/raid1/www/Hosts/bankrupt/TCR_Public/031126.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 26, 2003, Vol. 7, No. 234
Headlines
ADELPHIA BUSINESS: Solicitation Exclusivity Intact Until Jan. 1
ADELPHIA COMMS: Equity Committee Hires Chanin Capital as Advisor
AES GENER: Fitch Ups & Maintains Low-B Ratings on Watch Positive
AIR CANADA: Preliminary Injunction Hearing Date Moved to Jan. 8
ALLIED WASTE: Completes Senior Secured Term Loan Refinancing
AMERICAN SEAFOODS: Extends Tender Offer for 10-1/8% Sr. Notes
AMES DEPT.: Secures Nod to Implement Performance Incentive Plan
APPLIED EXTRUSION: Red Ink Continued to Flow in Fiscal-Year 2003
ARMSTRONG: Court Strikes Testimony of Committee's Experts
BABSON CLO: Class E Notes Get S&P's BB Preliminary Rating
BIOTRANSPLANT: Board Approves Plan to Liquidate Remaining Assets
BIOVAIL CORP: Gets TSX Nod to Make Normal Course Issuer Bid
BOOT TOWN: Section 341(a) Creditors' Meeting Set for December 19
BURLINGTON INDUSTRIES: Terminates Common Stock Registration
CABLE SATISFACTION: Quebec Court Names Richter Interim Receiver
CABLETEL COMMS: William J. Biggar Resigns as Board Chairman
CASELLA WASTE: Will Host 2nd-Quarter Conference Call on Dec. 4
CEDARA: Partners with IBM China to Explore Market Opportunities
CHILDTIME LEARNING: Oct. Working Capital Deficit Widens to $28MM
CNA FINANCIAL: Completes Sale of Preferred Shares to Loews Corp.
CONE MILLS: Committee Signs-Up Ernst & Young as Workout Advisors
CONSOLIDATED CONTAINER: Completes Acquisition of Contour Assets
CONSTELLATION BRANDS: Files Shelf Registration for Shares Sales
COVANTA ENERGY: Court Confirms Heber Debtors' 3rd Amended Plan
CREST: S&P Assigns Low-B Ratings to Class E Notes and Preferreds
CROWN CASTLE: Commences Cash Tender Offer for 2 Discount Notes
CTC COMMS: Court Confirms 2nd Amended Joint Reorganization Plan
DEACONESS HOSPITAL: Case Summary & Largest Unsecured Creditors
DELTA AIR LINES: S&P Puts Low-B Level Ratings on Watch Negative
DIRECTV LATIN: Wants More Time to Make Lease-Related Decisions
DOMAN INDUSTRIES: Intends to Withdraw from Obligations Under FIR
DOMAN INDUSTRIES: FIR Seeks to Protect Doman from Strike
DYNEGY: S&P Affirms B Corp. Credit Rating over Terminated Deal
DYNEGY INC: Exelon Disappointed with Terminated Acquisition Deal
EMAGIN CORP: Completes Settlement Pact with Vertical Ventures
ENRON: Proposes Uniform Wind Projects Sale Bidding Procedures
FARMLAND IND.: Court to Consider Plan on December 16, 2003
FERRELLGAS PARTNERS: Red Ink Continued to Flow in First Quarter
FIBERCORE: Seeks Court Approval to Use Lender's Cash Collateral
FOX PLAZA PIZZA: Case Summary & Largest Unsecured Creditors
GENUITY: Court-Confirmed 3rd Amended Liquidation Plan Overview
GLOBALSTAR LP: Committee Lauds Approval of Asset Sale to Thermo
HASBRO INC: Commences Tender Offer for 8-1/2% Notes Due 2006
HORSEHEAD IND.: Court Okays Sun Capital as Stalking Horse Bidder
INFINIA AT WILMAR: Case Summary & 80 Largest Unsecured Creditors
INTEREP: Appoints Mike Agovino as Co-President & Co-COO
JA JONES: Gets OK to Tap Alston & Bird as Special Corp. Counsel
KMART CORP: Court Nixes 690 Employees' Claims Totaling $80 Mill.
LA QUINTA CORP: S&P Revises Low-B Ratings' Outlook to Stable
MEDMIRA INC: Oct. 31 Net Capital Deficit Widens to CDN$3 Million
MIRANT CORP: Asks Court to Determine Tax Liability and Refunds
MOLECULAR DIAGNOSTICS: Completes $4-Million Bridge Financing
MORGAN STANLEY: Fitch Affirms B+ Rating on Class G Notes
MSX INT'L: Weak Credit Measures Spur S&P to Lower Rating to B
NEW CENTURY COMPANIES: Plans to Expand Market for CNC Machinery
NORTEK INC: Parent Completes $515MM 10% Sr. Disc. Notes Offering
NRG ENERGY: Court Approves Andrews Kurth as Special Counsel
NUI UTILITIES: Arranges Credit Facilities Totaling $405 Million
OAKWOOD HOMES: Today is the Administrative Claims Bar Date
PENN NATIONAL: Wants to Make Amendments to Credit Facilities
PHILIP MORRIS: Jury Clears Co. in New Hampshire Smoker's Case
PILLOWTEX CORP: Court Fixes December 28, 2003 as Claims Bar Date
PLAINS ALL: Unit Acquires South Saskatchewan Pipeline System
PMA CAPITAL: S&P Keeps Counterparty & Debt Ratings on Watch Neg.
RELIANCE GROUP: Liquidator Wants to Amend Complaint vs. Deloitte
RESMED INC: EVP Christopher Roberts Leaving Company on Dec. 31
SHC INC: Creditors Must File Claims by December 5, 2003
SK GLOBAL: SK Corp. Q3 Operating Results Enter Positive Zone
SMARTSERV: Trading Under New SSRV Symbol after Reverse Split
SPECIALTY FOODS: Lenders Extend Covenant Breach Waivers
SUN HEALTHCARE: Has Until December 15, 2003 to Challenge Claims
SUPERIOR TELECOM: Fleet Capital Provides $120MM Exit Financing
TELEX COMMS: 11.5% Secured Note Issue Completes Debt Refinancing
TEXAS INDUSTRIES: Launches Exchange Offer for 10-1/4% Sr. Notes
US AIRWAYS: M&T Financial Agrees to Reduce Claim to $4 Million
VERITAS DGC: First Fiscal Quarter Net Loss Tops $26 Million
WCI COMMUNITIES: Prices 5.7 Million Share Public Offering
WEIRTON STEEL: Court to Consider Proposed Plan on Dec. 16, 2003
WESTPOINT: Has Until March 1 to Make Lease-Related Decisions
WINSTAR: Court Okays Additional Compensation for Charles Persing
WKI HOLDING: S&P Keeps Ratings on Watch Citing Industry Concerns
WORLDCOM: Court Nixes Move to Dismiss Suit Filed by Ex-Employee
W.R. GRACE: Request for Hamlin's Appointment Drawing Fire
XML GLOBAL TECH.: Completes Sale of All Assets to Xenos Group
XO COMMS: No Shares Were Authorized for Issue in Rights Offering
* Meetings, Conferences and Seminars
*********
ADELPHIA BUSINESS: Solicitation Exclusivity Intact Until Jan. 1
---------------------------------------------------------------
Adelphia Business Solutions, Inc. and its debtor-affiliates
obtained the Court's approval to extend their Exclusive Period
within which they must solicit acceptances of the Plan from
creditors, to and including January 1, 2004. (Adelphia Bankruptcy
News, Issue No. 45; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
ADELPHIA COMMS: Equity Committee Hires Chanin Capital as Advisor
----------------------------------------------------------------
On July 31, 2002, the Office of the United States Trustee for the
Southern District of New York appointed the Equity Committee to
represent Adelphia Communications' equity security holders
pursuant to Section 1102 of the Bankruptcy Code. On December 26,
2002, the Court approved the Equity Committee's application to
retain Saybrook Restructuring Advisors LLC as its financial
advisor on certain terms and conditions and its accompanying
engagement letter.
According to Norman N. Kinel, Esq., at Sidley Austin Brown & Wood
LLP, in New York, Saybrook provided the Equity Committee with
valuable and necessary services during the past year. Saybrook
monitored the ACOM Debtors' performance on a business level and
provided the Equity Committee with regular guidance and analysis
on a host of business issues pertaining to the Debtors' financial
affairs, operations and the various matters, which have come
before the Court to date in this case. Saybrook's Retention
formally terminates effective September 23, 2003. The Equity
Committee's decision to retain Chanin Capital Partners LLC as its
financial advisor should not be construed in any way as a
negative reflection on Saybrook's services to date.
Mr. Kinel relates that this case is currently entering a new
stage, during which the Equity Committee believes accounting
issues will become critical. For example, the Debtors recently
announced a series of likely financial reporting adjustments,
which they have indicated will include a material restatement of
their capital versus current expense accounting treatment. The
Debtors also recently restated the manner in which they account
for the number of cable subscribers that they service. Probably
even more significant, the Equity Committee anticipates an
increased focus on accounting issues when the Equity Committee
and other parties-in-interest receive:
(1) the Debtors' long-term business plan, which will
incorporate, among other things, EBITDA projections that
depend on modified capitalization procedures and other
accounting treatments;
(2) the Debtors' first audited financial statements
since more than a year prior to the Petition Date; and
(3) information as to the Debtors' prepetition cash flows and
cash management, which may, depending on forensic
accounting analyses, be relevant to critical
determinations in respect of inter-company balances and
substantive consolidation issues.
As a result of the present and continued anticipated prominence
of the foregoing and other financial and accounting issues, the
Equity Committee determines that it needed to supplement
Saybrook's skills with greater accounting and cable industry
expertise. During the past few months, Mr. Kinel notes that the
Equity Committee raised its need for accounting expertise with
the Debtors and the ACOM Creditors Committee. Both the Debtors
and their Creditors Committee indicated that they would oppose
any additional expenditure of estate funds by the Equity
Committee to retain accounting professionals for that purpose.
Thus, the Equity Committee sought a solution for its additional
professional needs, which would not involve additional
expenditures of estate funds. In this regard, the Equity
Committee asked Saybrook to consider a modification of its
engagement agreement by reducing its monthly compensation to
carve out funding for accountants. However, the Equity Committee
and Saybrook were unable to reach an agreement in this regard.
In view of these circumstances, the Equity Committee entered into
an agreement with Chanin that will provide it with the financial
advisory services of the type previously provided by Saybrook.
In addition, the Equity Committee decided to retain Kroll Zolfo
Cooper LLC to provide it with accounting and litigation support
services. The Equity Committee has been able to obtain the
services of both firms at no increased expense to the Debtors'
estates through Chanin's willingness to reduce its proposed
$150,000 monthly fee -- the same fee currently being paid to
Saybrook -- on a dollar-for-dollar basis, up to $50,000 per
month, to the extent of fees incurred by Kroll Zolfo which are to
be limited to $50,000 per month.
Mr. Kinel states that the proposed change in the Equity
Committee's financial advisors and retention of accountants will
provide the Equity Committee with an appropriate team of
financial advisors and will permit the Equity Committee to fully
perform its fiduciary duties in these cases, without increasing
the burden of administrative fees on the Debtors' estates. In
addition, the Equity Committee will undertake to coordinate with
Chanin and Kroll Zolfo with the goal of insuring that neither of
them provides services that are unnecessarily duplicative of
services provided by other professionals in the Debtors' cases or
that unnecessarily require the time of the Debtors' personnel and
other retained professionals in these cases.
Accordingly, on August 20, 2003, the Equity Committee voted to
retain:
(1) Chanin to replace Saybrook as its financial advisor in
the Debtors' Chapter 11 cases; and
(2) Kroll Zolfo as its accountants.
Chanin, who commenced working on these cases on the Equity
Committee's behalf on August 22, 2003, will replace Saybrook as
the Equity Committee's financial advisor in the Debtors' cases,
and its entitlement to compensation will commence, effective as
of September 23, 2003, the date that Saybrook's employment is
terminated.
Since August 22, 2003, Mr. Kinel reports that Chanin commenced to
fully perform as the Equity Committee's financial advisor even
though it will not be compensated for services it provides prior
to September 23, 2003. In addition to evaluating and advising
the Equity Committee on a regular basis concerning various
matters, including reports and other documents that the Debtors
generate, Chanin's principals have met with certain of the
Debtors' principals, as well as other professionals employed in
these cases, and have quickly gotten "up to speed" on both the
dynamics of the Debtors' cases as well as many of the business
and strategic issues that lately have come to the forefront.
Saybrook provided material assistance by fully cooperating to
transition their knowledge base to Chanin during this transition
period.
Accordingly, pursuant to Sections 327(a), 328(a) and 1103(a) of
the Bankruptcy Code, Rules 2014(a), 2016 and 5002 of the Federal
Rules of Bankruptcy Procedure and Local Bankruptcy Rule 2014-1,
the Equity Committee seek the Court's authority to retain Chanin
as its financial advisor effective September 23, 2003 in
accordance with the terms of the Engagement Letter, dated as of
August 21, 2003.
Mr. Kinel informs Judge Gerber that the Equity Committee selected
Chanin based on its experience and expertise in providing
investment banking and financial advisory services in Chapter 11
cases. Chanin is a respected investment banking and financial
advisory services firm and has extensive experience working with
financially troubled entities in complex financial
reorganizations -- both in Chapter 11 cases and in out-of-court
restructuring situations. In particular, Chanin served, or is
serving, as financial advisor and investment banker to numerous
official committees and debtors-in-possession in bankruptcy
proceedings, including:
(1) Global Crossing;
(2) Focal Communications;
(3) ITC Deltacom;
(4) Covad;
(5) iPCS, Inc.;
(6) MCLeodUSA; and
(7) Leap Wireless;
(8) International, Inc.;
(9) Assisted Living Concepts;
(10) Fruit of the Loom;
(11) Mariner Post-Acute Network;
(12) Talon Automotive;
(13) United Artists; and Washington Group International.
Services To Be Rendered
As this Court previously determined in connection with the Equity
Committee's application to retain Saybrook, the Equity Committee
requires a financial advisor to assist it during these Chapter 11
cases. The Equity Committee seeks to retain Chanin to provide
financial advisory and investment banking services including, but
not limited to:
A. General Financial Advisory Services:
(1) reviewing and analyzing the business, management,
operations, properties, financial condition and
prospects of the Debtors;
(2) reviewing the assumptions underlying the business plans
and cash flow projections for the assets involved in any
potential transaction;
(3) determining the reasonableness of the Debtors' projected
performance;
(4) monitoring, evaluating and reporting to the Equity
Committee with respect to the Debtors' near term
liquidity needs, material operational changes and
related financial and operational issues;
(5) reviewing and analyzing all material contracts and
agreements;
(6) identifying contracts and agreements that may be
disadvantageous to the interests of the Debtors' equity
security holders;
(7) assisting in procuring and assembling any necessary
validations of asset values; and
(8) providing ongoing assistance to the Equity Committee
and the Equity Committee's legal counsel.
B. Investment Banking Restructuring Services:
(1) evaluating the Debtors' capital structure and making
recommendations to the Equity Committee with respect to
the Debtors' efforts to reorganize their business
operations and confirm a Plan;
(2) advising and assisting the Equity Committee in analyzing
alternative reorganization strategies;
(3) reviewing and analyzing any and all plans of
reorganization and disclosure statements submitted to
the Court for approval;
(4) evaluating the proposed Plan structure for the Debtors
to ascertain its impact on the recovery available to
all shareholders;
(5) in connection with the Plan, advise and assist the
Equity Committee in connection with the Debtors'
structuring of any new securities to be issued to
creditors and Shareholders in full or partial
satisfaction of the creditors' or Shareholders' claims
or interests;
(6) providing ongoing analysis of the Debtors' financial
condition, business plans, capital spending budgets,
operating forecasts, management and the prospects for
their future performance;
(7) reviewing and providing analysis of any valuations of
the Debtors, as a whole and by system or other business
unit, on a going concern basis and on a liquidation
basis;
(8) reviewing and providing analysis of any proposed
disposition of any material assets of the Debtors or any
offers to purchase some or substantially all of the
Debtors' assets;
(9) assisting, if necessary, in the formation of a financing
team, including third party professionals;
(10) assisting and participating in negotiations on behalf of
the Equity Committee and other constituents with the
Debtors or any groups affected by a Plan;
(11) assisting the Equity Committee in preparing
documentation required in connection with supporting or
opposing a Plan; and
(12) at the Equity Committee's request and in conjunction
with the Debtors' advisors, identifying and pursuing:
(a) potential buyers for the Debtors or its systems; and
(b) potential new money investors.
Disinterestedness Of Professionals
Randall Lambert, Chanin's Managing Director, assures the Court
that Chanin neither has a connection with, nor holds an interest
adverse to, the Debtors, their estates, their creditors, or any
party-in-interest in these cases. Specifically, to the best of
Mr. Lambert's knowledge:
(1) Chanin does not hold or represent any interest adverse to
the Equity Committee in the matters for which they are to
be retained;
(2) Chanin is a "disinterested person" as that phrase is
defined in Section 101(14) of the Bankruptcy Code;
(3) neither Chanin, nor their professionals, has any
connection with ACOM, their creditors, or any other
party- in-interest.
Compensation
Chanin will be entitled to these compensation for its Chapter 11
related professional services pursuant to the Chanin Engagement
Letter:
A. Monthly Fee
A $150,000 cash fee per month payable on the 23rd day of each
month during the term of Chanin's engagement starting on
September 23, 2003, with Chanin to be paid with respect to all
Monthly Advisory Fees incurred from September 23, 2003;
provided, however, that the Monthly Advisory Fee will be
reduced for any particular month by the amount of fees, if
any, up to $50,000, to which Kroll Zolfo is entitled for the
particular month.
B. Transaction Fee
A transaction fee of a maximum of:
(a) $3,000,000 upon the Effective Date of a Plan by which the
Debtors emerges from Chapter 11; or
(b) the sum of:
(1) $4,000,000 if each class, pursuant to the Plan, of
preferred shareholders either by affirmative class
vote approves, or is unimpaired under the confirmed
Plan, plus
(2) $5,000,000 if either the Class A common shareholders
by affirmative class vote approves, or the Class A
common shareholders are not impaired by the Plan and
at least four of the five largest holders of Class A
common shareholders do not, as of the date the Plan
is confirmed, oppose confirmation of the Plan;
provided, however, that the Transaction Fee will be
reduced by $550,000; provided, further, that to the
extent the Transaction Fee to be paid pursuant to this
paragraph exceeds 3% of actual value, as of the Plan
Effective Date, of recoveries pursuant to the Plan by
equity holders, then the payment of the Transaction Fee
will be limited to 3% of the value distributed to equity
holders; provided, however, that the Transaction Fee will
never exceed 3% of the distribution to equity holders,
and in the event that there is no distribution to the
holders under a Plan, then the Transaction Fee will be
zero, and provided, further, for purposes of determining
class votes, impairment, and Plan objections pursuant to
this paragraph the votes, impairment and Plan objections
of the Rigas family members and entities affiliated with
the Rigas family members will be ignored.
Furthermore, in addition to any fees payable by the Debtors to
Chanin under the engagement, the Debtors, whether or not any Plan
is confirmed, will reimburse Chanin on a monthly basis for their
reasonable out-of-pocket expenses in connection with, or arising
out of, their activities under or contemplated by this
engagement. The Debtors will also reimburse Chanin at the times
as Chanin will request, for any sales, use or similar taxes
arising in connection with any matter referred to or contemplated
by this engagement.
Although Chanin commenced work on these cases shortly after the
ACOM Equity Committee determined to engage them on August 22,
2003, Chanin agreed to not seek or receive any compensation for
such services prior to September 23, 2003. The Equity Committee
nevertheless is requesting that Chanin be entitled to seek and
receive reimbursement for its reasonable out-of-pocket expenses
from and after August 22, 2003.
Mr. Lambert relates that Chanin's engagement under the terms of
the Engagement Letter will terminate on the Effective Date of the
Plan, or may be terminated by the Equity Committee at any time in
accordance with the Chanin Engagement Letter; provided however,
that:
(1) termination of Chanin's engagement will not affect the
Debtors' continuing obligations to Chanin and certain
related persons as provided in the Engagement Letter.
Notwithstanding any termination, Chanin will be entitled,
to the extent specified in each of its Engagement Letter,
to the full fees paid or payable in the amounts and at the
times provided for in the Chanin Engagement Letter for:
(a) in connection with the Monthly Fee, services rendered
prior to the date of the termination; and
(b) in connection with the Transaction Fee, for any Plan
which is confirmed within 6 months subsequent to the
termination; and
(2) any termination of Chanin's engagement will not affect the
Debtors' obligation to reimburse expenses accruing prior
to the termination to the extent provided in the Chanin
Engagement Letter. (Adelphia Bankruptcy News, Issue No. 45;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
AES GENER: Fitch Ups & Maintains Low-B Ratings on Watch Positive
----------------------------------------------------------------
Fitch Ratings has upgraded the international senior unsecured
local and foreign currency ratings of AES Gener S.A. to 'BB-' from
'B+', as well as its Chilean national scale ratings to Chl
'BBB-(chl)' from Chl 'BB+(chl)'. All ratings remain on Rating
Watch Positive.
The upgrade and continued Rating Watch status of Gener reflects
the company's continued favorable financial performance, improving
local market characteristics, improved local and international
capital market conditions and the strengthened financial position
of Gener's majority shareholder, The AES Corporation, which are
all expected to support company's in-process recapitalization
plan.
The operating fundamentals of Gener continue to reflect the
company's sound position in the Chilean electricity market.
Through September 2003, Gener reported consolidated EBITDA-to-
interest of 2.8 times versus 2.2x through the comparable period of
2002. Additionally, consolidated leverage, as measured by debt-to-
EBITDA, has improved to 5.2x at September 2003 from 6.2x last
year.
Market fundamentals have been improving. Electricity demand in
Chile has grown by approximately 6% over the last twelve months
and regulated prices have continued their upward trend, increasing
approximately 8% in U.S. dollar terms in the October 2003 tariff
reset. Gener further benefits from its project-like structural
characteristics, including long-dated power purchase agreements
with investment grade-rated customers and fuel supply contracts
that moderate business risk.
Additionally, international and local lending conditions have
steadily improved since the beginning of the second quarter of
2003, reducing refinancing risk. Furthermore, an increase in
activity in the local and international debt and equity markets
should enable the company and AES to successfully sell shares of
Gener held by its holding company, Inversiones Cachagua, and tap
the international debt markets with its proposed US$400 million
bond issuance. These sources of capital will be used to finance a
tender offer for its outstanding Convertible bonds and Yankee
bonds that mature in 2005 and 2006, respectively. Fitch will
continue to monitor the company's progress in executing its plan.
AIR CANADA: Preliminary Injunction Hearing Date Moved to Jan. 8
---------------------------------------------------------------
U.S. Bankruptcy Court Judge Beatty, who oversees Air Canada's
bankruptcy proceedings, amends her previous order to reschedule
the Preliminary Injunction hearing date. Judge Beatty will
convene a hearing on January 8, 2004 at 2:30 p.m. to consider
whether to continue the terms of the Preliminary Injunction beyond
that date. Any objections to the further continuation of the
Preliminary Injunction must be in writing, filed with the U.S.
District for the Southern District of New York and served on:
(i) Blank Rome LLP
405 Lexington Avenue
New York, New York 10174
Attn: Marc E. Richards, Esquire
(ii) Willkie Farr & Gallagher LLP
787 Seventh Avenue
New York, New York 10019
Attn: Matthew A. Feldman, Esquire
(iii) Stikeman Elliott LLP
5300 Commerce Court West, 199 Bay Street
Toronto, Canada M5L 1B9
Attn: Sean F. Dunphy, Esquire
(iv) Lenczner Slaght Royce Smith Griffin
130 Adelaide Street West, #2600
Toronto, Canada M5H 3P5
Attn: Peter J. Osborne, Esquire
(v) Ernst & Young Inc.
Toronto Dominion Centre
222 Bay Street, P.O. Box 251
Toronto, Ontario M5K 1J7
Attn: Brian Denega
Objections must be received by January 2, 2004 at 4:00 p.m. (Air
Canada Bankruptcy News, Issue No. 18; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ALLIED WASTE: Completes Senior Secured Term Loan Refinancing
------------------------------------------------------------
Allied Waste Industries, Inc. (NYSE: AW) has completed the
refinancing of the term loan portions of its senior secured credit
facility.
The Company's Term Loan B, Term Loan C and Institutional Letter of
Credit Facilities were re-priced at LIBOR plus 275 bps; a
reduction of nearly 50 bps. In addition to re-pricing the term
loan facilities, the Company, among other things, favorably
revised its financial covenants to provide greater operating
flexibility.
"The interest rate reduction on over $1.6 billion of term loan
facilities will generate an annual interest savings of almost $8
million," said Pete Hathaway, Executive Vice President and CFO of
Allied Waste. "We continue to opportunistically manage our
capital structure and we appreciate the support we've received
from the financial institutions."
Allied Waste Industries, Inc. (S&P, BB Corporate Credit Rating,
Stable Outlook), is the second largest, non-hazardous solid waste
management company in the United States, providing non-hazardous
waste collection, transfer, disposal and recycling services to
approximately 10 million customers. As of June 30, 2003, the
Company operated 333 collection companies, 171 transfer stations,
171 active landfills and 64 recycling facilities in 39 states.
AMERICAN SEAFOODS: Extends Tender Offer for 10-1/8% Sr. Notes
-------------------------------------------------------------
American Seafoods Group LLC and American Seafoods Finance, Inc.
announced that, as part of their previously announced tender offer
and consent solicitation for their outstanding 10-1/8% Senior
Subordinated Notes due 2010, they are extending the tender offer
expiration date.
The tender offer, which had been set to expire at 5:00 p.m.,
New York City time, on November 21, 2003, will be extended to 5:00
p.m., New York City time, on Friday, January 9, 2004, unless
extended by American Seafoods.
American Seafoods Corporation said that it will not commence
marketing its proposed initial public offering until January 2004,
at the earliest. The closing of the initial public offering and
the other financing transactions contemplated by the registration
statement on Form S-1 (Registration No. 333-105499) is a condition
precedent to the consummation of the tender offer.
The consent expiration date was 5:00 p.m., New York City time, on
September 26, 2003. Holders who desired to receive the consent
payment and the tender offer consideration must have both validly
consented to the proposed amendments and validly tendered their
Notes pursuant to the offer on or prior to the consent expiration
date. Holders who validly tender their Notes after the consent
expiration date will receive the tender offer consideration, which
is $1,170.00 per $1,000 principal amount of Notes, but not the
consent payment. As of the close of business on September 26,
2003, which was the consent expiration date and the last day on
which validly tendered Notes could have been withdrawn, American
Seafoods had received the requisite consents to the proposed
amendments to the Indenture governing the Notes. Consequently,
the proposed amendments were incorporated in the Third
Supplemental Indenture, which was executed and delivered on
September 26, 2003, by and among American Seafoods Group LLC,
American Seafoods Finance, Inc., the guarantors listed on Schedule
A thereto and Wells Fargo Bank Minnesota, National Association, as
trustee. The proposed amendments to the indenture, which will not
become operative unless and until the Notes are accepted for
purchase by American Seafoods, will eliminate substantially all of
the restrictive covenants, certain repurchase rights and certain
events of default and related provisions contained in such
indenture.
As of November 21, 2003, all of our existing senior subordinated
notes had been validly and irrevocably tendered.
Consummation of the offer is subject to certain conditions,
including consummation of certain financing transactions
contemplated by the registration statement on Form S-1 filed with
the Securities and Exchange Commission by American Seafoods
Corporation. Subject to applicable law, American Seafoods Group
LLC and American Seafoods Finance, Inc. may, in their sole
discretion, waive or amend any condition to the offer or
solicitation, or extend, terminate or otherwise amend the offer or
solicitation.
Credit Suisse First Boston, or CSFB, is the dealer manager for the
offer and the solicitation agent for the solicitation. MacKenzie
Partners, Inc. is the information agent and Wells Fargo Bank
Minnesota, National Association is the depositary in connection
with the offer and solicitation. The offer and solicitation are
being made pursuant to the Offer to Purchase and Consent
Solicitation Statement, dated September 15, 2003, and the related
Consent and Letter of Transmittal, each as modified by American
Seafoods' press release, dated September 24, 2003, which
collectively set forth the complete terms of the offer and
solicitation. Copies of the Offer to Purchase and Consent
Solicitation Statement and related documents may be obtained from
MacKenzie Partners, Inc. at 212-929-5500. Additional information
concerning the terms of the offer and the solicitation may be
obtained by contacting CSFB at 1-800-820-1653. Copies of the
registration statement may be obtained from the Securities and
Exchange Commission's Internet site. The site's Internet
address is http://www.sec.gov
American Seafoods (S&P, BB- Corporate Credit Rating, Positive),
headquartered in Seattle, Washington, is the largest harvester and
at-sea processor of pollock and the largest processor of catfish
in the United States.
AMES DEPT.: Secures Nod to Implement Performance Incentive Plan
---------------------------------------------------------------
Ames Department Stores, Inc., and its debtor-affiliates obtained
the Court's authority to:
(a) implement an Employee Performance Incentive Program and an
Expected Recovery Percentage Program to be distributed on
a discretionary basis to the Debtors' remaining employees,
including Rolando de Aguiar, Ames' president; and
(b) provide for the continued employment of Mr. de Aguiar.
The Programs
The Programs provide a mechanism to distribute incentive awards
from two independent, self-funding pools to Employees and Mr. de
Aguiar when the recoveries to creditors reach certain targets set
by the Committee. The Performance Incentive Program will have
one pool of funds and the Expected Recovery Percentage Program
will have a separate pool. Distributions from the Pools will be
administered solely by Mr. de Aguiar, who will determine what
awards are to be made and which employees will be entitled to the
awards.
(A) Programs are Self-Funding
Funding for the Pools will be based on the recoveries to
creditors. The amount of administrative expense claims on
the Debtors' books and records total $120,400,000. Based on
the Debtors' current projections as of May 31, 2003,
recoveries for administrative expense claimholders will be
between 80.3% and 99.4% of the allowed amount of their
administrative expense claims. In other words, the Debtors'
anticipate they will have between $96,600,000 and
$119,600,000 to distribute on account of the $120,400,000 in
administrative expense claims. The midpoint for the
anticipated recoveries to administrative expense creditors is
89.78% of the $120,400,000.
With the input and consent of the Committee, the Debtors have
established the Midpoint as the initial target under the
Programs. When the Debtors achieve the Midpoint, the
Performance Incentive Pool will be funded with $1,215,275 and
the Expected Recovery Percentage Program Pool will be funded
with $800,000. Any reduction in the amount of administrative
expense claims will be credited towards the Debtors' goal of
satisfying administrative expense claims. If recoveries to
administrative expense creditors increase above the Midpoint,
the Pools will be increased as well. Specifically, for each
quarter percentage point increase above the Midpoint, the
Performance Incentive Program Pool will be increased by
$12,618 and the Expected Recovery Percentage Program Pool
will be increased by $12,382. Thus, for each quarter
percentage point the Debtors recover above the Midpoint, the
Pools will be funded by an additional $25,000.
In total, pursuant to the Programs, the Debtors will be
entitled to distribute $2,015,275 to the Employees and Mr. de
Aguiar upon achieving the Midpoint and an additional $25,000
for each quarter-point above the Midpoint.
(B) Distribution Under the Programs
The Debtors will not make any distributions pursuant to the
Programs until they have reached the Midpoint. Once the
Midpoint is reached, the Debtors will be free to make
distributions pursuant to the Programs on a discretionary
basis as the pools are funded. (AMES Bankruptcy News, Issue
No. 46; Bankruptcy Creditors' Service, Inc., 215/945-7000)
APPLIED EXTRUSION: Red Ink Continued to Flow in Fiscal-Year 2003
----------------------------------------------------------------
Applied Extrusion Technologies, Inc. (NASDAQ NMS - AETC) announced
financial results for its year ended September 30, 2003.
FULL YEAR FISCAL 2003 RESULTS
Sales for fiscal 2003 of $247 million were $4.7 million or two
percent lower compared with fiscal 2002. A seven percent decline
in volume was partially offset by a six percent increase in
average selling price. The higher average selling price was due to
both price increases and an improved mix of products sold. Higher
average pricing resulted in a $14 million increase in revenues
which was entirely offset by an equal increase in raw material
costs, an increase of 17% over fiscal 2002. Additional
manufacturing cost reductions offset an approximate $3 million
increase in depreciation expense, resulting in gross profit of $44
million, which was equal to the prior year. Gross margin was 17.9
percent versus 17.5 percent in fiscal 2002.
