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/raid1/www/Hosts/bankrupt/TCR_Public/040106.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, January 6, 2004, Vol. 8, No. 3 Headlines 360NETWORKS: Avoidance Action Discovery Schedule Established ACTUANT CORP: Acquires All Dresco B.V. Shares for $30 Million ADELPHIA COMMS: Securities Claims Bar Date is January 9, 2004 AGERE SYSTEMS: Buys TeraBlaze to Serve Gigabit Ethernet Market AIR CANADA: Restructures Certain Unexpired Leases and Contracts AIRTRAIN AIRWAYS: Dec. 2003 Revenue Passenger Miles Up by 20% AMERICAN FINANCIAL: Will Pay Quarterly Dividend on January 25 APOGENT TECHNOLOGIES: Closes Sale of $345MM Floating-Rate Notes ARCHIBALD CANDY: Employees Fear "Chapter 22" Filing ATA HOLDINGS: Further Extends Exchange Offers for Two Notes AURORA FOODS: Will Pay Up to $1.1-Million Mechanic's Lien Claims AVADO BRANDS: Secured Lenders Agree to Forbear Until January 31 BANC OF AMERICA: Fitch Takes Rating Actions on Ser. 2003-10 Notes BRILLIANT DIGITAL: Secured Debt Maturity Extended to March 1 CENTURY/ML CABLE VENTURE: Claims Bar Date Set for Jan. 15, 2004 CKG ENERGY, INC: Involuntary Case Summary COVANTA ENERGY: Heber Plan Declared Effective on Dec. 18, 2003 CRESCENT REAL: Hires Anthony B. Click as VP, Leasing in Dallas CSK AUTO CORP: Prices Tender Offer for $280M of 12% Senior Notes CYCLELOGIC: Paying $50,000 of Prepetition Critical Vendor Claims DII INDUSTRIES: Will Pay Up to $4.5-Million of Tax Obligations ENRON: Selling Smith Street Bldg. to Antonio Pacifico Trustee ENVIRONMENTAL ELEMENTS: Completes Debt Restructuring Transaction FEDERAL-MOGUL: PD Committee Brings-In Bilzin Sumberg as Counsel FRANK'S NURSERY: Posts 10% Decline in December Same Store Sales GLOBAL CROSSING: Pushing for Approval of Tekelec Settlement Pact GOLDEN NORTHWEST: First Creditors' Meeting Set for January 29 GOODWILL CARE: Begins Chapter 7 Liquidation Process in Seattle GOODWILL CARE: Voluntary Chapter 7 Case Summary HA-LO INDUSTRIES: Plan Confirmation Objections Due on Jan. 12 INDIGINET: Taps Russell Bedford as New Independent Accountants INFORMATION ARCHITECTS: Seeking New Funds to Continue Operations INSCI CORP: Trading Symbol Changed to INCCV after Reverse Split INTERFERON SCIENCES: Recurring Losses Raise Going Concern Doubt IT GROUP: Plan Provides for Global Compromise & Settlement JAG MEDIA: Preparing Prospectus for 25-Mill. Class A Share Issue KAISER ALUMINUM: Secure Self Pitches Best Bid for Spokane Assets KSAT: Obtains Canadian Certificate of Intent to Dissolve LAIDLAW: Greyhound Meets Revolving Credit Facility Requirements LEIGH ENTERPRISES: Case Summary & 14 Largest Unsecured Creditors LITEGLOW INDUSTRIES: Bankruptcy Raises Going Concern Uncertainty LITFUNDING: Reports Events Leading to Bankruptcy Filing in Nov. LTV: ACC Files Preliminary Avoidance Suits Settlement Report LUBY'S INC: First-Quarter 2004 Net Loss Widens to $4.5 Million MACHINING CORPORATION: Signs-Up Brouse McDowell as Attorneys MAGELLAN HEALTH: Completes Financial Workout & Exits Chapter 11 MAGELLAN HEALTH: Secures Court Approval of Stipulation with MTS MIRANT CORP: Wants Nod to Hire Heller Ehrman as Special Counsel MOBILE TOOL: Product Liability Claims Bar Date Set for Jan. 31 MOODY'S CORP: CEO Will Present at Smith Barney Conference Today NEXTEL PARTNERS: Repurchases $67.7-Mill. of 12-1/2% Senior Notes NEXTWAVE TELECOM: Wants 45 More Days to File Chapter 11 Plan NOVADEL PHARMA: Hires J.H. Cohn as New Independent Accountants ON SEMICONDUCTOR: Refinances About $48 Million of Term Loans ON SEMICON.: Files Shelf Registration Statement for Common Stock OTISH MOUNTAIN DIAMOND: Cash Sufficient to Continue Explorations PACIFIC GAS: Investing $706 Mill. in Replacement Steam Generators PENN TRAFFIC: Losses Climb to $27.2MM After Chapter 11 Filing PG&E NATIONAL: Court Okays Proposed Excess Asset Sale Procedures PHARMCHEM INC: Amends Bank Loan Pact and Extends Govt. Contract PINE VALLEY SCHOOL: Case Summary & 11 Largest Unsecured Creditors PSYCHIATRIC SOLUTIONS: Files SEC Form S-3 to Permit Stock Resale RESTAURANTS NORTHWEST: Case Summary & Largest Unsecured Creditors ROHN INDUSTRIES: CEO Horace Ward & CFO John Castle Resign ROSS' TEAL LAKE: Case Summary & 20 Largest Unsecured Creditors SATCON TECHNOLOGY: Books $2.2M in New Contracts in First Quarter SHARK IND.: U.S. Trustee Amends Creditors' Committee Membership SHILOH INDUSTRIES: Look for Q4 and Fiscal 2003 Results Tomorrow SOLUTIA: Gets Interim Nod to Use Existing Investment Practices STARWOOD HOTELS: Acquires Le Meridien's Outstanding Senior Debt STELCO INC: Courtney Pratt Assumes Post as President & CEO TENFOLD CORP: Chairman Will Present at Needham Conference Friday TRINITY OF VIRGINIA: Case Summary & 20 Largest Unsec. Creditors US AIRWAYS: Agrees to Allow Verizon Capital's $3.4 Million Claim U.S. STEEL: Completes Voluntary Contribution to Pension Fund USEC INC: Secures Regulatory Recertification of Uranium Plants VERESTAR INC: US Trustee Appoints Official Creditors' Committee VOLUME SVCS: Will Make Cash Payment on Income Deposit Securities WINSTAR: Chapter 7 Trustee Wins Clearance for Lucent Settlement XECHEM: Closes Acquisition of Ceptor, Increasing Drug Pipeline * Large Companies with Insolvent Balance Sheets ********* 360NETWORKS: Avoidance Action Discovery Schedule Established ------------------------------------------------------------ The Official Committee of Unsecured Creditors of the Reorganized 360networks Debtors, obtained the Court's approval establishing dates for conducting and completing discovery and for filing and responding to dispositive motions on 242 Adversary Actions. With the Court's approval, the Committee will follow this timetable: Event Bucket 1 Bucket 2 Bucket 3 ----- -------- -------- -------- Deadline for Initial 12/31/03 12/31/03 01/30/04 Disclosure under 26(a) Deadline for Service of 01/30/04 01/15/04 02/13/04 Document demands, request for admission and interrogatories Deadline for responses 30 days 30 days 30 days to document demands, after after after requests for admission service of service of request and interrogatories request request service Designation of experts 04/02/04 03/12/04 02/27/04 and service of expert reports Disclosure of rebuttal 45 days 21 days same as experts and substance after after bucket 2 of testimony, if any service of service of opposing opposing party's party's designation designation Close of Discovery 07/14/04 05/07/04 04/16/04 Status Conference 07/__/04 05/__/04 05/__/04 Deadline for Dispositive 08/31/04 07/28/04 07/14/04 Motions Required notice for 30 days 30 days 30 days Dispositive Motions Response to Dispositive within the within the within Motions notice notice the period period notice period Replies to Dispositive 15 days 15 days 15 days Motions after after after service of service of service response response of response The Committee also obtained the Court's nod for other procedures to streamline the disposition of the Avoidance Actions: * If multiple Defendants file dispositive motions that raise a common principal issue or issues, the Committee would be authorized to file a consolidated memorandum in opposition, and the Court could issue a single opinion regarding the issues; * If common principal issues or defenses arise, the Committee would be authorized to file a consolidated motion or memorandum requesting the Court to determine or narrow the issues; * Except as provided for in the following sentence, no defendant in any Avoidance Action will be required to appear at any further pre-trial or status conferences unless specifically advised by the Committee or the Court that the appearance is required. In any case where a dispositive motion is not filed by the applicable deadline, the Court will set a final pretrial conference and counsel and a party representative for each party with final settlement authority would be required to attend that conference in person; * Depositions are to be conducted in accordance with the Bankruptcy Rules and the Federal Rules of Civil Procedure. The Parties will be required to make all reasonable efforts to coordinate depositions among the Avoidance Actions, taking into particular consideration: (a) the costs to the Debtors' estates; and (b) the burden that will likely be imposed on the Debtors' employees, former employees and experts as a result of the numerous actions which are pending where deposition testimony of individuals may be required; * Any deadline contained in the Scheduling Order, excluding the discovery cut-off date and the deadlines for dispositive motions, may be extended by the parties' consent without any filing, notice to, or approval of the Court. In the alternative, any deadline may be extended by the Court upon written motion and for good cause shown; and * In the discretion of the Committee, any notice, pleading or order applicable to multiple Avoidance Actions may be filed electronically in the main Chapter 11 case and recorded on that docket, rather than being filed in each adversary proceeding for each Preference Action. Service of the documents will be made on each party affected thereby and service may be effected by e-mail, notwithstanding any provisions of the Federal Rules of Bankruptcy Procedure or the Local Rules of the Court. (360 Bankruptcy News, Issue No. 60; Bankruptcy Creditors' Service, Inc., 215/945-7000) ACTUANT CORP: Acquires All Dresco B.V. Shares for $30 Million ------------------------------------------------------------- Actuant Corporation (NYSE:ATU) purchased all the outstanding shares of Dresco B.V., for approximately $30 million. A portion of the proceeds from Actuant's recent 2% senior subordinated convertible debentures offering was used to fund the transaction. Dresco, located in Wijchen, Netherlands, has approximately 120 employees and is a market leader selling electrical, plumbing and other supplies to the Benelux do-it- yourself market. Robert Arzbaecher, President and Chief Executive Officer of Actuant, commented, "Dresco's market leadership, geographic proximity, and logistics competency complements our Kopp business and supports our overall Tools & Supplies segment strategy. The additional new products, customers, and markets are natural extensions to our global DIY platform. Dresco, with annual sales of approximately $30 million, is expected