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/raid1/www/Hosts/bankrupt/TCR_Public/031105.mbx T R O U B L E D C O M P A N Y R E P O R T E R Wednesday, November 5, 2003, Vol. 7, No. 219 Headlines ACTUANT CORP: Selling $100MM of Conv. Senior Sub. Debentures ADVOCAT INC: Extends Deadline for Voting on DCMS Deal to Nov. 21 AEROGEN INC: Closes 2nd Debenture & Warrant Private Offering AGERE SYSTEMS: Names John Cummins New Vice President for China AIR CANADA: Expects 10-Year Pension Plan Deferred Payments AMERICA WEST AIRLINES: Kicks-Off Proposed 2004 Growth Plan AMERICAN AIRLINES: Traffic Slides-Down 1.7% in October 2003 AMERICAN TOWER: Unit Prices Senior Subordinated Note Offering AMERICANA PUBLISHING: Capital Deficits Raise Going Concern Doubt AMKOR TECHNOLOGY: Proposes 7-Million Share Public Offering ANCHOR GLASS: Posts $4.2-Mil. Net Loss on $193-Mil. Net Sales AURORA FOODS: Sept. 30 Net Capital Deficit Burgeons to $91 Mill. BALTIMORE MARINE: Michael Fox Will Auction-off Estate Today BUDGET GROUP: Lease Decision Period Stretched Until Dec. 1, 2003 BURLINGTON IND.: Court Confirms First Amended Chapter 11 Plan CAMBRIDGE RESEARCH: Case Summary & 20 Largest Unsecured Creditors CANBRAS: Inks Pacts to Sell Brazilian Operations to Horizon CENTERPOINT ENERGY: Unit Issues $160MM of Senior Unsecured Notes CEPHALON INC: Inks Definitive Merger Pact with CIMA LABS INC. CHARTER COMMS: Units Plan $500 Million Senior Debt Issue CONSECO FINANCE: Mark Sheperd Withdraws $2-Million Claim CONTINENTAL AIRLINES: October 2003 Traffic Slides-Up by 3.1% COVANTA ENERGY: Court Approves Proposed Duff & Phelps Agreement CRYOLIFE: Resolves Insurance Coverage Dispute on a $10MM Policy DATA TRANSMISSION: Exits Chapter 11 Restructuring Proceedings DEL GLOBAL TECHNOLOGIES: Gets Waiver of Loan Covenant Violation DEX MEDIA: S&P Revises Low-B Ratings Outlook to Negative DUNDEE: S&P Affirms BB+ Long-Term Counterparty Credit Rating ELIZABETH ARDEN: Consolidates US Warehouse Ops. in Roanoke, Va. EMERGENCY FILTRATION: Auditors Express Going Concern Uncertainty ENRON: Enron Equipment's Case Summary & 20 Unsecured Creditors ENRON CORP: Employee Committee Wants to Expand Scope and Duties FALCON PRODUCTS: Takes Additional Steps to Streamline Operations FASTNET CORP: Inks Pact to Sell All Assets to US LEC for $6.8MM FEDERAL-MOGUL: Reaches Consensual Agreement on Chapter 11 Plan FFP OPERATING: Section 341(a) Meeting to Convene on December 10 GAUNTLET ENERGY: Selling Seismic Assets & Methane Rights for $8MM GAUNTLET ENERGY: Ketch Will Buy Bulk of Business for $44.6 Million GENSCI ORTHOBIO.: Makes Initial Settlement Payment to Osteotech GENUITY: Wants Go-Signal to Examine Verizon Under Rule 2004 GEORGETOWN STEEL: Seeks to Employ Regelbrugge as Business Broker GILAT SATELLITE: Will Publish Third-Quarter Results on Nov. 13 GINGISS GROUP: Wants More Time to File Schedules and Statements GLOBAL CROSSING: Inks Stipulation Rejecting Terminal Plaza Lease GLOBAL CROSSING: Enhances IP Virtual Private Network Services GLOBALSTAR L.P.: Proposes Uniform Asset Sale Procedures GRASSLAKE HEALTHCARE: Voluntary Chapter 11 Case Summary HAYES LEMMERZ: Resumes Operations at Huntington, Indiana, Facility HEALTHSOUTH: Gets Notice of Technical Default from Bondholders ICO INC: Terminates Rights Agreement with Harris Trust INAMED INC: Board Declares 3-For-2 Reverse Stock Split INTERLINE BRANDS: Sept. 26 Net Capital Deficit Widens to $256MM INTERNATIONAL PAPER: Declares Dividend Payable on December 15 JAMES RIVER: General Claims Bar Date Set for November 17, 2003 KMART: Court Reclassifies Improper Debtor Claims Totaling $1.8BB MIRANT CORP: NMWDA Seeks Relief from Stay to Use Cash Deposit NEXTERA ENT.: Nasdaq Will Delist Shares from SmallCap Market NRG ENERGY: Gets Court Clearance for AFCO Replacement Agreement ONEIDA LTD: Lenders Waive Financial Covenants Until November 21 ORBITAL IMAGING: Bankr. Court Confirms Final Reorganization Plan OWENS-ILLINOIS: Will Padlock Ontario Glass Container Facility PEGASUS SATELLITE: Lenders Agree to Amend & Restate Credit Pact PG&E NATIONAL: Noteholders' Committee Taps Shapiro as Co-Counsel PHAR-MOR INC: Makes Second Distribution to Unsecured Creditors POLAROID: Committee Asks Court to Disallow 7 Duplicate Claims PROVANT INC: Enters Letter of Intent for Sale of Gov't Group QWEST: Offering VoIP Services to Businesses in 12 Western States RADIO UNICA: Earns Court Nod to Hire Trumbull as Claims Agent REPUBLIC WESTERN: Fitch Withdraws Default-Level IFS Rating RESTRUCTURE PETROLEUM: Case Summary & 40 Unsecured Creditors ROUGE INDUSTRIES: Looks to Morgan Joseph for Financial Advice SAN REMO 7128 CORPORATION: Voluntary Chapter 11 Case Summary SEITEL DEVELOPMENT: Shareholders Can Propose Alternative Plan SK GLOBAL: SK Corporation Board Approves SK Networks Compromise SLMSOFT INC: Richter & Partners Appointed Receiver over Assets SUPERIOR GALLERIES: Ability to Continue Operations Uncertain TANGER FACTORY: Sells Casa Grande, Ariz. Property for $7 Million TENET HEALTHCARE: Raises $430-Mill. from Sale of Six Hospitals TRANSGLOBAL SERVICES: Malone & Bailey Airs Going Concern Doubt TRIAD HOSPITALS: S&P Rates $450-Million Senior Sub. Notes at B TRI-UNION DEVELOPMENT: Tapping Medleh Group as Notice Agents TWINLAB CORP: Court Approves Twinlab Sale to IdeaSphere Inc. UNIROYAL: Has Until November 25 to Make Lease-Related Decisions UNITED AIRLINES: Names Martin C. White Senior VP of Marketing UNITED AIRLINES: Wants Nod to Sell Hotwire Stake for $85 Million U.S. WIRELESS DATA: Brascan Backs-Out of Equity Financing Deal WACKENHUT CORRECTIONS: Look for Third-Quarter Results Tomorrow WHEELING-PITTSBURGH: Seeks Resolution of Marubeni's $1.6MM Claim WHITEHALL MACHINERY: Case Summary & Largest Unsecured Creditors WORLDCOM INC: Turning to Huron Consulting for Financing Advice W.R. GRACE: Pushing for Nod to Hire New Unidentified Pres. & COO XOMA LTD: Exercises Option to Defer $40 Million Payment of Loan ZYMETX INC: Bankruptcy Court Confirms Plan of Reorganization * Meetings, Conferences and Seminars ********* ACTUANT CORP: Selling $100MM of Conv. Senior Sub. Debentures ------------------------------------------------------------ Actuant Corporation (NYSE:ATU) intends to sell, subject to market and other conditions, $100 million aggregate principal amount of its Convertible Senior Subordinated Debentures due 2023 in a private, unregistered offering to "qualified institutional buyers," pursuant to Rule 144A under the Securities Act of 1933, as amended. Actuant intends to grant the initial purchasers a 13 day over- allotment option to purchase up to an additional $25 million aggregate principal amount of the Debentures. The Debentures will be convertible into shares of Actuant's common stock, subject to certain conditions. Proceeds from the offering will be used to repay a portion of the borrowings under the Company's senior credit facility and for other general corporate purposes, which may include possible repurchases of outstanding 13% Senior Subordinated Notes due 2009, working capital and possible future acquisitions. The Debentures to be offered and the shares of common stock issuable upon their conversion have not been registered under the Securities Act of 1933, and may not be offered or sold absent registration or an applicable exemption from the registration requirements of the Securities Act. This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the Debentures or the shares of common stock issuable upon conversion of the Debentures, and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful. Actuant Corporation's August 31, 2003 balance sheet shows a total shareholders' equity deficit of about $11.6 million. ADVOCAT INC: Extends Deadline for Voting on DCMS Deal to Nov. 21 ---------------------------------------------------------------- Advocat Inc. (Nasdaq: AVCA) extended the deadline for shareholders to vote on the transaction to sell its wholly owned Canadian subsidiary, Diversicare Canada Management Services Co., Inc. to November 21, 2003. A majority of Advocat's shares outstanding were neither voted to approve nor deny the transaction at the meeting today. Shareholders cast the following votes as of Monday regarding the DCMS transaction: Voting in Favor of the DCMS transaction: 2,443,248 shares, or 44.5% of the outstanding shares. Voting Against the DCMS transaction: 1,162,530 shares, or 21.2% of the outstanding shares. Abstaining from Voting: 37,810 shares, or 0.7% of the outstanding shares. The transaction requires a majority of the Company's 5,493,287 shares, or 2,746,644 shares, to approve the transaction. "The deadline for voting on the sale of DCMS was extended so that a majority of shares outstanding would have a voice in the transaction," stated William R. Council, Chief Executive Officer. "We intend to re-solicit votes from those shareholders that have not voted on the transaction. Shareholders who have already voted will also have the opportunity to change their vote until the extended deadline of November 21st." "The Company believes the shareholders should approve this transaction in order to afford the Company the best chance to continue the orderly repayment of creditors and the extension of the January 2004 maturities of certain debt agreements," continued Mr. Council. "In addition, the Company believes that this is an opportune time to conclude a sale of DCMS due to the expiration of certain significant leases and management contracts in the coming months. The Company encourages all shareholders to exercise their right to vote on this important issue." If approved, Advocat would sell DCMS to DCMS Holding, Inc., a privately-owned Ontario corporation, for $16.5 million Canadian (approximately $12 million U.S. dollars). The transaction includes 14 nursing homes and 24 assisted living facilities in the Canadian provinces of Ontario, British Columbia and Alberta operated by DCMS. Advocat has signed a definitive agreement to sell DCMS pending shareholder and regulatory approval. Under terms of the agreement, the purchaser has deposited $1 million Canadian in escrow and Advocat will receive the deposit and $7.5 million Canadian at closing plus a note for $8.0 million Canadian payable over five years. The proceeds from the transaction will be used to pay down debt under Advocat's bank credit facility. Advocat Inc. -- whose June 30, 2003 balance sheet shows a total shareholders' equity deficit of about $43 million -- provides long-term care services to nursing home patients and residents of assisted living facilities in 9 states, primarily in the Southeast, and three provinces in Canada. For additional information about the Company, visit Advocat's Web site: http://www.irinfo.com/avc AEROGEN INC: Closes 2nd Debenture & Warrant Private Offering ------------------------------------------------------------ Aerogen, Inc. (Nasdaq: AEGN) closed Monday the second round of a two-round convertible debt financing, which has resulted in aggregate gross proceeds to Aerogen of approximately $1,950,000 from SF Capital Partners, Ltd. The first $950,000 of the investment was made on September 11, 2003; and the remaining investment of $1,000,000 closed Monday following stockholder approval obtained last week. Under the terms of Monday's investment, SF Capital has purchased a secured convertible debenture with a face amount of $1,000,000 that bears interest at a rate of 10% per annum and is due March 1, 2004, at a conversion price of $3.28 per share. If converted, the principal amount of the debenture would result in the issuance of 304,878 shares of common stock. SF Capital has also received a four-year warrant to purchase up to 152,439 shares of common stock at an exercise price of $3.28 per share. "Now that our near-term cash position has been further strengthened, we can intensify our focus on securing the additional resources vital to the Company's commitment to develop important new therapeutics that maximize shareholder value," said Dr. Jane E. Shaw, Aerogen 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(R) 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 * * * Liquidity and Going Concern Uncertainty Aerogen, Inc.'s June 30, 2003 balance sheet shows an accumulated deficit of about $100 million that eroded its total shareholders' equity to about $8 million from about $16 million recorded six months earlier. In its SEC Form 10-Q for the quarter ended March 31, 2003, the Company stated: "The Company's recurring net losses from operations and negative cash flows from operations, in light of the Company's current liquidity and capital resources, raise substantial doubt regarding the Company's ability to continue as a going concern for a reasonable period of time. Since inception, we have financed our operations primarily through equity financings, product revenues, research and development revenues, and the interest earned on related proceeds. The process of developing our products will continue to require significant research and development, clinical trials and regulatory approvals. These activities, together with manufacturing, selling, general and administrative expenses, are expected to result in substantial operating losses for the next several years. "[The Company's] condensed consolidated financial statements contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. The continued operation of the Company is dependent on our ability to obtain adequate funding and eventually establish profitable operations. As of March 31, 2003, we had $4.5 million in cash and cash equivalents. During the first three months of 2003, our expenditures have been approximately $1.6 million per month. We need to raise additional funds through public or private financings, collaborative relationships or other arrangements by early June 2003 in order to continue as a going concern. We cannot be certain that such additional funding will be available on terms attractive to us, or at all. Furthermore, additional equity or debt financing may involve substantial dilution to our existing stockholders, restrictive covenants or high interest rates. 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 will also explore other potential options, such as a merger or sale. If our efforts are unsuccessful, the Company will have to significantly curtail operations even further, or cease operations altogether and explore liquidation alternatives." AGERE SYSTEMS: Names John Cummins New Vice President for China -------------------------------------------------------------- Agere Systems (NYSE: AGR.A, AGR.B) has appointed one of its sales leaders, John Cummins, as vice president, Agere Systems, China. In this newly created position, Cummins will spearhead the company's efforts to address growth opportunities and strengthen customer relationships in China, which represents an increasingly important market for Agere. Cummins will be based in Shanghai, China, and will report to Ahmed Nawaz, executive vice president, worldwide sales for Agere. Cummins and his team complement the strong presence that Agere already has in the Asia/Pacific region. The company has assembly and test facilities in Singapore and Bangkok, Thailand; a joint venture with Chartered Semiconductor in Singapore; design centers in Bangalore, India, Shanghai and Singapore; and sales offices across the region. Agere also recently established a new technical support center in Shanghai specifically to customize mobile handset solutions for the growing Asian marketplace and provide related hardware, software and systems support to customers within the region. In addition, the company has established a design center in Australia to develop new solutions for the growing 3G handset market. Many of Agere's major networking equipment, mobile terminal and PC customers are located in China and the Asia/Pacific region. "With the continued customer momentum and growth opportunities in China, we felt it was the right time to sharpen our focus on this market and dedicate resources to building Agere's presence in China," said Nawaz. "John has an excellent track record of forging deep customer relationships, and has solid sales, marketing, applications and business development experience, crucial to our success in the dynamic China market. He will work very closely with the rest of our Asia/Pacific sales and marketing team as we look to expand our relationships with key customers in this important region." Cummins joined Agere in October 2000 through the acquisition of Texas-based Agere Inc., where he served as director, Sales. Cummins has nearly 20 years' experience in semiconductor sales and marketing, including key positions at Sun Microsystems and Cypress Semiconductor. Cummins holds a BSEE degree from California Polytechnic State University and an MBA from University of California-Berkeley. Agere Systems, whose $220 million Convertible Notes are rated by Standard & Poor's at 'B', is a premier provider of advanced integrated circuit solutions that access, move and store network information. Agere's access portfolio enables seamless network access and Internet connectivity through its industry-leading WiFi/802.11 solutions for wireless LANs and computing applications, as well as its GPRS offering for data-capable cellular phones. The company also provides custom and standard multi-service networking solutions, such as broadband Ethernet- over-SONET/SDH components and wireless infrastructure chips, to move information across metro, access and enterprise networks. Agere is the market leader in providing integrated circuits such as read-channel chips, preamplifiers and system-on-a-chip solutions for high-density storage applications. Agere's customers include the leading PC manufacturers, wireless terminal providers, network equipment suppliers and hard-disk drive providers. More information about Agere Systems is available from its Web site at http://www.agere.com AIR CANADA: Expects 10-Year Pension Plan Deferred Payments ---------------------------------------------------------- In a letter dated October 16, 2003 to the Office of the Superintendent of Financial Institutions Canada, Calin Rovinescu, Air Canada Chief Restructuring Officer, expressed concerns over the proposed changes to the Pension Benefit Standards Regulation, 1985, which would bring into effect the immediate full funding for all federally regulated pension plans on plan termination. Mr. Rovinescu hopes for an amendment to the Pension Benefits Standards Regulations, 1985 to provide for funding relief with respect to employers under Companies' Creditors Arrangement Act, R.S.C. 1985 or Part III of the Bankruptcy and Insolvency Act. OSFI Superintendent Nicholas Le Pan, in his reply letter on October 21, 2003, advises Mr. Rovinescu that any decision with respect to implementation would consider the effect on all federally registered pension plans. As such, the proposed regulation change, like any other, would go through the necessary consultation procedure before implementation. Mr. Le Pan believes that a consultative process on the full funding regulation would unlikely be completed and the regulation in force by January 1, 2004. With respect to an inclusion of a full funding provision as part of the regulation that would allow for 10-year funding of plan solvency deficiency, any decision on the proposed amendments to the regulations lies with the Cabinet on the recommendation of the Minister of Finance. It is, however, expected that the Department of Finance, in making a recommendation to the Minister of Finance, will look to the OSFI for its views on the proposed changes, Mr. Le Pan notes. The OSFI believes that providing funding relief increases the risks to pension plan members and other beneficiaries. In assessing whether or not the OSFI would support a funding relief regulation, Mr. Le Pan relates that the OSFI has looked at various options for downside protection to plan members and other beneficiaries, one of which is the application of the proposed full funding regulation in respect of pension plans where the employer has elected to take funding relief. For the OSFI to make an informed opinion on appropriate downside protection, Mr. Le Pan indicates that it is necessary that the OSFI has access to information that may impact on the realizability of any claims that may arise on plan termination and ultimately jeopardize the pension plans. Mr. Le Pan points out that a specific request was made to Air Canada in August 2003 to have access to its agreements with GE Capital as well as the collateral analysis. Numerous requests were also made in the ensuing months to both Air Canada and the Monitor but to no avail. "The timely provision of this information will be of great importance on this matter," Mr. Le Pan says. Air Canada, in July 2003, warned that, upon emerging from CCAA, it may possibly fund its pension plans based on a going concern basis only, for a period of three years ending on January 1, 2006. Thereafter, Air Canada expects that any solvency deficit would become payable over a 10-year period. Under this proposal, contributions would resume immediately for all plans retroactive to January 1, 2003. Air Canada proposed the preliminary amendments at a July 22, 2003 meeting with the OSFI, the Department of Finance and various organized labor and non- unionized groups. Principles for a Proposal Providing For Funding Relief In a correspondence dated October 23, 2003, Carol Taraschuk, OSFI Legal Services counsel, says that the OSFI is prepared to propose an amendment to the Pension Benefits Standards Regulations, 1985 to provide for funding relief. To propose a change, Ms. Taraschuk states that the OSFI must be provided with a funding proposal submitted jointly by the employer and the appropriate representatives of the various plan beneficiaries. The OSFI would also need to be satisfied that a proposal addresses these principles: (1) Regulations concerning funding of pension plans under the Pension Benefits Standards Act, 1985 can only be made on a plan by plan basis. (2) Payments to eliminate a solvency deficiency may be made over a maximum period of ten years. A flexible payment schedule may be agreed upon provided that there is some control that would prevent a substantial amount of the payments being made in the last half of any payment schedule -- for example, for a payment schedule to be acceptable, at least 40% of the payments that would be made over a 10-year schedule, based on equal annual payments, would have to be made in the first half of a 10-year schedule. Valuations must be prepared on a basis consistent with the methodology previously employed by Air Canada e.g. non-smoothed basis. (3) New solvency deficiencies that arise after exiting CCAA, that is, identified in valuation reports filed subsequent to the first report identifying the solvency deficiency to which funding relief is applicable, will be funded in accordance with the current funding regulations, that is, five years. (4) There must be an informed buy in by the various classes of plan beneficiaries. Consent will be required from each class of plan beneficiaries -- example, actives as one class and retirees and other beneficiaries as another. The unions and court-appointed representatives may consent on behalf of their constituents. All plan beneficiaries should be provided with sufficient and adequate information concerning the risks associated with the election of funding relief by an employer. Consideration should be given to the consent levels required under Section 9.2 of the PBSA, 1985 -- two-thirds consent of members and two-thirds consent of other beneficiaries. (5) Downside Protection. Given the present economic environment, a requirement to fully fund deficiencies on plan termination will not be implemented until wider consultation is undertaken. However, since funding relief will increase the risk of loss to the plan beneficiaries, acceptable downside protection must be provided. Downside protection may include, among other things, any or all of: (a) On termination of a plan, the employer will fund up to the initial solvency ratio, that is, the solvency ratio as at the date the solvency deficiency to which the funding relief would apply was identified; (b) If a plan is terminated or most of the active members are terminated -- that is, most of the remaining liabilities of the plan are in respect of retirees' interests -- adequate payments will continue in accordance with the payment schedule until the solvency deficiency is eliminated on a plan by plan basis; (c) Surplus withdrawals will not be permitted where there are solvency deficiencies in other plans or the solvency ratio is below a prescribed amount; (d) Top up to initial solvency ratio while the plan is ongoing in respect of the retirees' benefits; and (e) Amounts owing will be accrued on a five-year basis but be payable over 10 years. (6) Opting out of the funding relief by the employer must not result in the re-amortization of deficiencies over a longer period. If an employer opts out of the funding relief with within years remaining in the payment schedule, the deficiency would not be re-amortized over five years. (7) Some control over benefit improvements when the plan still has a significant deficiency. (8) Deemed trust and compliance with regulations and directions -- Provisions recognizing deemed trusts and requiring compliance are contained in the Act and cannot be contracted out of. The OSFI is open to discuss any proposal to satisfy the directions issued before Air Canada's filing under CCAA. Air Canada Meets With Pension Stakeholders 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 $1,500,000,000 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, the Ministry of Finance, the Monitor and various financial and legal advisors, Air Canada 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. Air Canada 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. (Air Canada Bankruptcy News, Issue No. 16; Bankruptcy Creditors' Service, Inc., 609/392-0900) AMERICA WEST AIRLINES: Kicks-Off Proposed 2004 Growth Plan ---------------------------------------------------------- America West Airlines (NYSE: AWA), the nation's second largest low-fare airline, is kicking off its 2004 growth plan. America West is adding roundtrip flights between nine existing West Coast cities and Las Vegas. With these new flights, which are listed below, America West will offer 100 daily departures to 41 destinations from its Las Vegas hub. The Las Vegas growth will be accomplished through increased fleet utilization. "By eliminating long aircraft ground times, we've been able to introduce an additional roundtrip flight between these nine West Coast destinations and Las Vegas without incurring the expense of additional aircraft," said Dion Flannery, vice president, scheduling, route planning and distribution. "America West customers can now enjoy new, nonstop daytime flights to Las Vegas, one of the most popular destinations in the country, and benefit from the convenience of additional opportunities to connect to many other America West destinations." America West Airlines' second and third quarter profitability positions the airline to increase its mainline capacity (available seat miles) by approximately 10 percent by the fourth quarter of 2004. America West is adding flights because of growing customer demand for quality air service, business-friendly fares and flexible ticketing policies, including no Saturday night stay requirements. The growth will occur through increased fleet utilization and additional aircraft. The airline currently has plans to receive two Airbus aircraft in the fourth quarter of 2004 and is exploring the most efficient means of additional fleet expansion. In addition to the nine new Las Vegas flights, America West has implemented other expansion opportunities including new point-to- point service. America West recently initiated new nonstop transcontinental service between New York/JFK and Boston Logan International Airport on the East Coast and Los Angeles International Airport on the West Coast. Flights between JFK and San Francisco will begin Dec. 19, and flights between Boston and San Francisco will begin March 1, 2004. Founded in 1983 and proudly celebrating its 20-year anniversary in 2003, America West Airlines (S&P, B Long-Term Corporate Credit Rating, Stable Outlook) is the nation's second largest low-fare airline and the only carrier formed since deregulation to achieve major airline status. America West's 13,000 employees serve nearly 55,000 customers a day in 92 destinations in the U.S., Canada and Mexico. AMERICAN AIRLINES: Traffic Slides-Down 1.7% in October 2003 ----------------------------------------------------------- American Airlines, the world's largest carrier, reported a monthly load factor of 70.2 percent, an increase of 1.7 points compared to last year. Year-over-year gains were achieved in both domestic and international markets, with a load factor increase of 2.2 points in domestic markets and 0.3 points in international markets. For the month, overall capacity declined 4.1 percent year over year, yet traffic fell by a much smaller 1.7 percent. Domestic traffic was down 3.5 percent on a 6.6 percent capacity reduction. In international markets, October traffic increased 3.0 percent on a year-over-year capacity increase of 2.5 percent. American boarded 7.3 million passengers in October. Current AMR Corp. (NYSE: AMR) news releases can be accessed via the Internet by visiting its Web site at http://www.amrcorp.com As reported in Troubled Company Reporter's September 23, 2003 edition, Fitch Ratings assigned a rating of 'CCC+' to the $300 million in convertible unsecured notes issued by AMR Corp. - the parent of American Airlines, Inc. The privately placed notes carry a coupon rate of 4.25%, are guaranteed by American Airlines, Inc., and mature in 2023. The Rating Outlook for AMR and American is Negative. The 'CCC+' rating reflects Fitch's continuing concerns over the airline's ability to meet fixed financing obligations over the next two to three years - even after the successful labor contract restructuring undertaken by AMR this spring. The new labor agreements with all of American's unionized employee groups, ratified in April, are delivering significant unit operating cost savings and allowing American to stake out a much more competitive cost position versus the discount carriers that are encroaching on a larger part of American's route network. Mainline cost per available seat mile in the third quarter is likely to fall to approximately 9.5 cents (compared with 11 cents prior to the labor cost reductions), and additional non-labor savings initiatives should push unit costs even lower during the fourth quarter. AMERICAN TOWER: Unit Prices Senior Subordinated Note Offering ------------------------------------------------------------- American Tower Corporation (NYSE: AMT) (S&P, B- Corporate Credit Rating, Stable Outlook) announced that American Towers, Inc., its wholly owned subsidiary, has agreed to sell $400.0 million principal amount of 7.25% senior subordinated notes due 2011 of in an institutional private placement, as previously announced. The notes were priced at par and the aggregate net proceeds to the Company are expected to be approximately $389.3 million. The company intends to use the net proceeds to repay indebtedness under its credit facilities and is currently seeking an amendment to its credit facilities to permit the issuance of the notes. The closing is expected to occur on or about November 18, 2003 and is subject to the consent of the lenders under the credit facilities and customary closing conditions. The notes have not been registered under the Securities Act of 1933, as amended, or any state securities laws, and are being offered only to qualified institutional buyers in reliance on Rule 144A under the Securities Act. Unless so registered, the notes may not be offered or sold in the United States except pursuant to an exemption from registration requirements of the Securities Act and applicable state securities laws. AMERICANA PUBLISHING: Capital Deficits Raise Going Concern Doubt ---------------------------------------------------------------- During the year ended December 31, 2002 and the three months ended March 31, 2003, Americana Publishing Inc. incurred losses of $2,615,518 and $269,510, respectively. In addition, as of March 31, 2003, its total current liabilities exceeded its current assets by $2,777,479, and its shareholders' deficit was $2,478,218. These factors, among others, raise substantial doubt about its ability to continue as a going concern. The Company has historically financed its operation1s through the sale of common stock. The proceeds were used for start-up activities including website development as well as other start-up activities. The Company's revenues have averaged $53,404 per month for 2002. This revenue has not been adequate to cover current monthly cash expenditures thus requiring the Company to raise additional capital infusions to support operations. Currently management believes revenues will increase to adequate levels to support cash expenditures. In addition management has implemented a plan to lower cash expenditures and is actively pursuing additional capital infusions. There is no assurance that adequate revenues will be achieved to support operations, however, management believes it will be able to raise additional capital, lower cash expenditures or a combination of both to maintain operations for the next twelve months. The Company will require future financing in various forms. The Company proposes to finance working capital timing differences with an asset-based line of credit. Capital improvements should be financed by intermediate-term debt. The Company is not in possession of any commercial bank commitment letters or a letter of intent from a capable underwriter at this time. AMKOR TECHNOLOGY: Proposes 7-Million Share Public Offering ---------------------------------------------------------- Amkor Technology, Inc. (Nasdaq: AMKR) plans to offer 7,000,000 shares of its common stock in a public offering. The company has also provided the underwriters of the proposed offering an option to purchase an additional 1,050,000 shares to cover over-allotments. The net proceeds from this offering will be used for the repayment or repurchase of a portion of the indebtedness outstanding under one or more of our bank loans, senior notes, subordinated notes, convertible notes and/or other indebtedness. The offering is being made through an underwriting syndicate in which Citigroup Global Markets Inc. will act as the sole bookrunning manager, and Citigroup, Deutsche Bank Securities and J.P. Morgan Securities Inc. will act as joint lead managers. Bear, Stearns & Co. Inc. will act as co-manager. Printed copies of the preliminary prospectus relating to the offering may be obtained by contacting Citigroup Global Markets Inc., 388 Greenwich Street, New York, NY 10013. Amkor Technology, Inc. (S&P, B Corporate Credit and Senior Debt Ratings, Stable) is the world's largest provider of contract semiconductor assembly and test services. The company offers semiconductor companies and electronics OEMs a complete set of microelectronic design and manufacturing services. More information on Amkor is available from the company's SEC filings and on Amkor's Web site: http://www.amkor.com ANCHOR GLASS: Posts $4.2-Mil. Net Loss on $193-Mil. Net Sales ------------------------------------------------------------- Anchor Glass Container Corporation (NASDAQ: AGCC) reported financial results for its third quarter and nine months ended September 30, 2003. For the third quarter of 2003, net sales increased 7.3 percent to $193.5 million, from $180.4 million in the prior year, driven by a 7 percent gain in unit shipments. Net loss for the quarter was $4.2 million while EBITDA totaled $27.0 million, a 6.3 percent improvement from $25.4 million reported in the 2002 period. The improvement in sales was primarily due to the increase in shipping volumes while EBITDA performance was driven by the improvement in sales, continued improvements in manufacturing productivity and the elimination of rent expense associated with operating leases bought out in the first quarter of 2003. These positive EBITDA factors were partially offset by increased natural gas costs and downtime costs associated with capital improvement initiatives at Anchor's Warner Robins, Georgia facility. "This was an exciting quarter for Anchor. The business is strong, reflected by an increase in sales during the quarter. We continued to strengthen our balance sheet and liquidity position by issuing an additional $50 million of notes and completing our initial public offering," said Richard M. Deneau, president and chief executive officer. "While our investment in plant upgrades adversely impacted our results for the quarter, we're confident that these initiatives will strengthen our long-term productivity. This, along with our strong order book for next year, will help us achieve our targeted results in 2004." For the first nine months of 2003, net sales declined 2.8 percent to $542.8 million from $558.7 million