The restructuring, announced in September 2002, has been very
successful in reducing costs. Operating expenses in fiscal 2003
were $30.2 million compared with $48.6 million in fiscal 2002. As
a result, operating profit increased by $18.7 million to $14
million. Exclusive of the $9 million restructuring charge in
fiscal 2002, operating expenses were $9.4 million, or 24 percent,
lower than last year and operating profit improved by $9.7
million, a three-fold increase over fiscal 2002.
During fiscal 2003, the Company generated earnings before
interest, taxes, depreciation and amortization (EBITDA) of $37.4
million, an increase of 51 percent compared with EBITDA of $24.7
million for fiscal 2002.
Income tax expense of $1.1 million was recorded in the fourth
quarter of fiscal 2003 and represents an adjustment to the
valuation allowance against deferred taxes. The Company received a
tax refund in fiscal 2002, and accordingly recorded a $2 million
benefit. Aside from these items, the Company's effective tax rate
in fiscal 2002 and fiscal 2003 was zero. The net loss for fiscal
2003 was $17 million, or $1.33 per share, compared with a net loss
of $31.8 million, or $2.55 per share, for fiscal 2002.
FOURTH QUARTER 2003 RESULTS
Sales for the fourth quarter of fiscal 2003 of $58.1 million were
$6.6 million, or 10 percent, lower than the comparable quarter in
fiscal 2002. A 16 percent decline in volume was partially offset
by a seven percent increase in average selling price. The higher
average selling price was due to both price increases and an
improved mix of products sold.
Gross profit of $7 million was eight percent higher than the same
period of last year. The increase in average selling prices offset
the impact of both the lower sales volumes and a $2 million, or 10
percent, increase in raw material costs. Gross margin was 12.1
percent versus 10.1 percent in fiscal 2002.
Operating expenses of $7.8 million were $13.8 million lower
compared with $21.6 million in fiscal 2002. Operating losses
during the 4th quarter of $0.8 million were $14.3 million less
compared with losses of $15.1 million in fiscal 2002. Exclusive of
the September 2002 $9 million restructuring charge, operating
expenses were $4.8 million, or 38 percent, lower than last year.
The reduction in operating expenses reflects the successful
implementation of the September 2002 restructuring and ongoing
cost reduction efforts. The operating losses for the fourth
quarter, again exclusive of restructuring charges, were $5.3
million lower than fiscal 2002.
For the three months ended September 30, 2003, the Company
generated earnings before interest, taxes, depreciation and
amortization (EBITDA) of $5.2 million compared with a negative
EBITDA of $0.6 million for the fourth quarter of fiscal 2002. The
net loss for the fourth quarter of fiscal 2003 was $9.3 million,
or $.73 per share, compared with a net loss of $22.6 million, or
$1.81 per share, for the fourth quarter of fiscal 2002.
BALANCE SHEET, CASH FLOW AND LIQUIDITY
At September 30, 2003, the Company had borrowings of $29 million
pursuant to its revolving line of credit. The Company used these
borrowings, in part, for the prepayment in September 2003 of its
$6.5 million industrial revenue bond which was due in 2004. As
previously announced, the Company entered into a new $100 million
credit facility with GE Capital Finance on October 3, 2003. The
credit facility consists of a $50 million term loan and a $50
million revolving line of credit. Under this new revolving line of
credit, the Company has increased its availability to $25 million,
a $17 million improvement. Net Debt (total debt less cash) at
September 30, 2003 was $298 million, representing 89 percent of
total capitalization.
COMPANY COMMENTS
Commenting on the results, Amin J. Khoury, Chairman and Chief
Executive Officer, said: "The OPP Films industry continues to be
plagued by weak demand and over capacity. While we have made
progress in increasing our prices and improving our product mix,
these improvements have been substantially offset by increased raw
material costs."
Mr. Khoury further remarked, "We are encouraged by the increases
in operating profit and EBITDA as compared with fiscal 2002. This
is primarily due to ongoing cost reduction efforts as well as our
improvements in product mix. We will continue to carefully control
capital expenditures and constantly reevaluate our cost structure.
We remain focused on executing a successful turnaround in a
difficult business environment. Our objective is to generate
positive free cash flow in 2004 and to improve gross margins
through the commercialization of our high-value proprietary
products. We expect to achieve acceptable levels of profitability
over time through continuous improvement in product mix and
capacity utilization."
Applied Extrusion Technologies, Inc. (S&P, B Corporate Credit
Rating, Negative Outlook) is a leading North American developer
and manufacturer of specialized oriented polypropylene films used
primarily in consumer products labeling and flexible packaging
applications.
ARMSTRONG: Court Strikes Testimony of Committee's Experts
---------------------------------------------------------
On behalf of Armstrong World Industries, Inc., Marla R. Eskin,
Esq., at Campbell & Levine in Wilmington, continues the attack on
the attempts by the Unsecured Creditors' Committee to delay the
confirmation hearing in these cases until Congress acts on the
FAIR Act by asking Judge Newsome to exclude the "expert" testimony
of the Unsecured Creditors Committee witnesses Donald Smith and
Letitia Chambers.
Mr. Smith is an investment banker. Ms. Eskin says that his sole
basis for concluding that the FAIR Act is likely to be enacted is
the supposed run-up in the price of stock for USG and other
asbestos-affected companies since April.
Mr. Smith conveniently fails to mention that USG's stock price has
in fact declined from a high of $23.72 a share in July to its
current level of $16. Even if stock market movements predict
legislative action, the market is saying there will be none.
Letitia Chambers has a bachelor's degree in English and a master's
and doctorate in education. Ms. Eskin says acidly that "She
styles herself an economic and financial researcher. Her supposed
"expert" analysis is nothing more than repetition of rank hearsay
from conversations with selected stakeholders in the legislative
process."
The Asbestos Personal Injury Claimants' Committee and the Future
Claimants' Representative join in urging Judge Newsome to grant
this Motion.
Boiled down to their essence, these "experts" opine that the
proposed Plan of Reorganization should not be confirmed as a
matter of law because a piece of legislation very much like the
so-called Fairness In Asbestos Injury Resolution Act of 2003 now
languishing in the United States Senate is likely to pass the
United States Congress in early 2004 and be signed into law by the
President, and that when this happens, Armstrong's liability to
asbestos claimants will be far lower than its contribution to the
Asbestos Personal Injury Trust under the Plan.
Ms. Eskin argues that courts "routinely preclude experts from
offering opinions about legal conclusions or governing law." The
Unsecured Creditors' Committee goes a step further by proffering
"experts" on what the law will be, by speculating on the prospects
of enactment and effects of a proposed bill which has never even
seen a floor vote in either chamber. Ms. Eskin urges Judge
Newsome not to permit such testimony.
It is a bedrock principle of evidence law that a witness may not
provide "expert" opinion testimony on legal conclusions or on what
the law is. Moreover, the Third Circuit has explained that
Evidence Rule 702 embodies a trilogy of restrictions on expert
testimony: qualification, reliability and fit. The testimony must
be reliable; it must be based on the "methods and procedures of
science" rather than on "subjective belief or unsupported
speculation." Merely conclusory or speculative testimony is not
enough.
A court may conclude that there is simply too great an analytical
gap between the data and the opinion proffered." Here, the
Committee proffers supposed "expert" testimony about the likely
passage and financial effects on Armstrong's asbestos liability of
a bill which has passed neither House of Congress. If it is
impermissible for an expert to offer his opinion on the existing
law governing a given situation, how could it be proper for an
expert to opine on the effect of a law which has not been enacted?
As far as counsel can tell, no litigant has ever suggested the
application of unenacted legislation in any case in the federal
system, since research fails to disclose any decision remotely on
point. Ms. Eskins urges Judge Newsome to make his determination
of whether this plan is confirmable based on the law as it exists
now, and not upon a guess (educated or not) of what might happen
if the law were something else. The opinions of the Committee's
"experts" are inadmissible and the Court should preclude them from
testifying at this Confirmation Hearing.
Unfortunately for the Creditors' Committee, Judge Newsome agrees
with the Debtors on these points and will not listen to testimony
about possible legislation. (Armstrong Bankruptcy News, Issue No.
52; Bankruptcy Creditors' Service, Inc., 215/945-7000)
BABSON CLO: Class E Notes Get S&P's BB Preliminary Rating
---------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Babson CLO Ltd. 2003-1/Babson (Delaware) Corp. 2003-1's
$356.200 million floating-rate notes, senior preferred shares, and
preferred equity certificates.
The preliminary ratings are based on information as of Nov. 24
2003. Subsequent information may result in the assignment of final
ratings that differ from the preliminary ratings.
The preliminary ratings reflect:
-- The expected commensurate level of credit support in the
form of subordination to be provided by the notes junior
to the respective classes;
-- The cash flow structure, which is subject to various
stresses requested by Standard & Poor's;
-- The experience of the collateral manager; and
-- The legal structure of the transaction, which includes the
bankruptcy remoteness of the issuer.
Babson CLO Ltd. 2003-1/Babson (Delaware) Corp. 2003-1 is a cash
flow arbitrage CLO managed by David L. Babson & Co. Inc.
PRELIMINARY RATINGS ASSIGNED
Babson CLO Ltd. 2003-1/Babson (Delaware) Corp. 2003-1
Class Rating Amount (mil. $)
A-1 AAA 150.0
A-2A AAA 93.0
A-2B AAA 17.0
B AA 20.0
C A 18.5
D BBB 17.7
E BB 7.0
Senior preferred shares BB 5.0
Preferred equity certificates N.R. 28.0
BIOTRANSPLANT: Board Approves Plan to Liquidate Remaining Assets
----------------------------------------------------------------
BioTransplant, Incorporated (BTRNQ.PK) announced that its board of
directors has approved the liquidation of the Company's remaining
assets. The Company projects that proceeds of liquidation will
not likely be sufficient to provide any distribution to the
Company's shareholders.
On February 27, 2003, the Company and its wholly-owned subsidiary,
Eligix, Inc., filed voluntary petitions for relief under Chapter
11 of the Bankruptcy Code in the United States Bankruptcy Court in
Boston, Massachusetts. The Company's goal was to utilize Chapter
11 to preserve the Company's assets, cut back expenses, provide
for the near-term payment in full of outstanding liabilities, and
emerge from Chapter 11 with the prospect of realizing long-term
value for shareholders from the Company's intellectual property.
However, the Company believes that the value of preexisting
licenses and transactions available to the Company since the
Chapter 11 filing have not proved sufficient to meet these goals.
The Company expects to file with the Bankruptcy Court in the
coming weeks a Chapter 11 plan providing for appointment of a
trustee to liquidate assets, wrap up the Company's affairs, make a
cash distribution to creditors and, if there are any remaining
funds, then make a cash distribution to holders of the Company's
common stock as of the effective date of the plan. The plan will
be subject to approval by the Company's general unsecured
creditors and the Bankruptcy Court.
Although the timing cannot be predicted with certainty and is
subject to change, the Company estimates that the effective date
of the plan will occur in early 2004. On the effective date, the
Company expects to notify the Pink Sheets LLC that the Company is
defunct and will close its stock transfer books, which would
generally prohibit any further transfers of its shares after the
effective date of the Chapter 11 plan.
BioTransplant Incorporated is a Delaware corporation located in
Medford, Massachusetts. On February 27, 2003, the Company and
Eligix, Inc., its wholly-owned subsidiary, filed voluntary
petitions for relief under Chapter 11 of the Bankruptcy Code in
the United States Bankruptcy Court in Boston Massachusetts. The
Company has no active operations and its primary assets are
intellectual property rights that it has exclusively licensed to
third parties. The Company has exclusively licensed Siplizumab
(MEDI-507), a monoclonal antibody product, to MedImmune, Inc. On
October 28, 2003, BioTransplant sold its Eligix HDM Cell
Separation Systems to Miltenyi Biotec GmbH for $175,000 in cash
and the right to receive 4% to 8% royalties in future sales of
products. The Company's assets also include its AlloMune System
technologies, which are intended to treat a variety of hematologic
malignancies and improve outcomes for solid organ transplants.
BioTransplant also has a 33% interest in Immerge BioTherapeutics,
AG, a joint venture with Novartis, to further develop both
companies' individual technology bases in xenotransplantation and
a less than 10% interest in Stem Cell Sciences, a life sciences
company with operations in Australia and Scotland.
BIOVAIL CORP: Gets TSX Nod to Make Normal Course Issuer Bid
-----------------------------------------------------------
Biovail Corporation (NYSE:BVF)(TSX:BVF) has received regulatory
approval from the Toronto Stock Exchange to make a normal course
issuer bid through the facilities of the TSX and the New York
Stock Exchange (NYSE).
Common shares may be purchased on the TSX commencing on
November 26, 2003 and on the NYSE commencing on December 1, 2003.
The issuer bid will terminate on November 25, 2004 or earlier if
the Company purchases 13,164,059 common shares prior to such date.
Any common shares purchased by the Company under the issuer bid
will be cancelled.
Biovail Corporation (S&P, BB+ Long-Term Corporate Credit Rating,
Stable) is an international full-service pharmaceutical company,
engaged in the formulation, clinical testing, registration,
manufacture, sale and promotion of pharmaceutical products
utilizing advanced drug delivery technologies.
BOOT TOWN: Section 341(a) Creditors' Meeting Set for December 19
----------------------------------------------------------------
The United States Trustee will convene a meeting of Boot Town,
Inc.'s creditors on December 19, 2003, at 11:00 a.m., in the
Office of the U.S. Trustee, 1100 Commerce St., Room 976, Dallas,
Texas 75242. 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 Farmers Branch, Texas, Boot Town, Inc., is a
retailer of brand name boots and western wear: hats, belts,
buckles, and jeans. The Company filed for chapter 11 protection
on November 17, 2003 (Bankr. N.D. Tex. Case No.: 03-81845).
Cynthia Cole, Esq., Esq. Neligan Tarpley Andrews & Foley, L.L.P.
represent the Debtor in its restructuring efforts. When the
Company filed for protection from its creditors, it listed more
than $10 million in both estimated assets and debts.
BURLINGTON INDUSTRIES: Terminates Common Stock Registration
-----------------------------------------------------------
In a November 10, 2003 regulatory filing with the Securities and
Exchange Commission, Burlington Industries, Inc. terminated the
registration of its common stock, par value $0.01 per share. The
termination was filed under Rule 12g-4(a)(1)(i) of the Securities
Exchange Act of 1934. (Burlington Bankruptcy News, Issue No. 43;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
CABLE SATISFACTION: Quebec Court Names Richter Interim Receiver
---------------------------------------------------------------
Cable Satisfaction International Inc. (TSX: CSQ.A) announced that
the Quebec Superior Court rendered an order appointing Richter &
Associes Inc., as Interim Receiver under the Companies' Creditors
Arrangement Act until January 23, 2004; pursuant to the Order,
Richter & Associes Inc., was also appointed as the Monitor in
replacement of PricewaterhouseCoopers Inc.
The Interim Receiver has been granted certain specific powers,
including to borrow up to $500,000 per 30-day period from Catalyst
Capital Group Inc., to consider steps to protect and preserve the
assets of Csii if deemed appropriate, and to call, with the
consent of Csii, the meeting of the creditors of Csii entitled to
vote on the plan of arrangement and reorganization of Csii filed
under the CCAA and assist in the finalization of related matters.
Subject to the terms of the Order, the Board of Directors of Csii
otherwise continues to manage the business and affairs of Csii.
There can be no assurance that the plan of arrangement and
reorganization of Csii will be completed successfully or on the
terms and conditions contained therein.
The Company also announced that as a result of its current
financial resources, it is unlikely that it would be in a position
to file its interim financial statements for the period ended
September 30, 2003 within the prescribed delays. However, the
Company intends to discuss with the Interim Receiver the manner
and timing in which the appropriate resources can be applied in
order that its interim financial statements may be completed and
filed. The Company intends to comply with the requirements of
Policy 57-603 of the Ontario Securities Commission "Default by
Reporting Issuers in Complying with Financial Statement Filing
Requirements" and make the requisite announcements prescribed
thereby. As a result of such failure, partial cease trade orders
may be imposed by Canadian securities regulators; if the Company's
failure to file its interim financial statements continues after
February 1, 2004, full cease trade orders may be issued.
The orders rendered under the CCAA proceedings in respect of CSII,
including the Order, are available on the Company's Web site at
http://www.csii.ca
Csii builds and operates large bandwidth (750 Mhz) hybrid fibre
coaxial networks and, through its subsidiary Cabovisao - Televisao
por Cabo, S.A. provides cable television services, high-speed
Internet access, telephony and high-speed data transmission
services to homes and businesses in Portugal through a single
network connection.
The subordinate voting shares of Csii are listed on the Toronto
Stock Exchange (TSX) under the trading symbol "CSQ.A".
CABLETEL COMMS: William J. Biggar Resigns as Board Chairman
-----------------------------------------------------------
Cabletel Communications Corp. (AMEX: TTV; TSX: TTV), a leading
distributor of broadband equipment to the Canadian television and
telecommunications industries, announced the resignation of
William J. Biggar as Chairman of the Board of Directors.
Mr. Biggar, appointed in September as President and CEO of MI
Developments, Inc., cited significant time demands necessitating a
reduction in his outside commitments. "I have enjoyed my
association with Cabletel over the last two and one half years and
wish the Board and management all the best in their future
endeavors with the Company," said Mr. Biggar.
"On behalf of Cabletel and all of its shareholders, I would like
to thank Mr. Biggar for his exceptional leadership and active
participation. Our Company will definitely miss his input," stated
Greg Walling, Cabletel President and CEO. "However, as we finish
2003 and our realignment efforts, we eagerly look forward to 2004
and plan to shortly announce the addition of new Board members."
Cabletel Communications Corp. is a full-service distributor and
manufacturer of broadband equipment to the television and
telecommunications industries offering a wide variety of products
required to construct, build, maintain and upgrade broadcasting
and telecommunications systems. Stirling Connectors, Cabletel's
manufacturing division, supplies national and international
clients with proprietary products for deployment in cable, DBS and
other wireless distribution systems. More information about
Cabletel can be found at http://www.cabletelgroup.com
* * *
Financial Liquidity, Capital Resources
and Bank Facility Covenants
Historically the Company has funded its operations through working
capital. At June 30, 2003, the Company's current assets exceeded
its current liabilities by $996,918. However, during the three and
six months ended June 30, 2003, the liquidation of inventory
slowed from prior experience, primarily as a result of the
slowdown in the industry. As a result the Company has been slower
than usual in meeting vendor payment terms. Should this trend
continue it may present a long-term liquidity concern for the
Company.
On May 16, 2002, Cabletel entered into a Revolving Credit Facility
Agreement with LaSalle Business Credit, a division of ABN AMBRO
BANK N.V., Canada Branch for a three year committed fifteen
million Canadian dollars (CAD$15,000,000), or its United States
dollar equivalent.
The facility contains certain customary covenants. As of June 30,
2003, as a result of a variation from the required minimum
adjusted net worth, interest coverage ratio and debt service
ratio, the Company had a technical violation of the applicable
covenants. The Company is working with its lender to resolve the
matter and expects to receive either a waiver or amendment to the
agreement shortly. There can be no assurance that the Company will
be successful in obtaining either a waiver or amendment. In the
event that the Company is unable to obtain such waiver or
amendment it could adversely affect the Company.
As of November 1, 2002, the Company began consolidating the
results of Allied, as a result of the Company's ability to convert
it's convertible debenture into 100% ownership of all issued and
outstanding common shares of Allied for a nominal consideration.
Subsequently, on May 9, 2003, Cabletel exercised its option and
acquired all the outstanding shares of Allied. Allied is currently
in negotiations with its senior bank lender with regards to an
extension of its senior bank facility beyond its current maturity
date. If Allied is unable to obtain such an extension, this could
adversely affect the consolidated results of the Company as the
Company would be required to write off its investment and
receivables due from goods sold in the ordinary course of business
amounting to approximately $250,000.
In connection with its restructuring plan, the Company announced
that it is in the process of seeking to renegotiate the payment
terms of its US $2.2 million senior subordinated promissory note
issued to one of its major suppliers. As a result, it has obtained
the consent of the payee to pay half of each of the full US
$120,000 installments due under the note on each of May 31, June
30 and July 31, 2003. The promissory note, which was issued in May
2002 as part of the conversion of US $2.2 million in outstanding
payables owed by the Company to a major supplier, bears interest
at the rate of 12% per annum and called for repayment in monthly
installments of US $60,000 through April 2003 and US $120,000
thereafter through April 30, 2004. Because of the continued
weakness in the Canadian television and telecommunication
industries, the Company has been in discussions with the payee of
the note regarding a restructuring which would reduce the monthly
payments below the required US $120,000.
Although discussions with the payee have commenced, to date the
Company and the payee have not agreed upon the terms of a
restructuring. Unless an agreement is reached by September 15,
2003, the Company will be required to pay the full US $120,000
installment due on August 31, 2003, plus the amount of the
Company's total underpayment of US $180,000 with respect to the
May 31, June 30 and July 31, 2003 installments. Unless an
agreement is reached, the Company does not expect to be in a
position to make those payments. If the Company is unable or
otherwise fails to make those payments in full it would constitute
a default of the terms of the note, which is unsecured and
subordinated to the rights of the senior bank lenders under the
Company's senior credit facility. The Company has been
coordinating its efforts to renegotiate the terms of the note with
its senior bank lenders, who have been supportive of the Company
in that regard. While the Company expects that it can conclude a
renegotiation of the payment terms of note on terms mutually
satisfactory to the Company, the payee and the bank, no assurances
can be given that such agreement can be reached. If no agreement
is reached, the Company may not be in a position to make all of
the required payments, an event that could permit the payee to
call an event of default under the note and have a material
adverse impact on the Company and its business.
CASELLA WASTE: Will Host 2nd-Quarter Conference Call on Dec. 4
--------------------------------------------------------------
Casella Waste Systems, Inc. (Nasdaq: CWST), a regional, integrated
solid waste services company, will host a conference call on
Thursday, December 4, 2003 to discuss its financial results for
the company's fiscal year 2004 second quarter, which ended
October 31, 2003.
The conference call will begin at 10:00 a.m. EST. Interested
investors can participate by dialing (719) 457-2661 at least 10
minutes prior to the start of the conference call.
The call will also be webcast; to listen, participants should
visit Casella Waste Systems' Web site at http://www.casella.com
and follow the appropriate link to the webcast.
A replay of the call will be available on the company's website,
or by calling (719) 457-0820 (conference code #586721), until
11:59 p.m. EST on Thursday, December 11, 2003.
Casella Waste Systems (S&P, BB- Corporate Credit Rating, Stable),
headquartered in Rutland, Vermont, provides collection, transfer,
disposal and recycling services primarily in the northeastern
United States.
For further information, visit the company's Web site at
http://www.casella.com
CEDARA: Partners with IBM China to Explore Market Opportunities
---------------------------------------------------------------
Cedara Software Corp. (TSX:CDE/OTCBB:CDSWF), a leading independent
developer of medical software technologies for the global
healthcare market, has signed a memorandum of understanding with
IBM China. The agreement commits both companies to work together
to explore and identify opportunities in the Chinese market.
"IBM values the Chinese market especially in the healthcare
domain, and we are pleased to be working with Cedara in that
market space. With Cedara's extensive experience and expertise in
healthcare imaging and our hardware platform advantage, this
complementary relationship can deliver a win-win solution to
China's large healthcare market," said Mr. Liu, Huan Shi, General
Manager, Public Sector of IBM China.
Under the terms of the agreement, IBM and Cedara will develop a
channel strategy. Both companies will promote Cedara software and
IBM hardware and integrate it with their business partners'
solutions.
"Cedara is delighted that IBM has recognized our accomplishments
in partnering with a number of Chinese companies over the last
year and we are looking forward to identifying opportunities that
will allow both of us to prosper and grow in the vast Chinese
market," said Abe Schwartz, Cedara's President and CEO.
Cedara's product line is well suited to the Chinese market.
Cedara's PACS product suite is designed to meet the image
management needs of the entire healthcare enterprise. The suite
includes an image archiving and distribution system (Cedara I-
Store(TM)), diagnostic review workstation (Cedara I-Softview(TM)),
web-based image distribution server (Cedara I-Reach(TM)), and
hospital system interface products. This easy-to-integrate PACS is
used to review, analyze, store and distribute medical images that
allow system integrators to build robust, flexible, and scalable
image storage management solutions.
Both IBM and Cedara intend to maximize opportunities with their
partners. For example, both companies will participate in the B-
Soft user group meeting this month in China. B-Soft is one of
China's top Hospital Information Systems companies with a customer
base of 700 hospitals.
IBM's involvement in China dates back to 1934 and IBM opened its
China office in 1992. Today, IBM China has 14 branch offices, two
fully-owned subsidiaries and eight joint ventures. One of IBM's
eight research centers is located in China, where more than 300
technical and research talents are developing the latest
technology solutions such as pervasive computing and wireless
solutions, and IBM's customer services center is the largest of
its kind in China.
Cedara Software Corp. -- whose September 30, 2003 balance sheet
shows a total shareholders' equity deficit of about C$167,000 --
is a leading independent provider of medical technologies for many
of the world's leading medical device and healthcare information
technology companies. Cedara software is deployed in hospitals and
clinics worldwide - approximately 20,000 medical imaging systems
and 4,600 Picture Archiving and Communications System workstations
have been licensed to date. Cedara is enabling the future of the
healthcare industry with new innovative approaches to workflow,
data and image management, integration, the web, software
components and professional services. The company's medical
imaging solutions are used in all aspects of clinical workflow
including the capture of patient digital images; the sharing and
archiving of images; sophisticated tools to analyze and manipulate
images; and even the use of imaging in surgery. Cedara is unique
in that it has expertise and technologies that span all the major
digital imaging modalities including angiography, computed
tomography, echo-cardiology, digital X-ray, fluoroscopy,
mammography, magnetic resonance imaging, nuclear medicine,
positron emission tomography and ultrasound.
CHILDTIME LEARNING: Oct. Working Capital Deficit Widens to $28MM
----------------------------------------------------------------
Childtime Learning Centers, Inc. (Nasdaq: CTIM) announced
operating results for the 12 weeks (second quarter 2004) and 28
weeks (year to date) ended October 10, 2003. Increased systemwide
sales and improved gross profit were the highlights for second
quarter 2004.
Net revenue for second quarter 2004 increased $1.5 million, or
3.5%, from the same period last year to $45.1 million. Learning
Center revenues increased $1.3 million, with comparable center
revenues, defined as centers opened 18 months or longer,
increasing $0.9 million or 2.3%, and non-comparable centers
increasing $0.4 million, partially offset by closed center
revenues. Franchise Operations revenues, which consisted
primarily of royalties, increased $0.2 million or 20.5% from the
same period last year to $1.4 million. Net revenue for year to
date 2004 increased $20.0 million, or 22.8%, from the same period
last year to $107.8 million. The increase was primarily a result
of additional revenues of $17.9 million contributed by Tutor Time
centers and $2.1 million contributed by Franchise Operations, both
of which were acquired at the end of first quarter 2003.
The increase in Franchise Operations revenues is a result of
royalties generated from revenue increases experienced by the
Company's franchisees. Tutor Time franchisee-owned centers
reported revenues of $26.3 million for the quarter, an increase of
11.0% from the same period last year, with comparable center
revenues increasing 5.0% for the quarter. Second quarter
systemwide sales, which include revenues from franchisee-owned and
Company-owned centers, grew to $70.2 million, an increase of 5.9%
from the same period last year.
Gross profit for second quarter 2004 increased $1.4 million, or
53.4%, from the same period last year to $4.1 million. This
increase was primarily a result of reduced personnel expenses
achieved through improved labor efficiency. Gross profit for year
to date 2004 increased $4.9 million, or 68.4%, from the same
period last year to $12.1 million. This increase was a result of
a $2.1 million increase in Franchise Operations, increased
revenues from Tutor Time centers and increased Learning Centers
gross profit as a result of reduced personnel expenses achieved
through improved labor efficiency.
Operating loss for second quarter 2004 decreased $9.4 million from
the same period last year to ($1.1 million). The improvement was
primarily attributable to increased gross profit of $1.4 million,
decreased general and administrative expenses of $0.2 million, and
decreased long lived fixed asset and intangible asset impairment
charges of $7.6 million. Operating loss for year to date 2004
decreased $10.2 million from the same period last year to ($0.5
million). The improvement was primarily attributable to increased
gross profit of $4.9 million and decreased long lived fixed asset
and intangible asset impairment charges of $7.6 million, partially
offset by increased general and administrative expenses of $2.1
million.
Net loss decreased to $1.6 million for second quarter 2004,
compared to a net loss of $11.4 million for the same period last
year. The second quarter improvement was primarily attributable
to increased operating income of $9.4 million and decreased
interest expense of $0.3 million. Year to date 2004 net loss
decreased to $1.8 million, compared to a net loss of $16.8
million for the same period last year. The year to date
improvement was primarily attributable to increased operating
income of $10.2 million and decreased expenses related to
cumulative effect of changes in accounting principle of 5.0
million.
The second quarter 2004 loss per share was $0.08 on a basic and
diluted basis as compared to $2.10 on a basic and diluted basis
for the same period last year. Year to date 2004 loss per share
was $0.11 on a basic and diluted basis as compared to $3.15 on a
basic and diluted basis for the same period last year. On May 16,
2003, the Company completed a rights offering under which it
issued 14.1 million shares of common stock. Accordingly, the
weighted average shares outstanding were 19.7 million and 5.4
million for the 12 weeks ended October 10, 2003 and October 11,
2002, respectively. The weighted average shares outstanding were
16.1 million and 5.3 million for the 28 weeks ended October 10,
2003 and October 11, 2002, respectively.
Bill Davis, President and Chief Executive Officer commented, "We
continue to see our operating results improve over last year.
While the summer months can be a challenging time in our industry,
we are pleased with the gross margin improvement and the strong
comparable revenue increases, particularly with the Tutor Time
corporate and franchise centers. We are starting to reap the
benefits from this acquisition and believe we will return to
profitability by our fourth quarter."
At October 10, 2003, the Company's balance sheet shows that its
total current liabilities outweighed its total current assets by
about $28 million.
Childtime Learning Centers, Inc. -- http://www.childtime.com-- of
Novi, MI acquired Tutor Time Learning Systems, Inc., --
http://www.tutortime.com-- on July 19, 2002, and is one of the
nation's largest publicly-traded child care providers with
operations in 30 states, the District of Columbia and
internationally. Childtime Learning Centers, Inc. has over 7,500
employees and licensed capacity to provide education and care for
over 50,000 children daily in over 470 corporate and franchise
centers worldwide.
CNA FINANCIAL: Completes Sale of Preferred Shares to Loews Corp.
----------------------------------------------------------------
CNA Financial Corporation (NYSE:CNA) has completed the previously
announced sale of $750 million of its participating convertible
preferred stock to Loews Corporation, the owner of approximately
90% of CNA's outstanding common stock.
The sale of the preferred shares is part of the Company's
previously announced capital plan. The preferred stock has terms
that make it economically equivalent to CNA's common stock. CNA
has approximately 223.6 million outstanding shares of common
stock. The preferred shares will convert into 32,327,015 shares of
CNA common stock, utilizing a conversion price per share of common
stock that is based on average market prices of CNA common stock
from November 17, 2003 through November 21, 2003. Upon conversion,
Loews will own approximately 91% of CNA's outstanding common stock
of approximately 255.9 million shares. Conversion will take place
when the Company satisfies applicable stock exchange requirements.
CNA is the country's fourth largest commercial insurance writer
and the 11th largest property and casualty company. CNA's
insurance products include standard commercial lines, specialty
lines, surety, marine and other property and casualty coverages;
life and accident insurance; group long term care, disability and
life insurance; and pension products. CNA services include risk
management, information services, underwriting, risk control and
claims administration. For more information, please visit CNA at
http://www.cna.com
* * *
As previously reported, A.M. Best Co., affirmed the financial
strength ratings of the wholly-owned insurance subsidiaries of CNA
Financial Corporation (Chicago, IL).
Additionally, A.M. Best has affirmed the "bbb" debt rating on
CNA Financial Corporation's existing debt securities, a rating
of AMB-2 to the commercial paper program and indicative ratings
to corporate securities under a $600 million shelf registration
filed in 1999. These indicative ratings include "bbb" on senior
unsecured debt, "bbb-" on subordinated debt, "bb+" on trust
preferred securities and "bb+" on preferred stock.