to be modestly accretive to Actuant's earnings per share during fiscal 2004." Dresco's management team will continue to lead the business following the acquisition, reporting to Guus Boel, Managing Director of Kopp. Mr. Boel stated, "Dresco is a logical next step for our European DIY business. The globalization of our customers, demands for product line consolidation opportunities, and potential synergies are all factors supporting this deal. We believe that combining our respective product lines and new product development initiatives will offer customers unparalleled opportunity. I look forward to working with Albert Kalkhoven, Dresco's former owner, and his management team to ensure a smooth transition." Actuant (S&P, BB Corporate Credit Rating, Stable Outlook), headquartered in Milwaukee, Wisconsin, is a diversified industrial company with operations in over 20 countries. The Actuant businesses are market leaders in highly engineered position and motion control systems and branded hydraulic and electrical tools. Products are offered under such established brand names as Enerpac, Gardner Bender, Kopp, Kwikee, Milwaukee Cylinder, Nielsen Sessions, Power-Packer, and Power Gear. For further information on Actuant and its business units, visit the Company's Web site at http://www.actuant.com/ ADELPHIA COMMS: Securities Claims Bar Date is January 9, 2004 ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York directs Securities Law claim holders against Adelphia Communications Corporation and its debtor-affiliates to file their proofs of claim before 5:00 p.m. Eastern Time on January 9, 2004. Securities Claimants purport to hold claims arising out of or relating to the purchase, sale, issuance, or distribution of securities issued by certain Debtors, based on damages claimed to arise under applicable securities laws or pursuant to Section 510(b) of the Bankruptcy Code. Claims must be received on or before Jan. 9. If filed by mail, proof of claim forms must be sent to: Adelphia Communications Corp. Claims Processing Center PO Box 5059 Bowling Green Station New York, NY 10274-5059 If by hand or overnight courier, to: Adelphia Communications Corp. Claims Processing Center c/o United States Bankruptcy Court Southern District of New York One Bowling Green New York, NY 1004-1408 Adelphia Communications Corporation, with headquarters in Coudersport, Pennsylvania, is the sixth largest cable television company in the country. The Debtor filed for Chapter 11 protection on June 25, 2002 (Bankr. S.D.N.Y. Case No. 02-41729). Myron Trepper, Esq., Marc Abrams, Esq., and Shelley C. Chapman, Esq., at Willkie Farr & Gallagher represent the Debtors in their restructuring efforts. AGERE SYSTEMS: Buys TeraBlaze to Serve Gigabit Ethernet Market -------------------------------------------------------------- Agere Systems (NYSE: AGR.A, AGR.B) acquired TeraBlaze Inc., a privately held developer of Gigabit Ethernet switching solutions based in Cupertino, Calif. With this acquisition, Agere expects to deliver high-density switching solutions to serve the fast-growing Gigabit Ethernet market. TeraBlaze's industry-leading switch-on-a-chip technology will enable Agere to provide single-chip GbE solutions to equipment providers addressing SOHO (small office, home office) and enterprise applications. Agere acquired the Silicon Valley company in a stock transaction for approximately 6.92 million shares of Agere Class A common stock, valued at about $21 million based on the closing price of $3.05 for an Agere Class A common stock on December 31, 2003. Excluding the impact of approximately $12-14 million for in- process R&D charges, the acquisition is expected to have a minimal impact on earnings of less than $0.005 per share for the full fiscal year 2004 that will be offset by cost reductions already underway. In August 2003, Agere acquired Massana, a privately held provider of GbE physical layer device solutions. Based on the TruePHY(TM) technology Agere developed through this acquisition, the company is also announcing the availability of its Gigabit Ethernet single port device, the 0.13-micron ET1011, the lowest-power PHY in the industry. With today's acquisition, Agere will combine TeraBlaze's technology with its TruePHY family of GbE products and deliver highly integrated PHY and switch solutions. "The acquisition of TeraBlaze advances our strategy to take share in the fast-growing Gigabit Ethernet market," said Sohail A. Khan, executive vice president of Agere's Infrastructure Systems Group. "TeraBlaze together with TruePHY technology is a very powerful combination, which gives us early mover advantage in bringing integrated GbE switch and PHY solutions to this market." Market research firm Dell'Oro Group estimates that the Gigabit Ethernet switch market, into which Agere will sell the new single chip switching solutions, will total approximately $12 billion in 2004. IDC estimates that the Gigabit Ethernet switch ASIC/ASSP market will see revenue greater than $500 million in 2004, and more than $850 million in 2007. Agere is capitalizing on this market opportunity with competitive PHY and switch-on-a-chip solutions for client and enterprise networking equipment manufacturers. "The surge in Gigabit Ethernet-over-copper PHY shipments in the client device market will drive a rapid deployment of Gigabit Ethernet switches in 2004 and 2005," said Ed Roberts, vice president and general manager of Agere's Ethernet Division. "We now have the core technology to deliver a broad family of PHY and switch solutions that scale from SOHO all the way to 48-port enterprise applications. Our architecture and integration capabilities will enable system manufacturers to offer the most competitive price per port GbE products in the market." Agere expects to deliver switch solutions bundled with multi-port TruePHY products in the second half of 2004. All 16 TeraBlaze employees will join Agere, including TeraBlaze founder and CEO Shankar Mukherjee. "The TeraBlaze design team jumped several important hurdles to develop very high-density switching solutions with integrated memory, enhanced network security and an integrated stacking bus," said Mukherjee. "I'm delighted that these solutions will now benefit from all the market and business advantages that come from being a part of one of the world's foremost communications semiconductor companies." Agere Systems, whose $220 million Convertible Notes are rated by Standard & Poor's at 'B', is a premier provider of advanced integrated circuit solutions that access, move and store network information. Agere's access portfolio enables seamless network access and Internet connectivity through its industry-leading WiFi/802.11 solutions for wireless LANs and computing applications, as well as its GPRS offering for data-capable cellular phones. The company also provides custom and standard multi-service networking solutions, such as broadband Ethernet- over-SONET/SDH components and wireless infrastructure chips, to move information across metro, access and enterprise networks. Agere is the market leader in providing integrated circuits such as read-channel chips, preamplifiers and system-on-a-chip solutions for high-density storage applications. Agere's customers include the leading PC manufacturers, wireless terminal providers, network equipment suppliers and hard-disk drive providers. More information about Agere Systems is available from its Web site at http://www.agere.com/ AIR CANADA: Restructures Certain Unexpired Leases and Contracts --------------------------------------------------------------- Murray McDonald, President of Ernst & Young, Inc., the Court- appointed monitor, reports that, since April 1, 2003, Air Canada reduced their total fleet size by 61 aircraft, including repudiated and returned aircraft. Of these 61, only 38 were actually used by the Applicants as at April 1, 2003 since the remaining 23 are comprised of: * three aircraft already sub-leased to an external third party. The Applicants have since removed themselves from the leases by having the third party assume the lease obligation directly; and * 20 F28s parked and not in use. Mr. McDonald says that Air Canada undertook to reduce its fleet size to properly match current and anticipated capacity requirements and to re-negotiate aircraft leasing costs to reflect current market rates. The Monitor tabulates the status of Air Canada's fleet reduction and re-negotiation efforts: Air Canada Jazz Total Number of Aircraft as at April 1, 2003 259 130 Less: owned and parked aircraft (19) (51) ------ ------ Number of Aircraft subject to re-negotiation 240 79 Status of Re-Negotiations: Repudiations 21 5 Consensual returns or lease expirations 13 2 Re-negotiated under the GECAS agreement 61 10 Re-negotiated under the ECA agreement 38 n/a Re-negotiated pursuant to other signed MOUs 52 20 Re-negotiated in principle, with MOUs pending 55 21 Other settled aircraft arrangements n/a 20 ------ ------ Lease remaining to be re-negotiated 0 1 ====== ====== The agreement entered into between Air Canada and GECAS covers an additional three Air Canada aircraft and 20 Jazz aircraft for which leases have expired or the aircraft have been returned on consent as well as an additional 10 aircraft covered by the Export Credit Agencies agreement for a total of 104 aircraft. The "other settled aircraft arrangements" represents 20 F-28 aircraft that were owned by Jazz and had been previously parked. Pursuant to a prepetition agreement, GECAS was to take title to these aircraft. Under the terms of the Global Restructuring Agreement reached with Air Canada after the Petition Date, GECAS has given up the right to take title to the F-28s. Mr. McDonald also notes that the Applicants received three new aircraft since April 1, 2003 pursuant to their agreement with GECAS. The rental rates on these new aircraft reflect the Applicants' view of the current fair market lease rates. Accordingly, after considering the unused aircraft and newly delivered aircraft, the Applicants made a net reduction in their operating fleet of 35 aircraft. It is anticipated that further reductions will occur as certain re-negotiated leases provide for the early return of aircraft over the next 24 months. Based on 2002 cost data, the net reduction in annual aircraft