no further value. For Las Vegas travel, a minimum one night stay is required. For Grand Bahama Island and Montego Bay, a minimum three-night or Saturday night-stay is required and maximum 30-day stay allowed. Travel must be completed by Jan. 31, 2004. Seats are limited and may be sold out on some flights or dates. Fares are not available in all markets. Fares do not include a federal excise tax of $3, which will be imposed on each flight segment of the itinerary. A flight segment is defined as a takeoff and a landing. Fares are subject to the September Security Fee of up to $10 per itinerary, and up to $18 in airport passenger facility charges where applicable. International fares do not include government-imposed taxes, fees and surcharges of up to $65. US Airways is the nation's seventh-largest airline, serving nearly 200 communities in the U.S., Canada, Mexico, Europe, the Caribbean and Latin America. US Airways, US Airways Shuttle, and the US Airways Express partner carriers operate over 3,300 flights per day. For more information on US Airways schedules and fares, visit http://usairways.com. WALTER IND: Board Declares Quarterly Dividend Payable Dec. 11 ------------------------------------------------------------- Walter Industries, Inc. (NYSE: WLT) announced that its Board of Directors has declared a regular quarterly dividend of 3 cents per common share, payable December 11, 2003, to shareholders of record on November 13, 2003. Walter Industries, Inc. (S&P, BB Corporate Credit Rating, Stable) is a diversified company with five principal operating businesses and annual revenues of $1.9 billion. The Company is a leader in homebuilding, home financing, water transmission products, energy services and specialty aluminum products. Based in Tampa, Florida, the Company employs approximately 6,300. Formore information, visit the corporate web site at http://www.walterind.com. WCI STEEL: Bankruptcy Court Grants Final Nod on DIP Financing ------------------------------------------------------------- WCI Steel, Inc. announced that U.S. Bankruptcy Judge William T. Bodoh has given final approval to the company's proposed Debtor- In-Possession financing from Congress Financial Corporation, Bank of America, N.A. and other lenders under WCI's existing $100 million working capital facility. Judge Bodoh had approved the DIP facility on an interim basis last month, pending consideration of an alternative financing offer from another group. WCI was able to successfully resolve concerns relating to the Congress facility and proceed with this credit facility on a consensual basis. Edward R. Caine, president and chief executive officer of WCI, said the court approval allows WCI to continue operations uninterrupted while proceeding with its reorganization. "We are pleased that the court has granted final approval to our DIP credit facility," Caine said. "The financing package provides WCI with the liquidity which we expect will be required to meet our obligations to suppliers, customers and employees as we work through the Chapter 11 process." As of Oct. 28, 2003, the DIP facility provides more than $32 million in available liquidity. A hearing on an additional $10 million subordinated secured credit facility from The Renco Group, Inc., WCI's ultimate parent, is currently scheduled for Nov. 12, 2003. On Sept. 16, 2003, WCI filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Ohio, Eastern Division in Youngstown. WCI is an integrated steelmaker producing more than 185 grades of custom and commodity flat-rolled steel at its Warren, Ohio facility. WCI products are used by steel service centers, convertors, electrical equipment manufacturers and the automotive and construction markets. The company has approximately 1,800 employees. WEIRTON STEEL: Gets Clearance for Workforce Reduction Program ------------------------------------------------------------- As of June 1, 2003, Weirton Steel Corporation employed approximately 517 salaried employees who were not represented by any collective bargaining unit. Since the Petition Date, in order to address market conditions, and to assure compliance by the Debtor with financial covenants under its debtor-in- possession credit facility, the Debtor has evaluated various cost-cutting measures, including, but not limited to, reducing salaries, temporarily laying off certain of the Salaried Employees, and seeking certain wage and benefit concessions from its represented workforce. The Debtor actually implemented the Temporary Layoff Program and has required Salaried Employees to share the cost of their healthcare coverage. Notwithstanding the cost savings that the Debtor has achieved to date, the Debtor has determined that it is imperative to implement a workforce reduction of as many as 175 Salaried Employees. The Workforce Reduction Program will include a formal declaration by Weirton that it is unlikely that impacted Salaried Employees will return to work. As of the Petition Date, the Debtor did not have formal programs or policies with respect to workforce reductions involving Salaried Employees, other than contractual obligations to eight individuals not impacted by the Workforce Reduction Program. Since 1999, the Debtor has implemented several layoff programs, and a determination of benefits has been made on a case-by-case basis within the Debtor's discretion. According to James H. Joseph, Esq., at McGuireWoods, in Pittsburgh, Pennsylvania, the Debtor has undertaken a review of its Salaried Employees, and has identified certain job functions that can be eliminated or replicated by other job functions. Job groups and individual jobs have been designated by senior management for elimination, first with volunteers solicited from Salaried Employees whose job functions were identified as being subject to elimination. If volunteers for layoff do not fill the number of layoffs allocated to a particular job function, involuntary