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/raid1/www/Hosts/bankrupt/TCR_Public/031204.mbx T R O U B L E D C O M P A N Y R E P O R T E R Thursday, December 04, 2003, Vol. 7, No. 240 Headlines ABN AMRO MORTGAGE: Fitch Rates 2 Certs. Classes at Low-B Levels ACANDS INC: Creditors Must File Non-Asbestos Claims by Dec. 8 AIR CANADA: Transamerica Aviation Wants to Retrieve Aircraft AM COMMS: Will Auction-Off Assets Today at 10 A.M. in Delaware AMERCO: Court Okays Huron as Equity Committee's Fin'l Advisors AMERICA WEST: Reports 5% Year-Over-Year Increase in Nov. Traffic AMERICAN PLUMBING: Has Until December 4 to Decide on Leases ANC RENTAL: Bringing-In Anderson Kill as Insurance Counsel ARMSTRONG: Adjourns Special Shareholders' Meeting to January 7 ASBURY AUTOMOTIVE: Terminates Proposed Pact to Acquire Bob Baker ATLANTIC COAST: Cancels Mesa Consent Solicitation Record Date BALDWIN CRANE: Creditors Must File Claims by December 22, 2003 BIOGEN IDEC: S&P Ups Credit & Sr. Unsecured Debt Ratings to BB+ BLADES BOARD: Case Summary & 20 Largest Unsecured Creditors BOMBARDIER RECREATIONAL: S&P Assigns B+ Long-Term Credit Rating BRIDGE: Plan Committee Sues AmEx to Recover Close to $2 Million BVS MOTELS INC: Case Summary & 4 Largest Unsecured Creditors CALICO COMMERCE: Will Make Initial Cash Liquidating Dividend CHAMPIONSHIP AUTO: OWRS Merger Conditions May Not Be Satisfied CHANNEL MASTER: Panel Turns to J.H. Cohn for Financial Advice CHARTER: Appoints Derek Chang Executive VP, Finance and Strategy CHIQUITA BRANDS: Sets Analyst and Investor Day for Dec. 16, 2003 CIT RV TRUST: S&P Takes Rating Actions on Various Trust Series CITIGROUP MORTGAGE: Fitch Rates Class B-4 and B-5 Notes at BB/B CMS ENERGY: $225 Mil. Preferred Issue Gets Fitch's B- Rating COASTAL BANCORP: S&P Puts BB- Counterparty Rating on Watch Pos. CONNECTICARE: Counterparty & Fin'l Strength Ratings Down to B+ CONSOLIDATED FREIGHTWAYS: Selling Provo Assets at Dec 17 Auction CONSOLIDATED FREIGHTWAYS: Augusta Facility Up on Auction Block CONSOLIDATED FREIGHTWAYS: Selling Atlanta Distribution Facility CONSOLIDATED FREIGHTWAYS: Auctioning-Off Dallas Distr. Facility CONSOLIDATED FREIGHTWAYS: Selling Wilson Facility on December 17 CONSOLIDATED FREIGHTWAYS: Trenton Facility for Sale on Dec. 17 COVANTA ENERGY: Selling Energy & Water Businesses to Danielson DAISYTEK INT'L: Files Plan and Disclosure Statement in Texas DDI CORPORATION: S.D.N.Y. Court Confirms Plan of Reorganization EL PASO: Amends Exchange Offer for 9.00% Equity Security Units ENRON CORP: Proposes Uniform Smith Street Bidding Procedures ENRON CORP: Proposes to Compromise Potential Employee Claims EXIDE TECHNOLOGIES: Court Okays S&P Consulting as Fin'l Advisor FAO INC: Will File for Chapter 22 Bankruptcy Later This Week FIRST HORIZON: Fitch Rates Class B-4 & B-5 Certificates at BB/B FLOWSERVE: Proposes to Borrow from the European Investment Bank FRIEDE GOLDMAN: Co.'s Ability to Continue Operations Uncertain GENERAL CHEMICAL: Case Summary & 20 Largest Unsecured Creditors HARTMARX CORP: Michael F. Anthony Elected to Board of Directors HAYES LEMMERZ: Court Approves Plan Distribution Procedures HOLIDAY RV: U.S. Trustee Names 4-Member Creditors' Committee HYTEK: Revises Management Structure and Reduces Workforce by 10% INFINIA AT FLAGSTAFF: Case Summary & Largest Unsecured Creditors INFRAWORKS CORP: Successfully Emerges from Chapter 11 Bankruptcy INTERNATIONAL WIRE: S&P Yanks Credit & Debt Ratings Down to D ITC DELTACOM: Annual Shareholders' Meeting Set for December 18 JA JONES: Spriggs & Hollingsworth Serving as Litigation Counsel JACUZZI BRANDS: Will Complete Transactions Under SEC Rule 10b5-1 JARDEN CORP: Effects 3-For-2 Stock Split & Closes Exchange Offer KAISER ALUMINUM: Wants Clearance for Reliance Release Agreement KB HOME: Reports Preliminary Fourth Quarter 2003 Net Orders KMART: Court Disallows $84 Million of Revolving Credit Claims LENNAR CORP: Reports Improved New Home Performance for Q4 2003 LEVI STRAUSS: Fitch Junks Ratings as Alvarez & Marsal is Hired LIFEPOINT HOSPITALS: S&P Ups Rating to BB over Improved Profile LMIC INC: Capital Deficits and Losses Raise Going Concern Doubt LOUISIANA-PACIFIC CORP: Modifies Tender Offer for 10.875% Notes MANITOWOC COMPANY: Terry D. Growcock Establishes 10b5-1 Plan MARINER HEALTH: Divests Two Nursing Facilities in Louisiana MERCURY AIR: Will Re-Audit Financials for FYs 2002 and 2001 METROCALL INC: Will Redeem $20-Mil. of Series A Preferred Shares MILACRON INC: Bank Group Relaxes Key Terms of Credit Agreement MIRANT CORP: Wants Go-Signal to Assign Contracts to Mirant Asia MSX INT'L: Names Robert Netolicka as Chief Executive Officer NATIONAL BENEVOLENT: Fitch Downgrades $149MM Debt Rating to DDD NAT'L WATERWORKS: S&P Affirms Low-B Ratings with Stable Outlook ORTHOFIX: S&P Rates Corporate Credit & Bank Loan Ratings at BB- OWENS CORNING: Seeks to Block Chapter 11 Trustee Appointment PACIFIC GAS: Urges CPUC to Adopt Settlement Pact Without Changes PG&E NAT'L: NEG Solicitation Exclusivity Intact Until March 19 QUINTEK TECHNOLOGIES: Secures $500K Financing from KMVI, LLC RAINBOW MEDIA: S&P Rates $775 Million Bank Facilities at BB+ SAMSONITE CORP: Holding Third-Quarter Conference Call on Dec. 11 SATURN (SOLUTIONS): Continues Report Filing Default Status SHGC LTD: Voluntary Chapter 11 Case Summary SIMMONS CO: Planned $340M Senior Sub. Notes Get S&P's B- Rating SIX FLAGS INC: S&P Rates $300 Million Senior Notes Issue at B- SLATER STEEL: Tomorrow is the General Claims Bar Date SOLUTIA: Rejects Pharmacia Settlement Costs of 2 Asbestos Cases SWEETHEART HOLDINGS: Year-End Results Enter Positive Territory THAXTON GROUP: US Trustee Appoints Official Creditors' Committee UNITED AIRLINES: Wants Marshall & Ilsley to Turn-Over Assets UNITED RENTALS: Noteholders Purchase Additional 1-7/8% Notes VENTAS INC: Improved Credit Profile Spurs S&P's Positive Outlook VENTAS: Declares Regular Quarterly Dividend of $0.2675 Per Share VIVA INT'L: Lacks Working Capital to Continue Operations WESTERN FIN'L: Fitch Affirms Ratings & Changes Outlook to Pos. WESTWIND GROUP: Section 341(a) Meeting to Convene on December 18 WOODWORKERS WAREHOUSE: Case Summary & Largest Unsecured Creditors WORLDCOM INC: Salomon Smith Barney Claims Going to Arbitration W.R. GRACE: Peninsula Investment Discloses 6.16% Equity Stake ********* ABN AMRO MORTGAGE: Fitch Rates 2 Certs. Classes at Low-B Levels --------------------------------------------------------------- ABN AMRO Mortgage Corporation's multi-class mortgage pass-through certificates, series 2003-12, are rated by Fitch Ratings as follows: -- $288,573,262 classes 1A, 2A, 3A1, 3A2, A-P, and R (senior certificates) 'AAA'; -- $4,307,000 class M certificates 'AA'; -- $1,783,000 class B-1 certificates 'A'; -- $891,000 class B-2 certificates 'BBB'; -- $594,000 privately offered class B-3 certificates 'BB'; -- $445,000 privately offered class B-4 certificates 'B'. The privately offered class B-5 certificates are not rated by Fitch. The 'AAA' rating on the senior certificates reflects the 2.85% subordination provided by the 1.45% class M, 0.60% class B-1, 0.30% class B-2, 0.20% privately offered class B-3, 0.15% privately offered class B-4 and 0.15% privately offered class B-5. Fitch believes the amount of credit enhancement will be sufficient to cover credit losses, including limited bankruptcy, fraud and special hazard losses. The ratings also reflect the high quality of the underlying collateral originated by ABN AMRO Mortgage Group, Inc., the integrity of the legal and financial structures and the servicing capabilities of Washington Mutual Bank, FA (rated 'RPS2+' by Fitch). The trust is secured by conventional, 30-year fixed-rate mortgage loans, which are separated into three cross-collateralized groups or 'tracks' by the underlying loans' interest rate. As of Nov. 1, 2003 (the cut-off date), the aggregate principal balance is $297,039,584. Track 1 collateral consists of recently originated, conventional, fixed-rate, fully amortizing, first lien, one- to two-family residential mortgage loans, with remaining terms to stated maturity ranging from 353 to 360 months. The weighted average original loan-to-value ratio of the track is approximately 67.38%; approximately 0.50% of the mortgage loans have an OLTV greater than 80%. The weighted average coupon of the mortgage loans is 5.62% and the weighted average FICO score is 742. Cash-out and rate/term refinance loans represent 11.20% and 44.20% of the track, respectively. The states that represent the largest geographic concentration are California (49.60%), New York (8.50%), and Illinois (6.30%). All other states represent less than 5% of the outstanding balance of Track 1. Track 2 collateral consists of recently originated, conventional, fixed-rate, fully amortizing, first lien, one- to two-family residential mortgage loans, with remaining terms to stated maturity ranging from 348 to 360 months. The weighted average OLTV of the track is approximately 70.10%; approximately 1.60% of the mortgage loans have an OLTV greater than 80%. The WAC of the mortgage loans is 6% and the weighted average FICO score is 740. Cash-out and rate/term refinance loans represent 13.90% and 30% of the track, respectively. The states that represent the largest geographic concentration are California (50%), New York (6.40%), and Florida (5.30%). All other states represent less than 5% of the outstanding balance of Track 2. Track 3 collateral consists of recently originated, conventional, fixed-rate, fully amortizing, first lien, one- to two-family residential mortgage loans, with remaining terms to stated maturity ranging from 348 to 360 months. The weighted average OLTV of the track is approximately 73.39%; approximately 3.20% of the mortgage loans have an OLTV greater than 80%. The WAC of the mortgage loans is 6.37% and the weighted average FICO score is 741. Cash-out and rate/term refinance loans represent 12.30% and 19.40% of the track, respectively. The states that represent the largest geographic concentration are California (51.28%), Virginia (5.94%), and Illinois (5.15%). All other states represent less than 5% of the outstanding balance of Track 3. None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. AAMG originated all of the loans. U.S. Bank, N.A. will serve as trustee. AMAC, a special purpose corporation, deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. For federal income tax purposes, election will be made to treat the trust as three real estate mortgage investment conduits. ACANDS INC: Creditors Must File Non-Asbestos Claims by Dec. 8 ------------------------------------------------------------- The United States Bankruptcy Court for the District of Delaware, fixes December 8, 2003, as the last date by which general unsecured non-asbestos claims may be filed against AcandS, Inc. Claim holders are required to submit their proofs of claim. A proof of claim form may be downloaded from the AcandS Bankruptcy Web site, or obtained by calling the AcandS Claims helpline at 1-888-455-9302. Claim forms must be delivered to: If sent by mail, to: The Garden City Group, Inc. Claims Agent for Acand S, Inc. PO Box 9000-6029 Merrick, New York 11566-9000 If sent by hand-delivery or overnight mail, to: The Garden City Group, Inc. Claims Agent for AcandS, Inc. 105 Maxess Road Melville, New York 11747 AcandS, Inc., was an insulation contracting company, primarily engaged in the installation of thermal and mechanical insulation. In later years, the Debtor also performed a significant amount of asbestos abatement and other environmental remediation work. The Company filed for chapter 11 protection on September 16, 2002, (Bankr. Del. Case No. 02-12687). Laura Davis Jones, Esq., at Pachulski Stang Ziehl Young Jones & Weintraub represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of over $100 million. AIR CANADA: Transamerica Aviation Wants to Retrieve Aircraft ------------------------------------------------------------ On behalf of Transamerica Aviation, LLC and Wells Fargo Bank Northwest, National Association, Carter A. White, Senior Vice President of Transamerica Equipment Financial Services, reports several breaches by Air Canada under the aircraft lease agreement. Mr. White tells Mr. Justice Farley that the Airbus A320-200 airframe, bearing manufacturer's serial number 283 and Canadian registration mark C-FLSI, that Air Canada leased from Transamerica was due for a heavy maintenance check in February 2003. However, Air Canada opted to utilize its tolerance window under its maintenance program and continued to operate the aircraft without performing the heavy maintenance check that was due. When it filed for CCAA protection, Air Canada had the right pursuant to the Initial CCAA Order to suspend or terminate the aircraft lease. But it did not do so. Instead, Air Canada continued to operate the aircraft without making any payments or performing the maintenance check due in February. Wells Fargo is the owner trustee of the aircraft. Wells Fargo purchased the aircraft from Aircraft Lease Portfolio Securitisation 92-1 Limited, the original lessor, on December 20, 2002. Transamerica is the beneficial owner of the aircraft pursuant to a Trust Agreement with Wells Fargo. According to Mr. White, the Initial CCAA Order required Air Canada to continue to maintain, "service, repair and overhaul all aircraft . . . engine and parts" in accordance with the higher of Air Canada's standards before April 1, 2003 and accepted industry standards and practice. But Air Canada did not comply with the Court Order and continued to operate the aircraft in regular service to the outermost edge of its maintenance tolerance window, thus compounding wear and tear damage to the aircraft. On July 4, 2003, the aircraft was grounded and kept outdoors at Vancouver International Airport. The aircraft was later cannibalized. The engines and some parts were removed and reinstalled in other airplanes. In September 2003, Air Canada purported to terminate the aircraft lease effective September 20, 2003. Wells Fargo advised Air Canada of its intention to conduct a final inspection of the aircraft and its records. However, Air Canada did not cooperate with the inspectors. Mr. White relates that Transamerica and Wells Fargo are currently attempting to negotiate a Ferry Flight Agreement with Air Canada so that the aircraft may be ferried to a proper storage location in Arizona in the United States. Mr. White informs the CCAA Court that Air Canada currently owes $1,710,000 for the use of the aircraft since April 30, 2003 and its component, as of September 20, 2003. Air Canada also owes $2,765,540 in reconciliation payments arising as a result of the continued use since April 30, 2003 of the airframe, engines and auxiliary power unit without performing the required heavy maintenance. Transamerica and Wells Fargo ask Mr. Justice Farley to compel Air Canada to return the aircraft in airworthy condition and pay the outstanding amounts. (Air Canada Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) AM COMMS: Will Auction-Off Assets Today at 10 A.M. in Delaware -------------------------------------------------------------- AM Communications, Inc., and its debtor-affiliates seek to sell substantially all of their assets free and clear of liens and encumbrances. Pursuant to three asset-purchase agreements, the Debtors agreed to sell their assets to three purchasers, subject to higher and better offers and the approval of the U.S. Bankruptcy Court for the District of Delaware. The base purchase prices for each set of assets are: $4.0 million for the company's network monitoring and management products division, $2.0 million for the company's cable television and broadband communications construction service operations, $3.7 million for the company's subscriber fulfillment, engineering design, construction and installation services. An auction to flush-out the highest and best bid for each set of assets will convene today at 10:00 a.m. Eastern Time at the offices of the debtors' counsel, The Bayard Firm, located at 222 Delaware Avenue, Suite 900, Wilmington, Delaware, 19899. The Honorable Peter J. Walsh will hold a hearing to consider the approval of the Sale of the Assets tomorrow at 3:30 p.m. Headquartered in Quakertown, Pennsylvania, AM Communications, Inc., and its debtor-affiliates provide services to the television, cable and wireless industry, their services include installation and maintenance of television lines and wireless systems in the Northeastern and Southeastern parts of the U.S. The Company filed for chapter 11 protection on August 28, 2003 (Bankr. Del. Case No. 03-12689). Steven M. Yoder, ESq., Neil B. Glassman, Esq., and Christopher A. Ward, Esq., at The Bayard Firm represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $29,886,155 in total assets and $25,641,048 in total debts. AMERCO: Court Okays Huron as Equity Committee's Fin'l Advisors -------------------------------------------------------------- U.S. Bankruptcy Court Judge Zive authorizes the Equity Committee, appointed in the AMERCO Debtors' bankruptcy proceedings, to retain Huron Consulting, as its forensic financial investigators and advisors, nunc pro tunc to October 11, 2003, provided that the combined fees of Huron and Providence Capital, Inc. will not exceed $100,000 in any month. The averaging of fees by Huron or Providence over a period of months or over the length of their retention is not permitted. However, Judge Zive clarifies that the Equity Committee has the right to seek increases in the $100,000 monthly cap upon an adequate showing of good cause. * * * In its capacity as the Equity Committee's advisor, Huron will: (a) assist in the review and assessment of the financial and accounting information or analysis thereof provided by the financial advisors for the Debtors and the Creditors Committee; (b) assist in the analysis of the reasonableness of the financial projections for the Debtors and their subsidiaries; (c) assist in the analysis of the level of debt that can be reasonably supported by the Debtors' business operations; (d) assist in the analysis of the reasonableness of Republic West's insurance reserves; (e) assist in the assessment of the Debtors' litigation involving PricewaterhouseCoopers; and (f) render other advisory services as may from time to time be agreed on by the Equity Committee, its legal advisors and Huron. Huron will seek compensation based on the current hourly rates of its professionals. It will also seek reimbursement of reasonable out-of-pocket expenses. Currently, Huron's hourly rates are: Managing Directors $600 Directors 450 Managers 350 Associates 250 Analysts 175 (AMERCO Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000) AMERICA WEST: Reports 5% Year-Over-Year Increase in Nov. Traffic ---------------------------------------------------------------- America West Airlines (NYSE: AWA) reported record traffic statistics for the month of November and year-to-date 2003. Revenue passenger miles for November 2003 were a record 1.7 billion, an increase of 5 percent from November 2002. Capacity for November 2003 was 2.3 billion available seat miles, up 1.2 percent from November 2002. The passenger load factor for the month of November was a record 74.0 percent vs. 71.3 in November 2002. Year-to-date load factor was a record 76.5 percent, up three points from 2002. Year-to-date RPMs were a record 19.5 billion, a 7.3 percent increase from 2002. Available seat miles increased 3.1 percent for the current year to 25.5 billion. "We are quite pleased with our Thanksgiving holiday passenger loads. In addition, we generated a new daily unit revenue record for America West this past Sunday, Nov. 30," said Scott Kirby, executive vice president, marketing and sales. "In December, we'll offer customers additional opportunities to take advantage of our low fares and outstanding operational performance with the start of our nonstop transcontinental flights between San Francisco and New York/JFK, as well as our first flights to Costa Rica in Central America, which began Monday, Dec. 1." The following summarizes America West's November and year-to-date traffic results for 2003 and 2002: Nov. 2003 Nov. 2002 % Change --------- --------- -------- Revenue Passenger Miles (000) 1,675,418 1,595,770 5.0 Available Seat Miles (000) 2,264,516 2,237,634 1.2 Load Factor (percent) 74.0 71.3 2.7 pts. YTD 2003 YTD 2002 % Change -------- -------- -------- Revenue Passenger Miles (000) 19,497,205 18,172,111 7.3 Available Seat Miles (000) 25,479,412 24,709,392 3.1 Load Factor (percent) 76.5 73.5 3.0 pts. Founded in 1983 and proudly celebrating its 20-year anniversary in 2003, America West Airlines (S&P, B Long-Term Corporate Credit Rating, Stable Outlook) is the nation's second largest low-fare airline and the only carrier formed since deregulation to achieve major airline status. America West's 13,000 employees serve nearly 55,000 customers a day in 92 destinations in the U.S., Canada and Mexico. AMERICAN PLUMBING: Has Until December 4 to Decide on Leases ----------------------------------------------------------- By order of the U.S. Bankruptcy Court for the Western District of Texas, American Plumbing and Mechanical Inc., and its debtor- affiliates obtained an extension of their lease decision period. The Court gives the Debtors until December 4, 2003 to decide whether to assume, assume and assign, or reject their unexpired nonresidential real property leases. Headquartered in Round Rock, Texas, American Plumbing & Mechanical, Inc. and its affiliates provide plumbing, heating, ventilation and air conditioning contracting services to commercial industries and single family and multifamily housing markets. The Company filed for chapter 11 protection on October 13, 2003 (Bankr. W.D. Tex. Case No. 03-55789). Demetra L. Liggins, Esq., at Winstead Sechrest & Minick P.C., represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $282,456,000 in total assets and $256,696,000 in total debts. ANC RENTAL: Bringing-In Anderson Kill as Insurance Counsel ---------------------------------------------------------- The ANC Rental Debtors and the Official Committee of Unsecured Creditors seek Judge Walrath's permission to employ Anderson Kill & Olick, P.C., nunc pro tunc to October 21, 2003, as special insurance counsel to both the Debtors and the Committee to evaluate and pursue the Debtors' insurance coverage claims. Anderson Kill is expected to: (1) advise the Debtors and the Committee regarding matters of the Debtors' insurance coverage available for payment of claims, including gaps in coverage, overlapping coverage provided by multiple carriers and availability of excess insurance coverage; (2) exchange correspondence and information with the Debtors' insurance carriers regarding claims and defenses and provide settlement analyses to the Debtors and the Committee; (3) advise the Debtors and the Committee regarding issues related to the Debtors' insurance coverage in connection with these Chapter 11 cases; and (4) if necessary, commence and conduct insurance coverage related litigation on behalf of the Debtors' estates. Elio Battista, Jr., Esq., at Blank Rome LLP, in Wilmington, Delaware, relates that Anderson Kill has experience in matters of this nature and character, and that the firm possesses substantial and well-known expertise in analyzing complex insurance coverage and recovery issues. Among other things, Anderson Kill successfully pursued insurance coverage on behalf of 10 major asbestos defendants, as well as a great many other insurance policyholder clients. Anderson Kill tried many major insurance coverage litigations on behalf of policyholders, and obtained billions of dollars in recoveries in well-publicized settlements in numerous other cases. Anderson Kill has extensive appellate experience in insurance coverage matters as well. The Debtors and the Committee believe that the services of Anderson Kill are both necessary and appropriate. Anderson Kill will be compensated in this manner: -- Anderson Kill will receive 35% of the first $2,500,000 in insurance recovery whenever it is actually received by the Debtors or any Reorganization Trust or successor; -- In addition: * if the matter continues for more than four months after October 31, 2003, then the firm will receive 10% of all recoveries actually received by the Debtors in excess of $2,500,000; and * if the matter continues for more than five months after October 31, 2003, then Anderson Kill will receive 15% of the recoveries actually received the Debtors in excess of $2,500,00. Thereafter, Anderson Kill's share of the recoveries actually received by the Debtors in excess of $2,500,000 will continue to increase 5% per month, capped at a limit of 33% of the total recovery actually received by the Debtors. Moreover, all costs and expenses will be the responsibility of the Debtors, but such costs will be "fronted" by Anderson Kill. The firm will carry a receivable for those costs and expenses until such time as the Trust has approximately $500,000 or more in cash on hand; once the Trust garners that cash, the Trust will promptly reimburse Anderson Kill for those costs and expenses. To the extent the Anderson Kill "receivable" remains unpaid for more than four months, the firm will be permitted to accrue interest on the unpaid receivable at the rate of 0.5% per month. All receivables will be treated pari passu with the other operational costs and expenses of the Trust and the Trust will be solely responsible for the cost and payment of all expert witness fees. The Anderson Kill attorneys who potentially may provide services to the Debtors and the Committee are: (1) Finley T. Harckham, (2) John N. Ellison, and (3) Mark D. Silverschotz. According to Mr. Battista, all three of these attorneys have extensive experience in insurance coverage litigation, including the interplay between bankruptcy law and insurance coverage law. This listing is not exclusive and other professionals may perform services for the Debtors and the Committee. Finely T. Harckman, Esq., an equity shareholder of Anderson Kill, assures the Court that: (1) Anderson Kill is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code and as referenced by Section 328(c), and holds no interest adverse to the Debtors and their estates for the matters for which Anderson Kill is to be employed; and (2) Anderson Kill has no connection to the Debtors, their creditors or their related parties. However, because of the Debtors' size, unbeknownst to Anderson Kill, it may now or, in the future, represent other creditors of the Debtors in other matters unrelated to these bankruptcies, Mr. Harckman says. Anderson Kill will supplement its affidavit if and when necessary to disclose any further relationships that require disclosure. The Debtors and the Committee are satisfied that Anderson Kill does not represent an interest adverse to the estate with respect to the matters for which Anderson Kill is to be employed. (ANC Rental Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., 215/945-7000) ARMSTRONG: Adjourns Special Shareholders' Meeting to January 7 -------------------------------------------------------------- Armstrong Holdings, Inc. (OTC Bulletin Board: ACKHQ), the parent company of Armstrong World Industries, Inc., announced that the special shareholder meeting of AHI currently scheduled for Wednesday, December 3 in New York City, will be adjourned to Wednesday, January 7, 2004 at the same location (the offices of Weil, Gotshal & Manges at 767 Fifth Avenue, New York, NY) and hour (11 a.m.). The adjournment is being made in view of a procedural delay in the Chapter 11 case of AWI, which is AHI's only significant asset. The meeting was called to authorize the dissolution of AHI upon implementation of a plan of reorganization in AWI's Chapter 11 case. The adjournment provides additional time for shareholders who have not already done so to vote on the proposal. Armstrong Holdings, Inc. is the parent company of Armstrong World Industries, Inc., a global leader in the design and manufacture of floors, ceilings and cabinets. In 2002, Armstrong's net sales totaled more than $3 billion. Based in Lancaster, PA, Armstrong operates 58 plants in 14 countries and approximately 15,700 employees worldwide. More information about Armstrong is available on the Internet at http://www.armstrong.com ASBURY AUTOMOTIVE: Terminates Proposed Pact to Acquire Bob Baker ---------------------------------------------------------------- Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest automotive retail and service companies in the U.S., announced that its proposed agreement to acquire the Bob Baker Auto Group of San Diego, California has been terminated. When the proposed acquisition was announced in 2002, Asbury noted that it was subject to customary closing conditions, including approvals from all of the relevant manufacturers. As previously disclosed, all of the manufacturers gave their approval promptly with the exception of Ford Motor Company and Toyota Motor Sales, U.S.A., Inc. Asbury has been working through the approval process with Toyota, including paperwork issues, and believes an approval would ultimately have been reached. However, attempts to carve Baker's Ford store out of the acquisition proved too complex and ultimately led to the deal's termination. Kenneth B. Gilman, Asbury's President and CEO, said, "Bob Baker and Asbury have come to a mutual agreement that it is in the best interest of all our respective stakeholders to cancel our acquisition agreement and go our separate ways." Bob Baker, President and CEO of the Bob Baker Auto Group, said, "Ken and I talked it over, and we decided this is the best thing to do at the present time. The Bob Baker Auto Group remains the pre- eminent automotive retailer in San Diego and we look forward to the continued growth and success of our business." "Our ongoing acquisition program is very much on track," Mr. Gilman continued. "We have already met our 2003 acquisition objectives, with completed deals representing about $415 million in annual revenues, and we are very pleased with the high-quality transactions in our pipeline. We have executed contracts to acquire three additional dealerships-including one in Suburban Los Angeles-with $190 million in annual revenues, as well as signed letters of intent for another two dealerships with $165 million in annual revenues." In the fourth quarter of 2003, the Company will incur (as previously disclosed) a pre-tax charge of approximately $3 million, reflecting expenses related to the proposed Bob Baker Auto Group transaction. Asbury Automotive Group, Inc. (S&P, BB- Corporate Credit Rating, Stable), headquartered in Stamford, Connecticut, is one of the largest automobile retailers in the U.S., with 2002 revenues of $4.5 billion. Built through a combination of organic growth and a series of strategic acquisitions, Asbury now operates through nine geographically concentrated, individually branded "platforms." These platforms currently operate 95 retail auto stores, encompassing 138 franchises for the sale and servicing of 35 different brands of American, European and Asian automobiles. Asbury believes that its product mix includes one of the highest proportions of luxury and mid-line import brands among leading public U.S. automotive retailers. The Company offers customers an extensive range of automotive products and services, including new and used vehicle sales and related financing and insurance, vehicle maintenance and repair services, replacement parts and service contracts. ATLANTIC COAST: Cancels Mesa Consent Solicitation Record Date ------------------------------------------------------------- Atlantic Coast Airlines Holdings, Inc. (Nasdaq: ACAI) announced the cancellation of the October 23, 2003 record date previously set in connection with Mesa's proposed consent solicitation. A new record date has not been established. The Company stated that its Board of Directors set the original record date shortly after Mesa filed its preliminary consent solicitation statement with the Securities and Exchange Commission. At the time, the Company did not anticipate that it would take over a month for Mesa to clear its consent solicitation materials with the Securities and Exchange Commission. ACA currently operates as United Express and Delta Connection in the Eastern and Midwestern United States as well as Canada. On July 28, 2003, ACA announced plans to establish a new, independent low-fare airline to be based at Washington Dulles International Airport. The Company has a fleet of 148 aircraft-including a total of 120 regional jets-and offers over 840 daily departures, serving 84 destinations. ACA employs approximately 4,600 aviation professionals. The Company has filed with the SEC a preliminary consent revocation statement on Schedule 14A and intends to file its definitive consent revocation statement on Schedule 14A shortly. The definitive consent revocation statement will contain important information about ACA's position regarding Mesa's consent solicitation. You are urged to read carefully the definitive consent revocation statement, which you will receive from the Company after it has been filed, before taking any action or making any decision with respect to Mesa's consent solicitation. You may obtain a copy of the Company's preliminary consent revocation statement on Schedule 14A, and will be able to obtain a copy of the Company's definitive consent revocation statement, when filed, free of charge at the website maintained by the SEC at http://www.sec.gov In addition, you may obtain documents filed with the SEC by ACA free of charge by requesting them in writing from ACA, 45200 Business Court, Dulles, VA 20166, Attention: Director, Corporate Communications. ACA and certain of its directors and executive officers may be deemed to be participants in the solicitation. A detailed list of the names of ACA's directors and executive officers is contained in ACA's preliminary consent revocation statement, which may be obtained without charge at the Web site maintained by the SEC at http://www.sec.gov The common stock of parent company Atlantic Coast Airlines Holdings, Inc. is traded on the Nasdaq National Market under the symbol ACAI. For more information about Atlantic Coast Airlines, visit its Web site at http://www.atlanticcoast.com Atlantic Coast Airlines (S&P, B- Corporate Credit Rating, Developing) employs over 4,600 aviation professionals. BALDWIN CRANE: Creditors Must File Claims by December 22, 2003 -------------------------------------------------------------- The United States Bankruptcy Court for the District of Massachusetts, set 4:00 p.m. on December 22, 2003, as the deadline for all creditors owed money on account of claims arising prior to the Petition Date to file their proofs of claim against Baldwin Crane & Equipment Corporation and its debtor-affiliates. Claim forms must be delivered to: The Clerk's Office United States Bankruptcy Court for the District of Massachusetts Thomas P. O'Neill Federal Building 10 Causeway Street, Room 1101 Boston, Massachusetts and a copy must be sent to: Debtor's Counsel Parker & Associates 10 Converse Place Winchester, Massachusetts 01890 Claims listed as liquidated, undisputed and contingent in the Debtor's Schedules of Liabilities are not required to file their proofs of claim with respect to such claim. However, any creditors whose claim against the Debtor for which a proof of claim is required, but failed do so, will be forever disallowed and barred from asserting the claim. Headquartered in Wilmington, Massachusetts, Baldwin Crane and Equipment Corp., a crane-operating business, filed for chapter 11 protection on October 3, 2003 (Bankr. Mass. Case No. 03-18303). Nina M. Parker, Esq., at Parker & Associates represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of over $10 million each. BIOGEN IDEC: S&P Ups Credit & Sr. Unsecured Debt Ratings to BB+ --------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit and senior unsecured debt ratings on Biogen Idec Inc. (formerly Idec Pharmaceutical Corp.) to 'BB+' from 'BB'. The ratings have been removed from CreditWatch, where they were placed June 23, 2003, following Idec's announcement that it was merging with fellow biopharmaceutical company Biogen Inc., based in Cambridge, Mass., in an all-equity transaction valued at $6.6 billion. The outlook is positive. The upgrade reflects the recently combined biopharmaceutical company's greater portfolio diversity and the solid growth prospects of its key products. "The near-investment-grade ratings on San Diego, Calif.