in the prior year. EBITDA declined slightly to $75.1 million from $75.9 million in the prior year. These results reflected soft demand across the industry in the first half of 2003, as well as increased natural gas costs and downtime expenses for capital improvement projects at two of the Company's facilities. These costs were partially offset by productivity gains, pricing improvements and reduced rent expenses as described earlier. "Sales for the Company and the industry were adversely affected in the first half of 2003 due to harsh weather conditions, military action in Iraq and the general softness in the economy. We are pleased to have that all behind us, and that we have returned to year-over-year sales increases," said Deneau. IPO On September 30, 2003, Anchor consummated an initial public offering of 7,500,000 shares of its common stock, par value $.10 per share, at the initial public offering price of $16.00 per share. The Company received net proceeds from the offering of approximately $127.8 million, including the sale on October 14, 2003 of an additional 1,125,000 shares following the exercise of the over-allotment option. A portion of the proceeds was used to redeem all of Anchor's Series C Redeemable Preferred Stock. Balance Sheet Restatement Anchor will restate the balance sheets in its 10-K report for 2002 and its 10-Q reports for the first two quarters of 2003 to reflect the change in classification of its Series C Redeemable Preferred Stock, which is no longer outstanding, to outside of permanent equity. The balance sheet restatement will have no effect on the Company's statement of operations, earnings per share, assets or cash flows for any periods. Total liabilities will be reduced to reflect the change in classification of accrued dividends from liabilities to part of the Series C Redeemable Preferred Stock. Because of the prior redemption of the Series C Preferred Stock, the change in classification has no impact on the Company's balance sheet as of September 30, 2003. Dividend Declared The Board of Directors of Anchor declared its first quarterly dividend of $0.04 per share of its common stock. The dividend is payable December 15, 2003 to stockholders of record at the close of business on December 1, 2003. Anchor Glass Container Corporation (S&P, B+ Corporate Credit Rating, Stable Outlook) is the third largest manufacturer of glass containers in the United States. It has nine strategically located facilities where it produces a diverse line of flint (clear), amber, green and other colored glass containers for the beer, beverage, food, liquor and flavored alcoholic beverage markets. AURORA FOODS: Sept. 30 Net Capital Deficit Burgeons to $91 Mill. ---------------------------------------------------------------- Aurora Foods Inc. (OTC Bulletin Board: AURF), a producer and marketer of leading food brands, announced results for the third quarter ended September 30, 2003. Aurora's net loss for the third quarter 2003 was $12.7 million, or $0.17 per share, compared with a net loss the previous years' third quarter of $5.8 million, or $0.08 per share. The third quarter 2003 net loss included pre-tax charges of $6.6 million in financial restructuring costs and $3.2 million of excess leverage fees. Third quarter 2002 net loss included pre-tax charges of $5.7 million related to the value of derivatives and a positive adjustment of $2.5 million related to the reduction of warrants previously issued. Aurora's net sales in the third quarter 2003 were $170.0 million versus $181.3 million in the third quarter 2002. Aurora's September 30, 2003 balance sheet shows a working capital deficit of about $1 billion, and a total shareholders' equity deficit of about $91 million. Use of Non-GAAP Financial Measures In an effort to provide investors with additional information regarding the Company's results as determined by generally accepted accounting principles (GAAP), the Company also discloses certain non-GAAP financial measures within the meaning of Regulation G under the federal securities laws, including EBITDA. Management believes this information is of interest to investors and facilitates more useful period-to-period comparisons of the Company's financial results. Pursuant to the requirements of Regulation G, the Company has attached a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures. Aurora Foods Inc., based in St. Louis, Missouri, is a producer and marketer of leading food brands, including Duncan Hines(R) baking mixes; Log Cabin(R), Mrs. Butterworth's(R) and Country Kitchen(R) syrups; Lender's(R) bagels; Van de Kamp's(R) and Mrs. Paul's(R) frozen seafood; Aunt Jemima(R) frozen breakfast products; Celeste(R) frozen pizza and Chef's Choice(R) skillet meals. More information about Aurora may be found on the Company's Web site at http://www.aurorafoods.com BALTIMORE MARINE: Michael Fox Will Auction-off Estate Today ----------------------------------------------------------- By Order of the U.S. Bankruptcy Court for the District of Maryland, the ship building and ship repair facility and machinery of Baltimore Marine Industries, will be auctioned-off by Michael Fox International as a complete shipyard or on a piecemeal basis today at 9:00 a.m. EST. Located at 600 Shipyard Road, the property consists of approximately 250 acres with one mile of waterfront and contains numerous buildings, a VLCC-capable drydock, and a Panamax floating dock. The estate also has a view of the Harbor to the Key Bridge. In addition to the real estate, the sale will include shipyard machinery and equipment. Baltimore Marine Industries, Inc.'s main line of business is ship repair. The Company filed for chapter 11 relief on June 11, 2003 (Bankr. Md. Case No. 03-80215). Martin T. Fletcher, Esq., Cameron J. Macdonald, Esq., and Dennis J. Shaffer, Esq., at Whiteford Taylor & Preston L.L.P., represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of over $10 million each. BUDGET GROUP: Lease Decision Period Stretched Until Dec. 1, 2003 ---------------------------------------------------------------- Budget Group Inc., and its debtor-affiliates obtained from the U.S. Bankruptcy Court another 60-day extension of the period within which they may elect to assume or reject all of their remaining unexpired leases pursuant to Section 365(d)(4)3 of the Bankruptcy Code. Specifically, the Debtors' Lease Decision Period is extended through and including December 1, 2003. (Budget Group Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., 609/392-0900) BURLINGTON IND.: Court Confirms First Amended Chapter 11 Plan ------------------------------------------------------------- The Burlington Industries Debtors present these modifications to their First Amended Joint Plan of Reorganization: A. Section I.A.112 "Released Parties" means parties serving on or after the Petition Date. B. Section IV.B.6.a The BII Distribution Trust is additionally empowered to close or dismiss applicable Reorganization Cases, as appropriate. C. Section IV. B.6.b The Distribution Trust Representative will also have the authority to close or dismiss the applicable Reorganization Cases. D. Section IV.B.6.g The BII Distribution Trust Agreement will provide that the termination will occur no later than three years after the Effective Date, unless the Bankruptcy Court will approve an extension based upon a finding that the extension is necessary for the BII Distribution Trust to complete its claims resolution and liquidating purpose. E. Section V.E.1.b The obligations of each Debtor to indemnify any person who, at any time prior to the Effective Date, served as a director, officer or employee of the Debtor, which indemnify obligation arose by reason of the person's service in any capacity or as a director, officer or employee of another corporation, partnership or other legal entity, whether provided in the applicable certificates of incorporation, by-laws, or similar constituent documents, by statutory law or by written agreement, policies or procedures of or with the Debtor, will terminate and be discharged pursuant to Section 502(e) and 1141 of the Bankruptcy Code, or otherwise, as of the Effective Date and upon the purchase of the insurance described in Section V.E.1.a. F. Section VI.E.1. The Unsecured Claims Reserve will remain in full force and effect for three years from the Effective Date. G. Section VII.A.2. Notwithstanding anything to the contrary in the Plan, the U.S. Trustee may file and prosecute objections to any Fee Claims Filed by a Professional for services rendered prior to the Effective Date. These sections are also added to the Plan: A. Section IV.D.3.e No Nondebtor Release from liability to the United States Notwithstanding any language to the contrary contained in the Disclosure Statement, Plan, and Confirmation Order, no provision will release any nondebtor, including any officer and director of the Debtors and any nondebtor included in the Released Parties, from liability to the United States of America and any of its agencies, including the SEC, in connection with any civil or criminal action brought by the governmental unit against the person. B. Section IV.D.3.f Reservation of the United States Environmental Protection Agency Nothing in the Plan or the Confirmation Order will limit any entity's liabilities to a governmental unit under applicable police and regulatory statutes or regulations as an owner or operator of property after the Effective Date. Nothing in the Plan or the Confirmation Order will release, discharge or preclude any claim or remedy of the U.S. Environmental Protection Agency or any state environmental agency that is not within the definition of a Claim as of the Effective Date. Any Claim held by the U.S. EPA or any state environmental agency on or before the Effective Date is subject in all respects to the terms of the Plan and the Confirmation Order, provided, however, that nothing in this sentence abrogates the first sentence. Moreover, any and all rights, remedies and defenses of the Debtors, the Reorganized Debtors, the Estates and any other entity under applicable environmental laws in connection with the foregoing are specifically reserved and unaffected by the Plan and the Confirmation Order. The Court finds and concludes that the Debtors' First Amended Plan of Reorganization complies with the standards for confirmation under Section 1129 of the Bankruptcy Code: A. Section 1129(a)(1): The Plan complies with each applicable provision of the Bankruptcy Code. In particular, the Plan complies with the requirements of Sections 1122 and 1123: * In accordance with Section 1122(a), Article II of the Plan classifies each Claim against and Interest in the Debtors into a class containing only substantially similar Claims or Interests; * In accordance with Section 1123(a)(1), Article II of the Plan properly classifies all Claims and Interests that require classification; * In accordance with Section 1123(a)(2), Article III of the Plan properly identifies and describes each class of Claims that is unimpaired by the Plan; * In accordance with Section 1123(a)(3), Article III of the Plan properly identifies and describes the treatment of each impaired class of Claims or Interests; * In accordance with Section 1123(a)(4), the Plan provides the same treatment for each Claim or Interest in a particular class unless the holder of the Claim or Interest agrees to less favorable treatment; * In accordance with Section 1123(a)(5), the Plan, including Article IV of the Plan, provides adequate means for its implementation; * In accordance with Section 1123(a)(6), the Reorganized Debtors' charters, bylaws or similar constituent documents contain provisions prohibiting the issuance of non-voting equity securities and provide for the appropriate distribution of voting power among all classes of equity securities authorized for issuance; and * In accordance with Section 1123(a)(7), the provisions of the Plan and Reorganized Debtors' charter, bylaws or similar constituent documents regarding the manner of selection of officers and directors of Reorganized Debtors are consistent with the interests of creditors and equity security holders and with public policy. B. Section 1129(a)(2): The Debtors have complied with all applicable provisions of the Bankruptcy Code. In particular, the Plan complies with the requirements of Sections 1125 and 1126: * On September 12, 2003, the Debtors, through their solicitation and balloting agent, Logan & Company, Inc. caused to be transmitted to the Interested Parties copies of: -- the Confirmation Hearing Notice; -- the Disclosure Statement; -- the solicitation letters of the Debtors and the Creditors' Committee; and -- with respect to holders of Claims in Classes that were entitled to vote to accept or reject the Plan, an appropriate form of Ballot and return envelope. * On September 26, 2003, the Debtors, through Logan, caused a copy of the Confirmation Notice to be published in the national editions of The Wall Street Journal and The New York Times, in accordance with the Solicitation Procedures Order; * On September 30, 2003, the Debtors filed the exhibits to the Plan and the Plan Supplement and made these documents available on the Document Website; * The Confirmation Hearing Notice provided due and proper notice of the Hearing and all relevant dates, deadlines, procedures and other information relating to the Plan and the solicitation of votes, including the Voting Deadline, the Objection Deadline, the time, date and place of the Hearing; * All Persons entitled to receive notice of the Disclosure Statement, the Plan and the Hearing have received proper, timely and adequate notice in accordance with the Solicitation Procedures Order, applicable provisions of the Bankruptcy Code and the Bankruptcy Rules and have had an opportunity to appear and be heard; * Votes with respect to the Plan were solicited in good faith and in a manner consistent with the Bankruptcy Code, the Bankruptcy Rules and the Solicitation Procedures Order, including the inclusion of letters from the Debtors and the Creditors' Committee recommending acceptance of the Plan in the Solicitation Packages. The Debtors, the Reorganized Debtors and their directors, officers, employees and professionals, acting in their capacity; the DIP Lenders and the Prepetition Lenders; and the Creditors' Committee, its members and each of their directors, officers, employees, agents, members and professionals, acting in their capacity, have acted in "good faith," within the meaning of Section 1125(e); * The Plan was voted on by all classes of impaired Claims that were entitled to vote pursuant to the Bankruptcy Code, the Bankruptcy Rules and the Solicitation Procedures Order; * Logan has made a final determination of the validity of, and tabulation with respect to, all acceptances and rejections of the Plan by holders of Claims entitled to vote on the Plan, including the amount and number of accepting and rejecting Claims in Classes 3, 4 and 5 under the Plan; * Each of Classes 3, 4 and 5 have accepted the Plan by at least two-thirds in amount and a majority in number of the Claims in the Classes actually voting; and * The determination of Logan with respect to the voting on the Plan validly and correctly sets forth the tabulation of votes, as required by the Bankruptcy Code, Bankruptcy Rules and the Solicitation Procedures Order. C. Section 1129(a)(3): The Plan is the result of extensive arm's-length negotiations and reflects substantial input from the principal constituencies having an interest in the Debtors' Reorganization Cases and, as evidenced by the overwhelming acceptance of the Plan, achieves the goal of consensual reorganization embodied by the Bankruptcy Code. D. Section 1129(a)(4): No payment for services or costs in connection with the Reorganization Cases or the Plan has been made by a Debtor other than payments that have been authorized by order of the Bankruptcy Court. E. Section 1129(a)(5): The Debtors disclosed that, on the Effective Date, the Distribution Trust Representative will become the sole director and officer of any Reorganized Debtor whose New Common Stock or New Subsidiary Equity Interests are issued to the BII Distribution Trust. F. Section 1129(a)(6): The Plan does not provide for any changes in rates that require regulatory approval of any governmental agency. G. Section 1129(a)(7): Each holder of an impaired Claim or Interest that has not accepted the Plan will, on account of the Claim or Interest, receive or retain property under the Plan having a value, as of the Effective Date, that is not less than the amount that the holder would receive or retain if the Debtors were liquidated under Chapter 7 of the Bankruptcy Code. H. Section 1129(a)(8): The Plan has not been accepted by all impaired classes of Claims and Interests because holders of Claims or Interests in Classes 6, 7 and 8 are not receiving or retaining any property under the Plan and, therefore, are deemed to have rejected the Plan. Nevertheless, the Plan is confirmable because it satisfies Section 1129(b)(1) with respect to the non-accepting classes of Claims and Interests. I. Section 1129(a)(9): The Plan provides treatment for Administrative Claims, Priority Tax Claims and Priority Claims. J. Section 1129(a)(10): The Plan has been accepted by all classes of impaired Claims that are entitled to vote on the Plan, including Classes 3, 4 and 5, determined without including any acceptance of the Plan by any insider. K. Section 1129(a)(11): Confirmation of the Plan is not likely to be followed by the liquidation or the need for the further financial reorganization of the Debtors. L. Section 1129(a)(12): The Plan provides for the payment of all fees payable under Section 1930 of the Judicial Procedures Code by the Debtors on the Effective Date or as soon as practicable. After the Effective Date and until the Reorganization Cases are closed, converted or dismissed, the Plan provides for the payment of all the fees as they become due and payable. M. Section 1129(a)(13): There are no retiree benefits to be continued by the Debtors as to any current or former employees. Thus, Section 1129(a)(13) is inapplicable to the Reorganization Cases. Accordingly, Judge Newsome confirmed the Debtors' First Amended Joint Plan of Reorganization on October 30, 2003. The Court also overruled any objections or responses to the confirmation of the Plan and reservations of rights that have not been withdrawn, waived or settled. Furthermore, Judge Newsome approved: (a) the modifications to the Plan; (b) the settlements under the Plan in all respects; (c) the Plan Releases in their entirety; (d) the Plan discharge provision and the termination of interests; (e) the release and discharge of Liens provisions; (f) the implementation of the WLR Purchase Agreement; (g) the creation and implementation of the BII Distribution Trust, the execution and terms of the BII Distribution Trust Agreement, and the appointment and authority of the Distribution Trust Representative; (h) the provisions regarding Executory Contracts and Unexpired Leases; and (i) the substantive consolidation of the Debtors solely for the purpose of implementing the Plan. (Burlington Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., 609/392-0900) CAMBRIDGE RESEARCH: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Cambridge Research Associates, Inc. Space 1430 Spring Hill Road Suite 200 McLean, Virginia 22102 Bankruptcy Case No.: 03-14952 Type of Business: The Debtor provides technology consulting to the private and government sectors. Chapter 11 Petition Date: October 30, 2003 Court: Eastern District of Virginia (Alexandria) Debtor's Counsel: Kevin M. O'Donnell, Esq. Henry, Henry, O'Donnell & Dahnke, PC 4103 Chain Bridge Road Suite 100 Fairfax, VA 22030 Tel: 703-273-1900 Fax: 703-273-6884 Total Assets: $1,000,000 Total Debts: $6,211,348 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Action Capital Corporation $2,469,829 230 Peachtree Street, NW Suite 810 Atlanta, GA 30303 Winthrop Resources/ Judgment entered $627,208 Wells Fargo & Company P.O. Box 650 Hopkins, MN 55343-0650 Internal Revenue Service $548,544 Philadelphia, PA 19255 CESC Tysons Dulles Plaza Judgment entered $455,343 Estate Services P.O. Box 642006 Pittsburgh, PA 15264-2006 Thomas McInerney $135,198 Harris Corporation Judgment entered $120,000 ARC Science Simulations Open account $100,000 Dell Marketing, L.P. Judgment entered $93,968 Virginia Dept. of Taxation $69,394 United Healthcare Open account $67,077 Canterbury Resources, Inc. Open account $50,289 Stephen Seipel Salary owed $48,417 Trigon/Blue Cross Open account $46,942 Blue Shield Bosque Technologies, Inc. Open account $44,471 Donaldson Beard Salary owed $42,704 Lockheed Martin Tactical Open account $44,250 Logistics Management Open account $37,014 Institute Russell Fenner Salary owed $39,139 Tsai-Chia Chou Salary owed $34,721 CDW Computer Center, Inc. Judgment entered $32,542 CANBRAS: Inks Pacts to Sell Brazilian Operations to Horizon ----------------------------------------------------------- Canbras Communications Corp. (TSX.CBC) released results for the third quarter ended September 30, 2003. (All subsequent amounts are expressed in Canadian dollars, unless specified otherwise). Renato Ferreira, President and CEO of the Canbras Group, stated, "On October 8, 2003 Canbras announced that it had signed agreements for the sale of all of its broadband communications operations in Brazil, and that closing of the sale transactions was subject to certain conditions including the obtaining of the requisite approval of Canbras' shareholders and of all required Brazilian regulatory agencies, as well as the approval of Canbras' bank lending syndicates. We expect that the closing conditions will be met over the next several months and that the sale transactions will close during the first quarter of 2004." BCI has informed Canbras that BCI has entered into an agreement with Horizon Cablevision do Brasil S.A., to vote its 76.6% majority stake in Canbras in favor of the Horizon sale transaction. As a result of the signing of the definitive agreements to sell substantially all assets of the Corporation, Canbras recorded, at the end of the third quarter of 2003, a $42.9 million write-down of the carrying value of its long lived assets, which also includes a provision for estimated cost of disposal. Upon closing of the sale transactions, the Corporation will charge to income foreign exchange losses previously deferred and included in the foreign currency translation adjustment account in the shareholders' equity section of the balance sheet. Had closing of the sale transactions occurred on September 30, 2003, the total charge to income would have been $93.6 million. The total amount of the loss to be recorded on the sale transactions will fluctuate with operating results and foreign exchange movements between September 30, 2003 and the date of closing of the sale transactions. Mr. Ferreira added: "The strong performance of Canbras' operations during the first nine month of this year played an important role in the Corporation's ability to reach an agreement to sell its broadband communications operations in Brazil and maximize shareholder value. While cable subscriber levels remain relatively stable from the beginning of the year, EBITDA for the first nine months of 2003 has experienced solid growth of approximately 64% over the same period a year ago." Operating Results Review Third Quarter 2003 versus third Quarter 2002 Revenue for the third quarter of 2003 was $16.3 million, an increase of 10.2% over the third quarter of 2002. The increase was primarily a result of price increases and cable and access subscriber growth, partially offset by a 7% devaluation of the average translation rate of Brazilian reais into Canadian dollars relative to the third quarter of 2002. In Brazilian reais, revenue for the third quarter of 2003 increased by approximately 18% over the third quarter of 2002. EBITDA (earnings before interest, taxes, depreciation, amortization and foreign exchange) reached $5.9 million in the third quarter of 2003, up from $3.7 million a year ago. This increase was a result of higher revenues as well as lower cost of service and operating expenses mainly due to the weaker foreign exchange translation rate of the Brazilian real. The Corporation recorded a net loss of $42.2 million in the quarter, compared to a net loss of $1.7 million in the third quarter of 2002. The higher net loss in the quarter is attributed to the $42.9 million write-down of the carrying value of Canbras' long-lived assets as a result of the signing of definitive agreements to sell all of the Corporations' broadband communications operations in Brazil. At September 30, 2003, Canbras' balance sheet shows a working capital deficit of about CDN$7 million, while net capitalization dwindled to about CDN$29 million from about CDN$118 million nine months ago. Year-to-Date September 2003 versus Year-to Date September 2002 Revenue for the nine months ended September 30, 2003 was $45.3 million, down 6.6% over the same period of the previous year. This decrease was a result of a 31% devaluation of the average translation rate of Brazilian reais into Canadian dollars relative to the nine month period ended September 30, 2002, partially offset by price increases and cable and access subscriber growth. In Brazilian reais, revenue for the first nine months of 2003 increased by more than 21% over the same period of 2002. EBITDA for the nine months ended September 30, 2003 reached $13.9 million, up from $8.5 million a year ago. This increase was the result of lower operating expenses and cost of service mainly due to the weaker foreign exchange translation rate of the Brazilian real. The net loss for the nine months ended September 30, 2003 was $38.6 million, compared to a net loss of $6.5 million for the same period the previous year. The higher net loss is primarily attributable to the $42.9 million write-down of the carrying value of long-lived assets recorded in the third quarter of 2003, partially offset by lower depreciation and amortization expenses as a result of the change in the functional currency of the Corporation's Brazilian subsidiaries and the increased EBITDA and a foreign exchange gain on the US dollar denominated debt due to a 17% appreciation relative to December 31, 2002 in the Brazilian real compared to the US dollar. Interest expenses were lower in the first nine months of 2003 compared to the first nine months of 2002 as a result of the purchase by the Corporation of US$9.25 million in notes issued under Canbras TVA's US-denominated credit facility from a group of banks during the first quarter of 2002 and the additional debt repayments made during 2003. Capital expenditures for the nine months ended September 30, 2003 were $3.9 million compared to $8.2 million in the comparable period of 2002. This decrease was mainly due to lower subscriber additions. During the first nine months of 2003, cash increased by $4.6 million as cash provided by operating activities exceeded (i) capital expenditures of $3.9 million, (ii) a $3.1 million debt repayment and (iii) cash used for discontinued operations of $0.9 million. Also during the first nine months of 2003, the Canbras Group sold $0.6 million of materials held for future capital expenditures. Canbras, through the Canbras Group of companies, is a leading broadband communications services provider in Brazil, offering cable television, high speed Internet access and data transmission services in Greater Sao Paulo and surrounding areas, and cable TV services in the State of Paran . Canbras Communications Corp.'s common shares are listed on the Toronto Stock Exchange under the trading symbol CBC. Visit its Web site at http://www.canbras.ca CENTERPOINT ENERGY: Unit Issues $160MM of Senior Unsecured Notes ---------------------------------------------------------------- CenterPoint Energy, Inc. (NYSE: CNP) announced that its natural gas distribution, pipelines and gathering operations subsidiary, CenterPoint Energy Resources Corp., issued $160 million principal amount of senior unsecured notes in a placement with institutions under Rule 144A. The senior unsecured notes have a coupon rate of 5.95 percent and will be due on Jan. 15, 2014. CERC accepted $140 million aggregate principal amount of CERC's 6.375 percent Term Enhanced ReMarketable Securities due in November and $1.25 million as consideration for the notes. CERC retired the TERMS and used the remaining proceeds to finance costs of issuance and for general corporate purposes. The securities have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration under that Act. CenterPoint Energy, Inc., headquartered in Houston, Texas, is a domestic energy delivery company that includes electric transmission and distribution, natural gas distribution and sales, interstate pipeline and gathering operations, and more than 14,000 megawatts of power generation in Texas. The company serves nearly five million customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Missouri, Oklahoma, and Texas. Assets total approximately $20 billion. CenterPoint Energy became the new holding company for the regulated operations of the former Reliant Energy, Incorporated in August 2002. With more than 11,000 employees, CenterPoint Energy and its predecessor companies have been in business for more than 130 years. For more information, visit the Web site at http://www.CenterPointEnergy.com * * * As reported in Troubled Company Reporter's March 5, 2003 edition, Fitch Ratings affirmed the outstanding credit ratings of CenterPoint Energy, Inc., and its subsidiaries CenterPoint Energy Houston Electric LLC and CenterPoint Energy Resources Corp. The Rating Outlook for all three companies remains Negative. The following ratings were affirmed by Fitch: CenterPoint Energy, Inc. -- Senior unsecured debt 'BBB-'; -- Unsecured pollution control bonds 'BBB-'; -- Trust originated preferred securities 'BB+'; -- Zero premium exchange notes 'BB+'. CenterPoint Energy Houston Electric, LLC -- First mortgage bonds 'BBB+'; -- $1.3 billion secured term loan 'BBB'. CenterPoint Energy Resources Corp. -- Senior unsecured notes and debentures 'BBB'; -- Convertible preferred securities 'BBB-'. CEPHALON INC: Inks Definitive Merger Pact with CIMA LABS INC. ------------------------------------------------------------- Cephalon, Inc. (Nasdaq: CEPH) and CIMA LABS INC. (Nasdaq: CIMA) have signed a definitive merger agreement under which Cephalon will acquire all the outstanding common shares of CIMA for $34 per share in cash. The total value of the transaction is approximately $515 million, or $397 million net of CIMA's cash and cash equivalents. The agreement was unanimously approved by the boards of directors of both companies and requires CIMA stockholder approval as well as customary regulatory approvals. The merger is expected to close in the first quarter of 2004. CIMA will become a wholly owned subsidiary of Cephalon. The acquisition of CIMA -- a leader in the field of drug delivery technology -- will add a growing business to Cephalon, already one of the fastest growing biopharmaceutical companies. CIMA also offers Cephalon an opportunity to develop additional proprietary products using CIMA's innovative oral drug delivery technologies, including OraVescent(R). CIMA is developing an OraVescent form of fentanyl, which, if approved, would be a valuable product for the Cephalon pain care sales force. "Combining CIMA's innovative delivery technologies together with our clinical development, regulatory, and sales and marketing experience will create tremendous new opportunities for Cephalon," said Frank Baldino Jr., Chairman and CEO of Cephalon. Baldino said that Cephalon intends to encourage the growth of CIMA's core business of developing and manufacturing orally disintegrating tablets and to supplement its technology portfolio with Cephalon's own drug delivery assets, which were acquired in other mergers and acquisitions completed in the past 36 months. Steven B. Ratoff, Chairman and Interim CEO of CIMA, said: "The merger with Cephalon provides a significant and immediate return to CIMA shareholders and is in the long-term best interests of CIMA employees and partners. We look forward to working with the Cephalon team to expand our leadership in ODT technology and accelerate the commercialization of our proprietary OraVescent fentanyl product." Cephalon has approximately 1,400 employees at locations in the United States and Europe, including corporate headquarters in West Chester, Pennsylvania, and manufacturing sites in Salt Lake City, Utah, and in France. CIMA has approximately 275 employees in Eden Prairie and Brooklyn Park, Minnesota. Once the transaction closes, Baldino said he anticipates that CIMA and Cephalon could be integrated in a timely and seamless manner, and that Cephalon expects to maintain both of CIMA's Minnesota facilities. JP Morgan acted as financial advisor to Cephalon in this transaction. Deutsche Bank Securities Inc. acted as financial advisor to CIMA. Concurrent with the announcement of this definitive merger agreement, CIMA notified aaiPharma (Nasdaq: AAII) that it has terminated its August 5, 2003 merger agreement with aaiPharma and has paid the applicable break-up fee to aaiPharma. CIMA will file a proxy statement with the Securities and Exchange Commission for submission to its stockholders for use in connection with a special meeting of stockholders that will be held for the purpose of approving the merger. The proxy statement will fully describe the terms of the merger agreement and should be carefully reviewed by CIMA stockholders. Founded in 1987, Cephalon, Inc. (S&P, B+ Corporate Credit Rating, Positive) is an international biopharmaceutical company dedicated to the discovery, development and marketing of innovative products to treat sleep and neurological disorders, cancer and pain. Cephalon currently employs approximately 1,400 people in the United States and Europe. U.S. sites include the company's headquarters in West Chester, Pennsylvania, and offices and manufacturing facilities in Salt Lake City, Utah. Cephalon's major European offices are located in Guildford, England, Martinsried, Germany, and at Maisons-Alfort, France. The company currently markets three proprietary products in the United States: PROVIGIL, GABITRIL(R) (tiagabine hydrochloride) and ACTIQ(R) (oral transmucosal fentanyl citrate) [C-II] and more than 20 products internationally. Further information about Cephalon and full prescribing information on its U.S. products is available at http://www.cephalon.com CIMA develops and manufactures prescription and over-the-counter products based upon its proprietary, orally disintegrating drug delivery technologies, OraSolv(R) and DuraSolv(R). Based on these technologies, an active drug ingredient, which the company frequently taste-masks, is formulated into a new, orally disintegrating dosage form that dissolves quickly in the mouth without chewing or the need for water. CIMA's business involves a dual operating strategy. The company develops and manufactures orally disintegrating versions of drugs for pharmaceutical company partners for whom CIMA currently produces three branded prescription pharmaceuticals and three over-the-counter brands. CIMA is also developing proprietary products utilizing its orally disintegrating technologies, as well as its new OraVescent(R) enhanced absorption, transmucosal drug delivery system. Further information about CIMA is available at http://www.cimalabs.com CHARTER COMMS: Units Plan $500 Million Senior Debt Issue -------------------------------------------------------- Charter Communications, Inc. (Nasdaq:CHTR) announced that its subsidiaries, CCO Holdings, LLC and CCO Holdings Capital Corp. intend to offer Senior Notes due 2013 for estimated proceeds of $500 million in a private transaction. The net proceeds of this proposed issuance will be used to repay indebtedness under the revolving credit facilities of the Company's subsidiaries and for other general corporate purposes. The Notes will be sold to qualified institutional buyers in reliance on Rule 144A and outside the United States to non-U.S. persons in reliance on Regulation S. The Notes will not be registered under the Securities Act of 1933, as amended (the Securities Act), and, unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The Company said that, subject to market conditions, it anticipated that the sale would be completed within the next week. Charter Communications, A Wired World Company(TM), is the nation's third-largest broadband communications company. Charter's Western Division Operations serve some 1.1 million customers in five states, including California, Nevada, Oregon, Washington, and Idaho. Charter provides a full range of advanced broadband services to the home, including cable television on an advanced digital video programming platform via Charter Digital Cable(R) brand and high-speed Internet access marketed under the Charter Pipeline(R) brand. Commercial high-speed data, video and Internet solutions are provided under the Charter Business