CONE MILLS: Committee Signs-Up Ernst & Young as Workout Advisors
----------------------------------------------------------------
The duly appointed Unsecured Creditors' Committee of Cone Mills
Corporation and its debtor-affiliates is asking permission from
the U.S. Bankruptcy Court for the District of Delaware to employ
Ernst & Young Corporate Finance LLC as Restructuring Advisors,
nunc pro tunc to October 7, 2003.
The Committee will look to EYCF to:
(a) analyze the current financial position of the Debtors;
(b) analyze the Debtors' business plans, cash flow
projections, restructuring programs, and other reports
or analyses prepared by the Debtors or their
professionals in order to advise the Committee on the
viability of the continuing operations and the
reasonableness of projections and underlying
assumptions;
(c) analyze the financial ramifications of proposed
transactions for which the Debtors seek Bankruptcy
Court approval, including, but not limited to, DIP
financing and cash management, assumption/rejection of
real property leases and other contracts, asset sales,
management compensation and/or retention and severance
plans;
(d) analyze the Debtors' internally prepared financial
statements and related documentation, in order to
evaluate the performance of the Debtors as compared to
projected results on an ongoing basis;
(e) attend and advise at meetings with the Committee, its
counsel, other financial advisors and representatives
of the Debtors;
(f) assist and advise the Committee and its counsel in the
development, evaluation and documentation of any
plants) of reorganization or strategic transaction(s),
including developing, structuring and negotiating the
terms and conditions of potential plants) or strategic
transaction(s) and the consideration that is to be
provided to unsecured creditors;
(g) prepare hypothetical liquidation analyses;
(h) render testimony as needed;
(g) above, as required, on behalf of the Committee; and
(i) provide such other services, as requested by the
Committee and agreed to by Ernst & Young.
Samuel Star reports that, currently, his firm's hourly rates are:
Managing Directors $575 - 595 per hour
Directors $475 - 545 per hour
Vice Presidents $375 - 440 per hour
Associates $320 - 340 per hour
Analysts $275 per hour
Client Service Associates $140 per hour
Headquartered in Greensboro, North Carolina, Cone Mills
Corporation is one of the leading denim manufacturers in North
America. The Debtor also produces fabrics and operates a
commission finishing business. The Company, with its debtor-
affiliates filed for chapter 11 protection on September 24, 2003
(Bankr. Del. Case No. 03-12944). Pauline K. Morgan, Esq., at
Young, Conaway, Stargatt & Taylor represent the Debtors in their
restructuring efforts. When the Company filed for protection from
its creditors, it listed $318,262,000 in total assets and
$224,809,000 in total debts.
CONSOLIDATED CONTAINER: Completes Acquisition of Contour Assets
---------------------------------------------------------------
Consolidated Container Company has completed an acquisition of the
blow-molding assets of Contour Packaging Corporation of
Philadelphia, Pennsylvania.
Jeff Greene, Senior Vice President of the Consumer Packaging
Group, a business unit of Consolidated Container Company, stated
"The equipment purchased will be relocated to facilities within
the CPG region, expanding our broad-based shuttle platform
technology. This move supports Consolidated's business strategy of
growing its capabilities in the custom - specialty markets on a
national basis."
In addition to assets acquired, CPG also secured a 3-year sole
source agreement with a customer previously shared by Consolidated
and Contour.
Consolidated Container Company (S&P, B- Corporate Credit Rating,
Stable) is a leading U.S. developer, manufacturer and marketer of
blow-molded rigid plastic containers for the beverage, consumer
and industrial markets. The company was created in 1999 through
the merger of Reid Plastics Holdings with the domestic plastic
packaging operations of Suiza Foods Corporation.
CONSTELLATION BRANDS: Files Shelf Registration for Shares Sales
---------------------------------------------------------------
Constellation Brands, Inc. (NYSE: STZ, ASX: CBR), a leading
international producer and marketer of beverage alcohol brands,
has filed a Shelf Registration Statement with the Securities and
Exchange Commission.
This shelf registration will allow the Company to issue various
types of securities, including debt, Class A common stock and
preferred stock, from time to time, up to an aggregate of $750
million.
Constellation Brands Executive Vice President & Chief Financial
Officer, Thomas Summer said, "Consistent with past practices, the
Company is updating its shelf registration in order to maintain
financial flexibility through efficient access to the capital
markets. The shelf will allow us to refinance debt when market
conditions are favorable, and longer term, support the continued
growth of the Company. There are no immediate plans to issue
securities under the shelf registration in connection with any
acquisitions."
A registration statement relating to these securities has been
filed with the Securities and Exchange Commission but has not yet
become effective. These securities may not be sold nor may offers
to buy be accepted prior to the time the registration statement
becomes effective.
Constellation Brands, Inc. (S&P, BB Corporate Credit and Senior
Unsecured Debt Ratings) is a leading international producer and
marketer of beverage alcohol brands, with a broad portfolio across
the wine, spirits and imported beer categories. The Company is
the largest multi-category supplier of beverage alcohol in the
United States; a leading producer and exporter of wine from
Australia and New Zealand; and both a major producer and
independent drinks wholesaler in the United Kingdom. Well-known
brands in Constellation's portfolio include: Corona Extra,
Pacifico, St. Pauli Girl, Black Velvet, Fleischmann's, Mr. Boston,
Estancia, Simi, Ravenswood, Blackstone, Banrock Station, Hardys,
Nobilo, Alice White, Vendange, Almaden, Arbor Mist, Stowells and
Blackthorn.
COVANTA ENERGY: Court Confirms Heber Debtors' 3rd Amended Plan
--------------------------------------------------------------
The U.S. Bankruptcy Court finds and concludes that the Heber
Debtors' Third Amended Joint Plan of Reorganization complies with
the standards for confirmation under Section 1129 of the
Bankruptcy Code:
A. Compliance with Section 1129(a)(1) of the Bankruptcy Code
The Heber Reorganization Plan complies with the applicable
provisions of the Bankruptcy Code, thereby satisfying Section
1129(a)(1).
B. Compliance with the Bankruptcy Code
The Heber Debtors, as proponents of the Heber Reorganization
Plan, have complied with each of the applicable provisions of
the Bankruptcy Code including, without limitation, Sections
1125 and 1126, and therefore have satisfied the requirements
of Section 1129(a)(2).
C. Proposed in Good Faith
The Heber Reorganization Plan has been proposed in good faith
and not by any means forbidden by law, thereby satisfying the
requirements of Section 1129(a)(3). In determining that the
Heber Reorganization Plan has been proposed in good faith, the
Court has examined the totality of the circumstances
surrounding the filing and prosecution of the Heber
Reorganization Cases and the formulation of the Heber
Reorganization Plan. The Heber Reorganization Cases were
filed, and the Heber Reorganization Plan was proposed with,
the proper purpose of maximizing the value of the Heber
Debtors' estates by providing a means through which the
Reorganized Heber Debtors may emerge from Chapter 11 as a
viable, operating enterprises and through which creditors may
expeditiously receive Distributions in respect of their
Claims.
D. Payments for Services or Costs and Expenses
Any payments made or to be made by the Heber Debtors for
services or for costs and expenses in, or in connection with,
the Heber Reorganization Cases or the Heber Reorganization
Plan have, to the extent required by the Bankruptcy Code, the
Bankruptcy Rules or the Orders of the Court, been approved by,
or are subject to the approval of, the Court as reasonable.
Accordingly, the Heber Reorganization Plan satisfies the
requirements of Section 1129(a)(4).
E. Directors, Officers and Insiders
The Heber Debtors have complied with Section 1129(a)(5).
Section 6.4 of the Heber Reorganization Plan provides that the
boards of directors and officers of each of the Heber Debtors
will resign on or prior to the Effective Date. Buyers have
complied with the applicable provisions of Section 1129(a)(5).
F. No Rate Changes
Section 1129(a)(6) is satisfied because the Heber
Reorganization Plan does not provide for any change in rates
over which a governmental regulatory commission has
jurisdiction.
G. Best Interests of Creditors
The Heber Reorganization Plan satisfies Section 1129(a)(7)
because the only holders of Impaired Claims or Equity
Interests -- Classes 9 and 14 -- are insiders and do not
object to, and in fact support, the Heber Reorganization Plan,
notwithstanding Section 1126(g).
H. Acceptance by Unimpaired Classes
Classes 1, 2H, 3H, 7 and 8 are Unimpaired and are deemed to
accept the Heber Reorganization Plan under Section 1126(f).
Classes 9 and 14 -- the Rejecting Classes -- are Impaired and
will receive no Distributions under the Heber Reorganization
Plan and therefore are deemed to reject the Heber
Reorganization Plan. Section 1129(a)(8) is therefore
satisfied with respect to Claims and Equity Interests other
than those in the Rejecting Classes.
I. Treatment of Administrative and Priority Claims
The treatment of Allowed Administrative Expense Claims,
Allowed Priority Tax Claims and Allowed Non-Priority Tax
Claims under the Heber Reorganization Plan satisfies the
applicable requirements of Section 1129(a)(9).
J. Acceptance by Impaired Class
The Heber Reorganization Plan satisfies Section 1129(a)(10)
because the only Impaired Class of Claims under the Heber
Reorganization Plan is Class 9 -- Intercompany Claims, which
is comprised solely of insiders whose acceptances may not be
counted for purposes of Section 1129(a)(10). Thus, there are
no Classes of Impaired Claims whose acceptances are required
for confirmation under Section 1129(a)(10).
K. Feasibility
The Disclosure Statement and the evidence proffered or adduced
at the Confirmation Hearing (a) are persuasive and credible;
(b) have not been controverted by other evidence; and (c)
establish that confirmation of the Heber Reorganization Plan
is not likely to be followed by liquidation or the need for
further financial reorganization of the Reorganized Heber
Debtors; thus satisfying the requirements of Section
1129(a)(11).
L. Payment of Fees
The fees due and payable by the Heber Debtors to the United
States Trustee or the Clerk of Court, as provided under
Section 1930(a)(6) of Judiciary and Judicial Procedures Code,
have been paid or will be paid by Covanta pursuant to Section
13.3 of the Heber Reorganization Plan. Thus, the requirements
of Section 1129(a)(12) are satisfied.
T. Continuation of Retiree Benefits
Section 1129(a)(13) is inapplicable to the Heber
Reorganization Plan because there are no employees or retirees
of the Heber Debtors and the Heber Debtors do not have any
obligations with respect to any retirement benefits subject to
Section 1129(a)(13). Thus, the requirements imposed by
Section 1129(a)(13) are satisfied.
Accordingly, Judge Blackshear confirmed the Heber Debtors' Third
Amended Joint Plan of Reorganization on November 21, 2003. The
Court made it clear that:
(a) the Imperial County Taxing Authorities' Objection and the
Marley Cooling Tower Company's Objection were withdrawn by
stipulation between the objecting parties and the Debtors,
which stipulations were filed with and approved by the
Court at the Confirmation Hearing;
(b) the Heber Geothermal Royalty Owners Group Objection and
the General Electric Capital Corporation Objection were
resolved; and
(c) any objections to confirmation of the Heber Plan or the
sale of the Geothermal Debtor Interests that have not been
withdrawn or resolved by stipulation are overruled.
(Covanta Bankruptcy News, Issue No. 41; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
CREST: S&P Assigns Low-B Ratings to Class E Notes and Preferreds
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to CREST 2003-2 Ltd./ CREST 2003-2 Corp.'s $325 million
floating- and fixed-rate notes and preferred shares.
The preliminary ratings are based on information as of
Nov. 24, 2003. Subsequent information may result in the assignment
of final ratings that differ from the preliminary ratings.
The preliminary ratings reflect:
-- The expected commensurate level of credit support in the
form of subordination to be provided by the notes junior
to the respective classes and the preferred shares;
-- The excess spread and diversification provided by the
assets;
-- The cash flow structure, which is subject to various
stresses requested by Standard & Poor's;
-- The experience of the collateral administrator and the
disposition consultant;
-- The coverage of interest rate risks through hedge
agreements; and
-- The legal structure of the transaction.
The preliminary rating on the preferred shares addresses solely
the ultimate payment of the $53.625 million notional amount by the
legal final maturity date in December 2038.
PRELIMINARY RATINGS ASSIGNED
CREST 2003-2 Ltd./CREST 2003-2 Corp.
Class Rating Amount (mil. $)
A AAA 146.000
B AA 48.750
C A- 29.250
D BBB 29.250
E BB 17.875
Preferred shares BB- 53.625
CROWN CASTLE: Commences Cash Tender Offer for 2 Discount Notes
--------------------------------------------------------------
Crown Castle International Corp. (NYSE: CCI) (S&P, B- Corporate
Credit Rating, Stable) has commenced cash tender offers and
consent solicitations for all of its outstanding 10-3/8% Senior
Discount Notes due 2011 (CUSIP No. 228227AD6) and 11-1/4% Senior
Discount Notes due 2011 (CUSIP No. 228227AF1).
The tender offers and consent solicitations are made upon the
terms and conditions in the Offer to Purchase and Consent
Solicitation Statement and related Consent and Letter of
Transmittal dated November 24, 2003. The tender offers will
expire at 5:00 p.m. (EST) on December 23, 2003, unless extended or
terminated. The consent solicitations will expire at 5:00 p.m.
(EST) on December 9, 2003, unless extended. 10-3/8% Notes and
11-1/4% Notes tendered before the Consent Date may be withdrawn at
any time on or prior to the Consent Date, but not thereafter.
10-3/8% Notes and 11-1/4% Notes tendered after the Consent Date
may not be withdrawn.
Under the terms of the tender offer for the 10-3/8% Notes, the
consideration for each $1,000 principal amount at maturity of
10-3/8% Notes tendered will be determined on the third business
day before the Expiration Date. The consideration will be
calculated by taking (i) the present value of $1,051.87, which is
the redemption price applicable to the 10-3/8% Notes on May 15,
2004, the first date on which the 10-3/8% Notes may be redeemed,
determined on the basis of a yield to such date using the sum of
the yield to maturity of the 3-1/4% U.S. Treasury Note due May 31,
2004, plus 100 basis points, and subtracting (ii) the consent
payment described below of $20.00 per $1,000 principal amount at
maturity of 10-3/8% Notes. In conjunction with this tender offer,
the Company is also soliciting the consent of holders of the
10-3/8% Notes to eliminate substantially all of the restrictive
covenants and certain events of default under the Indenture for
the 10-3/8% Notes, and to make certain other amendments to such
Indenture. Holders cannot tender their 10-3/8% Notes without
delivering a consent and cannot deliver a consent without
tendering their 10-3/8% Notes.
Under the terms of the tender offer for the 11-1/4% Notes, the
consideration for each $1,000 principal amount at maturity of
11-1/4% Notes tendered will be determined on the third business
day before the Expiration Date. The consideration will be
calculated by taking (i) the present value of $1,056.25, which is
the redemption price applicable to the 11-1/4% Notes on August 1,
2004, the first date on which the 11-1/4% Notes may be redeemed,
determined on the basis of a yield to such date using the sum of
the yield to maturity of the 7-1/4% U.S. Treasury Note due
August 15, 2004, plus 100 basis points, and subtracting (ii) the
consent payment described below of $20.00 per $1,000 principal
amount at maturity of 11-1/4% Notes. In conjunction with this
tender offer, the Company is also soliciting the consent of
holders of the 11-1/4% Notes to eliminate substantially all of the
restrictive covenants and certain events of default under the
Indenture for the 11-1/4% Notes, and to make certain other
amendments to such Indenture. Holders cannot tender their 11-1/4%
Notes without delivering the consent and cannot deliver a consent
without tendering their 11-1/4% Notes.
The Company will pay a consent payment of $20.00 per $1,000
principal amount at maturity of 10-3/8% Notes or 11-1/4% Notes
validly tendered on or prior to the Consent Date. Holders who
tender their 10-3/8% Notes or 11-1/4% Notes after the Consent Date
will not receive the consent payment.
The closing of each tender offer is subject to certain conditions,
including (i) the closing by the Company of its offering of 7.5%
Senior Notes due 2013, which is scheduled for December 2, 2003,
and (ii) the receipt of the required consents from holders to
amend the Indenture related to the applicable series of Notes.
The Company has retained J.P. Morgan Securities Inc., to serve
as the Dealer Manager and Solicitation Agent for the tender
offers. Requests for documents may be directed to MacKenzie
Partners, Inc., the Information Agent, by telephone at (800) 322-
2885 (toll-free) or (212) 929-5500 (collect), or in writing at 105
Madison Avenue, New York, New York 10016, Attention: Steve Balet.
Questions regarding the tender offer may be directed to Brian
Tramontozzi of JPMorgan at (212) 270-9153.
CTC COMMS: Court Confirms 2nd Amended Joint Reorganization Plan
---------------------------------------------------------------
CTC Communications Group, Inc. announced that the U.S. Bankruptcy
Court for the District of Delaware has confirmed CTC
Communications Group's Second Amended Joint Plan of
Reorganization.
This decision paves the way for CTC's emergence from Chapter 11
upon consummation of its investment agreement with Columbia
Ventures Broadband LLC, a subsidiary of Vancouver, Washington-
based Columbia Ventures Corporation, and satisfaction of other
conditions.
The Plan of Reorganization was accepted by an overwhelming
majority of its voting creditors. The plan was supported by a
majority of CTC's secured lenders, its unsecured creditors'
committee, Cisco Systems, Inc. and other important creditor
groups.
CTC's Interim CEO, Michael Katzenstein, said, "CTC is very pleased
with the decision of the Court. CTC has benefited from the loyalty
of its customers and the hard work and dedication of its
employees. We look forward to continuing to lead the industry in
service to our customers, to deploying new and innovative products
and to achieving significant growth."
Mr. Katzenstein expressed appreciation to CTC's creditors and new
investor for their support and collaboration in reaching this
milestone.
He noted that CTC is expected to emerge from Chapter 11 in the
coming weeks under new sponsorship with a strong balance sheet, an
intact management team and a vision for the future.
Kenneth D. Peterson, Columbia Ventures Chairman and CTC's
President-designate under the Plan of Reorganization, said:
"Columbia Ventures is eager to complete this transaction so that
CTC Communications can emerge from bankruptcy protection. CTC's
employees have demonstrated their determination to continue
serving their customers with high quality service, and have done
an excellent job in retaining their ability to compete
effectively. I also believe the CTC customers, who have
demonstrated their loyalty to the company, will be pleased to have
the cloud of bankruptcy removed and see CTC emerge an even
stronger competitor."
CTC is a "next generation" Integrated Communications Carrier
utilizing advanced technology and providing its customers with
converged voice, data, Internet and video services on a broadband,
packet-based network, called the PowerPathr Network. The Company
serves medium and larger business customers from Virginia to
Maine, which includes the most robust telecommunications region in
the world -- the Washington D.C. to Boston corridor. CTC's Cisco
Powered IP+ATM packet network and its top-tier sales and service
teams provide contiguous marketing and technology coverage
throughout the Northeast and Mid-Atlantic States. The Company,
through its dedicated commitment to exceptional customer service,
has achieved an industry-leading market share in the Northeast.
CTC can be found on the worldwide web at http://www.ctcnet.com
Columbia Ventures Corporation owns and operates telecommunications
and industrial businesses. The most recent addition to CVC's
operations is Hibernia Atlantic, a transatlantic fiber optic
network with landing stations in Boston, Halifax, Liverpool and
Dublin. The Hibernia Atlantic system includes a fully protected
terrestrial system linking Boston via New York City. CVC also
operates a fiber optic metropolitan network in Spokane, Washington
and is the largest shareholder in Og Vodafone, the second largest
telecommunications provider in Iceland. The industrial businesses
of CVC include Nordural, an aluminum smelter developed and
constructed by CVC in Iceland, as well as aluminum manufacturing
and fabrication operations in the United States ands Mexico. CVC
and its related businesses began operations in 1987. The company's
headquarters are located in Vancouver, Washington.
DEACONESS HOSPITAL: Case Summary & Largest Unsecured Creditors
--------------------------------------------------------------
Lead Debtor: Deaconess Hospital, LLC
4229 Pearl Road
Cleveland, Ohio 44109
fka 4229 Pearl Road, L.L.C.
aka Deaconess Hospital
Bankruptcy Case No.: 03-25461
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Indoga, Inc. 03-25462
Pearlview Square, Inc. 03-25463
Type of Business: Deaconess Hospital LLC is a 287-bed facility
with over 500 employees.
Chapter 11 Petition Date: November 21, 2003
Court: Northern District of Ohio (Cleveland)
Judge: Pat E. Morgenstern-Clarren
Debtors' Counsel: Daniel A. DeMarco, Esq.
Hahn Loeser & Parks LLP
200 Public Square
3300 BP Tower
Cleveland, OH 44114-2301
Tel: 216-621-0150
Fax: 216-241-2824
Total Assets: $15,022,560
Total Debts: $14,314,343
A. Deaconess Hospital's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Illuminating Company Services $566,290
PO Box 3638
Akron, OH 44309-3638
Kenneth A. Strah
Tel: 800-589-3101
Intelistaf Healthcare Services $529,327
P O Box 503289
Saint Louis, MO 63150-3289
Kit Weatherwaxx
Tel: 216-524-8400
Amerisource Corp-Toledo Services $245,536
Soft Computer Consultants Services $195,530
Seneca Medical Inc Open Account $193,390
Division Of Water Services $183,791
Quality Professional Staff Services $168,773
North Coast Energy Inc Services $148,593
Ascend Healthcare Systems Services $134,739
Amerisource/Dialysis Open Account $132,962
Compucare Company Open Account $110,562
US Foodservice Inc $53,978
Medical Mutual Of Services $54,012
Ohio Fi
SBC - Ameritech Services $60,175
Medispec, Ltd Services $61,845
Randstad-Beachwood/Pharm Services $63,342
Dominion East Ohio Services $76,808
Kforce.Com Services $90,090
Maxim Healthcare Services Services $95,807
B. Indoga, Inc. & Pearlview Square's 2 Largest Unsecured
Creditors:
Entity Claim Amount
------ ------------
George J. Saad $1,000
Nour Management Companies Investments $1,000
DELTA AIR LINES: S&P Puts Low-B Level Ratings on Watch Negative
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Delta Air
Lines Inc. (BB-/Watch Neg/--) on CreditWatch with negative
implications.
"The CreditWatch placement reflects concerns regarding the
airline's continued heavy, albeit narrowing, losses, a relatively
high operating cost structure, and substantial upcoming debt
maturities and pension obligations," said Standard & Poor's credit
analyst Philip Baggaley. Delta announced [Mon]day that its
Chairman and CEO, Leo Mullin, would retire as of Jan. 1, 2004 (but
remain nonexecutive Chairman until April), and will be succeeded
as CEO by Gerald Grinstein, a member of the Board of Directors and
former nonexecutive Chairman. John F. Smith, Jr., another Board
member and former CEO of General Motors Corp., will become
nonexecutive Chairman in April 2004.
Delta reported a third-quarter 2003 net loss of $164 million ($172
million before special items), narrower than the $326 million loss
($212 million before special items) in 2002's third quarter, but
still disappointing given gradually recovering airline industry
revenues and better results from other large airlines. Management
predicts a fourth-quarter 2003 net loss before special items of
$200 million to $250 million, but will also incur a $140 million
after-tax pension settlement charge relating to early retirement
of pilots and a $26 million after-tax charge relating to sale of
aircraft deliveries. In addition, the company expects to take an
estimated $700 million charge directly to equity due to continued
underfunding of pension plans (similar actions are expected also
at several other large U.S. airlines).
Delta, like other large airlines, is seeking to reduce expenses in
response to the adverse revenue outlook, targeting a 15% cut,
compared with year-end 2002 levels, in cost per available seat
mile by the end of 2005. In addition, management has opened
discussions with its pilots, who have agreed to consider contract
changes, regarding concessions to reduce labor costs. These talks,
which are expected to be difficult and lengthy, will be important
in Delta's plans to reduce its relatively high operating costs. If
management succeeds, it would be the first time that a large
U.S. airline secured material labor cost concessions without being
in or at the edge of bankruptcy (Northwest Airlines Inc. is also
trying to achieve this currently). Other Delta employees are not
unionized, so the company has greater flexibility to change
compensation and has revised the pension plans of noncontract
employees to narrow a substantial pension-funding gap. Liquidity
remains satisfactory, with $2.7 billion of unrestricted cash at
Sept. 30, 2003, and Delta has generated positive operating cash
flow in 2002 and 2003, despite heavy losses, giving the company
time to pursue cost-cutting initiatives.
Standard & Poor's will review its ratings on Delta in the near
term, focusing on prospects for reducing costs and improving
operating results to service substantial upcoming debt and pension
obligations.
DIRECTV LATIN: Wants More Time to Make Lease-Related Decisions
--------------------------------------------------------------
DirecTV Latin America LLC asks the Court to extend the time by
which it must assume or reject unexpired non-residential property
leases, through and including March 1, 2004.
Alfred Villoch, III, Esq., at Young, Conaway, Stargatt & Taylor,
LLP, in Wilmington, Delaware, tells the Court that the Debtor is
a party to these unexpired non-residential property leases:
Leased Premises Lessor
--------------- ------
2400 East Commercial Blvd. CB Richard Ellis
Fort Lauderdale, Florida 2400 East Commercial Blvd.
33308 Suite 708
Fort Lauderdale, Florida 33308
New Town Commerce Center Iron Mountain
3821 SW 47th Avenue New Town Commerce Center
Fort Lauderdale, Florida 3821 SW 47th Avenue
33314 Fort Lauderdale, Florida 33314
Attn: Daniel Melendez
The Debtor leases the premises for its corporate offices and
headquarters and for its warehouse. Mr. Villoch assures the
Court that the Debtor has performed its postpetition obligations
under the Unexpired Leases in a timely manner. The Unexpired
Leases are valuable assets of the Debtor's estate and are
integral to the continued operation of the Debtor's business.
Mr. Villoch relates that the Debtor is presently working with the
Official Committee of Unsecured Creditors and Hughes Electronics
Corporation to draft and file a consensual reorganization plan.
Mr. Villoch contends that forcing the Debtor to assume the
Unexpired Leases would subject the estate to potential
unnecessary administrative expense. Alternatively, forcing the
Debtor to reject the Unexpired Leases, and seek a new office and
storage space would be extremely disruptive to its business and
reorganization efforts. The Debtor's determination to assume or
reject the Unexpired Leases is, therefore, subject to the
ultimate formulation and confirmation of a reorganization plan.
Mr. Villoch points out that the extension will promote the
Debtor's ability to maximize the value of its estate, avoid the
incurrence of needless administrative expenses and other claims
on the estate by minimizing the likelihood of an inadvertent
rejection of a valuable lease or, alternatively, the premature
assumption of a burdensome one.
The Court will convene a hearing on December 15, 2003 to consider
the Debtor's request. By application of Del.Bankr.LR 9006-2, the
lease decision deadline is automatically extended through the
conclusion of that hearing. (DirecTV Latin America Bankruptcy
News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
DOMAN INDUSTRIES: Intends to Withdraw from Obligations Under FIR
----------------------------------------------------------------
As a result of the deteriorating labor environment in the Coastal
Forest Industry, and Doman Industries Limited continuing
restructuring process under the Companies Creditors Arrangement
Act, Doman, on Friday, November 21, 2003, formally requested that
Forest Industrial Relations, the accredited bargaining agent for
the Coastal Forest Industry to consent to Doman's withdrawal from
its obligations under FIR and to permit Doman to independently
negotiate and conclude a Collective Agreement with representatives
of IWA Canada.
Although FIR has offered certain accommodations to Doman, it has
rejected the Company's request to be able to negotiate and
conclude a Collective Agreement with the IWA. In those
circumstances, given the financial circumstances of Doman and its
continued involvement in CCAA proceedings, Doman has no option but
to seek court approval in its CCAA proceedings to be relieved of
its obligations to FIR. The process to obtain such court approval
has begun and Doman intends to bring the issue before the courts
as soon as possible.
DOMAN INDUSTRIES: FIR Seeks to Protect Doman from Strike
--------------------------------------------------------
Forest Industrial Relations Ltd expects the IWA to live up to its
commitment not to strike Doman Industries Limited, after the FIR
board agreed today to release Doman from any obligations to
implement new terms and conditions of employment.
"The FIR Board has agreed to a special arrangement for Doman
because they are under bankruptcy protection," explained Terry
Lineker, FIR president and CEO. "The union has also said they do
not want to be the reason for the demise of the company and the
associated employment and we hope they will respect that Doman is
in a special situation."
"The FIR Board has reached a compromise that we believe should
protect Doman from any strike action, while maintaining the
integrity of the bargaining process," said Lineker.
"The objective of coastal employers is to modernize our labour
collective agreement so that we can rebuild this industry over the
next decade," concluded Lineker. "It would be reprehensible for
the IWA to force its will on a company under bankruptcy protection
and jeopardize over 2,000 jobs."
FIR comprises 61 forest products employers in coastal BC,
Vancouver Island, and the Terrace area in the north. Member
companies employ 65 percent of the coastal industry workforce and
include large, publicly traded companies as well as small,
privately owned firms.
DYNEGY: S&P Affirms B Corp. Credit Rating over Terminated Deal
--------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B' corporate
credit rating on Dynegy Inc. and its subsidiaries. At the same
time, Standard & Poor's removed its ratings on electric utility
Illinois Power Co., a Dynegy subsidiary, from CreditWatch with
positive implications. All rating outlooks are negative.
The CreditWatch was removed following the announcement that Exelon
Corp. has terminated an agreement to purchase Illinois Power.
"The sale of Dynegy's Illinois Power unit was a key part of the
company's comprehensive self-restructuring program," said Standard
& Poor's credit analyst John Kennedy. "Now that the agreement to
sell Illinois Power to Exelon has been terminated, Dynegy will
need to improve Illinois Power's financial structure through cost
reductions to stem credit deterioration at the consolidated
enterprise," added Kennedy.
Importantly, several key credit issues still need to be resolved.
Before the sale was canceled, Dynegy expected to eliminate $170
million in annual interest payments associated with the $2.3
billion intercompany note and $1.8 billion in Illinois Power debt,
which was to be assumed by Exelon. In addition, the company's
consolidated debt leverage will remain at a burdensome level
because the anticipated proceeds could have been used to reduce
debt retained from the prior failed business strategy.
The negative outlook reflects the continued uncertainty around
Dynegy's ability to effectively manage the Illinois Power
operation, difficulty generating sustainable cash flow given the
current environment in electric generation, as well as the price
volatility in gathering and processing of natural gas liquids. In
addition, the current rating level incorporates, maintaining
access to capital markets for debt refinancing, preserving an
adequate liquidity position, and meeting obligations over the next
12 months. Still, lower ratings are a distinct possibility given
Dynegy's weakened financial profile, regulatory uncertainty in
Illinois, stagnant generation prices, volatile gathering and
processing natural gas liquids margins, and vulnerability to
adverse economic conditions.
DYNEGY INC: Exelon Disappointed with Terminated Acquisition Deal
----------------------------------------------------------------
Exelon Corporation and its ComEd subsidiary expressed
disappointment in the termination of Exelon's acquisition of
Illinois Power from Dynegy Inc., following the absence of approved
legislation by the Illinois General Assembly during its fall veto
session.
From the beginning, Exelon and ComEd officials believed that the
prospect of Exelon acquiring Illinois Power would have been
positive for Illinois because it provided job protection to
Illinois Power and ComEd labor unions, ensured a continuing
commitment to improved electricity reliability in the state, and
enhanced Illinois' economy.
"I really believe this transaction would have benefited the state
of Illinois, our customers, our investors and, certainly, the
employees of Illinois Power," said Exelon Chairman and Chief
Executive Officer John W. Rowe. "It is our opinion that a real
opportunity has been lost."
Despite major compromises that were made throughout the
legislative process, the company could not agree with language
proposed in a House amendment. "Unfortunately, the final proposed
language change in this process would have created unacceptable
uncertainty regarding the ability of Exelon to enter into long-
term purchase power agreements related to the acquisition of
Illinois Power," Rowe said. "We exercised the discipline that our
shareholders expect and terminated the agreement with Dynegy."
Rowe also stated that he and other representatives of Exelon and
ComEd had conducted all discussions in an open, honest and
straightforward manner. "There were never any tricks or secrets in
our proposal. It may have sounded complicated, and we may have
had disagreement, but we were never less than honorable and
respectful in our dealings with the legislature," Rowe said.
Exelon officials would like to thank Senate President Emil Jones
and Senate Republican Leader Frank Watson for their support.