-based Biogen Idec reflect the growing diversity of its biopharmaceutical portfolio, its favorable product growth prospects in the intermediate term, and the company's strong financial profile," said Standard & Poor's credit analyst Arthur Wong. "These factors are partially offset by the company's high revenue dependence on only two drugs, its relatively thin near-term product pipeline, and the challenges associated with a major merger." Biogen Idec specializes in the development of monoclonal antibody- based cancer treatments and autoimmune disease treatments. Pro forma for the merger, the company had nearly $1.37 billion in sales for the nine months ended September 2003. The combined portfolio is led by the multiple sclerosis treatment Avonex. Launched in 1996 by Biogen, the drug continues to hold the leading market share, with nearly 44% of all new prescriptions, and it generated $858 million in sales in the nine months ended September 2003. The company also enjoys a royalty stream from its B-cell non-Hodgkin's lymphoma treatment Rituxan, which is co-marketed with Genentech Inc. Rituxan, discovered by Idec and approved in late 1997, was the first Mab approved by the FDA as a cancer treatment. It is currently the best selling cancer treatment in the world and faces little competition for the foreseeable future. Idec's revenue from Rituxan sales amounted to nearly $365 million for the first nine months of 2003. In the wake of the merger, Biogen Idec has a $550 million R&D program, the third largest in the biopharmaceutical industry. Significant new products are essential to decreasing the company's high reliance on Avonex and Rituxan for sales and earnings. Sales for the company's more recent product launches--Amevive (Biogen's treatment of moderate-to-severe chronic plaque psoriasis) and Zevalin (Idec's cancer treatment)--have been disappointing thus far, as both products have encountered reimbursement issues. Moreover, the near-term product pipeline is light, with only multiple sclerosis treatment Antegren in Phase III development trials. Data from the trial is not expected until 2005. In the meantime, competition in the multiple sclerosis market is increasing, especially with the 2002 launch of rival Rebif by Serono SA and its co-marketer, Pfizer Inc. BLADES BOARD: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Blades Board and Skate, LLC 365 Carnegie Avenue Kenilworth, New Jersey 07033 Tel: 908-245-1650 Bankruptcy Case No.: 03-48818 Type of Business: The Debtor is an in-line skating specialty store. Chapter 11 Petition Date: December 2, 2003 Court: District of New Jersey (Newark) Judge: Novalyn L. Winfield Debtor's Counsel: Paul H. Aloe, Esq. Kudman Trachten LLP Continental Plaza III 433 Hackensack Avenue 2nd Floor Hackensack, NJ 07601 Tel: 201-487-6220 Fax: 201-487-6450 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Burton Snowboards, Trade $502,887 80 Industrial Pkwy, Burlington, VT 05401 Attn: Chris Sherman Tel: 800-367-2951 Salomon, Inc. Trade $332,259 5055 North Greeley Ave., Portland, OR 97217 Attn: John Mears Tel: 888-634-8175 K2, Inc. Trade $260,475 19215 Vashon Highway SW Vashon WA 98070-5236 Attn: Bryan Nohr Tel: 800-972-4037 Sole Technologies, Inc. Trade $140,895 Four Star Distribution Trade $138,422 Westlife, Inc. Trade $100,427 DC Shoes, Inc. Trade $92,666 Benetton Sports Trade $90,348 Mervin Manufacturing Trade $89,357 Podium Dist. Trade $84,646 Rollerblade Trade $78,729 CCM (Maska US INC) Trade $64,975 Element Skatewear Trade $59,621 Northwave North America Trade $43,967 Bravo Sports Corporation Trade $42,640 Puma USA Trade $40,356 Graf Canada, LTD. Trade $40,347 Sunshine Distribution Trade $40,255 Bladez, Inc. Trade $39,409 Mission Roller Trade $37,772 BOMBARDIER RECREATIONAL: S&P Assigns B+ Long-Term Credit Rating --------------------------------------------------------------- Standard and Poor's Ratings Services initiated coverage on motorized recreational products manufacturer Bombardier Recreational Products Inc. and assigned a 'B+' long-term corporate credit rating. At the same time, Standard & Poor's assigned its 'B+' rating to BRP's proposed C$360 million seven-year senior secured term loan B and its C$250 million five-year senior secured revolving credit facility. Standard & Poor's also assigned its 'B- ' rating to BRP's proposed issuance of US$200 million 2013 senior subordinated notes. The outlook is stable. Proceeds will be used to finance the acquisition of the recreational products division from Bombardier Inc. for approximately C$1 billion. The rating on the proposed credit facility is based on preliminary offering statements and is subject to review of final documentation. The senior subordinated notes are rated two notches below the corporate credit rating to reflect their junior position to the significant amount of secured debt in the capital structure. "The ratings on BRP reflect the high leverage of the borrower following the acquisition, the strong competition in the recreational products markets, and the volatile demand for the primary products," said Standard & Poor's credit analyst Kenton Freitag.. These factors are partially offset by BRP's market knowledge, the company's well established dealer network, and the stable margins and revenues gained from the parts and accessories component of this business. BRP, formerly the recreational products division of Bombardier Inc., is one of the leading manufacturers of motorized recreational products in the world. The company's primary products are snowmobiles, personal watercraft, engines for recreational products, and ATVs and outboard motors. The snowmobiles, watercraft, and engines segments are considered core as the company has a long operating history with well established market positions and relatively stable margins in mature but cyclical markets. The ATV and outboard motors divisions represent relatively new segments for the company that have not yet translated to stable margin contributors. Nevertheless, the significant capital costs associated with entry into these markets has already been incurred and the future costs of gaining traction in these markets are not considered onerous. The company's long history in the snowmobile and personal watercraft markets, and leading product development have resulted in strong customer loyalty to its brands. This, combined with the company's expansive dealership base, has been key to maintaining market share, which has allowed for maintenance of leading market positions. Nevertheless, BRP competes against well established U.S.- and Japan-based competitors that are very well capitalized. With its leveraged financial profile, BRP is considered vulnerable to competitive challenges during future market downturns. The stable outlook reflects the expectation that contributions from the company's core segments will allow for modest free cash flow generation and the maintenance of liquidity and credit measures as the company seeks to develop markets. BRIDGE: Plan Committee Sues AmEx to Recover Close to $2 Million --------------------------------------------------------------- Pursuant to Section 6.05 of the Bridge Information Systems Debtors' Confirmed Plan, the Plan Committee for the estate of BIS Administration, Inc. was created. The rights and responsibility of the Plan Committee are set forth in the Plan Administrator Agreement which, among others, provide that if the Plan Administrator determines he has a material conflict of interest concerning the prosecution of litigation, he may select a designee to act on behalf of the Reorganized Debtors. The designee may, but need not be, the Plan Committee. The Plan Administrator is a member of American Express Tax and Business Services, Inc. Thus, the Plan Committee pursues a claim against AmEx on the Plan Administrator's behalf. The Plan Committee alleges that during the 90 days prior to the Petition Date, the Debtors made these payments to or for the benefit of American Express Corporation, which AmEx accepted on account of antecedent debt: Check No. Check Date Amount Date Honored -------- ---------- ------ ------------ 8100891 11/15/00 $2,626 12/26/00 8101118 11/16/00 438,404 11/21/00 8101123 11/16/00 56,560 11/21/00 8102228 12/04/00 94,525 12/08/00 8102338 12/06/00 410,131 12/11/00 8102421 12/08/00 2,651 01/10/01 8104154 12/31/00 405,483 01/10/01 8104093 01/05/01 3,486 01/22/01 8104311 01/22/01 90,390 01/16/01 8105291 01/22/01 3,187 01/26/01 8105990 02/02/01 2,410 02/06/01 8106001 02/08/01 324,465 02/13/01 6370 11/14/00 14,137 11/17/00 6454 11/30/00 33,983 12/04/00 6505 12/15/00 10,341 12/19/00 6529 12/29/00 42,205 01/03/01 10041 01/18/01 14,795 01/22/01 10072 02/07/01 39,043 02/12/01 According to A. Thomas Dewoskin, Esq., at Keating & Shure, in St. Louis, Missouri, each of the Preference Payments was honored by the Debtors' bank on a date, which is within the Preference Period. Each Preference Payment enabled AmEx to receive more than it would have received if: -- the case were a case under Chapter 7 of the Bankruptcy Code; -- the Preference Payment had not been made; and -- AmEx had received payment of its debt to the extent provided by the Bankruptcy Code. Mr. Dewoskin asserts that pursuant to Section 547(b) of the Bankruptcy Code, the Plan Committee may avoid the Preference Payments. AmEx was the initial transferee of the Preference Payments or the entity for whose benefit the Preference Payments were made. Mr. Dewoskin adds that under Section 550, the Plan Committee may recover the Preference Payments from AmEx. On January 9, 2002, the Plan Committee sent AmEx, via United States Mail, a letter demanding the return of the Preference Payments. But AmEx refused. Thus, the Plan Committee asks the Court to: (a) declare that the Preference Payments were voidable preferences pursuant to Section 547(b); (b) set aside, avoid, and hold the Preference Payments as null and void; and (c) declare that the Plan Committee may recover the Preference Payments aggregating $1,975,216 from AmEx pursuant to Section 550(a), along with interest as of January 9, 2002 plus costs to the extent permitted by law. (Bridge Bankruptcy News, Issue No. 53; Bankruptcy Creditors' Service, Inc., 215/945-7000) BVS MOTELS INC: Case Summary & 4 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: BVS Motels, Inc. 12111 Brook Meadows Stafford, Texas 77477 Bankruptcy Case No.: 03-11798 Type of Business: Motels Chapter 11 Petition Date: December 1, 2003 Court: Eastern District of Texas (Beaumont) Judge: Bill Parker Debtor's Counsel: Willard P. Conrad, Esq. 9898 Bissonnet, Suite 112 Houston, TX 77036 Tel: 713-777-4077 Fax: 713-777-1034 Total Assets: $2,493,000 Total Debts: $2,467,358 Debtor's 4 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Jefferson County Tax Taxes $100,000 Assessor Days Inn Worldwide, Inc. Franchise Fees $13,000 Willard P. Conrad Attorney Fees $10,000 Anis Damani Non-Purchase Money $6,000 CALICO COMMERCE: Will Make Initial Cash Liquidating Dividend ------------------------------------------------------------ Calico Commerce, Inc., announced that on December 10, 2003 the Company will make its initial liquidating dividend to stockholders of record on August 26, 2003. The liquidating dividend is being made pursuant to the terms of, and in accordance with, the joint Plan of Reorganization filed by Calico and its Official Committee of Equity Security Holders, and approved by order of the United States Bankruptcy Court for the Northern District of California, San Jose Division, Case No. 01- 56101-MSJ, entered on August 14, 2003, confirming the First Amended Joint Plan of Reorganization (Dated June 30, 2003) filed by Calico Commerce, Inc. and the Official Committee of Equity Security Holders appointed in the case. The Company's stockholders of record at the close of business on August 26, 2003 will receive $0.46 per share for each share of the Company's common stock that they own on that date. The Company's transfer agent, American Stock Transfer & Trust Company, will be the distribution agent for purposes of distributing this dividend. Further distributions, if any, will be made after all disputed, contingent claims have been resolved. After final distribution of all remaining assets to creditors and equity holders in one or more distributions, and after entry of the final decree in the bankruptcy case, the Company expects to dissolve. CHAMPIONSHIP AUTO: OWRS Merger Conditions May Not Be Satisfied -------------------------------------------------------------- Championship Auto Racing Teams, Inc. (OTC Bulletin Board: CPNT.OB) announced that representatives of Open Wheel Racing Series informed the company that OWRS believes that a number of conditions of the pending merger between the parties will not be satisfied by the time of the special meeting of stockholders scheduled for December 19, 2003. Championship has considered OWRS' position and believes that it is unlikely that the condition requiring the absence of a material adverse effect will be satisfied because it expects that there will be a net decrease in the number of teams planning on participating in the series for the 2004 season from the number that participated in the 2003 season. OWRS has indicated it will not waive any condition of the closing. In light of the foregoing, Championship's board of directors is evaluating available alternatives to the merger, including the possibility of ceasing operations, winding up the Company's affairs and liquidating its remaining assets. In addition, OWRS has made a preliminary proposal contemplating an alternative transaction under which Championship and its subsidiary CART, Inc., would commence reorganization cases under Chapter 11 of the Bankruptcy Code and OWRS would purchase certain assets of the Company and/or CART, Inc., and assume certain liabilities. OWRS advised the Company that under the OWRS proposal, OWRS would continue the Champ Car Racing Series in 2004. Although Championship is reviewing this proposal there can be no assurance that any agreement will be entered into or that any transaction, if completed, will result in any payments to stockholders. Open Wheel Racing Series is a newly formed holding company owned indirectly by a group of investors including Gerald R. Forsythe, Kevin Kalkhoven and Paul Gentilozzi. OWRS currently has beneficial ownership of 3,377,400 shares of Championship common stock, approximately 22.9% of the outstanding shares of Championship. Championship Auto Racing Teams, Inc. (OTC Bulletin Board: CPNT.OB) owns, operates and markets the 2003 Bridgestone Presents The Champ Car World Series Powered by Ford. Veteran racing teams such as Newman/Haas Racing, Player's/Forsythe Racing, Team Rahal, Patrick Racing and Walker Racing competed with many new teams this year in pursuit of the Vanderbilt Cup. CART Champ Cars are thoroughbred racing machines that reach speeds in excess of 200 miles per hour, showcasing the technical expertise of manufacturers such as Ford Motor Company, Lola Cars, Walker Racing LLC, (Reynard) and Bridgestone/Firestone North American Tire, LLC. The 18-race 2003 Bridgestone Presents The Champ Car World Series Powered by Ford was broadcast by television partners CBS and SPEED Channel. CART also owns and operates its top development series, the Toyota Atlantic Championship. Learn more about CART's open-wheel racing series at http://www.champcarworldseries.com * * * On November 11, 2003, in response to a request by the management of Championship Auto Racing Teams Inc., that Deloitte & Touche LLP, the Company's independent auditor, reissue its report on the Company's financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2002, and in connection with the filing by the Company of a proxy statement on November 13, 2003 relating to the pending transaction with Open Wheel Racing Series LLC, Deloitte & Touche informed management that its report on the Company's financial statements as of December 31, 2002 and 2001, and for each of the three years in the period ended December 31, 2002 would include an explanatory paragraph indicating that developments during the nine-month period ended September 30, 2003 raise substantial doubt about the Company's ability to continue as a going concern. CHANNEL MASTER: Panel Turns to J.H. Cohn for Financial Advice ------------------------------------------------------------- The duly-appointed Committee of Unsecured Creditors of Channel Master, LLC and its debtor-affiliates' chapter 11 cases asks the U.S. Bankruptcy Court for the District of Delaware for permission to retain J.H. Cohn LLP as accountants and financial advisors. The Committee submits that it needs J.H. Cohn to perform certain accounting and financial advisory services. In its capacity, J.H. Cohn will: a. assist and advise the Committee in determining the Debtors' short-term cash flow requirements and availability of assets to support DIP loans; b. assist and advise the Committee in understanding the Debtors' accounting systems; c. assist and advise the Committee in monitoring the Debtors' postpetition operating results and cash flows; d. assist and advise the Committee in ascertaining the Debtors' current financial condition; e. assist and advise the Committee in reviewing historical financial information of the Debtors; f. assist and advise the Committee in reviewing key employee retention plans; g. assist and advise the Committee in reviewing proposed financing commitments; h. assist and advise the Committee in reviewing the Debtors' expense structure and identifying opportunities for further reductions; i. assist and advise the Committee in preparing a liquidation analysis; j. assist and advise the Committee in identifying and/or evaluating strategies to maximize the value of the estate, including the proposed sale transaction; and k. render other bankruptcy and consulting services, attend hearings and/or meetings, and render such assistance as the Creditors' Committee and its counsel may deem necessary. The Committee has selected J.H. Cohn as accountants and financial advisors because of its experience and knowledge in the area of insolvency accounting. J.H. Cohn's normal billing rates for the accounting and financial advisory services are: Senior Partner $495 per hour Partner $425 per hour Director $385 per hour Senior Manager $330 per hour Manager $300 per hour Supervisor $275 per hour Senior Accountant $230 per hour Staff $175 per hour Paraprofessional $120 per hour Clifford A. Zucker, assures the Court that J.H. Cohn and members of the Firm are "disinterested persons" within the meaning of Section 101(14) of the Bankruptcy Code. Headquartered in Smithfield, North Carolina, Channel Master Holdings, Inc., with the Debtor-affiliates, are leading designer and manufacturer of high-volume, superior quality antenna products for the satellite communications industry both in the U.S. and internationally. The Company filed for chapter 11 protection on October 2, 2003 (Bankr. Del. Case No. 03-13004). David B. Stratton, Esq., at Pepper Hamilton LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of over $50 million each. CHARTER: Appoints Derek Chang Executive VP, Finance and Strategy ---------------------------------------------------------------- Charter Communications, Inc. (Nasdaq:CHTR) has appointed Derek Chang to the newly-created position of Executive Vice President of Finance and Strategy. Mr. Chang will report to Carl Vogel, President and CEO, and will have overall responsibility for treasury and mergers and acquisitions, serving as the primary contact for all banking relationships. Mr. Chang was previously Executive Vice President of the Yankees Entertainment and Sports Network, a regional sports programming network in New York where he headed corporate development and financing activities from the company's inception in 2001 until earlier this year. Prior to joining YES, he was the Chief Financial Officer and Co-Chief Operating Officer of GlobalCenter, the web hosting subsidiary of Global Crossing. Mr. Chang worked for TCI Communications/AT&T Broadband in Denver from 1997 to 2000, ultimately as Executive Vice President of Corporate Development where he directed the Company's M&A activities and managed a multibillion dollar portfolio of cable joint ventures. He was Treasurer of InterMedia Partners in San Francisco from 1994 to 1997. With the announcement of Mr. Chang's appointment, Mr. Vogel said, "We continue to recruit top talent who will work together with our existing team towards the goal of increasing Charter's performance and leadership. Derek is a seasoned professional with an impressive history in M&A and complicated financings, including significant trades and partnerships. He possesses excellent relationships in the industry and the financial community. His background will serve us well as we continue to make progress on rationalizing our assets and improving our balance sheet." A cum laude graduate of Yale University with a B.A. in History, Mr. Chang also received an MBA from the Stanford University Graduate School of Business. Charter Communications, A Wired World Company*, is the nation's third-largest broadband communications company. Charter provides a full range of advanced broadband services to the home, including cable television on an advanced digital video programming platform via Charter Digital Cable(R) brand and high-speed Internet access marketed under the Charter Pipeline* brand. Commercial high-speed data, video and Internet solutions are provided under the Charter Business Networks* brand. Advertising sales and production services are sold under the Charter Media* brand. More information about Charter can be found at http://www.charter.com As previously reported, Standard & Poor's Ratings Services assigned its 'CCC-' rating to the $500 million senior unsecured notes due 2013 of CCO Holdings LLC, an indirect, wholly owned subsidiary of cable TV system operator Charter Communications Inc. (CCC+/Developing/--). Although the CCO notes are structurally senior to the 'CCC-' rated debt of Charter Communications Holdings LLC and CCH II LLC, the substantial amount of priority obligations, largely in the form of secured bank debt structurally ahead of the new CCO notes, constrains the rating on these notes to two notches below the 'CCC+' corporate credit rating. CHIQUITA BRANDS: Sets Analyst and Investor Day for Dec. 16, 2003 ---------------------------------------------------------------- Chiquita Brands International, Inc. (NYSE: CQB) will hold its second annual analyst and investor day on Tuesday, Dec. 16, 2003. The meeting will begin at 8 a.m. in the Astor Ballroom of the Barclay Intercontinental Hotel, 111 E. 48th St., New York. Cyrus Freidheim, chairman and chief executive officer, James Riley, senior vice president and chief financial officer, and other management team members will discuss the progress of Chiquita's turnaround and present its strategic approach to the opportunities and challenges facing the company. The presentation will be accessible remotely by telephone or over the Internet, via CCBN. Telephone Access To listen to a conference call of the presentation, please contact one of the following numbers at least ten minutes prior to the scheduled start time. - United States and Canada: (800) 810-0924 - Other locations: (913) 981-4900 - Conference Call Title: "Chiquita Investor Day" A replay will also be available from approximately 1 p.m. on Dec. 16, to 6 p.m. on Dec. 23, 2003. To listen to the replay, dial (888) 203-1112 in the United States and Canada or (719) 457-0820 from other locations and provide the confirmation code 657971. Internet Access To listen to the live audio webcast of the event, please use the link on Chiquita's home page -- http://www.chiquita.com The webcast will also be distributed over CCBN's Investor Distribution Network to both individual and institutional investors. Individual investors can listen to the call through CCBN's individual investor center -- http://www.companyboardroom.com-- or by visiting any of the investor sites in CCBN's Individual Investor Network, such as America Online's Personal Finance Channel. Institutional investors can access the call via CCBN's password- protected event management site, StreetEvents -- http://www.streetevents.com An archived webcast will be available after the call at http://www.chiquita.comuntil Jan. 5, 2004. Chiquita Brands International (S&P, B Corporate Credit Rating, Positive) is a leading international marketer, producer and distributor of high-quality fresh and processed foods. The company's Chiquita Fresh division is one of the largest banana producers in the world and a major supplier of bananas in North America and Europe. Sold primarily under the premium Chiquita(R) brand, the company also distributes and markets a variety of other fresh fruits and vegetables. Additional information is available at http://www.chiquita.com CIT RV TRUST: S&P Takes Rating Actions on Various Trust Series -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on various notes and certificates issued by CIT RV Trust 1996-B, CIT RV Trust 1997-A, CIT RV Trust 1998-A, and CIT RV Trust 1999-A and removed them from CreditWatch where they were placed with negative implications Aug. 22, 2003. Concurrently, the rating on the class B notes issued by CIT RV Trust 1997-A is raised, while the ratings on the remaining rated notes and certificates issued by the trusts are affirmed. The downgrades reflect dissipating credit support available to cover losses on the rated classes as well as the negative performance trends displayed by the underlying pools of assets consisting of installment sale contracts and direct loans that are secured by new and used recreational vehicles. Income generated by the trusts has been insufficient to fully cover monthly net losses, resulting in draws upon the reserve accounts for all trusts on each of the last six consecutive distribution dates. Consequently, none of the trusts' reserve accounts are funded at their "specified reserve amounts." Moreover, as of the November remittance date, between 6.46% and 6.88% of the pools backing the trusts consist of loans that are in repossession inventory, and between 3.91% to 5.03% of the trusts' pools consist of receivables that are 90 or more days delinquent. Standard & Poor's expects that the reserve accounts will continue to experience draws in light of the negative effect that high levels of delinquencies and repossession inventories are having on monthly excess spread and as CIT Group/Sales Financing Inc. (a subsidiary of CIT Group Inc.), acting as servicer, continues to liquidate repossessed units. CIT Group/Sales Financing Inc. exited the recreational vehicle loan-origination business in 2001, causing it to become increasingly reliant upon auction distribution channels for the liquidation of repossession inventory. Monthly recovery rates have noticeably declined since such time, resulting in higher cumulative net losses than initially anticipated. The affirmed ratings and the upgrade reflect adequate credit enhancement available to support those ratings, considering expected remaining losses. The senior classes have benefited from the sequential pay structures and subordination has increased as the senior classes have been paid down. RATINGS LOWERED AND REMOVED FROM CREDITWATCH NEGATIVE CIT RV Trust 1996-B Rating Class To From Certs BB- BBB/Watch Neg CIT RV Trust 1997-A Rating Class To From Certs BBB- BBB/Watch Neg CIT RV Trust 1998-A Rating Class To From Certs BB BBB/Watch Neg CIT RV Trust 1999-A Rating Class To From B BBB- A/Watch Neg Certs BB- BBB/Watch Neg RATING RAISED CIT RV Trust 1997-A Rating Class To From B AA- A RATINGS AFFIRMED CIT RV Trust 1996-B Class Rating A-3 AAA CIT RV Trust 1997-A Class Rating A-6 AAA A-7 AAA CIT RV Trust 1998-A Class Rating A-4 AAA A-5 AAA CIT RV Trust 1999-A Class Rating A-3 AAA RATINGS AFFIRMED AND REMOVED FROM CREDITWATCH NEGATIVE CIT RV Trust 1998-A Rating Class To From B A A/Watch Neg CIT RV Trust 1999-A Rating Class To From A-4 AAA AAA/Watch Neg A-5 AAA AAA/Watch Neg CITIGROUP MORTGAGE: Fitch Rates Class B-4 and B-5 Notes at BB/B --------------------------------------------------------------- Citigroup Mortgage Loan Trust, Inc.'s mortgage pass-through certificates series 2003-UP3, are rated by Fitch Ratings as follows: -- $304.4 million classes A-1 through A-3, PO and IO (senior certificates) 'AAA'; -- $5.5 million class B-1 'AA'; -- $4.2 million class B-2 'A'; -- $3.1 million class B-3 'BBB'; -- $1.6 million class B-4 'BB'; -- $1.6 million class B-5 'B'. The 'AAA' rating on the senior certificates reflects the 6% subordination provided by the 1.70% class B-1, 1.30% class B-2, 0.95% class B-3, 0.50% privately offered class B-4, 0.50% privately offered class B-5 and 1.05% privately offered class B-6 (not rated by Fitch). Classes B-1, B-2, B-3, B-4, and B-5 are rated 'AA', 'A', 'BBB', 'BB' and 'B', respectively, based on their respective subordination. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings also reflect the quality of the underlying mortgage collateral, strength of the legal and financial structures and the master servicing capabilities of Union Planters Mortgage, Inc., a wholly- owned subsidiary of Union Planters Bank, National Association. The Group I collateral consists of conventional, primarily one- to four-family, fixed-rate mortgage loans secured by first liens on residential real properties, with remaining terms to maturity ranging from 1 to 192 months. As of the cut-off date (Nov. 1, 2003), the weighted average amortized loan-to-value ratio for the mortgage loans in the pool is approximately 56.93%. The average balance of the mortgage loans is $30,846 and the weighted average coupon of the loans is 8.23%. Second homes and investor properties comprise 6.14% and 16.27%, respectively, of the Group I loans. Rate-term and cash-out refinances represent 33.08% and 23.73%, respectively. The states that represent the largest portion of mortgage loans are Tennessee (22.15%), Mississippi (15.05%), and Alabama (11.52%). The Group II collateral consists of conventional, primarily one- to four-family, fixed-rate mortgage loans secured by first liens on residential real properties, with remaining terms to maturity ranging from 13 to 357 months. As of Nov. 1, 2003, the weighted average amortized LTV for the mortgage loans in the pool is approximately 77.05%. The average balance of the mortgage loans is $69,644 and the WAC of the loans is 7.83%. Second homes and investor properties comprise 4.87% and 2.01%, respectively, of the Group II loans. Rate-term and cash-out refinances represent 16% and 17.14%, respectively. The states that represent the largest portion of mortgage loans are Tennessee (19.72%), Florida (17.12%), and Alabama (15.27%). The Group III collateral consists of conventional, primarily one- to four-family, fixed-rate mortgage loans secured by first liens on residential real properties, with remaining terms to maturity ranging from 57 to 353 months. As of the cut-off date, the weighted average amortized LTV for the mortgage loans in the pool is approximately 77.69%. The average balance of the mortgage loans is $425,684 and the WAC of the loans is 7.03%. Second homes comprise 7.13% of the Group III loans and there are no investor- occupied loans. Rate-term and cash-out refinances represent 29.68% and 18.90%, respectively, of the Group III mortgage loans. The states that represent the largest portion of mortgage loans are Florida (21.71%), Alabama (12.45%), and Indiana (12.35%). Approximately 80.89% of the Group I Mortgage Loans, approximately 91.59% of the Group II Mortgage Loans and approximately 93.02% of the Group III Mortgage Loans, (in each case, by aggregate principal balance of the related loan group as of the cut-off date), were originated or acquired by the originator generally in accordance with the underwriting criteria of the originator's Stated Income Program (such loans are also referred to as the Program Mortgage Loans). The remaining approximately 19.11% of the Group I Mortgage Loans, approximately 8.41% of the Group II Mortgage Loans and approximately 6.98% of the Group III Mortgage Loans, were acquired by the originator in connection with the acquisition of various entities by the originator and its affiliates. These mortgage loans are referred to as the Non- Program Mortgage Loans. CMLTI deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. For federal income tax purposes, one or more elections will be made to treat the trust fund as a real estate mortgage investment conduit. Wells Fargo Bank Minnesota, N.A. will serve as trustee. CMS ENERGY: $225 Mil. Preferred Issue Gets Fitch's B- Rating ------------------------------------------------------------ Fitch Ratings has assigned a 'B-' rating to CMS Energy Corp.'s $225 million issuance of cumulative convertible preferred stock. The preferred stock is being issued to qualified institutional investors under Rule 144A of the Securities Act. Proceeds from the issuance will be used to repay debt. The Rating Outlook for CMS is Stable. The ratings for CMS take into consideration the expectation of stable revenues and cash flow from its primary subsidiary, Consumers Energy Co. (senior unsecured rated 'BB', Rating Outlook Stable by Fitch) and adequate liquidity at CMS as a result of the successful refinancing of secured bank agreements, realization of asset sale proceeds and improved access to the capital markets. The current ratings of CMS also recognize the relatively high level of parent level debt and weak consolidated credit metrics. Recently, CMS reached a settlement agreement with the Commodity Trading Futures Commission (CFTC) for $16 million related to allegations of round-trip trading activities in its energy and marketing segment during 2000 and 2001. CMS has since exited the trading and marketing business. Ongoing investigations surrounding the same trading allegations continue at the Securities and Exchange Commission and the Federal Energy Regulatory Commission. CMS is a utility holding company whose primary subsidiary is Consumers Energy Co., a regulated electric and gas utility serving more than 3.3 million customers in western Michigan. CMS also has operations in natural gas pipelines and independent power production. COASTAL BANCORP: S&P Puts BB- Counterparty Rating on Watch Pos. --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Coastal Bancorp Inc. (NASDAQ:CBSA), including Coastal's 'BB-' long-term counterparty credit rating, on CreditWatch with positive implications. At the same time, Standard & Poor's affirmed its 'BBB' long-term counterparty credit rating on Hibernia Corp. (Hibernia, NYSE:HIB), as well as its ratings on Hibernia's subsidiary Hibernia National Bank. The outlook for both Hibernia entities remains positive. The ratings actions follow Hibernia's announcement that it has reached a definitive merger agreement with Coastal, a $2.6 billion asset thrift based in Houston, Texas, for approximately $230 million in cash. "Upon completion of the acquisition, it is expected that Coastal's counterparty credit rating will be equalized with Hibernia's 'BBB' rating," said Standard & Poor's credit analyst Mark J. Kilduff. CONNECTICARE: Counterparty & Fin'l Strength Ratings Down to B+ -------------------------------------------------------------- Standard & Poor's Ratings Services lowered its counterparty credit and financial strength ratings on ConnectiCare Inc. to 'B+' from 'BB' and removed them from CreditWatch, where they had been placed Oct. 2, 2003. The outlook is negative. The ratings on ConnectiCare were placed on CreditWatch with negative implications after Bank of America Corp. announced that it would launch a $115 million bank loan transaction for Carlyle Group-owned ConnectiCare Holding Co. Inc. Proceeds from this transaction are to be used primarily to pay a dividend to its shareholders, The Carlyle Group, and Liberty Partners, and to refinance existing debt. "The rating actions are based on ConnectiCare's significantly declined financial flexibility, declined capitalization, and uncertainties on the company's prospective capitalization strategy," said Standard & Poor's credit analyst Phillip C. Tsang. ConnectiCare Holding Co. Inc.'s ability to service its debt and meet its bank covenants will depend on the cash flow-generating capacity of ConnectiCare, which will be based on the continued favorable earnings trend of ConnectiCare. In the event ConnectiCare's earnings performance deteriorates, ConnectiCare Holding Co. Inc. may not be able to meet its debt servicing obligations. In addition, if ConnectiCare's statutory capital adequacy ratio declines further, its ratings may be lowered. CONSOLIDATED FREIGHTWAYS: Selling Provo Assets at Dec 17 Auction ---------------------------------------------------------------- As part of the largest real estate sale in transportation history -- 220 total properties with an appraised value over $400 million -- Consolidated Freightways is placing its Provo distribution facility located at 1396 West 200 South for sale to the highest bidder, through an open auction process scheduled for December 17, 2003. The Provo property is a 12-door cross-dock distribution facility situated on 5 acres and has been closed to operations since September 3, 2002 when the 74-year-old company filed for bankruptcy protection. Since then CF has been liquidating the assets of the corporation under orders of the bankruptcy court. Two CF employees formerly worked at the Omaha terminal. A contract price of $455,000 has been established for the CF property. Interested parties who would like to participate in the December 17 bankruptcy auction should submit the form Request to be Designated a Qualified Bidder at Auction. That form can be found at http://www.cfterminals.com/Overbidder.htmland must be submitted prior to the date of the auction. The indicated deposit must also be received, via wire or certified check, prior to the date of the auction. To date, 169 CF properties throughout the U.S. have been sold for over $295 million. Potential bidders should direct any questions about the property and the bidding procedures that cannot be answered at the company's Web site http://www.cfterminals.comto Transportation Property Company at 800-440-5155. CONSOLIDATED FREIGHTWAYS: Augusta Facility Up on Auction Block -------------------------------------------------------------- As part of the largest real estate sale in transportation history -- 220 total properties with an appraised value over $400 million -- Consolidated Freightways is placing its Augusta distribution facility located at 45 Industrial St. for sale to the highest bidder, through a reserve auction process scheduled for December 17, 2003. The Augusta property is a 15-door cross-dock distribution facility situated on 5.0 acres and has been closed to operations since September 3, 2002 when the 74-year-old company filed for bankruptcy protection. Since then CF has been liquidating the assets of the corporation under orders of the bankruptcy court. Ten CF employees formerly worked at the Augusta terminal. A reserve auction starting price of $85,000 has been established for the CF property. Interested parties who would like to participate in the December 17 bankruptcy auction should submit the form Request to be Designated a Qualified Bidder at Auction. That form can be found at http://www.cfterminals.com/Overbidder.htmland must be submitted prior to the date of the auction. The indicated deposit must also be received, via wire or certified check, prior to the date of the auction. To date, 169 CF properties throughout the U.S. have been sold for over $295 million. Potential bidders should direct any questions about the property and the bidding procedures that cannot be answered at the company's Web site http://www.cfterminals.comto Transportation Property Company at 800-440-5155. CONSOLIDATED FREIGHTWAYS: Selling Atlanta Distribution Facility --------------------------------------------------------------- As part of the largest real estate sale in transportation history -- 220 total properties with an appraised value over $400 million -- Consolidated Freightways is placing its Atlanta distribution facility located at 2590 Campbell Blvd. for sale to the highest bidder, through an open auction process scheduled for December 17, 2003. The Atlanta property is a 155-door cross-dock distribution facility situated on 39.44 acres and has been closed to operations since September 3, 2002 when the 74-year-old company filed for bankruptcy protection. Since then CF has been liquidating the assets of the corporation under orders of the bankruptcy court. 