Networks(R) brand. Advertising sales and production services are sold under the Charter Media(R) brand. More information about Charter can be found at http://www.charter.com * * * As reported in Troubled Company Reporter's October 2, 2003 edition, Standard & Poor's Ratings Services assigned its CCC- rating to the $1.6 billion 10.25% senior notes due 2010 of CCH II, LLC and CCH II Capital Corp., both of which are indirect subsidiaries of cable system operator Charter Communications Inc. (CCC+/Developing/--). The notes were issued in privately negotiated transactions in exchange for $609 million principal amount of convertible debt at Charter Communications Inc., and $698 million principal amount of senior notes and about $560 million in accreted principal amount of senior discount notes debt at intermediate holding company Charter Communications Holdings, LLC. The notes are currently not registered, but the company has agreed to exchange the notes for identical registered securities at a future date. All outstanding ratings on Charter were affirmed. The outlook is developing. CONSECO FINANCE: Mark Sheperd Withdraws $2-Million Claim -------------------------------------------------------- Mark Sheperd of Deephaven, Minnesota, is the former Executive Vice President of Conseco Finance Corporation. Mr. Sheperd filed Claim No. 49675-002680 for $2,033,339: Description Amount ----------- ------ Claims from D&O Loan Program Fraud $535,739 Employment Law Claim 1,497,600 According to Mark D. Wisser, Esq., at Anthony, Ostlund & Baer, in Minneapolis, Minnesota, Mr. Sheperd determined to avoid the expense and uncertainty of litigation or arbitration and has elected to withdraw his claims. (Conseco Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service, Inc., 609/392-0900) CONTINENTAL AIRLINES: October 2003 Traffic Slides-Up by 3.1% ------------------------------------------------------------ Continental Airlines (NYSE: CAL) (S&P, B Corporate Credit Rating, Stable Outlook) reported an October 2003 systemwide mainline load factor of 74.0 percent, an October record and 4.6 points above last year's October load factor. In addition, the airline had a record October domestic mainline load factor of 74.4 percent, 4.3 points above October 2002, and an international mainline load factor of 73.4 percent, 5.1 points above October 2002. During the month, Continental recorded a U.S. Department of Transportation on-time arrival rate of 88.2 percent and a systemwide completion factor of 99.8 percent. In October 2003, Continental flew 4.9 billion mainline revenue passenger miles (RPMs) and 6.6 billion mainline available seat miles (ASMs) systemwide, resulting in a traffic increase of 3.1 percent and a capacity decrease of 3.3 percent as compared to October 2002. Domestic mainline traffic was 3.0 billion RPMs in October 2003, up 2.5 percent from October 2002, and domestic mainline capacity was 4.0 billion ASMs, down 3.5 percent from October 2002. Mainline October 2003 passenger revenue per available seat mile (RASM) is estimated to have increased between 3.5 and 4.5 percent compared to October 2002. For September 2003, RASM increased 5.3 percent as compared to September 2002. Continental's regional operations (Continental Express) set a record October load factor of 70.3 percent, 7.0 points above last year's October load factor. Regional RPMs were 551.2 million and regional ASMs were 784.3 million in October 2003, resulting in a traffic increase of 58.6 percent and a capacity increase of 43.0 percent versus October 2002. COVANTA ENERGY: Court Approves Proposed Duff & Phelps Agreement --------------------------------------------------------------- Covanta Energy Corporation and its debtor-affiliates obtained the Court's approval of a letter agreement with Duff & Phelps, LLC, providing that Covanta will indemnify D&P and hold it harmless as the firm provides financial advisory services to U.S. Trust Company, N.A. To recall, the D&P Agreement provides that: (1) D&P will be engaged as independent financial advisor to the ESOP Fiduciary and provide U.S. Trust with a written opinion and supporting analysis of the ESOP; (2) Covanta will furnish, or use its best efforts to cause to be furnished, to D&P all reasonably requested data and information concerning Covanta and all other data, material and information as D&P shall reasonably request; (3) D&P will maintain the confidentiality of all nonpublic information relating to Covanta that D&P receives or develops during the course of its engagement; and (4) Covanta agrees to pay D&P these fees to D&P for its financial services: (a) $100,000 upon execution of the D&P Agreement; and (b) $100,000 upon delivery of the Opinion; (5) Covanta will indemnify and hold harmless D&P for any and all losses, claims, damages, expenses, costs or liabilities, including reasonable attorneys fees, arising in any manner in connection with the provision of services under the D&P Agreement, unless they resulted from bad- faith, self-dealing, breach of fiduciary duty (if any), gross negligence or willful misconduct of D&P; and (6) In the event that the Court does not enter an order authorizing Covanta's entry into the indemnification provisions of the D&P Agreement on or before September 17, 2003, D&P may terminate the D&P Agreement. In the event of the termination, D&P will not be required to refund to the Company the first $100,000 payment and will be entitled to reasonable fees and expenses incurred by D&P in excess of $100,000, subject to the $200,000 aggregate cap. (Covanta Bankruptcy News, Issue No. 39; Bankruptcy Creditors' Service, Inc., 609/392-0900) CRYOLIFE: Resolves Insurance Coverage Dispute on a $10MM Policy --------------------------------------------------------------- CryoLife, Inc. (NYSE: CRY) and an insurer have mutually agreed to resolve their coverage dispute on a $10 million policy previously issued to CryoLife, representing the last layer of insurance in place for the 2002-2003 insurance policy year. The full amount of this policy will be placed in escrow for CryoLife to use, together with other funds provided by the Company and another insurer, for the purpose of defending and resolving certain products liability litigation. CryoLife previously announced that this insurance company indicated that it would cover certain liability cases from the 2002-2003 policy year and intended to exclude certain other cases that would have potentially reduced the amount of funds available overall to settle the cases. Founded in 1984, CryoLife, Inc. is a leader in the processing and distribution of implantable living human tissues for use in cardiovascular and vascular surgeries throughout the United States and Canada. The Company's BioGlue(R) Surgical Adhesive is FDA approved as an adjunct to sutures and staples for use in adult patients in open surgical repair of large vessels, and is CE marked in the European Community and approved in Canada for use in soft tissue repair, and approved in Australia for use in vascular and pulmonary sealing and repair. The Company also manufactures the SynerGraft(R) Vascular Graft, which is CE marked for distribution within the European Community. For additional information about the company, visit CryoLife's Web site: http://www.cryolife.com * * * Liquidity and Capital Resources In its Form 10-Q filed with the Securities and Exchange Commission, CryoLife Inc., reported: Overall Trend in Liquidity and Capital Resources "The Company expects its liquidity to continue to decrease significantly over the next twelve months due to 1) the anticipated decrease in preservation revenues as compared to preservation revenues prior to the FDA Order as a result of reported tissue infections, the FDA Order, and associated adverse publicity, 2) the increase in cost of human tissue preservation services as a percent of revenue as a result of lower tissue processing volumes and changes in processing methods, which have increased the cost of processing human tissue and 3) an expected use of cash due to the increased costs relating to the defense and resolution of lawsuits and legal and professional costs relating to the ongoing FDA compliance and the anticipated required Term Loan pay off during 2003. The Company believes that anticipated revenue generation, expense management, savings resulting from the reduction in the number of employees in September 2002 necessitated by the reduction in revenues, and the Company's existing cash and marketable securities will enable the Company to meet its liquidity needs through at least June 30, 2004. In addition, the Company has recorded $9.0 million related to the potential expense of resolving current product liability claims in excess of insurance coverage. The $9.0 million accrual is reflective of settlement costs related to outstanding lawsuits, and does not reflect actual settlement arrangements or judgments, including punitive damages, which may be assessed by the courts. The $9.0 million accrual is not a cash reserve. Should expenses related to the accrual be incurred, the expenses would have to be paid from insurance proceeds and liquid assets, if available. The Company has called a meeting with the plaintiffs' attorneys to determine the feasibility of obtaining a global settlement on outstanding claims in order to substantially reduce the potential cash payout related to these accruals and is currently evaluating all of its alternatives in connection with resolving the dispute with its upper layer excess carrier concerning the restrictions on the matters it has excluded from coverage. If the Company is unsuccessful in arranging settlements of product liability claims for an amount substantially below the amount accrued, there may not be sufficient insurance coverage and liquid assets to meet these obligations, even if the Company satisfactorily resolves the restrictions on the upper layer excess insurance coverage. However, if the Company is unable to settle the outstanding claims for amounts within its ability to pay and one or more of the product liability lawsuits in which the Company is a defendant should be tried during this period with a substantial verdict rendered in favor of the plaintiff(s), there can be no assurance that such verdict(s) would not exceed the Company's available insurance coverage and liquid assets. The Company's product liability insurance policies do not include coverage for any punitive damages that may be assessed at trial. There is a possibility that significant punitive damages could be assessed in one or more lawsuits which would have to be paid out of the liquid assets of the Company, if available. "In addition, the Company has recorded $7.5 million for estimated costs of unreported product liability claims related to services performed and products sold prior to June 30, 2003. The $7.5 million accrual is not a cash reserve. The timing of the actual payment of the expense related to the accrual is dependent on when and if claims are asserted. Should expenses related to the accrual be incurred, the expenses would have to be paid from insurance proceeds and liquid assets, if available. Since amounts expensed are estimates, the actual amounts required could vary significantly. "The Company's long term liquidity and capital requirements will depend upon numerous factors, including the Company's ability to return to the level of demand for its tissue services that existed prior to the FDA Order, the outcome of litigation against the Company, the timing of and amount required to resolve the product liability claims, the resolution of the dispute with its upper excess product liability insurance carrier, the ability to arrange and fund a global settlement of outstanding claims for an amount substantially below the amount of the accrual, and the Company's ability to find suitable funding sources to replace the Term Loan. The Company may require additional financing or seek to raise additional funds through bank facilities, debt or equity offerings, or other sources of capital to meet liquidity and capital requirements beyond June 30, 2004. Additional funds may not be available when needed or on terms acceptable to the Company, which could have a material adverse effect on the Company's business, financial condition, results of operations, and cash flows. These are factors that indicate that the Company may be unable to continue operations. "On August 4, 2003 the Company approved a buyback of employee stock options with an exercise price of $23 or greater. The option buyback was approved for an aggregate of up to $350,000 using a Black Scholes valuation model. The Company anticipates making the offer to employees in third quarter of 2003. Net Working Capital "At June 30, 2003 net working capital (current assets of $52.6 million less current liabilities of $31.8 million) was $20.8 million, with a current ratio (current assets divided by current liabilities) of 2 to 1, compared to net working capital of $37.6 million, with a current ratio of 3 to 1 at December 31, 2002. The Company's primary capital requirements historically arose from general working capital needs, capital expenditures for facilities and equipment, and funding of research and development projects. The Company has historically funded these requirements through bank credit facilities, cash generated by operations, and equity offerings. Based on the decrease in revenues resulting from the adverse publicity surrounding the FDA Order, FDA Warning Letter, and reported tissue infections, and the anticipated costs to be paid by the Company in resolving pending litigation, the Company expects that its cash used in operating activities will continue to be high and will increase to the extent funds are needed to defend and resolve litigation, and that net working capital will significantly decrease. "The Company's Term Loan, of which the principal balance was $4.5 million as of August 4, 2003, contains certain restrictive covenants including, but not limited to, maintenance of certain financial ratios and a minimum tangible net worth requirement, and the requirement that no materially adverse event has occurred. The lender has notified the Company that the FDA Order have had a material adverse effect on the Company that constitutes an event of default. Additionally, as of June 30, 2003, the Company is in violation of the debt coverage ratio and net worth financial covenants. Therefore, all amounts due under the Term Loan as of June 30, 2003 are reflected as a current liability on the Summary Consolidated Balance Sheets. The Company and the lender are currently in the process of negotiating specific terms of a forbearance agreement, which, if entered into, would increase the interest rate charged on the Term Loan effective August 1, 2003 to LIBOR plus 4% (5.32% at June 30, 2003), accelerate the principal payments on the Term Loan by requiring a balloon payment to pay off the outstanding balance by October 31, 2003, and cause the Company to pay a $12,000 modification fee and the lender's attorneys costs, which have yet to be determined. As of August 4, 2003 the Company has sufficient cash and cash equivalents to pay the remaining outstanding balance of the Term Loan. Since the lender is in the process of accelerating the payment of the debt, the above chart shows payment of the outstanding balance of the Term Loan during 2003. "In the quarter ended June 30, 2003 the Company entered into two agreements to finance $2.9 million in insurance premiums associated with the yearly renewal of certain of the Company's insurance policies. The amount financed accrues interest at a 3.75% rate and is payable in equal monthly payments through January 2004. As of August 4, 2003 the outstanding balance of the agreements was $1.3 million. "Due to cross default provisions included in the Company's debt agreements, as of June 30, 2003 the Company was in default of certain capital lease agreements maintained with the lender of the Term Loan. Therefore, all amounts due under these capital leases are reflected as a current liability on the Summary Consolidated Balance Sheets as of June 30, 2003." DATA TRANSMISSION: Exits Chapter 11 Restructuring Proceedings ------------------------------------------------------------- Data Transmission Network Corporation, a privately held information services company, announced that its "prepackaged" Plan of Reorganization has become effective and, accordingly, the Company's financial restructuring has been successfully completed. On September 25, 2003, Data Transmission Network Corporation announced that it had reached a definitive agreement with its secured lenders on a restructuring plan that would significantly reduce the company's outstanding debt and provide it with greater financial flexibility. The Company's Plan of Reorganization was confirmed by the U.S. Bankruptcy Court for the Southern District of New York on October 20, 2003, paving the way for the Company and certain related subsidiaries and affiliates to emerge from the Chapter 11 reorganization process on October 31, 2003. As expected, this process had no impact on the Company's operations. The Company's business units have continued to operate as normal, vendors are being paid in full on regular terms for all goods and services provided to the Company both before and after the filing, and there has been no change in data transmission services or customer support. Now that it has emerged from Chapter 11, Data Transmission Network Corporation has a stronger balance sheet, greater financial flexibility and the ability to invest more of its free cash flow in growing its operating businesses rather than servicing debt. All of the Company's business units will continue to operate as usual. Data Transmission Network Corporation is a leading business-to- business information services and electronic communications company. With approximately 125,000 subscribers located primarily throughout the United States, the company's business units serve business and professional users in specific markets that have a critical business need for the data they provide, including agriculture, commodities trading, refined fuels, aviation and public safety. DEL GLOBAL TECHNOLOGIES: Gets Waiver of Loan Covenant Violation --------------------------------------------------------------- Del Global Technologies Corp. (DGTC) announced operating results for its Fiscal 2003 fourth quarter and fiscal year ended August 2, 2003. Walter F. Schneider, President and Chief Executive Officer of Del Global, commented, "While annual sales were flat compared to last year, sales in the fourth quarter of Fiscal 2003 rebounded when compared to the immediately preceding third quarter. This sales recovery was evident in both the Medical Systems business and RFI Corporation, and was partially offset by decreases in the High Voltage business. Regarding the Medical Systems Group, during Fiscal 2003 we entered new markets, expanded our product portfolio and continued to integrate our worldwide business. On the Power Conversion side, we continued to focus on high growth markets, and accelerated our design-to-market cycle." Thomas V. Gilboy, Chief Financial Officer, stated, "Each of the four quarters in Fiscal 2003 also produced sequential increases in consolidated gross margin percentages. This improvement is due, in part, to the positive impact of our previously announced restructuring initiatives and increased efficiencies resulting from more favorable materials costs." FISCAL 2003 ANNUAL AND Q4 RESULTS Consolidated net sales for Fiscal 2003 remained stable at $98.6 million versus $98.8 million last year. Medical Systems Group sales increased 2% to $56.1 million from Fiscal 2002, due primarily to increased domestic sales and favorable exchange rates on international sales made in Euros. Excluding the approximately $5.2 million favorable exchange rate effect, sales at the Medical Systems Group for Fiscal 2003 would have declined by approximately $4.1 million if the Euro exchange rate had been similar to last year's rate. Sales at the Power Conversion Group decreased 3% to $42.5 million from last year, with the biggest declines caused by a previously announced shift to in-house production by a large customer and a decline in sales to the semiconductor capital equipment market. The decline in these customers and markets at the Power Conversion Group was offset by an $8 million increase in high voltage EDS ("Explosive Detection Systems") sales. The discontinued business from that one large customer had produced lower margins, and was not consistent with Del Global's long-term strategy. Sales in the fourth quarter of Fiscal 2003 declined to $23.7 million from $27.6 million in the same period last year, due primarily to the aforementioned shift by a large customer to in- house production and fewer shipments of EDS units in this year's fourth quarter. Fiscal 2003 fourth quarter sales increased 2.9% from the immediately preceding third quarter, reflecting a recovery in sales at the Medical Systems Group and RFI, partially offset by lower High Voltage sales. Consolidated gross margin for Fiscal 2003 increased to 21% from 19% last year. Margins at the Power Conversion Group increased to 21% from 16% last year, due primarily to improved efficiencies resulting from more favorable materials costs, and the shift in sales mix in connection with the discontinued customer mentioned above. Gross margin at the Medical Systems Group remained stable at 22%, despite higher sales, due to the higher realized margins in Fiscal 2002 on sales of previously written-off product. Consolidated gross margin in the Fiscal 2003 fourth quarter of 22% was similar to the 22% reported in the immediately preceding third quarter of Fiscal 2003. Margins at the Power Conversion Group in the fourth quarter of Fiscal 2003 increased to 26% from 22% in the third quarter of Fiscal 2003, reflecting favorable inventory adjustments and the reorganization cost savings. Margins at the Medical Systems Group in the fourth quarter of Fiscal 2003 declined to 20% versus the third quarter's 22%. In the Medical Systems Group in the fourth quarter, more favorable overhead absorption from higher sales was offset by a decline in labor and overhead costs being capitalized in inventory, because in our US operations we have been improving our inventory turns and operating with lower inventory balances. Fiscal 2003 selling, general and administrative expenses included $1.9 million in unusually high legal and accounting fees, and approximately $1 million of costs (including legal costs) associated with the proxy contest. The majority of these proxy expenses were realized in the Fiscal 2003 fourth quarter. S,G& A expenses for Fiscal 2002 included approximately $3.7 million in unusually high accounting fees. Excluding the unusually high legal fees and costs incurred in Fiscal 2003, S,G &A expenses increased by approximately $1.5 million from Fiscal 2002. The operating loss for Fiscal 2003 decreased to $5.9 million from $14.0 million last year. The Medical Systems Group reported an operating profit of $1.0 million, while the Power Conversion Group reported an operating loss of $2.5 million. The operating loss for Fiscal 2002 included $7.7 million in litigation settlement costs versus $2.1 million of such costs in Fiscal 2003, as well as higher facilities reorganization costs. The operating loss for the fourth quarter of Fiscal 2003 narrowed significantly to $796,000 from $5.6 million in the same period last year. This is attributable to higher consolidated gross margin in the Fiscal 2003 fourth quarter, $0 in litigation settlement costs versus $735,000 in the prior year period and $1.2 million in facilities reorganization costs in Fiscal 2002 fourth quarter versus just $82,000 in the Fiscal 2003 period. The net loss for Fiscal 2003 increased to $15 million, or $1.45 per diluted share, versus a net loss of $12.0 million, or $1.38 per diluted share, last year. The net loss for the fourth quarter of Fiscal 2003 decreased to $4.3 million, or $.41 per diluted share, versus a net loss of $5.1 million, or $.50 per diluted share, for the same period last year. The net loss for the Fiscal 2003 year and fourth quarter included income tax provisions of $8.2 million and $3.3 million, respectively, versus income tax benefits of $3.2 million and $163,000 in the respective prior year periods. This increase reflects the establishment in Fiscal 2003 of approximately $8 million in deferred tax asset valuation allowances, which included an additional allowance of $3.3 million established in the Fiscal 2003 fourth quarter. MEXICO AND VIETNAM CONTRACT AWARDS Del Global also announced that its Medical Systems Group received an $8.5 million order from Instituto Mexicano del Seguro Social for 22 "Mercury" remote controlled digital Radiographic / Fluoroscopic imaging systems, and certain installation and training services. This $8.5 million order is part of a $9.8 million systems integration and service contract that was arranged by Del Global and its agent in Mexico, Suministro para uso Medico Y Hospitalario S.A. de C.V. This agreement is Del Global's largest one-time award in Mexico. I.M.S.S., part of the Government of Mexico, operates the majority of the country's hospital system and provides a variety of health care services to workers and their families, the sick, the invalid and elderly populations. This contract is part of a broad upgrade of diagnostic capabilities throughout Mexico's social security healthcare system. The R/F systems will be manufactured in Milan at Del Global's 80%- owned subsidiary Villa Sistemi Medicali S.p.A. Del Global currently expects to have these systems delivered and installed during Fiscal 2004. The Mercury R/F imaging system allows users to perform a variety of radiological examinations, including: tomography; chest radiography; gastroenterology; gynecology; angiography; and fluoroscopy. The systems purchased under this agreement will be installed by SMH in twenty facilities throughout Mexico. The Medical Systems Group also received a $1.0 million order from the government of Vietnam to supply various radiographic and remote R/F systems. The systems are funded in part by the European Community Malaria project and are scheduled for delivery during Fiscal 2004. These systems will also be manufactured in Milan at the Villa Sistemi Medicali facility. Mr. Schneider commented, "We believe that these agreements reflect the quality and reputation of our products, as well as our continued focus on increasing international sales. The scope of supply of these contracts is similar to recent projects that we have undertaken in other parts of the world. We believe that these agreements demonstrate the synergies that we are creating within Del Global, as we were able to leverage Villa's product portfolio through our global sales force." LITIGATION UPDATE The Company is continuing its discussions with the United States Department of Defense regarding a global settlement of the DoD's previously disclosed investigation into certain past business practices at RFI. As previously announced, Del Global recorded a charge of approximately $2.3 million during the third quarter of Fiscal 2003, representing its estimate of the low end of a range of potential fines and restitution, plus estimated legal and professional fees. In October 2003, based on discussions with the U. S. Government, the Company was advised that the U.S. Government is currently seeking up to approximately $5 million in the fines and restitution portion of any comprehensive settlement. The Company is continuing to negotiate with the U.S. Government regarding a comprehensive settlement, including the amount of such fines. There can be no assurance that such a settlement will be reached and, even if reached, that the ultimate fines and outcome of any settlement will not vary significantly from the Company's original estimate and expectations. In addition, such a settlement, even on the most favorable terms, may have a material adverse impact on the Company's financial condition, liquidity and operations. Del Global is also in ongoing discussions with the Enforcement Division of the SEC to settle claims regarding an investigation commenced by the SEC on December 11, 2000 in connection with the restatement of previously issued financial statements filed by the Company's former management, specifically for the Fiscal years 1997 through the third quarter of Fiscal 2000. As previously announced, Del Global reached an agreement in principle with the SEC regarding this matter. The terms of the settlement include a penalty of up to $400,000, and an injunction against future violations of the antifraud, periodic reporting, books and records and internal accounting control provisions of the federal securities law. The settlement is subject to, amongst other things, review by the Commission and court approval. Del Global recorded a charge of $685,000 in the fourth quarter of its Fiscal 2002 year related to this matter, which included associated legal costs. If we are not able to reach an acceptable settlement with the SEC, we may incur substantial additional penalties and fines. BACKLOG Consolidated backlog at August 2, 2003 was $26.3 million versus a backlog of approximately $31.0 million at August 3, 2002. Backlog at the Power Conversion Group declined to $17.7 million from $23.7 million, due to higher EDS shipments from backlog in the beginning of Fiscal 2003. Backlog at the Medical Systems Group increased to $8.6 million from $7.6 million at August 3, 2002. FINANCIAL CONDITION Del Global's balance sheet at August 2, 2003 reflected working capital of $13.6 million, shareholders' equity of $23 million and a stated book value of $2.22 per share. As of August 2, 2003, Del Global had approximately $3.8 million of borrowing available under its U.S. revolving credit facility. As of August 2, 2003, the Company was compliant with all of the covenants of this facility except for the tangible net worth covenant of its U.S. credit facility. In October 2003, Del Global obtained a waiver of non- compliance of this covenant and amended certain other covenants for future periods. INVESTOR CONFERENCE CALL TODAY Suzanne M. Hopgood, Walter F. Schneider and Thomas V. Gilboy will host a conference call today at 4:30 P.M. Eastern Time to discuss this news release. The telephone number to join this conference call is (973) 582-2783. A taped replay of the call will be available through 5:00 P.M. Eastern Time, Monday, November 10, 2003. Please dial (973) 341-3080 and enter the number 4275805 to hear the taped replay. In addition, the conference call will be broadcast live over the Internet via the Webcast section of Del Global's web site at http://www.delglobal.com To listen to the live call on the Internet, go to the web site at least 15 minutes early to register, download and install any necessary software. If you are unable to participate in the live call, the conference call will be archived and can be accessed on Del Global's website for approximately five business days. Del Global Technologies Corp. is primarily engaged in the design, manufacture and marketing of cost-effective medical imaging and diagnostic systems consisting of stationary and portable x-ray systems, radiographic/fluoroscopic systems, dental imaging systems and proprietary high-voltage power conversion subsystems for medical and other critical industrial applications. Industrial applications for which Del Global supplies power subsystems include airport explosives detection, analytical instrumentation, semiconductor capital equipment and energy exploration. DEX MEDIA: S&P Revises Low-B Ratings Outlook to Negative -------------------------------------------------------- Standard & Poor's Ratings Services revised its outlooks on Dex Media East LLC and Dex Media West LLC to negative from stable. In addition, Standard & Poor's affirmed its 'BB-' corporate credit ratings on both companies. At the same time, Standard & Poor's assigned its 'BB-' corporate credit rating and negative outlook to Dex Media Inc., the holding company parent of Dex East and Dex West. In addition, 'B' senior unsecured debt ratings were assigned to Dex Media's planned $500 million notes due 2013 and $250 million (gross proceeds) discount notes due 2013. Proceeds will be used to pay a dividend to the company's equity holders, The Carlyle Group and affiliates and Welsh, Carson, Anderson & Stowe and affiliates. Through its operating subsidiaries Dex East and Dex West, the Denver, Colorado-headquartered Dex Media is the nation's fourth largest telephone directory publisher. The company has about $6.2 billion of pro forma consolidated debt outstanding. "The outlook revision reflects a change in Dex Media's financial strategy with this transaction that increases the financial risk of Dex Media, Dex East, and Dex West," said Standard & Poor's credit analyst Donald Wong. "This also heightens the uncertainty over what type of capital structure Dex Media's equity holders would like to maintain in the intermediate term," added Mr. Wong. Ratings for all three entities are based on the consolidated credit quality of Dex Media. This reflects Dex Media's holding company status with no direct operations and the significant additional debt that will have to be serviced by the cash flows of Dex East and Dex West. In addition, while Dex East and Dex West have different financial profiles with separate financing structures, the operations of both entities are managed as one company with the same senior management team. DUNDEE: S&P Affirms BB+ Long-Term Counterparty Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services said it affirmed its 'BB+' long-term counterparty credit and senior unsecured debt ratings on Toronto, Ontario-based merchant banker and financial services company Dundee Bancorp Inc. At the same time, the outlook was revised to stable from negative. "The company has benefited from improved operating earnings in its wealth management division, positive results in the corporate portfolio, and the continued success with the integration of Canadian First Financial Group Inc. and StrategicNova Inc., which were acquired in 2002," said Standard & Poor's credit analyst Donald Chu. The outlook revision also reflects the success of Dundee Realty Corp.'s conversion to a REIT, which was successful in surfacing the underlying value of this investment and which creates a steady stream of cash flow, and the improving conditions of the global equity markets, which continue to provide an updraft to both the merchant banking and wealth management businesses. The ratings on Dundee reflect the quality of the company's equity base, which is made up entirely of common equity; the quality of its merchant banking portfolio; and the position of its wealth management franchise in the Canadian market. Dundee is a merchant banking and financial services company. Dundee Wealth Management Inc. (unrated; 84%-owned by Dundee) is engaged in the provision of a broad range of financial products and services to individuals, institutions, and corporations. The credit risks facing Dundee include its exposure to the equity markets through its real estate, merchant banking, and wealth management businesses, the high industry and single-name concentrations in its corporate portfolio, the small (2%) market share held and lack of scale within the Canadian mutual fund sector, and the increasing level of competition in the wealth management sector, which continues to place pressure on asset growth and margins. The stable outlook reflects Standard & Poor's expectation that the company will be able to maintain its position in the Canadian wealth management sector, and that management will continue to reallocate capital from more cyclical and volatile merchant banking investments into more stable financial services holdings. Pressure could be placed on the outlook if management chooses to leverage up its balance sheet with future acquisitions. ELIZABETH ARDEN: Consolidates US Warehouse Ops. in Roanoke, Va. --------------------------------------------------------------- Elizabeth Arden, Inc. (NASDAQ: RDEN), a global prestige fragrance and beauty products company, is consolidating its U.S. distribution operations into a single facility in Roanoke, Virginia by March 2004. The consolidation is designed to reduce supply chain, logistics and corporate overhead expenses and to improve working capital efficiency by centralizing the U.S. logistics and fulfillment functions into one facility. The single transportation hub is expected to result in lower freight expenses as well as lower labor, insurance and other overhead expenses. This consolidation is part of the continuous effort by the Company to rationalize its cost structure globally since acquiring the Elizabeth Arden business in January 2001. Since that time, the Company has streamlined its facilities, including closing its Edison, New Jersey warehouse facility in 2002, and reduced its fixed overhead structure, while, at the same time, increasing its operating capacity. To accomplish the consolidation, the Company is planning on transitioning all of its