Exelon also thanks the Governor and members of the Illinois Senate
and House of Representatives who took so much time to listen to
and understand this proposal. In addition, Exelon thanks its
dedicated employees and the community and civic leaders who
expressed their support for its purchase of Illinois Power.
Exelon Corporation (NYSE: EXC) is one of the nation's largest
electric utilities with approximately 5 million customers and more
than $15 billion in annual revenues. The company has one of the
industry's largest portfolios of electricity generation capacity,
with a nationwide reach and strong positions in the Midwest and
Mid-Atlantic. Exelon distributes electricity to approximately 5
million customers in Illinois and Pennsylvania and gas to more
than 440,000 customers in the Philadelphia area. Exelon is
headquartered in Chicago and trades on the NYSE under the ticker
EXC.
Dynegy Inc. (S&P, B Corporate Credit Rating, Positive) provides
electricity, natural gas and natural gas liquids to wholesale
customers in the United States and to retail customers in the
state of Illinois. The company owns and operates a diverse
portfolio of energy assets, including power plants totaling
approximately 13,00 megawatts of net generating capacity, gas
processing plants that process more than 2 billion cubic feet of
natural gas per day and approximately 40,000 miles of electric
transmission and distribution lines.
EMAGIN CORP: Completes Settlement Pact with Vertical Ventures
-------------------------------------------------------------
eMagin Corporation (AMEX:EMA), the leading developer of active
matrix organic light emitting diode microdisplays, announced that
a mutual release with Vertical Ventures Investments LLC was
completed on November 21, 2003 and the action was dismissed.
In May 2003, an action was commenced against eMagin in the Supreme
Court of the State of New York, County of New York, in which
Vertical Ventures asserted claims for the breach of a Registration
Rights Agreement, and sought compensatory damages against eMagin
in the amount of $1,500,000. A settlement with Vertical Ventures
was reached on November 18, 2003 in the amount of $169,071, which
was paid on November 21 with 109,078 shares of eMagin common stock
and no cash. The majority of the settlement amount has already
been accrued in previous quarters due to contractual charges
related to the delayed registration of the Vertical Ventures
shares, as specified in the original agreement between the
companies which established such compensation in the event of a
delay in share registration.
The settlement and discontinuance of this action removes the
existing violation of one of the representations and warranties
contained in the Note Purchase Agreement executed in connection
with eMagin's April 2003 financing, which may have been deemed to
constitute a default under the promissory notes issued in
connection with such financing.
This settlement is also expected to result in most of eMagin's
short term debt from the April 2003 Note being reclassified into
long term debt, pending review by independent accountants.
The world leader in organic light emitting diode (OLED)-on-silicon
microdisplay technology, eMagin combines integrated circuits,
microdisplays, and optics to create a virtual image similar to the
real image of a computer monitor or large screen TV. eMagin
invented the award-winning SVGA+ and SVGA-3D OLED microdisplays,
the world's first single-chip color video OLED microdisplay and
embedded controller for advanced virtual imaging. eMagin's
microdisplay systems are expected to enable new mass markets for
wearable personal computers, wireless Internet appliances,
portable DVD-viewers, digital cameras, and other emerging
applications for consumer, industrial, and military applications.
eMagin has developed its own technology to create high performance
OLED-on-silicon microdisplays and related optical systems, and is
a licensee of Eastman Kodak's OLED technology. eMagin is the only
company to announce, publicly show and sell full-color active
matrix OLED-on-silicon microdisplays. eMagin's corporate
headquarters and microdisplay operations are co-located with IBM
on its campus in East Fishkill, N.Y. Optics and system design
facilities are located at its wholly owned subsidiary, Virtual
Vision, Inc., in Redmond, WA. Additional information is available
at http://www.emagin.com
At June 30, 2003, eMagin's balance sheet shows a total
shareholders' equity deficit of about $6 million.
ENRON: Proposes Uniform Wind Projects Sale Bidding Procedures
-------------------------------------------------------------
To maximize the value of the Wind Power Projects, the Wind
Debtors wish to implement a competitive bidding process designed
to generate a maximum recovery and typical for transactions of
this size and nature. Thus, at the Wind Debtors' request, the
Court approves and directs the Wind Debtors to implement the
proposed Bidding Procedures, which, among other things, provides
that:
(a) The Auction will be held on December 2, 2003 commencing
at 10:00 a.m. (New York Time) at the offices of Weil,
Gotshal & Manges LLP, for consideration of qualifying
bids;
(b) Each Competing Bid must be accompanied by a cash deposit
at least equal to 10% of the bidder's proposed purchase
price for the Project it is bidding on;
(c) Competing Bids must be received in writing no later than
12:00 p.m. on November 21, 2003 by:
-- Enron Corp.,
-- The Blackstone Group LP,
-- Weil, Gotshal & Manges LLP, and
-- Squire Sanders & Dempsey LLP;
(d) Initial Overbids for the Projects must be at least:
Project Name Initial Overbid
------------ ---------------
Sky River $1,185,000
Victory Garden Phase IV 290,000
251 90,000
Cabazon 1,550,000
Green Power 205,000
VG Repower 120,000
EWS Real Estate 40,000
(e) Subsequent bids at the Auction, including those of the
Purchasers, must be in these minimum amounts than the
Initial Overbids for each Projects:
Project Name Subsequent Bids
------------ ---------------
Sky River $200,000
Victory Garden Phase IV 50,000
251 20,000
Cabazon 260,000
Green Power 45,000
VG Repower 25,000
EWS Real Estate 10,000
(f) Interested Parties may conduct a due diligence and ask
questions prior to submitting bids provided that they
execute the Confidentiality Agreement;
(g) The Auction may be adjourned, upon consultation with the
Creditors Committee, as the Wind Debtors deem
appropriate, provided, however, that the Auction must be
completed on or before January 15, 2004;
(h) The Wind Debtors must serve to all parties-in-interest
the Procedures Order and Notice immediately; and
(i) Objections to the proposed sale must be filed with the
Court and served to all parties-in-interest by 5:00 p.m.
on December 1, 2003.
If the winning bidder is not the Purchasers, pursuant to the
terms of the Purchase Agreement, Judge Gonzalez also approves
these Break-Up Fees per Project as fair and reasonable and were
negotiated by the parties in good faith and at arm's length:
Project Break-Up Fee
------- ------------
Sky River $1,052,000
Victory Garden Phase IV 256,400
Total Sky River/Victory Garden IV 1,308,400
251 74,010
Cabazon 1,378,000
Green Power 175,470
VG Repower 103,680
WES Real Estate 32,040
In the case of a termination of the Cabazon Purchase Agreement,
subject to the satisfaction of the agreed conditions, FPL Cabazon
will be paid, without any further Court order, its reasonable and
documented out-of-pocket fees and expenses actually incurred with
the Cabazon Purchase Agreement, not to exceed $250,000.
Martin A. Sosland, Esq., at Weil, Gotshal & Manges LLP, in New
York, explains that the Break-Up Fees will initiate an overbid
process at floor prices that are desirable for the Wind Debtors,
will foster competitive bidding for the Projects and will confer
a benefit to the estates and creditors. (Enron Bankruptcy News,
Issue No. 87; Bankruptcy Creditors' Service, Inc., 215/945-7000)
FARMLAND IND.: Court to Consider Plan on December 16, 2003
----------------------------------------------------------
On October 8, 2003, the U.S. Bankruptcy Court for the Western
District of Missouri ruled on the adequacy of the Disclosure
Statement prepared by Farmland Industries, Inc., and its debtor-
affiliates to explain their second Amended Joint Plan of
Reorganization. Pursuant to Sec. 1125 of the Bankruptcy Code, the
Court found that the Disclosure Statement contained the right kind
and amount of information to enable creditors to make informed
decisions whether to accept or reject the Debtors' Plan.
Subsequently, the Honorable Jerry W. Venters will convene a
hearing to consider the confirmation of the Debtors' Plan for
December 16, 2003, at 2:30 p.m. Kansas Time.
Farmland Industries, Inc., and its debtor-affiliates, filed for
Chapter 11 protection on May 31, 2002. Laurence M. Frazen, Esq.,
Cynthia Dillard Parres, Esq., and Robert M. Thompson, Esq., at
Bryan Cave LLP represent the Debtors in their restructuring
efforts. When the debtors filed for protection from its creditors,
it listed total assets of $2.7 billion and total liabilities of
$1.9 billion.
FERRELLGAS PARTNERS: Red Ink Continued to Flow in First Quarter
---------------------------------------------------------------
Ferrellgas Partners, L.P. (NYSE: FGP), one of the nation's largest
retail marketers of propane, reported earnings for the first
quarter of fiscal year 2004. The first quarter covers the three-
month period ended October 31, 2003.
Retail propane sales volume for the first quarter was 176 million
gallons, a 2 percent increase, as compared to 172 million gallons
sold in the first quarter of fiscal year 2003. This increase in
sales volume was primarily the result of acquisitions, partially
offset by the lack of sustained cold temperatures this fall which
helps to initiate the winter heating season.
First quarter gross profit and operating expense were $96.2
million and $72.5 million, respectively, as compared to $92.6
million and $68.4 million recognized in the first quarter of
fiscal year 2003, again primarily the result of this quarter's
increased retail sales volume.
General and administrative expense for the quarter was $6.9
million, essentially unchanged in comparison to the first quarter
of fiscal year 2003. Equipment lease expense for the quarter
decreased 25 percent to $4.5 million, from $6.0 million, primarily
reflecting the Partnership's fiscal year 2003 refinancing of
certain operating lease obligations.
The resulting Adjusted EBITDA for the quarter was $12.3 million,
as compared to $11.3 million in the first quarter of fiscal year
2003. The Partnership historically experiences a seasonal loss
during its first quarter, as sales volumes typically represent
less than 20 percent of annual gallon sales, causing fixed costs
to exceed off-season cash flow. The first quarter seasonal net
loss was $18.6 million, as compared to the prior year's first
quarter net loss of $25.0 million, and was consistent with the
Partnership's expectations.
"Our first quarter's performance is a good start to fiscal 2004
and continues our history of consistent, stable earnings," said
James E. Ferrell, Chairman, President and Chief Executive Officer.
"This performance comes on the heels of three consecutive fiscal
years in which we achieved record or near-record earnings, which
should give investors confidence that we know how to effectively
manage our business."
Ferrellgas Partners, L.P. (Fitch, BB+ Senior Debt), through its
operating partnership, Ferrellgas, L.P., currently serves more
than one million customers in 45 states. Ferrellgas employees
indirectly own more than 17 million common units of the
partnership through an employee stock ownership plan.
At July 31, 2003, Ferrallgas Partners' balance sheet shows that
its total current liabilities outweighed its total current assets
by about $4 million.
FIBERCORE: Seeks Court Approval to Use Lender's Cash Collateral
---------------------------------------------------------------
FiberCore, Inc., asks for authority from the U.S. Bankruptcy Court
for the Western District of Massachusetts to use its secured
lender's cash collateral to finance the ongoing operations under
Chapter 11 of the Bankruptcy Code.
The Debtors relate that the operation of their business, including
the implementation of patents and the oversight of the worldwide
operations of subsidiary entries required the use of cash derived
from operations and from postpetition DIP Financing.
The Debtors disclose that Tyco, Inc., as assignee of security
instruments made in favor of Fleet Bank, NA, claims to have a lien
or security interest in or upon most of the Debtor's assets. This
secures the Debtor's obligations in the aggregate principal
balance of $8,500,000.
If not permitted to use the cash collateral, the Debtor will have
to cease operations. That action would make reorganization
impossible and severely reduce the fair market value of the
estate, resulting in financial losses to all parties in interest.
The Debtor agrees to use of Tyco's cash collateral seeks in
accordance with this Semi-Monthly Budget:
15-Nov 30-Nov 16-Dec 31-Dec
------ ------ ------ ------
Cash Balance 184,912 126,656 105,348 91,305
Operating Cost 61,671 21,223 13,957 18,797
Ending Cash 123,156 105,346 91,305 72,423
15-Jan 30-Jan 14-Feb 29-Feb
------ ------ ------ ------
Cash Balance 72,423 58,376 44,699 31,362
Operating Cost 13,962 13,592 13,252 13,342
Ending Cash 58,376 44,699 31,362 17,935
Headquartered in Charlton, Massachusetts, FiberCore, Inc., is a
manufacturer and global supplier of optical fiber and preform for
the telecommunication and data communications markets. The Company
filed for chapter 11 protection on November 14, 2003 (Bankr. Mass.
Case No.: 03-46551). Carl D. Aframe, Esq., at Aframe & Barnhill,
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 more than $10 million each.
FOX PLAZA PIZZA: Case Summary & Largest Unsecured Creditors
-----------------------------------------------------------
Lead Debtor: Fox Plaza Pizza, Inc.
5561 Alameda
El Paso, Texas 79905
Bankruptcy Case No.: 03-33058-lek
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Restaurant Ventures, Inc. 03-33059
Type of Business: Food Services
Chapter 11 Petition Date: November 20, 2003
Court: Western District of Texas (El Paso)
Judge: Larry E. Kelly
Debtors' Counsel: Wiley France James, III, Esq.
James, Goldman & Haugland, P.C.
P.O. Box 1770
El Paso, TX 79949-1770
(915) 532-3911
Email: agil@jghpc.com
Total Assets: $311,742
Total Debts: $1,511,980
A. Fox Plaza Pizza's Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
GE Capital Judgment $694,000
10900 N.E. 4th St. #500
Bellevue, WA 98004
RPM-Fox Plaza Ltd. Past Due Rent $56,316
Ricky Lee Campbell Unsecured Loan $50,515
Textron Financial Unsecured Loan $29,818
Ricky Lee Campbell Unsecured Loan $21,646
Vistar Corporation Vendor $7,459
Central Texas Pizza Vendor $6,100
Company
Ricky Lee Campbell Reimbursement for $5,500
Expenses
K-Fox Vendor $5,253
KVIA TV Vendor $4,606
Sysco Vendor $4,118
Superior Sign & Lighting Vendor $4,024
Univision 26 Vendor $3,985
Central Distributing Co. Vendor $3,791
Pepsi-Cola Bottling, Co. Vendor $3,411
Cananwill, Inc. Vendor $3,241
Peter Piper, Inc. Payments Due Under $2,788
Franchise Agreement
Bank One Credit Card Debt $2,369
Muncie Novelty Co., Inc. Vendor $1,995
Betson West Vendor $1,901
B. Restaurant Ventures' Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
GE Capital Judgment $694,000
10900 N.E. 4th St. #500
Bellevue, WA 98004
Wells Fargo Bank Unsecured Line $93,959
of Credit
Fox Plaza Pizza Operating Loan $54,764
Ricky Lee Campbell Unsecured Loan $50,515
Yarbrough Drive Center JV Rent $24,146
Ricky Lee Campbell Unsecured Loan $21,646
Vistar Corporation Vendor $15,907
K-Fox Vendor $11,819
Univision Vendor $10,460
KVIA TV Vendor $6,909
Central Distributing Co. Vendor $6,533
Bank One Credit Card Debt $6,319
Pepsi-Cola Bottling, Co. Vendor $4,039
Cananwill, Inc. Vendor $3,964
Fun Express, Inc. Vendor $3,791
Peter Piper, Inc. Payments due under the $3,591
Franchise Agreement
Central Texas Pizza Reimbursement of Expenses $3,223
Company
Betson West Vendor $3,078
Ricky Lee Campbell Reimbursement of $2,500
Attorneys' Fees
Southwestern Mill Dist., Vendor $2,411
Inc.
GENUITY: Court-Confirmed 3rd Amended Liquidation Plan Overview
--------------------------------------------------------------
The Genuity Debtors provided overview of their court-confirmed
Third Amended Joint Liquidation Plan, which was delivered to the
Court on November 14, 2003.
Genuity President, Ira H. Parker, relates that the Plan includes
principal modifications providing the inclusion of provisions for
the treatment of Cure Claims, as well changes in:
-- the treatment of Miscellaneous Secured Claims,
-- Subordination of BBN Bonds,
-- Distributions and Reserves, and
-- Release and Injunction provisions.
Treatment of Allowed Cure Claims
Under the Third Amended Plan, each Allowed Cure Claimholder will
be paid in Cash, the difference between the aggregate amount of
the Allowed Cure Claim minus any amounts already paid in respect
of the Claim, or other amounts to which the Claimholder consents,
on or as soon as reasonably practicable after the latest of:
-- the Effective Date,
-- the date the Cure Claim becomes Allowed; and
-- the date fixed by the Bankruptcy Court.
Treatment of Miscellaneous Secured Claims
In the Treatment of Miscellaneous Secured Claims, additional
provisions were added to reflect that each Allowed Miscellaneous
Secured Claimant will receive Cash equal to the Allowed amount of
the Claim, including any interest required to be paid pursuant to
Section 506(b) of the Bankruptcy Code. The Claim, including the
interest, will be paid in full in Cash, on or as soon as
reasonably practicable after the later of the Effective Date and
the date on which the Claim becomes Allowed.
BBN Bonds Trustee
From the original $13,000, the Allowed Substantial Contribution
Claim granted to the BBN Bonds Trustee was revised to $39,318.
Subordination of BBN Bonds
The Third Amended Plan provides that a person who is a Holder of
a Claim under any agreement with Genuity Solutions not set forth
on this list, or who does not agree with the amount listed, may
seek treatment as a Senior Creditor Claimant in respect of a
Claim against Genuity Solutions by filing a statement of the
Claim, including the basis for qualification as a Senior Creditor
Claimant, not later than the 30th day after the Effective Date:
Senior Creditor Claimant Agreement Amount
------------------------ --------- ------
JPMorgan Chase Bank, Guaranty of Amended $1,761,908,382
as Agent and Restated Credit
Agreement dated
09/21/01 as amended
and in effect
1300 Federal L.L.C. Real Estate Lease 4,898,000
InterXion Netherlands, B.V. Real Estate Lease 4,145,000
Silicon Graphics, Inc. Equipment Lease 69-1 82,019
Equipment Lease 85-1 438,780
Equipment Lease 85-1 1,000,153
Comdisco, Inc. Equipment Lease Schedules 296,572
Fleet Business Credit Equipment Lease Schedules 2,224,222
Wells Fargo Equipment Lease Schedules 2,231,236
The requirement to file the Senior Creditor Claim will not be
construed as a new bar date for the Claim. Only Holders of
Claims against Genuity Solutions are entitled to the benefit of
the subordination provisions of the BBN Bonds Indenture.
Distributions and Reserves
If there remains any Cash or Class B Beneficial Interests in the
Senior Creditor Claims Reserve after all Approved Senior Creditor
Claims has been paid in full, this Cash and Class B Beneficial
Interests will be distributed to the BBN Bonds Trustee for the
benefit of holders of BBN Bonds Claims, pursuant to the Third
Amended Plan.
Statutory Fees and Reports
The Quarterly United States Trustee Fees provision, Mr. Parker
says, was revised and replaced with the title "Statutory Fees and
Reports." The provision states that to the extent not already
paid, all statutory fees under Section 1930 of the Judiciary
Procedures Code, including quarterly fees payable pursuant to
Section 1930(a)(6), will be paid when due, by the Debtors on or
prior to the Effective Date and by the Liquidating Trust after
the Effective Date, through the closing of the Chapter 11 Cases.
The Liquidating Trustee will file all required reports with the
Office of the United States Trustee through the closing of the
Chapter 11 Cases, and will be authorized to seek closing of the
Chapter 11 Cases.
Releases
The Third Amended Plan's release provisions clarify that no
Person will be released from:
(a) any criminal liability;
(b) liability to the United States federal government;
(c) liability pursuant to Section 502(a) of the ERISA with
respect to any employee benefit plan sponsored by the
Debtors; or
(d) liability to any beneficial holder of BBN Bonds that did
not vote to accept the Plan.
Injunction
Subject to the occurrence of the Effective Date, the revised Plan
reveals that the entry of the Confirmation Order will permanently
enjoin all Persons that held, currently hold or may hold a Claim
or an Interest in the Debtors, from taking any of these actions
in respect of the Claim or Interest:
(a) commencing, conducting or continuing in any manner,
directly or indirectly, any suit, action or other
proceeding of any kind against any or all of the Debtors,
the Liquidating Trust or their property or assets;
(b) enforcing, levying, attaching, collecting or otherwise
recovering in any manner or by any means, whether directly
or indirectly, any judgment, award, decree or order
against any or all of the Debtors, the Liquidating Trust
or their property or assets;
(c) creating, perfecting or enforcing in any manner, directly
or indirectly, any Lien against any or all of the Debtors,
the Liquidating Trust or their property or assets;
(d) asserting any set-off, or right of subrogation or
recoupment of any kind, directly or indirectly, against
any debt, liability or obligation due to the Debtors, the
Liquidating Trust or their property; and
(e) proceeding in any manner in any place whatsoever that does
not conform to, or comply with, or is inconsistent with
the provisions of the Plan.
The Debtors' Third Amended Liquidation Plan will not enjoin a
party from asserting rights of set-off in connection with the
resolution of claims to the extent the rights have been asserted
or preserved in a timely filed proof of claim or other pleading
filed with the Bankruptcy Court prior to November 14, 2003.
(Genuity Bankruptcy News, Issue No. 23; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
GLOBALSTAR LP: Committee Lauds Approval of Asset Sale to Thermo
---------------------------------------------------------------
Globalstar, LP, a satellite telephone company, received approval
on November 20 in a court hearing before Judge Peter Walsh at the
U.S. Bankruptcy Court in Wilmington, Delaware for a sale of its
assets to Thermo Capital Partners LLC. The Court also granted a
$1.9 million break-up fee and other bidder protections for Thermo.
During the Court hearing, Cogent Communications Group, Inc.
(American Stock Exchange Symbol COI) also indicated its desire to
engage in a transaction.
Cogent believes that its offer, based on the last 20 days average
closing prices of Cogent stock, would include more than $100
million in fully registered, freely tradable Cogent stock to be
distributed to Globalstar creditors. The Creditors Committee is
in the midst of its due diligence on the proposed Cogent
transaction and has no opinion on this valuation.
Under the terms of the Thermo deal, Thermo will pay $43 million in
cash and assume $10 million in debt in exchange for Globalstar's
assets and an 81.25 percent stake in the new company. Globalstar
will retain the remaining 18.75 percent to pay unsecured
creditors. In addition, Globalstar's creditors will have the
right to purchase additional equity interests in the reorganized
company. It is expected that the parties to the Thermo
transaction shall execute definitive documents by December 2,
2003.
The possibility exists that some other party may make an offer to
purchase substantially all of the assets of Globalstar. In such
event, Globalstar and its Official Creditors Committee will review
any such offer to determine whether it represents more value than
the Thermo transaction.
Statement by Van Greenfield, Chairman of the Official Committee of
Unsecured Creditors for Globalstar, LP:
"I am pleased with the outcome of the November 20 hearing
before Judge Walsh in the U.S. Bankruptcy Court in Wilmington,
Delaware.
"The hearing established Thermo as the current highest and
best offer for the primary assets of Globalstar. Cogent
Communications also outlined a competing offer during courtroom
proceedings. Consistent with its fiduciary duties, the Creditors
Committee is actively evaluating this proposal and is conducting
due diligence to make a final recommendation to the Court."
HASBRO INC: Commences Tender Offer for 8-1/2% Notes Due 2006
------------------------------------------------------------
Hasbro, Inc. (NYSE: HAS) commenced a tender offer for all
$200,000,000 in aggregate principal amount of its 8-1/2% Notes due
2006 (CUSIP No. 418056AL1) on November 24, 2003.
Upon the terms and subject to the conditions set forth in the
Offer to Purchase dated November 24, 2003 and the related Letter
of Transmittal, Hasbro, Inc. is offering to purchase all of the
outstanding Notes at a price equal to $1,130.00 per $1,000
principal amount of Notes, which Total Consideration includes an
early tender premium of $20 per $1,000 principal amount of Notes.
The Total Consideration, plus accrued but unpaid interest to, but
not including, the date of payment for the Notes, will be paid in
respect of all Notes validly tendered and accepted for payment
pursuant to the tender offer if the noteholder validly tenders
such Notes prior to 5:00 p.m., New York City time, on December 8,
2003. Any holder validly tendering Notes after the Early Tender
Date will, if such Notes are accepted for payment pursuant to the
tender offer, receive $1,110.00 per $1,000 principal amount of
Notes, which amount is equal to the Total Consideration, less the
Early Tender Premium for the Notes. In addition, accrued but
unpaid interest to, but not including, the date of payment for the
Notes will be paid for Notes validly tendered and accepted for
payment.
The tender offer is scheduled to expire at 12:00 midnight, New
York City time, on December 22, 2003. The tender offer is
conditioned on, among other things, the absence of a material
adverse change or similar event affecting Hasbro, its ability to
consummate the tender offer or the value or trading market for the
Notes.
Requests for Tender Offer Documents may be directed to D.F. King &
Co., Inc., the information agent for the tender offer, at 48 Wall
Street, 22nd Floor, New York, New York 10005. The information
agent may be telephoned toll-free at (800) 207-3158. The Dealer
Managers for the tender offer are Bear, Stearns & Co. Inc. and
Barclays Capital Inc. Questions regarding the tender offer may be
directed to Bear, Stearns & Co. Inc., Global Liability Management
Group, at 383 Madison Avenue, 8th Floor, New York, New York 10179,
telephone number (877) 696-2327 or to Barclays Capital Inc.,
Liability Management Group, at 200 Park Avenue, 4th Floor, New
York, New York 10166, telephone number (888) 227-2275.
Hasbro (Fitch, BB Senior Unsecured Debt, Stable) is a worldwide
leader in children's and family leisure time and entertainment
products and services, including the design, manufacture and
marketing of games and toys ranging from traditional to high-tech.
Both internationally and in the U.S., its PLAYSKOOL, TONKA, SUPER
SOAKER, MILTON BRADLEY, PARKER BROTHERS, TIGER and WIZARDS OF THE
COAST brands and products provide the highest quality and most
recognizable play experiences in the world.
HORSEHEAD IND.: Court Okays Sun Capital as Stalking Horse Bidder
----------------------------------------------------------------
Horsehead Industries, Inc. announced that the bankruptcy court
approved Sun Capital as its stalking horse bidder for the sale of
substantially all of its assets.
The court set December 8th as the final sale hearing date with
competing bids due by the morning of December 5th with an auction
to follow that same afternoon.
"We are extremely pleased to receive court approval to move
forward in the sale process and to finally come to resolution on
terms with our major secured creditors and a potential buyer,"
said Dave Carpenter, Chairman and CEO. "I want to thank our
customers and suppliers for their patience and support through
this difficult period and look forward to their continued support
as we complete our emergence from bankruptcy."
Horsehead is the largest zinc producer in the United States and
the world's largest recycler of zinc bearing materials, including
the steel industry's (EAF Dust). The company annually produces
over 165,000 tons of zinc products and recycles more than 450,000
tons of EAF Dust. Horsehead operates primarily under its Zinc
Corporation of America and Horsehead Resource Development brands
employing over 1000 people in seven states.
INFINIA AT WILMAR: Case Summary & 80 Largest Unsecured Creditors
----------------------------------------------------------------
Lead Debtor: Infinia at Willmar, Inc.
450 S. 400 E., Suite 200
Bountiful, Utah 84010
Bankruptcy Case No.: 03-39895
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Infinia at Owatonna, Inc. 03-39896
Infinia at Faribault, Inc. 03-39897
Type of Business: Medical Services
Chapter 11 Petition Date: November 19, 2003
Court: District of Utah
Judge: William T. Thurman
Debtors' Counsel: Blake D. Miller, Esq.
Miller Magleby & Guymon
170 South Main, Suite 350
Salt Lake City, UT 84101
Tel: 801-363-5600
Estimated Assets: $1,000,00 Million to $10 Million
Estimated Debts: $500,000 to $1 Million
A. Inifinia at Willmar's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Internal Revenue Service Tax $351,100
50 South 200 East
Salt Lake City, UT 84111
DHS Medical Surcharge Trade Debt $181,707
Thrifty White Stores Trade Debt $26,153
Health Trac Trade Debt $18,945
Medline Industries Trade Debt $9,813
Kandiyohi County B&R Trade Debt $7,821
Refunds
Kick Technologies Trade Debt $7,365
Willmar Municipal Utility $4,239
Utilities
Care Providers of MN Trade Debt $3,791
Habilitative Services, Trade Debt $3,426
Inc.
Jerry's Flooring, Inc. Trade Debt $3,423
Northside Residence Trade Debt $2,800
Culligan of Willmar Trade Debt $2,747
G.E. Capital Trade Debt $2,639
Sysco Minnesota Trade Debt $2,335
BDS Laundry Systems Trade Debt $1,839
Charter Communications Trade Debt $1,543
Affiliated Community Trade Debt $1,485
Plumbing & Heating of Trade Debt $1,419
Willmar
Atwater Ford Trade Debt $1,348
B. Infinia at Owatonna, Inc.'s 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
DHS Medical Care Trade Debt $246,380
Surcharge
Internal Revenue Service Tax $207,100
Medline Industries, Inc. Trade Debt $25,863
Health Trac Trade Debt $14,745
Tim English & Trade Debt $12,018
Associates
Sterling Drug #5 Trade Debt $10,490
Owatonna Public Utilities Trade Debt $7,103
Steele County Human Trade Debt $7,532
Services
Owatonna Clinic Trade Debt $5,930
Allina Hospitals & Trade Debt $5,122
Clinics
Kick Technologies Trade Debt $4,930
Ruth Braun Trade Debt $4,087
Medical Director Trade Debt $4,000
Care Providers of MN Trade Debt $3,516
Paro's Interiors, Inc. Trade Debt $3,195
Owatonna Hospital Trade Debt $3,108
Insty Prints Trade Debt $2,816
Jean Zamboni Trade Debt $2,511
Sterling Long Term Care Trade Debt $2,479
Owatonna People's Press Trade Debt $2,424
C. Infinia at Faribault, Inc.'s 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Internal Revenue Service Tax $385,700
50 South 200 East
Salt Lake City, UT
84111
DHS Medical Surcharge Trade Debt $233,755
Minnesota Associates, LLC Trade Debt $27,279
Rice County Public Trade Debt $24,503
Health Nursing
Medicine Industries Trade Debt $20,678
Paro's Interiors, Inc. Trade Debt $18,379
Sterling Long Term Trade Debt $15,698
Health Trac Trade Debt $14,400
Commercial Finance of $12,425
Minnesota
Excel Energy Utility $8,221
Bauernfeind Goedtel Trade Debt $6,960
Allina Medical Director Trade Debt $5,400
District One Hospital Trade Debt $4,936
Allina Medical Clinic Trade Debt $4,578
Associated Clinic of Trade Debt $4,425
Psychology
Meisner Roofing Trade Debt $4,200
Northwest Respiratory Trade Debt $3,955
Services
Astrup Drug, Inc. Trade Debt $3,738
Care Providers of MN Trade Debt $3,516
Retrofit Recycling, Inc. Trade Debt $3,130
INTEREP: Appoints Mike Agovino as Co-President & Co-COO
-------------------------------------------------------
Ralph Guild, Chairman and CEO of Interep, (OTC Bulletin Board:
IREP) announced the appointment of Mike Agovino as co-president
and -COO of Interep, effective November 24, 2003. Agovino will
report to Guild and continue to be based in Los Angeles.
Agovino's responsibilities will include building out a new
independent radio rep company and contributing to Interep's new
business development initiatives. His success in developing
similar programs for Clear Channel has made him one of the
industry's leaders in this area.
"I am delighted to welcome Mike Agovino, one of our industry's
strongest managers to Interep," Guild said. "Mike understands the
power of independent radio representation. Having him on board
gives us an even stronger rep management capability to serve our
growing list of independent radio station groups."
Agovino most recently accepted a position as vice president and
general manager for the Spanish Broadcast System in Los Angeles.
Previously, he was president of Clear Channel Radio Sales.
Beginning immediately, Agovino will apply his 19 years of industry
experience to Interep's growing client base. "As the only
independent radio rep, Interep will best allow me to expand
national market share for the industry's premier independent
clients. I have a huge passion for business development and Ralph
shares that passion. Together we look forward to building a
strong, new independent radio rep firm and programs, alliances,
integrations and promotions that bring new revenue to Interep
clients and radio in general," he said.