674 CF employees formerly worked at the Atlanta terminal. A contract price of $3,350,000 has been established for the CF property. Interested parties who would like to participate in the December 17 bankruptcy auction should submit the form Request to be Designated a Qualified Bidder at Auction. That form can be found at http://www.cfterminals.com/Overbidder.htmland must be submitted prior to the date of the auction. The indicated deposit must also be received, via wire or certified check, prior to the date of the auction. To date, 169 CF properties throughout the U.S. have been sold for over $295 million. Potential bidders should direct any questions about the property and the bidding procedures that cannot be answered at the company's Web site http://www.cfterminals.comto Transportation Property Company at 800-440-5155. CONSOLIDATED FREIGHTWAYS: Auctioning-Off Dallas Distr. Facility --------------------------------------------------------------- As part of the largest real estate sale in transportation history -- 220 total properties with an appraised value over $400 million -- Consolidated Freightways is placing its Dallas distribution facility located at 3925 Singleton Blvd. for sale to the highest bidder, through an open auction process scheduled for December 17, 2003. The Dallas property is a 150-door cross-dock distribution facility situated on 26.3 acres and has been closed to operations since September 3, 2002, when the 74-year-old company filed for bankruptcy protection. Since then CF has been liquidating the assets of the corporation under orders of the bankruptcy court. 526 CF employees formerly worked at the Dallas terminal. A contract price of $2,150,000 has been established for the CF property. Interested parties who would like to participate in the December 17 bankruptcy auction should submit the form Request to be Designated a Qualified Bidder at Auction. That form can be found at http://www.cfterminals.com/Overbidder.htmland must be submitted prior to the date of the auction. The indicated deposit must also be received, via wire or certified check, prior to the date of the auction. To date, 169 CF properties throughout the U.S. have been sold for over $295 million. Potential bidders should direct any questions about the property and the bidding procedures that cannot be answered at the company's Web site http://www.cfterminals.comto Transportation Property Company at 800-440-5155. CONSOLIDATED FREIGHTWAYS: Selling Wilson Facility on December 17 ---------------------------------------------------------------- As part of the largest real estate sale in transportation history - 220 total properties with an appraised value over $400 million - Consolidated Freightways is placing its Wilson distribution facility located at 2105 Whittey Rd. for sale to the highest bidder, through an open auction process scheduled for December 17, 2003. The Wilson property is a 27-door cross-dock distribution facility situated on 4.95 acres and has been closed to operations since September 3, 2002 when the 74-year-old company filed for bankruptcy protection. Since then CF has been liquidating the assets of the corporation under orders of the bankruptcy court. 15 CF employees formerly worked at the Wilson terminal. A contract price of $175,000 has been established for the CF property. Interested parties who would like to participate in the December 17 bankruptcy auction should submit the form Request to be Designated a Qualified Bidder at Auction. That form can be found at http://www.cfterminals.com/Overbidder.htmland must be submitted prior to the date of the auction. The indicated deposit must also be received, via wire or certified check, prior to the date of the auction. To date, 169 CF properties throughout the U.S. have been sold for over $295 million. Potential bidders should direct any questions about the property and the bidding procedures that cannot be answered at the company's Web site http://www.cfterminals.comto Transportation Property Company at 800-440-5155. CONSOLIDATED FREIGHTWAYS: Trenton Facility for Sale on Dec. 17 -------------------------------------------------------------- As part of the largest real estate sale in transportation history - 220 total properties with an appraised value over $400 million - Consolidated Freightways is placing its Trenton distribution facility located at 2515 East State St. for sale to the highest bidder, through an open auction process scheduled for December 17, 2003. The Trenton property is a 21-door cross-dock distribution facility situated on 3.78 acres and has been closed to operations since September 3, 2002 when the 74-year-old company filed for bankruptcy protection. Since then CF has been liquidating the assets of the corporation under orders of the bankruptcy court. Twenty-four CF employees formerly worked at the Trenton terminal. A contract price of $500,000 has been established for the CF property. Interested parties who would like to participate in the December 17 bankruptcy auction should submit the form Request to be Designated a Qualified Bidder at Auction. That form can be found at http://www.cfterminals.com/Overbidder.htmland must be submitted prior to the date of the auction. The indicated deposit must also be received, via wire or certified check, prior to the date of the auction. To date, 169 CF properties throughout the U.S. have been sold for over $295 million. Potential bidders should direct any questions about the property and the bidding procedures that cannot be answered at the company's Web site http://www.cfterminals.comto Transportation Property Company at 800-440-5155. COVANTA ENERGY: Selling Energy & Water Businesses to Danielson -------------------------------------------------------------- Danielson Holding Corporation (Amex: DHC) and Covanta Energy Corporation have signed a definitive agreement under which Danielson will acquire Covanta's energy and water businesses in connection with Covanta's emergence from bankruptcy. Danielson will not acquire Covanta's geothermal and other assets, the dispositions of which are already under contract with other buyers under Covanta's Chapter 11 process. In addition, Danielson and Covanta have agreed on principal terms of new credit arrangements for Covanta's domestic and international businesses. Covanta will remain headquartered in Fairfield, New Jersey. Anthony J. Orlando will continue to serve as the company's Chief Executive Officer and the company's existing management structure will stay in place. "This acquisition by Danielson offers a superior deal to Covanta's creditors and is supported by Covanta's management, the agents for its secured bank group, its ad hoc committee of 9.25% debenture holders and its official unsecured creditors' committee," stated Covanta Chief Executive Officer Tony Orlando. "We believe that, under the Danielson plan, Covanta will be in a better position from which to emerge from Chapter 11 than under the prior plan, which is being superseded by the Danielson plan. We are confident that the Danielson acquisition will be advantageous to the company's clients and employees," concluded Mr. Orlando. Under the terms of the proposed transaction, Danielson would acquire 100% of Covanta's equity in consideration for $30 million. In addition, Danielson has obtained commitments from certain of its shareholders to provide a new $118 million replacement letter of credit facility to Covanta, secured by a second lien on Covanta's domestic assets. With respect to Covanta's domestic operations, the transaction also provides for a new $139 million first lien secured letter of credit facility and $205 million of senior secured notes accreting to $230 million by 2011, and an unspecified amount of unsecured notes. As a result of the transaction, Covanta expects to emerge from bankruptcy with approximately $50 million in cash and revolving credit facility availability. D. E. Shaw Laminar Portfolios, L.L.C., a significant creditor of Covanta, has agreed with Danielson to provide a $10 million secured revolving loan facility to Covanta's international operations, which would also issue up to $95 million of secured 3-year term debt to Covanta's creditors. To implement the proposed transaction, Covanta anticipates filing a revised proposed plan of reorganization, a revised proposed plan of liquidation for certain non-core businesses, and an accompanying draft disclosure statement, each reflecting this transaction, with the Bankruptcy Court for the Southern District of New York, where its Chapter 11 cases are pending. The proposed Danielson transaction does not affect Covanta's recently filed plans to sell its geothermal assets to Ormat Nevada, Inc. which was declared the winning bidder following the auction of those assets. The proposed transaction between Covanta and Danielson remains subject to the completion of certain documentation, approval by holders of claims against Covanta, and entry of an order by the Bankruptcy Court confirming Covanta's revised proposed reorganization plan necessary to implement this transaction. There can be no assurance that the Bankruptcy Court will approve, or that the holders of claims against Covanta will vote to support, the new reorganized proposed plan embodying the transaction with Danielson or that final documentation will be reached on terms satisfactory to all parties. Subject to receipt of these approvals, the companies expect the transaction to close in the first quarter of 2004. Danielson has obtained the financing necessary for the Covanta acquisition from three of its shareholders: SZ Investments, L.L.C., Third Avenue Trust, on behalf of Third Avenue Value Fund, and Laminar have provided $40 million of bridge financing to Danielson in exchange for a note convertible into shares of Danielson common stock at a price of $1.53 per share. Danielson will use $30 million of the proceeds from the bridge financing first to post a deposit with Covanta. The deposit would then be used as Danielson's purchase price for Covanta's equity interests. Danielson will use the remainder of the proceeds to pay certain transaction expenses and for general corporate purposes. Danielson expects to refinance the convertible note through a pro rata rights offering to its shareholders following the closing of the Covanta acquisition. Danielson intends to issue rights to purchase 0.75 shares for each outstanding share of Danielson common stock at an exercise price of $1.53 per share in a registered rights offering. If Danielson does not refinance the entire convertible note, the remainder of the note would be convertible into shares of Danielson common stock at the rights offering price of $1.53 per share. In addition, Laminar has agreed to purchase up to an additional 8.75 million shares of Danielson common stock at $1.53 per share based upon the levels of public participation in the rights offering. The financing and other related party transactions were approved by a special committee of independent directors of Danielson. Covanta Energy Corporation is an internationally recognized designer, developer, owner and operator of power generation projects and provider of related infrastructure services. Its waste-to-energy facilities convert municipal solid waste into energy for numerous communities, predominantly in the United States. The Company also operates water and wastewater treatment infrastructures. Danielson Holding Corporation is an American Stock Exchange listed company, engaging in the financial services and specialty insurance business through its subsidiaries. Danielson's charter contains restrictions that prohibit parties from acquiring 5% or more of Danielson's common stock without its prior consent. DAISYTEK INT'L: Files Plan and Disclosure Statement in Texas ------------------------------------------------------------ Daisytek International Corporation and all of its Chapter 11 affiliates announced that the company, which filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code earlier this year, has filed its proposed plan and disclosure statement with the United States Bankruptcy Court for the Northern District of Texas. The plan and disclosure statement remain subject to Bankruptcy Court approval. The plan was formulated after extensive discussions among the Debtors and their professionals and the Official Unsecured Creditors Committee and its professionals and contemplates the transfer of Daisytek's remaining assets to a creditors trust which will oversee the winding up of operations of the Debtors and make distributions to holders of allowed claims. The plan does not contemplate any distribution for holders of equity interests in Daisytek International. The secured claims of Bank of America, N.A., for itself and as agent to certain lenders (the collective Bank Group of Daisytek International), have previously been paid in full, on a provisional basis, pending the outcome of certain litigation between the Bank Group and the Official Unsecured Creditors Committee. Daisytek has recently consummated the sales, on a going concern basis, of the assets of Arlington Industries, Inc.; Digital Storage, Inc.; The Tape Company Inc.; certain intellectual property assets of Daisytek, Incorporated and the capital stock of Daisytek Argentina, Daisytek Canada and Daisytek Mexico. All of the above mentioned sales have closed and funded subject to certain post-closing adjustments that are anticipated to result in significant additional proceeds to the Debtors in the next several months. The Debtors anticipate that the Official Committee of Unsecured Creditors will become a co-proponent of the Plan in the next few weeks. The Bankruptcy Court has set a hearing on the disclosure statement for January 6, 2004. Confirmation of the plan is anticipated by mid-February, 2004. The United States subsidiaries of Daisytek International Corporation including Arlington Industries, Inc., Digital Storage, Inc. and The Tape Company each filed a voluntary petition for relief under Chapter 11 of the United State Bankruptcy Code on May 7, 2003 and subsequently, Daisytek International Corporation filed a voluntary petition for relief under Chapter 11 on June 2, 2003. Both petitions were filed in the United States Bankruptcy Court for the Northern District of Texas, Dallas Division. On May 16, 2003, the boards of directors for certain business units of Daisytek International Corp. outside of the United States elected to appoint voluntary administrators for their business units. DDI CORPORATION: S.D.N.Y. Court Confirms Plan of Reorganization --------------------------------------------------------------- DDi Corp. (OTC Bulletin Board: DDIC), a Delaware corporation and DDi Capital Corp., a California corporation and an indirect wholly-owned subsidiary of DDi Corp., announced that the United States Bankruptcy Court for the Southern District of New York has approved their Plan of Reorganization. The Plan received overwhelming support from the senior lenders, convertible subordinated noteholders, senior discount noteholders and voting stockholders. The Company expects the Plan to go effective no later than ten days after the Court enters its order confirming the Plan. "The Court's confirmation of our Plan of Reorganization and the vote of confidence from our creditors mark a significant milestone as we move closer to completing our restructuring and successfully emerging from Chapter 11," said Bruce McMaster, President and CEO of DDi Corp. "The hard work and commitment of all parties were integral in formulating a Plan which makes DDi a financially stronger company that will position us for future growth. We appreciate the support and loyalty of our customers and vendors through this process as well as the diligent efforts of our employees, which allowed us to continue to provide the leading- edge technological capabilities and service that are our hallmark." The Company's Chapter 11 case which was filed on August 20, 2003, involved a pre-arranged restructuring of the debt and equity of DDi Corp. and DDi Capital. Under the Plan, the Company will emerge with significantly reduced debt and a restructured senior credit facility. In addition, the Plan provides for the cancellation of convertible subordinated notes of DDi Corp. and the restructuring of senior discount notes in DDi Capital. DDi Corp.'s convertible subordinated noteholders will receive pro rata shares in the new outstanding common stock of DDi Corp as well as shares in a new class of preferred stock in DDi Europe, DDi Corp.'s European operating company. Full details are outlined in the Plan of Reorganization. DDi is a leading provider of time-critical, technologically advanced, electronics manufacturing services. Headquartered in Anaheim, California, DDi and its subsidiaries offer fabrication and assembly services to customers on a global basis, from its facilities located across North America and in England. EL PASO: Amends Exchange Offer for 9.00% Equity Security Units -------------------------------------------------------------- El Paso Corporation (NYSE: EP) has amended its exchange offer for its 9.00% Equity Security Units dated October 24, 2003, as amended by the Amended and Restated Confidential Offering Memorandum dated November 19, 2003, and has extended the expiration date of the exchange offer to Tuesday, December 23, 2003. The extension will allow sufficient time for El Paso to disseminate its long-range plan, currently scheduled to be announced December 15, 2003. The offer had previously been scheduled to expire on Wednesday, December 3, 2003. In accordance with the terms and subject to the amended conditions of the exchange offer, El Paso will offer to exchange for up to 10,350,000 Units validly tendered and not properly withdrawn, (1) 2.5063 shares of its common stock and (2) cash in the amount of $9.70. Fractional shares will not be issued in the exchange. The 10,350,000 Units represent 90 percent of the 11,500,000 Units currently outstanding. If more than 10,350,000 Units are tendered, Units will be accepted on a pro rata basis. The exchange offer is conditioned upon, among other things, the valid tender of at least 5,750,000 Units, which represents 50 percent of the currently outstanding Units. Completion of the exchange offer is also subject to the nonwaivable condition that the exchange offer not result in the Units being delisted from the NYSE. By offering to exchange for up to 90 percent of the outstanding Units, El Paso will ensure that the Units may still be traded on the NYSE. The exchange offer is being made pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended. Each Unit currently consists of a purchase contract to purchase at a price of $50, a maximum of 2.5063 shares of El Paso common stock on August 16, 2005, and a senior note with a principal amount of $50 that is due on August 16, 2007. The senior note is pledged to El Paso to secure the holder's obligation to purchase shares of common stock under the purchase contract. The exchange offer for the Units will expire at 5:00 p.m. New York City time, on December 23, 2003, unless the offer is extended by El Paso. The withdrawal rights will also expire at 5:00 p.m. New York City time on the expiration date. The exchange agent for the exchange offer is The Bank of New York. The information agent for the exchange offer is D.F. King & Co., Inc. Additional information concerning the procedures of the exchange offer and copies of the Second Amended and Restated Confidential Offering Memorandum and related documents, which collectively describe the exchange offer in greater detail, may be obtained from D.F. King & Co. at (212) 269-5550 (banks and brokers) or (800) 431-9633 (all others). The company's board of directors is not making any recommendation to holders of Units as to whether or not they should tender any Units pursuant to the exchange offer. El Paso Corporation (S&P, B+ L-T Corporate Credit Rating, Negative) is the leading provider of natural gas services and the largest pipeline company in North America. The company has core businesses in pipelines, production, and midstream services. Rich in assets, El Paso is committed to developing and delivering new energy supplies and to meeting the growing demand for new energy infrastructure. For more information, visit http://www.elpaso.com ENRON CORP: Proposes Uniform Smith Street Bidding Procedures ------------------------------------------------------------ To maximize the value of the Property located at 1400 Smith Street, in Houston, Texas, Enron Corp., Enron Property & Services Corporation and non-debtor Enron affiliate, Enron Leasing Partners, LP, Bank wish to implement a competitive bidding process designed to generate a maximum recovery and typical for transactions of this size and nature. Accordingly, at the Parties' request, Judge Gonzalez rules that: A. Auction Date and Time: The Auction will be held on December 2, 2003 commencing at 9:00 a.m. at the offices of Weil, Gotshal & Manges LLP, 700 Louisiana Street, Houston, Texas for consideration of qualifying bids for the Property that may be presented to the Parties. B. Qualification as Bidder Any entity that wishes to make a bid for the Property must provide the Parties with sufficient and adequate information to demonstrate, to the sole and absolute satisfaction of the Debtors, upon prior consultation with the Creditors' Committee, and TNPC, that the bidder has the financial wherewithal and ability to consummate the transactions contemplated in the purchase and sale agreement submitted with the Bid, including evidence of adequate financing or a parent guaranty or irrevocable letter of credit, if deemed appropriate, each in a form agreed upon by the Debtors, upon prior consultation with the Creditors' Committee, and TNPC. C. Bid Requirements (1) All Bids must have a purchase price of at least $50,000,000. TNPC reserves the right to cause the Parties to refuse any bid for a purchase price that does not exceed $55,000,000; (2) Bids must be received no later than 12:00 noon (Central Time) on December 1, 2003 by: * Enron Corp. Atten.: George Wasaff (george.wasaff@enron.com) Facsimile: (713)853-1500 * Travis National Properties Corporation Atten.: F. Hall Webb (hall.webb@chase.com) Facsimile: (713)216-2092 * Weil, Gotshal & Manges LLP Atten.: Philip I. Danze, Esq., (Philip.danze@weil.com) Facsimile: (214)746-7777 * Bracewell & Patterson LLP Atten.: Clark Thompson, Esq., (cthompson@bracepatt.com) Facsimile: (713)222-3272 * Squire, Sanders & Dempsey LLP Atten.: Steven P. Otillar, Esq., (sotillar@ssd.com) Facsimile: (713) 546-5830 (c) Each bid must be accompanied by a $3,000,000 Deposit, to be wire transferred to the account of Stewart Title Company, 1980 Post Oak Blvd., Suite 110, in Houston, Texas 77056. D. Due Diligence Interested parties may contact Richard H. Rudd, Senior Managing Director, Granite Partners LLP, at Telephone No. (713)479-5020, Facsimile No. (713)479-5010 or at e-mail address rrudd@granitepartner.com for due diligence procedures. Before a party will be allowed to conduct due diligence, they must execute the Confidentiality Agreement. Due diligence will conclude before the Bid Deadline. E. Auction Upon consultation of the Creditors' Committee and TNPC, the Debtor, prior to the Auction, the Debtors will: (a) evaluate all Bids received; (b) invite qualified bidders to participate in and attend the Auction; and (c) determine which Bid reflects the highest and best offer for the Property. At the outsell of the Auction, the Parties will announce the Preliminary Purchase Price. Competing bids must exceed the Preliminary Purchase Price or the prior bid by at least $1,000,000. Subsequent bids in excess of $56,000,000 must be in $500,000 increments. Pursuant to the Forbearance Agreement, the Debtholder will waive the right to credit bid if there is an initial or subsequent competing Bid in excess of $55,000,000. F. Additional Earnest Money and Closing Immediately after the close of the Auction, the winning bidder will execute and deliver the Purchase Agreement, modified as appropriate for the Auction results, and deliver, as additional earnest money, the difference between (i) 20% of the purchase price, and (ii) $3,000,000 to the Title Company via wire transfer of immediately available Federal funds, which will be placed and held in escrow by the Title Company in the same account as the Earnest Money Deposit until Closing. At the Closing, the winning bidder will deliver the remainder of the Purchase Price to the Title Company and the Title Company will pay the Purchase Price to the Agent, on behalf of the Banks, subject to adjustments as provided in the Purchase Agreement, via wire transfer to Account No. 00113258983 at JPMorgan Chase Bank. (Enron Bankruptcy News, Issue No. 88; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENRON CORP: Proposes to Compromise Potential Employee Claims ------------------------------------------------------------ Enron Corporation and Enron Expat Services, Inc., are the corporate sponsors of, among other arrangements, two deferred compensation programs: -- the Enron Corp. 1994 Deferral Plan, and -- the Enron Expat Services, Inc. 1998 Deferral Plan. Pursuant to the Deferral Plans, eligible employees had the right to elect to defer the receipt of a portion of their salary, bonuses and long term incentive compensation, including, but not limited to, restricted stock, performance unit cash, or gains derived from the exercise of stock options, that they had the right to receive. The deferred amounts would thereafter be payable on certain events, including termination of employment not for "cause", retirement, death or disability, or at any time, subject to certain penalties and approvals. Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, in New York, relates that the Deferral Plans are "nonqualified" deferred compensation arrangements. A "nonqualified" plan is not subject to many of the rules under the Employee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code of 1986, as amended. Among the rules not applicable to nonqualified plans are rules pertaining to funding and vesting. Because of the unregulated nature of the nonqualified plans, employers must limit participation in the plant to "a select group of management or highly compensated employees." According to Mr. Rosen, the chief benefit of participation in the Deferral Plans is the Participant's deferral of taxation on the compensation deferred under the Deferral Plans until the benefits are actually paid to a Participant. To receive the benefit of deferred taxation, the amounts deferred must generally be made subject to the claims of general creditors of the employer. The Debtors believe that the Participants have the status of unsubordinated general unsecured creditors of the Debtors. The Deferral Plans generally provide that Participant salary deferrals are part of the general corporate assets of the Debtors and that, with respect to benefits under the Deferral Plans, Participants have the status of general creditors of the Debtors. The Deferral Plans generally provide that, subject to the consent of the applicable administrative committee for the Deferral Plans, a Participant has a right to receive his benefit under the Deferral Plans at any time, subject to the forfeiture of 10% of the elected distribution amount and the suspension of participation in the Deferral Plans for a period of 36 months after the date of the distribution. Between October 25, 2001 and November 30, 2001, 206 Participants made requests for accelerated distributions in accordance with the terms of the Deferral Plans. Of that, 106 were approved, resulting in aggregate pre-tax distributions of $53,135,993 in cash and $554,794 of Enron Common Stock. Mr. Rosen states that although the Accelerated Distributions were made in accordance with the terms of the Deferral Plans, due to the Debtors' subsequent Chapter 11 filing, the cash portion of the Accelerated Distributions may be subject to avoidance in accordance with Sections 544, 547, 548, 549 and 550 of the Bankruptcy Code. By motion, the Employee Committee requested authorization to commence litigation against each of the Recipients to recover the respective Accelerated Distributions. Subsequently, the Debtors and the Employee Committee began discussions in an effort to determine the best approach to recover the cash portion of the Accelerated Distributions and, at the same time, continue to provide incentives to those Recipients who remained in the employ of the Debtors after the receipt of the Accelerated Distributions. Based on those discussions, Mr. Rosen tells Judge Gonzalez that the Debtors and the Employee Committee reached an accord for the compromise and settlement of claims and causes of action arising from the Accelerated Distributions and authorization for the Employee Committee to commence litigation with respect to certain claims to the extent necessary, it being involuntary in nature with respect to the Recipients in accordance with the principles. The Proposed Settlement Pursuant to the settlement, the Debtors categorized the Recipients into three groups: Group I: Active employees Group II: Former employees whose employment was involuntarily terminated, other than for cause, following the Enron Petition Date Group III: Recipients who were not employed as of the Enron Petition Date, who voluntarily terminated their employment with the Debtors, or whose employment was involuntarily terminated for cause Accordingly, pursuant to Sections 105(a), 363(b) 1103(c) and 1109(b) of the Bankruptcy Code and Rule 9019 of the Federal Rules of Bankruptcy Procedure, the Debtors seek the Court's authority to compromise and settle potential claims and causes of action arising from the Accelerated Distributions and offer settlement and release agreements to Group I and Group II Recipients in exchange for repayment of a portion of the cash component of the Accelerated Distributions and authorizing the Employee Committee to commence litigation on behalf of the Debtors' estate with respect to the claims. On the basis of their voluntary or justified termination, Mr. Rosen says that Group III Recipients will be offered a Settlement Agreement by the Employee Committee on behalf of the Debtors' estates for repayment of 90% of the cash component of the Accelerated Distributions. The Employee Committee will thereafter have the authority, and has indicated its intent, to commence litigation to recover the full amount of the cash component of the Accelerated Distributions with respect to any Group I Recipient, Group II Recipient or Group III Recipient who fails to accept the settlement prior to October 31, 2003 or make the required repayments within the applicable period. The Debtors estimate that with this two-pronged approach, they may be able to recover a substantial portion of the aggregate cash component of the Accelerated Distributions for the benefit of their respective estates. The amounts the Participants deferred pursuant to the Deferral Plans may have been generated from different compensation sources. The Debtors believe it is possible that a portion of certain Recipient's prepetition salary or bonuses may be subject to challenge as a preference or fraudulent conveyance, while simultaneously subject to avoidance as an Accelerated