U.S. distribution and warehouse operations to its existing facility in Roanoke, Virginia by March 2004. During the past year, Elizabeth Arden expanded and upgraded the facility, adding over 130,000 square feet, which more than tripled storage capacity and reduced the need for overflow warehouse space. Along with these improvements, the Company has been enhancing its materials handling equipment and enterprise application systems to provide for higher throughput capacity, more rapid response times, improved customer service and increased inventory turns. The physical expansion of the Roanoke facility was completed in September 2003 and was operational during the peak shipping month of October. The equipment upgrade will be completed in February 2004. Both projects were financed with minimal capital outlays. As part of this restructuring initiative, the Company will close and sell its Miami Lakes distribution center and relocate its Miami Lakes corporate offices to another location in the area. The proceeds from the sale of the building are expected to be more than adequate to repay the mortgage and all of the one-time severance and restructuring costs related to the consolidation. To ensure no disruption of customer service, the Company will continue shipping activities from the Miami Lakes facility until January 31, 2004 and move any remaining inventory to the Roanoke location following that date. Once the inventory is consolidated into one facility, it is expected that there will be a reduction in the total level of inventory required to support the business. In connection with the facility consolidation, the Company expects to realize estimated savings of approximately $2 million to $4 million during the fiscal year ended January 31, 2005, and approximately $4 million to $6 million on an annual basis for the fiscal years thereafter. The U.S. workforce will be reduced by approximately 10%. The Company expects to incur pre-tax charges of approximately $3.5 million related to severance benefits, including severance pay, outplacement services and health insurance assistance for affected employees, training and relocation costs that will be incurred by March 2004, with approximately $2.0 million to $2.5 million expected to be incurred in the fourth quarter of fiscal 2004. The consolidation will have no impact on the financial results for the third quarter of fiscal 2004. The Company intends to provide further details on the expense savings and charges when it reports its third quarter results in December 2003. Scott Beattie, Chairman and Chief Executive Officer of Elizabeth Arden, Inc., commented, "While there is a clear economic rationale for consolidating our distribution facilities, it was an extremely difficult decision given the dedication and support of our people in Miami Lakes. Many of the affected employees have been instrumental in building our business and we are forever grateful for their dedication and service. We hope that the measures we have put in place to provide assistance will help them transition to their next opportunity. Mr. Beattie added, "We also want to stress that Elizabeth Arden remains committed to South Florida, as it will remain the home of our corporate headquarters. In addition to accommodating our corporate offices, our South Florida location will include certain sales, marketing, finance and other corporate functions." Elizabeth Arden (S&P, B+ Corporate Credit and Senior Secured Debt Ratings, Stable Outlook) is a global prestige fragrance and beauty products company. The Company's portfolio of leading brands includes the fragrance brands Red Door, Red Door Revealed, Elizabeth Arden green tea, 5th Avenue, ardenbeauty, Elizabeth Taylor's White Diamonds, Passion, Forever Elizabeth and Gardenia, White Shoulders, Geoffrey Beene's Grey Flannel, Halston, Halston Z-14, Unbound, PS Fine Cologne for Men, Design and Wings; the Elizabeth Arden skin care line, including Ceramides and Eight Hour Cream; and the Elizabeth Arden cosmetics line. EMERGENCY FILTRATION: Auditors Express Going Concern Uncertainty ---------------------------------------------------------------- Emergency Filtration Products Inc. is in the business of producing masks and filters for medical devices that are designed to reduce the possibility of transmission of contagious diseases. The Company is also a distributor of a blood clotting device for surgery, trauma and burn wound management. The most valuable asset of the Company is its intellectual property and technology. The Company has acquired the rights to certain intellectual property, which property includes title to the patent on a component of an emergency CPR assistance device, called a dual-filtered rotary isolation valve and the rights to certain other technologies related to environmental masks. Rights pertaining thereto include the right to maintain, sell and improve the devices, and to license those rights. Emergency Filtration Products Inc. has incurred significant losses, which have resulted in an accumulated deficit of $7,833,002 at June 30, 2003. The Company has raised approximately $1,011,000 through the issuance of common shares under an SB-2 registration during the six months ended June 30, 2003. These funds have been used to retire outstanding debt, to acquire additional molds and equipment to be used in operations, and for ongoing working capital. Nevertheless, the Company's ability to continue as a going concern may be dependent upon the success of management's ongoing business plans which include a) continued product development efforts, and b) continuing efforts to increase its product sales in the U.S. and internationally. For example, during April 2003, the Company entered into an agreement with a Taiwan based company whereby the Contractor will manufacture, distribute, market and sell the Company's new environmental mask to the Asian markets. It is the intent of management to create additional revenues through the development and sales of its emergency respiration equipment and to rely upon additional equity financing if required to sustain operations until revenues are adequate to cover the costs. The Contractor has just recently begun production of the environmental masks discussed above and the Company expects sales to increase during the third quarter of 2003 as a result of the Contractor's marketing and sales in the Asian market. Management can offer no assurance with respect to its ability to create additional revenues, obtain additional equity financing or execute its long-term business plan. Since inception, revenues have not been adequate to cover operating expenses and the Company has reported a loss in each of its years of existence. To date, the Company has funded itself by way of a series of private equity placements. As of the quarter ended June 30, 2003, the Company had offset its accumulated deficit in this manner. As stated above, the Company has incurred significant losses, which have resulted in an accumulated deficit of $7,833,002 at June 30, 2003. Accordingly, in their report on the Company's latest annual financial statements, its independent auditors expressed substantial doubt about the Company's ability to continue as a going concern. ENRON: Enron Equipment's Case Summary & 20 Unsecured Creditors -------------------------------------------------------------- Debtor: Enron Equipment Procurement Company 1400 Smith Street Houston, Texas 77002 Bankruptcy Case No.: 03-16882 Type of Business: The Debtor is an affiliate of Enron Corp. Chapter 11 Petition Date: October 31, 2003 Court: Southern District of New York (Manhattan) Judge: Arthur J. Gonzalez Debtors' Counsel: Brian S. Rosen, Esq. Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, NY 10153 Tel: 212-310-8602 Fax: 212-310-8007 Estimated Assets: More than $100 Million Estimated Debts: More than $100 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Compagnie Generale De Trade $106,738 Logistique National Engineering Lab. Trade $71,843 Jean Pierre Mabilat Trade $37,731 Gary Lee Allen Trade $34,794 The Fritz Companies Trade $34,092 Sunbelt Supply Trade $24,303 Solar Turbines Trade $22,460 Power Support Trade $17,607 Maughan Engineering Trade $15,923 Hugh Chisholm Trade $12,000 Wilson Valve Specialties Trade $7,030 Vibranalysis Engineering Trade $6,015 Corp John L Wortham & Son LLP Trade $8,648 Impact Register Inc Trade $5,220 Wilson Industries Trade $4,644 Acme Truck Lines Trade $3,834 Corestaff Services Trade $3,364 Toromont Process Systems Trade $3,100 Inc. Chase Manhattan Bank Trade $2,691 Offshore Technical Trade $1,800 Services Inc ENRON CORP: Employee Committee Wants to Expand Scope and Duties --------------------------------------------------------------- Pursuant to Sections 105(a), 1103(c) and 1109(b) of the Bankruptcy Code, the Official Employee-Related Issues Committee, appointed in the Enron Debtors' Chapter 11 cases, asks the Court to expand its scope and mandate and grant it standing and authority to commence certain avoidance actions on behalf of the Debtors' estates. James A. Beldner, Esq., at Kronish Lieb Weiner & Hellman LLP, in New York, relates that within 40 days prior to the Petition Date, Enron accelerated payments totaling over $53,000,000 under two deferred compensation plans -- the Payments -- to 126 current and former Enron Corp. employees -- the Defendants -- who had submitted accelerated withdrawal requests in the days and weeks immediately preceding Enron's bankruptcy. Enron Examiner, Neal Batson, analyzed and concluded in this Second Interim Report that the Payments were avoidable preferences pursuant to Section 547 of the Bankruptcy Code. Mr. Beldner explains that Enron had two active non-qualified deferred compensation plans in effect in 2001: -- the Enron Corp. 1994 Deferred Plan, Restated as of October 6, 2000; and -- the Enron Expat Services, Inc. 1998 Deferred Plan Restated as of September 1, 2001. The Plans allowed key employees and outside directors to defer current earnings and thereby defer taxes and earn tax-free returns on the amounts deferred. Both Plans provided that the compensation so deferred and owed to the participating employees would be classified as an unsecured obligation of the company, payable from its general assets. As a result, the participants were general unsecured creditors of Enron. Plan participants could elect to either a lump sum payout or periodic annual payouts after retirement, disability, death or termination. The Plan also allows participants to elect an accelerated distribution, subject to the consent of the Plan Committee. To ensure compliance with Internal Revenue Service guidelines, any participant who elected this acceleration feature would be subject to a substantial penalty, and would not be eligible to participate in the Plans for a period of time. Accordingly, Enron's Plans provided that a participant who elected an accelerated distribution would forfeit 10% of his or her account balance and would be suspended from participating in the Plans for 36 months. Mr. Beldner reports that in late October 2001, Enron's Human Resource Department began receiving requests for accelerated distributions from Plan participants. According to the Plans' provisions, for the participants to receive the requested distributions, three events needed to occur: (1) the Plan Committee needed to approve the distributions; (2) a form acceptable to the Plan Committee needed to be developed; and (3) the Plan Committee needed to approve the forms. The Plan provides that no more than three persons should be appointed in the committee. But, Mr. Beldner notes, no one had ever been appointed to the Plan Committee in the eight years the Plans had been in place. To rectify this, Lawrence "Greg" Whalley, who was at the time the President and Chief Operating Officer of Enron Corp., agreed to be appointed to the Plan Committee on October 29, 2001 for both Plans. Between October 30, 2001 and November 30, 2001, the Plan Committee was presented with forms from 211 participants requesting distribution that aggregated $86,000,000. In the last 32-day period, 126 approved participants received distributions of $53,135,993 in cash. That total number and rate of these requests are in stark contrast to when Enron was perceived to be financially healthy, when, upon information and belief, no participant had ever requested an accelerated distribution and any request would have been an extraordinary event. Pursuant to the Examiner's Report, all the elements of Section 547(b) have been met: -- the transfers were made to Enron creditors; -- the transfers were made on account of an antecedent debt; -- Enron is presumed to be insolvent within 90 days prior to the Petition Date; and -- because the participants' claims were general unsecured claims, the participants received more that they would have received in a Chapter 7 case and the transfer had not been made. Moreover, the Examiner's Report contends that: (a) there does not appear to be any facts supporting any affirmative defenses in favor of the transferees; (b) the distributions were not conditioned on continued employment with Enron and as a result, the "new value" and "contemporaneous exchange" defenses do not appear to be applicable; (c) the ordinary course of business defense is inapplicable; Mr. Beldner informs the Court that the Employees' Committee made numerous attempts to obtain the Debtors' consent to commence and prosecute the Deferred Compensation Avoidance Actions to no avail. The Employees' Committee also consulting the Official Committee of Unsecured Creditors and it agreed that: (i) colorable avoidance actions like these should be commenced by an estate representative; and (ii) the Debtors were not the appropriate representatives to prosecute these actions given their former-employer relationship to the potential Defendants. On April 16, 2003, the Employees' Committee asked the Debtors to consent the commencement of Deferred Compensation Avoidance Actions. However, the Debtors denied the Employee Committee's request. Consequently, the Employee Committee asked the Debtors to confer standing upon it. The Debtors still yet to respond to this request. Mr. Beldner contends that the Debtors' action in connection with the Deferred Compensation Avoidance Actions have been dilatory and non-committal. One can only speculate the reason why the Debtors have not yet pursued these actions. However, the Employees' Committee believes that the Debtors will not pursue these potential Defendants. "The Debtors should not be allowed to delay the commencement of these actions any longer... to protect those officers and directors that were preferred over other employees," Mr. Beldner remarks. These actions should have been commenced by this time and the Debtors have unjustifiably delayed in bringing these actions. Thus, Mr. Beldner argues that the Employees' Committee's request should be granted, especially that: (a) the Defendants were preferred over all unsecured creditors, including other deferred compensation applicants, which to date, $435,000,000 is still owed to them; (b) commencement of the Deferred Compensation Avoidance Actions is necessary since the Debtors have unjustifiably delayed the commencement of these actions; and (c) the Creditors' Committee fully supports the Employees' Committee's proposal. The Employees' Committee, upon consultation with the Creditors' Committee, agreed to these fee reimbursement procedure for the Employees' Committee counsel, KLWH: (a) Legal Fees. Legal Fees are to be paid on an hourly basis by the estate in accordance with the existing fee and expense application process at 50% of KLWH's usual hourly rates with the balance of the accrued and allowed hourly time charges paid from proceeds recovered -- the Percentage Recovery. KLWH's Percentage Recovery on the unpaid 50% portion of its accrued and allowed hourly charges, will, on an individual recovery, not exceed 25% of the recovery. KLWH will endeavor to delegate mi-level associates with partner supervision in the prosecution prior to trial. All fees will be subject to the existing fee application process; and (b) Expenses. Out of pocket expenses will be paid by the estate in the ordinary course through the existing expense application process. (Enron Bankruptcy News, Issue No. 85; Bankruptcy Creditors' Service, Inc., 609/392-0900) FALCON PRODUCTS: Takes Additional Steps to Streamline Operations ---------------------------------------------------------------- Falcon Products, Inc. (NYSE: FCP), a leading manufacturer of commercial furniture, announced the next step in its plans to streamline its operations. Through a combination of operating improvements in all of its plants and expansion of strategic sourcing partnerships, the Company will close its Canton, Mississippi facility and reallocate production across its current supply base. The initiatives announced today are expected to reduce the Company's fixed cost structure and improve operating performance. In addition, these actions are expected to provide greater levels of customer service and reduce required inventory levels. The Company expects to complete the plant closing and production transfers by the second quarter of fiscal 2004. In making the announcement, Franklin A. Jacobs, Chairman and Chief Executive Officer, stated, "We have significantly improved our cost structure in the last few years. The actions announced today reflect our continued focus on improving our cost structure and streamlining our operations. These actions will build upon our previously announced decision to close our manufacturing facility in Zacatecas, Mexico and are a key component of our ongoing plans to reduce costs and improve customer service." David L. Morley, President and Chief Operating Officer, commented, "The primary focus of our restructuring efforts will be to better leverage the Company's existing manufacturing competencies and improve operating efficiencies. As we consolidate manufacturing operations into our existing facilities, we will improve our operational focus, deepen the skills of our people, provide greater levels of customer service, and improve our cost structure. We believe these actions will position the Company for improved financial performance, even in a slow economic environment." Falcon Products, Inc. is the leader in the commercial furniture markets it serves, with well-known brands, the largest manufacturing base and the largest sales force. Falcon and its subsidiaries design, manufacture and market products for the hospitality and lodging, food service, office, healthcare and education segments of the commercial furniture market. Falcon, headquartered in St. Louis, Missouri, currently operates 10 manufacturing facilities throughout the world and has approximately 2,600 employees. * * * As previously reported in Troubled Company Reporter, Moody's Investors Service lowered its ratings on Falcon Products, Inc. Outlook for the said ratings is negative. Rating Action To From * $30 Million Senior Secured Revolving Term Facility due 2005 B3 B1 * $44 Million Senior Secured Amortizing Term Facility due 2005 B3 B1 * $100 Million 11 3/8% Senior Subordinated Notes due 2009 Caa2 B3 * Senior Implied Rating B3 B1 * Senior Unsecured Issuer Rating Caa1 B2 FASTNET CORP: Inks Pact to Sell All Assets to US LEC for $6.8MM --------------------------------------------------------------- FASTNET Corporation (OTC Bulletin Board: FSSTQ) has entered into an Asset Purchase Agreement to sell substantially all of its assets, including its Broadband and Dial Up Internet Access, Co- location, and Managed Hosting business units, to US LEC Corp., for an estimated $6.8 million, which is subject to adjustment and includes the assumption of certain liabilities. The transaction does not include assets associated with FASTNET's Web Development and Wireless Access businesses. The completion of the transaction is contingent on the satisfaction of a number of conditions, including certain requirements under the Bankruptcy Code and approval of the United States Bankruptcy Court for the Eastern District of Pennsylvania. The transaction contemplated by the Asset Purchase Agreement with US LEC Corp. is expected to be completed in December, 2003. R. Barry Borden, CEO of FASTNET, commented, "This agreement marks a major step forward in setting the stage for the conclusion of FASTNET's bankruptcy process and provides the assurance of continuity of service to our customers. We are excited that we have been able to maintain our original stated goal of resolving these issues within a six-month period. We are particularly pleased that we have fulfilled our commitment to our customers to bring top quality companies such as US LEC into the process to maintain the high degree of customer service and satisfaction that our loyal FASTNET customers have come to expect." Headquartered in Charlotte, North Carolina, US LEC (Nasdaq: CLEC) is a super-regional telecommunications carrier providing voice, data and Internet services throughout 14 Southeast and Mid- Atlantic states. With more than 900 employees, US LEC serves over 75 markets and more than 14,000 medium and large-sized business customers. FASTNET (NASDAQ:FSST) provides high-performance, dedicated and reliable broadband services to businesses that need to drive productivity, profitability and customer service via the Internet. Through private, redundant peering arrangements with the national IP backbone carriers, FASTNET delivers customer data through the fastest, least congested route to enhance reliability, improve performance, and eliminate downtime. Founded in 1994, FASTNET provides a complete suite of solutions for dedicated and broadband access, Internet security and data backup as well as wireless Internet connectivity, VPN design and implementation, managed hosting, Web site and e-commerce development and co-location. FASTNET filed for Chapter 11 protection on June 10, 2003, in the U.S. Bankruptcy Court for the Eastern District of Pennsylvania (Reading) (Bankr. Case No. 03-23143). FEDERAL-MOGUL: Reaches Consensual Agreement on Chapter 11 Plan -------------------------------------------------------------- Federal-Mogul Corporation (OTC Bulletin Board: FDMLQ) has reached an agreement with the Unsecured Creditors Committee, the Asbestos Claimants Committee, the Future Asbestos Claimants Representative, the Agent for the Prepetition Bank Lenders and the Equity Committee on an amended plan of reorganization that will be filed with the U.S. Bankruptcy Court in Delaware in its Chapter 11 reorganization case. The agreement on the amended plan is consistent with the principal terms of the plan filed with the Bankruptcy Court in March 2003. The next steps for the Co-Proponents will be completion of the documentation of the amended plan and related disclosure statement and the joint filing of those documents with the Bankruptcy Court. The Bankruptcy Court has scheduled a hearing to approve the disclosure statement prior to year-end. Chip McClure, chief executive officer and president of Federal- Mogul stated: "We will continue to work collaboratively with the other Co-Proponents to emerge from Chapter 11 in mid-2004. Under the amended plan, Federal-Mogul will emerge with an appropriate capital structure and protected from asbestos liability by a permanent channeling injunction, and will continue to be a leading original equipment and aftermarket global automotive supplier." Federal-Mogul is a global supplier of automotive components, sub- systems, modules and systems serving the world's original equipment manufacturers and the aftermarket. The company utilizes its engineering and materials expertise, proprietary technology, manufacturing skill, distribution flexibility and marketing power to deliver products, brands and services of value to its customers. Federal-Mogul is focused on the globalization of its teams, products and processes to bring greater opportunities for its customers and employees, and value to its constituents. Headquartered in Southfield, Michigan, Federal-Mogul was founded in Detroit in 1899 and today employs more than 46,000 people in 24 countries. On October 1, 2001, Federal-Mogul decided to separate its asbestos liabilities from its true operating potential by voluntarily filing for financial restructuring under Chapter 11 of the Bankruptcy Code in the United States and Administration in the United Kingdom. For more information on Federal-Mogul, visit the company's Web site at http://www.federal-mogul.com FFP OPERATING: Section 341(a) Meeting to Convene on December 10 --------------------------------------------------------------- The United States Trustee will convene a meeting of FFP Operating Partners, LP and its debtor-affiliates' creditors on December 10, 2003, 10:00 a.m., at Fritz G. Lanham Federal Building, Taylor Street, Room 7A24, Fort Worth, Texas 76102. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Headquartered in Fort Worth, Texas, FFP Operating Partners, LP, together with other subsidiaries of FFP Partners, L.P., owns and operates convenience stores, truck stops, and self-service motor fuel outlets over a twelve state area. The Company filed for chapter 11 protection on October 23, 2003 (Bankr. N.D. Tex. Case No. 03-90171). Mark Joseph Petrocchi, Esq., at Colvin and Petrocchi represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed over $10 million in assets and debts of over $50 million. GAUNTLET ENERGY: Selling Seismic Assets & Methane Rights for $8MM ----------------------------------------------------------------- Gauntlet Energy Corporation provides the following update in respect of the process undertaken to maximize value for its various stakeholders. Gauntlet reports the completion of the sale of certain seismic assets and the sale of certain coal bed methane rights for cash proceeds of approximately $7.8 million, substantially all of which will be used to reduce the outstanding secured debt of the principal lender of the Corporation to approximately $38 million. In addition, Ketch Resources Ltd. has agreed to subscribe for First Preferred Shares, Series A of Gauntlet, which upon completion of the plan will represent all of the issued and outstanding common shares, for $44.6 million, as adjusted for working capital. The completion of the transaction with Ketch is subject to numerous conditions including that a plan under the Companies Creditors' Arrangement Act which is satisfactory to Ketch, is approved by the Secured Creditors, the Unsecured Creditors and the Court and that ongoing legal actions are resolved to Ketch's satisfaction. Gauntlet has also agreed to cease solicitations of any sales of further assets of the Corporation or the sale of the Corporation. The completion of the asset sales and the agreement with Ketch provides additional certainty that a plan under the CCAA will be proposed to the Secured Creditors and Unsecured Creditors of Gauntlet in November 2003, with creditors meetings to be held in early December and the effective date of the plan to be in mid December. The Corporation continues to deal with legal actions and there remains no assurance that any plan under the CCAA will be completed or, if completed, what the level of participation of the Secured Creditors and Unsecured Creditors will be under any such plan. The Corporation does not anticipate paying any amount to the holders of common shares. The Corporation is continuing to engage in discussions with various stakeholders. FirstEnergy Capital Corp. is acting as financial advisor to Gauntlet in connection with these transactions. GAUNTLET ENERGY: Ketch Will Buy Bulk of Business for $44.6 Million ------------------------------------------------------------------ Ketch Resources Ltd. has entered into an agreement with Gauntlet Energy Corporation, approved by Gauntlet's Board of Directors, which will result in Gauntlet becoming a wholly-owned subsidiary of Ketch for total consideration of $44.6 million pursuant to a proposed Plan of Arrangement under the Companies Creditors' Arrangement Act. The Plan contemplates the completion of a series of transactions affecting certain creditors of Gauntlet as well as a reorganization of the share capital of Gauntlet and is subject to numerous conditions including that the Plan is satisfactory to Ketch, is approved by the Secured and Unsecured Creditors of Gauntlet and the Court of Queen's Bench of Alberta (the "Court") and that ongoing legal actions are resolved to Ketch's satisfaction. The Plan will be filed with the Court in mid November, 2003 and mailed to affected creditors of Gauntlet immediately thereafter. Meetings of affected creditors to approve the Plan will be held in Calgary in early December, 2003. Upon approval by the affected creditors, an application will be made to the Court to approve the Plan. Following Court approval, it is anticipated that the Plan would become effective by mid December, 2003. The Plan does not provide existing shareholders of Gauntlet with any consideration nor are such shareholders being asked to vote on the Plan. The assets to be acquired by Ketch are located in northwest and central Alberta and have production of approximately 1,650 barrels of oil equivalent ("boe") per day approximately 96% of which is natural gas. Reserves, as evaluated by Ketch and independently reviewed by Ketch's third party reserves consultants, are currently estimated at 2,990 mboe of proved and 3,680 mboe of established reserves. In addition, Ketch will acquire 125,500 net acres of undeveloped land valued at $9.4 million, 2,400 kilometers of 2D seismic and 440 square kilometers of 3D seismic data. Upon completion of the Plan, Gauntlet will have approximately $80 million of quality tax pools. Following completion of the Plan, Ketch may seek to dispose of certain of the acquired assets of Gauntlet for $15 to $20 million. Mr. Grant B. Fagerheim, President and CEO of Ketch stated, "The acquisition of Gauntlet results in Ketch expanding its growth potential while adding unhedged gas reserves at attractive acquisition parameters and is accretive on all operational and financial measures." The transaction will be effective on completion of the Plan in December 2003 and will be financed through bank lines to be provided by Ketch's existing lender. Ketch has also entered into a flow-through common share financing agreement, on a bought deal basis, with an underwriting syndicate led by Griffiths McBurney & Partners. Ketch will issue 850,000 flow-through common shares at a price of $9.25 per share for total gross proceeds of approximately $7.86 million pursuant to certain exemptions from prospectus requirements. The private placement financing is scheduled to close on or about November 20, 2003, and is subject to regulatory approval and completion of definitive documentation. The proceeds of the flow-through common share offering will be used to incur Canadian Exploration Expenses on the continued exploration of Ketch's oil and natural gas properties prior to December 31, 2004. The transaction, following completion of the Plan, the flow- through share financing and any asset sales, is expected to be approximately 10% accretive to cash flow per share. National Bank Financial Inc. is acting as financial advisor to Ketch in connection with the acquisition of Gauntlet. Ketch's common shares are listed on the Toronto Stock Exchange under the symbol KER. Ketch is a Canadian growth oriented energy company engaged in the exploration, development and production of crude oil and natural gas. Gauntlet Energy Corporation is a Calgary based junior oil and gas exploration and development company. GENSCI ORTHOBIO.: Makes Initial Settlement Payment to Osteotech --------------------------------------------------------------- Osteotech, Inc. (Nasdaq: OSTE) announced that as a result of GenSci Orthobiologics, Inc.'s recent emergence from bankruptcy and completion of its merger with IsoTis, SA, GenSci has made the initial payment of $2.5 million of the total $7.5 million due to Osteotech in connection with the settlement agreement resolving Osteotech's claims against GenSci arising out of the finding at trial that GenSci had infringed claims of certain of Osteotech's Grafton(R) DBM patents. In addition, at the same time, GenSci issued an irrevocable Letter of Credit to Osteotech to secure the balance of $5 million, which will be paid to Osteotech quarterly over a 5-year period, commencing with the quarter beginning in January, 2004. As a result of these events, Osteotech will recognize the entire amount of the settlement of $7.5 million, approximately $4.5 million after provision for income taxes, or approximately $.25 per diluted share, in the fourth quarter of 2003. Therefore, the Company also is reiterating its guidance for 2003 of revenues in the range of $94 million to $96 million and diluted net income per share of $.63 to $.67. Osteotech, Inc., headquartered in Eatontown, New Jersey, is a leading provider of human bone and bone connective tissue for transplantation and an innovator in the development and marketing of biomaterial and implant products for musculoskeletal surgery. For further information regarding Osteotech or this press release, please go to Osteotech's Web site homepage at http://www.osteotech.com GENUITY: Wants Go-Signal to Examine Verizon Under Rule 2004 ----------------------------------------------------------- The Genuity Debtors seek Judge Beatty's permission to issue a subpoena commanding Verizon Communications Inc. to produce certain documents pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure. D. Ross Martin, Esq., at Ropes & Gray, in Boston, Massachusetts, relates that before the Petition Date, the Comptroller of Public Accounts for the State of Texas began a sales and use tax audit of Genuity Networks Inc. for the audit period January 1, 1996 to June 30, 1999. The audit was commenced in response to a request by GTE Corporation, before the June 2000 merger of GTE and Bell Atlantic, creating Verizon, and the related spin-off of Genuity. The audit concerns a request for a $7,500,000 refund of use taxes that had been paid to the State of Texas by GTE Intelligent Network Services, also known as Genuity Networks Inc. and now known as Genuity Solutions Inc. The overpayment was discovered by Ryan & Company, which had been hired by GTE to perform a reverse audit on all of GTE's affiliated companies, including GTE Intelligent Network. By letter dated April 29, 2003, the auditor for the State of Texas contacted Genuity to ask for records necessary to complete the Audit and refund request. The letter informed Genuity that the requested refund would be denied unless Genuity provided the auditor with records sufficient to verify the request on or before May 30, 2003. Upon receipt of the Letter, the Debtors' counsel contacted the auditor to ask for an extension of time to produce the requested documents and to inform the auditor that any refund should be remitted to Genuity and not Verizon. Genuity also contacted Verizon to seek Verizon's assistance in gathering the documents requested by the Texas auditor. Because the Audit Period pertains to a period of time before the spin-off of Genuity from GTE, Genuity believes that the necessary documents are, or should be, in Verizon's possession as successor to GTE. Genuity was unable to obtain the requested documents by late May 2003, at which time the auditor agreed to extend Genuity's time to respond to the auditor's document request to August 31, 2003. During the next few months, Genuity contacted Verizon several times in an effort to obtain the documents necessary to complete the Audit. As of mid-August, Verizon failed to provide Genuity with any of the requested documents. The Debtors' counsel again asked for an extension of time for Genuity to produce the documents requested by the Texas auditor. The auditor again extended the deadline for Genuity to produce the documents to October 31, 2003, but indicated that it would not grant any further extensions. To date, the Debtors have obtained some of the necessary documents from Verizon. However, the Debtors still need these documents to comply with the auditor's request: (a) Soft copies of GTE Intelligent Network's billing run for each of the months in the Audit Period, from January 1, 1996 to June 30, 1999, that indicate the total sales for GTE Intelligent Network during the Audit Period; (b) The financial statements for GTE Intelligent Network for each of the months in the Audit Period; and (c) Documentation to support, by customer, sales during the Audit Period that were exempt from taxation, that is, documentation that supports a reduction from GTE Intelligent Network's gross sales to taxable sales, including exemption certificates filed by customers or billing statements containing information that indicates that the product sold was not taxable. Because the Audit could result in a $7,500,000 refund coming back into the Debtors' estate, the Debtors cannot, in keeping with their fiduciary duties to their creditors, rely on Verizon's oral representations that it has looked for the requested documents and simply cannot find them. The Debtors want Verizon to produce the documents