layoffs will be implemented to satisfy the number of necessary layoffs. The Debtor designed the Workforce Reduction Program in consultation with its professionals without unlawful consideration of race, sex, age, religion, national origin, veteran status, and qualified disability status as factors in determining impacted jobs. Mr. Joseph maintains that the Workforce Reduction Program: (1) was designed with the Debtor's reasonable exercise of sound business judgment, (2) constitutes a legitimate business purpose, and (3) was job-related and consistent with business necessity. Workforce Reduction Program For purposes of the Workforce Reduction Program, Salaried Employees are divided into three categories: * employees who are immediately eligible at their option for a pension -- Retirement Eligible Employees; * employees with at least three years of service who are not immediately eligible at their option for a pension -- Retirement Ineligible Employees; and * employees with less than three years of service who are not immediately eligible at their option for a pension. Those Salaried Employees subject to the Workforce Reduction Program, either voluntarily or involuntarily, will be requested to execute a Waiver and Release. Those Salaried Employees subject to the Workforce Reduction Program who execute the Waiver and Release will receive the Release Consideration: (a) Retirement Eligible Employees * Payments totaling $40,000 payable in equal monthly installments over a period that is the greater of: (i) 25 months, or (ii) the number of months until the individual reaches the age of 62; and * Active healthcare and life insurance coverage with no change in the allocation of cost between Weirton and the employees, including the same coverages as are provided under COBRA continuation coverage for the employee, spouse and eligible dependents for exempt Salaried Employees, not subject to change with respect to employee premium contributions only, for 12 months. (b) Retirement Ineligible Employees with at least three years of service * Monthly payments each for $1,500 for the number of months equal to the number of full years of service by the impacted employee; and * Active healthcare and life insurance coverage with no change in the allocation of cost between Weirton and the employees, including the same coverages as are provided under COBRA continuation coverage for the employee, spouse and eligible dependents for exempt Salaried Employees, not subject to change with respect to employee premium contributions only, for 12 months. The Debtor will provide those impacted Salaried Employees who do not execute or who are not eligible to execute a Waiver and Release the Basic Benefits, including: (a) Retirement Eligible Employees and Retirement Ineligible Employees * One time payment of $1,500; and * Active healthcare and life insurance coverage with no change in the allocation of cost between Weirton and the employees, including the same coverages as are provided under COBRA continuation coverage for the employee, spouse and eligible dependents for exempt Salaried Employees, not subject to change with respect to employee premium contributions only, for three months; (b) Salaried Employees with less than three years of service * Will not receive any benefits other than those required by applicable non-bankruptcy law. In addition to Workforce Reduction Benefits, in accordance with the West Virginia Wage Payment Collection Act, all impacted Salaried Employees will be paid for unused vacation time on the next regular pay after the layoff. Impact on Salaried Employees Previously Impacted By Temporary Layoff Program Previously, the Debtor temporarily laid off 30 Salaried Employees under the Court-approved Temporary Layoff Program. All of the Laid Off Employees will be subject to the Workforce Reduction Program, and will therefore be entitled to receive Workforce Reduction Benefits. In order to receive the Release Consideration under the Workforce Reduction Program, these individuals will be required to execute the Waiver and Release in connection with the Workforce Reduction Program, regardless of whether or not they executed a release in connection with the Temporary Layoff Program. The amount of any cash payments to which a Laid Off Employee will be entitled will be reduced dollar-for-dollar by the amount of cash payments that the Laid Off Employee has received under he Temporary Layoff Program. Similarly, the period to which a Laid Off Employee will be entitled to received healthcare and life insurance coverage will be reduced by the period that the Laid Off Employee has received healthcare and life insurance coverage under the Temporary Layoff Program. Indemnification of Senior Management The Debtor contemplates that, notwithstanding the care undertaken by senior management to formulate and implement a fair, reasonable and non-discriminatory layoff program, some impacted Salaried Employees may refuse to execute the Waiver and Release. These employees may in fact seek legal redress against the Debtor's senior management. Accordingly, the Debtor seeks the Court's authority to fully indemnify and hold harmless senior management from any causes of action against them that arise by virtue of the Workforce Reduction Program. Financial Impact of Workforce Reduction Program The Debtor anticipates that its aggregate liability for the proposed salary continuation payments and benefits to the impacted Salaried Employees will range from $4,500,000 to $6,800,000, excluding vacation pay, assuming that all of the impacted Salaried Employees execute the Waiver and Release and receive Release Consideration. Workforce Reduction Benefits will be entitled to administrative priority claim status in accordance with Section 503(b)(1)(A) of the Bankruptcy Code. The Debtor further anticipates that the implementation of the Workforce Reduction Program will result in aggregate