Distribution. To avoid the possibility of exposure to multiple avoidance actions over the same property transfers by the Debtors, Mr. Rosen says the Settlement Agreement includes a provision that upon the Recipient's payment in full of the amounts agreed to in the Settlement Agreement, the Debtors will waive all other claims directly relating to the amount received as an Accelerated Distribution. However, the waiver will not include those claims included in the "90-Day Bonus Avoidance Actions" as defined in the August 28, 2002 Court order, or any subsequent clarifications or modifications by the Court of that order. In addition, the Debtors ask that they be given authority to waive or reduce claims in respect of the Accelerated Distributions against any Recipient who qualifies for hardship; provided, that the Debtors will provide the Creditors' Committee and the Employee Committee with 10 business days prior written notice of any proposed determination of hardship, and will not implement the determination without the consent of the Creditors' Committee or the Employee Committee if either objects in writing to the proposed determination within the 10 business day period. Certain of the Recipients received both Accelerated Distributions and performance bonuses that are being challenged by the Committee pursuant to the assignment of claims in the Court's order dated August 28, 2002. The Debtors, the Creditors' Committee and the Employee Committee understand that the overlap of claims against certain Recipients for Accelerated Distributions and pursuant to the "90-Day Bonus Avoidance Actions" might create practical and other potential conflicts that may need to be addressed at a future date. The Debtors, the Creditors' Committee and the Employee Committee will jointly and consensually resolve the disposition of any overlap creating the conflicts or will resolve the conflicts by further Court order. Consideration for the Settlement Agreement The amount required to be repaid in exchange for entering into the Settlement Agreement depends on whether the Recipient continues to provide or has provided post-bankruptcy services to the Debtors' estate. Specifically, in light of the ongoing benefits being provided to the Debtors, each Group I Recipient would be required to repay 40% of the cash component of the Accelerated Distribution in exchange for entering into the Settlement Agreement. Similarly, based on the postpetition services provided, each Group II Recipient would be required to repay a scaled portion of the cash component of the Accelerated Distribution, depending on the date of his or her termination of employment, as: Postpetition Services Repayment Percentage --------------------- -------------------- Through 12/31/01 85% Through 03/31/02 80% Through 06/30/02 70% Through 09/30/02 64% Through 12/31/02 58% Through 03/31/03 52% Through 06/30/03 46% Through 09/30/03 40% The Debtors will offer the Settlement Agreement to Groups I and II Recipients as soon as practicable. If the Settlement Agreement is not acceptable, the Employee Committee would thereafter have standing and authority as a representative of the Debtors' estates to seek repayment of the cash component of the Accelerated Distributions from the respective non-accepting Group I and Group II Recipients through commencement of litigation, including, without further Court approval, settlements against Recipients at the percentages set forth herein. In addition, the Employee Committee will be authorized to enter into hardship settlements with Recipients; provided that the Employee Committee will provide the Debtors and the Creditors' Committee with 10 business days prior written notice of any settlement, and will not enter into the settlement without the consent of the Debtors or the Creditors' Committee if either objects in writing to the proposed determination within the 10 business day period. Payment of Consideration The Debtors recognize that the repayment of the cash component of the Accelerated Distributions will require the outlay of a significant amount of cash for the Recipients, many of whom are no longer employed with the Debtors or their affiliates and many of whom may have been unemployed for a significant period of time. To provide the maximum possibility that Recipients will be able to meet the repayment term of the Settlement Agreement, the Debtors ask the Court that they be given the authorization to provide three possible methods of repayment: (1) All Recipients would be encouraged to make the repayment in a single lump sum cash payment; (2) All Group I Recipients who remain active employees of the Debtors or their affiliates would have the option, subject to the Debtors' approval, to elect that the Debtors or their affiliates withhold the repayment in installments or a lump sum from their current net compensation, including payments vested and earned under the Debtors' Court-approved retention programs, with a requirement that the full amount be repaid by October 30, 2004. In the event that the Recipient will be separated from employment, the repayment is due in full in a lump sum from the Recipient's final compensation, including regular and vacation pay, bonuses and severance. If, however, the Recipient can demonstrate, to the reasonable satisfaction of the Debtors, an inability to make an immediate payment in a lump sum, the Debtors may provide the Recipient with the option to continue the previously agreed on installment payments; and (3) In all cases, Group I and Group II Recipients who are current or former employees of the Debtors or their affiliates and who can demonstrate, to the reasonable satisfaction of the Debtors, an inability to make an immediate payment in a lump sum would have the option to elect to make the repayment in installments, with payment in full to be received no later than October 30, 2004. Notwithstanding, the Debtors will only consent to an installment election to the extent permitted by applicable law and provided that the Debtors will provide the Creditors' Committee and the Employee Committee with 10 business days prior written notice of the proposal to provide any installment option, and will not implement the installment option without the consent of the Creditors' Committee or the Employee Committee if either objects in writing to the proposed determination within the 10 business day period. For any Recipient who is granted the option to repay the cash component of the Accelerated Distribution in installments, the Settlement Agreement provides for a tolling of the applicable statute of limitations pursuant to Section 108 of the Bankruptcy Code and other applicable law and further provides that in the event of default, the full amount of the repayment is payable immediately and that absent full repayment in accordance with the terms of the Settlement Agreement the Recipient owes the full amount of the cash component of the Accelerated Distribution, plus the costs, expenses and attorneys' fees associated with collection and the Employee Committee will be given the standing and authority to enforce the terms of the Settlement Agreement. Employee Committee's Authorization to Pursue Claims As noted, the Debtors request that the Employee Committee be given standing and authority to offer Group III Recipients, those who voluntarily terminated their employment on or prior to the Enron Petition Date or were dismissed for Cause, the opportunity to settle the Accelerated Distribution claims at 90% of the cash component of the Accelerated Distribution. The Employee Committee will have the standing and authority to prosecute or settle the full amount of the cash component of the Accelerated Distributions from all Group III Recipients who do not sign the Settlement Agreement they are offered. To the extent that a Group I or Group II Recipient declines to accept the Settlement Agreement, the Debtors submit that the full amount of the cash component of their respective Accelerated Distributions should be recovered and the Employee Committee will have the standing and authority to do so. Similarly, to the extent a Recipient signs a Settlement Agreement and fails to fully or timely make payments in accordance with the terms of the Settlement Agreement, the Employee Committee will have standing and authority as a representative of the Debtors' estates to enforce the terms of the Settlement Agreement. Due to the employee/employer relationship among the Recipients and the Debtors, the Debtors assert that the Employee Committee is the more appropriate entity to commence litigation. Accordingly, the Debtors request that the Court authorize the Employee Committee to offer the Group III Recipients the opportunity to settle claims in respect of the Accelerated Distributions at 90% of the cash component of the Accelerated Distribution, and to pursue the full amount, 100%, of the cash component of all Accelerated Distributions against any Group I Recipient, Group II Recipient, or Group III Recipient who fails to accept the Settlement Agreement by October 31, 2003, or to enforce the terms of the Settlement Agreement against all Recipients who make the required repayment to the Debtors within the applicable period stated in the Settlement Agreement. In addition, the Debtors request that the Employee Committee be granted standing and authority to pursue the full amount of claims for repayment of the cash component of the Accelerated Distribution, plus costs, expenses and attorneys' fees associated with collection, from any Recipient who fails to satisfy the terms of the Settlement Agreement, including Recipients who fail to make a full repayment through permitted installments. The Employee Committee will have standing and authority, as a representative of the Debtors' estates, to seek repayment of the cash component of the Accelerated Distributions from Recipients through the commencement of litigation as stated herein, and to negotiate the settlement with the Recipients on terms and conditions acceptable to the Debtors and the Creditors Committee without further Court order; provided, however, that in the absence of hardship, in the event any settlement is proposed to be provided on terms that would result in a reduced recovery from the amounts set forth herein, the settlements will only become effective upon further Court order. The Debtors, through their officers, managers and employees, other than the individuals who qualify as Recipients, will reasonably and promptly assist the Employee Committee and its representatives in the performance of its duties described in this request, including the provision of reasonable requested documentation, testimonial or otherwise, other than the documentation as may reasonably be designated as privileged or confidential by the Debtors. Other Matters The Debtors and the Employee Committee seek authorization for the Employee Committee's counsel's fees and expenses in pursuing claims related to the Accelerated Distributions to be paid in accordance wit the existing fee and expense application process. To the extent that funds are recovered either through compromise and settlement or in the commencement of litigation, the Debtors will hold the funds and neither used nor dispersed by until further Court order, and will thereafter be distributed in accordance with the Plan or Court order. In that regard, any funds recovered by the Employee Committee will be recovered solely as the Debtors' agent and will be promptly turned over to the Debtors for retention. Mr. Rosen contends that the Debtors' request is warranted and should be granted because: (a) given the fact that the Debtors have suffered from high rates of attrition, it is neither in their best interests nor good business practice to expose Group I Recipients to the risk of litigation while they are expending their efforts providing value to, and enhancing the value of, the Debtors' estates; (b) the Debtors believe that it is inappropriate to treat Group II Recipients in the same manner as Group II Recipients as certain of them may have provided value to the Debtors postpetition, which is reflected in the scaled repayments; (c) the Recipients qualifying for hardship represent a collection risk that renders seeking disgorgement a fruitless exercise that would only result in increased costs to the estate with no likely return on the investment; (d) the return of a substantial portion of the aggregate cash component of the Accelerated Distribution through these efforts is beneficial to the estates; (e) the elimination of potential litigation costs represents a benefit to the Debtors' creditors and all parties-in- interest; (f) assigning to the Employee Committee the right to pursue litigation with respect to the Accelerated Distributions is consistent with the goal of maximizing the value of the Debtors' estates; and (g) the assignment of right to pursue litigation relieves the Debtors from being placed in the untenable position of having to litigate with their current employees. (Enron Bankruptcy News, Issue No. 88; Bankruptcy Creditors' Service, Inc., 215/945-7000) EXIDE TECHNOLOGIES: Court Okays S&P Consulting as Fin'l Advisor --------------------------------------------------------------- The Exide Debtors obtained permission from the Court to employ Standard & Poor's Corporate Value Consulting pursuant to Section 327(a) of the Bankruptcy Code to perform financial advisory services for the Debtors in these Chapter 11 cases. Specifically, S&P Consulting will assist: -- the Debtors in determining the value of their current business operations; -- with the financial modeling; and -- in the valuation of the Debtors' tangible or intangible assets for Fresh Start Accounting and tax reporting purposes. The Debtors will to pay S&P Consulting based on these customary hourly rates, subject to periodic adjustments: Managing Director $360 Director 330 Manager 290 Senior Associate/Associate 160 - 230 (Exide Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 215/945-7000) FAO INC: Will File for Chapter 22 Bankruptcy Later This Week ------------------------------------------------------------ FAO Inc., a specialty retailer of high-quality, developmental, educational and care products for infants and children and high quality toys, games, books and multimedia products for kids through age 12, is expected to file for Chapter 11 bankruptcy protection in Delaware later this week, Dow Jones Business News reported. This would be the toy retailer's second filing within this year, the first being filed on January 13, 2003, in the U.S. Bankruptcy Court for the District of Delaware. The company, along with its affiliates, eventually emerged from bankruptcy proceedings in April. The report added that the company, under bankruptcy protection, plans to sell its FAO Schwarz and Right Start stores and liquidate the Zany Brainy business. Lenders have given the company a December 15 deadline to sell inventory of the three brands, while the company hasn't found buyers for the stores. As previously reported in Troubled Company Reporter's November 11, 2003 edition, the company said that sales in its retail stores and through its catalogs and internet sites had been disappointing and significantly below expectations. Assuming a continuation of the low sales trend in late October and early November, the Company would not have adequate liquidity to operate its business normally in November and that liquidity in December would depend on whether the sales trend would improve through the holidays. In the near term the Company stated that it was asking certain of its vendors to reduce shipments and most vendors to extend payment dates to the first of the year. The Company gave no assurances that its vendors would relax terms as requested. The Company also stated that it had requested an overadvance from its lenders which could lead to its lenders issuing a notice of default. Previously the Company announced that it had engaged an investment banker to assist it in raising capital. In light of current circumstances, the Company stated that it had expanded the assignment to include a review of strategic alternatives including a sale of the Company but made no assurances that any alternatives would be available or, if available, would be acceptable. FIRST HORIZON: Fitch Rates Class B-4 & B-5 Certificates at BB/B --------------------------------------------------------------- Fitch rates First Horizon Asset Securities Inc.'s $249.9 million mortgage pass-through certificates, series 2003-10, as follows: -- $244.6 million classes I-A-1 through I-A-6, I-A-PO, I-A-R, II-A-1 (senior certificates) 'AAA'; -- $2.8 million class B-1 'AA'; -- $1.3 million class B-2 'A'; -- $626,000 class B-3 'BBB'; -- $375,000 class B-4 'BB'; -- $376,000 class B-5 'B'. The 'AAA' rating on the senior certificates reflects the 2.30% subordination provided by the 1.10% class B-1, 0.50% class B-2, 0.25% class B-3, 0.15% privately offered class B-4, 0.15% privately offered class B-5 and 0.15% privately offered class B-6 certificates. Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings reflect the quality of the mortgage collateral, strength of the legal and financial structures, and the servicing capabilities of First Horizon Home Loan Corporation, currently rated 'RPS2' by Fitch. As of the cut-off date (Nov. 1, 2003), the trust will consist of two cross-collateralized groups. The certificates whose class designation begins with 'I' and 'II' correspond to groups I and II, respectively. The group I mortgage loans have an aggregate principal balance of $190,277,207 of conventional, fully amortizing, 30-year fixed-rate mortgage loans secured by first liens on one- to four-family residential properties. The average principal balance of the loans in this pool is approximately $478,083. The mortgage pool has a weighted average original loan-to-value ratio of 69.34%. The weighted average FICO score is approximately 743. Rate/Term and Cash-out refinance loans account for 30.78% and 12.21% of the pool, respectively. The states that represent the largest portion of the mortgage loans are California (31.04%), Virginia (8.28%), Maryland (6.82%), Texas (6.47%), Massachusetts (5.81%), and Washington (5.27%). The group II mortgage loans have an aggregate principal balance of $60,060,082 of conventional, fully amortizing, 15-year fixed-rate mortgage loans secured by first liens on one- to four-family residential properties. The average principal balance of the loans in this pool is approximately $513,334. The mortgage pool has a weighted average OLTV of 61.72%. The weighted average FICO score is approximately 749. Rate/Term and Cash-out refinance loans account for 53.95% and 20.48% of the pool, respectively. The states that represent the largest portion of the mortgage loans are California (22.27%), Massachusetts (12.09%), Washington (9.95%), Texas (7.36%), and Pennsylvania (5.35%). None of the mortgage loans are 'high cost' loans as defined under any local, state or federal laws. All of the mortgage loans were originated or acquired in accordance with First Horizon Home Loan Corporation's underwriting guidelines. The trust, First Horizon Mortgage Pass-Through Trust 2003-10, was created for the sole purpose of issuing the certificates. For federal income tax purposes, an election will be held to treat the trust as a sole real estate mortgage investment conduit. The Bank of New York will act as trustee. FLOWSERVE: Proposes to Borrow from the European Investment Bank --------------------------------------------------------------- Flowserve Corp. (NYSE:FLS) recently proposed to borrow EUR 70 million from the European Investment Bank in Luxembourg. If the proposal is approved, the company said it plans to use the proceeds for future product research and development in its facilities in EU member states. Flowserve produced revenues of approximately $790 million in Europe in 2002. The company stressed the transaction would not increase the total amount of its net outstanding debt, as it plans to prepay higher cost bank debt if the transaction closes as contemplated. The company said it expects a decision on the proposal by year end, with funding being subject to both the EIB's discretion and consent of the company's lenders under its credit agreement. Flowserve Corp. (S&P, BB- Corporate Credit Rating, Stable) is one of the world's leading providers of industrial flow management services. Operating in 56 countries, the company produces engineered and industrial pumps for the process industries, precision mechanical seals, automated and manual quarter-turn valves, control valves and valve actuators, and provides a range of related flow management services. FRIEDE GOLDMAN: Co.'s Ability to Continue Operations Uncertain -------------------------------------------------------------- Friede Goldman Halter, Inc. incurred substantial operating losses during 2000 and the first quarter of 2001 and had a working capital deficit of $140.4 million and $343.9 million at December 31, 2000 and March 31, 2001, respectively. On April 13, 2001, the Company received a Notice of Continuing Events of Default and Demand for Payment from Foothill Capital Corporation, as agent for itself and another lender under the Company's Restated Credit Agreement, which demanded the immediate payment of $85.7 million plus interest and various other costs, within five days of the Notice. Further, the Company did not pay the $4.2 million interest payment due on March 15, 2001 on the Company's outstanding 4-1/2% convertible subordinated notes due in 2004 in the principal amount of $185.0 million which resulted in the entire principal amount becoming immediately callable. The Company's inability to meet the obligations under the Restated Credit Agreement and the Subordinated Notes, the working capital deficit, and the expectation of continued operating losses in the short term had generated substantial uncertainty regarding the Company's ability to meet its obligations in the ordinary course of business. As a result, on April 19 and 20, 2001, the Company, including 31 of its subsidiaries, elected to file separate petitions for relief under Chapter 11 of the United States Bankruptcy Code which allows for the reorganization of its debts. The Company filed the petitions in the U.S. Bankruptcy Court for the Southern District of Mississippi, and they are being jointly administered under Case No. 01-52173 SEG. Since the date of the petition, the Company has maintained possession of its property, and has continued to remain in control of its ongoing business affairs as a Debtor in Possession. On March 22, 2002, the Company filed a plan of reorganization with the United States Bankruptcy Court. On June 11, 2003, the Company filed an amended plan of reorganization with the United States Bankruptcy Court due to the sale of the Vessels and Offshore segments. A third amended plan of reorganization was filed on August 14, 2003. An order approving the third amended disclosure statement was entered on August 19, 2003 and ballots were due from claimants on October 17, 2003. Balloting has been completed and the hearing on confirmation of the third amended plan of reorganization originally scheduled for November 18, 2003, has been re-scheduled at the request of the Bankruptcy Court to December 8, 2003. The amended plan will result in no recovery for current equity interests. The amount of any recovery to general creditors will depend primarily on, but will not be limited to, the following factors: (a) the ultimate value of pre-petition claims and (b) the dollar amount of claims associated with the administration of the bankruptcy case. During the nine months ended September 30, 2003, Friede Goldman Halter financed its business activities primarily through funds generated from cash balances and proceeds received from the sale of the Offshore segment. Net cash used in operating activities during the nine months ended September 30, 2003 was approximately $23.9 million, including a net loss of $12.7 million for the nine months ended September 30, 2003, offset by non-cash depreciation and amortization of $0.6 million. Funds generated through operating activities included a $6.8 million decrease in other assets. Funds used by operating activities included a $15.0 million decrease in accounts payable and accrued liabilities and a $4.3 million increase in contract and other receivables. Net cash provided by investing activities during the nine months ended September 30, 2003 was $12.7 million, which includes net cash of $15.1 million generated from the sale of the Offshore segment. In addition, restricted cash increased by $2.4 million primarily due to the remaining Offshore sale proceeds deposited in escrow. Net cash provided by financing activities during the nine months ended September 30, 2003 was $1.1 million. Sources of cash included net borrowings under the line of credit of $1.7 million. Funds used in financing activities included net repayments on other debt facilities of $0.5 million. Total balances outstanding under the Restated Credit Agreement at September 30, 2003 were $10.5 million. On April 18, 2003, $5.7 million was drawn against the one remaining letter of credit issued under the Restated Credit Agreement. The Company's obligation to reimburse Foothill for any draws was secured by $5.7 million in cash. In April 2003, restricted cash was reduced by an amount equal to the draw on the letter of credit. The letter of credit was provided to secure the Company's worker's compensation obligations. GENERAL CHEMICAL: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: General Chemical Industrial Products Inc. 90 East Halsey Road Parsippany, New Jersey 07054 Bankruptcy Case No.: 03-48772 Type of Business: General Chemical Industrial Products Inc., through its subsidiaries and affiliates, is a leading producer of soda ash and calcium chloride in North America. Chapter 11 Petition Date: December 2, 2003 Court: District of New Jersey (Newark) Judge: Donald H. Steckroth Debtor's Counsel: Gregory V. Gooding, Esq. Michael E. Wiles, Esq. Steven R. Gross, Esq. Debevoise & Plimpton 919 Third Avenue New York, NY 10022 Tel: 212-909-6000 -and- Warren J. Martin, Jr. Porzio, Bromberg & Newman PC 100 Southgate Parkway Morristown, NJ 07962-1997 Tel: 973-889-4006 Fax: 973-538-5146 Total Assets: $75,952,105 Total Debts: $144,574,409 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ U.S. Bank National Bond $100,000,000 Association Corporate Trust Services Division One Federal Street 3rd Floor Boston, MA 02110 Mail Station: EX-MAFED Attn: Laura Moran Tel: 617-603-6640 General Chemical Corp. Trade debt $141,483 FMC Wyoming Corporation Trade debt $84,314 Distribution Data Inc. Trade debt $70,000 Matthew McManus Employee Severance $53,083 Joseph Moncofski Employee Severance $13,325 Kleinschmidt Inc. Trade debt $2,699 Acf Industries, Inc. Trade debt $2,307 ADP, Inc. Trade debt $2,051 Professional Pump, Inc. Trade debt $1,847 Hewlett Packard Trade debt $1,399 Village Office Supply Trade debt $1,257 The Copy Depot Trade debt $1,118 BJ Services Company, USA Trade debt $982 Bonta Trade contract $888 RSI Logistics, Inc. Trade debt $774 Piers - The Journal of Trade debt $441 Commerce The Hibbert Company Trade debt $272 Shareholder Service Trade debt $246 Clearblue Technologies Trade debt $240 Management HARTMARX CORP: Michael F. Anthony Elected to Board of Directors --------------------------------------------------------------- Hartmarx Corporation (NYSE: HMX) announced that Michael F. Anthony, chairman, president and chief executive officer of Brookstone, Inc., a specialty retailer of health and fitness, home and office, travel and auto, and outdoor living products, has been elected to the Hartmarx Corporation Board of Directors. Anthony, 48, has been with Brookstone since 1994, serving as president and chief executive officer since September 1995, and was elected chairman in March 1999. Prior to joining Brookstone, Inc., Mr. Anthony held various senior executive positions with Lechter's, Inc., a nationwide chain of specialty housewares stores, including president in 1994, executive vice president from 1993 to 1994, and vice president, general merchandise manager from 1989 to 1993. From 1978 to 1989, he was with Gold Circle, then a division of Federated Department Stores, where he held various merchandising positions. Anthony earned a B.A. in Economics from Westminster College in New Wilmington, Pennsylvania, in 1977, and an M.B.A. from Bowling Green University in 1978. Stuart L. Scott, Chairman of the Nominating and Governance Committee of the Hartmarx Board of Directors stated, "We are pleased that Michael has agreed to serve on the Hartmarx board. His retailing and direct marketing expertise will serve the company and its shareholders well." Hartmarx (S&P, SD Corporate Credit Rating) produces and markets business, casual and golf apparel under its own brands including Hart Schaffner & Marx, Hickey-Freeman, Palm Beach, Coppley, Cambridge, Keithmoor, Racquet Club, Naturalife, Pusser's of the West Indies, Royal, Brannoch, Riserva, Sansabelt, Barrie Pace and Hawksley & Wight. In addition, the Company has certain exclusive rights under licensing agreements to market selected products under a number of premier brands such as Austin Reed, Tommy Hilfiger, Kenneth Cole, Burberry men's tailored clothing, Ted Baker, Bobby Jones, Jack Nicklaus, Claiborne, Evan-Picone, Pierre Cardin, Perry Ellis, Andrea Jovine, KM by Krizia, and Daniel Hechter. The Company's broad range of distribution channels includes fine specialty and leading department stores, value-oriented retailers and direct mail catalogs. HAYES LEMMERZ: Court Approves Plan Distribution Procedures ---------------------------------------------------------- U.S. Bankruptcy Court Judge Walrath approves the Reorganized Hayes Lemmerz Debtors and the HLI Creditor Trust's request, pursuant to these modifications: (a) Rule 3007-1(f) of the Local Rules for the United States Bankruptcy Court for the District of Delaware is waived to allow the Reorganized Debtors to file omnibus objections to all claims held by parties that are subject to Trust Avoidance Claims. The omnibus objections: -- may object to more than 150 claims in each omnibus objection; -- may exceed two substantive omnibus objections in a calendar month; and -- need not contain all substantive grounds to which the claim may be objected to without prejudice to the Reorganized Debtors' rights to object to the claims on additional substantive grounds in other omnibus objections; (b) Neither the Reorganized Debtors nor the Trust will be required to make any distribution under the Plan to a holder of an Allowed Claim until the holder has either: (i) received the appropriate Notice of Allowed Claims from either the Reorganized Debtors or the Trust and returned a Form W-9 or From W-8 as may be applicable; and (ii) established an adequate basis for exemption from withholding. Neither the Reorganized Debtors nor the Trust will request that any holder of an Allowed Claim be required to resubmit either the Form W-9 or Form W-8, as applicable, if the party that would make the distribution under the plan possesses a previously provided copy of the Form W-9 or Form W-8 the validity of which has not expired. Nor will the Reorganized Debtors or the Trust request that an Allowed Claim holder re-establish an adequate basis for exemption from withholding, if the party that would make the distribution possesses a record of the holder's previous establishment of an adequate basis for exemption from withholding and has no reason to believe that the basis for exemption has become valid; (d) The Reorganized Debtors and the Trust will file a certificate of service with the Court indicating the parties on which a Notice of Allowed Claim has been served; (e) Nothing will affect the Debtors' ability to prosecute any pending claims objection or file any new claims objection prior to the Claims Objection Deadline, including any objection, within the appropriate statutory period, to any claim of a Trust Avoidance Party resulting from the resolution of any of the Trust Avoidance Claims; and (f) A holder of an Allowed Claim that does not complete and return a Form W-9 or Form W-8 in accordance with the Notice of Allowed Claims may be subject to a motion to have its claim disallowed. * * * As previously reported, the Reorganized Hayes Lemmerz Debtors and the HLI Creditor Trust proposed certain additional procedures with respect to distributions, pursuant to the Plan. Specifically, the Debtors and the Trust asked the Court to declare that: (a) any holder of an Administrative Claim, Priority Tax Claim, Other Priority Claim, Miscellaneous Secured Claim, General Unsecured Claim or Subordinated Securities Claim, who is also subject to a Trust Avoidance Claim will not have an Allowed Claim and be entitled to receive a distribution pursuant to the Plan, until the time the Trust Avoidance Claim against the holder is resolved; and (b) in the event that the Reorganized Debtors, as Disbursing Agent, or the Trust require a holder of an Allowed Claim to provide an Internal Revenue Service Form W-9 or Form W-8, if applicable, or establish an adequate basis for exemption from withholding, the Disbursing Agent or Trust will be authorized to reserve any distribution otherwise payable to the holder, until the time the holder provides the necessary form or establishes an adequate basis for exemption from withholding. (Hayes Lemmerz Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service, Inc., 215/945- 7000) HOLIDAY RV: U.S. Trustee Names 4-Member Creditors' Committee ------------------------------------------------------------ The United States Trustee for Region 3 appointed 4 creditors to serve on an Official Committee of Unsecured Creditors in Holiday RV Superstores, Inc.'s Chapter 11 cases: 1. Doerge Capital Collateralized Bridge Fund, L.P. Attn: Christopher J. Horvay, Esq., 30 South Wacker Drive, Suite 2112, Chicago, IL 60606, Phone: (312) 906-9600, Fax: (312) 906-8563; 2. Coast Distribution System Attn: Moira M. Knight, P.O. Box 1449 Morgan Hill, California 95038 Phone: (866) 293-2064, Ext. 152, Fax: (303) 375-0527; 3. Century Partnership, Ltd. Attn: Thomas H. Fell, Esq. 3960 Howard Hughes Parkway, 9th Floor, Las Vegas, NV 89109 Phone: (702) 796-5555, Fax: (702) 369-2666; and 4. FTI Consulting, Inc. Attn: Theordore Pincus 2021 Research Drive, Annapolis, MO 21401 Phone: (410) 224-1476, Fax: (410) 224-2809. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Ft. Lauderdale, Florida, Holiday RV Superstores, Inc., owns real property which is leased to an RV dealership. The Company filed for chapter 11 protection on October 20, 2003 (Bankr. Del. Case No. 03-13221). Mark J. Packel, Esq., at Blank Rome LLP represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $3,221,137 in total assets and $15,368,975 in total debts. HYTEK: Revises Management Structure and Reduces Workforce by 10% ---------------------------------------------------------------- Hytek Microsystems, Inc. (OTC Bulletin Board: HTEK) announced the resignation of Scott Martin, vice president and general manager. Martin stepped down as part of a company-wide restructuring effort designed to reduce overhead and improve productivity. In total, the company eliminated approximately 10% of its workforce in the cost saving initiative. "This restructuring will assist us in achieving our long term objectives which include returning the company to profitability," stated John Cole, Hytek's chief executive officer. Founded in 1974, Hytek, headquartered in Carson City, Nevada, specializes in high reliability microelectronic circuits that are used in oil exploration, military applications, satellite systems, industrial electronics, opto-electronics and other OEM applications. Note: News releases and other information regarding Hytek Microsystems can be accessed on the Internet at http://www.hytek.comor http://ctapr.com/htek/ * * * Going Concern Uncertainty In its most recent Form 10-QSB filed with Securities and Exchange Commission, Hytek reported: "In the opinion of management, the [Company's] unaudited financial statements include all adjustments (consisting of only normal recurring adjustments) that are necessary in order to make the financial statements contained herein not misleading. These financial statements, notes and analyses should be read in conjunction with the financial statements for the fiscal year ended December 28, 2002, and notes thereto, which are contained in our Annual Report on Form 10-KSB for such fiscal year. The reports of our independent auditors in the fiscal 2002 financial statements included explanatory paragraphs stating that there is substantial doubt with respect to our ability to continue operating as a going concern. The operating results for the three- and nine-month periods ended September, 27 2003 are not necessarily indicative of the results that may be expected for the entire year ending January 3, 2004. We operate on a 52/53-week fiscal year, which approximates the calendar year. "The unaudited financial statements as of September 27, 2003 have been prepared in accordance with accounting principles generally accepted in the United States, which require the use of estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ materially from those estimates." INFINIA AT FLAGSTAFF: Case Summary & Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: Infinia at Flagstaff, Inc. 450 S. 400 E. Suite 200 Bountiful, Utah 84010 Bankruptcy Case No.: 03-40412 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Infinia at Central Topeka, Inc. 03-40413 Infinia at Scottsdale, Inc. 03-40414 Infinia at McPherson, Inc. 03-40415 Infinia at Arma, Inc. 03-40416 Infinia at South Mountain, Inc. 03-40418 Infinia at Kensington, Inc. 03-40419 Infinia at Wichita, Inc. 03-40420 Infinia at Show Low, Inc. 03-40421 Infinia at Alta, Inc. 03-40422 Infinia at Ogden, Inc. 03-40423 Infinia at Safford, Inc. 03-40424 Infinia at Granite Hills, Inc. 03-40425 Infinia at Smith Center, Inc. 03-40426 Infinia at Abilene, Inc. 03-40427 Infinia at Douglas, Inc. 03-40428 Infinia at Oswego, Inc. 03-40429 Infinia at Florence Heights, Inc. 03-40430 Infinia at Cottonwood, Inc. 03-40431 Infinia at Camp Verde, Inc. 03-40432 Type of Business: Hospital Chapter 11 Petition Date: December 1, 2003 Court: District of Utah (Salt Lake City) 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 Fax: 801-363-5601 Entity Estimated Assets Estimated Debts ------ ---------------- --------------- Flagstaff, Inc. $1M to $10M $100,001 to $500,000 Central Topeka, Inc. $0 to $50,000 $500,001 to $1M Scottsdale, Inc. $100,001 to $500,000 McPherson, Inc. $100,001 to $500,000 $100,001 to $500,000 Arma, Inc. $500,001 to $1M $100,001 to $500,000 South Mountain, Inc. $100,001 to $500,000 Kensington, Inc. $500,001 to $1M $100,001 to $500,000 Wichita, Inc. $1M to $10M $100,001 to $500,000 Show Low, Inc. $500,001 to $1M $100,001 to $500,000 Alta, Inc. $500,001 to $1M $100,001 to $500,000 Ogden, Inc. $1M to $10M $100,001 to $500,000 Safford, Inc. $1M to $10M $0 to $50,000 Granite Hills, Inc. $100,001 to $500,000 $100,001 to $500,000 Smith Center, Inc. $100,001 to $500,000 $100,001 to $500,000 Abilene, Inc. $100,001 to $500,000 $1M to $10M Douglas, Inc. $100,001 to $500,000 $0 to $50,000 Oswego, Inc. $100,001 to $500,000 $100,001 to $500,000 Florence Heights $100,001 to $500,000 $100,001 to $500,000 Cottonwood, Inc. $100,001 to $500,000 $100,001 to $500,000 Camp Verde, Inc. $500,001 to $1M $100,001 to $500,000 A. Infinia at Flagstaff's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Southern Desert Pharmacy Trade Debt $41,183 Medline Industries, Inc. Trade Debt $35,384 Health Trac Trade Debt $18,810 Alternative Professional Trade Debt $18,799 Services Mediq PRN Trade Debt $13,655 EnduraCare Therapy Trade Debt $10,274 Shadow Mountain Trade Debt $10,000 HealthCare, PLL Endura Care Trade Debt $6,189 Xerox Capital Trade Debt $5,498 Kick Technologies Trade Debt $5,060 Apparel Pro Trade Debt $3,455 TRS Recovery Services Trade Debt $3,352 City of Flagstaff Utility $3,162 ISmart Health Systems Trade Debt $3,156 KCI The Clinical Advantage Trade Debt $2,979 AZ Department of Public Trade Debt $2,573 Safety Alliance Medical Trade Debt $2,571 Laboratory Maintenance Warehouse Trade Debt $2,507 UniSource Energy Utility $2,361 Grainger Trade Debt $2,008 B. Infinia at Central Topeka's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Hill-Rom Trade Debt $18,994 Medline Industries, Inc. Trade Debt $14,396 Kick Technologies Trade Debt $7,445 JM Bauersfeld Trade Debt $3,595 Highland Park Pharmacy Trade Debt $2,822 Logan Business Machines Trade Debt $2,736 Advanced Homecare, Inc. Trade Debt $2,454 James Rider Trade Debt $2,000 Ford Credit Trade Debt $1,837 Lathrop & Gage Trade Debt $1,679 Xerox Corporation Trade Debt $1,656 Cotton O'Neil Clinic Trade Debt $1,600 Telecommunications Design Trade Debt $1,450 Life Connections Trade Debt $1,375 KPL/Kansas Gas Service Utility $1,282 John Volker Trade Debt $1,008 Betz Laundry Equipment Trade Debt $968 Topeka Capital Journal Trade Debt $965 Health Trac Trade Debt $945 Birch Telecom Utility $763 C. Infinia at Scottsdale's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Medline Industries, Inc. Trade Debt $35,515 Platinum Select Trade Debt $33,654 Health Trac Trade Debt $33,255 City of Scottsdale Utility $17,048 Southern Desert Pharmacy Trade Debt $15,153 Southwest Gas Corporation Utility $9,476 Southwest Gas Utility $7,404 APS Trade Debt $6,945 Qwest Utility $6,390 Kick Technologies Trade Debt $5,200 MGA Healthcare Staffing Trade Debt $4,943 Fern Office Supplies Trade Debt $3,923 Favorite Nurses Trade Debt $2,989 AAA Full Transportation Trade Debt $2,616 Sonora Quest Utility $2,041 American Physician, Inc. Trade Debt $1,982 Dependable Medical Trade Debt $1,752 Transport, Service, Inc. First Choice Business Trade Debt $1,674 Machines MidState Mechanical, Inc. Trade Debt $1,506 ReddiRoot'r Trade Debt $1,212 D. Infinia at McPherson's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Rehab Works, Inc. Trade Debt $97,278 Select Rehabilitation Trade Debt $19,900 Medical Center Pharmacy Trade Debt $18,553 Medline Industries, Inc. Trade Debt $11,469 Memorial Hospital, Inc. Trade Debt $10,974 Health Trac Trade Debt $8,265 Staff Support Services Trade Debt $5,468 Dr. Brian Billings Trade Debt $3,500 Advanced Homecare, LLC Trade Debt $2,848 B&K Prescription Shop Trade Debt $2,835 Kick Technologies Trade Debt $2,455 Maintenance Warehouse Trade Debt $1,923 Hill-Rom Industry Trade Debt $1,887 Kansas Gas Service Utility $1,543 McPherson True Value Trade Debt $1,512 Board of Public Utilities Utility $1,504 QS Nurses Corporation Trade Debt $1,399 Cheryl Stevens Trade Debt $1,275 Theraprime of Kansas Trade Debt $1,001 Fern Office Supplies Trade Debt $857 E. Infinia at Arma's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Ronald Edwards, MD Trade Debt $22,538 Mt. Carmel Medical Center Trade Debt $20,700 Tim English & Associates Trade Debt $20,692 Hospital District 1 Trade Debt $20,686 Ruddick's, Inc. Trade Debt $8,196 Maintenance Warehouse Trade Debt $7,791 Kick Technologies Trade Debt $7,435 Medline Industries, Inc. Trade Debt $6,626 City of Arma Utility $6,126 C/S Group Trade Debt $5,423 Advanced Homecare, Inc. Trade Debt $3,974 Rex Kness Trade Debt $3,766 Health Trac Trade Debt $2,910 The Morning Sun Trade Debt $2,782 Arma Drug Trade Debt $2,642 Elias Tawil, MD Trade Debt $2,636 Shelley M. Gromer Trade Debt $2,629 Arma Petty Cash Trade Debt $2,625 John M. Baughman Trade Debt $2,210 Copy Products, Inc. Trade Debt $2,027 F. Infinia at South Mountain's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Southern Desert Pharmacy Trade Debt $80,176 Sacred Heart Nursing Trade Debt $61,854 Services Medline Industries, Inc. Trade Debt $28,171 Integrated Healthcare Trade Debt $24,537 Staffing Arrow Security, Inc. Trade Debt $16,648 Dependable Nurses of Trade Debt $14,156 Phoenix, Inc. Healthchoice Nurses Agency Trade Debt $12,132 Divine Healthcare Trade Debt $10,101 Group, Inc. Salt River Project Trade Debt $10,101 High Peaks Water Service Utility $8,146 Kick Technologies Trade Debt $7,605 MGA Healthcare Staffing Trade Debt $7,459 KCI The Clinical Trade Debt $7,227 Medical Professionals of Membership Dues $7,000 Arizona Ideal Nursing Services Trade Debt $6,766 Infinia Trade Debt $6,603 CareStaff Trade Debt $6,555 Minuteman Express Service Trade Debt $6,195 Alternative Professional Trade Debt $5,865 Services Maintenance Warehouse Trade Debt $5,633 G. Infinia at Kensington's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Kick Technologies Trade Debt $7,295 Health Trac Trade Debt $6,720 Medline Industries, Inc. Trade Debt $5,537 Aquila Trade Debt $5,031 HQ H2O Inc. Trade Debt $3,575 Loomis Brothers Trade Debt $2,885 Fire Alarm Specialist, Trade Debt $2,842 Inc. Estate of Walter Anschutz Trade Debt $2,238 Centre Pharmacy Trade Debt $2,121 Estate of Zelma Trade Debt $2,112 Estate of Essie Trade Debt $1,344 Eakes Office Plus, Inc. Trade Debt $1,259 Ford Credit Trade Debt $1,215 Michael Miles Trade Debt $1,200 Engineered Recovery Trade Debt $1,028 Crest Healthcare Supply Trade Debt $945 Advanced Homecare, Inc. Trade Debt $865 Northwestern Office Trade Debt $798 Suppliers Earthgrains Hastings Trade Debt $765 Witmer Drug Store Trade Debt $752 H. Infinia at Wichita's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Select Rehabilitation Trade Debt $104,028 Services Rehab People, Inc. Trade Debt $71,930 Health Trac Trade Debt $35,625 Medline Industries, Inc. Trade Debt $28,159 Dandurand Pharmacy Trade Debt $25,924 Shared Pharmacy Trade Debt $16,489 Schendel Trade Debt $10,568 Therapeutic Medical Supply Trade Debt $8,341 Westar Energy Utility $6,353 Dr. Florante Moncao Trade Debt $6,000 Kick Technologies Trade Debt $4,930 Richardson's Trade Debt $3,368 Dubley M. Cranston Trade Debt $2,904 Progressive Medical, Inc. Trade Debt $2,596 Kansas Gas Service Utility $2,551 ASHA Wholesale Trade Debt $2,491 Great Plains Trade Debt $2,431 Radiology Service Corp Trade Debt $2,403 The Wasserstrom Company Trade Debt $2,276 Bio Center Laboratory Trade Debt $2,022 I. Infinia at Show Low's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Apex Healthcare Trade Debt $94,604 Southern Desert Pharmacy Trade Debt $32,479 Medline Industries, Inc. Trade Debt $20,756 Health Trac Trade Debt $18,675 Shamrock Foods, Inc. Trade Debt $10,653 c/o M. Kirkorsky, Esq. Pineview Water Company Utility $9,020 Navopache Electric Utility $8,854 Mediq PRN Trade Debt $5,921 Aaron Bornstein Trade Debt $5,100 Show Low Waste Management Trade Debt $3,914 Roadrunner Fire Trade Debt $3,778 Apparel Pro Trade Debt $3,567 Sun Devil Fire Trade Debt $3,436 Frontier Trade Debt $2,888 City of Show Low Utility $2,602 Kick Trade Debt $2,525 Alarm Specialist Trade Debt $2,167 Tim English & Associates Trade Debt $1,829 Fern Office Supplies Trade Debt $1,578 Sprint Utility $1,186 J. Infinia at Alta's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Medical Staffing Network Trade Debt $25,304 Medline Industries, Inc. Trade Debt $17,405 Health Trac Trade Debt $14,928 Kick Technologies Trade Debt $4,970 Dr. Rachel Stubbs Trade Debt $4,500 Laboratory Corp of America Trade Debt $4,481 Utah State Tax Commission Trade Debt $4,310 Fairview Care Centers, Trade Debt $3,352 Inc. Patient Care Services Trade Debt $2,706 Gulf South Medical Supply Trade Debt $2,586 Centers for Medicaid & Trade Debt $2,250 Medicare Questar Gas Utility $2,233 Wernli Refrigeration, Inc. Trade Debt $2,187 Tyco Fire Security Trade Debt $1,945 Utah Power Utility $1,750 Xerox Capital Services, Trade Debt $1,735 LLC Symphony Mobilex Trade Debt $1,534 TDM Trade Debt $1,438 M. Sydney Post Trade Debt $1,379 Les Olsen Company Trade Debt $1,279 K. Infinia at Ogden's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Ogden Associates, LLP Rental Fees $40,187 Health Trac Trade Debt $17,670 Medline Industries Trade Debt $16,316 Kick Technologies Trade Debt $7,405 John E. Clift Trade Debt $5,100 Ali Ben-Jacob, MD Trade Debt $5,100 Superior Care Pharmacy Trade Debt $5,047 Utah Power Utility $4,828 Utah State Tax Commission Tax $4,780 Allen Fraughton Trade Debt $4,400 Ogden Clinic Trade Debt $2,875 Qwest Diagnostics Trade Debt $2,477 E.M. Systems Trade Debt $2,226 Green Daze Trade Debt $2,200 Ford Credit Trade Debt $1,926 Medical Disposal Services Trade Debt $1,850 Mendenhall Equipment Trade Debt $1,826 Eagle Security Systems Trade Debt $1,764 Culligan Water Trade Debt $1,675 TCM Business Systems Trade Debt $1,665 L. Infinia at Safford's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Southern Desert Pharmacy Trade Debt $42,415 Medline Industries, Inc. Trade Debt $32,552 Health Trac Trade Debt $23,066 Regency Medical Equipment Trade Debt $12,841 Susan J. Jones, M.D. Trade Debt $10,500 Valley Telecom Group Utility $7,647 John Sokal, Jr. Trade Debt $7,280 Maxin Healthcare Services Trade Debt $6,355 Kick Technologies Trade Debt $4,950 Fern Office Supplies Trade Debt $4,100 Kindred Pharmacy Trade Debt $3,790 Maintenance Warehouse Trade Debt $3,406 Paradise Valley Bird Trade Debt $2,080 Sonora Quest Utility $2,025 NCI/Nursing Centers, Inc. Trade Debt $2,010 Mediq PRN Trade Debt $1,820 Select Information Trade Debt $1,796 Ernest Brewer Trade Debt $1,485 Roadrunner Fire Trade Debt $1,378 Mt. Graham Regional Trade Debt $1,377 M. Infinia at Granite Hills' 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Superior Care Pharmacy Trade Debt $41,442 Medical Sraffing Network Trade Debt $13,994 Health Trac Trade Debt $12,600 Medline Industries, Inc. Trade Debt $10,808 Blue Cross of California Trade Debt $8,539 Simplex Grinnell Trade Debt $6,127 John E. Clift Trade Debt $5,169 Kick Technologies Trade Debt $4,930 Marshall Industries, Inc. Trade Debt $4,858 Symphony Mobilex Trade Debt $3,933 Bradshaw Door Controls Trade Debt $3,388 Utah State Tax Commission Trade Debt $3,340 B&L Electric Utility $3,063 Utah Power Utility $2,948 Praxair Distribution, Inc. Trade Debt $2,428 Gold Cross Transportation Trade Debt $2,401 Emergency Medical Staffing Trade Debt $2,198 Easter Seals of Utah Trade Debt $2,084 Mark D. Johnson, MD Trade Debt $1,805 Portable Xray & Trade Debt $1,537 Ultrasound Utah N. Infinia at Smith Center's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Smith County Family Trade Debt $10,800 Practice Kick Technologies Trade Debt $7,365 Center Pharmacy Trade Debt $6,462 QS Nurses Trade Debt $2,992 Medline Industries, Inc. Trade Debt $2,939 Aquila Trade Debt $2,513 Southwestern Bell Utility $2,416 Estate of Ross Eller Trade Debt $1,810 Estate of Robert Johnson Trade Debt $1,760 Fire Alarm Specialist, Trade Debt $1,705 Inc. Ruth Lee Trade Debt $1,679 Estate of Ruby Feldman Trade Debt $1,536 City of Smith Center Utility $1,515 Advanced Homecare, Inc. Trade Debt $1,503 Michael Miles Trade Debt $1,500 Estate of Laura Trade Debt $1,386 Arjo, Inc. Trade Debt $1,262 Smith Center Petty Cash Trade Debt $1,164 Lifecycle Systems, LLC Trade Debt $1,160 Elva Fiene Trade Debt $1,054 O. Infinia at Abilene's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Gates Remodeling Trade Debt $19,833 Staff Support Services, Trade Debt $5,361 Inc. Medline Industries, Inc. Trade Debt $4,962 Health Trac Trade Debt $3,834 Coleman Gary Trade Debt $3,400 Kick Technologies Trade Debt $2,465 Tim English & Associates Trade Debt $2,373 Rainbow Nursing Trade Debt $1,776 Columbine Healthcare Trade Debt $1,691 Patterson Healthcare Trade Debt $1,432 Jody Sellers Trade Debt $1,340 Westar Energy/KPL Fas Utility $1,315 Services Ford Credit Trade Debt $1,210 Feist Publications Trade Debt $894 Consolidated Trade Debt $747 Communications Directory Aspen Publishers, Inc. Trade Debt $666 Maintenance Warehouse Trade Debt $663 Jessica Pacenka Trade Debt $622 Dawson Enterprises, Inc. Trade Debt $600 City of Abilene Utility $399 P. Infinia at Douglas' 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Medline Industries, Inc. Trade Debt $19,805 Health Trac Trade Debt $12,915 RCS Management Corporation Trade Debt $11,247 Kick Technologies Trade Debt $5,890 APS Trade Debt $5,651 Maintenance Warehouse Trade Debt $4,513 Apparel Pro Trade Debt $3,531 AZ Health Care Association Trade Debt $3,008 Goodman Company, LP Trade Debt $3,001 American Geriatrics Trade Debt $3,000 Enterprises, Inc. United Fire Trade Debt $2,843 Metroplex Professional Trade Debt $2,843 Services RCS Management Trade Debt $2,739 Fern Office Supplies Trade Debt $2,674 KDAP Trade Debt $2,657 Southern Desert Pharmacy Trade Debt $2,475 Arizona Consultant Trade Debt $2,400 Pharmacists Enterprises, Inc. Roadrunner Fire Trade Debt $2,300 Stericycle Trade Debt $1,874 Southwest Gas Corporation Utility $1,709 Q. Infinia at Oswego's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Select Rehabilitation, Trade Debt $24,182 Inc. Rehab Works, Inc. Trade Debt $7,758 Kick Technologies Trade Debt $7,325 Health Trac Trade Debt $4,335 Advanced Homecare, Inc. Trade Debt $3,651 Mt. Carmel Medical Center Trade Debt $3,608 Riggs Rexall Trade Debt $3,527 Sprint Utility $3,213 Medline Industries, Inc. Trade Debt $2,785 Maintenance Warehouse Trade Debt $2,668 Philip E. Bortmes, MD Trade Debt $2,250 Petty Cash Oswego Trade Debt $2,033 Westar Enery/Kansas Gas Utility $1,532 City of Oswego Utility $1,528 TDM Trade Debt $1,400 NCS Healthcare of Wichita Trade Debt $1,152 IKON Office Solutions Trade Debt $1,133 IOS Capital Trade Debt $989 Labette County Medical Trade Debt $977 Center Innovative Medical Trade Debt $909 R. Infinia at Florence Heights' 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Nebraska Health & Trade Debt $61,294 Human Services Florence Heights Rental Fees $54,754 Omnicare of Nebraska Trade Debt $49,249 Kubat Heartland Trade Debt $35,931 Kubat Trade Debt $31,774 Ferguson, Chesterman & Legal Fees $26,933 Acierno Medline Industries, Inc. Trade Debt $23,131 Health Trac Trade Debt $21,843 Nurses R Us Trade Debt $14,146 Nebraska Workforce Trade Debt $12,990 Development Symphony Mobilex Trade Debt $12,855 Hill-Rom Industry Trade Debt $11,290 Creighton Medical Trade Debt $9,108 Laboratories Kick Technologies Trade Debt $7,515 Info Data Employment Trade Debt $5,656 First Choice Healthcare Trade Debt $5,466 Omaha Ambulance Service Trade Debt $5,136 Nebraska Department of Tax $4,953 Revenue Clarkson Family Medicine Trade Debt $4,000 Internal Revenue Service Tax $3,695 S. Infinia at Cottonwood's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Southern Desert Pharmacy Trade Debt $54,375 EnduraCare Therapy Trade Debt $50,314 RCS Management Trade Debt $15,822 Medline Industries, Inc. Trade Debt $12,493 City of Cottonwood Trade Debt $10,780 Verde Medical Laboratory, Trade Debt $7,482 Inc. Health Trac Trade Debt $7,425 Total Transit, Inc. Trade Debt $4,269 Verde Valley Medical Trade Debt $3,991 Center AZ Health Care Association Membership Dues $3,760 Preferred Home Care Trade Debt $3,156 APS Trade Debt $3,111 NextireOne, LLC Trade Debt $2,808 Firemaster Trade Debt $2,630 The Trane Company Trade Debt $2,496 Apparel Pro Trade Debt $2,486 Kick Technologies Trade Debt $2,475 Scott Thomas Trade Debt $2,062 Nurses Network, Inc. Trade Debt $2,000 Bureau of Citizenship Trade Debt $2,000 T. Infinia at Camp Verde's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Medline Industries, Inc. Trade $15,622 Health Trac Trade $15,465 EnduraCare Therapy Trade $13,769 RCS Management Trade $13,633 A Golden Touch Health Trade $12,470 Services Ismart Health Systems Trade $12,390 Endura Care Trade $11,986 Camp Verde Water Utility $8,416 Kregg Chidester Trade $7,418 Southern Desert Pharmacy Trade $7,353 Apparel Pro Trade $5,313 Kick Technologies Trade $5,000 Nurses Network, Inc. Trade $4,082 Omega Orthopaedics Trade $3,578 MGA Healthcare Staffing, Trade $2,959 Inc. Verde Medical Laboratory, Trade $2,376 Inc. Fern Office Supplies Trade $2,115 Arizona Republic Trade $1,887 Sherwin Williams Trade $1,752 Camp Verde Sanitary Utility $1,683 District INFRAWORKS CORP: Successfully Emerges from Chapter 11 Bankruptcy ---------------------------------------------------------------- Infraworks Corporation, a security software company, has successfully emerged from Chapter 11 reorganization and has simultaneously delivered its fifth consecutive quarter of revenue growth. Infraworks voluntarily filed for reorganization on April 11, 2003, after a unanimous vote by the company's board of directors, chaired by former Secretary of Defense Frank Carlucci. The company decided to file bankruptcy after severe economic and legal issues forced the company into an untenable position. "We understood that more than 83% of Chapter 11 companies never emerge from bankruptcy, but given the demand for our products and the economy's rebound, we were confident that if we could restructure the company, we could get on a positive track," said Joyce Durst, President and CEO at Infraworks. The company has just delivered its most successful quarter to date, reflecting 300% growth year over year. "We're very happy to be moving on with the Infraworks story. We're now officially out of the suspense-thriller genre and squarely in Cinderella territory. We're calling it 'Chapter Twelve.' We expect to be cash-flow positive in 1Q 2004 and profitable for the year," adds CEO Durst. Continued Strong Demand for Products Infraworks' InTether solutions protect digital files containing key intellectual property against the threat of internal theft. In other words, companies can ensure that employees inside a company or those with access to key confidential information cannot share that information inappropriately or take such intellectual property with them when they leave the company. "Throughout this process, about half of our growth has come from current customers who have continued to adopt our InTether solutions to secure files in more and more areas. The other half has come from new prospects who purchased on the merits of the InTether solution," said Darryl Worsham, Vice President of Sales at Infraworks. "Protecting intellectual property against internal threat and the compliance requirements of the Sarbanes-Oxley Act are front-burner issues that Infraworks' solutions address." "Clearly our legal status has been a challenge, but our pipeline of customers has seen steady growth due to the significant need in the marketplace," adds Worsham. The company enjoys a growing roster of customers in the energy, pharmaceutical and insurance industries, and within the federal government. Infraworks' customers include Halliburton, Schlumberger, National Oilwell and the Office of Homeland Security. Patented Technology Infraworks' InTether File Security Series is a collection of enterprise applications that protect digital files throughout their entire lifecycle. The patented InTether security technology enables organizations to create and share digital files of any type with intended recipients while keeping the files and data protected from others. Viewing, saving, forwarding, printing, even screen-grabbing functions can be restricted by the sender of the file. Self-destruction of a protected file at a specific time and date, or upon sensing any tampering attempts, can also be set. Infraworks currently has three InTether solutions available and deployed in the marketplace. These include the InTether Desktop, which enables business professionals to share and secure files sent via email. InTether Server enables organizations to dynamically secure and distribute files over the Web and the InTether SecureCD solution offers organizations the means to easily secure and distribute content on CD-ROM media. Founded in 1998 and privately held, Infraworks Corporation is an emerging leader of security software solutions. Infraworks' enterprise file security software helps companies protect sensitive information and intellectual property that is stored and distributed electronically. The Infraworks security solutions protect files from the time they are created until the time they are deleted, even while they are in use. For additional information, visit the company's Web site at http://www.infraworks.com INTERNATIONAL WIRE: S&P Yanks Credit & Debt Ratings Down to D ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on St. Louis, Missouri-based International Wire Group Inc. to 'D' following the company's announcement to forego making the Dec. 1, 2003, interest payment on its 11.75% senior subordinated notes. "The rating downgrade also reflects the company's plans to recapitalize, which likely will result in lenders not receiving full recovery of their principal and interest," said Standard & Poor's credit analyst Dominick D'Ascoli. International Wire Group is a producer of copper wire products in a highly fragmented industry. Weak end markets coupled with onerous debt leverage placed the company under significant financial stress. Furthermore, the company faced large refinancing risk, with substantially all of its debt maturing in the first half of 2005. ITC DELTACOM: Annual Shareholders' Meeting Set for December 18 -------------------------------------------------------------- The annual meeting of ITC Deltacom Inc. will be held on Thursday, December 18, 2003, at 11:00 a.m., local time, at the New Horizon Community Theater, 411 West 8th Street, West Point, Georgia. The annual meeting has been called for the following purposes: 1. to consider and vote upon a proposal to elect seven directors of ITC DeltaCom; 2. to consider and vote upon a proposal to approve an amended form of ITC DeltaCom's Restated Certificate of Incorporation; 3. to consider and vote upon a proposal to approve the ITC DeltaCom, Inc. Amended and Restated Stock Incentive Plan; and 4. to transact such other business as may properly come before the annual meeting or any adjournment or postponement thereof. Only stockholders of record at the close of business on November 3, 2003 will be entitled to notice of, and to vote at, the annual meeting or any adjournment or postponement thereof. ITC Delatacom, Inc., an exempt telecommunications company and a holding company, filed for chapter 11 protection on June 25, 2002. Rebecca L. Booth, Esq., Mark D. Collins, Esq. at Richards, Layton & Finger, P.A. and Martin N. Flics, Esq., Roland Young, Esq. at Latham & Watkins represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $444,891,574 in total assets and $532,381,977 in total debts. JA JONES: Spriggs & Hollingsworth Serving as Litigation Counsel --------------------------------------------------------------- J.A. Jones, Inc., and its debtor-affiliates seek approval from the U.S. Bankruptcy Court for the Western District of North Carolina of their application to employ Spriggs & Hollingsworth as Special Counsel. The Debtors report that they are parties to certain lawsuits pending throughout the county. To perform their duties, the Debtors require assistance of litigation counsel to prosecute and defend certain claims pending in the Lawsuits. The lawsuits primarily involve construction, insurance, bond disputes involving claims, which may be valuable for the Debtors' estates. The Debtors expect Spriggs & Hollingsworth to: a) advise the Debtors with respect to its rights and remedies in the Lawsuits; b) prepare on behalf of the Debtors all necessary pleadings, discovery, notices, lien filings and other legal documents in the lawsuits; c) represent the Debtors in negotiations, discussions, litigation, mediation, arbitration or other proceedings relates to the lawsuits; and d) perform legal services on behalf of the Debtors necessary to preserve or advance any rights and remedies the Debtors may have in the Lawsuits. The Debtors believe that employing the Firm for these purposes is in the best of interests of the Debtors, their estates and creditors. Douglas L. Patim, Esq., a partner in Spriggs & Hollingsworth reports that his firm will bill its current hourly rates of: Partners $310 to $360 per hour Associates $180 to $250 per hour Legal Assistants $115 to $125 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. JACUZZI BRANDS: Will Complete Transactions Under SEC Rule 10b5-1 ---------------------------------------------------------------- Jacuzzi Brands, Inc. (NYSE:JJZ) announced that David H. Clarke, Chairman and Chief Executive Officer, and an entity controlled by Mr. Clarke's family, plan to complete a previously announced series of transactions in JJZ's common stock for tax planning purposes that, once consummated, will leave their holdings in JJZ unchanged. As reported by the Company on May 13, 2003, Mr. Clarke and the entity purchased, in aggregate, 150,000 additional shares of JJZ common stock. Mr. Clarke and the entity then entered into trading plans complying with Rule 10b5-1 under the Securities Exchange Act in order to sell in compliance with Rule 10b5 of that act the same number of shares from their earlier holdings in JJZ at market prices. The planned sale of the 150,000 shares covering their earlier holdings in JJZ will be completed prior to the end of 2003. Under Rule 10b5-1, directors and officers of a company may adopt written plans for trading securities in a non-discretionary, pre- planned manner under specified conditions and times if the person has no material non-public information about the company. Subsequent to the completion of this planned sale, and as disclosed in the proxy statement dated May 7, 2003, Mr. Clarke will own 2,441,297 shares of JJZ common stock (including options). Jacuzzi Brands, Inc. is a global manufacturer and distributor of branded bath and plumbing products for the residential, commercial and institutional markets. These include whirlpool baths, spas, showers, sanitary ware and bathtubs, as well as professional grade drainage, water control, commercial faucets and other plumbing products. The company also manufactures premium vacuum cleaner systems. Jacuzzi products are marketed under our portfolio of brand names, including JACUZZI(R), SUNDANCE(R), ELJER(R), ZURN(R), SANITAN(R), ASTRACAST(R) and RAINBOW(R). Learn more at http://www.jacuzzibrands.com/ As reported in Troubled Company Reporter's August 20, 2003 edition, Fitch Ratings withdrew its 'B' rating on Jacuzzi Brands, Inc.'s $133 million 11.25% senior secured notes due 2005, $70 million 7.25% senior secured notes due 2006, and $377 million senior secured bank facilities due 2004. These issues have been fully repaid with proceeds from Jacuzzi Brands' new debt financing completed on July 15, 2003. Fitch rates Jacuzzi Brands' new debt as follows: -- $200 million asset based bank credit facility maturing in 2008 'BB'; -- $65 million term loan due 2008 'BB-'; -- $380 million 9.625% senior secured notes due 2010 'B'; Rating outlook is Stable. JARDEN CORP: Effects 3-For-2 Stock Split & Closes Exchange Offer ---------------------------------------------------------------- Jarden Corporation (NYSE: JAH) announced that its previously announced exchange offer for its outstanding 9-3/4% Senior Subordinated Notes Due 2012 expired today at 5:00 p.m., New York City time. The total principal amount of the Old Notes were tendered in the exchange offer and the Company will, as soon as practicable, issue new 9-3/4% Senior Subordinated Notes Due 2012 in the aggregate principal amount of $30,000,000 to the tendering holders of the Old Notes. The New Notes are substantially identical to the Old Notes. The exchange offer follows the previously announced 3-for-2 stock split which became effective on November 26, 2003; the additional shares have been distributed to shareholders of record as of November 12, 2003. This stock split has increased the Company's total shares of common stock outstanding to approximately 26.8 million. The Company separately announced that Martin E. Franklin, Chairman and Chief Executive Officer, and Ian G.H. Ashken, Vice Chairman and Chief Financial Officer, have entered into forward purchase contracts with CIBC World Markets in connection with the sale of 237,000 and 82,500 shares of common stock (taking into account the stock split), respectively. Mr. Franklin and Mr. Ashken entered into the forward purchase contracts principally to cover the immediate tax liability incurred in connection with the recent lapsing of the restrictions over their restricted shares of common stock. Mr. Franklin and Mr. Ashken will continue to retain beneficial ownership and voting rights with respect to these shares for the terms of the contracts to enable them to participate in future appreciation of the stock. Jarden Corporation Corporation (S&P, B+ Corporate Credit Rating, Stable) is a leading provider of niche consumer products used in and around the home, under well-known brand names including Ball(R), Bernardin(R), Crawford(R), Diamond(R), FoodSaver(R), Forster(R), Kerr(R), Lehigh(R) and Leslie-Locke(R). In North America, Jarden is the market leader in several consumer categories, including home canning, home vacuum packaging, kitchen matches, branded retail plastic cutlery, toothpicks and rope, cord and twine. Jarden also manufactures zinc strip and a wide array of plastic products for third party consumer product and medical companies, as well as its own businesses. KAISER ALUMINUM: Wants Clearance for Reliance Release Agreement --------------------------------------------------------------- In accordance with Rule 9019 of the Federal Rules of Bankruptcy Procedure, the Kaiser Aluminum Debtors ask the Court to approve a release and indemnity agreement with Reliance Insurance Company pursuant to which Reliance will release a $2,000,000 letter of credit. Before the Petition Date, the Debtors contracted with Reliance, an insurance company formed under the laws of the Commonwealth of Pennsylvania, for the insurance of various retrospective premium and deductible reimbursement, claims-based insurance policies primarily providing them with environmental liability protection. To secure their liability under two of the Policies and any subsequent extensions or renewals, in respect of either retrospective premium rating or payments within the policy deductible, the Debtors issued collateral to Reliance in the form of a letter of credit. The Letter of Credit was originally issued in 1994 for $3,000,000 and has been amended several times both as to term and amount. The Letter of Credit, which was renewed under the Debtors' postpetition credit facility, has a $2,000,000 current balance and expires on March 31, 2004. In May 2001, Reliance was placed into rehabilitation upon a Petition for Rehabilitation filed by the Insurance Commissioner of the Commonwealth of Pennsylvania. On October 3, 2001, the Commonwealth Court of Pennsylvania declared Reliance insolvent and ordered the company into liquidation. The liquidation is proceeding under the law of Pennsylvania with the Commissioner appointed as liquidator and a collateral committee overseeing the collection and control of collateral securing policies issued by Reliance. The Debtors established that the policies, for which the Letters of Credit had originally been issued, have either expired or been cancelled. Accordingly, the Debtors initiated communications with Reliance to obtain the release of the Letter of Credit. However, initial negotiations related to the release of the Letter of Credit resulted in an impasse. In June 2003, Reliance offered to release the Letter of Credit in exchange for the Debtors' release and indemnification of Reliance from obligation and liabilities under the Policies. Following a comprehensive review, the Debtors confirmed that the release of Reliance from obligations under the Policies would have no effect on them because the Policies are each claim-based policies for which coverage has lapsed or expired. Furthermore, the Debtors determined that no open claims existed under the Policies and that no claims could be brought under the Policies. Although the Debtors have in place with Reliance certain occurrence-based coverage related to their commercial umbrella liability coverage for the period of October 1997 through October 2000, the Release will not affect that coverage. Accordingly, the Debtors agreed to enter into the Release. The Debtors and Reliance have agreed in principle to enter into the Release. Reliance anticipates that the Collateral Committee will approve the Release. The principal terms of the Release are: (a) Reliance will release the Letter of Credit to the Debtors