at the offices of Ropes & Gray, LLP, at One International Place, Boston, MA, 02110 as soon as possible. Parties Stipulate Through a Court-approved stipulation, the Debtors and Verizon resolve their dispute and agree that: (a) The Debtors are authorized to serve on Verizon a subpoena seeking production of the documents; (b) In response to the subpoena, Verizon will produce any documents that are in its possession to the Debtors' counsel; and (c) Any documents that are required to be produced in electronic form will be delivered to rmartin@ropesgray.com unless the documents are too voluminous for and in a format that is not susceptible to delivery via e-mail, in which event they will be delivered in CD-R or other electronic media. (Genuity Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 609/392-0900) GEORGETOWN STEEL: Seeks to Employ Regelbrugge as Business Broker ---------------------------------------------------------------- Georgetown Steel Company, LLC is asking the U.S. Bankruptcy Court for the District of South Carolina for approval to employ Roger R. Regelbrugge as a non-exclusive business broker in connection with locating potential investors or purchasers for the Debtor's steel mill and related assets located in Georgetown, South Carolina. The Debtor points out that Mr. Regelbrugge is well qualified to assist it. Mr. Regelbrugge has extensive experience in the steel industry generally and with the Steel Mill specifically. The Debtor relate that Mr. Regelbrugge has widespread ties throughout the steel industry. At the Debtor's request, Mr. Regelbrugge also currently serves on the Debtor's board of managers. Given Regelbrugge's background, expertise, and experience both in the steel industry generally and with the Debtor and its business in particular, the Debtor believes that Mr. Regelbrugge is both well qualified and uniquely able to search out and market the Debtor's assets to his contacts in the industry in a most efficient and timely manner. Consequently, the Debtor seeks to engage Mr. Regelbrugge postpetition to provide services, including: a. compiling a list of potential candidates to acquire the operations of the Debtor; b. negotiating the sale of the Steel Mill, either its asset or stocks, as appropriate; and c. performing other related tasks as assigned by the Debtor. The Debtor believes that Mr. Regelbrugge is a "disinterested person," as such term is defined in section 101(14) of the Bankruptcy Code. Mr. Regelbrugge will be compensated in the amount of $1,000 for each day he works on the sale of the Steel Mill, or $125 an hour for anything less than a six hour day. If Mr. Regelbrugge is successful in locating a buyer for the assets or stock of the Steel Mill acceptable to the Debtor and such sale is approved by the Court, he will receive a success fee equal to 1% of the sale amount upon the closing of such approved transaction. Headquartered in Georgetown, South Carolina, Georgetown Steel Company, LLC manufactures high-carbon steel wire rod products using the Direct Reduced Iron (DRI) process. The Company filed for chapter 11 protection on October 21, 2003 (Bankr. S.C. Case No. 03-13156). Michael M. Beal, Esq., at McNair Law Firm P.A., represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of over $50 million each. GILAT SATELLITE: Will Publish Third-Quarter Results on Nov. 13 -------------------------------------------------------------- Gilat Satellite Networks Ltd. (Nasdaq:GILTF), a worldwide leader in satellite networking technology, announced its estimated results for the quarter ended September 30, 2003. The Company's regular announcement of third quarter results is scheduled for Thursday, November 13, 2003. The Company historically has not given guidance in advance of its regular announcements of quarterly results, does not expect to do so in the future, and is making this announcement solely due to its outstanding offer to exchange its 4% Convertible Subordinated Notes due 2012 for its Ordinary Shares. The expiration date for the exchange offer is 12:00 midnight, New York City time, on Monday, November 10, 2003, unless extended. The Company estimates its revenues for the quarter to be between US$43 to US$45 million. Operating loss for the quarter, which includes restructuring charges in an amount of approximately US$2 million, is estimated to be between US$12 million and US$14 million. Net loss for the quarter, which includes the restructuring charges, a gain from restructuring of debt in an amount of approximately US$5 million and other income in an amount of approximately US$1 million, is estimated to be between US$3 million to US$5 million or US$(0.23) to (0.38) per share. The Company's cash balances as of September 30, 2003 are expected to be approximately US$61 million, which reflects a decrease of approximately US$9 million during the third quarter of 2003. The cash balances are comprised of cash and cash equivalents, short- term bank deposits, short and long term restricted cash less short term bank credits and does not include restricted cash held in trustees. Gilat Satellite Networks Ltd., with its global subsidiaries Spacenet Inc., Gilat Latin America and rStar Corporation (RSTRC), is a leading provider of telecommunications solutions based on Very Small Aperture Terminal (VSAT) satellite network technology - - with nearly 400,000 VSATs shipped worldwide. Gilat, headquartered in Petah Tikva, Israel, markets the Skystar Advantage(R), DialAw@y IP(TM), FaraWay(TM), Skystar 360E(TM) and SkyBlaster(a) 360 VSAT products in more than 70 countries around the world. Gilat provides satellite-based, end-to-end enterprise networking and rural telephony solutions to customers across six continents, and markets interactive broadband data services. Gilat is a joint venture partner with SES GLOBAL, and Alcatel Space and SkyBridge LP, subsidiaries of Alcatel, in SATLYNX, a provider of two-way satellite broadband services in Europe. Skystar Advantage, Skystar 360E, DialAw@y IP and FaraWay are trademarks or registered trademarks of Gilat Satellite Networks Ltd. or its subsidiaries. Visit Gilat at http://www.gilat.com At June 30, 2003, Gilat's balance sheet shows a total shareholders' equity deficit of about $3.5 million. GINGISS GROUP: Wants More Time to File Schedules and Statements --------------------------------------------------------------- The Gingess Group, Inc., and its debtor-affiliates want more time within to file their schedules of assets and liabilities, list of equity security holders, schedules of executory contracts and unexpired leases, and statement of financial affairs as required under 11 U.S.C. Sec. 521(1). The Debtors submit that their cases are of significant size. They have potentially thousands of creditors and complex claims that may be asserted against the Debtors' estates. The Debtors operate a national chain of retail stores specializing in the rental and sale of formal wear. They operate a total of approximately 400 stores in 34 states and in Jamaica. Additionally, their employees number to 1,400 in approximately 230 company-owned stores in 13 different states. Business operations also involve hundreds of contracts, leases, licenses, and other agreements. The Debtors have a limited number of qualified staff available to perform and oversee all the necessary chapter 11 reporting obligations. The Debtors and their professionals need time to evaluate the information comprising the Schedules and Statements once this information can be compiled. Additionally, in the week prior to filing their petitions the Debtors closed approximately 31 stores. The Debtors assure the Court that they have worked and will work diligently to review their records in order to prepare the Schedules and Statements. However, pulling all the required information together is a substantial task. Based upon the sheer size of their business operations, it is virtually impossible to complete the Schedules and Statements on the deadline. Consequently, the Debtors ask the Court to give them until January 13, 2004. Headquartered in Addison, Illinois, The Gingiss Group, Inc., a national men's formal wear rental and retail company, filed for chapter 11 protection on November 3, 2003 (Bankr. Del. Case No. 03-13364). James E. O'Neill, Esq., and Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub represent the Debtors in their restructuring efforts. The Debtors listed debts of over $50 million in their petition. GLOBAL CROSSING: Inks Stipulation Rejecting Terminal Plaza Lease ---------------------------------------------------------------- On November 26, 1999, Terminal Plaza and Global Crossing Debtor IXNET, Inc. entered into a non-residential real property lease for office space at 450 Mission Street in San Francisco, California. After a careful and lengthy review, the GX Debtors determined that the Lease was not beneficial to their businesses. Accordingly, on March 25, 2003, the GX Debtors sought to reject the Lease and abandon certain personal property located in the leased premises as of the date that the GX Debtors vacated the premises. On April 8, 2003, the GX Debtors physically vacated the premises covered by the Lease and surrendered the keys to Terminal Plaza. On April 10, 2003, Terminal Plaza asserted that the GX Debtors could not reject the Lease until they paid certain postpetition expenses through the date that the Court approved an order authorizing rejection of the Lease, including payment for: -- unpaid rent; -- direct expenses; -- direct utility expenses; -- taxes, services and utilities; -- third party fees; -- construction liens; -- repairs of tenant's construction deficiencies; and -- attorneys' fees. In addition, on the same date, Terminal Plaza sought to compel the Debtors to pay postpetition expenses, which Terminal Plaza contended were in excess of $1,200,000. The Parties then negotiated in good faith to resolve the dispute. In a Court-approved stipulation, the parties agree that: (1) Pursuant to Sections 365(a) and 554(a) of the Bankruptcy Code, the GX Debtors will reject the Lease and abandon all personal property located at the premises covered by the Lease effective as of April 8, 2003; (2) Except as otherwise expressly stated, pursuant to Sections 365(d)(3) and 503(b)(1) of the Bankruptcy Code, Terminal Plaza will have an administrative expense priority claim in the GX Debtors' Chapter 11 cases for $746,310 as full and complete satisfaction of any and all postpetition charges arising under the Lease, including, among other things, rent, direct expenses, direct utility expenses, taxes, services and utilities, third party fees, mechanics' liens and attorneys' fees; (3) The GX Debtors will pay the Administrative Expense Claim to Terminal Plaza as: (i) $377,119 of the Administrative Expense Claim will be paid immediately -- the First Payment; and (ii) the remaining $369,200 -- the Second Payment of the Administrative Expense Claim -- will be paid upon the earlier to occur of: * the effective date of a plan of reorganization in the GX Debtors' Chapter 11 cases; or * the date upon which all claims asserted in the GX Debtors' Chapter 11 cases that relate to mechanics' liens filed against the premises covered by the Lease, are allowed, disallowed, withdrawn or settled. The First Payment and the Second Payment will be made by company check and will be delivered by Federal Express or another nationally recognized overnight courier service to the office of Terminal Plaza. In the event that the GX Debtors are required, as part of their claims administration process, to make distributions on account of the Mechanics' Lien Claims, the GX Debtors will be entitled to offset any and all payments from the Second Payment. For the avoidance of doubt the GX Debtors will: (i) have no set-off right against the First Payment; and (ii) in no event, be entitled to recover or disgorge any portion of the Second Payment from Terminal Plaza after it has been paid in accordance with the terms of the Stipulation. In addition, the GX Debtors will cooperate, to the extent reasonable, with Terminal Plaza in the adjudication or settlement of any proceeding between Terminal Plaza and the holder of a Mechanics' Lien Claim; (4) Terminal Plaza and the GX Debtors each reserve their rights relating to the $88,000 security deposit the GX Debtors provided prior to the Petition Date. Terminal Plaza contends that pursuant to the terms of the Lease and applicable bankruptcy and non-bankruptcy law, the security deposit secures its claims and, therefore, Terminal Plaza is under no obligation to apply the security deposit to the Administrative Expense Claim. Nothing in the Stipulation will be construed as an express or implied waiver by Terminal Plaza of its right to apply the security deposit to its prepetition claims against the GX Debtors. In the event, however, that the GX Debtors prevail in any dispute relating to the security deposit and the Bankruptcy Court directs Terminal Plaza to apply the security deposit to the Administrative Expense Claim, the GX Debtors will be entitled to offset their scheduled payments for the Administrative Expense Claim by the amount of the security deposit. If the GX Debtors have paid the full amount of the Administrative Expense Claim to Terminal Plaza, Terminal Plaza will promptly refund the amount of the security deposit to the GX Debtors; (5) Notwithstanding anything to the contrary, Terminal Plaza reserves its right to amend the proof of claim that it has filed in the GX Debtors' Chapter 11 cases to include any damage claims from the rejection of the Lease, including, but not limited to, cleanup and removal costs. The GX Debtors reserve all of their rights with respect to the proof of claim, any amendments thereto, and the underlying claims; and (6) Upon the GX Debtors' payment of the Administrative Expense Claim to Terminal Plaza, the parties will exchange mutual releases. (Global Crossing Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., 609/392-0900) GLOBAL CROSSING: Enhances IP Virtual Private Network Services ------------------------------------------------------------- Building upon its success in delivering leading IP solutions to multinational enterprises worldwide, Global Crossing announced access enhancements to its Internet protocol virtual private network service that respond to customer demand for end-to- end data, voice and video application support built upon the superior reach, throughput and reliability of the Global Crossing network. Global Crossing IP VPN Service(TM) enhancements are the latest in a series of enterprise IP service portfolio offerings that are designed to provide customers with a roadmap for convergence -- the integration of data, voice and video services securely through a single access method. This represents the second major enhancement to Global Crossing IP VPN Service, and future enhancements will continue to deliver customer benefits of increased performance, reach, interoperability, and security while contributing to a decreasing total cost of ownership. "Robust IP solutions such as Global Crossing IP VPN Service represent the delivery of real-world value to multinational corporations through the Global Crossing network," said Global Crossing CEO John Legere. With three classes of service and associated service level agreements (SLAs) that include latency, packet loss, jitter and availability, Global Crossing IP VPN Service has been enhanced to integrate Global Crossing's IP Video and Global Crossing VoIP Termination Services onto a single connection. Voice over IP (VoIP) termination service allows IP networks to interconnect, thereby enabling customers to reduce their network costs by leveraging their own VoIP network investment and extend their domestic and international service reach. The integrated IP Videoconferencing service also enables customers to hold videoconferences utilizing the IP VPN networks for exceptional image quality, reliability and cost savings. "There's a direct connection between customer experience and product and service innovation," said Anthony Christie, Global Crossing's senior vice president of offer and product management. "Customers can count on having more time to focus on their core business while Global Crossing focuses on providing secure, reliable, high-performance IP solutions." Also included in the enhanced Global Crossing IP VPN Service is digital subscriber line (DSL) access, which is available today in the United Kingdom, with worldwide availability planned for later in the year. A DSL solution can lower access costs by 30 to 40 percent over traditional local access methods. "With these latest enhancements of Global Crossing IP VPN Service, Global Crossing has engineered a compelling and differentiated hybrid solution, enabling a migration path to a pure MPLS-based IP VPN infrastructure," stated David Parks, senior analyst, The Yankee Group. "This evolution path strengthens Global Crossing's position as a global provider of next generation IP VPN services, where The Yankee Group has projected a substantial service uptake during the next 12-month period." Global Crossing IP VPN Service is supported by a global managed capability, providing full service lifecycle support including 24- hour customer service, engineering and design, equipment procurement, installation and maintenance, network monitoring, and industry-leading SLAs. Also increasing the value of Global Crossing's multi-protocol label switching (MPLS)-based IP VPN Service is network supported site-based remote access for IP VPN. Dispersed remote users and centralized small office users alike can connect to the VPN via a secure IPSec "tunnel" connection over any access method, such as cable or DSL. Authentication for remote access is performed in the Global Crossing network rather than through costly on-site equipment. Global Crossing's full portfolio of services addresses multinational enterprise requirements for internetworking solutions based on frame relay, asynchronous transfer mode (ATM) and Ethernet technologies with IP VPN locations to optimize a network's total cost of ownership. In addition, Global Crossing IP VPN Service provides the logical evolution path for enterprises using Global Crossing frame relay, ATM, or private line networks to an MPLS IP-based network without interruption. Additionally, the IP VPN service is well suited as a reliable, secure backup to other wide area networking (WAN) connections for enterprise business continuity planning. Global Crossing IP VPN Service offers multiple Classes of Service (CoS) and differentiated Quality of Service (QoS) -- basic, enhanced and premium (real-time) -- using MPLS directly over Dense Wavelength Division Multiplexing (DWDM). MPLS technology speeds the flow of data by adding a series of labels and delivering packets across a pre-determined path meeting QoS standards. Global Crossing provides telecommunications solutions over the world's first integrated global IP-based network, which reaches 27 countries and more than 200 major cities around the globe. Global Crossing serves many of the world's largest corporations, providing a full range of managed data and voice products and services. On January 28, 2002, Global Crossing Ltd. and certain of its subsidiaries (excluding Asia Global Crossing and its subsidiaries) commenced Chapter 11 cases in the United States Bankruptcy Court for the Southern District of New York (Bankruptcy Court) and coordinated proceedings in the Supreme Court of Bermuda (Bermuda Court). On the same date, the Bermuda Court granted an order appointing joint provisional liquidators with the power to oversee the continuation and reorganization of the Bermuda-incorporated companies' businesses under the control of their boards of directors and under the supervision of the Bankruptcy Court and the Bermuda Court. Additional Global Crossing subsidiaries commenced Chapter 11 cases on April 23, August 4 and August 30, 2002, with the Bermuda incorporated subsidiaries filing coordinated insolvency proceedings in the Bermuda Court. The administration of all the cases filed subsequent to Global Crossing's initial filing on January 28, 2002 has been consolidated with that of the cases commenced on January 28, 2002. Global Crossing's Plan of Reorganization, which was confirmed by the Bankruptcy Court on December 26, 2002, does not include a capital structure in which existing common or preferred equity will retain any value. On November 18, 2002, Asia Global Crossing Ltd., a majority-owned subsidiary of Global Crossing, and its subsidiary, Asia Global Crossing Development Co., commenced Chapter 11 cases in the United States Bankruptcy Court for the Southern District of New York and coordinated proceedings in the Supreme Court of Bermuda, both of which are separate from the cases of Global Crossing. Asia Global Crossing has announced that no recovery is expected for Asia Global Crossing's shareholders. Asia Netcom, a company organized by China Netcom Corporation (Hong Kong) on behalf of a consortium of investors, has acquired substantially all of Asia Global Crossing's operating subsidiaries except Pacific Crossing Ltd., a majority-owned subsidiary of Asia Global Crossing that filed separate bankruptcy proceedings on July 19, 2002. Global Crossing no longer has control of or effective ownership in any of the assets formerly operated by Asia Global Crossing. Please visit http://www.globalcrossing.comfor more information about Global Crossing. GLOBALSTAR L.P.: Proposes Uniform Asset Sale Procedures ------------------------------------------------------- Globalstar, L.P. has filed a motion with the U.S. Bankruptcy Court in Delaware to allow Globalstar to sell the company's assets and operations to a new investor in a private sale transaction. This confirms the private sale plan that Globalstar described last week as part of its announcement that ICO Global Communications (Holdings) Limited might not complete its own plan to acquire Globalstar. Globalstar will entertain offers from all interested parties received by November 10, 2003. A copy of the company's full court filing, which includes details on the sale procedures, may be found at http://www.globalstar.com/downloads/CourtFiling.pdf A hearing with the U.S. Bankruptcy Court in Delaware to approve the sale transaction has been scheduled for November 20, 2003. During the course of the current sale process, Globalstar's day- to-day business operations are continuing as usual, and the company hopes to complete the sale of its assets and services to a new investor in the near future, followed by the completion of its Chapter 11 process. GRASSLAKE HEALTHCARE: Voluntary Chapter 11 Case Summary ------------------------------------------------------- Debtor: Grasslake Healthcare Investors, L.P. 925 North Point Parkway Suite 440 Alpharetta, Georgia 30005-8893 Bankruptcy Case No.: 03-74839 Chapter 11 Petition Date: October 28, 2003 Court: Northern District of Georgia (Atlanta) Judge: Joyce Bihary Debtor's Counsel: G. Frank Nason, IV, Esq. Lamberth, Cifelli, Stokes & Stout, PA East Tower Ste 550 3343 Peachtree Rd., NE Atlanta, GA 30326 Tel: 404-262-7373 Fax: 404-262-9911 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million HAYES LEMMERZ: Resumes Operations at Huntington, Indiana, Facility ------------------------------------------------------------------ Hayes Lemmerz International, Inc. (OTC: HAYZ) announced that its foundry, machinery and finishing operations have been restarted at its Huntington, Indiana Operations. As previously announced, operations there were su spended after an October 29 accident which caused isolated damage to the Hayes Lemmerz Huntington facility. The damage was confined to the northwest corner of the building near an aluminum chip reprocessing system and did not spread to the area where wheels are produced or machined. Hayes Lemmerz' employees and contract workers started returning to work over the October 31-November 2 weekend to carry out checks to ensure safety and quality of all systems, prior to start-up. Regularly scheduled shifts commenced on Sunday evening, November 2. Hayes Lemmerz has been working closely with its customers to minimize the impact of the accident on their business activities. The Company also reported that three of its employees were injured by the accident. Of the three, one has died from his injuries, one remains hospitalized at this time and one was treated and released. Curtis Clawson, Hayes Lemmerz' Chairman and CEO, said, "We are saddened by the injuries and loss of life resulting from this accident. We extend our deepest sympathy to the families, friends, and co-workers of the employees affected by this accident." The Company said that it continues to work with government agencies to determine the cause of the accident. Hayes Lemmerz International, Inc. is a world leading global supplier of automotive and commercial highway wheels, brakes, powertrain, suspension, structural and other lightweight components. The Company has 43 plants, 3 joint venture facilities and 11,000 employees worldwide. HEALTHSOUTH: Gets Notice of Technical Default from Bondholders -------------------------------------------------------------- HealthSouth Corporation (OTC Pink Sheets: HLSH), which previously announced that it has initiated discussions and submitted term sheets to its creditors providing for the restructuring of the Company's outstanding indebtedness, said that it has received a notice of technical default purportedly from the requisite holders of certain of its senior notes and its senior subordinated notes. Once notice has actually been received, the notes provide for a cure period, following which these noteholders would have the right to accelerate payment of the outstanding principal amount of these notes. The Company stated that it is current on all interest payments due to its bank and noteholders. The Company also reiterated it intention to remain current on all upcoming interest payments. "We have presented all of our creditors with term sheets and are awaiting their response," said Joel C. Gordon, HealthSouth's Interim Chairman. "While there are natural tensions that arise in any negotiation process, today's action we believe is a very public tactic by the holders of these notes to try to extract greater value at the expense of our other stakeholders. We firmly believe that there is equity value in HealthSouth and we are unwilling simply to give more shareholder value away to our bondholders than is fair. We will continue to do what is right for the benefit of all HealthSouth stakeholders." HealthSouth is the nation's largest provider of outpatient surgery, diagnostic imaging and rehabilitative healthcare services, operating nearly 1,700 facilities nationwide and abroad. HealthSouth can be found on the Web at http://www.healthsouth.com ICO INC: Terminates Rights Agreement with Harris Trust ------------------------------------------------------ ICO, Inc. (Nasdaq: ICOC) has amended the Rights Agreement between ICO and Harris Trust & Savings Bank to accelerate its final expiration date. As a result, the Rights Agreement terminated at the close of business on November 3, 2003. "A number of our shareholders have indicated that the Company's Rights Agreement should be terminated," said Chris O'Sullivan, Chairman of the Company. "After careful consideration, the Board voted to amend the Rights Agreement to provide for its prompt expiration." Shareholders do not need to exchange stock certificates or take any other action in respect of the termination of the Rights Agreement. Through twenty plants worldwide, ICO Polymers produces and markets ICORENE(TM) and COTENE(TM) rotational molding powders, as well as ICOFLO(TM) powdered processing aids and ICOTEX(TM) powders for textile producers. ICO additionally provides WEDCO(TM) size reduction services for specialty polymers. ICO's Bayshore Industrial subsidiary produces specialty compounds, concentrates, and additives primarily for the film industry. As previously reported, Standard & Poor's withdrew its 'B+' corporate credit and 'B-' senior unsecured debt rating on ICO Inc., at the company's request. INAMED INC: Board Declares 3-For-2 Reverse Stock Split ------------------------------------------------------ Inamed Corporation (Nasdaq:IMDC), a global healthcare company, announced that its Board of Directors has declared a three for two split of its common stock in the form of a 50% stock dividend. Stockholders will receive one-half new share of common stock for each share of common stock held at the close of business on December 1, 2003. The additional stock, together with cash payments in lieu of fractional shares, will be distributed on December 15, 2003. "Our decision to split the stock reflects our confidence in the company's continued success and our desire to broaden our stockholder base," said Nick Teti, Chairman, President and Chief Executive Officer of Inamed Corporation. "In addition, the larger number of shares resulting from this stock split should improve liquidity and our trading volume to the further benefit of stockholders." The three for two stock split will increase Inamed's outstanding common stock to approximately 35 million shares, well within the Company's 50 million share authorization. A two for one split would have required that Inamed obtain shareholder approval to increase the amount of its authorized common stock. Inamed (Nasdaq:IMDC) (S&P, BB- Corporate Credit Rating, Positive Outlook) is a global healthcare company with over 25 years of experience developing, manufacturing and marketing innovative, high-quality, science-based products. Current products include breast implants for aesthetic augmentation and for reconstructive surgery; a range of dermal products to treat facial wrinkles; and minimally invasive devices for obesity intervention, including the LAP-BAND(R) System for morbid obesity. The Company's Web site is http://www.inamed.com INTERLINE BRANDS: Sept. 26 Net Capital Deficit Widens to $256MM --------------------------------------------------------------- Interline Brands, Inc., a leading distributor and direct marketer of maintenance, repair and operations products, reported record net cash provided by operations as well as increases in gross profit and operating income for the fiscal quarter ending September 26, 2003 compared to the same period in 2002. Net cash provided by operations for the nine months ended September 2003 was $23.4 million compared to $7.6 million in the comparable period for the prior year. In the third quarter of 2003 operating income increased 13.6% and gross profit increased 5.0% despite relatively flat sales. For the nine months ending September 2003, operating income increased 9.5% and gross profit increased 2.4% on a 1.0% decline in sales. Interline's President and Chief Executive Officer Michael Grebe commented on the company's performance for the period: "Our strong earnings performance in the quarter and for the first nine months of 2003 is a result of our continued focus on maximizing operating efficiencies and our active management of investments in working capital, and is further validation of the benefits of our integrated operating model." Net sales increased by $0.7 million, or 0.4%, to $166.7 million in the third quarter of fiscal 2003 from $166.0 million in the comparable period for the prior year on the same number of shipping days. For the nine months ended September 2003, net sales decreased by $5.1 million, or 1.0%, to $481.2 million from $486.3 million in the comparable period for the prior year. These sales results reflect continued weakness in the multi-family housing and professional contractor markets, which are Interline Brands' two largest customer segments. Gross profit increased $3.0 million to $63.4 million in the third quarter of fiscal 2003 from $60.4 million in the comparable period in 2002. As a percentage of sales, gross profit improved to 38.0% in the third quarter of 2003 from 36.4% in the third quarter of 2002. For the nine months ending September 2003, gross profit increased $4.3 million to $183.0 million from $178.7 million in the comparable period in 2002. As a percentage of sales, gross profit for the first nine months of 2003 improved to 38.0% of sales from 36.7% for the same period last year. Selling, general and administrative expenses increased by $2.2 million, to $43.7 million in the third quarter of 2003 from $41.5 million in the comparable period for the prior year. SG&A expenses for the nine months ended September 2003 increased $2.4 million from the comparable period for the prior year. During the third quarter of 2003 the company reclassified freight costs paid by its customers from selling, general and administrative costs to net sales. Freight costs paid by customers increased during the third quarter by $0.3 million to $1.3 million from $1.0 million in the comparable period for the prior year. This reclassification did not have an effect on operating income; however it did increase net sales and selling, general and administrative costs -- each by $1.3 million -- during the third quarter. Operating income increased by $2.0 million, or 13.6%, to $16.4 million in the third quarter of 2003 from $14.4 million in the comparable period for the prior year. For the first nine months of 2003, operating income increased $4.0 million, or 9.5%, to $47.0 million from $43.0 million for the first nine months of 2002. Net cash provided by operating activities increased by 208.8% or $15.8 million to $23.4 million for the nine months ended September 2003 from $7.6 million in the comparable period for the prior year. The increase in net cash provided by operating activities was the result of continued strong operating income as well as continued realization of working capital efficiency initiatives during the period, which includes a $12.6 million reduction in inventory levels from December 27, 2002. Net income was $4.8 million for the third quarter and $2.9 million for the first nine months of 2003, compared to $0.3 million and $5.2 million during the respective comparable periods in 2002. At September 26, 2003, Interline Brands' balance sheet shows a total shareholders' equity deficit of about $256 million. Interline Brands, Inc. is a privately held, direct marketing and specialty distribution company with corporate offices in Jacksonville, Florida. Interline sells maintenance, repair and operations (MRO) products with guaranteed same-day or overnight shipping to professional contractors, facilities maintenance professionals, hardware stores, and other customers across North America and Central America. Interline's principal shareholders include Parthenon Capital, JPMorgan Partners, General Motors Pension Fund, Sterling Partners L.P. and management. To learn more about the company visit http://www.Interlinebrands.com INTERNATIONAL PAPER: Declares Dividend Payable on December 15 ------------------------------------------------------------- International Paper (NYSE: IP) announced a regular quarterly dividend of $0.25 per share for the period of Oct. 1, 2003, to Dec. 31, 2003, inclusive. The dividend on the common stock of the company is payable on Dec. 15, 2003, to holders of record at the close of business on Nov. 21, 2003. The company also declared a regular quarterly dividend of $1 per share for the period of Oct. 1, 2003, to Dec. 31, 2003, inclusive, on the preferred stock of the company, payable on Dec. 15, 2003, to holders of record at the close of business on Nov. 21, 2003. International Paper also announced the regular distribution of capital securities interests in International Paper Capital Trust III, to be paid at the rate of $0.4921875 per capital securities interest for the period Oct. 1, 2003 to Dec. 31, 2003. The distribution is payable on Dec. 1, 2003, to holders of record at the close of business on Nov. 16, 2003. Also, the company announced the regular distribution on convertible preferred securities interest in International Paper Capital Trust, paid at an annual rate of 5-1/4 percent per convertible preferred security for the period Oct. 1, 2003 to Dec. 31, 2003. The distribution is payable Dec. 15, 2003, for holders of record at the close of business on Nov. 30, 2003. International Paper -- http://www.internationalpaper.com-- is the world's largest paper and forest products company. Businesses include paper, packaging, and forest products. As one of the largest private forest landowners in the world, the company manages its forests under the principles of the Sustainable Forestry Initiative(R) program, a system that ensures the perpetual planting, growing and harvesting of trees while protecting wildlife, plants, soil, air and water quality. Headquartered in the United States, International Paper has operations in over 40 countries and sells its products in more than 120 nations. As previously reported, Standard & Poor's Ratings Services assigned its 'BB+' preferred stock ratings to International Paper Co.'s $6 billion mixed shelf registration. JAMES RIVER: General Claims Bar Date Set for November 17, 2003 -------------------------------------------------------------- The U.S. Bankruptcy Court for the