annual savings in the approximate range of $10,000,000 to $11,700,000. At the Debtor's request, the Court: (a) approves the Workforce Reduction Program;, (b) authorizes the payment of the Workforce Reduction Benefits and afford Workforce Reduction Benefits administrative priority claim status in accordance with Section 503(b); (c) authorizes the Debtor to pay all reasonable costs of defense and otherwise hold harmless and indemnify management from all claims of impacted Salaried Employees that arise from or relate to the Workforce Reduction Program and establish the Indemnity Reserve; and (d) exercises jurisdiction over any claims that arise from or relate to the Workforce Reduction Program. (Weirton Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 609/392-0900) WHEELING-PITTSBURGH: Gets Nod to Modify & Assume AMROX Contracts ---------------------------------------------------------------- James M. Lawniczak, Esq., at Calfee Halter & Griswold LLP, in Cleveland, Ohio, relates that Wheeling-Pittsburgh Steel Corporation operates several "pickle lines" in which steel coils are cleaned for use in making clean sheet metal by running them through acid baths that remove excess iron and other materials. WPSC operates pickle lines at its Allenport Works and Yorkville Works facilities. WPSC is a party to a Services Agreement for Iron Oxide Production Facility, a Property Disposition Agreement, and a Lease Agreement with American Iron Oxide Company. Under the existing Services Agreement, AMROX provides iron oxide processing services to WPSC at the Allenport Works and Yorkville Works facilities. These services include installing and maintaining the acid baths as well as removing the iron out of the pickle bath and producing regenerated acid, which it then resells to WPSC. Pursuant to the Property Disposition Agreement, WPSC permits AMROX to maintain facilities on WPSC property in order to provide the iron oxide processing services. AMROX leases real property from WPSC on which AMROX has iron oxide processing facilities. Certain disputes have arisen between the parties regarding amounts due under these three contracts. The parties entered into settlement discussions regarding the payment disputes, as well as terms for assumption of the contracts. The AMROX contracts are central to WPSC's continued operations for two reasons: (1) The iron processing services provided by AMROX alleviate the need for WPSC to dispose of the waste products generated by the pickle process. The waste, if disposed of by WPSC, would be considered hazardous material and thus, very expensive to dispose of. (2) The regenerated acid sold to WPSC by AMROX is significantly less expensive than new acid, which would otherwise be required for the pickle lines. Due to the importance of these contracts to both parties, AMROX and WPSC have negotiated amendments in the form of a new Amended AMROX Contract -- which incorporates by reference the Services Agreement, Property Disposition Agreement, and Lease Agreement -- to conform to WPSC's expected post-confirmation needs so that WPSC may assume the contracts. The Amended Contract also provides for settlement of all payment disputes between the parties. The Amended AMROX Contract The Amended AMROX Contract directs that, in settlement of all claims and any cure amounts under the agreements, AMROX has an allowed, general, unsecured claim against WPSC's bankruptcy estate for $375,223.81. Allowance of the claim constitutes a full and complete cure of all defaults under the Service Agreement, the Property Disposition Agreement, and the Lease. All other proofs of claim filed by AMROX are disallowed and expunged to the extent they are inconsistent with the allowed claim. AMROX waives any sum that might be due and owing by WPSC, other than the allowed claim, under these agreements, and any other default occurring under the agreements at any time before the date of execution of the Amended AMROX Contract. Other amendments include: (1) AMROX will furnish and install Pickle Liquor Heating Systems utilizing plant steam to enable WPSC to maintain the pickling liquor in the multi-tank (tubs) pickling installation at the Allenport Works and the Yorkville Works at temperatures and in accordance with operating specifications set out in the Contract. WPSC is fully and solely responsible for the proper operation and maintenance of the tubs during the term of the agreement. Each PLH system may be purchased by WPSC for $1 at the end of the term of the agreement. (2) WPSC will provide, and AMROX will accept, WPL produced at the Plants, up to a maximum volume of 15,600,000 gallons each year during the term of the Agreement, to be processed in the facility. The WPL will be supplied at a maximum rate of 300,000 gallons in any one week. (3) WPSC intends to provide WPL which consists of a minimum of 18% FeCb. AMROX will monitor on a batch- to-batch basis and test the quality of the Regenerated Acid to be returned to WPSC, and will warrant, provided that the WPL meets the quality standards agreed upon by the parties, that the quality of the Regenerated Acid produced will conform to the standards and specifications in the Agreement. (4) If WPSC's WPL does not conform to the agreed specifications, WPSC will be assessed an additional charge of $0.05 per gallon on the amount of out-of- specification material that is processed by AMROX. WPSC and AMROX will work together to identify the cause for any variance and to correct identified problems. (5) AMROX has the right to process WPL from any third party, provided that AMROX agrees that priority will be given to the processing of any and all WPL, up to a maximum of 300,000 gallons per week, supplied by WPSC, and provided further that any agreement between AMROX and any third party producer of WPL will contain a provision subordinating that agreement to the obligations of AMROX in this Agreement. (6) When available, AMROX