without further delay and will take all steps necessary to effectuate the release; (b) The Debtors will indemnify and hold harmless Reliance from and against all liabilities under: -- the operation or existence of the Policies; -- the payment, adjustment, settlement or denial of claims under the Policies; and -- any breach of any conditions, terms, provisions or endorsements of the Policies; and (c) No failure or delay on the part of Reliance or the Debtors in exercising any right, power or remedy under the terms of the Release will operate as a waiver of the Release, nor will any single or partial exercise of any right preclude any other. Any waiver of any provision of the Release, and any consent to any departure by Reliance or the Debtors from the terms of any provisions of the Release, will be effective only in the specific instance, and will be valid for the specific given purpose. According to Kimberly D. Newmarch, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, the Release will secure the release of the Letter of Credit, which will improve the Debtors' financial liquidity, and avoid the uncertainty, time and expense that would arise from litigation of the matter with Reliance. (Kaiser Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 215/945-7000) KB HOME: Reports Preliminary Fourth Quarter 2003 Net Orders ----------------------------------------------------------- KB Home (NYSE: KBH) released preliminary net orders for the quarter and year ended November 30, 2003. Presented below is preliminary net order information along with year-over-year percent changes. Quarter Ended November 30, Year Ended November 30, 2003 2003 Net Orders % Change Net Orders % Change West Coast 1,147 3.7% 5,810 -4.5% Southwest 1,882 20.1 7,763 23.6 Central 1,470 -11.7 7,359 -15.1 Southeast 944 215.7 3,844 372.2 Total U.S. 5,443 17.4 24,776 13.4 France 1,186 -.7 4,118 4.5 Total 6,629 13.7% 28,894 12.1% Unconsolidated JVs 76 245.5% 470 150.0% KB Home (Fitch, BB+ Senior Unsecured Debt and BB- Senior Subordinated Debt Ratings) is one of America's largest homebuilders with domestic operating divisions in the following regions and states: West Coast-California; Southwest-Arizona, Nevada and New Mexico; Central-Colorado, Illinois and Texas; and Southeast-Florida, Georgia and North Carolina. Kaufman & Broad S.A., the Company's majority-owned subsidiary, is one of the largest homebuilders in France. In fiscal 2002, the Company delivered 25,565 homes in the United States and France. It also operates KB Home Mortgage Company, a full-service mortgage company for the convenience of its buyers. Founded in 1957, KB Home is a Fortune 500 company listed on the New York Stock Exchange under the ticker symbol "KBH." For more information about any of KB Home's new home communities, call 1-888-KB-HOMES or visit the Company's Web site at http://www.kbhome.com KMART: Court Disallows $84 Million of Revolving Credit Claims ------------------------------------------------------------- The Kmart Debtors object to certain claims filed by their prepetition lenders to the extent the lenders seek amounts in excess of the allowed amount pursuant to their confirmed Chapter 11 Plan. The Debtors explain that the Plan allows the Prepetition Lender Claims for $1,076,156,647. On the Plan Effective Date, the Prepetition Lenders received a cash distribution in full satisfaction of the Allowed Prepetition Lender Claims. Consequently, the Court reduces JP Morgan Chase Bank's Revolving Credit Claim Nos. 32370 and 32372 from $1,180,429,188 to $1,076,156,647. The Court disallows and expunges these Revolving Credit Claims: Claimant Claim No. Amount -------- --------- ------ Comerica Bank 25579 $52,357,045 Key Bank, NA 25441 31,768,934 (Kmart Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service, Inc., 215/945-7000) LENNAR CORP: Reports Improved New Home Performance for Q4 2003 -------------------------------------------------------------- Lennar Corporation (NYSE: LEN and LEN.B) announced preliminary new home orders by region for the three months and year ended November 30, 2003 as presented below: Three Months Ended November 30, Years Ended November 30, 2003 2002 Change 2003 2002 Change ---- ---- ------ ---- ---- ------ East 2,591 2,182 19% 11,644 10,192 14% Central 2,284 2,065 11% 9,696 7,591 28% West 2,914 2,284 28% 12,186 10,590 15% Total 7,789 6,531 19% 33,526 28,373 18% Of the new home orders listed above, 414 and 1,582 new home orders relate to unconsolidated partnerships for the three months and year ended November 30, 2003, respectively, compared to 183 and 737 new home orders in the same periods last year. Lennar's market regions consist primarily of the following states: East: Florida, Maryland, Virginia, New Jersey, North Carolina and South Carolina. Central: Texas, Illinois and Minnesota. West: California, Colorado, Arizona and Nevada. Lennar Corporation, founded in 1954, is headquartered in Miami, Florida and is one of the nation's leading builders of quality homes for all generations, building affordable, move-up and retirement homes. Under the Lennar Family of Builders banner, the Company includes the following brand names: Lennar Homes, U.S. Home, Greystone Homes, Village Builders, Renaissance Homes, Orrin Thompson Homes, Lundgren Bros., Winncrest Homes, Sunstar Communities, Don Galloway Homes, Patriot Homes, NuHome, Barry Andrews Homes, Concord Homes, Summit Homes, Cambridge Homes, Seppala Homes, Coleman Homes, Genesee and Rutenberg Homes. The Company's active adult communities are primarily marketed under the Heritage and Greenbriar brand names. Lennar's Financial Services Division provides mortgage financing, title insurance, closing services and insurance agency services for both buyers of the Company's homes and others. Its Strategic Technologies Division provides high-speed Internet access, cable television and alarm installation and monitoring services to residents of the Company's communities and others. Previous press releases may be obtained at http://www.lennar.com * * * As reported in Troubled Company Reporter's February 7, 2003 edition, Standard & Poor's Ratings Services raised its corporate credit rating on Lennar Corp., to 'BBB-' from 'BB+'. At the same time, ratings are raised on approximately $2.185 billion senior debt, including bank lines, and on $254 million subordinated debt. The company's outlook was revised to stable from positive. The ratings and outlook acknowledge Lennar's solid market position, highly profitable operations, successful track record of integrating acquisitions, and sound financial risk profile. These credit strengths, coupled with management's discipline with regard to debt leverage, should enable Lennar to perform solidly even if housing demand does soften. RAISED RATINGS Lennar Corp. Ratings To From -- ---- Corporate credit BBB-/Stable BB+/Positive $2.185 bil. sr debt BBB- BB+ $254.19 mil. sub debt BB+ BB- U.S. Homes Corp. Ratings To From -- ---- Corporate credit BBB- BB+ $2.181 mil. sr debt BBB- BB+ $6.187 mil. sub debt BB+ BB- LEVI STRAUSS: Fitch Junks Ratings as Alvarez & Marsal is Hired -------------------------------------------------------------- Levi Strauss & Co.'s $1.7 billion senior unsecured debt was downgraded to 'CCC+' from 'B-' by Fitch Ratings following Levi's announcement that it has retained the management consulting firm Alvarez & Marsal and replaced its CFO. In addition, Levi's $650 million asset-based loan is lowered to 'B+' from 'BB-' and its $500 million term loan is lowered to 'B' from 'B+'. The Rating Outlook remains Negative, reflecting the continued challenges Levi faces to improve its financial condition and in stimulating top- line sales growth. Levi announced that its chief financial officer would be leaving effective immediately and replaced him with an interim CFO who is also from A&M. Fitch considers these changes to be a material event that possibly could lead to a debt restructuring in the near-to-intermediate term. This downgrade follows a previous downgrade by Fitch last month due to Levi's revision in its earnings guidance for 2003. Management has stated that the consulting firm was hired to assist Levi in scaling back its infrastructure in order to become profitable at current sales levels. This is to be accomplished by identifying further costs that can be eliminated. Fitch recognizes that Levi maintains adequate liquidity, has limited debt maturities and is not in danger of violating covenants in the near term. However, Fitch feels that in light of the closing of the remaining North American facilities and the corporate headcount reductions in September, additional cost eliminations will not materially affect Levi's profitability and/or its ability to increase cash flow generation to reduce debt in the coming year. Fitch believes that financial restructuring options will be explored, which could be a detriment to the bondholders. LIFEPOINT HOSPITALS: S&P Ups Rating to BB over Improved Profile --------------------------------------------------------------- Standard & Poor's Ratings Services raised its corporate credit rating on LifePoint Hospitals Inc. to 'BB' from 'BB-'. At the same time, LifePoint's senior secured bank loan rating has been raised to 'BB+' from 'BB'. The new outlook is stable. LifePoint's bank facility is rated one-notch above the corporate credit rating. Standard & Poor's believes the value of the pledged collateral offers a strong likelihood of full recovery of bank debt in the event of default. "The ratings upgrade reflects the significant improvement in the company's credit profile," said credit analyst David Peknay. "The upgrade also reflects Standard & Poor's belief that LifePoint will be able to sustain its improved cash flow and credit protection measures considering the currently favorable reimbursement environment. Total debt outstanding as of Sept. 30, 2003, was $250 million." The speculative-grade ratings reflect LifePoint Hospitals Inc.'s limited size and its potential for operating vulnerability due to industry risks. The ratings also reflect the company's recent acquisition activity and potential for more aggressive activity to hurt the company's future financial profile. These factors are modestly offset by leading positions in the small markets it serves. Brentwood, Tennessee-based LifePoint owns and operates 28 hospitals in non-urban communities. The majority of the facilities are located in the Southeast, with Tennessee and Kentucky accounting for about 50% of the company's total bed capacity. LifePoint's hospitals are typically the sole facilities in the markets they serve. LifePoint has demonstrated success in its efforts to aggressively recruit physicians and enhance services to address a typical problem of patient migration from its markets to other localities. The company has pursued a disciplined acquisition strategy, using a combination of equity, low-cost debt, and free cash flow, to fund about $190 million of acquisitions since 2001. During that time, and despite its acquisition activity, the company's efforts to improve both its operating performance and credit protection measures have been successful. LMIC INC: Capital Deficits and Losses Raise Going Concern Doubt --------------------------------------------------------------- Cheshire Distributors, Inc., a Delaware Company, changed its name to LMIC, Inc. and completed a reverse acquisition with Linsang Manufacturing, Inc. on July 17, 2003. The Company's consolidated financial statements contain the historical results of LMI, the operating Company, and the results of operations of the combined entities from July 17, 2003 through September 30, 2003. The stockholders' equity (deficiency) has been restated to give effect to recapitalization and reverse acquisition transactions. The Company provides a full range of engineering, design and manufacturing services, including product development and design, materials procurement and management, prototyping, manufacturing and assembly, systems integration and testing, and after-market support. Manufacturing services are provided either on a turnkey basis, where LMIC procures materials required for product assembly, or on a consignment basis, where the customer supplies the material necessary for product assembly. In both cases, the Company provides materials warehousing and management services, in addition to manufacturing. The financial statements have been prepared on a going concern basis. However, the Company has sustained substantial operating losses in recent years. At September 30, 2003, current liabilities exceed current assets and total liabilities exceed total assets. These factors raise substantial doubt about the Company's ability to continue as a going concern. The recovery of assets and continuation of future operations are dependent upon the Company's ability to obtain additional debt or equity financing and its ability to generate revenues sufficient to continue pursuing its business purpose. The Company is actively pursuing financing to fund future operations. Net cash used in the nine months ended September 30, 2003 was $2,743,003. This was primarily from a net loss of $3,824,720. Of that loss, $1,058,993 was depreciation expense, $223,052 was reduction in inventories and $423,063 from the increase in accounts payable and accrued expenses. However, increasing receivables by $110,142 and the increase in deferred revenue by $633,596 as well as use of cash to increase other current items by $62,150 offset those items. Net cash used in the nine months ended September 30, 2002 was $5,228,120. This was primarily from a net loss of $6,618,186. Of that loss, $1,087,679 was depreciation expense, $499,317 was reduction in taxes receivable and $1,404,451 from the increase in accounts payable and accrued expenses. However, increasing receivables by $1,378,454 and the increase of deferred revenue by $221,633 as well as use of cash to increase other current items by $291,893 offset those items. In the nine months ended September 30, 2003, net cash of $1,877,190 was provided from the issue of convertible debt of $698,004 and from the proceeds of the net of further debt issues of $181,119 and the proceeds of capital transactions of $998,067. In the nine months ended September 30, 2002, net cash of $5,208,352 was provided from the issue of convertible debt of $5,472,443 and provided from the issue of new common stock of $580,524 and used to pay down debt of $921,322, as well as short term financing of $76,707. LOUISIANA-PACIFIC CORP: Modifies Tender Offer for 10.875% Notes --------------------------------------------------------------- Louisiana-Pacific Corporation (LP) (NYSE:LPX) has modified its pending tender offer (the "Offer") for any and all of its 10.875% Senior Subordinated Notes due 2008 and the related consent solicitation. The Offer and Solicitation were originally structured to provide a separate consent payment to all holders who granted consents in the solicitation by December 2, 2003, conditioned upon receipt by that date of sufficient consents to amend the indenture under which the Notes were issued. Because the requisite number of consents has not been received, LP has (a) extended the Solicitation to expire simultaneously with the Offer (at 9:00 a.m. EST on December 16, 2003, unless further extended) and (b) amended the terms of the Solicitation to eliminate the payment of a consent fee. The amount payable for each $1,000 principal of Notes accepted by LP for purchase pursuant to the Offer continues to be $1,170, plus accrued and unpaid interest, and will be payable upon the terms and subject to the conditions set forth in the Offer to Purchase and Consent Solicitation Statement and the related Letter of Transmittal and Consent, as amended or modified by this news release. Although each holder who tenders Notes in the Offer will now be deemed to have granted consents with respect to those Notes in the Solicitation, no additional compensation will be paid for such consents. LP also announced that it has waived or modified the conditions to the Offer so that the only conditions to the Offer are: -- the holders of a majority in aggregate outstanding principal amount of the Notes not owned by LP or its affiliates having, prior to the expiration date of the Offer, validly tendered to the Depositary for the Offer, and not validly withdrawn, such Notes; and -- there being no statute, rule, regulation, stay, judgment, order, decree or injunction be enacted, entered, issued, promulgated, enforced or deemed applicable by any court or other governmental authority that, in LP's reasonable judgment, would prohibit or prevent consummation of the Offer. The withdrawal rights associated with the Offer and the Solicitation have been modified so that Notes tendered may be withdrawn at any time prior to 9:00 a.m. EST on December 10, 2003. No withdrawals of tenders will be permitted thereafter. Holders of Notes who have already validly tendered their Notes pursuant to the procedures set forth in the Offer to Purchase and Consent Solicitation Statement and the related Letter of Transmittal and Consent are not required to take any further action to effect a tender of their Notes. Holders of Notes who wish to tender their Notes should use the Letter of Transmittal and Consent in the form originally disseminated by LP for this purpose. LP does not make any recommendation as to whether or not any Holder should tender Notes. Additional information concerning the terms and conditions, and the procedure for tendering Notes may be obtained from UBS Securities LLC, at 677 Washington Blvd., Stamford, Connecticut 06901, 203-719-4210 or toll-free 888-722- 9555, extension 4210, Attention: Liability Management Group. Copies of the Offer to Purchase and Consent Solicitation Statement and related documents may be obtained from D.F. King & Co., Inc., at 48 Wall Street, New York, New York 10005, 888-628-9011. LP is a premier supplier of building materials, delivering innovative, high-quality commodity and specialty products to its retail, wholesale, homebuilding and industrial customers. Visit LP's Web site at http://www.lpcorp.comfor additional information on the company. * * * Since May 2002, Louisiana-Pacific Corp.'s debt ratings fell into the low-B levels: Debt Obligation S&P Moody's Fitch --------------- --- ------- ----- Senior Secured Debt BB+ Ba1 NR Senior Unsecured Debt 8-1/2% Notes due 2005 BB- Ba1 NR 8-7/8% Notes due 2010 BB- Ba1 NR Subordinated Debt 10-7/8% Notes due 2008 B+ Ba2 NR "Management's desire to significantly reduce debt and focus on businesses in which the company has competitive market and cost positions should help stabilize credit quality and result in acceptable performance throughout the business cycle," S&P said last year. MANITOWOC COMPANY: Terry D. Growcock Establishes 10b5-1 Plan ------------------------------------------------------------ The Manitowoc Company, Inc. (NYSE: MTW) announced that Terry D. Growcock, chairman of the board and chief executive officer, has adopted a written plan for the purpose of selling limited amounts of his company stock. The written plan was adopted in accordance with Rule 10b5-1 under the Securities and Exchange Act of 1934. The plan provides Mr. Growcock with a mechanism to fund the exercise of options and the payment of taxes resulting from the exercise. Sales under the plan will be made from time to time and will be funded by the simultaneous exercise of stock options held by Mr. Growcock. A total of 75,000 options have been dedicated to this plan. The plan may not be revised for three months and any revision must first be reviewed and approved by the Company. The Manitowoc Company, Inc. (S&P, BB- Corporate Credit Rating, Stable Outlook) is one of the world's largest providers of lifting equipment for the global construction industry, including lattice- boom cranes, tower cranes, mobile telescopic cranes, and boom trucks. As a leading manufacturer of ice-cube machines, ice/beverage dispensers, and commercial refrigeration equipment, the company offers the broadest line of cold-focused equipment in the foodservice industry. In addition, the company is a leading provider of shipbuilding, ship repair, and conversion services for government, military, and commercial customers throughout the maritime industry. MARINER HEALTH: Divests Two Nursing Facilities in Louisiana ----------------------------------------------------------- Effective October 31, 2003, certain Mariner Health Care Inc. subsidiaries entered into agreements to terminate their operation of two skilled nursing facilities in Metairie and Waldon, Louisiana and transfer those operations to a third party on or about November 30, 2003, which is the same date that the related lease agreements expire by their terms. On November 7, 2003, Mariner entered into a definitive agreement to sell its SNF located in Jefferson, Louisiana to a third party for $5,000,000. The Jefferson sale transaction is expected to close by November 30, 2003. Coincident with the termination of the Metairie and Waldon leases and the sale of the Jefferson SNF, Mariner, through its operating subsidiaries, will no longer own or operate SNFs in the state of Louisiana. (Mariner Bankruptcy News, Issue No. 53; Bankruptcy Creditors' Service, Inc., 215/945- 7000) MERCURY AIR: Will Re-Audit Financials for FYs 2002 and 2001 ----------------------------------------------------------- The management of Mercury Air Group, Inc. (Amex: MAX; PCX) is recommending to the Audit Committee of the Company's Board of Directors that it engage its current independent public accountants to re-audit Mercury's financial statements for the fiscal years ended June 30, 2002 and 2001. The Company expects to complete the audit of its current year financial statements and the re-audit of the prior two fiscal years' financial statements in December 2003 and file its Annual Report on Form 10-K for the period ended June 30, 2003 with the Securities and Exchange Commission by December 31, 2003. The Company's 2003 10-K is expected to include a restated balance sheet and restated statements of operations and cash flows for the fiscal year ended June 30, 2002. Management is currently not aware of any items that would result in a restatement of the financial statements for fiscal 2001. Accordingly, until the re- audit is complete and the Company files its 2003 10-K with the SEC, investors are cautioned not to rely on the financial statements and the related Independent Auditors' Report for fiscal years 2002 and 2001. The recommendation to re-audit the prior years' financial statements is being made as a result of certain findings made by Company management and its current independent accountants during the course of conducting the audit of the Company's financial statements for fiscal year ended June 30, 2003 that is expected to result in a restatement of the fiscal 2002 net earnings as reported in the Company's Annual Report on Form 10-K for the period ended June 30, 2002 as filed with the SEC. Such restatement is expected to take the previously reported net income from $5,033,000, or $1.53 and $1.50 per basic and diluted share, respectively, to $4,387,000, or $1.34 and $1.31 per basic and diluted share, respectively, a reduction of $646,000. The issues identified involve the following three transactions that are expected to result in the restatement of the prior year's financial statements: 1) a proposed retroactive rent increase for one of the Company's warehouse facilities at the Los Angeles International Airport; 2) additional compensation expense associated with the 2002 Management Stock Purchase Plan; and 3) the reversal of the sale leaseback accounting for the sale of a building housing the Company's corporate headquarters and the consolidation of the financial statements of CFK Realty Partners LLC with the Company's financial statements starting in the Company's third quarter of fiscal 2002. It is anticipated that the Company's balance sheet as of June 30, 2002 will reflect the following restatements: 1) a reduction in current assets of $1,414,000; 2) an increase in non-current assets of $2,590,000; 3) a reduction in current liabilities of $163,000; 4) an increase in non-current liabilities of $1,407,000; and 5) a reduction in stockholders' equity of $68,000. On September 30, 2003, the Company announced preliminary net losses for the three-month and twelve-month periods ended June 30, 2003 of $1,529,000 and $3,455,000, respectively. As a result of the expected restatement of fiscal 2002 results, the previously announced preliminary net losses will be reduced by $601,000 and $386,000, respectively, to result in restated net losses of $928,000 and $3,069,000 for the three-month and twelve-month period ended June 30, 2003, respectively. The previously announced preliminary net loss for the fourth quarter of fiscal 2003 reflected the full amount of the proposed retroactive rent adjustment amounting to an after-tax net expense of $672,000. The restated preliminary net loss for the three-month and twelve-month periods ended June 30, 2003 is due to the inclusion of the proposed retroactive rent expense in fiscal 2002 restated results and for each of the first three quarters of fiscal 2003. There can be no assurance that additional items will not be identified in connection with the re-audit nor can the Company warrant that the re-audit will be completed to result in the filing of the Company's 2003 10-K by December 31, 2003. Los Angeles-based Mercury Air Group (Amex: MAX; PCX) provides aviation petroleum products, air cargo services and transportation, and support services for international and domestic commercial airlines, general and government aircraft and specialized contract services for the United States government. Mercury Air Group operates four business segments worldwide: Mercury Air Centers, Inc., MercFuel, Inc., Maytag Aircraft Corporation and Mercury Air Cargo, Inc. For more information, visit http://www.mercuryairgroup.com * * * As reported in Troubled Company Reporter's October 30, 2003 edition, Allied Capital Corporation (NYSE: ALD) acquired Mercury Air's $24.0 million Senior Subordinated 12% Note Due December 31, 2005 from J.H. Whitney Co. Mezzanine Fund and has also entered into a definitive agreement, subject to Mercury's stockholders' approval, the completion of due diligence and regulatory agency consents, for Allied to purchase 100% of the stock of Mercury Air Centers, Inc., the wholly-owned subsidiary of Mercury Air Group which provides fixed base operations at 19 locations throughout the United States. The Mercury FBO Sale provides for a purchase price of $70 million, including an escrow relating to a lease extension, adjustments related to certain capital investments made by Mercury, working capital and other customary terms and conditions. Upon completion of the sale transaction, which is planned to occur by December 31, 2003, the new promissory note issued to Allied in replacement of the Whitney Note, and other debt will be retired with the proceeds from the Mercury FBO Sale. As previously disclosed, Mercury was required to seek opportunities for asset sales or refinancings to prepay all or part of the $24.0 million Senior Subordinated 12% Note by December 31, 2003. Failure to make certain prepayments to Whitney by such date would have required the issuance of up to 10% of the Company's stock pursuant to warrants with a nominal exercise price, as well as issuance of an additional note in the amount of $5.0 million. Under the provisions of the Allied Note these penalty provisions were waived. Allied, upon the acquisition of the Whitney Note, also acquired detachable warrants to purchase 226,407 shares of Mercury's common stock from Whitney with Whitney retaining the right to purchase 25,156 shares of Mercury's common stock. Mercury agreed to reduce the exercise price of these warrants to $6.10 per share. METROCALL INC: Will Redeem $20-Mil. of Series A Preferred Shares ---------------------------------------------------------------- Metrocall Holdings, Inc. (OTCBB:MTOH), a leading provider of paging and two-way wireless messaging, announced that on January 6, 2004, it will make a $20 million redemption of 1,793,411 shares, representing approximately 43%, of its outstanding series A preferred stock (series A preferred). The per share redemption price will be approximately $11.15. Following this redemption, the Company will have redeemed approximately 3.6 million, or approximately 60%, of the aggregate 6 million series A preferred shares issued in connection with its October 2002 reorganization. This voluntary redemption of shares will be completed using $20 million in cash balances generated from operations. Metrocall's current cash balances are in excess of $32 million. Shares will be redeemed on a pro-rata basis from all holders of record on December 2, 2003. After the redemption, Metrocall will have approximately 2.4 million shares of its series A preferred stock outstanding with an aggregate liquidation preference of approximately $26.7 million. The payment follows an initial $20 million redemption of series A preferred completed on September 30, 2003 and the retirement in full of approximately $81.5 million aggregate principal amount of Metrocall's long-term debt securities completed on June 30, 2003. Additionally, Metrocall's board of directors has declared a dividend on the series A preferred stock of approximately $0.42 per share, payable December 31, 2003, to holders of record on December 15, 2003. Please refer to the Company's most recent report on Form 10-Q, annual report on Form 10-K and proxy statement for details on these securities. "We are pleased with the progress we have made over the last year," stated Vincent D. Kelly, Metrocall President & CEO. "During 2003 we paid off all of our long-term debt securities, have made significant progress in redeeming our preferred stock and announced the asset acquisition of Weblink Wireless. During 2004 we expect to redeem the remaining 2.4 million shares of outstanding series A preferred stock by continuing our focus on cash flow generation." Metrocall Wireless, Inc., headquartered in Alexandria, Virginia, is a leading provider of paging products and other wireless services to business and individual subscribers. In addition to its reliable, nationwide one-way networks, Metrocall's two-way network has the largest high-powered terrestrial ReFLEX footprint in the United States with roaming partners in Canada, Mexico, the Caribbean, Central and South America. Metrocall Wireless is the preferred ReFLEX wireless data network provider for many of the largest telecommunication companies in the United States that source virtual network services and resell under their own brand names. In addition to traditional numeric, one-way text and two- way paging, Metrocall also offers wireless e-mail solutions, as well as mobile voice and data services through AT&T Wireless and Nextel. Also, Metrocall offers Integrated Resource Management Systems with wireless connectivity solutions for medical, business, government and other campus environments. Metrocall focuses on the business-to-business marketplace and supports organizations of all sizes, with a special emphasis on the medical and government sectors. For more information on Metrocall please visit its Web site and on-line store at http://www.metrocall.com Metrocall, Inc. is a nationwide provider of one-way and two-way paging and advanced wireless data and messaging services. The Company filed for chapter 11 protection on June 3, 2002 (Bankr. DE. Case No. 02-11579). Laura Davis Jones, Esq. at Pachulski Stang Ziehl Young Jones & Weintraub, PC represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $189,297,000 in total assets and $936,980,000 in total debts. As previously reported, Metrocall, Inc., and its debtor-affiliates sought and obtained an extension from the U.S. Bankruptcy Court for the District of Delaware of their time to file final reports and to delay automatic entry of a final decree. This was the Debtors' second request to delay entry of a final decree. As reported in the Troubled Company Reporter on September 27, 2002, the Court confirmed the Company's Chapter 11 Plan. Since then, the Debtors have devoted their time to reviewing and reconciling approximately 4,300 claims. The Debtors told the Court that process is taking longer than expected. Consequently, the Court extended the deadline for entry of the final decree in these Chapter 11 Cases, to December 31, 2003. MILACRON INC: Bank Group Relaxes Key Terms of Credit Agreement -------------------------------------------------------------- Milacron Inc. (NYSE: MZ), a leading supplier of plastics processing equipment and supplies and industrial fluids, announced its principal bank group has agreed to amend and relax certain terms of its revolving credit facility. Under the agreement, the company's minimum EBITDA (earnings before interest, taxes, depreciation and amortization) requirement has been lowered for the fourth quarter, and the group has waived a $10-million reduction in the maximum amount available for borrowing, which was due to occur on December 15. "Our bank group has been very supportive and continues to provide us with the flexibility we need," said Milacron chairman, president and chief executive officer Ronald D. Brown. "This amendment enables us to move forward and focus our efforts on putting in place more permanent financing for our short-term and our long-term debt. It also comes at a good time, as we are now experiencing an upturn in orders for our industrial fluids and in the non-machinery portion of our plastics technologies businesses." In the newly amended revolving credit agreement, the covenant specifying minimum levels of cumulative EBITDA (including adjustments as defined in the agreement) has been relaxed by $4 million for the fourth quarter, and the maximum available for borrowing remains capped at $65 million, of which $54 million is currently utilized. The availability of the remaining $11 million is subject to certain restrictions based primarily on the company's cash position. In addition, Milacron currently has in excess of $60 million cash on hand. The new amendment, which contains additional minor changes, is being filed today with the Securities and Exchange Commission. The revolving credit facility, as before, is due to expire on March 15, 2004. Milacron's principal bank syndicate includes Deutsche Bank, arranger and administrative agent, and PNC Bank, documentation agent. First incorporated in 1884, Milacron (S&P, B- Corporate Credit Rating, Negative) is a leading global supplier of plastics- processing technologies and industrial fluids, with about 3,500 employees and major manufacturing facilities in North America, Europe and Asia. For further information, visit http://www.milacron.com MIRANT CORP: Wants Go-Signal to Assign Contracts to Mirant Asia --------------------------------------------------------------- In November 2000, Mirant Corporation, then called Southern Energy, Inc., through a related entity organized under the laws of the Republic of the Philippines, Mirant Diamond Holding Corp., acquired equity ownership of a portion of KEPCO Ilijan Corporation. KEILCO, organized under the laws of the Philippines, was established to develop, construct, own and operate a 1,251 megawatt natural gas-fired combined cycle generating plan with diesel fuel fire capability located in Ilijan, Batangas City, Philippines. Robin Phelan, Esq., at Haynes and Boone LLP, in Dallas, Texas, relates that Mirant indirectly owns Mirant Asia Pacific Limited, a non-debtor, which owns part of non-debtor Mirant Diamond. In connection with that ownership, Mirant and others executed a Shareholders' Agreement dated as of November 9, 2000, setting forth the rights and obligations of the parties relating to the ownership interests in KEILCO. Mirant is not a direct shareholder of KEILCO but executed the Shareholders' Agreement as a "Sponsor" to guarantee Mirant Diamond's payment obligations under the Shareholders' Agreement. On November 10, 2000, Mirant, Mirant Diamond and certain financial institutions providing project financing to