Middle District of Tennessee directs all creditors, except for holders of Governmental Claims, of James River Coal Company, and its debtor-affiliates to file their proofs of claim with the Debtors' Claims Agent, Bankruptcy Service, LLC, on or before November 17, 2003, or be forever barred from asserting their claims. The Court sets the Governmental Claims bar date for Jan. 16, 2004. To be timely, proof of claim forms must be received before 5:00 p.m. Eastern Time on Nov. 17. Proofs of claim need not be filed at this time if they are on account of: 1. Claims already properly filed with the Claims Agent; 2. Claims not listed as contingent, unliquidated or disputed; 3. Claims previously allowed by, or paid pursuant to, an Order of the Court; or 4. Claims of one Debtor to another Debtor. James River Coal Company, together with its debtor-affiliates, is one of the leading coal producers in the Central Appalachian coal region. The Company filed for chapter 11 protection on March 25, 2003, (Bankr. M.D. Tenn. Case No. 03-04095). Paul Jennings, Esq., and Gene L. Humphreys, Esq., at Bass Berry & Sims PLC represent the Debtors in their restructuring efforts. KMART: Court Reclassifies Improper Debtor Claims Totaling $1.8BB ---------------------------------------------------------------- During the Claims Review process, the Kmart Debtors determined that certain proofs of claim filed against them failed to indicate which Debtor the Claim was to be asserted against. In addition, the Debtors determined that certain proofs of claim were incorrectly asserted against every Debtor in these cases. At the Debtors' behest, Judge Sonderby reclassifies 6,676 Improper Debtor Claims so that each of these Claims is correctly asserted against Kmart Corporation. The Improper Debtor Claims total $1,805,741,418: Type of Claim Amount ------------- ------ Secured Claims $70,774,555 Administrative Claims 11,441,613 Priority Claims 199,112,507 Unsecured Claims 1,526,412,744 In subsequent orders, Judge Sonderby reclassifies 41 more claims so that these claims are asserted against Kmart Corporation. (Kmart Bankruptcy News, Issue No. 64; Bankruptcy Creditors' Service, Inc., 609/392-0900) MIRANT CORP: NMWDA Seeks Relief from Stay to Use Cash Deposit ------------------------------------------------------------- Pursuant to Section 362(d) of the Bankruptcy Code, Northeast Maryland Waste Disposal Authority asks the Court to modify the automatic stay to permit it to apply against unpaid electricity sales a cash deposit Mirant Americas Energy Marketing, LP provided to the Authority. The Authority was established to assist political subdivisions in Maryland with the management of solid waste and the development of waste disposal facilities for public benefit. The Authority owns facilities in Montgomery County, Maryland for the disposal of municipal solid waste the County generated and for the related production of electricity from a 50-megawatt resource recovery facility -- the Project. Katherine Elrich, Esq., at Piper Rudnick LLP, in Dallas, Texas, reports that the Authority financed the Project in 1993 through the issuance of tax exempt and taxable bonds having a $360,000,000 principal amount. A partial refunding and reissuance of the Bonds for $185,000,000 occurred in 2003. The Project's revenues secured the Bonds. On July 12, 2001, the Authority and Mirant Americas entered into the Electricity Sales Agreement. Pursuant to the Agreement, Mirant Americas will purchase all electricity generated by the Project. The Agreement is governed by an Initial Price Period that sets the Contract Price for a period expiring on December 31, 2003. Pursuant to the Agreement, Ms. Elrich relates that the Authority and Mirant Americas are to enter into negotiations for the price to be paid for Electricity subsequent to the Initial Price Period. If no agreement is reached, the Agreement will terminate on December 31, 2003. Mirant Americas is obligated to pay each month's total delivery of Electricity on the 25th day of the following month. Because of the credit downgrade, Mirant Corporation guaranteed to the Authority Mirant Americas' obligations during the Initial Price Period. In addition, Mirant Americas provided to the Authority, as beneficiary, a letter of credit issued by Wachovia Bank, National Association, which was subject to adjustment. Mirant Americas also provided the Authority a cash deposit. As of the Petition Date, the Authority holds a $2,100,000 letter of credit and $1,200,000 cash deposit. Ms. Elrich informs the Court that Mirant Americas did not pay the Authority for any of the Electricity delivered to it in June 2003, amounting to $1,648,105. In addition, Mirant Americas' representatives indicated that payment of July prepetition deliveries of Electricity would not be made when due. While the Authority does not yet have from Mirant Americas the precise quantity of Electricity delivered during the prepetition portion of July, it is expected that it will have a contract value of slightly more than $800,000. To avoid a shortfall in revenue available for debt service on the Bonds, Ms. Elrich reports that the Authority drew on the letter of credit the payment for June deliveries amounting to $1,648,105. Thus, the available balance remaining under the letter of credit is $451,895. This would be insufficient to satisfy the expected amount owed for prepetition July Electricity deliveries by not more than $400,000. The cash deposit remains the only available source of payment to the Authority for application to its Bond debt service. Accordingly, Ms. Elrich contends, the Authority's request is warranted as: (a) there appears to be no basis on which Mirant Americas can demonstrate that the cash deposit is necessary for an effective reorganization; and (b) it does not have an interest in the cash deposit to the extent of payment deficiencies under the Agreement. (Mirant Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 609/392-0900) NEXTERA ENT.: Nasdaq Will Delist Shares from SmallCap Market ------------------------------------------------------------ Nextera Enterprises, Inc. (NASDAQ: NXRA) announced that, while it has received a letter from the Nasdaq Stock Market stating that the Company's Class A common stock has received a conditional listing on the Nasdaq SmallCap Market, its common stock will be delisted upon the earlier of November 30, 2003 or the closing of the proposed sale of all of the assets of the Company's direct and indirect subsidiaries, Lexecon, Inc., CE Acquisition Corp. and ERG Acquisition Corp., to LI Acquisition Company, LLC, a wholly owned subsidiary of FTI Consulting, Inc. The reason given in the letter for the delisting is that the asset sale will result in Nextera lacking tangible business operations under Nasdaq's Marketplace Rules 4300 and 4330(a). Nextera's conditional listing for its common stock is also subject to the Company providing Nasdaq with at least three days prior notice of the closing of the asset sale and prompt notice of any significant events that occur prior during the conditional listing period. Nasdaq also informed Nextera in the letter that at any time preceding the delisting of its common stock, the Company may submit to the Nasdaq Listing Qualifications Panel a definitive plan outlining how the Company will prevent delisting. Any plan submitted by the Company will be considered by the Nasdaq Listing Qualifications Panel to determine whether it is sufficient to provide assurances that the Company will be able to sustain compliance with all applicable listing standards of the Nasdaq SmallCap Market. No assurance can be given, however, that the Company will be able to avoid delisting of its common stock. Nextera Enterprises Inc., through its wholly owned subsidiary, Lexecon, provides a broad range of economic analysis, litigation support, and regulatory and business consulting services. One of the nation's leading economics consulting firms, Lexecon assists its corporate, law firm and government clients reach decisions and defend positions with rigorous, objective and independent examinations of complex business issues that often possess regulatory implications. Lexecon has offices in Cambridge and Chicago. More information can be found at http://www.nextera.com and http://www.lexecon.com * * * Liquidity and Capital Resources In its SEC Form 10-Q for the quarter ended March 31, 2003, Nextera Enterprises reported: "Consolidated working capital was $6.1 million on March 31, 2003, compared to a working capital of $5.2 million on December 31, 2002. Included in working capital were cash and cash equivalents of $0.6 million and $1.6 million on March 31, 2003 and December 31, 2002, respectively. "Net cash used in operating activities was $8.4 million for the three months ended March 31, 2003. The primary components of net cash used in operating activities was an increase of $5.0 million of prepaid and other assets (relating to Messrs. Fischel and Carlton's non-compete agreements), an increase of $4.4 million of accounts receivable, a $1.6 million decrease of accounts payables and accrued expenses (primarily bonus payments), and a net loss of $3.1 million. These cash outflows were offset in part by $5.2 million of non-cash items relating to depreciation, provision for doubtful accounts, amortization of non-compete agreements, non- cash compensation charges, and interest paid-in-kind. "Net cash provided by investing activities was $2.6 million for the three months ended March 31, 2003, almost entirely representing decreases in restricted cash. "Net cash provided by financing activities was $4.8 million for the three months ended March 31, 2003. The primary component of net cash provided by financing activities was $5.0 million of borrowings under the Company's Senior Credit Facility. The Company's primary sources of liquidity are cash on hand, restricted cash (for bonus payments only) and cash flow from operations. The Company believes that if it is successful in reducing its current days sales outstanding level and achieving its forecasted profitability, it will have sufficient cash to meet its operating and capital requirements for the next twelve months. However, there can be no assurances that the Company's actual cash needs will not exceed anticipated levels, that the Company will generate sufficient operating cash flows, by reducing its current days sales outstanding level and achieving its forecasted profitability, to fund its operations in the absence of other sources or that acquisition opportunities will not arise requiring resources in excess of those currently available. In particular, the Company has the option of extending the employment and non- compete agreements with Messrs. Fischel and Carlton from their current expiration of July 16, 2003 to January 15, 2004. In order to exercise such option, the Company must pay Messrs. Fischel and Carlton an aggregate amount of approximately $3.5 million, including interest, on or before July 15, 2003 and an aggregate amount of approximately $1.6 million, plus interest at 3.5% per annum from January 15, 2003 through the date paid, within five days of collection of a specified receivable but in no case later than December 31, 2003, whether or not the receivable is collected by that date. The Company hopes to exercise such option from cash flows from operations, however, such funding from operations is dependent upon reducing current days sales outstanding and achieving forecasted profitability. To the extent that cash flows from operations are not sufficient, the Company will need to obtain alternative financing sources. In order for the Company to further extend these agreements from January 16, 2004 through December 31, 2008, the Company will need to make aggregate payments to Messrs. Fischel and Carlton of $20.0 million by January 15, 2004. We will require additional financing in amounts that we cannot determine at this time in order to make all of the payments required to extend these agreements to December 31, 2008. We expect that we will need to raise funds through one or more public or private financing transactions. "Effective December 31, 2002, the Company entered into a Second Amended and Restated Credit Agreement, which amended the Prior Credit Agreement. As part of the Senior Credit Facility, Knowledge Universe, Inc. purchased a $5.0 million junior participation in the Senior Credit Facility. On January 7, 2003, the Company borrowed $5.0 million under the Senior Credit Facility to fund the first payment required under the employment and non-compete agreements entered into with Messrs. Fischel and Carlton. The Company's outstanding liability under the Senior Credit Facility after the borrowing of the above mentioned $5.0 million was $32.2 million. The Senior Credit Facility requires that $4.7 million of outstanding borrowings be permanently reduced in each of 2003 and 2004. The maturity of the Senior Credit Facility was extended to January 1, 2005. Borrowings bear interest at the lender's base rate plus 1.5%. The Company will continue to pay annual administrative fees of $0.3 million, payable monthly, and the $0.9 million in aggregate back-end fees will continue to be payable upon the maturity of the Senior Credit Facility. The back-end fees can be waived if the Company repays the Senior Credit Facility prior to maturity. All administrative fees paid to the senior lenders are recorded by the Company as interest expense. An affiliate of Knowledge Universe has agreed to continue to guarantee $2.5 million of the Company's obligations under the Senior Credit Facility. The Senior Credit Facility contains covenants related to the maintenance of financial ratios, operating restrictions, restrictions on the payment of dividends and disposition of assets. The covenants are measured quarterly and have been set at varying rates, the most restrictive at approximately 15% below the Company's projected operating results. If the results of operations significantly decline below projected results and we are unable to obtain a waiver from the Company's senior lenders, the Company's debt would be in default and callable by the senior lenders. If our projections of future operating results are not achieved and our debt is placed in default, we would experience a material adverse impact on our reported financial position and results of operations." NRG ENERGY: Gets Court Clearance for AFCO Replacement Agreement --------------------------------------------------------------- The NRG Energy Debtors sought and obtained the Court's authority to enter into a Replacement Insurance Premium Finance Agreement with AFCO Credit Corporation on an interim basis. Michael A. Cohen, Esq., at Kirkland & Ellis, in New York, relates that the Debtors maintain several insurance policies pursuant to a Premium Finance Agreement. The PFA was entered into before the Petition Date. The Policies expired on June 30, 2003. In order to pay the premiums in connection with the Policies to be replaced, the Debtors have unsuccessfully attempted to obtain unsecured credit. However, in connection with the Replacement PFA, AFCO has agreed to finance the payment of the premiums for the Policies to be replaced for the term commencing June 30, 2003 and ending June 30, 2004. The PFA provides payment to AFCO totaling $42,180,000, broken down as: -- a $14,100,000 downpayment; -- an amount financed for $41,400,000; -- a $750,000 finance charge; and -- three quarterly installments of $14,100,000 each at an annual rate of 3.62%. Mr. Cohen reports that the amounts financed under the Replacement PFA, and the terms under which the amount will be financed, are going to be substantially similar to those stated in the PFA, except that the annual interest rate will be lowered from 3.62% to 3.5%. To secure payment of the amounts due to AFCO under the Replacement PFA, the Debtors grant AFCO a security interest in the gross unearned premiums and other amounts due to the Debtors under the Policies that may result from the cancellation of the Policies. In the event that the Debtors default in the timely repayments of any monies due to AFCO under the terms of the Replacement PFA, AFCO may cancel the insurance policies financed under the Replacement PFA after giving any notice required by applicable state law, and AFCO may apply any gross unearned premiums or other amounts due to the Debtors upon cancellation of the Policies to any amount owing by the Debtors to AFCO, all without further Court Order. In the event that, upon cancellation of the Policies financed by AFCO, the unearned or returned premiums by AFCO are insufficient to pay the Debtors' total amount due to AFCO, any remaining amount owing to AFCO will be allowed and given priority as an administrative expense pursuant to Section 503 of the Bankruptcy Code. (NRG Energy Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 609/392-0900) ONEIDA LTD: Lenders Waive Financial Covenants Until November 21 --------------------------------------------------------------- Oneida Ltd. (NYSE:OCQ) has obtained waivers through November 21, 2003 from its lenders in regard to the company's financial covenants and in respect to certain payments that are due. Oneida's bank lenders have agreed to postpone a $5 million reduction in the company's credit availability until November 21, 2003, when the company expects to have provided them with updated financial information regarding the company's operations and its restructuring plans. This reduction previously was scheduled to take effect on November 3, 2003 under the company's revolving credit agreement. In addition, Oneida's senior note holders have agreed to defer until November 21, 2003 a $3.9 million payment from the company that was due on October 31, 2003. The company continues to work with its lenders to make appropriate modifications to its credit facilities, and expects there will be a further deferral of the above reduction and principal payment until such modifications have been agreed upon. Oneida Ltd. is a leading source of flatware, dinnerware, crystal, glassware and metal serveware for both the consumer and foodservice industries worldwide. ORBITAL IMAGING: Bankr. Court Confirms Final Reorganization Plan ---------------------------------------------------------------- Orbital Imaging Corporation's final plan of reorganization under Section 1129 of the U.S. Bankruptcy Code was confirmed by the United States Bankruptcy Court for the Eastern District of Virginia. The Confirmation Order was signed by Judge Robert G. Mayer on October 24, 2003. The final Effective Date for the plan, and ORBIMAGE's emergence from Chapter 11, is now anticipated to occur in the near future. "The Confirmation Order is a significant milestone for ORBIMAGE because it means we're through with the bankruptcy court process and can now focus all our energy on executing our business plan. Once we complete the transfer of certain licenses, we can emerge from bankruptcy," said Matthew O'Connell, ORBIMAGE's Chief Executive Officer. Mr. O'Connell also added, "The timing of our confirmation is terrific. We now have a sound capital structure and our new OrbView-3 high-resolution satellite is generating great imagery as it nears completion of its final check-out. ORBIMAGE is grateful to our many customers who have stood by us through this process, and we look forward to supplying them with our new high resolution imagery and products beginning in the first quarter of next year." ORBIMAGE is a leading global provider of Earth imagery products and services, with a constellation of digital remote sensing satellites and a worldwide integrated image receiving, processing and distribution network. The company currently operates the OrbView-2 ocean and land multispectral imaging satellite that was launched in 1997, and the new OrbView-3 high- resolution satellite launched on June 26, 2003 which will soon offer one-meter panchromatic and four-meter multispectral digital imagery on a global basis. More information about ORBIMAGE and the status of the OrbView-3 check out, see its web site at http://www.orbimage.com OWENS-ILLINOIS: Will Padlock Ontario Glass Container Facility ------------------------------------------------------------- Owens-Illinois, Inc., (NYSE: OI) intends to close its glass container manufacturing facility in Milton, Ontario, on November 12. Approximately 150 employees will be affected. The approximately 300,000 square foot glass container facility located at 100 Chisholm Drive contains three machines and one furnace that manufactures beer bottles. The decision to close the Milton facility is part of a capacity utilization review recently announced by the Company. The review includes efforts to bring capacity and inventory levels in line with anticipated demand. Robert Smith, vice president and general manager of the company's glass container operations, said, "We sincerely regret having to make this decision. However, due to the expectations of glass container demand in 2004 we have concluded that we can continue to provide good service to our customers by consolidating operations and transferring capacity to our other North American facilities." The company will work with the United Steelworkers of America union and with government agencies to help employees search for new jobs and in dealing with other employment related issues. After the closing of this facility, Owens-Illinois will have 23 glass container manufacturing plants in North America, 18 of which are in the U.S. The Milton plant opened in 1980 and was one of six glass container plants acquired by Owens-Illinois from Consumers Packaging Inc. in 2001. Owens-Illinois (Fitch, BB- Bank Debt and Senior Unsecured Note Ratings, Stable) is the largest manufacturer of glass containers in North America, South America, Australia and New Zealand, and one of the largest in Europe. O-I also is a worldwide manufacturer of plastics packaging with operations in North America, South America, Europe, Australia and New Zealand. Plastics packaging products manufactured by O-I include consumer products (blow molded containers, injection molded closures and dispensing systems) and prescription containers. Copies of Owens-Illinois news releases are available at the Owens- Illinois Web site at http://www.o-i.com PEGASUS SATELLITE: Lenders Agree to Amend & Restate Credit Pact --------------------------------------------------------------- On October 22, 2003, the lenders under the Pegasus Media & Communications, Inc. credit facility gave their consent to enter into a fourth amendment and restatement of the credit agreement between PM&C, a subsidiary of Pegasus Satellite Communications, Inc. (S&P, B Corporate Credit Rating, Negative), the lenders, Bank of America Securities LLC, as sole lead arranger, Deutsche Bank Trust Company Americas, in its capacity as the resigning agent, and Bank of America, N.A., as administrative agent for the lenders. The fourth amendment and restatement created a new $300 million term loan tranche under the credit facility. The maturity date for the loans made under the new tranche is July 31, 2006. Proceeds from the loans made under the new tranche were used to prepay amounts outstanding under PM&C's existing revolving credit and term loan facilities that were scheduled to mature in 2004 and 2005 and for working capital and general corporate purposes. The fourth amendment also terminated the revolving credit commitments. At March 31, 2003, Pegasus Satellite's working capital deficit tops $100 million. Pegasus Communications is a leading independent provider of direct broadcast satellite (DBS) television. The company has about 1.5 million DBS subscribers on the DIRECTV platform in more than 41 US states; it primarily offers services in rural areas. Pegasus is also introducing high-speed, broadband Internet access via the satellite-based DIRECPC service in partnership with SBC Communications. The company operates 11 broadcast TV stations (affiliated with FOX, UPN, and WB) that reach about 3 million TV households in small markets. Pegasus has sold its cable TV operations in Puerto Rico to Centennial Communications. CEO Marshall Pagon controls more than half of the voting shares of Pegasus. PG&E NATIONAL: Noteholders' Committee Taps Shapiro as Co-Counsel ---------------------------------------------------------------- Shapiro Sher Guinot & Sandler has considerable experience in insolvency and bankruptcy matters, including the representation of creditors' committees in large and complex Chapter 11 cases. Shapiro Sher and Klee, Tuchin, Bogdanoff & Stern LLP have developed a close working relationship in connection with a prepetition engagement with an ad hoc group of holders of the PG&E National Energy Group Debtors' 10-3/8% Senior Note due 2011. Klee Tuchin is the Official Noteholders Committee's lead bankruptcy counsel. Accordingly, the Noteholders' Committee sought and obtained the Court's permission to retain Shapiro Sher Guinot & Sandler as co- counsel effective as of August 6, 2003. Specifically, Shapiro Sher will: (a) advise the Noteholders' Committee concerning the requirements of the Bankruptcy Code and federal and local rules relating to the administration of the NEG Debtors' cases; (b) represent the Noteholders' Committee in proceedings or hearings in the United States Bankruptcy Court for the District of Maryland; (c) prepare any necessary applications, motions, orders, reports and legal papers, relating to the NEG Debtors' cases; (d) assist the Noteholders' Committee in the investigation of the acts, liabilities and financial condition of the NEG Debtors, and any other matters relevant to the cases; (e) participate in the negotiation of a reorganization plan on behalf of the Noteholders' Committee; and (f) perform all legal services for the Noteholders' Committee that may be necessary or desirable and in the interest of the cases. Shapiro Sher will be compensated for its services according to its standard hourly rates: Partners $210 - 375 Associates 120 - 205 Paralegals 110 - 125 Joel I. Sher, a partner of Shapiro Sher, discloses that pursuant to a letter of agreement with the NEG Debtors dated July 7, 2003, Shapiro Sher received a $200,000 retainer from the NEG Debtors on account of its representation of the Ad Hoc Group. Before the Petition Date, Shapiro Sher incurred fees and expenses aggregating $25,000. From the Petition Date and through the date of the Noteholders Committee's appointment, Shapiro Sher incurred $58,000 in additional fees and expenses. Under the Letter Agreement, Shapiro Sher will return the retainer to the NEG Debtors less any unpaid fees or disbursements for services before the actual date Shapiro Sher is retained as the Noteholders Committee's co-counsel. Mr. Sher assures Judge Mannes that the firm has no connection to, and does not represent any interest adverse to any of the NEG Debtors, their creditors, and other parties-in-interest. Shapiro Sher is a disinterested person, as that term is defined in Section 101(14) of the Bankruptcy Code. (PG&E National Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 609/392- 0900) PHAR-MOR INC: Makes Second Distribution to Unsecured Creditors -------------------------------------------------------------- On March 13, 2003, the United States Bankruptcy Court entered an Order Confirming First Amended Joint Plan of Liquidation proposed jointly by the Debtors (Phar-Mor, Inc. and its named affiliates and subsidiaries) and its Official Committee of Unsecured Creditors. The Order, among other things, approves the distribution of funds to certain classes of creditors as set forth in such Plan and provides for a Plan Effective Date of March 28, 2003. The Company paid certain administrative claims in full on March 31, 2003 along with payment of certain agreed unsecured claims in the form of an initial 7% distribution on the agreed amount of the unsecured claim. The Company made a second 7% distribution on the agreed amount of unsecured claims in October 2003. Phar-Mor, a retail drug store chain operating, filed for bankruptcy protection on September 24, 2001, in the U.S. Bankruptcy Court for the Northern District of Ohio. POLAROID: Committee Asks Court to Disallow 7 Duplicate Claims ------------------------------------------------------------- Joseph A. Malfitano, Esq., at Young Conaway Stargatt & Taylor, in Wilmington, Delaware, relates that Mark S. Stickel, managing director of Wind Down Associates LLC, the Polaroid Debtors' wind down agent, identified seven duplicate claims: Duplicate Claimant Claim Amount -------- --------- ------ CO - El Paso County Treasurer 7154 $1,934 RI - PIC-Contractors, Inc. 685 12,660 Sigma Systems, Inc. 3788 92,252 Travelers Casualty & Surety Co. of America 6014 1,400,000 Travelers Casualty & Surety Co. of America 6018 10,800,000 Travelers Casualty & Surety Co. of America 6019 624,885 Travelers Casualty & Surety Co. of America 6047 6,600,000 Accordingly, the Committee asks the Court to disallow and expunge each of the Duplicate Claims in their entirety. Mr. Stickel points out that in the event that the Duplicate Claims are disallowed and expunged, each claimant will continue to have a surviving claim against the Debtors in the same amount as the Duplicate Claims. (Polaroid Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., 609/392-0900) PROVANT INC: Enters Letter of Intent for Sale of Gov't Group ------------------------------------------------------------ Provant, Inc. (POVT.PK) announced that the following letter to its stockholders has been posted on its Web site at http://www.provant.com Dear Stockholders: I am writing to update you regarding the status of our efforts to sell Provant's last business, Star Mountain, Inc. In July, we announced that, after an intensive marketing process, Provant had entered into a non-binding letter of intent with respect to the sale of Star Mountain. The letter of intent contemplated that Provant would receive a cash payment at closing and that Provant would retain an equity stake in Star Mountain going forward. During the course of negotiating the definitive agreements, the prospective purchaser significantly changed the terms on which it was willing to proceed with the transaction from those contained in the letter of intent, including the amount of the purchase price to be paid to Provant. As a result, we discontinued our negotiations with that purchaser and directed Quarterdeck Investment Partners, our investment-banking advisor, to contact the other parties that had expressed an interest in acquiring the Star Mountain business. After considering new expressions of interest from several interested parties, on October 29, 2003 Provant entered into a letter of intent for the sale of Star Mountain with a new prospective purchaser. The letter of intent contemplates that a definitive purchase agreement will be signed within a month, that the sale transaction will close by the end of the year, and that the purchase price to be paid to Provant will be all cash. Provant will not retain any equity interest in Star Mountain following the closing of the transaction. We anticipate that following the closing of the sale of Star Mountain Provant will begin the process of liquidating, discharging its various obligations and distributing any remaining cash (after the payment of creditors and the satisfaction of other liabilities) to its stockholders. The letter of intent is non-binding and subject to various conditions, including satisfactory completion of further due diligence by the purchaser and negotiation of a definitive purchase agreement. The transaction will require shareholder approval. We cannot guarantee that a transaction will be completed. If we are unable to complete a sale of Star Mountain in a timely manner and on terms that are satisfactory to Provant, existing resources will not be sufficient to satisfy Provant's obligations to its debt holders and other creditors. We look forward to providing you more information regarding the Star Mountain transaction in the upcoming weeks. Sincerely, John E. Tyson, Chairman QWEST: Offering VoIP Services to Businesses in 12 Western States ---------------------------------------------------------------- Hundreds of thousands of mid-market companies, large businesses and government agencies in 12 western states can take advantage of the voice, data and Internet protocol services, starting November 3, 2003, that Qwest Communications International Inc. (NYSE: Q) offers already to businesses across the U.S. As a result of the company's recent financial restatement, Qwest's advanced business-class services such as long-distance voice services, dedicated Internet access, virtual network services, IP, frame relay and asynchronous transfer mode are now available to most businesses in the country. Business customers have voted Qwest the best in delivering several critical voice and data services in a recent America's Network Enterprise User Survey. According to the survey conducted by a leading telecommunications trade publication, Qwest was top-rated in five product categories -- more than any other service provider in the study. These results emphasize why Qwest has business relationships with virtually all of the Fortune 500. "All of our business customers now have the opportunity to use Qwest's entire set of communications services and realize greater savings and performance," said Cliff Holtz, executive vice president, Qwest business markets group. "Our customers in the west can receive an end-to-end communications solution with one point of contact, and with the Qwest Spirit of Service promise. We intend to go after this business aggressively as we believe the total business long-distance market opportunity in our 14-state region is greater than $6 billion." Qwest has been highly successful in providing long-distance services to residential customers and small businesses where it has received approval to do so. Now, by offering long-distance voice, data and IP to larger businesses and government agencies, Qwest expects to further enhance its success in Colorado, Idaho, Iowa, Minnesota, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming. In Montana, businesses may benefit from Qwest data, IP and private line offerings, and resold switched voice long-distance services. The company expects to offer switched long-distance voice services over Qwest-owned facilities there later this month. Qwest expects to begin offering its complete product offerings to businesses in Arizona by the end of the year. As evidence of its success, the company is currently serving hundreds of IP customers on the Qwest network in these states. Many of these customers that have worked with Qwest for other services plan on expanding their agreements. For example, Regal Plastics -- a Littleton, Colo.