Interep (OTC Bulletin Board: IREP) is the nation's largest
independent advertising sales and marketing company specializing
in radio, the Internet and complementary media, with offices in 17
cities. Interep is the parent company of ABC Radio Sales, Cumulus
Radio Sales, D&R Radio, Infinity Radio Sales, McGavren Guild
Radio, D&R/Susquehanna, SBS/Interep, as well as Interep
Interactive, the company's interactive representation and web
publishing division specializing in the sales and marketing of on-
line advertising, including streaming media. Interep Interactive
includes Winstar Interactive, Cybereps and Perfect Circle Media.
In addition, Interep provides a variety of support services,
including: consumer and media research, sales and management
training, promotional programs and unwired radio "networks."
Clients also benefit from Interep's new business development team,
the Interep Marketing Group, as well as Morrison & Abraham,
Interep's sales consulting division focusing on non-traditional
revenue.
Interep National Radio Sales' March 31, 2003 balance sheet shows a
total shareholders' equity deficit of about $10.5 million.
JA JONES: Gets OK to Tap Alston & Bird as Special Corp. Counsel
---------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District of North
Carolina gave its nod of approval to J.A. Jones, Inc., and its
debtor-affiliates to employ Alston & Bird, LLP as Special
Corporate Counsel.
The professional services Alston & Bird, through its attorneys, is
expected to render include:
(a) representing Properties in connection with disputes and
litigation arising out of Properties' investments in
certain real estate projects located in Georgia, Texas
and Florida;
(b) assisting Properties with negotiating, documenting, and
closing asset sales as approved by the Court; and
(c) assisting the Debtor's bankruptcy counsel with issues
related to Properties.
The professionals who will be responsible in this case are:
Homer Lee Walker $385 per hour
Adrienne Byrdsong $230 per hour
Eric Ourada $260 per hour
Headquartered in Charlotte, North Carolina, J.A. Jones, Inc. was
founded in 1890 by James Addison Jones, J.A. Jones is a subsidiary
of insolvent German construction group Philipp Holzmann and a
holding company for several US construction firms. The Company
filed for chapter 11 protection on September 25, 2003 (Bankr.
W.D.N.C. Case No. 03-33532). John P. Whittington, Esq., at
Bradley Arant Rose & White LLP and W. B. Hawfield, Jr., Esq., at
Moore & Van Allen represent the Debtors in their restructuring
efforts. When the Company filed for protection from its
creditors, it listed debs and assets of more than $100 million
each.
KMART CORP: Court Nixes 690 Employees' Claims Totaling $80 Mill.
----------------------------------------------------------------
The Kmart Corp. Debtors identified 721 proofs of claim filed by
individuals claiming amounts owed for workers' compensation
benefits. The Debtors contend that the Employee Workers
Compensation Claims are not entitled to unsecured claims treatment
in these cases because they were authorized to continue to honor
their workers' compensation obligations to employees in the
ordinary course of business. Furthermore, pursuant to the Plan,
the Debtors are obligated to continue the workers' compensation
programs in accordance with applicable state law. They are
responsible for all valid claims for benefits and liabilities
under these programs regardless of when the applicable injuries
were incurred.
Accordingly, the Court disallows and expunges 690 Employee
Workers' Compensation Claims, aggregating $79,750,105. The Court
will continue the hearing on 29 more Employee Workers'
Compensation Claims, totaling $11,558,541. (Kmart Bankruptcy News,
Issue No. 65; Bankruptcy Creditors' Service, Inc., 215/945-7000)
LA QUINTA CORP: S&P Revises Low-B Ratings' Outlook to Stable
------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on La
Quinta Corp. to stable from negative and its related La Quinta
Properties Inc. and Meditrust Exercisable Put Options Securities
Trust.
At the same time, Standard & Poor's affirmed its ratings,
including its 'BB-' corporate credit ratings, on the company and
its affiliates. The Irving, Texas-headquartered hotel owner and
operator has about $900 million of debt outstanding.
"The outlook revision reflects La Quinta's increased financial
flexibility following its common equity offering on November 20,
resulting in gross proceeds of about $167 million, and the closing
earlier this month of a new $150 million revolving credit
facility," said Standard & Poor's credit analyst Craig Parmelee.
"In addition, the company's recent operating performance has
improved." The net proceeds from the stock sale will be used for
potential acquisitions of lodging properties and/or brands, debt
reduction, and/or redemption of preferred stock.
The ratings on La Quinta reflect the company's significant debt
levels and its dependence on a single mid-scale, limited service
lodging brand that has not yet achieved strong national
recognition. These factors are partially mitigated by the somewhat
less revenue volatility for mid-scale and lower-priced brands
during the recent downturn (reduced reliance on business
travelers) and improved liquidity.
In the 2003 third quarter, La Quinta made meaningful progress
strengthening its marketing and sales efforts and its customer
service. These improvements helped the company to achieve a 7.9
percentage point increase in its occupancy rate. This was
partially offset by a 4.6% decline in the average daily rate,
resulting in a 7.8% increase in revenue per available room
(RevPAR). This performance was considerably stronger than other
competing brands with similar price points and amenities. The
company also continued its franchise expansion by adding seven new
hotels to its portfolio. EBITDA for the quarter rose 16% to $49
million. The EBITDA margin increased to 34% from 32% in the third
quarter of 2002, but is still significantly below historical
portfolio highs of about 45% prior to its acquisition by Meditrust
in July 1998. Standard & Poor's expects that La Quinta will
gradually strengthen its EBITDA margins over time as the company
continues to improve the performance of its company-owned hotels
and increase its franchise portfolio.
MEDMIRA INC: Oct. 31 Net Capital Deficit Widens to CDN$3 Million
----------------------------------------------------------------
MedMira Inc. (TSX Venture: MIR) announced its financial results
for the three month period ended October 31, 2003. (All amounts
are expressed in Canadian dollars unless specified otherwise).
Product sales in the first quarter were $589 thousand, up from $31
thousand in the same quarter last year. The net loss for the
quarter was $0.9 million or $0.02 per share compared with $1.1
million or $0.05 per share in the same period last year, a
decrease of 12%.
"This was another good quarter for MedMira. After filling the
distribution pipeline in the fourth quarter of last year, sales by
our distributors continue to meet our expectations," said Stephen
Sham, Chair and CEO of MedMira, "We are very pleased with the
market acceptance of our product in the United States. With our
newly opened China office, the finalization last week of a
distribution agreement for China with a 1 million unit annual
commitment, plus our on-going successes in the US, we continue to
be optimistic regarding the future," Sham continued.
Sham also pointed out that profitability has been maintained
during the production ramp-up period. Gross margin in the first
quarter was 57%, compared to 37% a year ago and is in line with
industry norms.
Operating expenses for the first quarter increased by 18% to $1.3
million from $1.1 million in the same period last year. This
increase is driven by a sharp increase in production following
regulatory approvals in China and the United States for MedMira's
HIV product.
At October 31, 2003 the Company had total assets of $1.6 million
of which $24 thousand was cash and cash equivalents, compared with
$2.4 million in total assets and $264 thousand in cash and cash
equivalents at July 31, 2003. Subsequent to the end of the quarter
the Company has raised approximately $400 thousand through the
collection of outstanding receivables and the issue of promissory
notes. In addition, the Company is in the process of raising short
term capital.
Cash flow used in operations decreased to $226 thousand in the
first quarter of 2003, down from $762 thousand for the same period
last year, a decrease of 70%.
At October 31, 2003, the Company's balance sheet shows a total
shareholders' equity deficit of about C$3 million.
MedMira -- http://www.medmira.com-- is a commercial biotechnology
company that develops, manufactures and markets qualitative, in
vitro diagnostic tests for the detection of antibodies to certain
diseases, such as HIV, in human serum, plasma or whole blood.
MedMira's Reveal(TM) and MiraWell(TM) Rapid HIV Tests have
recently been approved by the United States FDA and SDA in the
People's Republic of China, respectively. All of MedMira's
diagnostic tests are based on the same flow-through technology
platform thus facilitating the development of future products.
MedMira's technology provides a quick (under 3 minutes), accurate,
portable, safe and cost-effective alternative to conventional
laboratory testing.
MIRANT CORP: Asks Court to Determine Tax Liability and Refunds
--------------------------------------------------------------
The Mirant Debtors, pursuant to Sections 105(a) and 505(a) of the
Bankruptcy Code, ask the Court to determine their property tax
liability and property tax refunds for:
(i) the years 1995 through 2003 on the real property located
in the Town of Haverstraw, New York, owned by Mirant
Bowline, LLC formerly known as Southern Energy Bowline,
LLC, and commonly referred to as the "Bowline Plant" and
which facilities are subject to taxation of taxing
authorities referred to as the "Haverstraw Taxing
Authorities";
(ii) the years 2000 through 2003 on the real property located
in the Town of Stony Point, New York, owned by Mirant
Lovett LLC, formerly known as Southern Energy Lovett
LLC, and commonly referred to as the "Lovett Plant" and
which facilities are subject to taxation of taxing
authorities referred to as the "Stony Point Taxing
Authorities"; and
(iii) the years 2000 through 2003 on the real property located
in the Towns of Ramapo, Lumberland, Forestburgh, Bethel,
Deerpark and Waywayanda, New York -- the Hydroelectric
Plants -- each of which is owned by Mirant NY-Gen LLC,
formerly known as Southern Energy NY-Gen, LLC, and each
of which Hydroelectric Plants is subject to taxation by
taxing authorities in the towns referred to -- the
Hydroelectric Taxing Authorities.
In addition, the Debtors ask the Court to determine that:
(a) the applicable Debtor be permitted to apply any refunds
with respect to the Power Plants to any and all current
unpaid postpetition tax liabilities owing to the relevant
taxing authority;
(b) the relevant taxing authorities must remit to the
applicable Mirant Debtor, in cash, the amount of any
refund due to them that was not applied to current unpaid
taxes;
(c) any interest or penalties, which may be charged to
the Debtors by the relevant taxing authorities for
failure to timely pay taxes that are first payable
postpetition -- including the tax obligations payable on
September 30, 2003 -- be disallowed or determined to be
zero; and
(d) no penalties or interest will begin to accrue against any
Debtor with regard to taxes first payable postpetition
until the date that is 30 days after the entry of a final
order determining that the applicable Debtor owes taxes
for which no overpayment is available as an offsetting
credit, but then only if the taxes are unpaid as of the
30th day.
Robin Phelan, Esq., at Haynes and Boone LLP, in Dallas, Texas,
relates that approximately 49% of the $130,000,000 per year in ad
valorem property taxes assessed to the Debtors nationwide in
connection with their various fixed assets relates to the Power
Plants, which constitute about 10% of the Debtors' fixed
assets. Since the acquisition of the Power Plants in 1999, the
Debtors have had significant, ongoing unresolved disputes with
various New York taxing authorities regarding unjust,
extraordinarily high assessments on the Power Plants and the
resulting amount of taxes owed. The Debtors believe that the
assessments of the Power Plants have no justifiable basis and are
far in excess of their real value. The Debtors believe that if
their assessments and corresponding tax liabilities are properly
determined, they will ultimately be entitled to refunds in excess
of $215,000,000 and thus it is in their best interest to try to
reach an expedited resolution of the refund claims.
The Bowline Plant
In July 1999, Mirant Bowline acquired from Orange & Rockland
Utilities, Inc. and Consolidated Edison Company of New York,
Inc., the Bowline Plant pursuant to an asset purchase agreement
for $212,350,000. Pursuant to the Bowline Purchase Agreement,
Mirant Bowline acquired, among other things, the Sellers' rights
to any refund claims for property taxes paid prior to the date of
the closing.
Notwithstanding the $212,350,000 purchase price for the Bowline
Plant in July 1999, in each year following the purchase, Mirant
Bowline was taxed based on these alleged "full or fair market"
values of the Bowline Plant, as determined by the Haverstraw
Taxing Authorities:
1999 $717,730,536
2000 886,427,885
2001 964,763,372
2002 1,035,825,843
2003 1,029,685,393
Prior to the sale of the Bowline Plant to Mirant Bowline, Mr.
Phelan tells the Court that O&R had timely commenced tax
certiorari proceedings for the years 1995 to 1998 in the Supreme
Court of the State of New York against the Town of Haverstraw;
Franklin D. Stein, Assessor for the Town of Haverstraw; and the
Board of Assessment Review of the Town of Haverstraw. O&R
challenged the valuations of the various tax parcels that
comprise the Bowline Plant as well as the various transmission
and distribution facilities located in the Town of Haverstraw.
Aside from acquiring the right to pursue the refund claims
associated with these tax certiorari proceedings pursuant to the
Bowline Purchase Agreement, Mirant Bowline, for the years 1999 to
2003, commenced its own tax certiorari proceedings challenging
the Bowline Assessments for those years. All of the proceedings
currently are pending before the New York Court, although the
Debtors are in the process of effecting removal of these
proceedings.
In an effort to reach a consensual resolution with respect to the
Bowline Assessments, Mirant Bowline entered into settlement
negotiations with the Haverstraw Stony Point Central School
District and the Town of Haverstraw, and it ostensibly resolved
the tax disputes for the years 1995 to 1999 and established
assessed values for future years.
Pursuant to the Memorandum of Agreement, the Haverstraw Taxing
Authorities agreed to refund $28,000,000 in property taxes to
Mirant Bowline and $1,000,000 to O&R in exchange for the
dismissal of the 1995-1999 tax proceedings. The Memorandum of
Agreement effectively lowered the assessed value of the Bowline
Plant and associated facilities and, in turn, lowered the real
property taxes. The assessed full or fair market value of the
Bowline Plant for tax purposes was reduced from $666,271,637 to
$200,000,000 over a period of four years and was to generally
remain at that level through the year 2008. In addition, there
was a six-year phased-in increase in real property taxes based on
the cost of construction of a new generation plant at the Bowline
Plant site that was being developed by certain of the Debtors.
As evidenced by the School District's resolution approving the
entry into the Memorandum of Agreement, the School District
believed that the Memorandum of Agreement was a fair resolution
of the tax disputes, as the School District believed as of 2000
that it could be liable for tax refunds in an amount upwards of
$60,000,000.
Although the Memorandum of Agreement was approved by both the
Town of Haverstraw and the School District and was executed by
all parties involved, Mr. Phelan informs Judge Lynn that the Town
of Haverstraw and the School District ultimately refused to
perform under the Memorandum of Agreement. Accordingly, Mirant
Bowline initiated an action in the New York Court to enforce
the terms and conditions of the Memorandum of Agreement.
Although the New York Court granted Mirant Bowline's motion to
enforce the Memorandum of Agreement, on appeal, the Appellate
Division, Second Department, reversed the trial court's ruling
per a Decision and Order, dated April 14, 2003. The Appellate
Division held that the Memorandum of Agreement was unenforceable
because it lacked material terms and failed to identify:
(a) the specific assessment reductions;
(b) the particular properties affected; and
(c) the specific years in which the adjustments were to be
made.
The Appellate Division declined to authorize Mirant Bowline to
appeal its decision to the New York State Court of Appeals.
During the time that the enforceability of the Memorandum of
Agreement was being litigated, the tax certiorari proceedings
were consensually stayed. Under a scheduling order entered in
the pending tax certiorari proceedings, the parties are required
to provide discovery and file any motions to strike the pleadings
by October 2, 2003. Further, the parties are required to
exchange appraisals by July 2, 2004.
The Lovett Plant
Concurrently with Mirant Bowline's purchase of the Bowline Plant,
Mirant Lovett purchased the Lovett Plant for $243,500,000 from
O&R pursuant to an asset purchase agreement. Notwithstanding the
$243,500,000 purchase price for the Lovett Plant in July 1999, in
each year from and after 2000, Mirant Lovett was taxed based on
these alleged "full or fair market" values for the Lovett Plant
as determined by the Stony Point Taxing Authorities:
2000 $256,941,867
2001 385,739,059
2002 417,020,584
2003 481,713,514
For the years 2000 to 2003, Mirant Lovett timely commenced tax
certiorari proceedings in the New York Court against the Town of
Stony Point, Rockland County, the Town of Stony Point Assessor,
and the Town of Stony Point Board of Assessment Review,
challenging the assessments on the various tax parcels that
comprise the Lovett Plant and the various transmission and
distribution facilities located in the Town of Stony Point. The
proceedings currently are pending before the New York Court,
though the Debtors are in the process of effecting removal of the
proceedings.
The Hydroelectric Plants
Concurrently with the purchases of the Bowline and Lovett Plants,
Mirant Hydroelectric purchased from O&R the Hydroelectric Plants
pursuant to an asset purchase agreement for $20,440,000.
Notwithstanding the $20,440,000 purchase price for the
Hydroelectric Plants in July 1999, in each year following the
purchase, Mirant Hydroelectric was taxed based on these alleged
"full or fair market" values of the Hydroelectric Plants,
as determined by the Hydroelectric Taxing Authorities:
Year Ramapo Lumberland Forestburgh
---- ------ ---------- -----------
2000 $38,435,269 $39,173,060 $18,357,364
2001 42,540,635 39,378,901 18,823,930
2002 45,282,735 55,537,408 22,409,729
2003 52,743,289 40,395,709 23,385,212
Year Bethel Deerpark Waywayanda
---- ------ -------- ----------
2000 $8,137,572 $4,582,964 $11,685,804
2001 8,487,425 4,715,006 7,760,000
2002 8,659,612 4,921,805 7,760,000
2003 8,400,745 5,610,857 7,200,000
For the years 2000 to 2003, Mirant Hydroelectric timely commenced
tax certiorari proceedings in the New York Court against each of
the Hydroelectric Taxing Authorities, their Assessors, and each
of their Boards of Assessment Review, challenging the assessments
on the various tax parcels that comprise the Hydroelectric Plants
located in each of the Hydroelectric Taxing Authorities. The
proceedings currently are pending before the New York Court,
although the Debtors are in the process of effecting removal of
the proceedings.
Tax Must be Determined
Mr. Phelan contends that the Court must use its authority under
Section 505(a) in determining the amount or legality of any tax,
including the property taxes imposed by local taxing authorities
of the Town of Haverstraw, the Town of Stony Point and the
Hydroelectric Taxing Authorities because it is necessary to
preserve the Debtors' assets and to ultimately assist in
achieving the Debtors' reorganization. Also, the Debtors are
entitled to set off any refunds from prior years against tax
liabilities for the current year pursuant to Section 106(c).
While the Debtors recognize that the actual amount of the tax
refunds owed the taxing authorities to the relevant Debtors has
not been determined, it is also evident to them that unless they
withhold the payment of taxes payable postpetition in a manner
analogous to an "administrative freeze" imposed by a bank that
wishes to preserve its setoff rights, the Debtors risk
squandering their setoff rights and lay themselves open to the
charge by creditors that the Debtors failed to protect the
interests of all creditors.
Moreover, Mr. Phelan points out that the Power Plants were
improperly classified as "specialty properties" and thus valued
under the "reproduction-cost-new-less-depreciation" method. With
the Federal Energy Regulatory Commission's Orders No. 889 and
888, the monopolistic public utilities like O&R were deregulated.
Accordingly, under prevailing case law, the Power Plants should
no longer be classified or valued as "special property".
Instead, all three valuation methods should be considered:
(1) market value or comparable sales method;
(2) capitalization of income method; and
(3) the cost approach.
Of the three valuation methods, the market method and income
method are often the most appealing. Under the market value
methodology, the initial consideration is the most recent sale of
each of the Power Plants -- the acquisition of each plant by the
applicable Debtor in 1999. Using the purchase price for the
Power Plants, each of the Power Plants would be valued as:
Non-Real Property Adjusted
Power Plant Purchase Price Allocation Purchase Price
----------- -------------- ----------------- --------------
Bowline Plant $212,350,000 $19,200,000 $193,150,000
Lovett Plant 243,500,000 24,920,000 218,580,000
Hydroelectric 20,440,000 3,065,000 17,375,000
Plants
A comparison of the assessed valuations in 2000 -- a matter of
months after the July 1999 acquisitions of the Power Plants --
illustrates the gross over-valuation of the Power Plants with the
net result of a disproportionately high tax burden in the
applicable jurisdictions:
Power Plant Adjusted Purchase Price 2000 Assessed Value
----------- ----------------------- -------------------
Bowline Plant $193,150,000 $886,427,885
Lovett Plant 218,580,000 356,246,188
Hydroelectric 17,375,000 112,996,519
Plants
The net effect of the improper assessments is that they paid more
taxes than is appropriate based on the fair value of the Power
Plants in violation of the New York State Constitution. Article
16, Section 2 of the New York State Constitution specifically
provides that "[a]ssessments shall in no case exceed full value."
The Towns of Haverstraw and Stony Point and the Hydroelectric
Taxing Authorities have assessed the Power Plants well in excess
of the full value of the plants and, thus, are in direct
violation of the New York Constitution.
Furthermore, Mr. Phelan relates that Section 300 of the New York
State Real Property Tax Law exempts certain real property and
personal property from (i) real property tax, (ii) special ad
valorem levies and special assessments. In addition to
overvaluing the Power Plants, the tax authorities issuing the
assessments for the Power Plants also included the value of
exempted property. This improper inclusion of exempted property
resulted in excessive tax assessments in each year since the
Power Plants were acquired. Clearly, the property taxes for the
Power Plants must be limited as expressly provided by the
language of the taxing statute.
Mr. Phelan is concerned that Mirant Bowline, Mirant Lovett and
Mirant Hydroelectric will be forced to pay nearly $50,000,000 --
the alleged tax liability for 2003 as of September 30, 2003 -- of
property taxes that should be available to creditors of the
estate, absent approval of their. Moreover, resolution of the
Debtors' proper tax liabilities would be further delayed as
clearly shown by the relative lack of progress to date in the
pending tax proceedings. Estimating conservatively, it will take
several years before the New York Court will adjudicate the
petitions. If nothing else, the magnitude of the potential tax
refunds to the Debtors' estates justifies the Court exercising
jurisdiction and determining the appropriate taxable value.
(Mirant Bankruptcy News, Issue No. 13; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
MOLECULAR DIAGNOSTICS: Completes $4-Million Bridge Financing
------------------------------------------------------------
Molecular Diagnostics, Inc. (OTC Bulletin Board: MCDG) has closed
on its $4 million secured Bridge II financing. This allows the
company to complete any of the numerous private equity investment
transactions it has been negotiating.
Furthermore, completing the bridge will now allow MDI to complete
its restructuring plan and close on at least one of its pending
strategic alliances. In a related move, MDI's Chairman, Peter
Gombrich, converted all funds he recently advanced the company
totaling over $200,000 and past due salaries owed him into this
Bridge.
MDI has been in discussions with several global companies
interested in establishing strategic relationships for the
manufacturing and distribution of the InPath(R) System, the
Company's revolutionary cervical cancer detection system. All of
the discussions include the potential partner's taking an equity
position in MDI. As such, the open bridge financing was an
impediment to the conclusion of these discussions. The Company
believes that closure of the bridge not only should pave the way
to close several of these relationships, but for several direct
cash investments which have been committed to be made in MDI in
the form of private investments.
"I am more convinced than ever that MDI not only has the
technology to become a breakout success, but the market position
and staff in place to truly revolutionize this aspect of women's
health," Mr. Gombrich stated. He added, "We are at the point of
culminating several strategic and equity based relationships, and
the remaining bridge was simply slowing-down the process. I have
great expectations that my converting my debt into equity will
deliver returns in orders of magnitude relative to the cash due
me."
Molecular Diagnostics develops cost-effective cancer screening
systems, which can be utilized in a laboratory or at the point-of-
care, to assist in the early detection of cervical,
gastrointestinal, and other cancers. The InPath System is being
developed to provide medical practitioners with a highly accurate,
low-cost, cervical cancer screening system that can be integrated
into existing medical models or at the point-of-care. Other
products include SAMBA(TM) Telemedicine software used for medical
image processing, database and multimedia case management,
telepathology and teleradiology. Molecular Diagnostics also makes
certain aspects of its technology available to third parties for
development of their own screening systems.
More information is available at http://www.Molecular-Dx.com/
The Company's September 30, 2003 balance sheet shows a working
capital deficit of about $16 million and a total shareholders'
equity deficit of about $8 million.
MORGAN STANLEY: Fitch Affirms B+ Rating on Class G Notes
--------------------------------------------------------
Morgan Stanley Capital Inc.'s commercial mortgage pass-through
certificates, series 1996-WF1 are upgraded as follows:
-- $30.3 million class C to AAA' from 'AA-';
-- $33.3 million class D to 'AA' from 'A-';
-- $9.1 million class E to 'A+' from 'BBB+';
In addition, Fitch affirms the following classes:
-- $135.1 million class A-3 at 'AAA';
Interest only class X at 'AAA';
-- $36.3 million class B at 'AAA';
-- $21.2 million class F at 'BB+';
-- $21.2 million class G at 'B+';
The $16.4 million class H certificates are not rated by Fitch
Ratings.
The upgrades are a result of increased subordination levels due to
additional loan amortization and payoffs. As of the November 2003
distribution date, the pool's aggregate collateral balance has
been reduced by approximately 50%, to $302.8 million from $605.4
million at issuance.
Wells Fargo, as master servicer, collected year-end 2002 operating
statements for 100% of the pool by balance. For those loans, the
weighted average debt service coverage ratio improved to 1.55
times, from 1.45x at issuance. Two loans (6.0%) are currently in
special servicing. The largest specially serviced loan (3.5%) is a
retail property located in Auburn, ME and is current. The loan
transferred to special servicing due to the borrower's request for
a restructuring of escrows. The second specially serviced loan
(2.5%) is a 268-room full service hotel located in Reno, Nevada.
The property is currently in foreclosure and continues to operate
with a receiver in place. The trust will take title to the
property once licensing issues related to gaming activities at the
property are resolved. Fitch applied various hypothetical stress
scenarios taking into consideration the specially serviced and
other loans of concern. Even under these stress scenarios, the
resulting subordination levels were sufficient to upgrade the
designated classes. Fitch will continue to monitor this
transaction, as surveillance is ongoing.
MSX INT'L: Weak Credit Measures Spur S&P to Lower Rating to B
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its corporate credit
rating on MSX International Inc. to 'B' from 'B+'. At the same
time, the rating on MSX's $75.5 million of 11% senior secured
notes, with a second lien, were lowered to 'B-' from 'B', and the
rating on the $130 million of senior subordinated notes were
lowered to 'CCC+' from 'B-'. The outlook is negative.
The downgrade reflects weak credit protection measures resulting
from continuing depressed end-markets.
"We do not see favorable prospects for significantly improved
credit measures over the near term, given expected soft market
demand combined with the company's high leverage," said Standard &
Poor's credit analyst Nancy Messer. "The ratings on MSX could be
lowered if continuing market pressures prevent an improvement in
credit protection measures or lead to liquidity or covenant
compliance concerns," Ms. Messer said.
Southfield, Michigan-based MSX, a significant provider of
engineering services, human capital management services, and other
collaborative services, principally to the automotive industry in
the U.S. and Europe, had total balance sheet debt of $254 million
as of Sept. 30, 2003.
The company expanded rapidly after its inception in 1996, through
a combination of acquisitions and internal growth. However, year-
over-year revenues for 2002 and 2001 declined 13% and 10%,
respectively, because of weak demand and pricing pressures, in
both the auto and non-auto markets. In 2003, revenue remains weak.
MSX derives about two-thirds of its revenues from the automotive
industry. Although MSX serves the design and product development
stage of automotive production, the company's revenues are subject
to the cyclical and competitive pressures of the industry. It
is unclear when automotive original equipment manufacturers may
resume outsourcing a significant level of technical business
services and staffing functions, such as those supplied by MSX.
The company's plan to penetrate non-automotive industries,
including the telecommunications and computer industries, has been
stymied by weak demand in those markets.
NEW CENTURY COMPANIES: Plans to Expand Market for CNC Machinery
---------------------------------------------------------------
New Century Companies, Inc. (OTCBB:NCNC) said it is expanding the
company product line by offering its expertise to manufacturing
companies seeking to improve their productivity with specialized
CNC Machinery.
The company recently booked $800,000 in revenue for two machines
it sold to companies that had required increased manufacturing
productivity to be competitive in their markets.
David Duquette, CEO stated, "We have decided to offer our
engineering expertise and experience to broaden our markets. In
addition to our recently announced orders, we are currently
quoting over $3,000,000 of additional new orders for our
machinery. Coupled with our previous success in this market, the
recent bankruptcy and demise of Ingersoll Milling Machine of
Rockford, Illinois, a former billion-dollar manufacturer in the
special machinery business gives New Century huge immediate
business opportunities. We expect to add over $5,000,000 in sales
in 2004 from this sector alone. Our company is embarking on an
aggressive sales campaign to offer this new special machine
capability to its distributor network of machinery dealers through
out the U.S. and Canada."
New Century, under its brand name Century Turn, specializes in
manufacturing, remanufacturing and retrofitting machine tools,
primarily Vertical Boring Mills and large Lathes. By offering
remanufactured Vertical Boring Mills, the Company saves or
conserves millions of dollars per year in energy costs by
reutilizing the major castings of each Vertical Boring Mill. These
savings, generally in the range of 40% to 60%, allow New Century
to be the most price competitive manufacturer of Vertical Boring
Mills in the U.S. These cost savings are passed on to New Century
customers and afford them the opportunity to manufacture rotating
turbine components for power generation at better costs. New
Century machines are also used by manufacturers of jet engine
components, airplane landing gear parts and oil and gas
components, to name a few. New Century currently manufactures its
machines in state-of-the-art facilities in Santa Fe Springs, CA.
New Century maintains a Web site at http://www.newcenturyinc.com/
* * *
At September 30, 2003, New Century Companies Inc. had a
stockholder's deficit of $432,194 (excluding notes receivable from
stockholders) and an accumulated deficit of $4,309,327. The
Company's primary liquidity need is for working capital. To date,
New Century has financed its working capital requirements through
a combination of internally generated cash and short-term loans.
The Company intends to continue funding its current operations
through sales and debt and equity financing arrangements which may
be insufficient to fund its capital expenditures, working capital
and other cash requirements. In order to continue operations, New
Century must obtain financing. The Company is currently addressing
its liquidity issue by the following actions:
- Continue its aggressive program for selling inventory.
- Continue to implement plans to further reduce operating costs.
- Continue seeking investment capital through the public or
private markets.
- Secure new customer orders. Since January 2003, the Company has
secured $6,000,000 of new orders.
However, there is no guarantee that any of these strategies will
enable the Company to meet its obligations for the foreseeable
future. If not successful in implementing these strategies and if
unable to obtain additional financing, New Century management has
stated that the Company will be unable to continue its operations.
Management intends to pursue external financing sources to meet
the cash requirement of ongoing operations and is currently
seeking to raise additional funds in the form of an equity or debt
securities offering, or a combination thereof. However, there can
be no guarantee that the Company will raise sufficient capital to
execute its business plan. To the extent that it is unable to
raise sufficient capital, its business plan will require
substantial modifications and its operations may be curtailed.
These conditions raise substantial doubt about the ability of the
Company to continue as a going concern. Continuation as a going
concern is dependent upon New Century's ability to ultimately
attain profitable operations, generate sufficient cash flow to
meet obligations, and obtain additional financing as may be
required.
NORTEK INC: Parent Completes $515MM 10% Sr. Disc. Notes Offering
----------------------------------------------------------------
Nortek Holdings, Inc., the parent company of Nortek, Inc.,
announced it has successfully completed the sale of $515 million
aggregate principal amount at maturity ($349.4 million gross
proceeds) of its 10% Senior Discount Notes due 2011.
The Notes, which are structurally subordinate to all debt and
liabilities of its subsidiary Nortek, were issued and sold in a
private Rule 144A offering to institutional investors.
The net proceeds of the offering will be used to pay a
distribution to Nortek Holdings equity holders.
"We are extremely pleased with the positive response to the note
offering by investors," said Nortek's Chairman and Chief Executive
Officer, Richard L. Bready.
The Notes will accrete from their initial issue price on a
non-cash basis at a rate of 10% per annum compounded semi-annually
until November 15, 2007. Thereafter cash interest will accrue and
be payable semi-annually at a rate of 10% per annum.
Nortek is a leading international manufacturer and distributor of
high-quality, competitively priced building, remodeling and indoor
environmental control products for the residential and commercial
markets. Nortek offers a broad array of products for improving
the environments where people live and work. Its products
include: range hoods and other spot ventilation products; heating
and air conditioning systems; vinyl products, including windows
and doors, siding, decking, fencing and accessories; indoor air
quality systems; and specialty electronic products.
* * *
As previously reported in Troubled Company Reporter, Moody's
Investors Service assigned and confirmed ratings to Nortek,
Inc., with Stable outlook.