the Ilijan Project entered into a Funding and Support Agreement, pursuant to which Mirant was jointly and severally liable with Mirant Diamond to make specified equity and cost contributions to the Ilijan Projects. Separately, Korea Electric Power Corporation, another indirect owner of KEILCO, agreed to fund 100% of any draw on the performance security under a separate operation and maintenance agreement procured for KEILCO's benefit so long as Mirant reimburses Korea Electric 30% of the amount it funds pursuant to the operation and maintenance agreement. Accordingly, Mirant and Korea Electric executed a separate Reimbursement Sharing Agreement on November 9, 2000. The Reimbursement Agreement provides for the reimbursement and capping of Mirant's maximum payments at $21,600,000 in the aggregate. Mr. Phelan notes that the Reimbursement Agreement contemplates the transfer of Mirant's rights and obligations under it to a person to whom Mirant is permitted to transfer its rights and obligations under the Funding Agreement, without Korea Electric's consent, provided that Korea Electric is duly notified of the transfer. Mirant Asia is a person to whom Mirant is permitted to transfer its rights and obligations under the Funding Agreement. Also, the Funding Agreement contemplates the transfer of Mirant's rights and obligations under the Funding Agreement to Mirant Asia. Accordingly, on July 11, 2003, Mirant assigned its obligations under the Funding Agreement to Mirant Asia under the terms of an Assignment and Assumption Agreement. Mr. Phelan informs Judge Lynn that prior to the Petition Date, Mirant was in the process of drafting an Assignment and Assumption Agreement to assign its obligations under the Reimbursement Agreement to Mirant Asia and a separate Assignment and Assumption Agreement to assign its obligations under the Shareholders' Agreement to Mirant Asia. However, Mr. Phelan points out that the Debtors filed for Chapter 11 protection before Mirant was able to execute the two Assignment Agreements. Mr. Phelan reports that Mirant Asia previously agreed to assume Mirant's obligations under the Contracts and this position has not changed. Mirant Asia is a well-funded corporation with $3,300,000,000 total consolidated assets and total unrestricted cash and cash equivalents of $287,000,000 as of August 31, 2003. Accordingly, the Debtors ask the Court, pursuant to Sections 365(a) and (f) of the Bankruptcy Code, to authorize Mirant to assume then assign to Mirant Asia its obligations and rights under the Reimbursement Agreement and the Shareholders' Agreement relation to KEILCO. Mr. Phelan explains that the assumption and assignment is warranted in this instance because: (a) the Reimbursement Agreement does not entitle Mirant to any benefit, but imposes potentially significant financial reimbursement obligations upon it; (b) Mirant, being only a "Sponsor," does not have any substantial rights under the Shareholders' Agreement; (c) the transfers ensures that Mirant's Chapter 11 filing does not adversely impact the Ilijan Project, while at the same time preserve the value of Mirant's indirect ownership interests in regard to that project for the estate; (d) Mirant Asia has enough cash and assets to provide adequate assurance of future performance under the Contracts; and (e) the assignment of the contracts will not affect Mirant's indirect ownership interest in Mirant Diamond and KEILCO as the original chain of ownership will be preserved. According to Mr. Phelan, the proposed assumption and assignment of the Contracts is the last of a number of assignments Mirant initiated to transfer all of its obligations, rights and liabilities related to the Ilijan Project to Mirant Asia. (Mirant Bankruptcy News, Issue No. 14; Bankruptcy Creditors' Service, Inc., 215/945-7000) MSX INT'L: Names Robert Netolicka as Chief Executive Officer ------------------------------------------------------------ MSX International, Inc. announced that Robert Netolicka will become president and chief executive officer on January 1, 2004. Thomas T. Stallkamp, vice chairman and current chief executive officer, will become chairman of the board of directors. Erwin H. "Bill" Billig, the current chairman, will continue as a member of the board and special advisor to the company. Robert Netolicka joined MSXI on June 1, 2003 as president and chief operating officer with responsibility for the company's worldwide operations. Prior to MSXI, he served 30 years with Johnson Controls in key leadership assignments in Asia Pacific, Europe and North America. Most recently, he had led their non- automotive service management business as president, Integrated Facilities Management. "Robert has moved swiftly to realign our organization, reduce our cost infrastructure and broaden our growth potential beyond our traditional customer base. I have every confidence he will lead MSXI to greater success and prosperity in the years ahead," commented Tom Stallkamp. "In my new position, I will continue to assist the company with strategic issues and guidance in support of our customers." Netolicka stated, "I greatly appreciate the support of our Board, and I am encouraged about MSXI's exciting prospects for growth. Our various business services offerings appeal to a wide variety of companies looking to reduce their costs and gain competitive advantage." MSX International (S&P, B Corporate Credit Rating, Negative), headquartered in Southfield, Mich., is a global provider of technical business services. The company combines innovative people, standardized processes and today's technologies to deliver a collaborative, competitive advantage. MSX International has 7,000 employees in 25 countries. Visit their Web site at http://www.msxi.com NATIONAL BENEVOLENT: Fitch Downgrades $149MM Debt Rating to DDD --------------------------------------------------------------- Fitch Ratings downgrades NBA's $149 million outstanding debt to 'DDD' from 'B-'. A 'DDD' rating indicates default and entities rated in this category have defaulted on some or all of their obligations. Entities rated 'DDD' have the highest prospect for resumption of performance or continued operation with or without a formal reorganization process. However, expected recovery values are highly speculative and cannot be estimated with any precision. The bonds remain on Rating Watch Negative. The downgrade is a result of NBA's failure to make bond payments due Dec. 1, 2003. These payments totaled approximately $2.5 million of principal and interest on some fixed-rate debt and approximately $7.8 million of variable-rate debt, which was the first scheduled installment of eight equal payments over 24 months due to KBC (KBC currently holds approximately $63 million in variable-rate bonds). Fitch notes that NBA's debt service reserve fund will most likely be tapped in order to make the fixed-rate bond payment. Fitch is still unaware of any restructuring plan with NBA's creditors. According to representatives for NBA, negotiations and discussions are still ongoing. Obtaining information on this matter has been extremely difficult due to a confidentiality agreement between KBC, NBA, UMB and its representatives, other letter of credit participants, and some fixed-rate bondholders. It is unclear whether KBC or the fixed- rate bondholders will extend their deadlines or demand immediate payment. It is Fitch's opinion that any acceleration and attachment of the debt will force NBA to seek bankruptcy protection. Fitch notes that NBA has settled its lawsuit with Bank of America for $3.8 million or 65% of the contested termination payment. The settlement has already been paid from NBA's unrestricted cash. This event has not triggered an acceleration of bond payments by the fixed or variable-rate bond holders. Fitch notes that there could be some significance to the negotiated payment to BOA as it could relate to a workout plan regarding total outstanding debt with remaining bondholders and creditors. However, no such plan has been mentioned or presented to Fitch. Based on nine-month interim statements from Sept. 30, 2003, NBA had approximately $77.6 million in unrestricted cash (190 days cash on hand). Although some operating improvements have been made year-to-date, NBA's liquidity ratios continue to decline as sizable operating losses are eroding the balance sheet. Through the nine-month interim period, NBA has lost approximately $12.7 million from operations, compared to $21 million loss in fiscal 2002, which translates into a negative 11.7% operating margin and weak debt service coverage of 0.2 times. Fitch will continue to closely monitor the situation and further comment on NBA's rating and outlook as information becomes available. Headquartered in St. Louis, MO NBA provides services to the elderly, children, and the developmentally disabled. The NBA was created in 1887 and currently operates 94 facilities and programs. The obligated group includes 22 operating facilities located in 13 states that care for approximately 9,000 individuals, accounting for the vast majority of consolidated financial operations. In fiscal 2002, NBA reported total revenues of $137.6 million. Outstanding Debt -- $9,650,000 Jacksonville Health Facilities Authority industrial development revenue bonds (NBA--Cypress Village Florida Project), series 2000A; -- $10,080,000 Colorado Health Facilities Authority revenue bonds (NBA--Village at Skyline Project), series 2000C; -- $9,390,000 Colorado Health facilities Authority revenue bonds (NBA-Village at Skyline Project), series 1999A; -- $3,980,000 Oklahoma County Industrial Authority health care revenue bonds (NBA - Oklahoma Christian Home Project), series 1999; -- $2,695,000 Health and Educational Facilities Authority of the State of Missouri health facilities refunding and improvement revenue bonds (NBA - Central Office Project), series 1999; -- $15,145,000 Colorado Health Facilities Authority health facilities revenue bonds (NBA - Village at Skyline Project), series 1998B; -- $10,715,000 Colorado Health Facilities Authority health facilities refunding revenue bonds (NBA - Multi-state Issue), series 1998A; -- $5,935,000 Iowa Finance Authority health facilities revenue bonds (NBA - Ramsey Home Project), series 1997; -- $2,235,000 Oklahoma County Industrial Authority health care refunding revenue bonds (NBA - Oklahoma Christian Home Project), series 1997; -- $2,160,000 Health and Educational Facilities Authority of the State of Missouri health facilities revenue bonds (NBA - Woodhaven Learning Center Project), series 1996A; -- $625,000 Colorado Health Facilities Authority tax-exempt health facilities revenue bonds (NBA - Colorado Christian Home Project), series 1996A; -- $2,650,000 Illinois Development Finance Authority health facilities revenue bonds (NBA - Barton W. Stone Christian Home Project), series 1996; --$4,485,000 Colorado Health Facilities Authority Health Facilities Authority Tax-exempt health facilities revenue bonds (NBA - Village at Skyline Project), series 1995A; -- $4,655,000 Jacksonville (FL) Health Facilities Authority industrial development revenue bonds (NBA - Cypress Village Florida Project), series 1994; -- $3,645,000 Health and Educational Facilities Authority of the State of Missouri health facilities revenue bonds (NBA - Lenoir Retirement Community Project), series 1994; -- $8,015,000 Jacksonville (FL) Health Facilities Authority industrial development revenue bonds (NBA - Cypress Village Florida Project), series 1993; -- $23,950,000 Jacksonville (FL) health facilities authority revenue refunding bonds (NBA - Cypress Village Florida Project), Series 1992; -- $22,590,000 City of Indianapolis, Indiana economic development refunding and improvement revenue bonds (NBA - Robin Run Village Project), series 1992; -- $4,485,000 Industrial Development Authority of Cass County, Missouri industrial revenue refunding bonds (NBA - Foxwood Springs Living Center Project), series 1992; -- $1,850,000 Bexar County (TX) Health Facilities Development Corp. Tax-exempt health facilities revenue bonds (NBA - Patriot Heights Project), series 1992B. NAT'L WATERWORKS: S&P Affirms Low-B Ratings with Stable Outlook --------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit and senior secured bank loan ratings on water and wastewater transmission distributor National Waterworks Inc. At the same time, Standard & Poor's affirmed its 'B' subordinated debt ratings on the company. All ratings were removed from CreditWatch, where they were placed on Oct. 29, 2003, when the company announced its intention to make a $110 million onetime dividend payment to its sponsors. The outlook is stable. The company, the largest distributor of water products in the U.S., had about $445 million of total rated debt outstanding as of Sept. 30, 2003. The ratings actions reflect the company's withdrawal of a consent solicitation to amend a covenant in NWI's subordinated bond indenture to allow for the payment of the dividend. However, the company plans to continue to consider payment of a special dividend to the extent permitted by the indenture governing the subordinated notes. In addition, payment of dividends will be subject to certain financial ratio tests as well as maximum amounts allowable under the company's $75 million revolving credit facility. "While we see potential for future distributions and/or niche acquisitions, we expect NWI to maintain a financial profile that remains within levels acceptable for the rating," said Standard & Poor's credit analyst Linli Chee. With annual sales of about $1.1 billion, NWI remains the leading distributor of products used to build and repair water and sewer systems in the U.S. While barriers to entry are fairly low, the company benefits from the economies of scale that come with a strong market share (20%) in an industry that is highly fragmented and dominated by small regional distributors. The company's markets are expected to remain mixed in the coming year as residential activity may slow slightly from 2002 highs, influenced by rising interest rates. ORTHOFIX: S&P Rates Corporate Credit & Bank Loan Ratings at BB- --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to orthopedic product manufacturer Orthofix International N.V. Standard & Poor's also assigned its 'BB-' senior secured bank loan rating to Colgate Medical Ltd.'s proposed $125 million bank facility, which consists of a $15 million, five- year, revolving credit facility and a $110 million term loan maturing in 2008. Colgate Medical is a holding company owned by Orthofix International N.V., its parent company. The outlook is stable. The proposed debt, cash, and $28 million of equity will be used to purchase Breg Inc., a leading manufacturer of orthopedic bracing and cold therapy products for $150 million. Although the rated debt will be obligations of holding company Colgate Medical, the acquisition will be executed by Orthofix Inc., the U.S. operating company. Colgate Medical will own both Orthofix Inc. and Breg Inc. After the transaction, Colgate's total debt outstanding will be approximately $110 million. "The speculative-grade ratings are based on the company's niche product lines and highly competitive markets, factors partially offset by its diverse revenue stream and relatively low leverage," said Standard & Poor's credit analyst Jordan C. Grant. Charlotte, North Carolina-based Orthofix Inc. is a leading provider of minimally invasive medical devices for the orthopedic rehabilitation and trauma markets. Orthofix has leading positions in the fast growing bone growth stimulation market, the specialty external fixation market, and the vascular therapy market. The acquisition of Breg will add bracing, cold therapy, and pain management products to Orthofix's offerings. Strong patent protection limits the number of participants in the BGS market, Orthofix's largest product segment. Many of its other product lines, while profitable, are relatively small and so less attractive to large companies. Still, the BGS market, which will account for about 35% of revenue pro forma for the transaction, is competitive. Orthofix must vie for market share against well-entrenched players with similar technology. And while the electrical stimulation segment of the market is well protected by patents that serve as a barrier to competitors' entry into the market, the company is somewhat vulnerable to competition from larger players. Medtronic Inc. (AA- /Stable/A-1+) and Stryker Corp. (A-/Stable/--) are in the process of developing bone growth stimulation gels, which may be available in the next few years. These gels would be applied directly to fractures and may lessen the need for electrical growth stimulators often used when bones do not heal adequately after surgery. Moreover, external fixation devices--Orthofix's second- largest segment, which will account for about 25% of revenues after the acquisition--are also manufactured by much larger companies. While Orthofix specializes in a niche segment of the external fixation market, increased competition is possible. Nevertheless, despite strong competition, the combined entity will manufacture products in at least five different markets, which will reduce the risks associated with drastic changes in technology. The company's customer base is also fairly well diversified, both by payor type and geography, which helps to lessen the risk of adverse reimbursement developments. Medicare and Medicaid will account for less than 10% of the company's payor mix, and international sales will account for more than 25% of revenue after the transaction is completed. OWENS CORNING: Seeks to Block Chapter 11 Trustee Appointment ------------------------------------------------------------ Norman L. Pernick, Esq., at Saul Ewing LLP, in Wilmington, Delaware, representing the Owens Corning Debtors asserts that the request for the appointment of the Chapter 11 Trustee (by the Creditors' Committee) is all about tactics and nothing about merits. Since the Petition Date, the Debtors engaged in extensive efforts to resolve their cases consensually, primarily through negotiation sessions with their creditor constituencies, mediation sessions, an extensive and broad reaching "Inter-Creditor Project" and Court-supervised settlement conferences. After initial settlement efforts were unsuccessful, the Debtors filed their first plan of reorganization on January 17, 2003, with the Official Committee of Asbestos Claimants and the Legal Representative for Future Claimants as co-plan proponents. The Plan Proponents continued to act appropriately and "dual track" their approach to these cases -- pursuing settlement on the one hand but also, in furtherance of the Debtors' duties to their estates as a whole to move these cases towards emergence, pursuing confirmation of a confirmable plan of reorganization. The Bank Group and its surrogate, the Creditors Committee, are dissatisfied with the Plan and recently stated publicly that they will not settle. Instead, they embarked on a guerilla-like campaign to oppose it, having filed in short succession a barrage of motions and lawsuits, all with the obvious purpose of derailing or at least severely delaying these bankruptcy proceedings. A consistent theme emerged, Mr. Pernick notes. The Creditors Committee and the Bank Group apparently believe that anyone, including a judge, should be recused or replaced if they do not ascribe to the Creditor Committee's philosophy. Not surprisingly, the Creditor Committee's and Bank Group's new offensive was launched soon after it became clear to them that their delaying tactics were close to exhaustion: (1) the voluminous objections to the Debtors' disclosure statement and voting procedures that they asserted from June through October had been or were about to be overruled and a disclosure statement likely was about to be conditionally approved by the Court; and (2) the Creditors Committee's and Bank Group's numerous requests for a deferral of the Plan process in anticipation of potential asbestos legislation were going to continue to be denied by the Court. Among other things, the Creditors Committee and the Bank Group combined to file or orchestrated the filing of: (1) a $650,000,000 "constructive trust" complaint against the Debtors; (2) a complaint against a group of present and former officers and directors of the Debtors in New York State court; (3) a motion to recuse District Judge Wolin; (4) an Emergency Petition for Writ of Mandamus seeking to recuse Judge Wolin; (5) a motion to "Eradicate Structural Conflicts Between Asbestos Law Firms" on the alleged grounds that attorneys serving on the Official Committee of Asbestos Claimants have conflicts of interest; and (6) objections to the Debtors' proposed voting procedures. Additionally, the Creditors Committee seeks the appointment of a trustee to displace the Debtors' management and, and attempts to launch an inappropriate preemptive pre-confirmation hearing attack on the Debtors' present and future asbestos claims. The Creditors Committee alleges that the appointment of a trustee is warranted because the Debtors' actions in these cases supposedly reflect an attempt to "curry favor" with the Asbestos Creditors, in violation of their fiduciary duty. The asserted motivation for the Debtors' alleged breach of fiduciary duty is "personal gain" -- asserted promises of employment for the Debtors' management team post-confirmation and the employee and management incentive programs contained in the Plan. In a telling but consistent move, Mr. Pernick points out that the Creditors Committee provides no facts in support of these assertions. In fact, these assertions appear to be merely a pretext to support a far-reaching fishing expedition as part of the Creditor Committee's and Bank Group's scheme to find a much-needed alternative avenue to impede or at least delay Plan confirmation. Indeed, the existing factual record supports that as a more plausible basis for the Creditors Committee's Motion -- the very management that the Creditors Committee now seeks to replace on the eve of approval of a disclosure statement is the same management that the Committee recently agreed should be the subject of a "Corporate Incentive Plan" and a "Long Term Incentive Plan." Whatever the motives of the Creditors Committee may be, Mr. Pernick relates, the record in these cases over three years conclusively demonstrates that the actions and strategic decisions taken by the Debtors have been the product of the reasonable exercise of their business judgment, in full compliance with all fiduciary duties, and not in exchange for some unsubstantiated promise of personal gain. The fact that the Creditors Committee disagrees with the Debtors' decisions, particularly given the lack of any proffered evidence in support of their theory, does not constitute grounds for the appointment of a Chapter 11 trustee. According to Mr. Pernick, the appointment of a trustee is an extraordinary remedy that is appropriate only where the moving party can meet stringent requirements imposed by the Bankruptcy Code and applicable case law. The appointment of a trustee is a disfavored remedy to be exercised in only the most dire and extraordinary circumstances, as seen in cases in In re Marvel Entertainment Group, Inc., 140 F.3d 463, 471 (3d Cir. 1998); Official Committee of Asbestos Personal Injury Claimants & Official Committee of Asbestos Property Damage Claimants v Sealed Air Corp (In re W.R. Grace & Co.), 285 B.R. 148, 158 (Bankr. D. Del. 2002). Mr. Pernick argues that the appointment of a Chapter 11 trustee would not provide any material benefit to these cases but would in fact cause serious detriment. There is no reason to believe that a trustee would be any more able to resolve the parties' differences than have Judge Wolin, Judge Fitzgerald or the Court- appointed mediator, Prof. Francis McGovern. Mr. Pernick believes that the appointment of a trustee would certainly create significant delays to permit the trustee and his or her professionals to become familiar with the Debtors' businesses and employees and to meet with vendors, creditors and other parties- in-interest. Moreover, Mr. Pernick asserts that these facts warrant the denial of the trustee appointment: -- the appointment of a trustee for these cases would be prohibitively expensive; -- the appointment would cause incalculable harm to the Debtors' overall value and position in the marketplace and would seriously impair the Debtors' carefully maintained relationships with key customers, vendors and employees in what is under the current circumstances a very healthy business; and -- the appointment would result in severe loss of key management and non-management employees, as well as a serious deterioration in the value of the Debtors' businesses; Accordingly, the Debtors ask the Court to deny the Creditors Committee's request. (Owens Corning Bankruptcy News, Issue No. 63; Bankruptcy Creditors' Service, Inc., 215/945-7000) PACIFIC GAS: Urges CPUC to Adopt Settlement Pact Without Changes ---------------------------------------------------------------- Gordon R. Smith, Pacific Gas and Electric Company's president and chief executive officer, urged the California Public Utilities Commission to approve -- without change -- the proposed settlement agreement reached between PG&E and the CPUC staff. "The proposed settlement agreement represents the only consensual means of putting the disputes related to the energy crisis behind us and moving to a more secure future for our customers, employees and investors alike," said Smith. "The proposed settlement presents a unique opportunity to close a difficult chapter in California's energy history. "It is only a slight exaggeration to say that the entire financial world is watching us today, and will be watching which road you choose to take. The financial markets hope and expect you to continue restoring the credibility of California regulation." In remarks at this morning's CPUC hearing on the recent proposed decisions in the utility's Chapter 11 proceeding, Smith highlighted some of the important benefits of the proposed settlement agreement reached with the CPUC staff in June 2003, including: -- A rate decrease for customers: Beginning on January 1, 2004, customers will have their electricity rates reduced by more than $600 million with the opportunity for additional rate reductions in the future. (In their proposed decisions, both Commission President Michael Peevey and the CPUC administrative law judge noted that the rate reduction provisions of the proposed settlement are fair, reasonable and in the public interest.) -- Environmental benefits, including the protection of the 140,000 acres of sensitive watershed lands surrounding the company's hydroelectric facilities. (A number of organizations have announced their support for the environmental agreement, including the California Hydropower Reform Coalition, the California Farm Bureau, and the State Water Resources Control Board.) Restoration of PG&E's financial health and investment grade credit rating to allow the company to access the capital markets in order to finance, at historically low interest rates, the infrastructure improvements and long-term procurement of natural gas and electricity needed to support California's economy. Pending the Commission's vote and the confirmation of the associated plan of reorganization by the federal bankruptcy court expected this month, the company has targeted the end of the first quarter of 2004 for its exit from Chapter 11. Emerging as an investment grade utility would allow the company to take advantage of historically low interest rates as it finances the new debt, which experts have projected will save customers over $2.1 billion in lower interest costs over the next 10 years alone. In addition to the endorsement of the Official Committee of Unsecured Creditors, the proposed settlement agreement received the support of more than 97 percent of the voting creditors. "Rejection of the settlement, or a substantive modification, would be a return to prolonged litigation over the past, and represent a devastating blow to California's efforts to restore its credibility in financial markets," added Smith. "We are not prepared to support any settlement except the proposed settlement agreement we negotiated with your staff under the supervision of Judge Newsome. "[Tues]day, we have a chance to put the energy crisis behind us, and to put PG&E back on track toward achieving the goals we mutually set for ourselves -- to ensure safe and reliable service to customers at reasonable rates -- and under a system of public utility regulation that is balanced, stable and respected across the country and the world," concluded Smith. On December 8, PG&E along with the other parties will file comments on the proposed decisions and the full Commission is scheduled to take up the proposed settlement at its December 18th meeting. The Bankruptcy Court confirmation trial concluded last Monday, three weeks earlier than expected, and the Court has indicated it intends to issue a decision before December 18. PG&E NAT'L: NEG Solicitation Exclusivity Intact Until March 19 -------------------------------------------------------------- Pursuant to Section 1121(d) of the Bankruptcy Code, and in consideration to any amendments or modifications of National Energy & Gas Transmission, Inc.'s reorganization Plan, Judge Mannes extends NEG's Exclusive Solicitation Period to March 19, 2004. (PG&E National Bankruptcy News, Issue No. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) QUINTEK TECHNOLOGIES: Secures $500K Financing from KMVI, LLC ------------------------------------------------------------ Quintek Technologies, Inc. (OTCBB:QTEK) has closed on a $500,000 financing from KMVI, LLC, a management company operating businesses that generate over $150 million per year in revenues. The financing comes in the form of a loan that may become convertible into stock in the future. The conversion price on the loan has been fixed at the time of investment. Robert Steele, President and CEO of Quintek commented, "This is yet another huge vote of confidence in Quintek from KMVI. This financing will allow us to aggressively expand our sales and marketing initiatives and develop new streams of revenue." Steele added, "We are highly confident that we have put in place the needed ingredients to succeed in this industry." Andrew Haag, CFO of Quintek added, "Our efforts to date restructuring this Company have made us a more attractive candidate for investors, which is evidenced by our ability to secure this round of financing." Haag continued, "What management has accomplished over the last 9 months has set the stage for a sustainable growth phase. As we enter this phase we believe that we will continue to become an even more attractive investment for individuals and institutions alike." He further stated, "We feel strongly that Quintek will emerge as a leader in its industry and continue to attract new partners." Quintek is the only manufacturer of a chemical-free desktop microfilm solution. The company currently sells hardware, software and services for printing large format drawings such as blueprints and CAD files (Computer Aided Design), directly to microfilm. Quintek does business in the content and document management services market, forecast by IDC Research to grow to $24 billion by 2006 at a combined annual growth rate of 44%. Quintek targets the aerospace, defense and AEC (Architecture, Engineering and Construction) industries. Quintek's printers are patented, modern, chemical-free, desktop- sized units with an average sale price of over $65,000. Competitive products for direct output of computer files to microfilm are more expensive, large, specialized devices that require constant replenishment and disposal of hazardous chemicals. The company's June 30, 2003, balance sheet discloses a total shareholders' equity deficit of about $1.3 million. RAINBOW MEDIA: S&P Rates $775 Million Bank Facilities at BB+ ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'BB' corporate credit rating to Rainbow Media Holdings LLC. In addition, a 'BB+' bank loan rating was assigned to Rainbow's $775 million in amended and restated secured bank loan facilities (based on preliminary information and subject to receipt of the final bank loan documents). These ratings were simultaneously placed on CreditWatch with negative implications. The bank loan is rated one notch above the corporate credit rating. This reflects strong recovery prospects for the loan in a default scenario. Rainbow is a wholly owned intermediate holding company of Bethpage, New York-based cable operator Cablevision Systems Corp. Standard & Poor's ratings for Cablevision, including the 'BB' corporate credit rating, remain on CreditWatch with negative implications, where they were placed July 9, 2003. At Sept. 30, 2003, Cablevision's total debt outstanding was $6 billion, excluding collateralized indebtedness of $1.6 billion. The company's preferred stock totaled another $1.6 billion. "The rating on Cablevision reflects the company's relatively high ongoing level of debt to annualized EBITDA, which totaled about 7.3x as of Sept. 30, 2003 (including preferred stock, on an operating lease-adjusted basis), coupled with continued financing requirements and increasing competition from direct broadcast satellite," said Standard & Poor's credit analyst Catherine Cosentino. "However, the company continues to benefit from the attractive demographics of its cable TV franchise area, which currently serves about 2.9 million customers. This base provides good potential for expansion of digital and cable modem services, both of which Cablevision expects to continue to market aggressively." The ratings on Cablevision remain on CreditWatch with negative implications, where they were placed following Cablevision's Form 8K filing, in which it revealed that it had received a formal order of investigation from the SEC, as well as a subpoena in connection with the order. This investigation followed Cablevision's own recently reported internal investigation of improper expense accruals at American Movie Classics Co., which was disclosed by the company in June. Subsequent to the original findings, the company reported that additional improperly recognized expenses were discovered at the original productions units within AMC and WE: Women's Entertainment LLC. SAMSONITE CORP: Holding Third-Quarter Conference Call on Dec. 11 ---------------------------------------------------------------- Samsonite Corporation (OTC Bulletin Board: SAMC) will hold a conference call with securities analysts to discuss third quarter fiscal year 2004 earnings results for the quarter ended October 31, 2003, at 11:00 a.m. Eastern Standard Time on Thursday, December 11, 2003. Investors and interested members of the public are invited to listen to the discussion. The dial-in phone number is (877) 809-7599 in the U.S. and (706) 679-6135 for international calls, the conference name is Samsonite and the conference ID # is 4242194. The leader of the call is Luc Van Nevel. If you cannot attend this call, it will be played back through Wednesday, December 31, 2003. The playback number is (800) 642-1687 in the U.S. and (706) 645-9291 for international calls, and the conference ID # is 4242194. Samsonite (S&P, B Corporate Credit and CCC+ Subordinated Debt Ratings) is one of the world's largest manufacturers and distributors of luggage and markets luggage, casual bags, backpacks, business cases and travel-related products under brands such as SAMSONITE(R), AMERICAN TOURISTER(R), LARK(R), HEDGREN(R) and SAMSONITE(R) black label. SATURN (SOLUTIONS): Continues Report Filing Default Status ---------------------------------------------------------- Saturn (Solutions) Inc., announced that there has been no material change in the information nor any failure on Saturn's part to fulfill its stated intentions contained in the notice of default filed by Saturn on October 21, 2003 with the provincial securities commissions. Saturn has not filed its financial statements for the first quarter ended August 31, 2003 within the prescribed time