will provide WPSC with additional "regenerated acid" above AMROX's 98% recovery guaranty for use as "make up acid." AMROX will report to WPSC the volume of the regenerated acid supplied as make-up acid in a monthly "Chloride Balance Report." The market price for the Make-Up Acid will be updated quarterly and will be based upon the actual price for fresh acid delivery to WPSC on a freight equalized and chloride equivalent basis. (7) For regeneration services provided on or after October 1, 2003 -- the Amendment's Effective Date -- a flat fee equal to $0.125 per gallon of WPSC's WPL, plus any other applicable charges with respect to WPL that does not meet applicable quality specifications, will be charged. In addition, beginning with the Effective Date, and on the first day of each consecutive month after that, for a total of 96 months, WPSC will pay AMROX $2,700 per month. (8) Upon termination of the Agreement, or upon a material breach under it, each party may pursue any remedy available to it at law or at equity, with some agreed, but unidentified, limitations of liability. (9) The Amended Contract is based on existing practices, procedures and operations of WPSC. Nothing in this amendment limits in any way WPSC's right to change, alter or revise, or discontinue, any of its practices, procedures or operations, or any new practice, procedure or operation at any time WPSC may deem appropriate. However, should any change or new practice, procedure or operation of WPSC have a "significant impact" that requires AMROX to change, modify or relocate any facilities, equipment, or other property in order to provide the services specified in the Agreement to WPSC, or have a "significant effect" on AMROX's costs of providing these services to WPSC, then the parties will negotiate in good faith, with the intent to allow full recovery by AMROX of the costs of making such changes, modifications or relocations of facilities, equipment or other property, or of the increased costs of providing services to WPSC; provided that the negotiations are supported by the appropriate data as to costs, expenses, capital investments, and other items affecting costs as to which agreement is sought, and provided further that no effect will be deemed "significant" unless: (i) as to the changes resulting in capital expenditures, the costs exceed $10,000 in the aggregate during any 12-month period, or (ii) as to changes resulting in increased operating costs, the costs exceed $25,000 in the aggregate during any 12-month period. (10) WPSC has the option, exercisable by the delivery of written notice to AMROX no later than six months before the scheduled expiration date of the Agreement, to renew the Agreement. In the event of a renewal, the per-gallon processing charge will be replaced by a charge that is based on AMROX's net costs, plus a 15% profit margin. AMROX's net costs for this purpose are equal to: (i) the actual costs of labor, maintenance, operating supplies, supervisions and indirect costs incurred by AMROX in the operation of the facility, excluding any finance costs; minus (ii) revenues received by AMROX from the processing of third-party WPL and from the sales of iron oxide. The per-gallon charge for the processing of WPL during the renewal period will be based on AMROX's forecasted net costs plus a 15% profit margin, divided by the estimated amount of WPL to be provided by WPSC to AMROX. However, AMROX's actual net costs for each calendar quarter, and the amount of WPSC's WPL actually processed by AMROX during that period will be determined after the end of that quarter, and the charges for WPL processed during the quarter will be adjusted accordingly. (11) If the Agreement is renewed, it will be renewed initially for a period of one year, and thereafter will renew annually unless WPSC delivers timely written notice of termination. Accordingly, the Court authorizes WPSC to modify and assume the AMROX Contracts. (Wheeling-Pittsburgh Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., 609/392-0900) WORLDCOM: Inks Stipulation Resolving Wells Fargo Claim Disputes --------------------------------------------------------------- Wells Fargo Bank, N.A. and the Worldcom Inc. Debtors believe that their disputes regarding Wells Fargo's claims against the Debtors' estates and Wells Fargo's objection to the Debtors' Plan can best be resolved promptly and comprehensively as a matter of law in the context the claims dispute resolution process, based on factual record, as well as from certain supplemental facts. Wells Fargo does not object to substantive consolidation of the WorldCom Debtors or the Intermedia Debtors as contemplated in the Plan or the Intercreditor Settlements. Wells Fargo, however, objects to the effect of the Plan on its claims, including the release or discharge of its claims against Debtors and non- debtors. Wells Fargo questions the classification, release and treatment of its claims under the Plan. The Plan distributes $29,000,000 in payment on account of the Allowed Interests of the Intermedia Preferred Shareholders, approximating a 5% recovery to those holders. In a Court-approved stipulation, the parties agree that: (1) Wells Fargo's Plan Objections will be addressed as part of the claims reconciliation process and that a confirmation order may be entered, and the Plan may become effective, before the final adjudication of Wells Fargo's Plan Objections; (2) the deferral of the Wells Fargo Plan Objections to the claims reconciliation process will be without prejudice to Wells Fargo's right to argue as to the proper classification and treatment of its claims under the Plan, free of releases or discharges. The entry of a confirmation order, any findings of fact or conclusions of law, or the occurrence of the Effective Date, will not prejudice Wells Fargo's right to argue as it deems appropriate as to how its claims should be classified or treated