-based distributor of plastic, sheet, rod, tube film, and sign and graphics products, intends to use Qwest for all its voice and data needs. "We have used several data and voice providers over the last few years and we expect the transition to Qwest to be far superior and easier than any of the others," said Al Stoltz, president and CEO, Regal Plastics. "Now that we can consolidate all of our services with Qwest, I feel as though we will be with the premier carrier of voice and data." "This is an important milestone for Qwest and the industry," according to Brian Washburn, senior analyst at Current Analysis. "With this approval, Qwest will be uniquely positioned in the industry to take advantage of its symbiotic local/long-haul relationship and provide its local and national customers with an integrated array of communications solutions." Qwest Business Solutions Qwest has been offering a limited version of long-distance voice services to more than 600,000 businesses in these states, but for the first time, these customers will be able to complement their local services with long-distance voice and data service with Qwest's comprehensive offering of some of the industry's most powerful solutions including state-to-state: * Wide area networking * Business dial access * Dedicated Internet access * Frame relay service * ATM service * Long-distance switched and dedicated voice solutions * End-to-end network management and monitoring * Private line service * Toll-free and contact center solutions * Virtual private network * Web hosting and managed services For the best possible pricing and to simplify the contract and agreement process, customers can opt for Qwest Total Advantage(TM) or Qwest Voice Advantage(TM). Qwest Total Advantage allows businesses to create one customized package of local and long- distance voice and data services, and then receive significant cost savings based on total communications spending and term length. For customers interested only in voice services, Qwest Voice Advantage(TM) offers discounted long-distance rates based on a customer's total monthly spending and term commitment. Long-distance Business Promotions To celebrate this latest development, Qwest is offering to business customers an attractive long distance promotion. Business customers with at least six local service lines and committing to at least $500 per month in switched long-distance voice services may receive a per-minute rate of just $.04. Businesses with more advanced long-distance needs committing to at least $1,000 per month in dedicated long-distance services may receive a per-minute rate of only $.02. Both offers are for a one-year term. Qwest is also offering other valuable service plans and promotions on other services as well to meet virtually all businesses' needs. Customers interested in learning more about Qwest voice and network solutions for businesses should call 800-777-9594 or they can contact one of hundreds of Qwest Business Partners in their area. Qwest Communications International Inc. (NYSE: Q) -- whose December 31, 2002 balance sheet shows a total shareholders' equity deficit of about $1 billion -- is a leading provider of voice, video and data services to more than 25 million customers. The company's 49,000 employees are committed to the "Spirit of Service" and providing world-class services that exceed customers' expectations for quality, value and reliability. For more information, please visit the Qwest Web site at http://www.qwest.com RADIO UNICA: Earns Court Nod to Hire Trumbull as Claims Agent ------------------------------------------------------------- Radio Unica Communications, Corp., and its debtor-affiliates sought and obtained approval from the U.S. Bankruptcy Court for the Southern District of New York to retain and employ The Trumbull Group, LLC as the official noticing and claims agent in their chapter 11 cases. The Debtors have identified creditors, potential creditors and other parties-in-interest to whom certain notices, including notice of the commencement of the chapter 11 cases, bar date materials, notices of hearings, and other documents, must be sent. This may impose administrative and other burdens upon the Debtors, the Court and the Clerk of the Court. To relieve those burdens, the Trumbull Group will: a) prepare and serve required notices in these chapter 11 cases, including: i) a notice of the commencement of the chapter 11 cases and the initial meeting of creditors under section 341(a) of the Bankruptcy Code; ii) notice of the claims bar date; iii) notices of objections to claims; iv) notice of the hearing to consider approval of the disclosure statement and confirmation of the Plan; and v) such other miscellaneous notices as the Debtors or Court may deem necessary or appropriate for an orderly administration of the chapter 11 cases. b) within five business days after the service of a particular notice, file with the Clerk's Office a certificate or affidavit of service that includes: i) a copy of the notice served, ii) an alphabetical list of persons on whom the notice was served, along with their address, and iii) the date and manner of service; c) maintain copies of all proofs of claim and proofs of interest filed in these cases; d) maintain official claims registers in these chapter 11 cases by recording all proofs of claim and proofs of interest in a claims database that includes the following information for each such claim or interest asserted: i) the name and address of the claimant or interest holder and any agent thereof, if the proof of claim or proof of interest was filed by an agent; ii) the date the proof of claim or proof of interest was received by Trumbull and/or the Court; iii) the claim number assigned to the proof of claim or proof of interest; and iv) the asserted amount and classification of the claim; e) implement necessary security measures to ensure the completeness and integrity of the claims registers; f) transmit to the Clerk's Office a copy of the claims registers on a weekly basis, unless requested by the Clerk's Office on a more or less frequent basis; g) maintain an up-to-date mailing list for all entities that have filed proofs of claim or proofs of interest and make such list available upon request to the Clerk's Office or any party in interest; h) provide access to the public for examination of the proofs of claim or proofs of interest filed in this case without charge during regular business hours; i) record all transfers of claims pursuant to Bankruptcy Rule 3001(e) and provide notice of such transfers as required by Bankruptcy Rule 3001(e), if directed to do so by the Court; j) comply with applicable federal, state, municipal and local statues, ordinances, rules, regulations, orders and other requirements; k) provide temporary employees and contractors as necessary to process claims, prepare schedules and statements of financial affairs and such other duties as the Debtors may request from time to time; l) promptly comply with such further conditions and requirements as the Clerk's Office or the Court may at any time prescribe; and m) provide such other claims processing, noticing and relating administrative services as may be requested from time to time by the Debtors. Lorenzo Mendizabal reports that his firm's current hourly consulting rates are: Administrative Support $50 per hour Assistant Case Manager/Data Specialist $65-$80 per hour Case Manager $110-$125 per hour Automation Consultant $140-$160 per hour Sr. Automation Consultant $165-$185 per hour Consultant $175-$225 per hour Sr. Consultant $320-$300 per hour Headquartered in Miami, Florida, Radio Unica Communications Corp., the only national Spanish-language AM radio network in the U.S., broadcasting 24-hours a day, 7-days a week, filed for chapter 11 protection on October 31, 2003 (Bankr. S.D. N.Y. Case No. 03- 16837). Bennett Scott Silverberg, Esq., and J. Gregory Milmoe, Esq., at Skadden Arps Slate Meagher & Flom, LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $152,731,759 in total assets and $183,254,159 in total debts. REPUBLIC WESTERN: Fitch Withdraws Default-Level IFS Rating ---------------------------------------------------------- Fitch Ratings has withdrawn its 'DD' insurer financial strength rating on Republic Western Insurance Co. The rating is being withdrawn as Republic Western remains under the supervision of the Arizona Department of Insurance, where it was placed on May 20, 2003 in consideration of the financial and accounting problems at AMERCO, Republic Western's parent company. Rating Action Republic Western Insurance Company -- Insurer financial strength / Withdrawn / 'DD'. RESTRUCTURE PETROLEUM: Case Summary & 40 Unsecured Creditors ------------------------------------------------------------ Lead Debtor: Restructure Petroleum Marketing Services, Inc. 205 S. Hoover Blvd., Suite 101 Tampa, Florida 33609 Bankruptcy Case No.: 03-22395 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Petrol Mart, Inc. 03-22541 Type of Business: The Debtor is a motor fuel franchiser Chapter 11 Petition Date: October 29, 2003 Court: Middle District of Florida (Tampa) Judge: Alexander L. Paskay Debtors' Counsel: Harley E. Riedel, Esq. Stichter, Riedel, Blain & Prosser, P.A. 110 East Madison St., #200 Tampa, FL 33602 Tel: 813-229-0144 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million A. Restructure Petroleum's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Robert Feinstein, Esq. $3,796,538 Pachulski, Stang, et al 1285 Sixth Avenue 35th Floor New York, NY 10019 Conoco Philips, Inc. $941,405 Ponca 3064-600 N. Dairy Ashford PO Box 4784 Houston, TX 77210 Chevron $388,409 4949 Corporate Drive Houston, TX 77036 Louisiana Dept. of Revenue $354,563 PO Box 1429 Thibodaux, LA 70302-1429 Marathon $290,005 539 South Main Street Findlay, OH Hamilton Dept. of Revenue $200,000 Louisiana Dept. of Revenue $200,000 Danilo & Normuta Tulagan $199,029 Florida Dept. of Revenue $196,473 BP Oil $175,000 Freidman Young Suder & Cooke $111,830 Simpson $90,000 Louisiana Dept./Environmental Quality-Fiscal Services $82,221 Macfarlane Ferguson, et al $82,195 Dept. of Finance & Administration $75,464 Randell A. Bulleit $66,000 Brown 7 Root Environmental $55,000 ATC $35,000 Sems, Inc. $33,673 Ohio Petroleum $32,000 B. Petrol Mart's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Florida Dept. of Revenue $400,000 PO Box 6527 Tallahassee, FL 32314 Star Enterprise $307,510 4949 Corporate Drive Houston, TX 77036 Southeastern Vehicle Wash Div. $73,200 HT Hackney, Inc. - FL $53,026 Macfarlane Ferguson, et al. $37,873 Groundwater & Environmental Services, Inc. $17,435 Sysco $14,800 Hy-Tech Petroleum Maint Inc. $14,258 Barjan Products LP $14,253 Babu V Mangilipudi $13,852 Barnett Transportation, Inc. $12,458 Lassiter-Ware Insurance $10,403 Prime Outdoor Group $9,480 Sunny Florida Dairy $9,315 JC's Cigarette Outlet LLC $9,092 Pepin Dist Inc. $7,588 Premier Map Company, Inc. $5,909 Armchem International Corp. $5,537 TRM Copy Centers $5,478 Frost Brown Todd LLC $5,282 ROUGE INDUSTRIES: Looks to Morgan Joseph for Financial Advice ------------------------------------------------------------- Rouge Industries, Inc., and its debtor-affiliates are seeking permission from the U.S. Bankruptcy Court for the District of Delaware to retain Morgan Joseph & Co., Inc., as their Investment Bankers and Financial Advisors. Morgan Joseph is expected to: a) identify and/or initiate potential Transactions to the extent deemed desirable by the Debtors; b) review and analyze the Debtors' assets and the operating and financial strategies of the Debtors; c) review and analyze the business plans and financial projections prepared by the Debtors including, but not limited to, testing assumptions and comparing those assumptions to historical trends of the Debtors and industry trends in general; d) evaluate the Debtors' debt capacity in light of its projected cash flows and assist in the determination of an appropriate capital structure for the Debtors; e) assist the Debtors and their other professionals in reviewing the terms of any proposed Transaction, in responding thereto and, if directed, in evaluating alternative proposals for a Transaction; f) assist the Debtors in formulating and, if requested, implementing a Plan; g) determine a range of values for the Debtors and any securities that the Debtors offer or propose to offer in connection with a Transaction or a Plan; h) advise the Debtors on the risks and benefits of considering a Transaction with respect to the Debtors' intermediate and long-term business prospects and strategic alternatives to maximize the business enterprise value of the Debtors; i) review and analyze any proposals the Debtors receive from third parties in connection with a Transaction or a Plan; j) assist or participate in negotiations with the parties in interest, including, without limitation, any current or prospective creditors of, or holders of equity in, the Debtors in connection with a Transaction or a Plan; k) advise and attend meetings of third parties and official and unofficial constituencies, as necessary; l) if requested by the Debtors, participate in hearings before the Court or otherwise and provide relevant testimony with respect to the matters described herein and issues arising in connection with any proposed Plan; and m) render such other financial advisory and investment banking services as may be agreed upon by Morgan Joseph and the Debtors in connection with any of the foregoing. Robert M. Miller discloses that Morgan Joseph will receive: 1) a $175,000 monthly cash advisory fee; 2) a $4,000,000 Completion Fee; 3) a Transaction Fee equal to 2.0% of the Aggregate Value of each Limited Transaction; and 4) a New Capital Fee equal to: x) 1.0% of any senior secured bank debt, y) 3.0% of any junior secured debt, and z) 5.0% of any equity or hybrid capital. 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. SAN REMO 7128 CORPORATION: Voluntary Chapter 11 Case Summary ------------------------------------------------------------ Lead Debtor: San Remo 7128 Corporation c/o Robin Kobacker, Esq. 4631 N.W. 31st Ave. PMB 317356 Ft. Lauderdale, Florida 33309 aka and as Trustee of 4050 Trust Bankruptcy Case No.: 03-22273 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- San Remo 721 Corporation 03-22274 Chapter 11 Petition Date: October 27, 2003 Court: Middle District of Florida (Tampa) Judge: Thomas E. Baynes Jr. Debtors' Counsel: Buddy D. Ford, Esq. Buddy D. Ford, P.A. 115 N MacDill Avenue Tampa, Florida 33609 Tel: 813-877-4669 Estimated Assets: $0 to $50,000 Estimated Debts: $10 Million to $50 Million SEITEL DEVELOPMENT: Shareholders Can Propose Alternative Plan ------------------------------------------------------------- In a rare decision, a U.S. Bankruptcy Court in Delaware terminated Seitel Inc.'s exclusive right to propose restructuring plans in the Company's Chapter 11 bankruptcy proceeding. After listening to Lawrence Gottlieb, Esq., from Kronish Lieb Weiner & Hellman, counsel to the Official Committee of Equity Security Holders, Judge Peter Walsh ruled that shareholders had a right to propose their own plan. Currently, Seneca Financial Group is advising the Committee on the structure of such a plan. Under the Equity Committee's plan, shareholders will have the opportunity to participate in an offering to inject new equity into Seitel, the Houston-based seismic data company, and preserve their stake in the Company. This will allow the debt, held by Berkshire Hathaway, to be reinstated and paid down as it comes due. While the voting on Berkshire Hathaway's plan is currently underway and set to conclude as of November 7th, the Judge will allow individuals to vote on both plans by November 13th and offer those who already voted the ability to change their vote. "Before today, shareholders had no choice but to accept the financial terms of the Company's plan. This would have meant that each shareholder would have received, at most, $.40 for each share of stock," said James Harris, president of Seneca Financial Group. "With the Judge's decision, we can now offer a plan that reflects the full value that still exists in Seitel and offers shareholders a continued stake in what we believe to be a solid company with a bright future. This plan is being supported by many large sophisticated investors who are willing to commit additional funds to see a strong, liquid Seitel emerge from bankruptcy" As the official Financial Advisor to the Committee, Seneca Financial Group will have the opportunity to convince the Court that Seitel continues to offer significant shareholder value. The hearing on valuation will take place on December 3, 2003. Shareholders who would like to change their vote or need more information should immediately contact their brokers. They can change the master ballot and send a revised version or letter to Innisfree. Brokers who need information or ballots can call Innisfree at 212-750-5833. Beneficial owners can also call Innisfree directly at 877-750-2689 or contact Eric Haber at Kronish Lieb Weiner & Hellman at 212-479-6144. Seneca Financial Group is an investment bank focusing on working with companies and creditors to companies in financial distress. Seneca is based in Greenwich, Connecticut. More information can be obtained at http://www.senecafinancial.comor by calling the above contacts. SK GLOBAL: SK Corporation Board Approves SK Networks Compromise --------------------------------------------------------------- SK Corporation board members approved a compromise to save its trading affiliate, SK Networks Co., formerly known as SK Global Co. SK Corp. will swap KRW850,000,000,000 or $723,000,000 of SK Networks debt into stock. SK Corp. is SK Networks' biggest shareholder and South Korea's fourth largest oil refiner. Ian King of Bloomberg News reports that all 11 Board Members voted in favor of a June 15, 2003 pledge to aid SK Networks. The Board lived up to its word to ensure that SK Networks generates preset cash flow levels and to annul a March 2003 purchase of SK Networks gas stations, the Company said in an e-mailed statement. Securing SK Corp.'s support means SK Networks will stay in business because its creditors' demand that SK Corp. shoulder the bulk of the burden is finally met. But union leaders at SK Corp. are worried that the debt-to-equity swap with SK Networks may jeopardize SK Corp.'s profitability and lead to job cuts. (SK Global Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 609/392-0900) SLMSOFT INC: Richter & Partners Appointed Receiver over Assets -------------------------------------------------------------- Pursuant to an order of the Honourable Justice Ground of the Ontario Superior Court of Justice made on October 31, 2003, Richter & Partners Inc., has been appointed Interim Receiver and Receiver and Manager over the assets, property and undertaking of SLMSoft Inc., and certain of its subsidiaries, SLM Networks Corporation, SLM Technologies Inc., GSA Consulting Group Inc. and FMR Systems Inc. SLM filed for protection under the Companies' Creditor Arrangement Act on May 27, 2003. As a result of SLM's inability to meet ongoing obligations and its continuing losses after the CCAA filing, the CCAA proceedings were terminated and Richters was appointed. Richters anticipates that in its capacity as Receiver, it will seek to normalize SLM's affairs and institute a sale process for the Company's assets. A marketing plan, subject to approval of the Court, is being developed. SUPERIOR GALLERIES: Ability to Continue Operations Uncertain ------------------------------------------------------------ Superior Galleries Inc. has established a program of advancing consignment customers cash based on consigned inventory acquired for upcoming auctions. Superior can advance a customer up to 70% of a consigned coin(s) wholesale value. They will pay a customer and take control of the inventory to be held on consignment for auction. The customer will sign a note receivable for the funds advanced, to be secured by the consigned inventory. As consigned inventory is sold, the proceeds will be collected, repaying Superior for the auction advance and any auction fees, with the remaining amount due to the consignor. The total advanced funds under these notes receivable was $1,792,985 as of September 30, 2003. On October 13, 2003, the Company executed a Commercial Loan and Security Agreement with Stanford Financial Group Company, an affiliate of a principal stockholder, Stanford Venture Capital Holdings, Inc., to provide the Company with a $7.5 million line of credit for purposes of financing its inventory, auction advances and inventory loans to other rare coin dealers. The LOC bears interest at the prime-lending rate and is secured by substantially all the Company's assets. Upon the funding of the LOC, the Auction LOC with another private lender will be repaid in full and the financing arrangement will be terminated. However, the Company has sustained recurring operating losses, negative cash flows from operations, significant debt that was in default and callable by the creditor, and has limited working capital. These items raise substantial doubt about the Company's ability to continue as a going concern. Management is currently engaged in reversing or solving these significant issues through the implementation of its turnaround plan. In November 2002, the Company began to execute a plan of exiting the art business with exception of art auctions on a consignment basis to reduce losses in its operations. This plan includes the reduction of five employees, which was completed in January 2003, the reduction of sales, marketing and administrative expenses associated with the art business segment and the liquidation of its art inventory by June 30, 2003. The Company with the exception of the liquidation of its art inventory has completely exited the art business segment. The Company anticipated that the liquidation of the art inventory will be completed by November 30, 2003.The Company is currently rebuilding its retail rare coin sales force and has established sales and marketing budgets to assist in growing its retail rare coin business. The Company has reorganized and streamlined its structure in its efforts to return to a profitable state with positive cash flows. The Company consolidated all operations into one corporate entity and eliminated duplicative financial and operational systems to further control and reduce expenditures. These consolidation efforts included the combination of all operations with the exception of retail rare coins sales activities to the Beverly Hills location that occurred in February 24, 2003. In September 2003, the retail rare sales activities were transferred to Beverly Hills and the Newport Beach location permanently closed. This operational consolidation has resulted in the elimination of duplicated finance, inventory control, administration, sales, marketing and auction activities at the Newport Beach location. Separate information systems for operations and finance were eliminated as part of the consolidation. Effective January 1, 2003 the Company has out-sourced all payroll, employee benefits and human resources administration to a professional employer organization. The Company is exploring opportunities to reduce its occupancy costs at its Newport Beach location prior to the lease termination in September 30, 2004. Both the exit of the Art business and the consolidation of operations have reduced related insurance and administrative costs. The consolidation of operations into one location has allowed for enhanced coordination of all business activities and provided better control of costs. The operational consolidation has facilitated the coordination of sales and marketing efforts and expenditures, as the Company is promoting itself as one entity, rather than its parent and subsidiary. Through the anticipated liquidation of art inventory and the renewed focus on both retail and wholesale rare coin sales with an emphasis on increased inventory turns while maintaining solid gross margins, management anticipates these activities will provide some of the liquid capital to fund operations. The Company has made substantial progress in reducing losses for in the last six months for the year ended June 30, 2003. The Company incurred losses for the first six months ended December 31, 2002 of $3,449,811 as compared to a loss for the last six months ended June 30, 2003 of $41,292, a reduction in losses of 99%. TANGER FACTORY: Sells Casa Grande, Ariz. Property for $7 Million ---------------------------------------------------------------- Tanger Factory Outlet Centers, Inc. (NYSE: SKT) has completed the sale of a small non-core 184,768 square foot property located in Casa Grande, Arizona for a total cash sales price of $7.1 million. After the deduction of all closing costs, the Company will receive net proceeds of approximately $6.7 million and will recognize a net gain on the sale of the property of approximately $650,000. The company originally developed the property in 1992. The sales price represents approximately a 9.9% capitalization rate on the projected 2003 net operating income for the center. The center is currently 73% occupied and is generating average tenant sales of approximately $168 per square foot. This center represents approximately 3.4% of the Company's Gross Leasable Area and approximately 1.7% of its Net Operating Income. Stanley K. Tanger, Chairman of the Board and Chief Executive Officer stated, "We felt it was an opportune time to divest ourselves of our property in Casa Grande, Arizona. Its relative small size and location does not fit into our long-range strategic plans. The proceeds from the sale of this center will generate capital to invest in new development opportunities, expansions of existing centers, the acquisition of existing outlet centers, or to reduce outstanding debt. The sale of this property should improve our portfolio average occupancy and average sales per square foot, and will not have a material impact on our projected earnings for 2003. The sale of Casa Grande is an example of our Company's continuing efforts to aggressively manage our assets to increase shareholder value. " Tanger Factory Outlets, Inc. (NYSE: SKT) (S&P, BB+ Corporate Credit Rating, Stable), a fully integrated, self-administered and self-managed publicly traded REIT, presently operates 33 centers in 20 states coast to coast, totaling approximately 6.2 million square feet of gross leasable area. For more information on Tanger, visit http://www.tangeroutlet.com TENET HEALTHCARE: Raises $430-Mill. from Sale of Six Hospitals -------------------------------------------------------------- Tenet Healthcare Corporation (NYSE: THC) has completed the sale of five hospitals owned by Tenet subsidiaries in Florida, Missouri and Tennessee to Health Management Associates (NYSE: HMA), as well as the sale of Elkins Park Hospital, which is owned by a Tenet subsidiary in Philadelphia, Pa., to Albert Einstein Healthcare Network. Gross proceeds to Tenet from the sale of the five hospitals to HMA are estimated at $550 million, which includes $515 million for property, plant and equipment at closing, and approximately $35 million from working capital liquidation over the next several months. The five facilities are Seven Rivers Community Hospital in Crystal River, Fla.; Three Rivers Healthcare System, a two-campus hospital in Poplar Bluff, Mo.; Twin Rivers Regional Medical Center in Kennett, Mo.; Harton Regional Medical Center in Tullahoma, Tenn., and University Medical Center in Lebanon, Tenn. Gross proceeds to Tenet from the sale of Elkins Park Hospital are estimated at approximately $14.5 million, including working capital. Total net proceeds for both transactions after taxes and transaction costs will be approximately $430 million, including working capital. The six hospitals are among 14 hospitals that the company announced in March it would divest or consolidate. Definitive agreements for the sale of an additional five of the 14 hospitals were announced in September. Those transactions are expected to be concluded prior to the end of the year. Two of the 14 hospitals have closed and negotiations for the sale of the remaining hospital are ongoing. Tenet Healthcare Corporation, through its subsidiaries, owns and operates 112 acute care hospitals with 27,424 beds and numerous related health care services. Tenet and its subsidiaries employ approximately 113,526 people serving communities in 16 states. Tenet's name reflects its core business philosophy: the importance of shared values among partners -- including employees, physicians, insurers and communities -- in providing a full spectrum of health care. Tenet can be found on the World Wide Web at http://www.tenethealth.com At June 30, 2003, Tenet Healthcare's balance sheet shows a total shareholders' equity deficit of about $5.5 billion. TRANSGLOBAL SERVICES: Malone & Bailey Airs Going Concern Doubt -------------------------------------------------------------- Trans Global Services, Inc. provides technical temporary staffing services. In performing such services, it provides engineers, designers and technical personnel on a temporary contract assignment basis pursuant to contracts with major corporations, primarily aircraft and aerospace firms. The engagement may relate to a specific project or may cover an extended period based on the client's requirements. It is the Company's belief that the market for technical temporary staffing services, such as those which it offers, results from the trend in employment practices by major corporations principally in the aircraft and aerospace industries as well as the electronics, energy, information technology, telecommunications, and public utilities industries to reduce their permanent employee staff and to supplement their staff with temporary personnel on an as-needed basis. The Company's subsidiaries have an estimated payroll tax liability to the Internal Revenue Service in the amount of $4,528,164.88 for the period beginning January 1, 2003 and ending August 31, 2003. Additional liabilities have accrued since August 31, 2003. The federal payroll tax liability, but not the penalties and interests, for the first two quarters of 2003 were paid in full on or about October 17, 2003 for the following subsidiaries: Avionics Research Corporation, Avionics Research Corporation of Florida, Phoenix Services, Inc., and Truecom, Inc. The federal income tax liabilities for the year 2003 remain unpaid for the following subsidiaries: Resource Management International, Inc. and RMI Pendragon, Inc. If unable to either pay the amount owed or make satisfactory arrangements with the IRS under a payment plan, the IRS could levy on the assets of Transglobal's subsidiaries in an attempt to liquidate the tax liability. If that should happen, the Company would in all likelihood cease operations, and its business could fail. As of the date of the current Annual Report, the Company has not filed all of the required state and federal payroll tax reports and has not made any arrangements with the IRS nor secured any commitment from a lender to pay the unpaid taxes. This estimated federal payroll tax liability does not include any potential penalties and interest for non-payment and non- reporting. Transglobal acquired certain operating contracts from Pendragon Staffing, Inc. and Phoenix Marketing Services, Inc in January 2003 pursuant to the terms of a stock purchase agreement under which NAG, Financial, LLC, purchased Transglobal's newly issued common stock. Pursuant to the rules under the Securities Exchange Act of 1934 Transglobal is required to file a periodic report on Form 8-K along with audited financial statements of the assets acquired, however, the Company has not yet prepared the Form 8-K. In addition, it has not yet filed its quarterly financial reports on Form 10-Q for the periods ending March 31, 2003 and June 30, 2003. Consequently it has failed to comply with the reporting requirements of the Exchange Act. Until the Company is in compliance with all of the reporting requirements of the Exchange Act, it is prohibited from filing any registration statements under the Securities Act of 933, and may be subject to sanctions by the SEC. At December 31, 2002, Trransglobal had a deficiency in working capital of approximately $282,000. Presently, its primary source of funds is its line of credit from its asset-based lender. The Company has had limited success in raising funds and believes that, because of its financial condition and stock price, it will continue to have difficulty in raising funds. The failure to raise funds may affect its ability to continue in business. Transglobal Services sustained a loss of $3.3 million for 2002 and indicates that there is no assurance it will be able to generate profits in the future. Its failure to generate profits could affect its ability to continue operations. The Company's principal source of cash during 2002 was its credit facility with its asset-based lender. This facility was renewed on October 16, 2002, subject to a one-year renewal option, if mutually agreed. The agreement was extended for one year in January 2003. Transglobal requires this facility in order to meet its payroll obligations, since the Company pays its employees before it receives payment from its customers. Transglobal will not be able to continue in business unless it is able to extend its credit facility or otherwise obtain necessary financing. The terms of any financing which may be available may be less favorable than the terms of its present credit arrangement. Any equity financing would result in substantial dilution to stockholders. Malone & Bailey, PLLC, the Company's independent auditors of Houston, Texas have stated in their May 30, 2003, Auditors Report that Transglobal Services has suffered recurring losses from operations, has a working capital deficiency and an accumulated deficit that raise substantial doubt about it's ability to continue as a going concern. TRIAD HOSPITALS: S&P Rates $450-Million Senior Sub. Notes at B -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' rating to Triad Hospitals Inc.'s $450 million senior subordinated notes due 2013, issued under Rule 144A. At the same time, Standard & Poor's affirmed Triad's corporate credit, senior secured, senior unsecured, and subordinated debt ratings. Proceeds from the new issue will be used to repay existing subordinated debt and for general corporate purposes. The senior secured bank loan is rated one notch above the corporate credit rating. Based on collateral value estimates, Standard & Poor's believes that these measures offer a strong likelihood of full recovery of bank debt in the event of default. Total debt outstanding as of Sept. 31, 2003, was $1.6 billion. "The speculative-grade ratings on Triad reflect Standard & Poor's concern about the company's aggressive growth strategies, risks associated with potentially weaker future reimbursement by the government and other third-party payors, growing bad debt reserves, and the challenges the company faces to maintain or improve its local market positions," said credit analyst David Peknay. Dallas, Texas-based Triad is the third-largest proprietary hospital company in the U.S., owning and operating 55 hospitals (assuming the successful closing of four pending acquisitions and the completion of two hospitals under construction). The company also owns and operates 14 surgery centers in 17 states and a hospital management company. The company's strategy for increasing profitability centers on expanding the number of services offered, recruiting additional physicians, and strengthening relationships with physicians. Additional growth is expected to be generated from an aggressive strategy that incorporates joint venture partnerships with not-for-profit hospitals, potentially large acquisitions, new construction projects, and significant capital investment in existing facilities. The company's results support the success of this strategy to date, as funds from operations to lease-adjusted debt improved to 26% as of June 2003 from 13% in 2001, and return on capital improved to 10.6% from 7.4% in 2001. Still, there are many challenges for management. The future success of acquisitions and major capital initiatives is uncertain. Overall profitability will be tied to changes in reimbursement by the government and other third-party payors, which are coming under increasing pressure to contain their health care costs. Growing bad debt expenses will further strain margins and cash flow. Other key expense categories, such as labor, pharmaceuticals, and insurance will continue to be difficult to control. TRI-UNION DEVELOPMENT: Tapping Medleh Group as Notice Agents ------------------------------------------------------------ Tri-Union Development Corporation and Tri-Union Operating Company is asking for permission from the U.S. Bankruptcy Court for the Southern District of Texas to tap the services of The Medleh Group as Notice Agent in these proceedings. The Medleh Group is a leading document services company with offices located in Houston and Dallas, Texas and Chicago, Illinois. The company has extensive experience in serving notices especially with respect to Chapter 11 Cases. The Debtors believe that the Medleh Group is well qualified to provide such ministerial services and that appointing the Medleh Group as notice agent would benefit the Debtors' estates and their creditors because The Medleh Group is fully equipped to handle the heavy volume of notices to be distributed to creditors and other parties in interest in these bankruptcy cases. As Notice Agent, The Medleh Group will: a. prepare and serve required notices in these Chapter 11 Cases including: i. notice of the commencement of this Chapter 11 Case and the initial meeting of creditors under section 341(a) of the Bankruptcy Code in substantially the same form; ii. notice of the claims bar date; iii. notice of any hearings on a disclosure statement and confirmation of a plan of reorganization; and iv. other miscellaneous notices to any entities, as the Debtors or the Court may deem necessary or appropriate for an orderly administration of these Chapter 11 Cases; b. after the mailing of a particular notice, file with the Clerk's Office a certificate or affidavit of service within 10 days after each service, which includes a copy of the notice involved, an alphabetical list of persons to whom the notice was mailed and the date and manner of mailing; c. comply with applicable federal, state, municipal, and local statutes, ordinances, rules, regulations, orders and other requirements; and d. promptly comply with such further conditions and requirements as the Clerk's Office or the Court may at any time prescribe. Wes Davis, Account Manager, tells the Debtors that The Medleh Group's rates range from $55 to $150 on Trial Exhibit Boards. Other ordinary rates for mailing, labels and copywork will also apply. 