limit nor has the Company mailed such statements to its shareholders. All other material information concerning the affairs of Saturn has been generally disclosed. * * * Saturn's previously-announced assessment of strategic alternatives available to the Company is continuing. These alternatives may include an equity investment in Saturn, merger, partnership, joint venture, sale, or a combination thereof. An announcement on the outcome of the strategic review process will be made in due course. However, Saturn undertakes no obligation to make any announcement regarding its consideration of strategic alternatives until an agreement, if any, has been signed or a decision not to proceed with strategic alternatives is made. Saturn further said that following Saturn's application, the Irish courts have appointed a liquidator for Saturn Fulfilment Services Limited, the Company's wholly-owned Irish subsidiary. Saturn applied for the appointment of a liquidator in light of the insolvency of its Irish subsidiary. Among the factors which led to this development were: the departure from Ireland of several of Saturn's major customers; a general decline in the Irish market; a gain in strength of the Euro against the pound in late 2002 and the first half of 2003, which undermined Saturn's efforts to generate profitable new business in the United Kingdom; Saturn's inability in July 2003 to resell inventory of a customer in default to the Company; the loss of a major customer in August 2003; and an increase in rent at Saturn's main facilities in Dublin. The financial impact on Saturn of the appointment of a liquidator for Saturn Fulfilment Services cannot be determined at this time. SHGC LTD: Voluntary Chapter 11 Case Summary ------------------------------------------- Debtor: SHGC, Ltd. dba Sugar Hill Golf Course 13405 Southwest Freeway Sugar Land, Texas 77478 Bankruptcy Case No.: 03-47232 Type of Business: Golf course Chapter 11 Petition Date: December 2, 2003 Court: Southern District of Texas (Houston) Judge: William R. Greendyke Debtor's Counsel: Phillip Henry Trueba, Esq. Attorney at Law 2100 W Loop S, Suite 837 Houston, TX 77027 Tel: 713-590-5095 Fax: 713-590-5097 Estimated Assets: $1 Million to $10 Million Estimated Debts: $0 to $50,000 SIMMONS CO: Planned $340M Senior Sub. Notes Get S&P's B- Rating --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' rating to Atlanta, Georgia-based bedding manufacturer Simmons Co.'s proposed $340 million senior subordinated notes due 2013. The notes are issued pursuant to Rule 144A under the Securities Act of 1933. Proceeds will be used to finance the acquisition of Simmons Co. by Thomas H. Lee Partners, a private equity firm, and repay existing debt. The new rating is based on preliminary terms and is subject to review upon final documentation. At the same time, Standard & Poor's lowered its corporate credit rating on Simmons to 'B+' from 'BB-'. The rating is removed from CreditWatch, where it was placed Sept. 2, 2003. The outlook is stable. In addition, the company's $480 million senior secured credit facility was assigned a 'B+' rating. The bank loan rating is the same as the corporate credit rating because in a stress scenario, Standard & Poor's believes that the secured lenders could expect substantial, but not full, recovery of principal. "The rating actions reflect Simmons Co.'s leveraged financial profile stemming from the pending debt-financed acquisition of Simmons Company by Thomas H. Lee Partners L.P.," said Standard & Poor's credit analyst Martin Kounitz. "This debt leverage is partially offset by the company's No. 2 market share, its history of new product innovation, and its stable cash-flow generation in the domestic mattress industry, a business with stable demand." Simmons is the second-largest U.S. bedding manufacturer. Its ratings reflect the stable demand characteristics of the mattress industry. (About 70% of domestic mattress sales are for the replacement of existing bedding.) Given shipping costs and consumers' requirement for fast delivery, the industry faces little competition from imported mattresses. The company's high market share stems from its well-recognized brand name (Beautyrest), differentiated products, strong relationships with retailers, and broad distribution. The Beautyrest line was the first in the industry to be designed not to require rotation ("no-flip"). Management's strategy is to continue to gain market share by emphasizing premium and new products that facilitate higher average unit selling prices and therefore improve profitability. As a result of this strategy, both the company's average unit selling prices and volume increases have exceeded those of the mattress industry. Standard & Poor's expects the current management team to remain with Simmons under its new ownership, and also expects there to be no change in management strategy. SIX FLAGS INC: S&P Rates $300 Million Senior Notes Issue at B- -------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' rating to Six Flags Inc.'s privately placed, Rule 144A $300 million senior notes due 2014. Proceeds from the offering will be used to redeem about $280 million of its $423 million 9.75% senior notes due 2007. At the same time, Standard & Poor's affirmed its ratings, including its 'B+' corporate credit rating, on the theme park operator. Oklahoma City, Oklahoma-based Six Flags had $2.6 billion of total debt and preferred stock as of Sept. 30, 2003. The ratings outlook remains negative. The rating reflects Six Flags' high debt leverage currently depressed profitability, and Standard & Poor's expectation that discretionary cash flow will be slightly negative in 2003. Net cash usage is likely, despite lower capital spending, due to reduced profitability and the heavy interest expense and preferred dividend burden. These risks are only partly offset by the company's good competitive position in the regional theme park business, and good geographic and cash flow diversity. "Consideration of an outlook revision to stable will be linked to progress towards improving operating performance, generating positive discretionary cash flow, and achieving debt leverage below 6.5x, while deterioration in these areas from current levels could lead to a reassessment of the rating," said Standard & Poor's credit analyst Hal F. Diamond. SLATER STEEL: Tomorrow is the General Claims Bar Date ----------------------------------------------------- By Order of the U.S. Bankruptcy Court for the District of Delaware, tomorrow at 5:00 Eastern Time is set as the general claims bar date by which creditors, including Government Units, of Slater Steel U.S., Inc., and its debtor-affiliates, must file their claims against the Debtors. Creditors must file written proofs of claims. Forms must be delivered to the Debtors' Claims and Noticing Agent, Trumbull Group, LLC f/k/a Trumbull Associates, LLC, by courier-service, hand-delivery or overnight mail, to: Slater Steel U.S., Inc. c/o Trumbull Group, LLC 4 Griffin Road North Windsor, CT 06095 Claims need not be filed if they are on account of: 1. Claims already properly filed; 2. claims scheduled in the right amount and not listed as disputed, contingent or unliquidated; 3. claims previously allowed by the Bankruptcy Court; 4. intercompany claims; and 5. claims arising from ownership of interests. Slater Steel U.S., Inc., a mini mill producer of specialty steel products, filed for chapter 11 protection on June 2, 2003 (Bankr. Del. Case No. 03-11639). Daniel J. DeFranceschi, Esq., and Paul Noble Heath, Esq., at Richards Layton & Finger, represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed estimated assets of over $10 million and debts of more than $100 million. SOLUTIA: Rejects Pharmacia Settlement Costs of 2 Asbestos Cases --------------------------------------------------------------- Solutia Inc. (NYSE: SOI) notified Monsanto and Pharmacia that it would not be making a $3 million payment to satisfy litigation settlements in two asbestos cases brought against Pharmacia. Solutia's only obligation related to this litigation comes as a result of its contractual obligation to indemnify legacy liabilities of the old Monsanto chemical business which were assigned to Solutia at the time of Solutia's creation in 1997. Solutia has given notice to Monsanto and Pharmacia to enable them to make the required payments on their own behalf. When Solutia was spun off from Monsanto in 1997, Monsanto contractually obligated Solutia to bear the responsibility for hundreds of millions of dollars of legacy liabilities that accrued to Monsanto and its successor, Pharmacia, over a century of manufacturing, primarily in the areas of retiree benefits, environmental cleanup and litigation defense costs. In its 2003 third quarter 10-Q filing, Solutia disclosed that it must take action to reduce its current level of legacy liabilities, which currently cost Solutia approximately $100 million annually. Solutia has not advised Monsanto and Pharmacia that it will not honor any remaining legacy liabilities. In fact, Solutia continues to make other selected legacy liability payments. As individual legacy liability payments come due, Solutia will evaluate whether it is prudent for it to make those payments and will, in all cases where it determines to not make such payments, notify Monsanto and Pharmacia to enable them to pay their obligations. Solutia -- http://www.Solutia.com-- (Fitch, B- Senior Secured Bank Facility and CCC Senior Secured Notes Ratings, Negative) uses world-class skills in applied chemistry to create value-added solutions for customers, whose products improve the lives of consumers every day. Solutia is a world leader in performance films for laminated safety glass and after-market applications; process development and scale-up services for pharmaceutical fine chemicals; specialties such as water treatment chemicals, heat transfer fluids and aviation hydraulic fluid and an integrated family of nylon products including high-performance polymers and fibers. As of September 30, 2003, Solutia Inc. records a total shareholders' deficit of $369 million compared to $249 million as of December 31, 2002. SWEETHEART HOLDINGS: Year-End Results Enter Positive Territory -------------------------------------------------------------- Sweetheart Holdings Inc. reported financial results for the fiscal year ended September 28, 2003. Net sales increased $24.4 million, or 1.9%, to $1,307.9 million in Fiscal 2003 compared to $1,283.5 million in Fiscal 2002 reflecting a 0.6% decrease in sales volume and a 2.5% increase in average realized sales price. Sales volume decreased primarily as a result of lower demand from consumer customers, which was partially offset by increased demand from institutional customers. Average realized sales prices increased as a result of pricing increases associated with higher raw material costs and a change in product mix. Gross profit increased $12.9 million, or 8.4%, to $166.2 million in Fiscal 2003 compared to $153.3 million in Fiscal 2002. As a percentage of net sales, gross profit increased to 12.7% in Fiscal 2003 from 11.9% in Fiscal 2002. The increase in gross profit is primarily due to improved manufacturing efficiencies and labor utilization resulting from the Company's rationalization, consolidation and improvement of its manufacturing facilities. The benefits from improved manufacturing efficiencies were partially offset by average selling prices increasing later in the year than increasing raw material costs. Selling, general and administrative expenses decreased $6.6 million, or 5.7%, to $108.2 million in Fiscal 2003 compared to $114.8 million in Fiscal 2002. This decrease was primarily due to (i) $2.1 million decrease in salaries and related fringe benefits due to a workforce reduction program initiated in Fiscal 2002, (ii) $2.6 million decrease in depreciation expense resulting from the full depreciation of certain computer equipment, (iii) $2.0 million decrease in goodwill amortization and (iv) $1.1 million decrease in expenses due to fewer customer bankruptcy filings in Fiscal 2003. These favorable changes were partially offset by a $2.2 million increase in promotional and advertising expenses. Operating income in Fiscal 2003 increased by $31.2 million, or 92.0%, to $65.1 million as compared to $33.9 million in Fiscal 2002. The principal reasons contributing to the increase are an increase in gross profit and a decrease in selling, general administrative expenses, as noted above. In addition, in Fiscal 2002 the Company incurred various one-time expenses, including (i) a $5.4 million write-off of the management services agreement between Sweetheart Holdings and SF Holdings Group, Inc., which had been assigned and assumed by The Fonda Group, Inc. in 1998, (ii) a $2.6 million write-off of assets related to business initiatives which were abandoned subsequent to the merger with The Fonda Group, Inc., (iii) $6.9 million of costs in connection with the rationalization, consolidation and process improvement of the Company's manufacturing facilities and (iv) $0.5 million of additional costs associated with the termination of the Lily- Tulip, Inc. Salary Retirement Plan. These expenses were offset, in part by a gain of $3.0 million associated with the sale of a facility. The Company reported net income for Fiscal 2003 of $15.0 million as compared to a net loss of $3.1 million for Fiscal 2002. Adjusted EBITDA for Fiscal 2003 is $84.9 million as compared to $69.6 million for Fiscal 2002. A reconciliation of net income to Adjusted EBITDA is set forth in the table below. As presented by the Company, Adjusted EBITDA may not be comparable to similarly titled measures reported by other companies. We have included Adjusted EBITDA because we believe it is an indicative measure of our operating performance and our ability to meet our debt service requirements and is used by investors and analysts to evaluate companies in our industry. Adjusted EBITDA should be considered in addition to, not as a substitute for, operating income, net (loss) income, cash flow and other measures of financial performance and liquidity reported in accordance with accounting principles generally accepted in the United States of America. In addition, a substantial portion of our Adjusted EBITDA must be dedicated to the payment of interest on our indebtedness and to service other commitments, thereby reducing the funds available to us for other purposes. Accordingly, Adjusted EBITDA does not represent an amount of funds that is available for management's discretionary use. The Company also announced that its subsidiary, Sweetheart Cup Company Inc., plans to issue $95.0 million of senior secured notes and $20.0 million of junior subordinated notes in separate private placements, the proceeds of which would be used to repay a portion of its senior credit facility and to redeem all of its outstanding 12% Senior Notes due 2004. The senior secured notes would bear interest at a fixed rate that has not yet been determined and would mature in 2007. The junior subordinated notes, which would be purchased by International Paper Company, one of the Company's raw materials suppliers, would bear interest at the rate of 9-1/2% and would mature in 2008. There can be no assurance, however, that these refinancings will be completed. The senior secured notes and the junior subordinated notes are being offered in private placements and will not be registered under the Securities Act of 1933. The senior secured notes and the junior subordinated notes may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act. The Company 9S&P, CCC+ Corporate Credit Rating, Developing) is one of the largest converters and marketers of a broad line of disposable food service products serving the North American institutional and consumer markets. THAXTON GROUP: US Trustee Appoints Official Creditors' Committee ---------------------------------------------------------------- The United States Trustee for Region 3 appointed 7 creditors to serve on an Official Committee of Unsecured Creditors in The Thaxton Group, Inc.'s Chapter 11 cases: 1. Willard Picklesimer 78 Short Street, Milford Center, OH 43045 2. Laverne McKenzie 510 Saddle Drive, Camden, SC 29020 Tel: 803-286-5055, Fax: 803-286-7824; 3. Voyager Life Insurance Company Attn: Adam David Lamnin, CPA 11222 Quail Roost Drive, Miami, FL 33157 Tel: 305-256-7147, Fax: 305-278-5621; 4. The Bank of New York Attn: Gerard F. Facendola, Vice President 101 Barclay Street, 8W, New York, NY 10286 Phone: 212-815-5440, Fax: 212-815-5131; 5. David Allen Osteen, Sr. 1572 Ross Road, Elgin, SC 29045 Phone: 803-338-0147, Fax: 803-408-3960; 6. Garry D. Smith 6016 Highview Rd, Matthews, NC 28104 Phone: 704-814-0402, Fax: 704-814-0208; and 7. Claudine Lowrance Pate Attn: Jack L. Pate 4100 Peggy Lane, Charlotte, NC 28227 Phone: 704-545-9554 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Lancaster, South Carolina, The Thaxton Group, Inc., is a diversified consumer financial services company. The Company filed for chapter 11 protection on October 17, 2003 (Bankr. Del. Case No. 03-13183). Michael G. Busenkell, Esq., and Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell represent the Debtor in their restructuring efforts. When the Company filed for protection from it creditors, it listed $206,000,000 in total assets and $242,000,000 in total debts. UNITED AIRLINES: Wants Marshall & Ilsley to Turn-Over Assets ------------------------------------------------------------ The UAL Corp. Debtors ask Judge Wedoff to direct the turnover of assets held by Marshall & Ilsley Trust Company, as escrow agent, pursuant to a supplemental retirement income plan and certain employment agreements. On January 24, 1992, Air Wisconsin, Inc., pursuant to the terms of the Supplemental Retirement Plan and the Employment Agreements, created a general escrow account and five separate Escrow Accounts. Air Wisconsin delivered cash or short-term investments to Valley Trust Company to fund its compensation and fringe benefits provided in the Supplemental Retirement Plan and Employment Agreements. Marshall & Ilsley is the successor of Valley Trust Company and holds the funds in the Escrow Accounts. James H.M. Sprayregen, Esq., at Kirkland & Ellis, explains that the Debtors have made and will continue to make many difficult decisions in their effort to improve liquidity and restructure their costs. These decisions are especially difficult when they impact benefits to retirees who provided loyal and dedicated service to the Debtors. However, the Debtors have determined to terminate the Air Wisconsin Supplemental Retirement Plan and the Employment Agreements. With the termination of the Supplemental Retirement Plan and the Agreements, Mr. Sprayregen says that it is no longer necessary to maintain the Escrow Accounts. In an effort to garner all estate assets, the Debtors approached Marshall & Ilsley for the turnover of the funds. The Parties agreed that Marshall & Ilsley will liquidate the assets in the Escrow Accounts and deliver the proceeds to the Debtors. The current estimated value of the assets in the Employment Agreement accounts is $977,000. The current estimated value of the assets in the Supplemental Retirement Plan accounts is $92,000. (United Airlines Bankruptcy News, Issue No. 32; Bankruptcy Creditors' Service, Inc., 215/945- 7000) UNITED RENTALS: Noteholders Purchase Additional 1-7/8% Notes ------------------------------------------------------------ United Rentals, Inc. (NYSE: URI) announced that the initial purchasers of the company's recently issued 1-7/8% Convertible Senior Subordinated Notes due 2023 have exercised their option to purchase an additional $18.75 million principal amount of these notes. Including these additional notes, the company has sold a total of $143.75 million principal amount of its 1-7/8% Convertible Senior Subordinated Notes due 2023. The company plans to use the net proceeds from the sale of these notes to buy out existing equipment leases and/or for general corporate purposes. The offering of the notes has been made in transactions exempt from the registration requirements of the Securities Act of 1933. The notes offered have not been, and will not be, registered under the Securities Act of 1933. Accordingly, the notes may not be offered or sold in the United States absent registration under the Securities Act of 1933 or an applicable exemption from the registration requirements. * * * On Oct. 28, 2003, Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating on United Rentals (North America) Inc. and assigned its 'B+' subordinated debt rating to the company's $125 million 1-7/8% senior subordinated convertible notes due in 2023. The notes carry an option to issue an additional $18.75 million in notes issued under Rule 144A with registration rights. In addition, Standard & Poor's assigned its 'B+' subordinated debt rating to URI's proposed $450 million senior subordinated notes due in 2013 to be issued under Rule 144A with registration rights, with an option to issue additional notes. The completion of the proposed offering will be contingent upon URI obtaining an amendment to its senior credit facility. VENTAS INC: Improved Credit Profile Spurs S&P's Positive Outlook ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its ratings outlook on Ventas Inc. (S&P, BB- Corporate Credit) to positive from stable. The corporate credit and senior note ratings are affirmed on Ventas Inc., its operating partnership Ventas Realty L.P., and Ventas Capital Corp. These rating actions impact roughly $366 million in public debt securities. "The outlook revision reflects Ventas' improved credit profile, supported by lower debt levels, stronger debt protection measures, and more stable portfolio. The ratings also acknowledge this health care REIT's large portfolio of health care-related assets with strong facility level rent coverage. Material tenant concentration and constrained financial flexibility remain primary credit weaknesses," said Standard & Poor's credit analyst George Skoufis. Balance sheet improvements, including lower debt levels and debt cost, have contributed to notably improved debt service coverage. Modestly improved portfolio diversification and the improving stability of Kindred's operations, should support currently strong coverage measures. The ElderTrust acquisition is being financed appropriately and is consistent with the company's desire to grow the company while diversifying the operator and asset base. Ventas' ability to grow/diversify its business in a prudent manner, while maintaining its credit profile could result in raised ratings. Louisville, Kentucky-based Ventas -- whose September 30, 2003 balance sheet shows a total shareholders' equity deficit of about $24 million -- is a $1.2 billion (undepreciated book value assets) health care REIT, with investments in 255 health care-related facilities throughout 37 states. VENTAS: Declares Regular Quarterly Dividend of $0.2675 Per Share ---------------------------------------------------------------- Ventas, Inc. (NYSE: VTR) said its Board of Directors declared a regular quarterly dividend of $0.2675 per share, payable in cash on January 13, 2004 to stockholders of record on January 2, 2004. The dividend is the fourth quarterly installment of the Company's $1.07 per share 2003 annual dividend. The Company has approximately 80 million shares of common stock outstanding. This fourth quarterly installment of the 2003 dividend will be included in shareholders' 2004 dividend income for income tax purposes. Ventas, Inc. -- whose September 30, 2003 balance sheet shows a total shareholders' equity deficit of about $24 million -- is a healthcare real estate investment trust that owns 44 hospitals, 202 nursing facilities and nine other healthcare and senior housing facilities in 37 states. The Company also has investments in 25 additional healthcare and senior housing facilities. More information about Ventas can be found on its Web site at http://www.ventasreit.com VIVA INT'L: Lacks Working Capital to Continue Operations -------------------------------------------------------- Viva International, Inc. is a holding company that consists of (4) four wholly owned subsidiaries: Viva Airlines, Inc., CT Industries, Inc., Hardyston Distributors, Inc. (doing business as The Mechanics Depot), and Universal Filtration Industries, Inc. A previously wholly owned subsidiary (Harvey Westbury Corp.) was spun off by the Parent Company (Viva/Auxer) during January, 2003 to a former officer and director of the Company in exchange for the assumption of debts and related liabilities. Viva Airlines, Inc. is a development stage company that will provide passenger and cargo services to various destinations from its commercial hub in Santo Domingo, Dominican Republic. CT Industries, Inc., Hardyston Distributors, Inc. and Universal Filtration Industries, Inc. are all inactive. Management does not currently plan to resume the respective operations of CT Industries, Inc. and Universal Filtration Industries, Inc. Management has announced an acquisition of a 49% interest in Royal Aruban Airlines that has been agreed to on behalf of the Hardyston Distributors, Inc. subsidiary. Further, plans are to rename Hardyston and to spin-off the subsidiary. Under the plan, shareholders of record as of October 15, 2003 will receive 1 share of Hardyston for each 3 shares of Viva International that they own. At September 30, 2003, the Company had no cash. Since inception the Company has accumulated a deficit of approximately $12,612,817. Viva International, Inc. has previously estimated that it will require a minimum of $3,000,000 of working capital to complete Viva Airlines, Inc.'s transition from a development stage company to full operation. However, Company management has scaled back its business plan to a level that that will enable it to begin providing air services so long as it is able to raise a minimum of $500,000. Viva International, Inc. does not currently have the funds necessary to provide working and expansion capital to Viva Airlines, Inc. Viva International, Inc. will only be able to provide the needed capital by raising additional funds. As a result of the scaling back as discussed in the above paragraph, the Company believes that it will have very little problem with raising the minimum levels of financing required. However, an inability to raise funds or a continued lack of funds could result in the failure to complete needed acquisitions of certain aviation assets or payment of certain related expenses that would delay or prevent the commencement of the operation of Viva Airlines, Inc. Management is optimistic that the Company will be able to borrow sufficient capital to fund Viva Airlines, Inc. WESTERN FIN'L: Fitch Affirms Ratings & Changes Outlook to Pos. -------------------------------------------------------------- Fitch Ratings has affirmed Western Financial Bank's uninsured deposit rating of 'BB+', issuer rating of 'BB' and subordinated debt rating of 'BB-'. The Rating Outlook is revised to Positive from Stable. Approximately $600 million of uninsured deposits and $400 million of subordinated debt is affected by this action. Fitch's ratings and affirmation reflect the good record of performance over an extended period, improved capitalization, and manageable (problem asset levels) quality. Since transitioning from gain-on-sale accounting in 2001, WFB has remained profitable, despite lower revenues and increased provision expense resulting from this change. Through its parent company, Westcorp, WFB has strengthened its overall capitalization through issuance of equity at the holding company. During 2003 alone, $369 million of new equity capital was raised at the Westcorp level. Capital raised has been partly used to purchase assets from the bank and execute a securitization out of the holding company. Although credit losses have increased, Fitch believes that asset quality will remain within current ranges. Rating concerns recognize the niche focus on auto finance coupled with the difficult environment in this sector, and WFB's relatively encumbered balance sheet. The bank's focus on auto lending leaves it more vulnerable to circumstances in the automotive sector versus a more diversified bank, and weak used car prices have increased loss severity at most auto lenders. WFB's balance sheet is also relatively more encumbered than a traditional bank as many assets are already secured. The Outlook revision to Positive recognizes, WFB's commitment to improving overall capitalization and improved financial flexibility since the bank began executing securitizations on an uninsured basis. An upgrade of WFB is predicated on a sustainable improvement in capital, maintenance of acceptable charge-off and delinquency levels, and continued development of the bank's funding profile through uninsured asset-backed issuance. Western Financial Bank, based in Irvine, California, is a thrift focused on auto finance lending. It is a wholly-owned subsidiary of Westcorp, a publicly traded thrift holding company. At Sept. 30, 2003, WFB reported managed auto loans of $10.4 billion, making it one of the largest independent auto finance lenders in the U.S. WESTWIND GROUP: Section 341(a) Meeting to Convene on December 18 ---------------------------------------------------------------- The United States Trustee will convene a meeting of Westwind Group North Carolina, Inc.'s creditors on December 18, 2003, at 1:30 p.m., at 402 W. Broadway, Sixth Floor, Suite 630, San Diego, California 92101-8511. 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 San Diego, California, Westwind Group North Carolina, Inc., specializes in training systems development and implementation, engineering services, and management support for production and manufacturing based commercial/industrial clients workforce. The Company filed for chapter 11 protection on November 21, 2003 (Bankr. S.D. Calif. Case No. 03-10575). Karla A. Lyon, Esq., at Gray Cary Ware & Freidenrich represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $2,405,125 in total assets and $48,975,443 in total debts. WOODWORKERS WAREHOUSE: Case Summary & Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Woodworkers Warehouse, Inc. 126 Oxford Street Lynn, Massachusetts 01901 Bankruptcy Case No.: 03-13655 Type of Business: The debtor is a retailer of woodworking equipment and accessories. Chapter 11 Petition Date: December 2, 2003 Court: District of Delaware (Delaware) Judge: Joel B. Rosenthal Debtor's Counsel: Christopher A. Ward, Esq. The Bayard Firm 222 Delaware Avenue Suite 900 Wilmington, DE 19899 Tel: 302-655-5000 Fax: 302-658-6395 Total Assets: $28,366,000 Total Debts: $34,669,000 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Delta/Porter Cable Corp. Trade Debt $4,196,531 4825 Highway 45 North Jackson, TN 38305 WMH Tool Group Trade Debt $1,825,663 300 South Hicks Road Elgin, IL 60067 Black & Decker, Inc. Trade Debt $1,659,351 701 East Joppa Road Towson, MD 21286 Makita USA Inc. Trade Debt $926,405 251 Herrod Boulevard Dayton, NJ 08810 Robert Bosch Tool Corp. Trade Debt $658,028 1800 West Central Road Mount Prospect, IL 60056 Senco Products Inc. Trade Debt $377,213 12401 Triton Springs Drive Midlothian, VA 23114 Freud TMM, Inc. Trade Debt $370,291 PO Box 7187 218 Field Avenue High Point, NC 27263 Euler American Credit Trade Debt $348,715 100 East Pratt Street Baltimore, MD 21202 TLZ, Inc. Trade Debt $209,661 Milwaukee Electric Tool C Trade Debt $187,776 Taylor Made-Adidas Golf Co. Trade Debt $165,490 Fein Power Tools Inc. Trade Debt $156,316 CST/Berger Corp. Trade Debt $152,016 Irwin Industrial Tool Com Trade Debt $148,465 Oldham/United States Saw Trade Debt $117,208 Amana Tool Co. Trade Debt $113,576 Panasonic Company East Trade Debt $110,916 Winthrop Resources Trade Debt $97,367 Blue Cross & Blue Shield Trade Debt $89,173 Bankers Leasing Assoc. Trade Debt $89,094 WORLDCOM INC: Salomon Smith Barney Claims Going to Arbitration -------------------------------------------------------------- The Law Firm of Klayman & Toskes, P.A. is pursuing claims in excess of $50 million against Salomon Smith Barney, now known as Citigroup Global Markets Inc. (NYSE: C), on behalf of present and former WorldCom (OTC Pink Sheets: WCOEQ, MCWEQ, MCIAV) investors and employees whose portfolios were concentrated in WordCom stock and who do not wish to participate in any class actions. One claim (NASD Case No.: 02-02242) seeks damages of $1,787,689 and alleges specific sales practice violations at Salomon Smith Barney's Peachtree Road branch in Atlanta. These violations include the over-concentration of the investor's portfolio and the failure to recommend hedging strategies to properly protect the investors' concentrated and highly margined position. Smith Barney recently consented to a $1 million fine after the New York Stock Exchange found that it failed to adequately supervise its brokers at the Atlanta, Peachtree Road branch office who advised WorldCom employees to exercise their stock options and to hold the resulting company shares on margin. This advice given to employees created highly concentrated and leveraged positions in company stock. The outcome of this advice was the virtual loss of the employees' retirement "nest egg." The NYSE findings included that Smith Barney's brokers uniformly made these recommendations despite the customers' varying risk profiles, investment experience or investment objectives. These findings confirm the contentions that have been alleged against Smith Barney by K&T on behalf of their WorldCom employee clients since 2001. K&T recently published a detailed study on the appropriate path for securities dispute resolution against Wall Street brokerage firms. A link to the study is available at the firm's Web site -- http://www.nasd-law.com-- under "The Process" heading at the end of the first paragraph. The study focuses on the following points: 1. The Emergence of Arbitration as a Means of Securities Dispute Resolution; 2. Factors Leading to Class Action Litigation; 3. Large Class Action Settlements Tend to Skew Average Recovery Rates; 4. The Real Statistics for Arbitration Awards; 5. Claims that Fare Best in Arbitration; 6. Consider Using Arbitration When Your Losses Exceed $100,000; and 7. Mediation as an Alternative Path for Dispute Resolution. Federal District Judge Denise Cote recently certified a class- action lawsuit against Smith Barney involving WorldCom shareholders. A growing trend among investors with large losses is to use arbitration as a means of recovering losses. Arbitration as an alternative path will ultimately depend on whether the alleged losses are a result of sales practice violations and whether the alleged damages are large enough to justify the costs required to file a securities arbitration claim. Empirical evidence shows that when an investor suffers losses in larger amounts, usually in excess of $100,000, an individual dispute resolution process such as an arbitration claim filed before the New York Stock Exchange or the National Association of Securities Dealers is the best means of recovering losses suffered. W.R. GRACE: Peninsula Investment Discloses 6.16% Equity Stake ------------------------------------------------------------- Peninsula Investment Partners, L.P., beneficially owns 294,200 shares of the common stock of W.R. Grace & Co., representing 6.16% of the outstanding common stock of the Company. Peninsula Investment Partners shares voting and dispositive powers with Peninsula Capital Advisors, LLC, which owns an aggregate of 376,950 shares, representing 7.89% of the outstanding common stock of the Company. In addition to sharing voting and dispositive powers over the 294,200 shares of stock, Peninsula Capital Advisors holds sole voting power over 74,750 such shares, and sole dispositive powers over 82,750 such shares. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L. Metzler, Bernadette C. de Roda, Donnabel C. Salcedo, Ronald P. Villavelez and Peter A. Chapman, Editors. Copyright 2003. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $675 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***