lease payments with respect to all repudiated and returned aircraft to date, offset by the cost of the newly delivered aircraft is estimated to be CND140,000,000. The Applicants continue to defer the stay period lease payments for one remaining Jazz aircraft still under negotiation as well as 55 Air Canada aircraft and 20 Jazz aircraft for which re- negotiated terms have been agreed to in principle but for which actual memorandums of understanding have yet to be executed. The Applicants continue to work towards finalizing the remaining MOUs to formalize these agreements in principle. The Applicants expect to have them completed by January 31, 2004. As additional MOUs are signed, Mr. McDonald says, the lease payments will be made at the revised lease rates, where applicable, while the deficiency claims, if any, arising from the amended lease agreements will be dealt with in the Claims Process. The Applicants also entered into a tentative restructuring agreement with respect to 38 Airbus aircraft involving syndicates of lenders supported by the Export Credit Agencies of the United Kingdom, France and Germany. The ECA Agreement is subject to the approval of the lending syndicates members' internal credit departments as well as numerous other financial parties accessory to the leases. Discussions between the Applicants and certain of these financial parties are continuing. Accordingly, the ECA Agreement has not been finalized and payments on the 38 aircraft have not yet resumed. The Applicants believe that they have made substantial progress in the restructuring of their aircraft leases. Restructuring of Other Contractual Commitments The Applicants continue to analyze all of their contractual commitments and outsourcing contracts with a view to: (i) consolidating purchasing to benefit from volume discounts; (ii) identifying contracts which do not reflect current market pricing; and (iii) adapting current business processes to align them to evolving airline best practices as well as general industrial best practices in the fields of maintenance and inventory management. Contracts have been repudiated where necessary to achieve these objectives. To date, the Applicants achieved CND250,000,000 in recurring annual savings from the restructuring of various contracts and business processes, including contracts in respect of telecommunications, fuel, technology, in-flight catering, real estate and inventory management. The Applicants identified further business processes and contract obligations, which are subject to restructuring with a view to achieving CND350,000,000 in total annual cash savings. (Air Canada Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000) AIRTRAIN AIRWAYS: Dec. 2003 Revenue Passenger Miles Up by 20% ------------------------------------------------------------- AirTran Airways, a subsidiary of AirTran Holdings, Inc., (NYSE:AAI) reported record traffic results for December 2003, the fourth quarter and for the full year 2003. AirTran Airways' record traffic, measured by revenue passenger miles (RPMs), increased by 20.0 percent for the month of December 2003 versus the prior year on 20.1 percent more capacity, measured by available seat miles (ASMs), with a load factor of 71.1 percent. For the month of December, the airline served a record 1,030,276 customers - a 13.2 percent increase year-over-year. In addition, AirTran Airways' traffic grew by 27.5 percent in the fourth quarter of 2003, compared to the same period in 2002 on 21.0 percent capacity growth. The airline served a record 3,008,111 customers during the fourth quarter - a 19.9 percent increase year-over-year. For the year, AirTran Airways traffic increased 28.0 percent over 2002 on a 21.7 percent increase in capacity. The airline served a record 11,651,340 customers during 2003 - a 20.7 percent increase year-over-year. The airline set new annual records for traffic, capacity, load factor and passenger enplanements. AirTran Airways (S&P/B-/Negative) is one of America's largest low- fare airlines - employing more than 5,400 professional Crew Members and serving 492 flights a day to 43 destinations. The airline's hub is at Hartsfield Atlanta International Airport, the world's busiest airport (by passenger volume), where it is the second largest carrier operating 189 flights a day. The airline never requires a roundtrip purchase or Saturday night stay, and offers an affordable Business Class, assigned seating, easy online booking and check-in, the A-Plus Rewards frequent flier program, and the A2B corporate travel program. AirTran Airways, a subsidiary of AirTran Holdings, Inc., (NYSE:AAI), is the world's largest operator of the Boeing 717, the most modern, environmentally friendly aircraft in its class. In 2004, the company will begin taking delivery of 100 Boeing 737-700s, one of the most popular and reliable jet aircraft in its class. For more information, visit http://airtran.com/ AMERICAN FINANCIAL: Will Pay Quarterly Dividend on January 25 ------------------------------------------------------------- American Financial Group, Inc. (NYSE: AFG) announced that as of January 2, 2004 it declared a quarterly dividend of $.12-1/2 per share of American Financial Group Common Stock. The dividend is payable on January 25, 2004 to holders of record on January 15, 2004. Through the operations of Great American Insurance Group, AFG (A.M. Best, bb+ Preferred Securities Rating) is engaged primarily in property and casualty insurance, focusing on specialized commercial products for businesses, and in the sale of annuities, life and supplemental health insurance products. APOGENT TECHNOLOGIES: Closes Sale of $345MM Floating-Rate Notes --------------------------------------------------------------- Apogent Technologies Inc. (NYSE: AOT) completed its private offering and sale of $345 million principal amount of its floating rate senior convertible contingent debt securities(SM) (CODES(SM)) due 2033. On December 17, 2003, Apogent issued $300 million principal amount of its floating rate CODES, and on December 30, 2003, Apogent issued an additional $45 million principal amount of these securities upon the exercise by the initial purchasers of their option to purchase up to an additional $45 million principal amount of CODES. Apogent used approximately $70 million of the net proceeds from the sale to fund the repurchase of 3,000,000 of its common shares concurrently with the sale of its CODES on December 17, 2003. Apogent has used or intends to use the remaining net proceeds to pay down a portion of the amounts outstanding under its revolving credit facility and for general corporate purposes. The convertible securities bear interest at a floating rate equal to 3-month LIBOR minus 125 basis points (but not less than 0% per annum), payable in cash. The securities will be convertible into shares of Apogent common stock at a conversion price of $33.09 per share of common stock, subject to adjustment in certain circumstances (reflecting a premium of approximately 42%, relative to the closing price for Apogent's common stock of $23.30 on December 11, 2003): (a) if the price of Apogent's common stock exceeds the conversion price by 130% for at least 20 trading days during specified periods, (b) on or before December 15, 2028, if for at least 10 consecutive trading days, the securities trade below 98% of the average conversion value for the securities during that period, (c) if any of the credit ratings assigned to the securities fall below specified levels or other adverse credit rating developments occur, (d) if Apogent calls the securities for redemption, or (e) upon the occurrence of specified corporate transactions. Apogent may redeem all or some of the convertible securities on or after March 15, 2010 at par plus accrued and unpaid interest, if any, to the redemption date. Apogent may be required to repurchase the debt securities, at the option of the holders, on December 15, 2008, March 15, 2010, December 15, 2014, December 15, 2019, December 15, 2024, and December 15, 2029, at par plus accrued and unpaid interest, if any, to the redemption date. Apogent may also be required to repurchase the securities upon a change in control at par plus accrued and unpaid interest, if any, to the redemption date. Apogent will pay contingent interest during any quarterly period commencing the quarterly interest period beginning December 15, 2009, if the trading price of the securities exceeds 120% of the principal amount of the securities. The securities will mature on December 15, 2033. The offering was made to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended. The senior convertible debt securities and the common stock issuable upon conversion of such securities have not been registered under the Securities Act and, unless so registered, may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation, or sale would be unlawful. * * * As reported in Troubled Company Reporter's September 1, 2003 edition, Moody's Investors Service withdrew the Ba1 rating of Portsmouth, New Hampshire-based Apogent Technologies, Inc.'s $500 million bank credit facility maturing December 2005. In July 2003, Apogent replaced this facility with a new five-year $500 million bank credit facility maturing in 2008. The new bank credit facility maturing in 2008 is not rated. The remaining ratings of Apogent are unchanged: - Ba1 senior implied - Ba1 issuer rating - Ba1 senior unsecured notes of $325 million due 2011 - Ba1 senior unsecured convertible notes of $300 million due 2021 - Ba2 senior subordinated notes of $250 million due 2013 ARCHIBALD CANDY: Employees Fear "Chapter 22" Filing --------------------------------------------------- Archibald Candy Corp. is exploring selling its Fannie May and Fanny Farmer businesses amid claims by its employees that it is preparing to cease candy-making and file for chapter 11 bankruptcy for the second time in three years, according to the Associated Press. Following a demonstration by upset workers, the candy maker said on Dec. 31 that it has no "definitive" agreement yet to sell its more than 200 Fannie May candy stores in 12 states, including more than half in Illinois. Archibald representatives did not confirm or deny a purported company document that employees say outlines plans to file for federal