under the Plan and its right to argue that it is not bound by the Bank Settlement or Plan releases or discharges. However, Wells Fargo may not reargue or readjudicate any order that may be entered confirming the Plan; (3) the deferral of adjudication of the Wells Fargo Plan Objections is without prejudice to the Debtors' right to argue that the acceptance of Classes 3A and 5 of the Plan binds Wells Fargo to the treatment provided for those Classes under the Plan, or Wells Fargo's right to oppose the argument; (4) Wells Fargo's Plan Objections and the proceeding in connection with Wells Fargo's Claim will be adjudicated at a hearing commencing on January 27, 2004. The parties will diligently work in good faith to agree on the admissibility of evidence contained within the Factual Record, as well as to certain stipulated facts and discovery to supplement the Factual Record; (5) Wells Fargo reserves the right to assert these arguments -- the Debtors reserve the right to dispute, except that the Debtors will not assert that the fact of the Plan confirmation, should it be confirmed -- and the Plan confirmation will be without prejudice to such arguments by either party: (i) That Wells Fargo is entitled to select among alternative remedies and that Wells Fargo is entitled to cumulative remedies against the WorldCom Debtors and the Intermedia Debtors; (ii) That Wells Fargo is entitled to a Class 12 claim against the Intermedia Debtors, as well as a Class 6 Claim against MCIC, that each claim is not subsumed by Class 3A recoveries, and that Wells Fargo is entitled to opt out of Class 3A. However, nothing will preclude the Debtors from arguing that the acceptance of the Plan by Class 3A creditors binds Wells Fargo to the terms of the Bank Settlement; (iii) That Wells Fargo cannot be compelled to release claims against non-debtors, including under Section 524(e) of the Bankruptcy Code or to release Intermedia Debtors or MCIC Debtors with respect to Class 12 or 6 claims; (iv) That the incorporation of various settlements in the Plan, pursuant to which certain classes of creditors or equity receive greater recoveries than others, is a consideration that the Court may take into account in adjudicating the Wells Fargo Claim Proceeding in connection with Wells Fargo's objections to the classification, treatment or release of its claims. However, nothing will be construed to allow for reargument or readjudication the Court's approval of any settlement, should the Court enter an order confirming the Plan; and (v) That indemnification of certain officers, directors, and employees by the Debtors pursuant to the Plan does not affect any Wells Fargo claim against any Debtor or non-debtor; (6) Wells Fargo reserves the right to object to the Modified Plan as it relates to the settlement with preferred shareholders of Intermedia; and (7) In the event the Plan is confirmed and becomes effective before the final adjudication of the Wells Fargo Claim Proceeding, Wells Fargo will be entitled to receive a Class 5 distribution contemporaneously with distributions to other members of Class 5, subject to a holdback for any amount Wells Fargo may be entitled to receive under Class 3A. The other Banks participating in the Bank Settlement may receive their benefits under the Plan without regard to Wells Fargo's position. (Worldcom Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service, Inc., 609/392-0900) WORLDCOM/MCI: Increases Digex Tender Offer Price to $1 Per Share ---------------------------------------------------------------- MCI (WCOEQ, MCWEQ) announced that it had increased the offer price in its pending tender offer for all of the shares of Class A Common Stock of Digex, Incorporated (OTC Bulletin Board: DIGX) to $1.00 per share from the current offer price of $0.80 per share, a 25% increase. MCI also announced that it is extending the expiration of the tender offer to 5:00 p.m., New York City time, on November 14, 2003. MCI commenced a tender offer for all of the outstanding shares of Class A Common Stock of Digex on August 27, 2003. The offer was previously scheduled to expire at 5:00 p.m., New York City time, on October 31, 2003. On October 29, 2003, the U.S. Bankruptcy Court for the Southern District of New York granted approval for MCI to increase the offer price to $1.00 per share from the current offer price of $0.80 per share. All shareholders who tender shares to MCI pursuant to the tender offer will receive such increased price for shares tendered, regardless of whether such shares are tendered before or after this announcement, if the tender offer is consummated. As previously announced, David J. Greene & Company LLC and JMB Capital Partners, L.P., stockholders of Digex, have entered into agreements to tender all of the shares of Class A Common Stock of Digex owned by them into the tender offer, conditioned upon MCI increasing the offer price to $1.00 per share. Collectively, David J. Greene & Company and JMB Capital own an aggregate of 7,199,859 shares of Class A Common Stock. As of the date hereof, approximately 9,422,371 shares of Class A Common Stock have been validly tendered (and not properly withdrawn). Such tendered shares, plus the shares David J. Greene and JMB Capital have agreed to tender as described above, aggregates 16,622,230 shares, approximately 2,337,186 shares less than needed to satisfy the minimum condition of the tender offer. Georgeson Shareholder Communications Inc. is acting as the Information Agent in connection with the tender offer and can be contacted at (212) 440- 9800 (for banks and brokers) or (866) 295- 8105 (toll free for all others). The agreements, as well as other documentation relating to the offer, may be obtained free of charge at the SEC's web site, http://www.sec.gov,or by contacting Georgeson Shareholder Communications. Digex stockholders and other interested parties are urged to read the documentation