Rating Actions
* B1 senior implied rating
* B1 Issuer rating
* Ba3 on the $200 million senior secured revolving credit
facility due 2007
* B1 on $175 million of 9.25% senior notes due 3/15/2007
* B1 on $310 million of 9.125% senior notes due 9/1/2007
* B1 on $210 million of 8.875% senior notes due 8/1/2008
* B3 on $250 million of 9.875% senior subordinated notes
due 6/15/2011
The ratings reflect Nortek's high debt leverage due to its
acquisition-based growth strategy and its negative tangible equity
of about $370 million at June 29, 2002.
NRG ENERGY: Court Approves Andrews Kurth as Special Counsel
-----------------------------------------------------------
Scott J. Davido, Esq., Senior Vice President of NRG Energy, Inc.,
relates that Andrews Kurth LLP is a national law firm of almost
390 lawyers, with 83 lawyers in its business transaction practice
group, a number of whom are nationally recognized experts in the
field. Andrews Kurth has provided legal services to the Debtors
since 1994. As a result of its prior work with the Debtors,
Andrews Kurth has become familiar with the issues and has
developed expertise with respect to matters that relate to the
Debtors and the Debtors' businesses.
Pursuant to Section 327(e) of the Bankruptcy Code, the Debtors
sought and obtained the Court's approval to Andrews & Kurth as
special transaction counsel for business matters, nunc pro tunc
to the Petition Date.
In its capacity as the Debtors' Special Transaction Counsel,
Andrews Kurth will provide:
(a) legal services relating to the disposition of:
(i) electrical generating facilities, or
(ii) equity interests in entities owning the facilities;
(b) related supplemental legal services in support of the
activities, including bankruptcy, tax, environmental,
regulatory, labor, ERISA, real estate and finance; and
(c) coordinate transactions with Debtors' reorganization
counsel.
Andrews Kurth will employ attorneys and legal assistants with
varying degrees of legal experience as each matter may require.
The principal attorneys and legal assistants designated to
represent the Debtors and their current standard hourly rates
are:
Attorneys
---------
Paul J. Pipitone $475
Sherwood Jones 345
W. Robert Taylor, Jr. 485
David Zdunkewicz 450
John Dugdale 355
Michael Shaw 295
Ginnie Keller 200
Shahreen Rafique 180
Legal Assistants
----------------
Sue Driver 150
Zoraida Agosto 140
Paul J. Pipitone, a partner of Andrews & Kurth, tells the Court
that Andrews Kurth does not currently represent any potential
purchaser with regard to the acquisition of assets being sold or
to be sold by the Debtors in the course of their reorganization
proceedings. It is Andrews Kurth's policy to engage in a full
conflicts check prior to accepting new engagements or opening new
matters for current clients. In the event Andrew Kurth becomes
aware of a potential purchaser, Andrew Kurth will either decline
to represent the potential purchaser in the acquisition of the
Debtors' assets or will seek approval before engaging in the
representation.
Finally, based on the conflicts search conducted, Mr. Pipitone
assures the Court that Andrews Kurth, its partners, counsels or
associates do not represent an interest adverse to the Debtors or
their estates with respect to the matters on which Andrews Kurth
is to be employed. (NRG Energy Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
NUI UTILITIES: Arranges Credit Facilities Totaling $405 Million
---------------------------------------------------------------
NUI Corporation (NYSE: NUI) and its wholly owned subsidiary, NUI
Utilities, Inc., have entered into credit facilities aggregating
$405 million.
These credit facilities are unsecured and are available during a
364-day term that expires on November 22, 2004, and carry a 364-
day extension option, subject to certain conditions. These
facilities will be used to refinance credit facilities at NUI and
NUI Utilities and the Senior Notes outstanding at NUI, and for
general corporate purposes. Credit Suisse First Boston (CSFB) is
the sole lead arranger.
"We believe that the closing of these credit facilities provides
the company with the financial flexibility and necessary support
to continue the sales process," stated Mark Abramovic, NUI
President. "The proceeds will be used to strengthen our balance
sheet and support our distribution systems during the winter
heating season and beyond."
Terms of the agreements include:
NUI Corporation
NUI Corporation receives a Term Loan of $255 million with an
initial interest rate of 8 percent for a length of 364 days, with
one 364-day option. Of the $255 million, approximately $85 million
will be downstreamed as a capital contribution to NUI Utilities to
repay an intercompany receivable between NUI Corporation and NUI
Utilities.
NUI Utilities
NUI Utilities receives a Term Loan of $50 million, a $50 million
Revolver and a Delayed Draw Term Loan of $50 million. All
facilities bear an initial interest rate of 7 percent for a length
of 364 days, with one 364-day option. The Delay Draw Term Loan can
be used solely for the purpose of paying down NUI Utilities'
Medium-Term Notes, due February 2005, if the company so chooses.
NUI Corporation, based in Bedminster, NJ, is a diversified energy
company that operates natural gas utilities, as well as businesses
involved in natural gas storage and pipeline activities and
wholesale energy portfolio and risk management. NUI Utilities'
divisions include Elizabethtown Gas in New Jersey, City Gas
Company of Florida and Elkton Gas in Maryland. Visit
http://www.nui.comfor more information.
As previously reported, Standard & Poor's Ratings Services lowered
its corporate credit rating on NUI Utilities Inc. to 'BB' from
'BBB-'. The rating on NUI Utilities remains on CreditWatch with
developing implications as the parent NUI Corp. is being actively
marketed for sale.
NUI Utilities, headquartered in Bedminster, N.J., has $250 million
in debt outstanding.
OAKWOOD HOMES: Today is the Administrative Claims Bar Date
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware fixes today
as the deadline for Administrative Claim holders of Oakwood Homes
Corporation and its debtor-affiliates to file their requests for
payment of administrative claims or be forever barred from
asserting their claims.
All Requests for Payment of Administrative Claims must be received
by the Court-approved Claims Agent, Bankruptcy Services LLC,
before 4:00 p.m. Eastern Time today.
Oakwood Homes Corporation and its subsidiaries are engaged in the
production, sale, financing and insuring of manufactured housing
throughout the U.S. The Debtors filed for chapter 11 protection
on November 15, 2002 (Bankr. Del. Case No. 02-13396). Robert J.
Dehney, Esq., Derek C. Abbott, Esq., at Morris, Nichols, Arsht &
Tunnell and C. Richard Rayburn, Esq., and Alfred F. Durham, Esq.,
at Rayburn Cooper & Durham, P.A., represent the Debtors in their
restructuring efforts. When the Company filed for protection from
its creditors, it listed $842,085,000 in total assets and
$705,441,000 in total debts.
PENN NATIONAL: Wants to Make Amendments to Credit Facilities
------------------------------------------------------------
Penn National Gaming, Inc. (PENN:Nasdaq) intends to seek certain
amendments to its senior secured credit facilities.
At September 30, 2003 Penn National Gaming had approximately $11.1
million and $596.3 million outstanding, respectively, under its
Term Loan A Facility due March 2008 and Term Loan B Facility due
March 2009.
Penn National Gaming (S&P, BB- Corporate Credit Rating, Stable)
owns and operates: three Hollywood Casino properties located in
Aurora, Illinois, Tunica, Mississippi and Shreveport, Louisiana;
Charles Town Races & Slots(TM) in Charles Town, West Virginia; two
Mississippi casinos, the Casino Magic - Bay St. Louis hotel,
casino, golf resort and marina in Bay St. Louis and the Boomtown
Biloxi casino in Biloxi; the Casino Rouge, a riverboat gaming
facility in Baton Rouge, Louisiana and the Bullwhackers casino
properties in Black Hawk, Colorado. Penn National also owns two
racetracks and eleven off-track wagering facilities in
Pennsylvania; the racetrack at Charles Town Races & Slots in West
Virginia; a 50% interest in the Pennwood Racing Inc. joint venture
which owns and operates Freehold Raceway in New Jersey; and
operates Casino Rama, a gaming facility located approximately 90
miles north of Toronto, Canada, pursuant to a management contract.
PHILIP MORRIS: Jury Clears Co. in New Hampshire Smoker's Case
-------------------------------------------------------------
A New Hampshire jury has concluded that Philip Morris USA should
not be liable for a smoker's lung-cancer death. It was the first
smoking-and-health case tried in New Hampshire.
"The jury decided this case on the evidence, and the evidence
clearly established that Julien Longden well understood the risks
of smoking, and that he chose to accept those risks," said William
S. Ohlemeyer, Philip Morris USA vice president and associate
general counsel.
The 12-person jury reached its unanimous verdict after
deliberating less than two days. The trial began on October 6,
2003.
Mr. Longden died of lung cancer on May 19, 2000. The plaintiff in
the case was his widow, Sheila Longden.
PILLOWTEX CORP: Court Fixes December 28, 2003 as Claims Bar Date
----------------------------------------------------------------
Christopher M. Winter, Esq., at Morris, Nichols, Arsht & Tunnel
in Wilmington, Delaware, says that fixing a Bar Date will provide
certainty to all parties-in-interest and will enable the Pillowtex
Debtors to timely and effectively notify interested parties of the
Bar Date. Accordingly, the Debtors sought and obtained the
Court's approval establishing these claim-related deadlines:
A. Bar Date
December 29, 2003, 5:00 p.m. Eastern Time, will be the bar
date within which proofs of claim against the Debtors must be
filed. The Bar Date will apply to all creditors except to
those holding or wishing to assert these types of Claims
against the Debtors:
(a) Any Claim for which a proof of claim against the
Debtors, or any of the Debtors, has already been
properly filed with the Claims Docketing Center or the
Clerk of the Court;
(b) Any Claim:
(1) which is listed on the Schedules;
(2) which is not described in the Schedules as
"disputed," "contingent" or "unliquidated";
(3) as to which the holder of the Claim does not
dispute the amount, priority, status or nature of
the Claim as set forth in the Schedules; and
(4) as to which the holder of the Claim does not
dispute that the Claim is an obligation of the
specific Debtor against which the Claim is listed
in the Schedules;
(c) Any Claim to the extent that that Claim has been paid
in full by any Debtor;
(d) Any Claim for which specific deadlines have previously
been fixed by the Court;
(e) Any Claim that has been fixed and allowed by an Court
Order entered on or before the Bar Date; and
(f) Any Claim that is allowable under Sections 503(b) and
507(a) of the Bankruptcy Code as an expense of
administration.
Holders of the equity interests in the Debtors need not file
proofs of equity interest and must not file proofs of claim.
However, any stockholders who assert claims against the
Debtors, or who are alleging damages or asserting causes of
action based upon their stock ownership, or purchase or sale
of stock, would be required to file a proof of claim by
the Bar Date.
Original, written proof of Claim must be sent by U.S. mail or
delivery by hand, courier or overnight service at the Claims
Docketing Center:
Logan & Company, Inc.,
Pillowtex Claims Processing Department,
546 Valley Road, Upper Montclair,
New Jersey 07043
All proofs of claim will be deemed timely filed only if the
original is actually received by the Claims Docketing Center
on or before the Bar Date. Proofs of claim sent by facsimile,
telecopy or other electronic means will not be accepted.
B. Bar Date for Governmental Units
A Claim by a Governmental Unit must be filed on or before
January 26, 2004, 5:00 p.m. Eastern Time.
C. Rejection Bar Date
Proofs of claim for any rejection damages claims under
Sections 365(g) and 502(g) of the Bankruptcy Code as a result
of the Debtors' rejection of an executory contract or
unexpired lease during their cases must be filed by the later
of 30 days after the effective date of rejection of the
executory contract or unexpired lease as provided by a Court
Order or pursuant to notice procedures approved by the Court
and the Bar Date.
D. Proof of Claim Form
A Proof of Claim, to be properly filed, must:
(a) be signed;
(b) be written in the English language;
(c) be denominated in lawful currency of the United States;
(d) conform substantially to the Proof of Claim Form or
Official Bankruptcy Form No. 10;
(e) be submitted with copies of any supporting documents or
an explanation of why any supporting document is not
available; and
(f) specify by name and case number of the Debtor against
which the Proof of Claim is filed.
If the Person or Entity asserts a Claim against more than one
Debtor or has Claims against different Debtors, a separate
Proof of Claim Form must be filed with respect to each Debtor.
E. Notice of Bar Date
Notice the Bar Date will be deemed good, adequate and
sufficient notice if it is served by being deposited in the
United States mail, first class postage prepaid, on all known
persons and entities holding Claims against the Debtors. The
Debtors may make supplemental mailings of the Bar Date Notice
up to 23 days in advance of the Bar Date, as may be necessary
and appropriate.
F. Publication Notice
The Debtors will also publish a Bar Date Notice, once in the
national editions of The Wall Street Journal, The New York
Times, The Charlotte Observer, The Independent Tribune and The
Salisbury Post as soon as is reasonably practicable but in no
event later than 23 days prior to the Bar Date.
G. Supplemental Bar Date Notice
If the Debtors amend or supplement the Schedules after the Bar
Date Notice is served, the Debtors will give notice of any
amendment or supplement to the affected claim holders. These
holders will be afforded 30 days from the date of the notice
to file proofs of claim in respect of their Claims or be
barred from doing so.
H. Failure to File by Applicable Bar Date
Any holder of a Claim against the Debtors who is required, but
fails, to file a proof of claim in accordance with the
procedures set forth in the Bar Date Order, will be forever
barred, estopped and enjoined from asserting the Claim against
the Debtors or any of the Debtors, and the Debtors and their
property will be forever discharged from any and all
indebtedness or liability with respect to that Claim.
Additionally, that holder will not be permitted to vote to
accept or reject any plan of liquidation, or to participate in
any distribution in these cases on account of that Claim, or
be entitled to receive further notices regarding that Claim in
these cases.
I. Assistance of Claims Agent
Logan & Company, Inc. is authorized to retain and pay
necessary service providers, subject to the Debtors' prior
approval, and to obtain reimbursement from the Debtors for
the payments on the same terms as those applicable to Logan's
own services. The Debtors and Logan are authorized to take
other actions as may be reasonably necessary to ensure timely
preparation and mailing of the Bar Date Notice and the Proof
of Claim Form.
Judge Walsh makes it clear that the Debtors will retain the right
to:
(a) dispute, or assert offsets or defenses against any claim;
(b) subsequently designate any Claim as disputed, contingent
or unliquidated; and
(c) object to any Claim, whether scheduled or filed on any
grounds. (Pillowtex Bankruptcy News, Issue No. 55;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
PLAINS ALL: Unit Acquires South Saskatchewan Pipeline System
------------------------------------------------------------
Plains All American Pipeline, L.P. (NYSE: PAA) announced that its
subsidiary Plains Marketing Canada, L.P. has acquired the South
Saskatchewan Pipeline System from South Saskatchewan Pipe Line
Company.
Total purchase price for the assets was approximately $47 million,
including transaction costs, and was funded through a combination
of cash on hand and borrowings under the Partnership's revolving
credit facilities.
The South Saskatchewan Pipeline System originates approximately 75
miles southwest of Swift Current, Saskatchewan, and traverses
north and east until it reaches its terminus at Regina. The
system consists of a 158-mile, 16-inch mainline and 203 miles of
gathering lines ranging in diameter from three to twelve inches.
In 2002, the system transported approximately 52,000 barrels of
crude oil per day. At Regina, the system can deliver crude oil to
the Enbridge Pipeline System and to local markets. In addition,
the system can indirectly deliver crude oil into the Partnership's
Wascana Pipeline System.
"We are pleased to complete this transaction, which has been
subject to a letter of intent for several months," said Greg L.
Armstrong, Chairman & Chief Executive Officer of the Partnership.
"The acquisition of this fee-based pipeline system complements our
existing asset base in the province of Saskatchewan and advances
our efforts to expand our presence in the Canadian market."
Plains All American Pipeline, L.P. (S&P, BB+ Senior Unsecured
Rating, Positive) is engaged in interstate and intrastate crude
oil transportation, terminalling and storage, as well as crude oil
and LPG gathering and marketing activities, primarily in Texas,
California, Oklahoma and Louisiana and the Canadian Provinces of
Alberta and Saskatchewan. The Partnership's common units are
traded on the New York Stock Exchange under the symbol "PAA". The
Partnership is headquartered in Houston, Texas.
PMA CAPITAL: S&P Keeps Counterparty & Debt Ratings on Watch Neg.
----------------------------------------------------------------
Standard & Poor's Ratings Services lowered its counterparty credit
and senior debt ratings on PMA Capital Corp. (NASDAQ:PMACA) to 'B'
from 'BB-'.
Standard & Poor's also lowered its counterparty credit and
financial strength ratings on reinsurer PMA Capital Insurance Co.
to 'BB' from 'BBB-'. In addition, Standard & Poor's lowered its
counterparty credit and financial strength ratings on primary
writers Pennsylvania Manufacturers Assoc. Insurance Co.,
Pennsylvania Manufacturers Indemnity Co., and Manufacturers
Alliance Insurance Co., to 'BBB-' from 'BBB'.
These ratings remain on CreditWatch with negative implications,
where they were placed on Nov. 4, 2003.
"These ratings actions reflect PMACA's significantly diminished
financial flexibility following its Nov. 6, 2003, announcement
that it agreed with the Pennsylvania regulators not to make any
further dividend payments to the holding company without prior
regulatory approval," said Standard & Poor's credit analyst Laline
Carvalho. "This follows PMACA's Nov. 4, 2003, announcement of a
$150 million pretax charge for reserve additions at reinsurance
subsidiary PMACIC, which significantly weakened the capital
adequacy at this entity, which is the primary provider of dividend
payments to PMACA."
In addition, since Nov. 4 when the group first announced its
reserve addition, PMACA's shares have been trading significantly
below book value. "This materially constrains the holding
company's ability to raise additional funds in the financial
markets and increases its reliance on gaining regulatory approval
to service debt interest and principal payments over the medium
term," Ms. Carvalho added. Currently, Standard & Poor's believes
PMACA has enough liquidity at the holding company to service
interest payments in the next 12 months.
PMACA's future strategic direction and organizational structure
remain unclear, particularly following the recent departure of its
CEO and Chairman, as well as its decision to exit the reinsurance
business. In addition, PMACA has said that it is currently in
discussions with the Pennsylvania regulators. The primary workers'
compensation writers comprising PMAIG, which management expects to
be PMACA's ongoing business, are direct subsidiaries of PMACIC.
Standard & Poor's believes funds available at those subsidiaries,
which have very strong capital adequacy, could be used to support
the obligations of significantly weaker-capitalized PMACIC.
Standard & Poor's also believes PMAIG's business position in its
key markets might be jeopardized by PMACA's weakened franchise as
well as the significant decline in PMACIC's financial strength and
financial flexibility.
Reserve adequacy also remains a key concern. Standard & Poor's
believes the adequacy of PMACA's reserves will be a key factor
influencing PMACA's ability to execute its strategic plan and to
obtain regulatory approval for dividend payments to the holding
company over the near and medium term. PMACA has recently
announced that it has engaged an outside actuarial firm to review
reserve adequacy at PMAIG in the fourth quarter of 2003. PMACA
remains exposed to further reserve development at its operating
subsidiaries even though PMAIG's reserves appear to have shown
less volatility in recent years compared with other areas in
PMACA, and though such reserves were reviewed in third-quarter
2003 given the substantial amount of reserve additions reported by
the group over recent years (particularly relating to PMACIC and
run-off excess and surplus line subsidiary Caliber One Indemnity
Co.).
At the company's request Standard & Poor's will withdraw the
ratings on the operating units, PMA Capital Insurance Co.,
Pennsylvania Manufacturers Assoc. Insurance Co., Pennsylvania
Manufacturers Indemnity Co., and Manufacturers Alliance Insurance
Co. once the CreditWatch has been resolved. Standard & Poor's
expects to resolve the CreditWatch in the next two months, pending
the completion of PMAIG's independent actuarial review. Standard &
Poor's will maintain the ratings on the outstanding debt.
RELIANCE GROUP: Liquidator Wants to Amend Complaint vs. Deloitte
----------------------------------------------------------------
M. Diane Koken, Insurance Commissioner of the Commonwealth of
Pennsylvania, in her capacity as Liquidator of Reliance Insurance
Company, asks the Commonwealth Court for permission to file and
serve an amended complaint against Defendants Deloitte & Touche
and Jan A. Lommele. Mr. Lommele was a principal at Deloitte and
acting actuary for RIC.
Ann B. Laupheimer, Esq., at Blank, Rome LLP, recounts that on
October 15, 2002, the Liquidator filed a Complaint against
Deloitte and Mr. Lommele to recover damages caused by the
Defendants in connection with their RIC audit and actuarial
duties for fiscal years ended December 31, 1998 to December 31,
2000.
Ms. Laupheimer explains that the Liquidator seeks to add relevant
facts to the Complaint -- some of which the Defendants concealed
from the Liquidator -- which prevented their inclusion in the
initial Complaint. The new facts support pending causes of
action and an additional cause of action to recover preferential
payments from Deloitte.
According to Ms. Laupheimer, Deloitte conducted a comprehensive
reserve analysis for private equity firm Kohlberg, Kravis,
Roberts & Co. in February 2000. Kohlberg was conducting due
diligence for a contemplated $400,000,000 capital investment into
RIC and Reliance Group Holdings. Deloitte determined that RIC's
reserves were deficient by "hundreds of millions of dollars."
Kohlberg also hired Am-Re to a conduct separate, but
contemporaneous, evaluation of RIC's reserves. At this time, the
Defendants were simultaneously preparing to opine on the adequacy
of RIC's reserves in a mandatory filing with the Pennsylvania
Insurance Department.
As a result of its analysis for Kohlberg, Deloitte concluded that
RIC's reserves were deficient by at least $350,000,000 as of
December 31, 1999. Ms. Laupheimer alleges that the Defendants
failed to disclose these facts to the Insurance Department, RIC's
policyholders, creditors or the public. Rather, the Defendants
declared that RIC's reserves were adequate and in compliance with
"the requirements of the insurance laws of . . . Pennsylvania."
Equally distressing, the Defendants filed a Statement of
Actuarial Opinion, despite direct knowledge of Am-Re's
contemporaneous reserve analysis concluding that RIC's reserve
deficiency was $500,000,000 as of December 31, 1999.
During this period, when the Defendants filed a confirmation of
the adequacy of RIC's reserves and through the Liquidator's
pre-complaint investigation and the course of the litigation,
Deloitte concealed these facts from the Liquidator.
Notwithstanding a Court Order to produce all documents pertaining
to its RIC audit and actuarial review, Deloitte refused to
produce the Kohlberg due diligence documents. Despite the
Liquidator's numerous requests, Deloitte insisted that its
production was full and complete.
The Liquidator now seeks to add these facts to the Complaint.
Ms. Laupheimer alleges that Deloitte received preferential
transfers from RIC. While acting as independent auditor and
actuary, Deloitte collected fees from Kohlberg for reviewing
RIC's reserves. Deloitte accepted the Kohlberg engagement,
despite its professional role as RIC's accountant, auditor,
consultant and actuary, disregarding the confidential information
it possessed. Deloitte concluded, to Kohlberg's benefit, that
RIC's reserves were deficient by at least $350,000,000. At the
same time, Deloitte was collecting fees for protecting Kohlberg's
interests, but it professed to be acting in RIC's interests in
its capacity as independent auditor and appointed actuary. In
fact, less than a week after helping convince Kohlberg to abandon
its investment in RIC due to the reserve deficiency, the
Defendants filed their Actuarial Opinion with the Insurance
Department declaring that RIC's reserves were adequate. In other
words, Deloitte collected fees from Kohlberg for due diligence,
abusing its position of privileged access, then collected fees
from RIC in its position of public trust as auditor and actuary.
These fees constitute preferences under the Insurance Department
Act.
While Deloitte was being paid to protect Kohlberg's interests in
its consideration of a potential investment in RIC and RGH, the
Defendants continued to collect fees. Deloitte exploited the
competing interests of Kohlberg and RIC and financially benefited
by receiving payments from clients on opposite sides of a
potential transaction. In the year prior to RIC's
Rehabilitation, Deloitte received payments from RIC totaling over
$2,300,000.
Under 40 P.S. Section 221.30(a), the Liquidator may void
preferences if:
(a) RIC was insolvent at the time of the transfer;
(b) the transfer was made within four months before the filing
of the Petition;
(c) the creditor receiving the preference had, at the time the
transfer was made, reasonable cause to believe that RIC
was insolvent or about to become so; or
(d) the creditor receiving the preference was an officer of
RIC, so that it can be implied that RIC did not deal with
the creditor at arm's length.
Any entity receiving property from RIC as a voidable preference
is personally liable and accountable to the Liquidator. To the
extent Deloitte has legitimate rights to the payments it
received, like other claimants, it may submit a proof of claim to
the Liquidator.
Ms. Laupheimer assures the Court that allowing the Liquidator to
amend the Complaint will help secure a determination of the cases
on the merits because it will permit consideration of the
relevant facts that the Liquidator recently discovered, some of
which the Defendants concealed, preventing her from including
these in the initial Complaint. (Reliance Bankruptcy News, Issue
No. 43; Bankruptcy Creditors' Service, Inc., 215/945-7000)
RESMED INC: EVP Christopher Roberts Leaving Company on Dec. 31
--------------------------------------------------------------
ResMed Inc. (NYSE: RMD) announces that Christopher Roberts, Ph.D.,
Executive Vice President, will leave the Company on December 31,
2003.
Dr. Roberts will become the Chief Executive Officer of Cochlear
Ltd., effective February 1, 2004. Dr. Roberts will remain a non-
executive member of ResMed's Board of Directors.
Mr. Paul Eisen, presently Vice President Sales & Marketing, ResMed
Asia Pacific Ltd., will replace Dr. Roberts in managing the
European and Asian markets. He has been promoted to the new
position of Vice President Sales & Marketing Europe & Asia
Pacific.
Peter C. Farrell, Ph.D., Chairman and Chief Executive Officer
commented, "Chris has been a tower of strength over the past 11
years and has done an excellent job establishing and successfully
growing our Asian and European markets. We wish Chris the very
best of success in his new position. I am confident he will do
well and we are delighted that Dr. Roberts is able to remain a
Director of the Company."
Dr. Farrell further commented, "Since joining ResMed in 2001, from
a senior position within General Electric, Paul Eisen has
performed superbly in managing ResMed's Asia Pacific business. We
are confident in Paul's ability to further expand ResMed's
already-successful international operations."
ResMed (S&P, BB- Corporate Credit Rating, Stable Outlook) is a
leading developer, manufacturer, and marketer of medical equipment
for the diagnosis and treatment of sleep-disordered breathing.
Further information can be obtained by visiting the Company's Web
site at http://www.resmed.com
SHC INC: Creditors Must File Claims by December 5, 2003
-------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware directs all
creditors, except Governmental Claim holders, of SHC, Inc. and its
debtor-affiliates, to file their proofs of claim on or before
December 5, 2003, or be forever barred from asserting their claims
against the Debtors' estates.
The Court sets Dec. 27 as the Governmental Claims bar date.
All proof of claim forms must be received by the Bankruptcy Court
on or before 4:00 p.m. on Dec. 5.
Seven categories of claims are exempted from the bar date:
a. claims scheduled in the right amount and not listed as
disputed, contingent, or unliquidated;
b. claims already properly filed;
c. administrative claims of professionals;
d. administrative expense claims;
e. claims of current officers and directors arising from
postpetition service;
f. intercompany claims; and
g. claims subject to another bankruptcy court-imposed
deadline
SHC, Inc., headquartered in Chicopee, Massachusetts, is a
manufacturer of golf balls and clubs and other sporting goods. The
Company filed for chapter 11 protection on June 30, 2003 (Bankr.
Del. Case No. 03-12002). Pauline K. Morgan, Esq., at Young,
Conaway, Stargatt & Taylor represents the Debtors in their
restructuring efforts.
SK GLOBAL: SK Corp. Q3 Operating Results Enter Positive Zone
------------------------------------------------------------
SK Corp. recorded KRW10,200,000,000,000 of sales revenue and
KRW79,800,000,000 of operating profit -- KRW697,600,000,000
excluding additional allowances for SK Networks -- during the
first to the third quarter of 2003, due to the strong
petrochemical product spreads and stable profits from lubricant
and E&P businesses despite weakened refining margin in the third
quarter.
Market environment of petroleum business improved compared to
last year since the government lowered tariffs on crude oil from
5% to 3%, and market competition was eased. However, operating
profit from petroleum business turned negative due to weak demand
from seasonal effects and lowered refining margin in September.
Petrochemical business maintains strong operating profits as a
result of strong petrochemical product spreads. Lubricant and
E&P business also continued to make strong operating profits.
Allowances for SK Networks related Accounts Receivables include:
-- KRW617,800,000,000 of SG&A,
-- KRW30,000,000,000 for Non-operating expenses, and
-- Equity method valuation loss of KRW157,200,000,000.
SK Corp. Revises 3rd Quarter Profit
SK Corp. revised its third-quarter financial statements by
delaying making provisions for the debt-into-equity swap.
According to Bloomberg News, SK Corp.'s third-quarter net income
rose to KRW20,100,000,000 or $17 million from the preliminary
KRW10,500,000,000 profit figure. The company likewise earned an
operating profit of KRW236,600,000,000, compared with an earlier
estimate for a KRW52,400,000,000 loss. Sales remain at
KRW3,000,000,000,000. (SK Global Bankruptcy News, Issue No. 8;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
SMARTSERV: Trading Under New SSRV Symbol after Reverse Split
------------------------------------------------------------
SmartServ Online, Inc. (OTC:SSOL) announced that effective at
market open on Tuesday, November 25, 2003, its new trading symbol
was OTC:SSRV. This new trading symbol was assigned by NASD in
conjunction with SmartServ's one-for-six reverse stock split,
which also took effect at market open on Tuesday, November 25,
2003.
Under the reverse stock split, SmartServ's outstanding common
stock prior to the reverse split will be exchanged for new shares
of common stock at a ratio of one new share for every six pre-
split shares. All of SmartServ's convertible securities, such as
convertible debentures, stock options and warrants, are also
subject to the reverse split. SmartServ's convertible securities
will be convertible or exercisable, as the case may be, at six
times the price for one-sixth the number of shares into which such
security was previously convertible or exercisable.
SmartServ also announced that it has moved its corporate
headquarters from Stamford, Connecticut to Plymouth Meeting,
Pennsylvania, thereby significantly reducing its monthly rental
expenses. It has also recently completed two rounds of financing,
for $1,500,000 in the aggregate, consisting of debentures
convertible into common stock and warrants to purchase common
stock. SmartServ was advised on these transactions by a New York
investment bank. These transactions provide SmartServ with much
needed working capital as it prepares to implement its new
business and financial plan. The next steps of the plan include
potential acquisitions along with equity financing.
SmartServ (OTC:SSOL) is a wireless applications service provider
offering applications, development and hosting services.
SmartServ's customer and distribution relationships exist across a
network of wireless carriers, strategic partners, and a major
financial institution. Our applications can be delivered via
Java(TM) 2 Platform, Micro Edition (J2ME(TM)), QUALCOMM's Binary
Runtime Environment for Wireless(TM) (BREW(TM)) solution, WAP and
SMS, as well as RIM Blackberry and Pocket PC devices. For more
information, please visit http://www.SmartServ.com
* * *
As reported in Troubled Company Reporter's September 10, 2003
edition, the economic downturn in general, and its impact on the
telecommunications industry in particular, have caused
telecommunications service providers to reduce capital spending,
personnel and debt, as well as new service introductions. This
has resulted in delays in the build-out of high speed carrier data
networks and availability of data-enabled wireless devices,
causing the market for SmartServ's financial data and transaction
services to be lackluster. In addition, many financial services
firms have curtailed new product development to focus on data
security and recovery. Consequently, the potential demand for the
Company's products and services has been significantly delayed.
Such delays have had a very detrimental effect on the Company's
operations and have resulted in the Company's inability to
implement its business plan and related marketing strategies.
Consequently, in May 2002, the Company commenced an effort to
realign its infrastructure and related overhead to correlate with
reductions in projected revenue. As part of this effort,
management closed the Company's UK and Hong Kong sales offices and
downsized its domestic operations through staff reductions to a
level sufficient to support the Company's projected operations.
During 2003, the Company has continued to reduce its cost
structure through the termination of additional personnel.
Personnel headcount has been reduced from 66 in May 2002 to the
current level of 10. These efforts have reduced the Company's
average monthly operating expenses from approximately $1,090,000
in July 2002 to approximately $230,000 commencing September 2003,
excluding noncash stock compensation and depreciation and
amortization. The Company has also reviewed its revenue producing
contracts as of June 30, 2003 and reduced its projection of near
term revenues as a result of lower than anticipated demand for
the Company's products and services. As a result of the factors
identified above, the Company is in need of additional capital to
enable it to continue as a going concern.