bankruptcy court protection and close the Chicago candy- making plant on Jan. 17. Any sale apparently would not include the company's Laura Secord unit, which operates 174 stores in Canada. The company first filed for chapter 11 on June 13, 2002, emerging in late 2002 with creditors as its owners, including Capital Delaware Street LLC, a Chicago-based investment firm that holds about 30 percent. (ABI World, Jan. 2, 2003) ATA HOLDINGS: Further Extends Exchange Offers for Two Notes ----------------------------------------------------------- ATA Holdings Corp. (Nasdaq: ATAH), the parent company of ATA Airlines, Inc., announced the extension of its offers to exchange: * newly issued 11% Senior Notes due 2009 and cash consideration for any and all of the $175 million outstanding principal amount of its 10-1/2% Senior Notes due 2004; and * newly issued 10-1/8% Senior Notes due 2010 and cash consideration for any and all of the $125 million outstanding principal amount of its 9-5/8% Senior Notes due 2005. As part of the Exchange Offers, the Company is also seeking solicitations of consents to amend the indentures under which the Existing Notes were issued. The Company has extended the expiration date of the Exchange Offers until 5 p.m., New York City Time, on January 9, 2004, unless further extended by the Company. In addition, the Company has extended the deadline for holders of Existing Notes to deliver consents and receive the consent payment to January 9, 2004, unless further extended by the Company. As previously disclosed, the Company has been in discussions with a group of holders of the Existing Notes with respect to the terms of the pending Exchange Offers. The Company believes it has reached an agreement in principle with this group whereby these holders will agree to exchange their Existing Notes pursuant to amended offers to exchange reflecting this agreement. Upon reaching definitive agreement with this group and certain other bondholders with whom this group has been in contact regarding the terms of the amended offers, the Company expects to launch amended offers to exchange the Existing Notes, reflecting these newly agreed terms. There are, however, several conditions that remain to be satisfied prior to finalizing definitive agreements. Accordingly, the Company can offer no assurance that a definitive agreement with this bondholder group will be finalized or that the Company will launch these amended offers or that the Exchange Offers will ultimately be successful. The withdrawal deadline for the Exchange Offers has expired, and tenders with respect to any Existing Notes that have already been tendered or are subsequently tendered may not be withdrawn. The other terms of the Exchange Offers remain unchanged, and they are subject to a number of significant conditions, including but not limited to receiving valid tenders representing at least 85 percent in principal amount of each series of Existing Notes and receiving the consent of the Air Transportation Stabilization Board pursuant to the Company's government-guaranteed term loan. As of January 2, 2004, $11,510,000 principal amount of 2004 Notes and $29,550,000 principal amount of 2005 Notes had been tendered and not withdrawn in the Exchange Offers. The Exchange Offers are being made pursuant to the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended. The New Notes offered in the Exchange Offers have not been and will not be registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements of the Securities Act and any applicable state securities laws. Now celebrating its 30th year of operation, ATA (S&P, CCC Corporate Credit Rating, Developing) is the nation's 10th largest passenger carrier based on revenue passenger miles. ATA operates significant scheduled service from Chicago-Midway, Hawaii, Indianapolis, New York and San Francisco to more than 40 business and vacation destinations. To learn more about the company, visit the Web site at http://www.ata.com/ AURORA FOODS: Will Pay Up to $1.1-Million Mechanic's Lien Claims ---------------------------------------------------------------- To maintain the enterprise value of the Aurora Foods Debtors' estates and to facilitate the continued operation of the Debtors' businesses, U.S. Bankruptcy Court Justice Walrath permits the Debtors to pay the prepetition claims of materialmen arising on account of prepetition goods and repair and other services provided to the Debtors, to the extent that the claims have given or could give rise to liens against, or interests in, the Debtors' property. Payments on the Lien Claims will be subject to certain terms and conditions. The Debtors employ numerous Materialmen to provide goods and services that give rise to a right to payment that could become secured by liens against or interests in the Debtors' property. The Debtors call on these Materialmen daily to provide specialized goods and services related to the improvement and refurbishment of the Debtors' equipment and physical plants, the installation of new equipment, and the maintenance of the Debtors' equipment and physical plants. The Materialmen provide goods and services that are critical to the preservation of the Debtors' estates and the continued operation of the Debtors' businesses. The Debtors will not pay a Lien Claim unless the party holding the Lien Claim has perfected or, in the Debtors' judgment, will be capable of perfecting in the future, a lien against or interest in the Debtors' property on account of such claim. Judge Walrath rules that the total payments should not exceed $1,100,000 and $125,000 per claim, without further Court order. Any actions or payments made by the Debtors will not be deemed: (1) an assumption or adoption of any policy, program, practice, contract, or agreement, or will otherwise affect the Debtors' rights under Section 365 of the Bankruptcy Code to assume or reject any executory contract; and (2) an admission as to the validity of the underlying obligations or a waiver of any rights the Debtors may have to subsequently dispute the obligation on any ground that applicable law permits. (Aurora Foods Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945- 7000) AVADO BRANDS: Secured Lenders Agree to Forbear Until January 31 --------------------------------------------------------------- Avado Brands, Inc. (Pinksheets: AVDO), parent company of Don Pablo's Mexican Kitchen and Hops Grillhouse & Brewery, executed a forbearance agreement with its secured lenders. As part of this agreement, the secured lenders have agreed not to seek remedies from Avado Brands through January 31, 2004 for non- compliance with certain provisions of its credit agreement, chiefly relating to the Company's previously announced events of default under its secured credit facility and the indentures of its 9-3/4% Senior Notes and 11-3/4% Senior Subordinated Notes. The secured lenders have also agreed to provide new liquidity of $3 million. The Company also reported that it is in discussions with holders of its 9-3/4% Senior Notes with the goal of reaching a similar forbearance agreement as well as a joint approach to restructuring the Company's financial obligations. "This forbearance agreement is an important sign of cooperation and will allow us to work with our lenders to find ways to restructure our financial obligations, ensuring that Avado Brands is on a sound long-term footing while continuing to make payments to our vendors and business partners," said Avado Brands' chief financial officer Louis J. (Dusty) Profumo. "We are currently in discussions with our secured lenders and holders of our Senior Notes, and believe that all parties recognize that Avado Brands is a company with strong restaurant concepts, sound operations and skilled employees." The Company on December 31, 2003 announced that it will not make either the December 1, 2003 interest payment on its 9-3/4% Senior Notes or the December 15, 2003 interest payment on its 11-3/4% Senior Subordinated Notes within the 30 day no-default grace periods for those payments, triggering an event of default under its secured credit facility and the indentures of both series of Notes. The Company also announced that it anticipates that it will file its Form 10-Q on or before January 9, 2004. Avado Brands has previously disclosed that it has suffered from recurring losses from operations, has an accumulated deficit and has failed to meet certain financial covenant requirements, thereby incurring an event of default under its secured credit facility which matures on March 24, 2004. These factors, outlined in detail in the Company's second quarter SEC Form 10-Q, have raised substantial doubt about the Company's ability to continue as a going concern. There can be no assurance that Avado Brands' financial obligations can be restructured. Avado Brands (S&P, D Corporate Credit Rating) owns and operates two proprietary brands comprised of 108 Don Pablo's Mexican Kitchens and 63 Hops Grillhouse & Breweries. BANC OF AMERICA: Fitch Takes Rating Actions on Ser. 2003-10 Notes ----------------------------------------------------------------- Banc of America Mortgage Securities, Inc.'s mortgage pass-through certificates, series 2003-10, are rated by Fitch Ratings as follows: Group 1 certificates: -- $276,776,286 classes 1-A-1 - 1-A-9, 1-A-R, 1-A-MR, 1-A-LR and 1-30-IO 'AAA'; -- $4,141,000 class 1-B-1 'AA'; -- $1,714,000 class 1-B-2 'A'; -- $856,000 class 1-B-3 'BBB'; -- $572,000 class 1-B-4 'BB'; -- $428,000 class 1-B-5 'B'. Groups 2 and 4 certificates: -- $92,334,000 classes 2-A-1 - 2-A-8, 2-30-IO, 4-A-1, 4-A-2 and 4-15-IO 'AAA'; -- $1,235,000 class X-B-1 'AA'; -- $571,000 class X-B-2 'A'; -- $190,000 class X-B-3 'BBB'; -- $142,000 class X-B-4 'BB'; -- $95,000 class X-B-5 'B'. Group 3 certificates: -- $97,435,000 classes 3-A-1 and 3-15-IO 'AAA'; -- $693,900 class 3-B-1 'AA'; -- $198,000 class 3-B-2 'A'; -- $149,000 class 3-B-3 'BBB'; -- $99,000 class 3-B-4 'BB'; -- $99,000 class 3-B-5 'B'. and certificates of all four groups: -- $1,375,815 class A-PO 'AAA'. The 'AAA' ratings on the group 1 senior certificates reflect the 2.85% subordination provided by the 1.45% class 1-B-1, 0.60% class 1-B-2, 0.30% class 1-B-3, 0.20% privately offered class 1-B-4, 0.15% privately offered class 1-B-5 and 0.15% privately