relating to the offer because it contains important information. About WorldCom, Inc. WorldCom, Inc. (WCOEQ, MCWEQ), which currently conducts business under the MCI brand name, is a leading global communications provider, delivering innovative, cost-effective, advanced communications connectivity to businesses, governments and consumers. With the industry's most expansive global IP backbone, based on company-owned POPs, and wholly-owned data networks, WorldCom develops the converged communications products and services that are the foundation for commerce and communications in today's market. For more information, go to http://www.mci.com. About Digex Digex is a leading provider of enterprise hosting services. Digex customers, from Fortune 1000 companies to leading Internet-based businesses, leverage Digex's trusted infrastructure and advanced services to successfully deploy business-critical and mission- critical Web sites, enterprise applications and Web Services on the Internet. Additional information on Digex is available at http://www.digex.com. WORLD HEART: Will Hold Q3 Results Conference Call on November 5 --------------------------------------------------------------- World Heart Corporation (OTCBB: WHRTF, TSE: WHT) will hold a telephone conference call for shareholders, media and interested members of the financial community following the release of third- quarter results for the period ended September 30, 2003. The results will be released via Canada NewsWire and PR Newswire at approximately 2 p.m. on November 5th, and will be followed by the conference call at 4:00 p.m. (ET). Rod Bryden, President and Chief Executive Officer will host the call. Mark Goudie, Vice- President, Finance and Chief Financial Officer, will accompany him. To participate, please call 1-800-428-5596 ten minutes before the call begins. A recording of the presentation and question period will be available for review starting at 6:00 p.m. on November 5, 2003. The recording can be accessed at 1-800-558-5253 and entering reservation number 21164609. It will be available until midnight on December 5, 2003. World Heart Corporation, a global medical device company based in Ottawa, Ontario and Oakland, California, is currently focused on the development and commercialization of pulsatile ventricular assist devices. Its Novacor(R) LVAS (Left Ventricular Assist System) is well established in the marketplace and its next- generation technology, HeartSaverVAD(TM), is a fully implantable assist device intended for long-term support of patients with heart failure. World Heart Corporation's June 30, 2003, unaudited balance sheet shows a total shareholders' equity deficit of about CDN$53 million, while its June 30, 2003, Proforma balance sheet shows a total shareholders' equity deficit of about CDN$69 million. * E-Retailer Uses Permission Email Mktg to Get Out of Bankruptcy ---------------------------------------------------------------- Knetgolf.com, North America's Premier Internet Discount Golf Supplier, uses permission email marketing software to not only step up company sales outreach but to measure customer buying behavior. The online retail firm worked itself out of bankruptcy in less than two years using permission email sales campaigns created, tested and sent by Campaign Enterprise software. Knetgolf.com co- owner Bill Birss cited Campaign's database writeback ability as one of the keys to measuring the success of sales email campaigns. "The software gives us a detailed analysis of our email campaigns: what we've done, and what we could have done better," Birss said. "We can tell a message's impact by looking at these details and making adjustments with the software." Mr. Birss has been involved in Internet marketing for more than 10 years. He was involved in Canada's first online retail presence for music supplies and has been using permission email marketing since its initial development. Campaign Enterprise permission email marketing software automatically writes back to databases such as Microsoft SQL, Access, Oracle and MySQL. The software updates databases with email open reports and hyperlink clickthrough responses in real time, letting marketers know which messages are working best, and which need adjustment. Birss attributes the success of Knetgolf.com -- which this year will exceed $1 million in sales -- directly to revenue generated from reliable, timed permission email campaigns, working in tandem with tracking email message response and following up with adjustments to the sales message. Campaign Enterprise software is used by Fortune 500 corporations and small businesses alike, including Nortel, Bally's Total Fitness, XM Satellite Radio, Dell Computer, Solomon Smith Barney and Advanced Micro Devices. About Knetgolf.com Knetgolf.com is North America's premier discount golf supplier, selling name brand recycled golf balls at half the retail price. Their online business also retails clubs and other golf supplies. To contact Knetgolf.com, visit the website at www.knetgolf.com or call 877-563-8877. About Arial Software Founded in 1993, Arial Software is widely considered the industry leader in software designed for customer relationship management through permission email marketing. The company's products are used by large and small organizations to send personalized emails to customers, subscribers, prospects and members. Additional company and product information can be found at http://www.arialsoftware.com/presscenter.htm. * New Bankruptcy Court Fee Schedule Effective November 1, 2003 -------------------------------------------------------------- Effective November 1, 2003, in accordance with 28 U.S.C. Sec. 1930(b), these new fees will be charged for services to be performed by clerks of the bankruptcy courts. No fees are to be charged for services rendered on behalf of the United States, with the exception of those specifically prescribed in items 1, 