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. TWINLAB CORP: Court Approves Twinlab Sale to IdeaSphere Inc. ------------------------------------------------------------ Twinlab Corporation (OTCBB: TWLBE), Twin Laboratories Inc. and Twin Laboratories (UK) Ltd., announced that on October 31, 2003, the United States Bankruptcy Court for the Southern District of New York entered the sale order approving the sale of substantially all of the assets of Twinlab to IdeaSphere Inc. of Grand Rapids, Michigan. The Company filed for bankruptcy protection on September 4, 2003, and the case is being jointly administered under Case No. 03-15564 (CB). The asset sale was conducted under the supervision of the Bankruptcy Court pursuant to section 363 of the Bankruptcy Code. The Honorable Cornelius Blackshear approved the asset sale on October 27, 2003 pending the submission of a consensual sale order, which was submitted on October 30, 2003. The asset sale, which is expected to close in the coming weeks, remains subject to the satisfaction of standard and customary conditions of closing, including the receipt of regulatory approvals. Ross Blechman Chairman, President and CEO said, "We are now joining with tremendous partners. I saw potential for a partnership with IdeaSphere that could not only reshape this Company, but also reshape the industry. In addition to their desire to maintain the Company's employees, IdeaSphere is committed to the high quality, science-based philosophy that has been a hallmark of the Twinlab brand. I'm pleased that Twinlab can now continue to rebuild and become a stronger entity in this industry than ever before." Additional Twinlab information is available on the World Wide Web at: http://www.twinlab.com UNIROYAL: Has Until November 25 to Make Lease-Related Decisions --------------------------------------------------------------- By order of the U.S. Bankruptcy Court for the District of Delaware, Uniroyal Technology Corporation and its debtor- affiliates obtained an extension of their lease decision period. The Court gives the Debtors until November 25, 2003, to determine whether to assume, assume and assign, or reject their unexpired nonresidential real property leases. Uniroyal Technology Corporation and its subsidiaries are engaged in the development, manufacture and sale of a broad range of materials employing compound semiconductor technologies, plastic vinyl coated fabrics and specialty chemicals used in the production of consumer, commercial and industrial products. The Company filed for chapter 11 protection on August 25, 2002 (Bankr. Del. Case No. 02-12471). Eric Michael Sutty, Esq., and Jeffrey M. Schlerf, Esq., at The Bayard Firm represents the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, it listed $85,842,000 in assets and $68,676,000 in debts. UNITED AIRLINES: Names Martin C. White Senior VP of Marketing ------------------------------------------------------------- United Airlines (OTC Bulletin Board: UALAQ) named Martin C. White senior vice president-Marketing, effective immediately. In this role, Martin will be responsible for the development of marketing strategies and the implementation of marketing programs, including advertising, promotion, marketing communications, United's award- winning Mileage Plus program, united.com and UAL Loyalty Services. "United is committed to achieving and maintaining a revenue leadership position in the airline industry," said John Tague, executive vice president-Customer. "While we've made much progress in recent months, the addition of Martin White as a new leader of our marketing initiatives will bring energy, creativity and enhanced focus to our efforts." White has an extensive background in the airline, travel and tourism, and direct-marketing industries. From 1998-2000, White was vice president of Consumer Marketing for Delta Air Lines, Inc., with similar responsibilities to those he will assume at United. Before that, he served as vice president of Marketing Programs & Services for US Airways Group, Inc. He began his career at Continental Airlines, Inc., where he held several marketing positions of increasing importance. He most recently was senior vice president of Marketing and Sales for Vail Resorts, Inc. in Avon, Colo. From 1991-1997, he was an executive with direct-marketing firm Brierley & Partners. White will report directly to Tague. White, 39, replaces Scott Praven, who will retire. In addition, Candy Lee, president of UAL Loyalty Services, is leaving to pursue other opportunities. A replacement, who will report to White, will be named shortly. "Scott Praven and Candy Lee have made significant contributions to United," Tague added. "We wish them both all the best in their future endeavors." United and United Express operate more than 3,300 flights a day on a route network that spans the globe. News releases and other information about United can be found at the company's Web site at http://www.united.com UNITED AIRLINES: Wants Nod to Sell Hotwire Stake for $85 Million ---------------------------------------------------------------- UAL Corporation asks Judge Wedoff for permission to sell its equity interest in Hotwire, Inc., to InterActiveCorp and Hydrogen Properties, Inc. UAL also asks for permission to execute the Stockholder Agreement and the Airline Stockholder Agreement. Before the Petition Date, United and UAL Loyalty Services, Inc., entered into a Participation Agreement with Hotwire, pursuant to which United would provide Hotwire with competitively priced distressed "air inventory" -- various low-cost buckets of available seats on certain flights -- in exchange for Hotwire stock. Under the Agreement, UAL Loyalty Services entered an Exclusivity Commitment, a two-year commitment not to invest in any other company deriving 20% or more of its ticket revenues from the sale of distressed air inventory. Other airlines entered similar agreements with Hotwire. On November 1, 2002, United, UAL Loyalty Services and Hotwire extended the Participation Agreement until January 7, 2006 and the Exclusivity Commitment until February 26, 2004. The Debtors have invested $3,780,000 in Hotwire since its formation in January 2000. Specifically, the Debtors invested $160,000 in common stock and $3,620,000 in preferred stock. As a result, the Debtors currently own 16,480,000 shares of Hotwire. On September 19, 2003, InterActiveCorp and Hydrogen agreed to buy 100% of Hotwire's preferred and common stock for $675,000,000. Based on their ownership stake, the Debtors stand to receive $85,000,000. The Debtors will use the proceeds to pay down the Revolving Credit Term Loan and Guaranty Agreement: (a) 60% will pay down the DIP Revolver; and (b) 40% will pay down the DIP Term Loan. As a condition precedent to the Transaction, equity holders must enter into the Stockholder Agreement, which indemnifies InterActiveCorp and Hydrogen for damages in excess of $6,700,000 resulting from breaches of representations and warranties. Pursuant to an Agreement, the Debtors are only liable to indemnify InterActiveCorp and Hydrogen for damages in excess of $15,000,000. The indemnities provided by the Stockholder Agreement are collectively capped at $67,500,000, except for indemnities for breaches of representations with respect to taxes, undisclosed debt and capitalization, which are collectively capped at $675,000,000. Goldman Sachs, Hotwire's investment bankers, analyzed the terms of the Merger Agreement and concluded that InterActiveCorp and Hydrogen's offer presented Hotwire's equity holders with a favorable combination of value, liquidity and certainty that is not available under any other alternative. (United Airlines Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., 609/392-0900) U.S. WIRELESS DATA: Brascan Backs-Out of Equity Financing Deal -------------------------------------------------------------- U.S. Wireless Data, Inc. (OTC: USWE), a leader in wireless transaction processing, announced that on October 30, 2003, the company received notification from Brascan Financial Corporation, on behalf of its designate, MIST Inc., an affiliate of Brascan, that it no longer intends to pursue the equity financing transaction contemplated by the term sheet with USWD as previously announced on September 16, 2003. However, the company is continuing to explore alternative transactions with MIST, although there can be no assurance that any such transaction will be consummated, or consummated on terms favorable to the company. Brascan indicated that despite certain technical defaults in connection with their bridge loan to USWD, as previously reported in the company's Annual Report on Form 10-KSB, as filed on October 14, 2003 (which defaults were waived through October 31, 2003), it is willing to discuss continuing to extend the balance of the remaining unadvanced amounts under the bridge loan that approximate $1 million. However, there can be no assurance that Brascan will continue to extend such remaining amounts or that it will not declare a default under the bridge loan documentation subsequent to October 31, 2003. In connection with MIST's determination not to proceed with the equity financing transaction as previously contemplated, Brascan has released USWD from its obligations to not solicit alternative financings from other potential investors, and the break-up fee that was associated with such a financing. USWD is currently exploring such other options. In view of MIST's determination not to proceed with the equity financing transaction as contemplated, the warrant to purchase 10,000,000 shares of USWD common stock issued to Brascan in connection with the bridge loan will expire in September 2008 and will become exercisable on the earlier of (i) December 31, 2003, or (ii) upon a consolidation or merger with another entity, or the sale, transfer or other disposition of all or substantially all of the company's assets and properties to another entity. U.S. Wireless Data provides wireless transaction delivery and gateway services to the payments processing industry. Our customers include credit card processors, merchant acquirers, banks, automatic teller machine distributors and their respective sales organizations, as well as certain businesses seeking new solutions to make it easier for their customers to buy their products or services. We offer these entities turnkey wireless and other transaction management services. We also provide those entities with proprietary wireless enabling products designed to allow card acceptance where such acceptance has heretofore been either too expensive or technologically unfeasible, or to displace conventional telephone lines for increased speed, cost reduction and/or convenience. These services and products may be utilized by conventional card accepting retailers as well as emerging card accepting market segments such as vending machines, quickservice (fast-food) and quick casual restaurants, taxis and limousines, in-home service providers, door-to-door sales, contractors, delivery services, sporting events, and outdoor markets. Our services and products may also be used for gathering telemetric information such as mission critical operational data on a real- time basis from remote equipment (e.g., vending machines). Further information is available at http://www.uswirelessdata.com WACKENHUT CORRECTIONS: Look for Third-Quarter Results Tomorrow -------------------------------------------------------------- Wackenhut Corrections Corporation (NYSE: WHC) will release its 2003 Third Quarter financial results tomorrow. This will be followed by a conference call at 2:30 PM (Eastern Standard Time) on the same day. Hosting the call for WCC will be George C. Zoley, Chairman and Chief Executive Officer, accompanied by Wayne H. Calabrese, Vice Chairman, President and Chief Operating Officer, John G. O'Rourke, Chief Financial Officer, David Watson, Treasurer and Vice President of Finance and Brian Evans, Vice President and Chief Accounting Officer. To participate in the teleconference, please contact one of the following numbers 5 minutes prior to the scheduled start time. 1-800-952-4671 (U.S. only) 1-706-643-1406 (International) Conference Call Title: "Wackenhut Corrections Earnings" In addition, a live web-cast of the conference call may be accessed on the Company's investor relations home page at http://www.wcc-corrections.com A web-cast audio replay of the conference call will also remain available on the Web site for 30 days. If you are unable to participate in the conference call, a telephonic replay will be available from November 6 through December 8. The replay number is 1-800-642-1687 (U.S.) and 1-706- 645-9291 (International). If you have any questions, please contact WCC at (561) 999-7306. WCC (S&P, BB- Corporate Credit Rating, Negative) is a world leader in the delivery of correctional and detention management, health and mental health services to federal, state and local government agencies around the globe. WCC offers a turnkey approach that includes design, construction, financing and operations. The Company represents government clients in the United States, Australia, South Africa, New Zealand, and Canada servicing 49 facilities with a total design capacity of approximately 36,000 beds. WHEELING-PITTSBURGH: Seeks Resolution of Marubeni's $1.6MM Claim ---------------------------------------------------------------- By the parties' agreement, Lease Logistics' claim for $225,557.80 is allowed as a general, unsecured claim against the bankruptcy estate of Wheeling-Pittsburgh Steel Corp., for $8,719. The disputed claims left for resolution or disposition are: Claimant Claim Amount -------- ------------ Marubeni America Corp. $1,595,443.94 Tennessee Dept. of Revenue 50,918.14 (Wheeling-Pittsburgh Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., 609/392-0900) WHITEHALL MACHINERY: Case Summary & Largest Unsecured Creditors --------------------------------------------------------------- Lead Debtor: Whitehall Machinery, Inc. 1980 Grassland Parkway Alpharetta, Georgia 30201 Bankruptcy Case No.: 03-22381 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- JCS & Associates, Inc. 03-22382 Grassland Industrial Park, Inc. 03-22383 Type of Business: The Debtor is a used equipment dealer specializing in flat rolled metal processing machinery. Chapter 11 Petition Date: November 3, 2003 Court: Northern District of Georgia (Gainesville) Debtors' Counsel: Charles N. Kelley, Jr., Esq. Cummings Kelley & Bishop PC 340 Jesse Jewell Parkway Suite 602 Gainesville, GA 30501-7701 Tel: 770-531-0007 Fax: 770-533-9087 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 14 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ SunTrust Bank Bank loan $1,381,470 P.O. Box 4418 Unsecured: Mail Code: 150 $1,381,470 Atlanta, GA 30302-4418 Attn: Mr. Neal Barton Quirk & Quirk 450 Buckehad Centre 2964 Peachtree Rd., N.W. Atlanta, GA 30305-4903 Mr. Neal Quirk Jerome Lipman $128,449 Thomas Fisher $84,855 Vision Financial $61,623 Mike & Ed Masters $60,000 Georgia Natural Gas $56,394 Cumberland Machine Co. $32,198 Metals USA Horicon $30,000 Landstar Inway $23,265 Forsyth County $20,209 Georgia Department Of Revenue $19,359 Hurricane Machine Inc. $7,500 Steel Hector Davis $5,000 Bosko Machinery, Inc. $3,560 B. JCS & Associates' 10 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ SunTrust Bank Bank loan $2,177,313 P.O. Box 4418 Unsecured: Mail Code: 150 $2,177,313 Atlanta, GA 30302-4418 Attn: Mr. Neal Barton Quirk & Quirk 450 Buckehad Centre 2964 Peachtree Rd., N.W. Atlanta, GA 30305-4903 Mr. Neal Quirk Lib Properties Bank loan $280,277 200 Sandy Springs Place, N.E. Suite 100 Atlanta, GA 30328 Connie Robinson SunTrust Bank $175,137 Jerome Lipman Trade debt $14,439 Georgia Department Tax $11,246 Of Revenue Georgia Department Tax $10,783 Of Revenue Forsyth County Tax $1,799 Forsyth County Tax $1,682 Georgia Department Tax $357 Of Revenue Georgia Department Tax $222 Of Revenue C. Grassland Industrial Park's 7 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Lib Properties Bank loan $280,277 200 Sandy Springs Place, Collateral: N.E. $2,000,000 Suite 100 Unsecured: Atlanta, GA 30328 $280,277 Connie Robinson SunTrust Bank Bank loan $2,177,313 P.O. Box 4418 Collateral: Mail Code: 150 $2,000,000 Atlanta, GA 30302-4418 Unsecured: Mr. Neal Barton $177,313 Jerome Lipman Bank loan $14,439 Georgia Department Tax $11,246 of Revenue Georgia Department Tax $10,738 of Revenue Forsyth County Tax $1,799 Forsyth County Tax $1,682 WORLDCOM INC: Turning to Huron Consulting for Financing Advice -------------------------------------------------------------- The Worldcom Debtors seek the Court's authority to employ Huron Consulting Group LLC as financial advisors for their Chapter 11 cases, nunc pro tunc to August 25, 2003. WorldCom Chief Financial Officer Robert Blakely, specifically, describes Huron Consulting's scope of services as: (1) advising the Debtors with respect to reconciling, objecting to or otherwise resolving the claims filed against them in the course of the bankruptcy proceeding; (2) tracking the Debtors' work with regard to their decisions on executory contracts rejections, assumptions and cure amounts; and (3) preparing analyses to support the Debtors' decisions with regard to when and if to pursue preference payments or other avoidance actions. In connection with these Projects, Huron Consulting is also prepared to provide other assistance as the Debtors request. The specific procedures that Huron Consulting is to perform in connection with the Projects will include, in addition to other procedures that the firm and the Debtors may mutually agree upon: (a) building and maintaining a claims database linking claims data with scheduled debt data, objection data, duplicate claim data, settlement data, and any other relevant, mutually agreed upon data. Maintenance includes updating the database, reconciling it to the Bankruptcy Services, Inc. claims register and running ad hoc queries as required; (b) building and maintaining an executory contracts database consisting of data pertaining to existing contracts, contracts assumed and rejected since March 2003, and any other relevant, mutually agreed upon data; (c) assisting the Debtors to manage the claims objection process by preparing exhibits to omnibus objections to claims and coordinating with Debtors' claims agent and the Debtors' employees, counsel and advisors; (d) assisting the Debtors to manage the claims resolution process by tracking the status of claims resolution in each claim category, identifying potential issues impacting the claims resolution process, tracking estimated claims values for the largest claims within each category, coordinating the tracking adjustments to the Debtors' accounting records, and other, day-to-day tasks the Debtors ask during the course of the engagement; and (e) assisting the Debtors to gather and analyze the data necessary to allow management to make the appropriate decisions with regard to when and if to pursue avoidance actions. The Debtors have selected Huron Consulting because: -- of its diverse experience and extensive knowledge, including, without limitation, in the fields of business dispute analysis, data extraction, compilation, storage, retrieval and analysis, and case management planning; -- it has provided support for leading corporations on some of the largest and most complex litigation in the country; and -- it has the necessary depth and range of skills to assist the Debtors in the Chapter 11 cases. The Debtors will compensate Huron Consulting for its services based on the hours actually expended by each professional at each professional's current regular hourly billing rate: Managing Director $445 - 600 Director 315 - 450 Manager 265 - 350 Associate 185 - 250 Analyst 135 - 175 Benjamin J. Goren, Director of Huron Consulting, discloses Huron Consulting's connections with the Debtors: * The firm is currently engaged by WorldCom/MCI on a postpetition basis as an ordinary course professional to provide litigation support in claim against World Access. * The firm is currently engaged as financial advisor to United Airlines, Chapter 11 debtor. WorldCom is a vendor of United Airlines and MCI is a customer of United Airlines. * The firm is currently engaged as financial advisor to Global Crossing, Chapter 11 debtor. WorldCom/MCI may be a vendor or creditor of Global Crossing. * The firm is currently engaged by debtors or others in connection with various bankruptcy proceedings in which WorldCom or MCI may be a vendor or creditor, including Orion Refinery, 360 Networks, and Eagle Food Centers. * WorldCom is currently the dial-up Internet provider to Huron Consulting Group. Huron Consulting currently spends $10,000 to $12,000 per month on an annual contract for this service. Nevertheless, Mr. Goren assures the Court that Huron Consulting does not hold or represent an interest adverse to the Debtors' estates. Huron Consulting is a "disinterested person" as that term is defined in Section 101(14) of the Bankruptcy Code. (Worldcom Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service, Inc., 609/392-0900) W.R. GRACE: Pushing for Nod to Hire New Unidentified Pres. & COO ---------------------------------------------------------------- Paul J. Norris currently serves as W.R. Grace's Chairman, President and Chief Executive Officer. The Debtors have decided they need to hire a Chief Operating Officer and have selected -- but do not disclose the identity of -- a Candidate to fill that slot. Contingent on Judge Fitzgerald's approval of the company's decision to create the COO position and hire a new person to fill the President and COO slot, Mr. Norris will relinquish his position as President and retain the positions of Chairman and Chief Executive Officer. Three senior officers, each responsible for managing one of the Debtors' three "product lines" -- Davison Catalysts, Davison Silicas, and Grace Performance Chemicals -- report directly to Mr. Norris. Four other senior officers also report directly to Mr. Norris. These individuals are responsible for corporate-wide functions, including the Debtors' Chapter 11 cases, finance, treasury, legal, human resources, information technology, environmental, health and safety, and other functions. Need for a COO Over the past several months, Mr. Norris discussed with the Board of Directors his current intention to remain with the Debtors until their emergence from these Chapter 11 cases, depending on the timing of that emergence, and the need to address succession planning for the CEO position. In light of Mr. Norris' intentions, the Debtors determined that the best alternative regarding the management structure would be the creation of the COO position whereby the Product Line Officers would report to the COO, who in turn would report to Mr. Norris as CEO. The Administrative Officers would continue to report to Mr. Norris as CEO. The Debtors also concluded that revisiting their management structure to include a COO would have several other significant benefits in addition to providing the Debtors with an additional "in-house" candidate to succeed Mr. Norris as CEO. Those benefits include: (1) adding a high-level executive who would be focused primarily on managing the overall operations of the Debtors' businesses in an effort to improve the current financial performance of those businesses; and (2) permitting Mr. Norris to dedicate a greater portion of his time to manage corporate-wide issues, like the Debtors' Chapter 11 cases. The COO Candidate At the time the Board concluded that the Debtors should retain a COO, and after various discussions regarding candidates, Mr. Norris identified a specific individual as his preferred candidate for the COO position. The Candidate then met with each member of the Debtors' Board. Thereafter, the Debtors began discussions and negotiations with the Candidate. The Debtors concluded that the Candidate would bring specific and unique management and leadership strengths to the Debtors' businesses, which would make him particularly well suited to assume the COO position. The candidate, while not identified by name, is described as having significant operational experience within the chemicals industry and senior financial management experience within the general industry. He served as a vice president and general manager of a business unit of a major U.S. chemical manufacturer, where he also served as vice president of finance and business development for a major business unit. He has experience regarding use of technologies in ways that are relatively new to the Debtors' businesses, and has had responsibility for analyzing manufacturing and other businesses in order to determine the value of the businesses. The COO Agreement After identifying the candidate of their choice for the position of COO, the Debtors developed a competitive compensation package to present to the Candidate. Thereafter, the Debtors and the Candidate and their counsels negotiated and finalized the terms under which the Candidate would assume the position of COO. The Candidate has verbally accepted the COO agreement and the Board is expected to approve the COO agreement at its next scheduled meeting on November 6, 2003. The initial term of the COO agreement is three years, beginning on the Candidate's first day as COO of the Debtors. The Candidate's initial base salary is $550,000, with participation in the Debtors' existing annual incentive compensation program, at a targeted award equal to 74% of base salary. This award will be paid only to the extent that specific financial targets under the program are achieved for the applicable year. The Candidate's award under the program is targeted at 100% of base salary for each of 2003 and 2004, but his award for 2003 would be prorated to reflect the portion of that year that he was actually employed by the Debtors. The COO Agreement also provides the Candidate with a severance benefit equal to one and one-half times 175% of his base salary at the time of termination in the event he is terminated by the Debtors without cause, or he terminates his employment with the Debtors as a result of "constructive discharge" during the initial term of the COO agreement. The Candidate would also be entitled to such severance benefit if he terminates his employment as a result of not being offered the position of CEO following Mr. Norris' departure. In all other respects, the COO agreement provides that the Candidate will be provided with compensation, benefits, and incentive opportunities that are available to other senior officers of the Debtors as previously approved by the Court. COO Agreement Should be Approved The Debtors tell the Court that the COO Agreement will benefit their estates by: (a) addressing the Debtors' need for CEO succession planning; (b) allowing the Debtors to obtain the services of the Candidate as COO to help the Debtors' business operations; and (c) allowing Mr. Norris to concentrate more fully on corporate-wide issues. Judge Fitzgerald will convene a hearing on Nov. 17 to review the Debtors' request. (W.R. Grace Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., 609/392-0900) XOMA LTD: Exercises Option to Defer $40 Million Payment of Loan --------------------------------------------------------------- XOMA Ltd. (Nasdaq:XOMA) has exercised its option to defer payment of $40 million of its convertible loan from Genentech, Inc. related to the development of Raptiva(TM). As provided in the loan agreement, the deferred portion will be paid out of XOMA's share (25 percent) of U.S. operating profits generated from future Raptiva sales. XOMA will pay the balance of the loan with preference shares of XOMA stock before year-end 2003. These preference shares will be convertible into common shares at a price of $7.75 per share, the price determined under the loan agreements at the time XOMA notified Genentech of its election, based on a formula intended to reflect the current market price of XOMA's common shares. The total development loan balance reported as of June 30, 2003 was $69.6 million. The companies will determine the exact balance as of Raptiva's approval on October 27, 2003 and therefore the amount to be paid in shares and the exact number of shares. The loan agreement required that XOMA pay within 90 days after approval of Raptiva the amounts outstanding in cash or in shares of XOMA stock and decide whether to exercise its right to defer cash payment of up to $40 million beyond the 90-day period. "Now that Raptiva is approved, we are moving forward," said John L. Castello, XOMA's chairman, chief executive officer and president. "We are excited about the upcoming launch and anticipated sales, and we want to remove any lingering uncertainty about potential dilution to our shareholders related to our convertible development loan from Genentech. Final numbers remain to be determined, but we anticipate issuing preference shares convertible into approximately four million common shares to repay the approximately $30 million in development financing that we are not deferring." XOMA -- which has a net capital deficit of about $11 million -- develops and manufactures antibody and other protein-based biopharmaceuticals for disease targets that include immunological and inflammatory disorders, cancer and infectious diseases. XOMA's programs include collaborations: with Genentech, Inc. on the Raptiva(TM) antibody for psoriasis (BLA submission), psoriatic arthritis (Phase II) and other indications; and with Millennium Pharmaceuticals, Inc. on a recombinant protein, CAB-2, for vascular inflammation (preclinical). Earlier-stage development programs focus on antibodies and other compounds developed by XOMA for the treatment of acne (Phase I), cancer and retinopathies. ZYMETX INC: Bankruptcy Court Confirms Plan of Reorganization ------------------------------------------------------------ ZymeTx, Inc. (Pink Sheets:ZMTX), a biotechnology and influenza disease management firm based in Oklahoma City, announced that the United States Bankruptcy Court for the Western Division of Oklahoma has confirmed its reorganization plan, allowing the company to emerge from bankruptcy. Since filing for reorganization in November 2002, ZymeTx has continued marketing and selling its ZstatFlu(R) product, a proven point-of-care diagnostic test for the detection of Influenza A and B. The non-invasive test, administered using a throat swab, renders a diagnosis in a doctor's office within 20 minutes. The company has also continued research activities during the reorganization funded primarily by federal and state research grants and operated the National Flu Surveillance Network(TM), an Internet-based program to pinpoint and track the spread of influenza across the United States. "It has been a challenging process for our employees, vendors and stakeholders, but we are nevertheless pleased to announce we have succeeded in our reorganization effort and we are positioned to move forward with the company," commented Norman Proulx, the firm's president and chief executive officer. Under the terms of the reorganization, the Company sold all of its ZstatFlu test kit inventory and licensed and/or sublicensed all of its proprietary rights to certain of its other technology and assets, including the chemiluminescence-based (Polaroid) rapid disease detection technology, the ZstatFlu test kits and the National Flu Surveillance Network, to DiagXotics, Inc., a Delaware corporation. In addition, stockholders of the Company will retain their shareholder status with ZymeTx, thereby giving them the opportunity to potentially recover some or all of their original investment in the Company depending on the revenues that the Company ultimately realizes from the sale of the inventory and the licensing agreements, as well as from its ongoing research activities related to its other technology. "I am pleased our plan contains opportunity for ZymeTx creditors and shareholders to potentially benefit financially in the reorganized company," Proulx said. "We are grateful for the support of all stakeholders throughout the process this past year. As we look to the future, we have good reason for optimism with an acknowledged, accurate influenza diagnostic and excellent invitro and invivo data from our viral therapeutic program." ZymeTx, Inc., headquartered in Oklahoma City, is a biotechnology company engaged in the development of technology to produce products for the diagnosis and treatment of viral disease, viral management and disease surveillance. The Company developed ZstatFlu, the world's first rapid point-of-care test capable of detecting both Influenza A and B, and the National Flu Surveillance Network(TM), a network of physician sites across the country that use ZstatFlu to track influenza in their communities and practices. Additional information on ZymeTx and NFSN can be obtained by accessing the Web sites at http://www.zymetx.comand http://www.fluwatch.com * Meetings, Conferences and Seminars ------------------------------------ November 4-5, 2003 EUROFORUM INTERNATIONAL The Art and Science of Russian M&A Ararat Park Hyatt Hotel, Moscow Contact: +44-20-7878-6897 or liu@ef-international.co.uk November 12-14, 2003 AMERICAN BANKRUPTCY INSTITUTE Litigation Skills Symposium Emory University, Atlanta, GA Contact: 1-703-739-0800 or http://www.abiworld.org November 18, 2003 NEW YORK INSTITUTE OF CREDIT Joint Cocktail Partyu with TMA Chapters NY, LI, NJ Contact: info@nyic.org; 212-629-8686 November 18, 2003 NEW YORK INSTITUTE OF CREDIT NICHE Players in Alternative Lending Markets Contact: info@nyic.org; 212-629-8686 November 19, 2003 NEW YORK INSTITUTE OF CREDIT Joint Event with Nassau Bar Association Melville New York Hilton Contact: info@nyic.org; 212-629-8686 December 1-2, 2003 RENAISSANCE AMERICAN MANAGEMENT, INC. Distressed Investing The Plaza Hotel, New York City, NY Contact: 800-726-2524 or http://renaissanceamerican.com December 3-7, 2003 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference La Quinta, La Quinta, California Contact: 1-703-739-0800 or http://www.abiworld.org February 5-7, 2004 AMERICAN BANKRUPTCY INSTITUTE Rocky Mountain Bankruptcy Conference Westin Tabor Center, Denver, CO Contact: 1-703-739-0800 or http://www.abiworld.org March 5, 2004 MERICAN BANKRUPTCY INSTITUTE Bankruptcy Battleground West The Century Plaza, Los Angeles, CA Contact: 1-703-739-0800 or http://www.abiworld.org April 15-18, 2004 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting J.W. Marriott, Washington, D.C. Contact: 1-703-739-0800 or http://www.abiworld.org April 29-May 1, 2004 ALI-ABA Partnerships, LLCs, and LLPs: Uniform Acts, Taxation, Drafting, Securities, and Bankruptcy Fairmont Hotel, New Orleans Contact: 1-800-CLE-NEWS or http://www.ali-aba.org May 3, 2004 AMERICAN BANKRUPTCY INSTITUTE New York City Bankruptcy Conference Millennium Broadway Conference Center, New York, NY Contact: 1-703-739-0800 or http://www.abiworld.org June 2-5, 2004 AMERICAN BANKRUPTCY INSTITUTE Central States Bankruptcy Workshop Grand Traverse Resort, Traverse City, MI Contact: 1-703-739-0800 or http://www.abiworld.org June 24-26,2004 AMERICAN BANKRUPTCY INSTITUTE Hawaii Bankruptcy Workshop Hyatt Regency Kauai, Kauai, Hawaii Contact: 1-703-739-0800 or http://www.abiworld.org July 15-18, 2004 AMERICAN BANKRUPTCY INSTITUTE The Mount Washington Hotel Bretton Woods, NH Contact: 1-703-739-0800 or http://www.abiworld.org July 28-31, 2004 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop The Ritz-Carlton Reynolds Plantation, Lake Oconee, GA Contact: 1-703-739-0800 or http://www.abiworld.org September 18-21, 2004 AMERICAN BANKRUPTCY INSTITUTE Southwest Bankruptcy Conference The Bellagio, Las Vegas, NV Contact: 1-703-739-0800 or http://www.abiworld.org October 10-13, 2004 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Seventh Annual Meeting Nashville, TN Contact: http://www.ncbj.org/ December 2-4, 2004 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Marriott's Camelback Inn, Scottsdale, AZ Contact: 1-703-739-0800 or http://www.abiworld.org April 28- May 1, 2005 AMERICAN BANKRUPTCY INSTITUTE Annual Spring Meeting J.W. Marriot, Washington, DC Contact: 1-703-739-0800 or http://www.abiworld.org July 14 -17, 2005 AMERICAN BANKRUPTCY INSTITUTE Ocean Edge Resort, Brewster, MA Contact: 1-703-739-0800 or http://www.abiworld.org July 27- 30, 2005 AMERICAN BANKRUPTCY INSTITUTE Southeast Bankruptcy Workshop Kiawah Island Resort and Spa, Kiawah Island, SC Contact: 1-703-739-0800 or http://www.abiworld.org November 2-5, 2005 NATIONAL CONFERENCE OF BANKRUPTCY JUDGES Seventy Eighth Annual Meeting San Antonio, TX Contact: http://www.ncbj.org/ December 1-3, 2005 AMERICAN BANKRUPTCY INSTITUTE Winter Leadership Conference Hyatt Grand Champions Resort, Indian Wells, CA Contact: 1-703-739-0800 or http://www.abiworld.org The Meetings, Conferences and Seminars column appears in the Troubled Company Reporter each Wednesday. Submissions via e-mail to conferences@bankrupt.com are encouraged. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Bond pricing, appearing in each Thursday's edition of the TCR, is provided by DebtTraders in New York. DebtTraders is a specialist in global high yield securities, providing clients unparalleled services in the identification, assessment, and sourcing of attractive high yield debt investments. For more information on institutional services, contact Scott Johnson at 1-212-247-5300. To view our research and find out about private client accounts, contact Peter Fitzpatrick at 1-212-247-3800. Real-time pricing available at http://www.debttraders.com/ Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., 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 ***