offered class 1-B-6. The 'AAA' ratings on the group 2 and 4 senior certificates reflect the 2.50% subordination provided by the 1.30% class X-B-1, 0.60% class X-B-2, 0.20% class X-B-3 certificates, privately offered 0.15% class X-B-4, privately offered 0.10% class X-B-5 and privately offered 0.15% class X-B-6. The 'AAA' ratings on the group 3 senior certificates reflect the 1.35% subordination provided by the 0.70% class 3-B-1, 0.20% class 3-B-2, 0.15% class 3-B-3, 0.10% privately offered class 3-B-4, 0.10% privately offered class 3-B-5 and 0.10% privately offered class 3-B-6. The ratings also reflect the quality of the underlying collateral, the capabilities of Bank of America Mortgage, Inc. as servicer (rated 'RPS1' by Fitch), and Fitch's confidence in the integrity of the legal and financial structure of the transaction. Additional credit enhancement is provided for the class 1-A-3 certificates by an irrevocable financial guaranty insurance policy provided by Radian Asset Assurance, Inc. (rated 'AA' by Fitch). Fitch's 'AAA' ratings on the class 1-A-3 certificates are without regard to the financial guaranty insurance policy. The transaction is secured by four pools of mortgage loans, which respectively collateralize the groups 1, 2, 3 and 4 certificates. Groups 2 and 4 are cross-collateralized with each other, while groups 1 and 3 are not cross-collateralized. The group 1 collateral consists of recently originated, conventional, fixed-rate, fully amortizing, first lien, one- to four-family residential mortgage loans, with original terms to stated maturity ranging from 240 to 360 months. The weighted average original loan-to-value ratio for the mortgage loans in the pool is approximately 69.60%. The average balance of the mortgage loans is $497,579 and the weighted average coupon of the loans is 6.023%. The weighted average FICO credit score for the group is 742. Second homes and investor-occupied properties comprise 5.85% and 1.16%, respectively, of the group 1 loans. Rate/Term and cashout refinances represent 34.35% and 19.08%, respectively, of the group 1 mortgage loans. The states that represent the largest geographic concentration are California (50%), Florida (6.12%), and Texas (5.22%). All other states comprise fewer than 5% of properties in the group. The group 2 collateral consists of recently originated, conventional, fixed-rate, fully amortizing, first lien, single family residential mortgage loans, with original terms to stated maturity of 360 months. The weighted average OLTV for the mortgage loans in the pool is approximately 67.58%. The average balance of the mortgage loans is $521,422 and the WAC of the loans is 6.002%. The weighted average FICO credit score for the group is 744. Second homes and investor-occupied properties comprise 5.84% and 0.51%, respectively, of the group 2 loans. Rate/Term and cashout refinances represent 43.52% and 13.04%, respectively, of the group 2 mortgage loans. All of the mortgage properties in group 2 are located in the state of California. The group 3 collateral consists of recently originated, conventional, fixed-rate, fully amortizing, first lien, single family residential mortgage loans, with original terms to stated maturity ranging from 120 to 180 months. The weighted average OLTV for the mortgage loans in the pool is approximately 58.47%. The average balance of the mortgage loans is $519,097 and the WAC of the loans is 5.416%. The weighted average FICO credit score for the group is 741. Second homes comprise 8.34% of the group 3 loans and there are no investor-occupied properties. Rate/Term and cashout refinances represent 60.46% and 21.90%, respectively, of the group 3 mortgage loans. The states that represent the largest geographic concentration are California (49.99%), Florida (9.16%), Virginia (6.84%), Texas (5.81%), and Illinois (5.18%). All other states comprise fewer than 5% of properties in the group. The group 4 collateral consists of recently originated, conventional, fixed-rate, fully amortizing, first lien, one- and four-family residential mortgage loans, with original terms to stated maturity ranging from 120 to 180 months. The weighted average OLTV for the mortgage loans in the pool is approximately 55.69%. The average balance of the mortgage loans is $523,908 and the WAC of the loans is 5.432%. The weighted average FICO credit score for the group is 736. Second homes comprise 8.94% of the group 4 loans and there are no investor-occupied properties. Rate/Term and cashout refinances represent 59.61% and 19.37%, respectively, of the group 4 mortgage loans. All of the mortgage properties in group 4 are located in the state of California. Banc of America Mortgage Securities, Inc. deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. For federal income tax purposes, elections will be made to treat the trust as three separate real estate mortgage investment conduits. Wells Fargo Bank Minnesota, National Association will act as trustee. BRILLIANT DIGITAL: Secured Debt Maturity Extended to March 1 ------------------------------------------------------------ Brilliant Digital Entertainment, Inc. (AMEX:BDE) obtained the agreement from holders of its secured convertible promissory notes to extend the maturity date of the notes from December 31, 2003 to March 1, 2004. At December 31, 2003, and after giving effect to the costs incurred in obtaining the extension, the company was indebted to the note holders in the approximate amount of $3.3 million. The notes are secured by all of the company's assets and the assets of its subsidiaries, B3D, Inc. and Brilliant Studios, Inc., and guaranteed by B3D, Inc. and Brilliant Studios, Inc. About Brilliant Digital Entertainment Inc. Brilliant Digital Entertainment, Inc. (AMEX:BDE) is the parent company of Altnet Inc. and a developer of 3D rich media advertising and content creation technologies for the Internet. The b3d rich media format is used to produce entertainment, advertising and music content for consumers distributed over the Internet. Find out more about the Company at http://www.brilliantdigital.com/ Altnet is the leading peer-to-peer distributor of secured digital media that originates from content owners. Altnet reaches an estimated 70,000,000 users and is the number one issuer of rights managed music in the world. Altnet's products integrate with websites, applications and peer-to-peer networks to allow Internet users to simply and easily locate, download, preview and purchase digital content. Altnet is a subsidiary of Brilliant Digital Entertainment. * * * Liquidity and Going Concern Uncertainty In its Form 10-Q filed with the Securities and Exchange Commission, Brilliant Digital reported: "As of September 30, 2003, our cash and cash equivalents totaled approximately $64,000. This is a decrease of $172,000 as compared to December 31, 2002. "During the nine months ended September 30, 2003, we had a net decrease in cash of $172,000. The net cash used in operating activities of $125,000 during the nine months ended September 30, 2003 was primarily the net result of the net loss of $2,372,00, the decrease in deferred revenue associated with a change in accounting estimate related to the e-New Media agreement of $2,097,000, and the increase in Accounts Receivable of $1,877,000. These amounts were offset by the increase in accounts payable and accrued expenses of $3,011,000 and non-cash expenses of $3,317,000. "Our operations generated negative cash flow during the nine months ended September 30, 2002 and we are reporting a net loss for the nine months ended September 30, 2003. We expect a significant use of cash during the remainder of the 2003 fiscal year as we continue to initiate the business opportunity for Altnet, Inc. We anticipate that our current cash reserves, plus our expected generation of cash from existing operations, may not be sufficient to fund our anticipated expenditures for the remainder of 2003. Consequently, we may require additional equity or debt financing during 2003, the amount and timing of which will depend in large part on our spending program. Our recent financings have been significantly dilutive to our stockholders and if additional funds are raised through the issuance of equity securities, our stockholders may experience significant additional dilution. Furthermore, there can be no assurance that additional financing will be available when needed or that if available, such financing will include terms favorable to our stockholders or us. If such financing is not available when required or is not available on acceptable terms, we may be unable to develop or enhance our products and services, take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our business, financial condition and results of operations, and would most likely result in our having to file for bankruptcy protection under the Bankruptcy Code. "The [Company's] consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not purport to represent realizable or settlement values. The report of our Independent Certified Public Accountants for the December 31, 2002 financial statements included an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern." CENTURY/ML CABLE VENTURE: Claims Bar Date Set for Jan. 15, 2004 --------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of New York, directs creditors owed money by Century/ML Cable Venture to file their proofs of claim against the Debtor on or before January 15, 2004. Proof of claim forms may be obtained at: http://www.uscourts.gov/bkforms/official/b10.pdf All proof of claim forms must be received by the Bankruptcy Court before 5:00 p.m. on Jan. 15. If filed by regular mail, claims must be sent to: Century/ML Cable Venture Claims Processing Center c/o United States Bankruptcy Court Southern District of New York Bowling Green Station PO Box 5139 New York, NY 10004-5139 If by overnight courier or hand delivery, to: Century/ML Cable Venture Claims Processing Center c/o United States Bankruptcy Court Southern District of New York One Bowling Green, Room 534 New York, NY 10004-1408 Six categories of claims are exempted from the Bar Date: 1. claims already properly filed with the Court or with the Claims Agent, Bankruptcy Services LLC; 2. claims not listed as contingent, unliquidated or disputed in the Debtor's