No assurance can be given that the Company will be able meet its
revenue projections, maintain its cost structure as presently
configured, or raise additional capital on satisfactory terms.
Should the Company be unable to raise additional debt or equity
financing, it will be forced to seek a merger or cease operations.
The Company's financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and
the settlement of liabilities and commitments in the normal course
of business. The Company has, since its inception, earned limited
revenues and incurred substantial recurring operating losses,
including net losses of $6,725,058 for the six month period ended
June 30, 2003, net losses of $8,037,173 and $14,819,860 for the
years ended December 31, 2002 and 2001, respectively, and net
losses of $30,993,559 and $7,124,126 for the years ended June 30,
2000 and 1999, respectively. Additionally, it had an accumulated
deficit of $79,584,064 at June 30, 2003 and has debt service
requirements of $2,750,000 during the 12 month period ending June
30, 2004. These conditions raise substantial doubt about the
Company's ability to continue as a going concern.
SPECIALTY FOODS: Lenders Extend Covenant Breach Waivers
-------------------------------------------------------
Specialty Foods Group Income Fund (TSX: HAM.UN) announced
financial results for the quarter ended September 27, 2003, and
the 197 day period from March 14, 2003 to September 27, 2003.
The unaudited third quarter report for the Fund has been filed
with the Canadian securities regulatory authorities and is
available on the internet at the System for Electronic Document
Analysis and Retrieval (SEDAR) Web site at http://www.sedar.com
and may be downloaded from the company's Web site at
http://www.sfgtrust.comor printed report will be mailed upon
request.
The following represents a summary of the full report. The Notes
to the consolidated financial statements contained in the full
report are an integral part of the financial statements.
As the Fund commenced operation during the first quarter of 2003,
there are no 2002 financial statements for the Fund that can be
used on a comprehensive basis for comparing this year's operating
results with prior periods. However, in order to enhance the
usefulness of this financial report, certain financial and
operating results of the Fund for the third quarter of 2003 are
compared with results of the operating company for the third
quarter of 2002. Such information is for reference purposes only
and is not intended to represent a comprehensive comparison of
financial results.
The Fund reports its results in U.S. dollars. Cash flows related
to distributions to unitholders are reported in Canadian dollars
for the benefit of investors, designated with the Cdn$ symbol. All
amounts in this press release are stated in U.S. dollars unless
otherwise indicated.
The third quarter of 2003 was a difficult period for SFG. As
stated in the second quarter report, the Company expected third
quarter operating results to be impacted by high raw material
costs and integration issues. However, the impact of high raw
material costs was more severe than expected, as beef prices, a
raw material used in over 50% of the company's products, rose to
unprecedented levels during the third quarter. This followed the
discovery in May of a single case of bovine spongiform
encephalopathy (or "mad cow disease") in Canada, which closed the
U.S. border to imports of Canadian beef. The related shortage of
beef resulted in a sustained increase in raw material costs, with
some raw materials rising more than 100% over prior year levels in
the third quarter.
Under normal market conditions, the selling prices of the
Company's products can be adjusted to absorb raw material cost
changes, but generally a lag occurs between the time of the cost
changes and the effective date of price actions. Further, the
price increases that would have been necessary to maintain the
Company's historical profit margins were beyond the ability of
the market to absorb without causing significant erosion of the
Company's market share.
The Company has taken aggressive action to increase selling prices
on all products made from beef, but due to commitments to
customers and lead times on promotions, most of the increases will
not be fully effective until early in the first quarter of 2004.
Net sales for the third quarter of 2003 totaled $76.1 million,
compared with $76.7 million in the third quarter of 2002, a 0.8%
decrease. Sales volume decreased slightly from 50.5 million pounds
to 48.1 million pounds, but the average selling price was higher
by $.06 per pound. Volume was lower primarily due to the reduction
in orders from a large export private label customer for franks.
Excluding this customer, overall sales volume would have increased
by 4.2 million pounds, or 5.9%.
Net sales for the 197-day period beginning March 14, 2003 and
ending September 27, 2003 totaled $164.4 million. Sales volume
totaled 106.7 million pounds. While exact comparisons to the same
period of the prior year are not possible (due to the mid-month
start-up of the Fund), management believes that total sales in
volume and dollars were slightly lower than the prior year period
primarily due to a reduction in orders from the large export
private label customer for franks mentioned above.
As a result of the dramatic rise in raw material costs, gross
profit margins in the third quarter declined from 31.6% in 2002 to
27.8% in 2003. Combined with the effect of higher distribution
costs, the Company's EBITDA was $5.0 million lower than the third
quarter of 2002.
Due to the negative financial impact of the higher costs, on
November 18, 2003, the Fund announced that it would temporarily
reduce its monthly distribution rate by 50% to Cdn$.053125 from
the target distribution rate of Cdn$.10625.
Thomas D. Davis, President and Chief Executive Officer, stated,
"We believe that the reduced distribution rate should be
sustainable under current market conditions, but we look forward
to revisiting the distribution rate when raw material costs return
to more normal levels and the Fund's cash flows return to their
historical levels. I want to emphasize that we believe that the
current market for raw materials is an aberration, and that we are
highly confident that we will begin to see improvement in 2004. We
remain completely confident in our fundamental business plan. The
Company has embarked on a number of aggressive cost cutting
measures to enhance future profitability and to offset some of the
high raw material costs, but the effects of these actions will not
impact operating results until the middle of next year."
The negative financial results have also impacted the Company's
credit agreements. SFG's lenders have been supportive of the
Company during this unusual period, and have granted a waiver of
any covenant violations. The Company is currently in discussions
with its lenders to permanently amend the credit agreements to
reflect actual and forecasted results, and management believes
that such amendments will be approved before the end of the year.
Another major event that occurred during the third quarter was the
resignation of the Fund's auditors, PricewaterhouseCoopers LLP.
PwC did not provide the Fund with a reason for its decision to
resign, but management believes that their decision was based upon
their uncertainty over accounting for the deductibility of the
interest paid on the unsubordinated notes which are part of the
Fund's financial structure, despite the existence of authoritative
research and strong legal opinions supporting the Fund's
accounting treatment.
"On November 14, 2003, we were very pleased to announce that BDO
Dunwoody LLP would be appointed as the Fund's independent auditor
and that their U.S. member firm, BDO Seidman LLP, would serve as
the auditor of the U.S. operating company. BDO is a well-respected
firm with experience in the income trust marketplace, and we
believe that shareholders will be well served by their
engagement," continued Mr. Davis.
Despite the difficult market conditions and other events, SFG
continued to hold it's solid market position with regional and
national customers. The Company sold 48.1 million pounds of
product to some of the strongest companies in the retail grocery
and foodservice industry. SFG's leading brand, Nathan's Famous,
grew 18% compared with the third quarter of last year, and dry
sausage sales have also grown strongly. SFG continued to make
progress in introducing its newest brand, Swift Premium, with new
product offerings in dry sausage, ham and turkey.
During the month of September, the Company completed the sale of
its closed Louisville, Kentucky facility, with cash proceeds of
$1.9 million.
During the quarter, the Company also continued making progress in
integrating production from the closed Bloomfield, Connecticut
facility into the Owensboro, Kentucky facility. "We are now
beginning to realize much of the expected cost savings and
manufacturing synergies from the move, although we still have
improvements in productivity and overhead to accomplish. One
impact of the move has been a temporary increase in product
distribution costs. We are in the process of optimizing our
distribution network, but we are experiencing higher costs in the
short run as we have to absorb some duplicate costs until certain
contracts expire. Our distribution system should be fully
optimized by mid-year 2004," commented Mr. Davis.
"Specialty Foods Group faces significant challenges with continued
volatile raw material prices in the fourth quarter. We expect to
realize some benefits from our recent price increase, but most
will not be fully realized until the first quarter of next year.
We do expect to have reasonable margins on non-beef items,
particularly holiday ham sales over the fourth quarter period.
However, overall we expect to see only modest improvement in the
fourth quarter over the third quarter. Despite these events, we
believe our business strategy is solid. Our ability to produce,
sell, promote and grow our branded meat products has never been
stronger, and we will emerge from this difficult period a better
company - leaner, and poised for growth," Mr. Davis said.
Specialty Foods Group Income Fund is an open-ended, limited
purpose trust established under the laws of the Province of
Ontario, which indirectly holds an interest of approximately 55%
in Specialty Foods Group, Inc. SFG is a leading independent U.S.
producer and marketer of premium branded and private-label
processed meat products. SFG produces a wide variety of products
such as franks, hams, bacon, luncheon meats, dry sausage and
delicatessen meats. These products are sold to a diverse customer
base in the retail (e.g., supermarkets) and foodservice (e.g.,
restaurants) sectors. SFG sells products under a number of leading
national and regional brands, such as Nathan's, Swift Premium,
Field, Fischer's, Mosey's, Liguria, Alpine Lace and Scott Petersen
as well as on a private-label basis.
SUN HEALTHCARE: Has Until December 15, 2003 to Challenge Claims
---------------------------------------------------------------
Sun Healthcare Group, Inc., and its debtor-affiliates obtained an
extension of their deadline to file objections to claims asserted
in their cases, through and including December 15, 2003. According
to the Debtors, this will give them sufficient time to complete
the evaluation of, and objections to, all outstanding claims. (Sun
Healthcare Bankruptcy News, Issue No. 60; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
SUPERIOR TELECOM: Fleet Capital Provides $120MM Exit Financing
--------------------------------------------------------------
Fleet Capital Corporation, one of the nation's largest asset-based
lenders, agented a $120 million senior secured credit facility for
Superior Essex Inc. (OTC: SRTOQ.OB), successor to Superior Telecom
Inc., and a leading global manufacturer of wire and cable
products.
The facility will be used to refinance existing debt. Fleet will
also provide cash management products and services.
As a result of the financial restructuring, newly-formed Superior
Essex Inc., has become the parent and holding company for the
operating subsidiaries: Superior Essex Communications LLC and
Essex Group, Inc.
"Fleet Capital provided the deal structure and responsiveness we
needed to successfully emerge from our Chapter 11 restructuring,"
said Superior's newly appointed CEO Stephen M. Carter. "This
financing gives us the flexibility to address growth opportunities
and the continuing challenges we face in an uncertain economy."
"As a former lender to Superior, we understood the value of their
assets and were able to structure a complete financial package
with limited covenants and reasonable reporting requirements,"
said Fleet Capital President and CEO James G. Connolly.
Headquartered in Atlanta, Georgia, Superior Essex Inc. --
http://www.superioressex.com-- is a worldwide leader in the
development, manufacture and supply of a wide range of wire, cable
and accessory products. Through its Superior Essex Communications
and Essex Group businesses, the company markets its products to
telephone companies, major industrial original equipment
manufacturers, distributors and system integrators. Superior Essex
operates manufacturing facilities in the United States, United
Kingdom and Mexico.
Fleet Capital Corporation, which has 23 offices located throughout
the United States, provides asset-based loans and a broad array of
capital markets products to middle-market companies in North
America and their foreign subsidiaries. It also provides access to
cash management, foreign exchange and derivative products and
services. Fleet Capital is part of FleetBoston Financial (NYSE &
BSE: FBF), a diversified financial services company with assets of
$196 billion. The company offers an array of financial solutions
to over 18 million individual, corporate, and institutional
customers. Visit http://www.fleetcapital.com/prfor more
information about Fleet Capital.
TELEX COMMS: 11.5% Secured Note Issue Completes Debt Refinancing
----------------------------------------------------------------
Telex Communications, Inc., a worldwide leader in the design and
marketing of professional sound and communications equipment,
announces the placement of $125 million of the Company's 11-1/2%
Senior Secured Notes due 2008.
The proceeds of this offering were used primarily to retire the
maturing debt of the Company.
The 11-1/2% Notes were rated B by Standard & Poor's and B3 by
Moody's. In a related transaction, the company also established a
new domestic $15 million working capital line of credit. This line
of credit is not currently drawn.
"This is a very positive financial step for the Company and
demonstrates the confidence of the capital markets in the future
of Telex. The Company's balance sheet is also much stronger as a
result of this refinancing," said Gregory Richter, the Company's
Chief Financial Officer.
Telex Chief Executive Officer Raymond Malpocher added, "This new
capital structure provides us with a long-term stable financial
platform which will support our strategic growth initiatives. In
addition, it will afford us much greater flexibility by providing
additional undrawn credit lines to use as strategic opportunities
present themselves."
The Company is a worldwide industry leader in the design,
manufacture and marketing of audio and communications products and
systems to commercial, professional and industrial customers. The
Company's product lines include sophisticated loudspeaker systems,
wired and wireless intercom systems, mixing consoles, digital
audio duplication products, amplifiers, wired and wireless
microphones, military and aviation products, land mobile
communication systems, wireless assistive listening systems and
other related products. The Company markets over 30 product lines
that span the professional audio and communications sectors.
TEXAS INDUSTRIES: Launches Exchange Offer for 10-1/4% Sr. Notes
---------------------------------------------------------------
Texas Industries, Inc. (NYSE: TXI) commenced an offer to exchange
up to $600,000,000 principal amount of its 10-1/4% Senior Notes
due 2011 that have been registered under the Securities Act of
1933, as amended, for a like principal amount of all of its
outstanding 10-1/4% Senior Notes due 2011.
The Exchange Offer is expected to expire on December 23, 2003 at
5:00 p.m., New York City time, unless extended. Tenders of
original notes must be made on or prior to the expiration of the
exchange offer and may be withdrawn at any time on or prior to the
expiration of the exchange offer.
Copies of the prospectus and other documents describing the terms
of the exchange offer, including the related transmittal materials
for use in making tenders, may be obtained from the exchange
agent, Wells Fargo Bank, N.A., Corporate Trust Operations, MAC
N9303-121, P.O. Box 1517, Minneapolis, Minnesota 55480-1517, (800)
344-5128.
TXI (S&P, BB- Corporate Credit Rating, Negative) is a leading
supplier of building materials, primarily cement and structural
steel. Cement operations serve Texas and California, the two
largest cement markets in the nation. Structural steel products
are distributed throughout North America.
US AIRWAYS: M&T Financial Agrees to Reduce Claim to $4 Million
--------------------------------------------------------------
M&T Financial Corporation filed Claim No. 2939 for $6,199,087,
asserting tax indemnity claims, relating to Aircraft bearing
Registration Tail No. N413US, against the US Airways Reorganized
Debtors.
To settle the Claim, the Reorganized Debtors and M&T Financial
agree that Claim No. 2939 is reduced and allowed as general
unsecured Class USAI-7 Claim for $4,009,617. (US Airways
Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
VERITAS DGC: First Fiscal Quarter Net Loss Tops $26 Million
-----------------------------------------------------------
Veritas DGC Inc. (NYSE:VTS) (TSX:VTS) announced financial results
for its first fiscal quarter ended October 31, 2003. Revenues and
earnings with the comparative amounts for the corresponding period
of the prior fiscal year are as follows:
Three Months Ended October 31,
------------------------------
2003 2002
------ ------
(millions, except per share amounts)
Revenues $ 104.4 $ 137.5
Net income (loss) (26.3) 1.6
Earnings (loss) per common share (0.78) 0.05
These results include a $22.1 million ($0.66 per share after-tax)
non-cash charge related to a change in the Company's accounting
for multi-client amortization.
Chairman and CEO Dave Robson commented, "We continue to be
disappointed with activity levels in the seismic industry. The
quarter's results reflect the current lackluster spending by our
customers, especially with regards to our nonexclusive Gulf of
Mexico surveys. While there are signs that seismic spending may
finally be beginning to pick up, we are hesitant to forecast any
significant improvement in the near term. In the meantime, we
remain focused on running an efficient and technologically
proficient organization. We also remain committed to completing
the fiscal year with positive free cash flow for the second
consecutive year."
Revenues for the quarter were $104.4 million, a 24% decline from
prior year's first fiscal quarter, and breaks down as follows:
Three Months Ended October 31,
------------------------------
2003 2002
------ ------
(millions)
Multi-client:
Land $ 13.9 $ 11.0
Marine 25.9 45.3
------ ------
Subtotal 39.8 56.3
Contract:
Land 36.8 48.3
Marine 27.8 32.9
------ ------
Subtotal 64.6 81.2
------ ------
Total Revenues $ 104.4 $ 137.5
------ ------
Multi-client Revenue
Multi-client revenues of $39.8 million decreased by 29% compared
with the prior year's first fiscal quarter and represents the
lowest quarterly revenue level in four years. Shelf sales, i.e.
sales of existing data, were especially weak at only $19.0 million
for the quarter with most of the sales coming from Canada and
offshore West Africa. Marine multi-client revenues declined by 43%
while onshore revenues increased by 26% due to a large sale of
Canadian foothills data. Geographically, the largest declines
occurred offshore Brazil, down 60%, and the Gulf of Mexico, down
43%.
The Company completed three multi-client land surveys during the
quarter: Langham Creek (484 sq. km. in Texas), Ojay (468 sq. km.
in the Canadian foothills) and Woodrow (307 sq. km. in Texas).
Additional surveys were underway in the Gulf of Mexico (Aliminos
Canyon), Brazil (Santos Basin), Nigeria (OPL 317/318) and the
North Sea (Central Graben Quad 30).
Contract Revenue
Contract revenues declined by 21% from the prior year's first
fiscal quarter. Both marine and land contract revenues declined,
down 15% and 24%, respectively. During the quarter, the Company
performed contract marine surveys offshore West Africa and Asia
Pacific, and operated three contract land crews in Canada, six in
the U.S., two in Oman and one in Argentina.
Operating Income (Loss)
The operating loss of $22.1 million during the quarter was due to
the $22.1 million catch-up adjustment (included in cost of
services) related to a change in our accounting for multi-client
amortization effective August 1, 2003. The Company now recognizes
multi-client amortization expense based on the greater of straight
line (on a cumulative basis) over five years or sales forecast
method. In addition to the $22.1 million charge, which represents
the adjustment necessary to reduce each of the Company's surveys
as of August 1, 2003 to a balance no greater than that which would
have been recorded had the Company been previously using this
method, the results reflect additional minimum amortization
expense of $7.2 million during the quarter. As a result, multi-
client margins (excluding the catch-up adjustment) declined to 5%
during the quarter compared to 32% in the prior year's first
fiscal quarter. Multi-client margins were also negatively impacted
by the extremely low levels of Gulf of Mexico shelf sales.
Contract margins improved to 6% from a loss of 3% in the prior
year's first fiscal quarter. The prior year's negative contract
margin reflects several operational disruptions which occurred
during that quarter.
General and administrative expenses declined by $1.5 million from
the prior year due to overhead reduction efforts implemented in
the prior year. The prior year's general and administrative
expenses included $1.0 million of severance costs.
Income Taxes
Despite the significant pre-tax operating loss, a tax benefit of
only $87,000 was provided during the quarter due to limitations on
the booking of deferred tax assets (including net operating loss
carryovers) in the U.S. and several international jurisdictions.
Backlog
Backlog declined on a sequential basis to $161.4 million compared
with $173.2 million as of July 31, 2003. The marine acquisition
backlog, however, has improved from $9.8 million to $26.6 million
due to a multi-boat contract in India and is expected to continue
to increase in the upcoming quarter.
Other
The Company had a $56.3 million cash balance as of October 31,
2003 and a debt to total capitalization ratio of 29%. Subsequent
to quarter end, we paid down $12.4 million of our outstanding debt
in accordance with the terms of our credit facility.
Veritas DGC Inc. (Fitch, BB Senior Secured Debt Rating, Negative),
headquartered in Houston, Texas, is a leading provider of
integrated geological and reservoir technologies to the petroleum
industry worldwide.
WCI COMMUNITIES: Prices 5.7 Million Share Public Offering
---------------------------------------------------------
WCI Communities, Inc. (NYSE:WCI), one of Florida's leading
homebuilders and developers of highly amenitized lifestyle
communities, announced that certain selling stockholders priced a
public offering of a total of five million seven hundred thirty
five thousand six hundred sixty one (5,735,661) shares of WCI's
Common Stock at $19.50 per share.
In addition, the selling stockholders have granted the
underwriters a 30-day option to purchase up to an additional
573,568 shares of WCI's common stock to cover over-allotments, if
any. The sale of the common stock is expected to close on
December 1, 2003. WCI will not be selling any primary shares in
the offering, therefore, the number of outstanding shares
following the offering will remain unchanged.
Credit Suisse First Boston LLC is sole book-running manager, and
Deutsche Bank Securities Inc., UBS Securities LLC and Raymond
James & Associates, Inc. are serving as co-managers.
A registration statement relating to these securities has been
filed with the Securities and Exchange Commission and has been
declared effective.
When available, copies of the final prospectus relating to the
offering may be obtained from the offices of Credit Suisse First
Boston LLC, Prospectus Department, One Madison Avenue, New York,
New York, 10010 (Telephone Number: 212-325-2580).
Based in Bonita Springs, Florida, WCI (S&P, BB- Corporate Credit
Rating, Positive) has been creating amenity-rich, leisure-oriented
master-planned communities for more than 50 years. WCI's award-
winning communities offer primary, retirement, and second home
buyers traditional and tower home choices with prices from the
mid-$100,000s to more than $10 million and currently feature more
than 600 holes of golf and 1,000 boat slips as well as country
club, tennis and recreational facilities. The company also derives
income from its 28-office Prudential Florida WCI Realty division,
its mortgage and title businesses, and its amenities division,
which operates many of the clubhouses, golf courses, restaurants,
and marinas within its 30 communities. The company currently owns
and controls developable land of approximately 14,000 acres.
WEIRTON STEEL: Court to Consider Proposed Plan on Dec. 16, 2003
---------------------------------------------------------------
In consideration of the First Amended Plan of Reorganization
dated November 13, 2003, Weirton Steel Corporation asks the Court
to establish December 12, 2003 as the Voting Deadline. All
Ballots, including all Master Ballots, must be received by Donlin
& Recano & Company, Inc., no later than 5:00 p.m., Eastern Time,
on December 12, 2003 by U.S. mail, overnight courier, or personal
delivery.
* * *
The Court approves the Solicitation Procedures, including, but
not limited to, the form of the Ballots, the Notices of Non-
voting Status, the Voting Deadline, the Solicitation Packages,
and the Voting Record Date of October 20, 2003.
The Confirmation Hearing will be held before Judge Friend on
December 16, 2003, which may be continued from time to time by
the Court without further notice other than the announcement of
the adjourned dates at the Confirmation Hearing or any continued
hearing. Furthermore, the Confirmation Objection Deadline is
December 12, 2003 at 4:00 p.m., Eastern Time. (Weirton Bankruptcy
News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
WESTPOINT: Has Until March 1 to Make Lease-Related Decisions
------------------------------------------------------------
The WestPoint Stevens Debtors were parties to 82 leases as of the
Petition Date. Since that time, the Debtors closed 15 stores, two
offices and two plants, and rejected the leases at those
locations. The Debtors reduced the number of Unexpired Leases to
63.
However, John J. Rapisardi, Esq., at Weil, Gotshal & Manges LLP,
in New York, tells Judge Drain that the Debtors are still not in
the position to decide what Leases to assume or reject. A
reasoned determination as to all Unexpired Leases cannot be made
at this critical stage in the Debtors' Chapter 11 cases.
Mr. Rapisardi explains that the Debtors' management is in the
process of making vital decisions regarding restructuring
alternatives while continuing to work diligently on matters
directly related to the formulation of their Chapter 11
reorganization plan. These determinations will necessarily
impact the value of the Unexpired Leases to the Debtors' estates
and may affect the Debtors' decision on whether to assume or
reject these leases. Although the Unexpired Leases are needed
for their current business operations, the Leases must be
reviewed in conjunction with the Debtors' ultimate restructuring
plan before a final determination can be made.
For these reasons, the Debtors ask Judge Drain to further extend
their lease period to and including March 1, 2004.
Mr. Rapisardi assures Judge Drain that an extension will not
prejudice lessors under the Unexpired Leases. In compliance with
Section 365(d)(3) of the Bankruptcy Code, the Debtors remain
current with respect to all outstanding postpetition obligations
under the Unexpired Leases. Furthermore, the Debtors do not
intend to wait until the end of their lease decision period to
make a determination as to the assumption or rejection of the
Unexpired Leases. Rather, the Debtors will continue to evaluate
the Unexpired Leases on an ongoing basis as expeditiously as
practicable and will file appropriate motions as soon as informed
decisions can be made. In addition, an extension will not
prejudice the ability of a lessor to ask the Court to establish
an earlier date by which the Debtors must reject that lessor's
Unexpired Lease.
The Debtors believe that extending their lease decision period
will promote their ability to maximize the value of their estates
and avoid incurring needless administrative expenses by
minimizing the likelihood of a premature assumption of a
burdensome lease or an inadvertent rejection of a valuable one.
(WestPoint Bankruptcy News, Issue No. 12; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
WINSTAR: Court Okays Additional Compensation for Charles Persing
----------------------------------------------------------------
Sheldon K. Rennie, Esq., at Fox Rothschild LLP, in Wilmington,
Delaware, recounts that the Court authorized Winstar
Communications' Chapter 7 Trustee, Christine C. Schubert, to enter
into employment agreements with certain of the Debtors' former
employees, including Charles N. Persing, to assist her with the
administration of the Debtors' estates. The Trustee and Mr.
Persing entered into an employment agreement, wherein Mr. Persing
agreed to assist in the administration and wind down of the
Debtors' estates in consideration for (i) the continued payment
of the base salary that he was earning while employed by the
Debtors as well as (ii) a severance pay equal to six months of
his base salary if his employment is not terminated for cause.
Mr. Rennie tells the Court that increasing Mr. Persing's
compensation under the Employment Agreement and paying him
certain bonuses for his services is appropriate and justified in
view of his valuable services. Mr. Persing was extensively
involved in the identification and liquidation of the Debtors'
assets. The scope of Mr. Persing's services and responsibilities
increased dramatically as other staff positions have been
eliminated.
The Trustee has agreed to amend the Employment Agreement to pay
Mr. Persing:
(a) a $97,500 "stay bonus", which will be payable upon
termination of his services without cause on a timetable
agreeable to the Trustee;
(b) a $64,000 merit bonus, which will be payable immediately
and on a timetable agreeable to the Trustee; and
(c) an increase in his annual salary by $20,000 effective as
of October 1, 2003.
Pursuant to an Order dated June 11 2002, the Carve-Out under the
Debtors' Postpetition Credit Agreement was expanded to include
the unpaid salaries, severance and all other amounts payable to
the Winstar employees under the Employment Agreements, the cost
of the bond required by the Office of the United States Trustee,
and the agreed $300,000 flat fee payable to the Trustee in
connection with the amounts collected in these cases through and
including March 20, 2002, and the 3% commission for the Trustee
of all successful recoveries for the Debtors' estates for the
duration of these cases and the unpaid fees and expenses.
The Trustee is making an interim distribution of cash and IDT
Corporation Shares to the DIP Lenders. The interim distribution
of the IDT Shares requires the modification of the Trustee's
compensation under the Carve-Out Order.
Mr. Rennie says that the DIP Lenders have agreed to expand the
Carve-Out to include these compensations:
(i) The Trustee's 1% commission on the value of the 990,267
shares of IDT Corporation Class B Common Stock received
on December 19, 2001;
(ii) The Trustee's 3% commission on the value of the 792,079
shares of IDT Class B common stock received on April 16,
2002; and
(iii) The Trustee's 3% commission of all successful recoveries
for the Debtors' estates for the duration of the cases.
Mr. Rennie explains that to determine the Trustee's commission in
respect of the IDT Shares, the percentages will be applied to the
market value of the IDT Shares at the time of the distribution to
the DIP Lenders.
To support the estates' obligations to pay all the amounts owed
to Mr. Persing and the Trustee, Mr. Rennie tells the Court that
negotiations with the DIP Lenders regarding the modification and
expansion of the Carve-Out Order were undertaken to include Mr.
Persing's Additional Compensation and the Trustee's Commission.
In the event there are outstanding amounts due and payable from
the estates to Mr. Persing or the Trustee, they will obtain the
allowed benefits of the Carve-Out of the DIP Lenders' Lien.
The Trustee asserts that the Carve-Out expansion is necessary to
ensure that Mr. Persing continues to provide the services that
are vital to the administration of the Debtors' estates.
At the Trustee's behest, the Court approved Mr. Persing's
Additional Compensation and modified and expanded the Carve-Out
to include Mr. Persing's Additional Compensation and the
Trustee's Commission. (Winstar Bankruptcy News, Issue No. 50;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
WKI HOLDING: S&P Keeps Ratings on Watch Citing Industry Concerns
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on houseware
manufacturer and marketer WKI Holding Co. Inc. on CreditWatch with
negative implications. This includes the 'B' corporate credit and
senior secured bank loan ratings on WKI as well as the company's
'CCC+' subordinated debt rating. CreditWatch with negative
implications means that the ratings could be affirmed or lowered
following the completion of Standard & Poor's review.
Reston, Virginia-based WKI had about $405 million of total debt
outstanding at Sept. 28, 2003.
"The CreditWatch placement reflects Standard & Poor's heightened
concerns about challenging industry conditions," said credit
analyst David Kang. "Also, WKI's fourth quarter results might fall
below the level necessary for the company to maintain compliance
with its minimum EBITDA bank covenant, even though this covenant
was lowered in the second quarter through a bank amendment."
According to the company's recent 10-Q filing, net sales for the
nine months ended Sept. 28, 2003, were 12% lower than last year.
The decline is primarily due to volume shortfalls related to the
rationalization of the company's retail stores and market share
losses in certain categories. In addition, key retailers have had
to work off excess inventory from the disappointing 2002 holiday
season, and the company is also facing continued softness in the
economy.
There is some seasonality in WKI's business, and Standard & Poor's
is concerned that the company's financial performance will
continue to be pressured by challenging industry conditions,
particularly in the key fourth fiscal quarter. Standard & Poor's
will closely monitor the company's performance and covenant
compliance. Should WKI violate bank covenants in the fourth
quarter, Standard & Poor's will meet with management to discuss
the company's operating plans, financial policies, and strategies
before resolving the CreditWatch listing.
WKI is a leading manufacturer and marketer of consumer bakeware,
dinnerware, kitchen tools, range-top cookware, and cutlery
products.
WORLDCOM: Court Nixes Move to Dismiss Suit Filed by Ex-Employee
---------------------------------------------------------------
Roman Alexander, a former WorldCom employee residing in Colorado,
commenced a lawsuit against the Debtors on August 9, 1999 before
the U.S. District Court for the Southern District of New York to
receive accelerated vesting of 16,508 options to purchase
WorldCom stock which he held under four separate stock option
agreements. Mr. Alexander alleges that he was constructively and
involuntarily terminated by the Debtors as shown through material
reductions in his compensation and diminution in his position,
duties and responsibilities. Because this constructive
involuntary termination occurred within two years of a change in
control of MFS Communications Company Inc., Mr. Alexander asserts
that he is entitled to accelerated vesting under the terms of the
MFS 1993 Stock Plan. However, the Debtors' Compensation and
Stock Option Committee denied his request for accelerated
vesting. Mr. Alexander contends that the Committee's decision
was incorrect.
Throughout his employment, Mr. Alexander recalls that MFS had in
place a stock option plan to enable MFS Employees and Outside
Consultants to share in the Company's growth and prosperity.
Under the Plan, a Compensation Committee selected from the
members of MFS's board of directors was permitted to award stock
options to their employees. The Plan granted the Compensation
Committee broad discretion in exercising its powers:
(i) "The Plan will be administered by the Committee. A
majority vote of the Committee . . . will be valid acts
of the Committee for the purposes of the Plan. . . ."
(ii) "The Committee shall have plenary authority in its
discretion, but subject to the express provisions of
the Plan, to determine the terms if all Benefits granted
under the Plan including, without limitation . . . to
interpret the Plan and to make all other determinations
deemed advisable for the administration of the Plan."
(iii) "The Committee may designate Employees of the Company to
assist the Committee in the administration of the Plan
and may grant authority to such persons to execute
option agreements or other documents on behalf of the
Committee."
(iv) "Under the Plan, the Committee has the authority and
responsibility for interpreting and applying the
definition of Constructive Involuntary Termination. The
Committee's decisions are final and binding."