3, and 5, or to bankruptcy administrators appointed under Public Law No. 99-554, Sec. 302(d)(3)(I). No fees under this schedule shall be charged to federal agencies or programs which are funded from judiciary appropriations, including, but not limited to, agencies, organizations, and individuals providing services authorized by the Criminal Justice Act, 18 U.S.C. Sec. 3006A. (1) For reproducing any record or paper, $.50 per page. This fee shall apply to paper copies made from either: (1) original documents; or (2) microfiche or microfilm reproductions of the original records. This fee shall apply to services rendered on behalf of the United States if the record or paper requested is available through electronic access. (2) For certification of any document or paper, whether the certification is made directly on the document or by separate instrument, $9. For exemplification of any document or paper, twice the amount of the charge for certification. (3) For reproduction of recordings of proceedings, regardless of the medium, $26, including the cost of materials. This fee shall apply to services rendered on behalf of the United States, if the reproduction of the recording is available electronically. (4) For amendments to a debtor's schedules of creditors, lists of creditors, matrix, or mailing lists, $26 for each amendment, provided the bankruptcy judge may, for good cause, waive the charge in any case. No fee is required when the nature of the amendment is to change the address of a creditor or an attorney for a creditor listed on the schedules or to add the name and address of an attorney for a listed creditor. (5) For every search of the records of the bankruptcy court conducted by the clerk of the bankruptcy court or a deputy clerk, $26 per name or item searched. This fee shall apply to services rendered on behalf of the United States if the information requested is available through electronic access. (6) For filing a complaint, a fee shall be collected in the same amount as the filing fee prescribed in 28 U.S.C. Sec. 1914(a) for instituting any civil action other than a writ of habeas corpus. If the United States, other than a United States trustee acting as a trustee in a case under title 11, or a debtor is the plaintiff, no fee is required. If a trustee or debtor in possession is the plaintiff, the fee should be payable only from the estate and to the extent there is any estate realized. If a child support creditor or its representative is the plaintiff, and if such plaintiff files the form required by Sec. 304(g) of the Bankruptcy Reform Act of 1994, no fee is required. (7) For filing or indexing any document not in a case or proceeding for which a filing fee has been paid, $39. (8) In all cases filed under title 11, the clerk shall collect from the debtor or the petitioner a miscellaneous administrative fee of $39. This fee may be paid in installments in the same manner that the filing fee may be paid in installments, consistent with the procedure set forth in Federal Rule of Bankruptcy Procedure 1006. (9) Upon the filing of a petition under chapter 7 of the Bankruptcy Code, the petitioner shall pay $15 to the clerk of the court for payment to trustees serving in cases as provided in 11 U.S.C. Sec. 330(b)(2). An application to pay the fee in installments may be filed in the manner set forth in Federal Rule of Bankruptcy Procedure 1006(b). (10) Upon the filing of a motion to convert a case to chapter 7 of the Bankruptcy Code, the movant shall pay $15 to the clerk of court for payment to trustees serving in cases as provided in 11 U.S.C. Sec. 330(b)(2). Upon the filing of a notice of conversion pursuant to section 1208(a) or section 1307(a) of the Code, $15 shall be paid to the clerk of the court for payment to trustees serving in cases as provided in 11 U.S.C. Sec. 330(b)(2). If the trustee serving in the case before the conversion is the movant, the fee shall be payable only from the estate that exists prior to conversion. (11) For filing a motion to reopen a Bankruptcy Code case, a fee shall be collected in the same amount as the filing fee prescribed by 28 U.S.C. Sec. 1930(a) for commencing a new case on the date of reopening, unless the reopening is to correct an administrative error or for actions related to the debtor's discharge. The court may waive this fee under appropriate circumstances or may defer payment of the fee from trustees pending discovery of additional assets. If payment is deferred, the fee shall be waived if no additional assets are discovered. (12) For each microfiche sheet of film or microfilm jacket copy of any court record, where available, $5. (13) For retrieval of a record from a Federal Records Center, National Archives, or other storage location removed from the place of business of the court, $45. (14) For a check paid into the court which is returned for lack of funds, $45. (15) For docketing a proceeding on appeal or review from a final judgment of a bankruptcy judge pursuant to 28 U.S.C. Sec. 158(a) and (b), the fee shall be the same [$250] amount as the fee for docketing a case on appeal or review to the appellate court as required by Item 1 of the Courts of Appeals Miscellaneous Fee Schedule. A separate fee shall be paid by each party filing a notice of appeal in the bankruptcy court, but parties filing a joint notice of appeal in the bankruptcy court are required to pay only one fee. If a trustee or debtor in possession is the appellant, the fee should be payable only from the estate and to the extent there is any estate realized. (16) For filing a petition ancillary to a foreign proceeding under 11 U.S.C. Sec. 304, the fee shall be the same amount as the fee for a case commenced under chapter 11 of title 11 as required by 28 U.S.C. Sec. 1930(a)(3). (17) The court may charge and collect fees commensurate with the cost of providing copies of the local rules of court. The court may also distribute