Schedules; 3. claims previously allowed by Order of the Court; 4. claims already paid in full by the Debtor; 5. claims allowable under Sec. 503(b) and 507(a)(1) of the Bankruptcy Code as administration expense claims; and 6. claims arising out of an equity interest in the Debtor's estate. Century/ML Cable Venture is a holder of the cable franchise in Levittown, Puerto Rico and a New York joint venture between Century Communications Corp., a wholly owned indirect subsidiary of Adelphia Communications, and ML Media Partners, L.P. The Debtor filed for Chapter 11 relief on September 30, 2002 (Bankr. S.D.N.Y. Case No. 02-14838). Richard S. Toder, Esq., Neil H. Herman, Esq., and Ron Baskin, Esq., at Morgan, Lewis & Bockius LLP represent the Debtor in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets and debts of more than $100 Million. CKG ENERGY, INC: Involuntary Case Summary ----------------------------------------- Alleged Debtors: CKG Energy, Inc. 10713 Ranch Road 620 Bldg. F, Suite 621 Austin, Texas 78726 Involuntary Petition Date: December 31, 2003 Case Number: 03-70916 Chapter: 11 Court: Western District of Texas (Midland) Judge: Ronald B. King Petitioners' Counsel: Wiley France James, III, Esq. James, Goldman & Haugland, P.C. P.O. Box 1770 El Paso, TX 79949-1770 Tel: 915-532-3911 Petitioners: Computa Log USA, Inc. c/o Michael Stephenson 500 Winscott Road Fort Worth, TX 76126 Fleet Cementers, Inc. c/o Michael Stephenson 500 Winscott Road Fort Worth, TX 76126 Key Energy Services Inc. c/o Robert McKenzie 6 Desta Dr Ste 4400 Midland, TX 79705 Baker Hughes Oilfield Operations c/o Christopher Ryan 3900 Essex Lane Suite 1200 Houston, TX 77027 Basic Energy Services, L.P. c/o Judy McPeters P.O. Box 10460 Midland, TX 79702 Aggregate Amount of Claims: $1,357,980 COVANTA ENERGY: Heber Plan Declared Effective on Dec. 18, 2003 -------------------------------------------------------------- Because each of the conditions to the Effective Date pursuant to the Heber Plan occurred or was waived, the Court declared the Heber Plan effective on December 18, 2003. A. Administrative Fees Bar Date In accordance with the Heber Plan, all applications for actual and necessary costs and expenses incurred before the Effective Date pursuant to Sections 503(b), 507(a)(1), 507(b) or 1114(e)(2) of the Bankruptcy Code must be filed with the Bankruptcy Court on or before 4:00 p.m. prevailing Eastern Time on January 19, 2004, except for: -- the U.S. Trustee Claims; -- the postpetition liabilities incurred and payable in the ordinary course of business by any Heber Debtor prior to the Closing Date; or -- fees and expenses incurred by: * Retained Professionals; and * Persons employed by the Heber Debtors or serving as independent contractors to the Reorganizing Debtors in connection with their reorganization efforts. B. Record Date for Distributions The Distribution Record Date under the Heber Plan is November 21, 2003. As of the close of business on the Distribution Record Date, the applicable Heber Debtors' books and records for each of the Classes of Claims or Equity Interests as maintained by the Heber Debtor or its agent, will be deemed closed, and there will be no further changes in the record holders of any of the Claims or Equity Interests. The applicable Heber Debtor will have no obligation to recognize any transfer of Claims or Equity Interests occurring on or after the Distribution Record Date. C. Exercise of Option to Purchase Certain Partnership Interests Pursuant to the Alternative Transaction Purchase Agreement, as contemplated by the Heber Plan, the Buyers have exercised their option to directly acquire the Equity Interests in the SIGC Project Company rather than the Equity Interests in SIGC One Sub and SIGC Two. (Covanta Bankruptcy News, Issue No. 44; Bankruptcy Creditors' Service, Inc., 215/945-7000) CRESCENT REAL: Hires Anthony B. Click as VP, Leasing in Dallas -------------------------------------------------------------- Crescent Real Estate Equities Company (NYSE:CEI) announced that Anthony B. "Tony" Click has joined Crescent's Dallas leasing team as vice president, leasing. Mr. Click's primary responsibility with the company will be leasing Crescent's flagship property, The Crescent(R), in Uptown Dallas. Prior to joining Crescent, Mr. Click served as principal and leader of the office development division for Trammell Crow Company in Dallas, a position which he held since 1998. Mr. Click was employed with Trammell Crow Company from 1992 through 2003. His company, The Click Company, merged with Trammell Crow Company in 1992. "Tony's 20 years of experience in Dallas office leasing and development will further strengthen our top ranking team, which again leased over 3 million square feet of Class A office space in Dallas in 2003. We are very excited to have Tony join us and look forward to the opportunities he will bring," said John Zogg, senior vice president, asset management & leasing for Crescent. Crescent has agreed to grant common share options covering a total of 25,000 common shares to Mr. Click as an inducement for his employment. In accordance with NYSE Rule 303(A)(8), the grant was approved by Crescent's independent executive compensation committee. The exercise price for the options, which vest 20% per year for each of the next five years, is equal to the closing price of Crescent's common shares on the NYSE on January 2, 2004, the date of the grant. Crescent Real Estate Equities Company is one of the largest publicly held real estate investment trusts in the nation. Through its subsidiaries and joint ventures, Crescent owns and manages a portfolio of 75 premier office properties totaling over 30 million square feet located primarily in the Southwestern United States, with major concentrations in Dallas, Houston, Austin and Denver. In addition, the Company has investments in world-class resorts and spas and upscale residential developments. * * * As previously reported in Troubled Company Reporter, Standard & Poor's affirmed its ratings on Crescent Real Estate Equities Co., and Crescent Real Estate Equities L.P., and removed them from CreditWatch, where they were placed on Jan. 23, 2002. The outlook remains negative. Ratings Affirmed And Removed From CreditWatch Issue To From Crescent Real Estate Equities Co. Corporate credit rating BB BB/Watch Neg $200 million 6-3/4% preferred stock B B/Watch Neg $1.5 billion mixed shelf prelim B/B+ prelim B/B+/Watch Neg Crescent Real Estate Equities L.P. Corporate credit rating BB BB/Watch Neg $150 million 6 5/8% senior unsecured notes due 2002 B+ B+/Watch Neg $250 million 7 1/8% senior unsecured notes due 2007 B+ B+/Watch Neg CSK AUTO CORP: Prices Tender Offer for $280M of 12% Senior Notes ---------------------------------------------------------------- CSK Auto Corp. (NYSE: CAO), the parent company of CSK Auto Inc., a specialty retailer in the automotive aftermarket, announced the consideration to be paid in the previously announced cash tender offer and consent solicitation of CSK Auto Inc., for all of its $280 million outstanding principal amount of 12% Senior Notes due 2006. The consideration for each $1,000 principal amount of notes tendered is $1,126.465 plus accrued and unpaid interest, plus a consent payment of $20 per $1,000 principal amount of notes tendered with consents on or prior to 5 p.m., New York City time, on Dec. 31, 2003. The consideration was determined as of 10 a.m., New York City time, Friday, by reference to a fixed spread above the yield to maturity of the 2.00% U.S. Treasury Note due Nov. 30, 2004. The tender offer will expire at 12 midnight, New York City time, on Jan. 15, 2004, unless extended by CSK Auto Inc. The consummation of the tender offer is conditioned upon the successful completion of a replacement financing consisting of a new note offering and the amendment of the senior credit facility of CSK Auto Inc., among other conditions. The settlement date will promptly follow the expiration date. Credit Suisse First Boston LLC is the Dealer Manager and Solicitation Agent for the tender offer and consent solicitation. Questions regarding the tender offer may be directed to Credit Suisse First Boston's Liability Management Group at 800-820-1653. Request for documents may be directed to MacKenzie Partners Inc., the Information Agent, at 212-929-5500. The new notes to be offered have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. CSK Auto Corp. (S&P, B+ Corporate Credit Rating, Stable) is the parent company of CSK Auto Inc., a specialty retailer in the automotive aftermarket. As of May 4, 2003, the company operated 1,108 stores in 19 states under the brand names Checker Auto Parts, Schuck's Auto Supply and Kragen Auto Parts. CYCLELOGIC: Paying $50,000 of Prepetition Critical Vendor Claims ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware gave its stamp of approval to CycleLogic, Inc.'s request to pay prepetition claims held by certain of its critical vendors. The Debtor has identified, but does not disclose the identity of, certain critical vendors who are "absolutely essential to its business operations." These Critical Vendors primarily include telecommunication and service providers for specialized computer software and hardware. In its motion, the Debtor seeks to pay, in its discretion, up to $50,000 in the aggregate to the Critical Vendors. The Debtor believes that the authorization to make payment to the Critical Vendors and preservation of their relationship is crucial to the continued viability of its business, not to mention central to its efforts to maximize value in this chapter 11 case. These telecommunication and related services are simply not readily available in the marketplace and either could not be replaced or the delay in obtaining a replacement would significantly harm the Debtor's business. Headquartered in Miami, Florida, CycleLogic, Inc., has made the transition from Internet media company to wireless software provider. It offers Mobile Internet solutions that allow wireless operators and their end users to take full advantage of the Internet across multiple platforms. The Company filed for chapter 11 protection on December 23, 2003 (Bankr. Del. Case No. 03- 13881). Joseph A. Malfitano, Esq., at Young, Conaway, Stargatt & Taylor represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed assets of more than $100 million and debts of over $10 million. DII INDUSTRIES: Will Pay Up to $4.5-Million of Tax Obligations -------------------------------------------------------------- In connection with the normal operation of their businesses, the DII Industries and Kellogg, Brown & Root Debtors accrue various property, sales and use, excise and fuel taxes. The Debtors (a) incur and pay property taxes for the various pieces of property they own, (b) collect sales, use and fuel taxes which must be paid to various taxing authorities and (c) collect excise taxes on amounts paid for certain types of fuels. With the Court's permission, the Debtors will pay their prepetition tax obligations in the ordinary course of business. The Debtors recognize that, in any event, they are obligated to pay these taxes. Therefore, they do not believe that their Estates will be burdened by the payment of the prepetition taxes. The Debtors estimate that, as of the Petition Date, they owe $4,500,000 in taxes incurred prepetition but not yet paid to the Taxing Authorities. Of this amount, the Debtors estimate owing $3,700,000 in prepetition property taxes. On a monthly basis, the Debtors pay on average $760,000 in sales and use taxes. The Debtors are current on the payment of those taxes, other than the accrued amounts or obligations that may arise as a result of payments that have not cleared as of the Petition Date. The Debtors estimate that the amounts owed for fuel and excise taxes are de minimis -- about $2,400. (DII & KBR Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENRON: Selling Smith Street Bldg. to Antonio Pacifico Trustee ------------------------------------------------------------- After the auction, U.S. Bankruptcy Court Justice Gonzalez authorizes the sale of the 1400 Smith Street Building to Antonio Pacifico Trustee for $55,500,000. The Enron Corporation Debtors are empowered to consummate the sale and perform all obligations related to the transaction. Furthermore, the Court rules that all claims, liens and encumbrances, except that of Fisk Electric Company, are forever barred, estopped and permanently enjoined from being asserted against Antonio Pacifico Trustee, its successors, assigns and property. The Enron Parties, Subagent Travis National Properties Corporation and the Agent reserve their right to challenge the validity and amount of Fisk's claims or liens. * * * Backgrounder The Office Property is a multi-story, class A office building located in downtown Houston, Texas consisting of 1,265,000 rentable square feet. In April 1997, the Office Property was refinanced with $284,500,000 in synthetic lease financing involving: (a) a loan to Brazos Office Holdings LP by a syndicate of banks with JPMorgan Chase Bank as the Agent; and (b) a Land and Facilities Lease Agreement dated as of April 14, 1997, covering the Office Property by and between Brazos, as lessor, and Organizational Partner, Inc., an affiliate of Enron, as lessee. Enron guaranteed the performance of Organizational's obligations under the Lease pursuant to a Parent Guaranty dated as of April 14, 1997. Organizational assigned to ELP and ELP assumed all of Organizational's rights and obligations under the Lease pursuant to an Assignment and Assumption Agreement executed as of April 14, 1997. ELP subleased the improved real property to Enron pursuant to a Sublease dated as of April 14, 1997. Enron assigned its rights and obligations under the Sublease to EPSC pursuant to an Assignment and Assumption Agreement dated as of July 31, 1997. After the Petition Date, the Agent asserted that certain Events of Default occurred. Upon the occurrence of an Event of Default, Mr. Sosland explains that the Lease provides the agent certain right and remedy, including, without limitation, those that may adversely affect ELP's right, title and interest in and to the Office Property and the ability of Enron and its affiliates to occupy it. As ELP is not a debtor, the automatic stay would not apply to prevent the Agent from exercising remedies it may have against ELP under the Lease and other synthetic lease documents. On October 10, 2002, the Agent filed Proofs of Claim Nos. 11224 and 11225 against Enron. On October 15, 2002, Brazos filed Claim Nos. 19149 and 19151 against Enron and Claim Nos. 19150 and 19152 against EPSC. The Claims relate to Enron and EPSC's alleged obligations under the Parent Guaranty. As the occupancy of the Office Property was of paramount importance to Enron, on May 14, 2002, the Enron Parties entered into a Forbearance Agreement pursuant to which the Agent agreed to forbear from taking actions under the synthetic lease documents. As amended, the Agent's forbearance will end on December 31, 2003. On September 2, 2003, TNPC, a wholly owned subsidiary of the Agent, purchased at foreclosure Brazos' interest in the Lease and the Property. The foreclosure did not affect the right, title or interest of ELP in or to the Property. (Enron Bankruptcy News, Issue No. 92; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENVIRONMENTAL ELEMENTS: Completes Debt Restructuring Transaction ---------------------------------------------------------------- Environmental Elements Corporation (Pink Sheets: EECP) successfully concluded negotiations and has executed documents with its primary lender that will restructure its current debt agreement. The new agreement provides for a $5,000,000 reduction of EEC's outstanding line of credit balance, an increase in the borrowing capacity under the line and a restructuring of the financial and other covenants within the previous borrowing agreement. In return for these accommodations, EEC assigned to the Bank its rights to a long-term lease on its headquarters building in Baltimore, Maryland. "This is a significant accomplishment for the Company and an important component of our plan towards financial recovery," said Lawrence Rychlak, President and CFO. "We are very fortunate to have a lender who has truly been an important and supportive financial partner throughout the years and are very pleased to conclude the months of effort by both parties and close this deal. This new financing package will strengthen our balance sheet, lower our future interest cost and provide sufficient capital for the Company to execute its operating plan into the future. The completion of this deal, coupled with our recent successes in receiving significant orders for our products and services, closes out our third fiscal quarter in great fashion and provides us with a strong foundation for success for the remainder of this fiscal year and into the next." Environmental Elements Corporation is a solutions-oriented provider of plant maintenance services, air pollution control technology and complementary products. For over 55 years, EEC has served a broad range of customers in the power generation, pulp and paper, waste-to-energy, rock products, metals and petrochemical industries. Environmental Elements' September 30, 2003 balance sheet shows a working capital deficit of about $10 million, and a total shareholders' equity deficit of about $12 million. FEDERAL-MOGUL: PD Committee Brings-In Bilzin Sumberg as Counsel --------------------------------------------------------------- The Official Committee of Asbestos Property Damage Claimants of the Federal-Mogul Debtors, seeks the Court's authority to retain Bilzin Sumberg Baena Price & Axelrod LLP, as their counsel nunc pro tunc to November 17, 2003. Asbestos PD Committee Co-Chairman, Daniel Speights, informs the Court that in the interests of the asbestos property damage claimants, the PD Committee will require the advice and representation of Bilzin Sumberg during the administration of the Debtors' Chapter 11 consolidated cases. The PD Committee wants to retain Bilzin Sumberg to: (a) provide legal advice with respect to its rights, duties and powers in the Consolidated Cases; (b) provide assistance in: -- investigating the acts, conduct, assets, liabilities and financial condition of the Debtors; -- the operation of the Debtors' businesses; and -- the desirability of the continuance of the businesses and any other matter relevant to the Consolidated Cases or to the formation of a plan; (c) prepare pleadings and applications as may be necessary for the Committee's interests and objectives; (d) participate in formulating a plan or plans of reorganization; (e) assist in considering and requesting the appointment of a trustee or examiner or conversion, if necessary; (f) consult with the Debtors, their counsel and the United States Trustee concerning the administration of the estate; (g) represent them in hearings and other judicial proceedings; and (h) perform other legal services as may be required and as are deemed to be in the best interests of the PD Committee and the constituency that it represents. Mr. Speights informs the Court that given the advanced stage of the Consolidated Cases, the PD Committee will principally focus its attention and utilize Bilzin Sumberg's services in connection with the Debtors' reorganization and the treatment of asbestos property damage claims. "It is not the PD Committee's intention to 'reinvent the wheel' by revisiting matters generally concerning the administration of the Consolidated Cases, which will duplicate the efforts, and attendant expense, of other constituencies in the Consolidated Cases," Mr. Speights contends. Bilzin Sumberg's restructuring and bankruptcy group has extensive experience with routine and complex in-court and out-of-court reorganizations, placing substantial emphasis on creditors' rights, corporate, banking and financial matters. Bilzin Sumberg also has considerable experience in reorganization cases before the bankruptcy court and is uniquely well qualified to act as counsel for the PD Committee. According to Mr. Speights, Bilzin Sumberg's attorneys and paralegal will be compensated based on these hourly rates: Partners Scott L. Baena $550 Robert W. Turken 410 Associates Jay M. Sakalo 275 Allyn S. Danzeisen 275 Paralegal Luisa M. Flores 120 Scott L. Baena, a partner at Bilzin Sumberg, assures the Court that the firm has no connection with, and holds no interest adverse to the PD Committee. Bilzin Sumberg is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code