MFS and Mr. Alexander executed four Stock Option Agreements from
1994 to 1996. The Agreements provided for the grant of a certain
number of MFS options to Mr. Alexander. Each Agreement provided
that Mr. Alexander's options would vest immediately if he
suffered diminished responsibility or pay, within two years of a
change in control of MFS.
On December 20, 1996, the MFS shareholders approved the merger of
the MFS with a WorldCom subsidiary. Under the terms of the Plan,
this merger, effective December 31, 1996, constituted a Change in
Control.
If Mr. Alexander resigned voluntarily, he would forfeit his
unvested options. The Agreements and the Plan provided that in
limited circumstances, the unvested options might vest upon
termination, notwithstanding the normal five years vesting
timetable. Specifically, in the event of a Change in Control and
the employee's subsequent Constructive Involuntary Termination
within two years after the Change in Control, an employee's then
outstanding unvested options will immediately vest.
A Constructive Involuntary Termination is defined in the Plan as
the "voluntary termination of a person's employment with the
Company and all of its subsidiaries within 90 days after:
-- a material reduction in his compensation including
applicable fringe benefits, without his consent; or
-- his demotion or diminution in his position, authority,
duties or responsibilities, without cause and without his
consent."
After the Debtors acquired MFS in 1996, Mr. Alexander believed
that the Debtors substantially changed the terms of his
employment and compensation. On January 19, 1998, Mr. Alexander
resigned and accepted a position with Kiewitt Diversified Group,
Inc. He then requested to exercise all of his options
immediately.
As a result of his resignation, the Debtors cancelled Mr.
Alexander's unvested stock options. On April 9, 1998, Mr.
Alexander demanded accelerated vesting of his options through his
counsel by letter to Margaret Coons, Vice-President of Human
Resources, claiming he had suffered a Constructive Involuntary
Termination.
Ms. Coons reviewed Mr. Alexander's claim and concluded that his
claim had no merit and should be denied. She determined that
after the Change in Control, Mr. Alexander had not suffered a
diminution in his position or a reduction in his compensation
relative to his position and compensation immediately before the
Change in Control. She relayed her findings and recommendation
to the Compensation Committee designee, Dennis Sickle. Mr.
Sickle agreed with her and consequently denied Mr. Alexander's
request, on the Committee's behalf.
The Compensation Committee reviewed Mr. Alexander's claim and
concluded that he was not entitled to accelerated vesting of his
unvested shares. The Committee stated that any alleged decrease
in Mr. Alexander's compensation, including decreased fringe
benefits, was immaterial. The Committee noted that although
somewhat different, his new position did not result in diminished
responsibilities.
Pursuant to Rule 56 of the Federal Rules of Civil Procedure, the
Debtors asked the District Court for a summary judgment to
dismiss Mr. Alexander's complaint in its entirety with prejudice.
The Debtors contend that Mr. Alexander's compensation was not
materially reduced nor were his duties diminished. Any changes
that occurred were made either with Mr. Alexander's consent or
were based on cause. The Debtors argue that Mr. Alexander knew
what the compensation was under the Director Plan and also knew
that his new position would entail different responsibilities.
Mr. Alexander knowingly accepted his compensation and duties
package. If there was a diminution of Mr. Alexander's duties,
the Debtors explain that the diminution occurred because the
duties Mr. Alexander had been performing were no longer necessary
after the Change in Control.
Mr. Alexander argues that the Debtors, in an April 16, 1997 memo,
expressly promised him accelerated vesting of his 1996 Options.
He asserts that the Debtors are now estopped from denying this
promise and, at a minimum, the existence of the memo and its
possible contradictory terms to the Agreement create an issue of
fact.
The Debtors clarify that the letter was sent to employees subject
to an involuntary termination, not those who may have suffered a
Constructive Involuntary Termination. The Debtors explain that
the memo was sent to a group of employees who were part of a mass
layoff. The Debtors decided that it would be in their best
interest to give this group of individuals acceleration of their
outstanding options at one time rather than deal with the issue
of acceleration on a case-by-case basis.
The Debtors note that Mr. Alexander did not assert that he was
part of this group. Therefore, the Debtors point out, Mr.
Alexander was not promised acceleration of his 1996 grant.
After reviewing the merits of the case, District Court Judge John
F. Keenan finds that a genuine issue exists as to whether Mr.
Alexander suffered a Constructive Involuntary Termination.
"It is not clear that plaintiff did not in fact voluntarily leave
to pursue a more lucrative position instead of suffering a
[Constructive Involuntary Termination]. The [District Court]
finds that a rational juror could find for plaintiff," Judge
Keenan says in his 14-page Opinion and Order.
Central to resolution of the case, Judge Keenan points out, is
the determination of whether Mr. Alexander truly suffered a
Constructive Involuntary Termination. From this determination,
the District Court may appraise whether Mr. Alexander is entitled
to accelerated vesting of his stock options under the Plan and
whether the Committee's decision was, in fact arbitrary,
fraudulent or made in bad faith.
Having found a genuine issue of material fact to exist on this
point, Judge Keenan refrains from addressing the remaining
arguments advanced by the Debtors. The Debtors' request to
dismiss the complaint in its entirety is denied. Judge Keenan
also finds that Mr. Alexander is not entitled to accelerated
vesting of the 1996 options. Accordingly, Mr. Alexander's claim
for accelerated vesting of the 1996 grant is denied.
In view of the Debtors' bankruptcy proceeding, Judge Keenan stays
further trial on the case. Judge Keenan instructs both parties
to notify the District Court of the status of the case in writing
on December 1, 2003. (Worldcom Bankruptcy News, Issue No. 43;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
W.R. GRACE: Request for Hamlin's Appointment Drawing Fire
---------------------------------------------------------
The W.R. Grace Debtors' motion asking U.S. Bankruptcy Court Judge
Fitzgerald to appoint C. Judson Hamlin as the Legal Representative
for the holders of future asbestos-related claims against them,
meets resistance from various parties.
(1) The U.S. Trustee
Frank J. Perch, III, Esq., Assistant U.S. Trustee, in Wilmington,
Delaware, tells Judge Fitzgerald that the disclosures
accompanying the application to employ C. Judson Hamlin, Esq., as
the Legal Representative for Future Claimants is "incomplete
and/or deficient" in several respects. Mr. Hamlin's curriculum
vitae describes him as "Of Counsel" but neither the curriculum
vitae nor any other averment by the Debtors clearly identify the
firm to which Hamlin is of counsel. The c.v. refers to "the
Purcell firm" but does not provide the full name of the firm or
indicate whether such firm is Mr. Hamlin's current affiliation.
The Debtors' disclosures are incomplete without a disclosure of
Mr. Hamlin's current firm affiliation and the connections, if
any, of that firm with the Debtors, any creditors, or interested
parties.
The Debtors relate that Mr. Hamlin has been appointed "to act as
a special consultant and case manager in six asbestos Chapter 11
cases," without indicating that one of those "six asbestos
Chapter 11 cases" is the Debtors' case. While it may be that
this fact is known to most of the parties, it only serves to
point to the question of why the Application is so circumspect on
this matter. Furthermore, the Application fails to disclose the
extent to which Mr. Hamlin has already provided advice and
consultation to the Court in Grace's case.
The Debtors do not address the question whether Mr. Hamlin
intends to continue serving as a "Court Appointed Consultant and
Special Master" pursuant to the December 28, 2001 Order by Judge
Wolin, either in the Debtors' cases or in any of the other cases
covered by the Consultant Order.
The Debtors also do not disclose or discuss the implications of
the motion that has been filed in the Owens Corning case seeking
the recusal of Judge Wolin due to, among other things, Mr.
Hamlin's simultaneous service as an advisor to the Court pursuant
to Consultant Order and as Futures Representative in the G-I
Holdings case pending before the United States Bankruptcy Court
for the District of New Jersey.
Mr. Perch explains that the granting of the Recusal Motion in
Owens Corning would compel a finding that Mr. Hamlin's
appointment in these cases as Futures Representative should not
be approved, or, alternatively, would compel the recusal of Judge
Wolin from the Debtors' cases in the event that Mr. Hamlin were
appointed as Futures Representative. Therefore, due to the
interrelationship between the factual basis of the Recusal Motion
and Mr. Hamlin's Employment Application, and due to the potential
impact of granting the Recusal Motion, Mr. Hamlin's Employment
Application should be held in abeyance pending determination of
the Recusal Motion, unless the Court determines that it should be
denied on independent grounds.
Regardless of whether the Bankruptcy Code is interpreted as
expressly requiring that a Futures Representative be a
"disinterested person," Mr. Perch contends that it would be
inappropriate for the Court to approve the appointment of a
Futures Representative who has a clear conflict of interest and,
therefore, cannot discharge his or her duties of representing the
constituency of persons as yet unknown holding future demands as
defined in Section 524(g).
Mr. Hamlin's roles as Court-appointed consultant and special
master and as Futures Representative are in direct conflict. One
is an impartial role, which Judge Wolin has likened to that of an
examiner. The other role is clearly partisan, to represent the
interests of a constituency whose interests are not represented
by the Debtors, the Official Committee of Unsecured Creditors,
the Official Committee of Asbestos Personal Injury Claimants, or
the Official Committee of Asbestos Property Damage Claimants and
which are in conflict and competition with those constituencies.
Because Mr. Hamlin has served and may intend to continue serving
conflicting interests in the Debtors' cases, this conflict is
more direct than, and exists independently of, the conflict
alleged in the Recusal Motion between Mr. Hamlin's role pursuant
to the Consultant Order and his role as Futures Representative in
a case pending in another district which Judge Wolin is not
supervising.
(2) The London Underwriters
On behalf of Certain Underwriters at Lloyd's, London and Certain
London Market Companies who subscribed policies in favor of W.R.
Grace & Co. or its legal predecessors, Francis J. Murphy, Esq.,
at Murphy Spadaro & Landon, in Wilmington, Delaware, tells the
Court that Mr. Hamlin's appointment as Futures Representatives
constitutes a conflict of interest with his role as consultant
and advisor to Judge Wolin in the Debtors' cases and related
actions. Mr. Hamlin has performed the function of consultant and
advisor to the Court, as shown by his April 26, 2002 fee
application. Mr. Hamlin is being compensated as an officer of
the Court. Mr. Hamlin filed two other fee applications for his
service as "Court Appointed Advisor." Each was approved by the
Court. Mr. Hamlin's fee applications show that he has taken part
in ex parte communications with the Court and other consultants,
to which the parties to the Debtors' cases and the other
proceedings have not been privy.
As Futures Representative, Mr. Hamlin would be the "legal
representative for the purpose of protecting the rights of
persons that might subsequently assert demands" alleging asbestos
bodily injury. This role has been likened to that of a
"guardian," and necessitates a fiduciary relationship between the
representative and the future claimants. Mr. Hamlin, as a
lawyer, would have the obligations that all counsels have to
their clients. Mr. Hamlin would be both counsel for a party and
virtually a party himself. As guardian, it would be his duty to
analyze, determine, and represent the interests of unknown future
clients. As counsel, he would have the obligation to serve the
future claimants' interests zealously within ethical boundaries,
to the exclusion of the interests of all other parties.
Given his role as a personal consultant, where his service is
intended to be "in the best interests of the creditors, equity
holders and estates in bankruptcy," Mr. Hamlin could not
zealously serve the interests of future claimants or fulfill his
duties as their representative consistent with his duties to the
Court. Because the future claimants are as yet unknown, they
cannot waive this conflict and consent to Mr. Hamlin's dual role.
In any event, the conflict is not waivable. The ABA Model Rules
of Professional Conduct provide, at Rule 1.12, that -- except in
the case of a partisan arbitrator -- "a lawyer shall not
represent anyone in connection with a matter in which the lawyer
participated personally and substantially as a judge or other
adjudicative officer, arbitrator or law clerk to such a person,
unless all parties to the proceeding consent after consultation."
Mr. Hamlin, as a special consultant to the Court who also seeks
to represent persons in connection with this matter, appears to
fall within this rule. Moreover, Rule 1.12 applies equally to
former as well as present judicial officers. Therefore, Mr.
Hamlin could not resolve the conflict by obtaining an order
relieving himself of his duties as consultant to the District
Court.
Mr. Murphy also notes that Mr. Hamlin's dual service as Futures
Representative and consultant would not be consistent with Judge
Wolin's obligations concerning ex parte communications pursuant
to Canon 3(A)(4) of the Code of Judicial Conduct.
(3) Official Committee of Asbestos Property Damage Claimants
Theodore J. Tacconelli, Esq., at Ferry Joseph & Pearce, P.A., in
Wilmington, Delaware, contends that the Application fails to
adequately define the term "Future Claimants" and fails to
identify what type of future claims or constituencies would be
covered by the representation. As a result, the information
provided in the Application is insufficient for the PD Committee
to assess Mr. Hamlin's qualifications for the position or to
determine whether conflicts among future claimants exist or could
develop based on such a representation.
Before filing of the Application, the Debtors shared with the PD
Committee's counsel that they intended to seek the appointment of
a Futures Representative. At that time, the PD Committee's
counsel understood that the Debtors would only be seeking a legal
representative for future asbestos personal injury claims. As
filed, the Application and the proposed order do not identify
which claims or constituencies would be covered by the legal
representation. The term "Future Claimants" could arguably
include not just personal injury, but also all other future
claims that could arise, which, in turn, raises the concern of
conflicts among the various future claimants.
Due to the inadequate identification of "Future Claimants" and
the potential that other claims could fall within the definition,
the PD Committee's counsel contacted the Debtors twice and sought
confirmation that the Application's intent was to seek the
appointment of a legal representative solely for future asbestos
personal injury claimants. The PD Committee asked the Debtors to
make the necessary modifications.
When contacted, the Debtors' counsel was not able to confirm or
deny that the Futures Representative would only be responsible
for future asbestos personal injury claims and stated that the
issue had not been decided. Despite the two inquiries, the
Debtors failed to share with the PD Committee what future claims
would fall within the Futures Representative's responsibilities.
As a result, the PD Committee has been unable to assess Mr.
Hamlin's qualifications or his disinterestedness in light of the
potential that the representation would encompass a variety of
claims and may create conflicts among the future claimants.
Mr. Tacconelli also notes that, as the District Court has
withdrawn its reference as to all personal injury claims, the PD
Committee questions whether it is appropriate for the Application
to have been filed with the Bankruptcy Court, rather than the
District Court.
(4) Unofficial Committee
Members of an Unofficial Creditors' Committee -- D.K. Acquisition
Partners, L.P., Bear, Stearns & Co. Inc., Fernwood Associates,
L.P. and Deutsche Bank Trust Company Americas -- are surprised
that the Debtors want to appoint Mr. Hamlin, an individual "who,
for almost two years, has served as an intimate advisor to the
District Court."
Joanne B. Wills, Esq., at Klehr, Harrison, Harvey, Branzburg &
Ellers LLP, asserts that Mr. Hamlin is not, as required by the
Bankruptcy Code, disinterested, and his appointment as an
advocate on behalf of future asbestos claimants conflicts sharply
with his past and future role as an advisor to the District
Court.
If the Debtors' Application were granted, Ms. Wills points out
that a key constituency in these bankruptcy proceedings would be
represented by a person who has enjoyed -- and apparently will
continue to enjoy -- unparalleled access to and influence with
the District Court on the very same issues he will be called upon
to advocate on the future asbestos claimants' behalf. Given Mr.
Hamlin's role in the Debtors' cases and his close relationship
with the District Court, the fact that the Debtors would even
seek to have Mr. Hamlin appointed to such a powerful position as
Futures Representative is shocking. The Debtors' conduct raises
serious doubts in the Committee's collective mind, not only
concerning the Debtors' judgment, but also the fairness and
transparency of these proceedings. As Judge Henry Friendly
observed, "the conduct of bankruptcy proceedings not only should
be right but must seem right." The Application is deficient on
both counts and should be denied.
The Unofficial Committee agrees with the Third Circuit Court of
Appeals that "it is important that [asbestos claimants] have a
representative to protect their interests in any discharge of
[debts]." Such an appointment, however, must meet the
requirements of Section 327 of the Bankruptcy Code and the
ethical rules governing Mr. Hamlin's conduct as an attorney. Ms.
Wills argues that Mr. Hamlin's appointment as Futures
Representative would meet neither.
The Bankruptcy Code's Requirements
The Bankruptcy Code governs the employment of professional
persons in all bankruptcy cases. Section 327 provides that the
trustee or debtor-in-possession "may employ one or more
attorneys, accountants, appraisers, auctioneers, or other
professional persons, that do not hold or represent an interest
adverse to the estate, and that are disinterested persons, to
represent or assist the trustee in carrying out the trustee's
duties under [the Bankruptcy Code]." The term "disinterested
person" is defined under Section 101(14) as a person who, among
other things, "does not have an interest materially adverse to
the interest of the estate or of any class of creditors or equity
security holders, by reason of any direct or indirect
relationship to, connection with, or interest in, the debtor
. . . for any other reason."
Unlike "disinterested person," the term "adverse interest" is not
defined in the Bankruptcy Code. But most courts have defined
adverse interest "to hold or represent an interest adverse to the
estate" as either:
"(1) to possess or assert any economic interest that
would tend to lessen the value of the bankruptcy
estate or that would create either an actual or
potential dispute in which the estate is a rival
claimant; or
(2) to possess a predisposition under circumstances that
render such a bias against the estate."
In addition, "having" an interest adverse to the estate and
"representing" an interest adverse to the estate are identical
considerations. Therefore, the Bankruptcy Code prevents a party
from occupying two possibly conflicting roles.
The "disinterested person" requirement is not limited to those
directly employed by the debtor or trustee. Rather, it extends
to professionals connected to the bankruptcy. It has been held
to apply to the appointment of examiners and to the retention of
counsel by creditors' committees.
When the District Court appointed Mr. Hamlin as its consultant in
five asbestos cases, which includes the Debtors' case, on
December 28, 2001, the grant of authority provided to Mr. Hamlin,
as well as the other Consultants, was extremely broad. As the
District Court stated, the purpose of the "Consultants is to
advise the Court and to undertake [responsibilities, including by
way of example and not limitation, mediation of disputes, holding
case management conferences, and consultation with
counsel. . . ." The District Court described the Consultants as
"functioning in a manner in all respects similar to examiners as
provided for in the Bankruptcy Code".
Pursuant to the Appointment Order, Mr. Hamlin, as well as the
other Consultants, also was delegated "certain authority to hear
matters and to advise the District Court on issues that may arise
in these five large Chapter 11 cases." The Appointment Order
provided that the District Court could, "without further notice,
appoint any of the Court Appointed Consultants to act as a
Special Master to hear any disputed matter and to make a report
and recommendation to the Court on this disposition of such
matter."
In his role as Consultant, Mr. Hamlin participated materially in
the asbestos cases as an advisor to the District Court. Mr.
Hamlin's time records show that, over the course of the past 22
months, he has been deeply involved in the Debtors' case and his
activities included several meetings with the District Court and
the other Consultants and the drafting of a memorandum relating
to the propriety of certain motions filed by interested parties.
Given this, Ms. Will says, it cannot reasonably be disputed that
Mr. Hamlin has had unparalleled access to the District Court, and
has had, and continues to have, influence with the District Court
and the District Court's decision-making process not shared by
the Unofficial Committee or, presumably, by any other party to
these proceedings.
Minimizing Hamlin's Role
Nevertheless, the Unofficial Committee observes that Mr. Hamlin's
role as an advisor to the District Court garnered little more
than a passing reference by the Debtors in their Application to
have Mr. Hamlin appointed as a partisan advocate for future
asbestos claimants. The only mention of Mr. Hamlin's role as a
Consultant is buried within the section of the Application
dedicated to Mr. Hamlin's qualifications and in the section
discussing Mr. Hamlin's alleged disinterestedness. The Debtors'
attempt to minimize Mr. Hamlin's past and continuing role as an
advisor to the District Court is not surprising, given that Mr.
Hamlin's prior and continuing role as a Consultant disqualifies
him from serving as the Futures Representative.
Ms. Wills tells the Court that the Unofficial Committee was not
privy to the process by which the Debtors determined to seek the
appointment of Mr. Hamlin as Futures Representative. As a
result, the Unofficial Committee has served discovery requests
and subpoenas, seeking documents and depositions from the Debtors
and others, to ascertain why Mr. Hamlin was selected and the
steps that were taken by Debtors in coming to their decision.
Having fulfilled this role for almost two years, Mr. Hamlin
simply cannot now act as a partisan advocate for future asbestos
claimants -- a group whose interests clearly are adverse to the
Debtors' direct and immediate stakeholders and perhaps the
Debtors themselves. As Futures Representative, Mr. Hamlin will
be duty bound to see that the future asbestos claimants receive
the greatest consideration possible, even if such consideration
comes at the expense of other creditor classes or subjects the
Debtors to onerous obligations. Thus, on issues like discharge,
the setting of bar dates, the estimation of future claims,
substantive consolidation, channeling injunctions and successor
liability, Mr. Hamlin will -- as he must -- forcefully advocate
the interests of future asbestos claimants.
Ms. Wills asserts that it is not reasonable to believe that the
knowledge, insight, and potential advantage Mr. Hamlin has gained
based on his role as a close advisor to the District Court simply
can be set aside every time he turns to the role of acting as a
partisan advocate for his constituents. As troubling is a
"certain perception" that Mr. Hamlin's role as District Court
advisor could play a substantial role in the effectiveness of his
position as Futures Representative. Having approached the
question indirectly, Ms. Wills says that, if Mr. Hamlin were to
be appointed Futures Representative, he would be in a position to
exploit his close connection with the District Court -- and his
role in having helped the District Court evaluate the issues in
the Debtors' cases -- in his new role as the future claimants'
advocate, all to the detriment of other creditor classes and to
the perception of fairness and impartiality which is critically
important to the functioning of the judicial process in the
Debtors' cases.
The Rules of Professional Conduct
The Code of Conduct for Judicial Employees makes clear that those
"who occupy positions with functions and responsibilities similar
to those for a particular position identified in this code should
be guided by the standards applicable to that position, even if
the position title differs." While the role Mr. Hamlin has
fulfilled as District Court Consultant may not technically be
that of a law clerk or staff attorney, he clearly has performed
similar functions for the District Court. As with a law clerk,
Mr. Hamlin is a "sounding board for tentative opinions and legal
researcher who seek the authorities that affect [District
Court's] decisions," Ms. Wills states, and Mr. Hamlin has been
and will continue to be "privy to the judge's thoughts in a way
that other parties may not be."
Mr. Hamlin should be subject to the same ethical considerations
as those faced by former judicial law clerks or other court
personnel. Those considerations would not permit Mr. Hamlin to
assume the role of Futures Representative. Mr. Hamlin's
involvement as an advocate now to a party in a case in which he
has been active as an advisor to the District Court clearly would
be proscribed by New Jersey's and Delaware's ethical rules. Mr.
Hamlin's appointment as Futures Representative would require the
District Court's recusal.
Each of the Unofficial Committee members holds claims against the
Debtors arising under a $250,000,000 credit facility dated
May 14, 1998 and a $250,000,000 revolving credit facility dated
May 5, 1999. As of August 2003, the fixed, liquidated aggregate
claim of the Unofficial Committee members against the Debtors,
exclusive of accrued and accruing postpetition date interest, was
estimated to be not less than $150,000,000. This estimate
includes outstanding principal as well as estimated prepetition
interest and facility fees.
Debtors Respond
Faced by near unanimous opposition, the Debtors execute a
tactical retreat. They urge Judge Fitzgerald to accept the U.S.
Trustee's suggestion that the Application be held in abeyance for
the present.
David W. Carickhoff, Jr., Esq., at Pachulski Stang Ziehl Young
Jones & Weintraub PC, says that the Debtors' search for a
candidate for Futures Representative has been made difficult by
the need to propose a "consensus candidate" -- a need that often
conflicts with the divergent interests of the various
constituencies in these cases. This difficulty is further
compounded by the fact that only a handful of individuals have
experience with the role in asbestos cases, and still further
because those individuals have track records in other cases that
the different parties in these cases may assess in different
ways.
Because the principal activities in the Debtors' cases have, for
some time, focused on litigation and plan formulation has not
appeared to be feasible, there has been only mild pressure to
appoint a Futures Representative. More recent discussions of
case resolution, while unsuccessful to date, have highlighted the
need to get a Futures Representative in place.
Mr. Carickhoff says that, while not all constituencies committed
to support the Application, Mr. Hamlin appeared to be the best
candidate currently available.
While this Application was pending, Mr. Carickhoff relates that
the Debtors learned of a motion to recuse Judge Wolin in the
Owens Corning case, which was predicated upon the allegation that
certain creditors were unaware of Mr. Hamlin's role as a Futures
Representative in another asbestos case, and that this activity
created conflicts of interest.
Mr. Carickhoff dismisses the allegations of the recusal motion as
having "no adverse bearing upon the decision to seek Mr. Hamlin's
appointment in the Grace cases." Mr. Hamlin's experience as
Futures Representative in the G-I Holdings case could be a
positive, rather than a negative, factor for his service in a
comparable role in the Debtors' cases. In fact, the W.R. Grace
Debtors say, they have no direct knowledge that Mr. Hamlin's
acted as an advisor to Judge Wolin in their cases. Mr. Hamlin
says he's disinterested and W.R. Grace has no reason to believe
otherwise. (W.R. Grace Bankruptcy News, Issue No. 49; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
XML GLOBAL TECH.: Completes Sale of All Assets to Xenos Group
-------------------------------------------------------------
XML Global Technologies, Inc., (OTCBB:XMLG) has completed the sale
of substantially all of its assets to Xenos Group, Inc., of
Toronto, Ontario (TSX:XNS).
The transaction was approved by the Company's shareholders at the
annual meeting which was held on November 14, 2003.
As a result of the transaction, XML Global has transferred
substantially all of its business assets to Xenos Group, Inc. In
consideration of the assets, Xenos Group paid a combination of
$1,250,000 in cash, subject to closing adjustments, and 1,000,000
shares of Xenos Group common stock, which is traded on the TSX.
Xenos Group also assumed current accounts payable. Xenos Group
will continue to maintain the offices previously occupied by XML
Global in Vancouver, British Columbia, for an undetermined period
of time.
XML Global has agreed to pay to a group of developers who were
responsible for developing the Transform Kernel technology a total
of $250,000 from the cash proceeds of the sale and has agreed to
assign to the developer group an aggregate of 250,000 shares of
the Xenos Group common stock issued as part of the purchase price.
Of the cash payable to the developers, $200,000 was paid at
closing and the remaining $50,000 was paid into escrow to be
delivered to the developers after 12 months, subject to certain
conditions.
All 1,000,000 shares of Xenos Group common stock issued as part of
the purchase price for the XML Global assets, including the
250,000 shares assigned to the developer group, will be held in
escrow for a period of 12 months following the closing date. Xenos
Group has agreed to pay a price guarantee, not to exceed
C$1,340,000, at the end of the 12-month period if its shares of
common stock are trading below C$3.50 per share on the TSX at the
end of the 12-month escrow period.
Peter Shandro, Chairman of the Board of XML Global, stated: "We
are extremely pleased to have been able to complete the
transaction with Xenos Group. Our board and shareholders agreed
that Xenos Group was in a much stronger position to commercially
develop our technology, and through our holdings of Xenos Group
common stock, our shareholders have been given an opportunity to
participate indirectly in whatever future success Xenos Group is
able to demonstrate, and as continuing shareholders of XML Global,
they will share in whatever future opportunities we are able to
develop going forward."
XML Global stated that it continues to explore new opportunities,
including business combinations, but at the present time there
exist no agreements, understanding or arrangements with respect to
any particular transaction.
* * *
As previously reported, XML Global's independent auditor's report
stated that XML's consolidated financial statements for the year
ending June 30, 2002 have been prepared assuming that the Company
will continue as a going concern. However, the Company has
incurred losses since inception and has an accumulated deficit.
These conditions raise substantial doubt about its ability to
continue as a going concern.
It has incurred costs to design, develop and implement search
engine and electronic commerce applications and to grow its
business. As a result, it has incurred operating losses and
negative cash flows from operations in each quarter since
commencing operations. As of September 30, 2002 the Company had an
accumulated deficit of $12,860,900.
At September 30, 2002 XML's cash funds are insufficient to fund
operations through the end of fiscal 2003 based on historical
operating performance. In order for the Company to maintain its
operations it will have to seek additional funding, generate
additional sales or reduce its operating expenses, or some
combination of these. At current and planned expenditure rates,
taking into consideration cash received from the first part of the
Paradigm financing, current reserves are sufficient to fund
operations only through December 2002.
XO COMMS: No Shares Were Authorized for Issue in Rights Offering
----------------------------------------------------------------
XO Communications, Inc. announced that, on Friday, November 21,
2003, The Depository Trust Company electronically credited shares
of XO's common stock, $0.01 par value to the accounts of certain
subscribing holders of the first stage of XO's rights offering in
error.
No shares of Common Stock have been issued by XO with respect to
the rights offering, nor did XO authorize The Depository Trust
Company to credit any shares of Common Stock to any subscribing
holder. XO has instructed The Depository Trust Company to rescind
these credits and notify such subscribing holders that any
transactions with respect to such Common Stock should be
considered null and void.
The second stage of the rights offering is expected to commence in
early December. As previously announced, the Common Stock
subscribed for in both stages of the offering will be issued after
the conclusion of the second stage of the rights offering in early
January 2004. The rights offering is being made pursuant to the
Company's Chapter 11 plan of reorganization, which was confirmed
by the Bankruptcy Court, and the proceeds received by XO from the
rights offering will be used to retire existing secured debt.
XO is a leading broadband telecommunications services provider
offering a complete portfolio of telecommunications services,
including: local and long distance voice, Internet access, Virtual
Private Networking, Ethernet, Wavelength, Web Hosting and
Integrated voice and data services.
XO has assembled an unrivaled set of facilities-based broadband
networks and Tier One Internet peering relationships in the United
States. XO currently offers facilities-based broadband
telecommunications services in more than 60 markets throughout the
United States.
* Meetings, Conferences and Seminars
------------------------------------
December 1-2, 2003
RENAISSANCE AMERICAN MANAGEMENT, INC.
Distressed Investing
The Plaza Hotel, New York City, NY
Contact: 800-726-2524 or
http://renaissanceamerican.com
December 3-7, 2003
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
La Quinta, La Quinta, California
Contact: 1-703-739-0800 or
http://www.abiworld.org
February 5-7, 2004
AMERICAN BANKRUPTCY INSTITUTE
Rocky Mountain Bankruptcy Conference
Westin Tabor Center, Denver, CO
Contact: 1-703-739-0800 or
http://www.abiworld.org
March 5, 2004
AMERICAN BANKRUPTCY INSTITUTE
Bankruptcy Battleground West
The Century Plaza, Los Angeles, CA
Contact: 1-703-739-0800 or
http://www.abiworld.org
April 15-18, 2004
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
J.W. Marriott, Washington, D.C.
Contact: 1-703-739-0800 or
http://www.abiworld.org
April 29-May 1, 2004
ALI-ABA
Partnerships, LLCs, and LLPs: Uniform Acts, Taxation,
Drafting, Securities, and Bankruptcy
Fairmont Hotel, New Orleans
Contact: 1-800-CLE-NEWS or
http://www.ali-aba.org
May 3, 2004
AMERICAN BANKRUPTCY INSTITUTE
New York City Bankruptcy Conference
Millennium Broadway Conference Center, New York, NY
Contact: 1-703-739-0800 or
http://www.abiworld.org
June 2-5, 2004
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort, Traverse City, MI
Contact: 1-703-739-0800 or
http://www.abiworld.org
June 24-26,2004
AMERICAN BANKRUPTCY INSTITUTE
Hawaii Bankruptcy Workshop
Hyatt Regency Kauai, Kauai, Hawaii
Contact: 1-703-739-0800 or
http://www.abiworld.org
July 15-18, 2004
AMERICAN BANKRUPTCY INSTITUTE
The Mount Washington Hotel
Bretton Woods, NH
Contact: 1-703-739-0800 or
http://www.abiworld.org
July 28-31, 2004
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz-Carlton Reynolds Plantation, Lake Oconee, GA
Contact: 1-703-739-0800 or
http://www.abiworld.org
September 18-21, 2004
AMERICAN BANKRUPTCY INSTITUTE
Southwest Bankruptcy Conference
The Bellagio, Las Vegas, NV
Contact: 1-703-739-0800 or
http://www.abiworld.org
October 10-13, 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
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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
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institutional services, contact Scott Johnson at 1-212-247-5300.
To view our research and find out about private client accounts,
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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
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*** End of Transmission ***