copies of the local rules without charge. (18) The clerk shall assess a charge for the handling of registry funds deposited with the court, to be assessed from interest earnings and in accordance with the detailed fee schedule issued by the Director of the Administrative Office of the United States Courts. (19) When a joint case filed under Sec. 302 of title 11 is divided into two separate cases at the request of the debtor(s), a fee shall be charged equal to the current filing fee for the chapter under which the joint case was commenced. (20) For filing a motion to terminate, annul, modify, or condition the automatic stay provided under Sec. 362(a) of title 11, a motion to compel abandonment of property of the estate pursuant to Rule 6007(b) of the Federal Rules of Bankruptcy Procedure, or a motion to withdraw the reference of a case or proceeding under 28 U.S.C. Sec. 157(d), a fee shall be collected in the amount of the filing fee prescribed in 28 U.S.C. Sec. 1914(a) for instituting any civil action other than a writ of habeas corpus. No fee is required for a motion for relief from the co-debtor stay or for a stipulation for court approval of an agreement for relief from a stay. If a child support creditor or its representative is the movant, and if such movant files the form required by Sec. 304(g) of the Bankruptcy Reform Act of 1994, no fee is required. (21) For docketing a cross appeal from a bankruptcy court determination, the fee shall be the same amount as the fee for docketing a case on appeal or review to the appellate court as required by Item 1 of the Courts of Appeals Miscellaneous Fee Schedule. If a trustee or debtor in possession is the appellant, the fee should be payable only from the estate and to the extent there is any estate realized. * BOOK REVIEW: Risk, Uncertainty and Profit ------------------------------------------- Author: Frank H. Knight Publisher: Beard Books Softcover: 381 pages List Price: $34.95 Review by Gail Owens Hoelscher Order your personal copy today at http://www.amazon.com/exec/obidos/ASIN/1587981262/internetbankrupt The tenets Frank H. Knight sets out in this, his first book, have become an integral part of modern economic theory. Still readable today, it was included as a classic in the 1998 Forbes reading list. The book grew out of Knight's 1917 Cornell University doctoral thesis, which took second prize in an essay contest that year sponsored by Hart, Schaffner and Marx. In it, he examined the relationship between knowledge on the part of entrepreneurs and changes in the economy. He, quite famously, distinguished between two types of change, risk and uncertainty, defining risk as randomness with knowable probabilities and uncertainty as randomness with unknowable probabilities. Risk, he said, arises from repeated changes for which probabilities can be calculated and insured against, such as the risk of fire. Uncertainty arises from unpredictable changes in an economy, such as resources, preferences, and knowledge, changes that cannot be insured against. Uncertainty, he said "is one of the fundamental facts of life." One of the larger issues of Knight's time was how the entrepreneur, the central figure in a free enterprise system, earns profits in the face of competition. It was thought that competition would reduce profits to zero across a sector because any profits would attract more entrepreneurs into the sector and increase supply, which would drive prices down, resulting in competitive equilibrium and zero profit. Knight argued that uncertainty itself may allow some entrepreneurs to earn profits despite this equilibrium. Entrepreneurs, he said, are forced to guess at their expected total receipts. They cannot foresee the number of products they will sell because of the unpredictability of consumer preferences. Still, they must purchase product inputs, so they base these purchases on the number of products they guess they will sell. Finally, they have to guess the price at which their products will sell. These factors are all uncertain and impossible to know. Profits are earned when uncertainty yields higher total receipts than forecasted total receipts. Thus, Knight postulated, profits are merely due to luck. Such entrepreneurs who "get lucky" will try to reproduce their success, but will be unable to because their luck will eventually turn. At the time, some theorists were saying that when this luck runs out, entrepreneurs will then rely on and substitute improved decision making and management for their original entrepreneurship, and the profits will return. Knight saw entrepreneurs as poor managers, however, who will in time fail against new and lucky entrepreneurs. He concluded that economic change is a result of this constant interplay between new entrepreneurial action and existing businesses hedging against uncertainty by improving their internal organization. Frank H. Knight has been called "among the most broad-ranging and influential economists of the twentieth century" and "one of the most eclectic economists and perhaps the deepest thinker and scholar American economics has produced." He stands among the giants of American economists that include Schumpeter and Viner. His students included Nobel Laureates Milton Friedman, George Stigler and James Buchanan, as well as Paul Samuelson. At the University of Chicago, Knight specialized in the history of economic thought. He revolutionized the economics department there, becoming one the leaders of what has become known as the Chicago School of Economics. Under his tutelage and guidance, the University of Chicago became the bulwark against the more interventionist and anti-market approaches followed elsewhere in American economic thought. He died in 1972. ********* 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., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland 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 ***