and as required under Section 327(a). Since Bilzin Sumberg does not have an office in Delaware, the firm has coordinated with Ferry, Joseph & Pearce, P.A., a Delaware law firm, to assist it in its representation of the PD Committee. The Firm and FJ&P will divide tasks and responsibilities to avoid unnecessary and duplicative services. (Federal-Mogul Bankruptcy News, Issue No. 48; Bankruptcy Creditors' Service, Inc., 215/945-7000) FRANK'S NURSERY: Posts 10% Decline in December Same Store Sales --------------------------------------------------------------- Frank's Nursery & Crafts, Inc. (OTC:FNCN) reported net sales of $35.6 million for the four week period ended December 28, 2003 versus net sales of $39.7 million for the corresponding period in fiscal 2002, a comparable store decrease of 10.4%. Net sales for the forty-eight week period ended December 28, 2003 were $313.1 million compared to $309.3 million for the corresponding period in fiscal 2002, a comparable store increase of 1.2%. Franks Nursery -- whose November 2, 2003 balance sheet shows a total shareholders' equity deficit of about $716,000 -- is the nation's largest lawn and garden specialty retailer and operates 170 stores in 14 states. Franks Nursery is also a leading retailer of indoor garden products and accessories, including silk floral arrangements, as well as Christmas decor merchandise. GLOBAL CROSSING: Pushing for Approval of Tekelec Settlement Pact ---------------------------------------------------------------- Paul M. Basta, Esq., at Weil, Gotshal & Manges LLP, in New York, informs the Court that Tekelec is one of the Global Crossing Debtors' largest vendors. Tekelec provides the Debtors with hardware and software products for the transport of voice signals on their Network in various locations worldwide. The Debtors entered into a number of separate agreements with Tekelec for the provision of equipment and support services. The Agreements provided that the Debtors would purchase a variety of equipment, software, maintenance, warranties and support from Tekelec over a period of several years. In 2001, when the Debtors entered into the Agreements, they anticipated a large scale build-out of their Network. Accordingly, the Debtors entered into the Agreements to obtain the hardware and software necessary for the large expansion. Since that time, the Debtors have significantly reduced their operating costs and streamlined their businesses. As a result, much of the purchased hardware and software is now unnecessary for the Debtors' ongoing operations. Specifically, the Agreements are: (1) World Master Agreement between Global Crossing North America, Inc. and Tekelec, dated August 2, 2001, which is the master agreement to all of the other agreements between the parties; (2) European Supplement Agreement No. 1 to the World Master Agreement, dated August 3, 2001, between Tekelec and GC Pan European Crossing Holdings B.V., wherein the Debtors agreed to purchase $5,100,000 of hardware to support voice signaling services in Europe; (3) Letter of Commitment, dated March 30, 2001, between Global Crossing Ltd. and Tekelec, wherein the Debtors agreed to purchase $13,600,000 of telecommunications equipment to be used throughout various locations worldwide; (4) (a) Tekelec Quote for European Sentinel Monitoring Equipment and Three Year Millennium Warranty, and the related Support Services and Millennium Service Plan, and (b) Tekelec Quote for Tier 3 Custom Extended Warranty including (i) the Tekelec Standard Warranty and Tekelec Custom Extended Warranty and (ii) the Tekelec Customer Services Catalog Publication No. 910-0124-01, pursuant to which Tekelec agreed to provide maintenance, warranties and support services to the Debtors for the hardware that they purchased under the other agreements. A number of different disputes have arisen under the Agreements. First, under the Commitment Letter, the Debtors agreed to purchase $13,600,000 of telecommunications equipment from Tekelec to be used throughout various locations worldwide. Tekelec argues that the Debtors breached the Commitment Letter by failing to pay for equipment shipped on October 21, 2001 in connection with the Debtors' European Network. Similarly, Tekelec contends that the Debtors breached the European Supplement Agreement No. 1 by failing to pay for a variety of equipment delivered to the Debtors. Furthermore, Tekelec asserted claims in the Debtors' Chapter 11 cases exceeding $14,000,000 for shipped goods, extended warranty claims, backlog claims, and other account receivables related to the Agreements. While the Debtors dispute these claims, the Debtors have not yet objected to them. Due to changes in market conditions and their downsizing of operations, the Debtors no longer require all the hardware and software that they have committed to purchase under the Agreements. Nevertheless, the Debtors require certain of the agreements for the ongoing operation of their Network. Absent a settlement, the Debtors believe that they may be required to pay significant cure costs in connection with the assumption of the agreements. Following extensive arm's-length negotiations, the Debtors and Tekelec entered into a settlement agreement that resolves the parties' disputes under the Agreements. The salient terms of the Settlement Agreement are: (A) Return of Equipment The Debtors will take all actions reasonably required to effectuate title transfer of the equipment that was delivered to them pursuant to the Commitment Letter to Tekelec free and clear of liens, claims and encumbrances. In the event of default by the Debtors, the Settlement Agreement provides that Tekelec will have a single Allowed Administrative Expense Claim against the Debtors pursuant to Section 503 of the Bankruptcy Code, not to exceed the value of any equipment they fail to return. The parties agree that the aggregate value of all equipment is $5,460,000; (B) Allowed General Unsecured Claim Tekelec will have an allowed general unsecured claim in the Debtors' Chapter 11 cases aggregating to $8,058,000; (C) Release by the Parties Without further delay, the Debtors and Tekelec fully and finally release, acquit and forever discharge each other, from any and all Claims, demands, obligations, actions, causes of action, rights or damages under any legal theory, including under contract, tort, or otherwise, which they now have, may claim to have or ever had, whether known or unknown in connection with the Agreements, other than Claims arising under any warranties contained in the Agreements or applicable law, provided, however, that the releases do not affect obligations expressly preserved by or contained in the Settlement Agreement; (D) Collection of VAT Refund If Tekelec receives a VAT bad debt relief refund, the Debtors agree not to object to or contest this VAT refund. The Debtors also agree that any bad debt relief notices required to be sent by Tekelec to the Debtors pursuant to the VAT regulations will not be deemed a violation of the automatic stay pursuant to Section 362 of the Bankruptcy Code. The Debtors, however, will not be responsible to Tekelec for the payment of the VAT refund. Without further delay, Tekelec will escrow an amount equal to GBP61,722, representing 20% of the expected VAT refund. If the Debtors are required to pay the VAT Refund to the appropriate authorities in the United Kingdom, the Debtors will be entitled to receive 20% of any amounts that they are required to pay, plus interest, from the Escrowed Funds; (E) Assumption of the World Master Agreement and Maintenance Agreements The Debtors will assume the World Master Agreement and the Maintenance Agreements. Upon assumption, there is no cure required in connection with or arising from the assumption of the World Master Agreement and Maintenance Agreements pursuant to Section 365 of the Bankruptcy Code; and (F) Rejection of European Supplement Agreement No. 1 and the Commitment Letter The Debtors will reject the European Supplement Agreement No. 1 and the Commitment Letter. By this motion, the Debtors ask the Court to approve their Settlement Agreement with Tekelec. Mr. Basta contends that the Settlement Agreement is fair and equitable and falls well within the range of reasonableness. The Settlement Agreement resolves over $14,000,000 in claims against the Debtors, without the need for protracted litigation, at a fraction of that amount. In addition, under the Settlement Agreement, the Debtors will assume only those agreements that are necessary to the continuing operations of the Network, without the incurrence of any cure costs. Moreover, under the Settlement Agreement, Tekelec and the Debtors agree to release all claims against each other for actions occurring before the date of the Settlement Agreement. This release dispels the threat of potential litigation and allows the parties to resume a normal business relationship. Furthermore, Mr. Basta points out that under the Settlement Agreement, the Debtors will recover from Tekelec 20% of any VAT liability, which may exceed $104,810 and which may be owed by the Debtors to authorities in the United Kingdom for failure to pay for hardware and software purchased by the Debtors pursuant to European Supplement Agreement No. 1. Tekelec asserts that because of the Debtors' non-payment, it may be entitled to a VAT bad debt relief refund in an amount equal to GBP308,610, which amount the United Kingdom HM Customs and Excise authorities may seek to recover from the Debtors. Pursuant to the Settlement Agreement, if the Debtors are required to pay any VAT liability, Tekelec will reimburse the Debtors from a segregated escrow account established by Tekelec under the terms of the Settlement Agreement, for 20% of any amounts paid by the Debtors. (Global Crossing Bankruptcy News, Issue No. 53; Bankruptcy Creditors' Service, Inc., 215/945-7000) GOLDEN NORTHWEST: First Creditors' Meeting Set for January 29 ------------------------------------------------------------- The United States Trustee will convene a meeting of Golden Northwest Aluminum, Inc.'s creditors on January 29, 2004, at 3:30 p.m., at the US Trustee's Office, 620 SW Main Street, Room 223, Portland, Oregon 97205. 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 The Dalles, Oregon, Golden Northwest Aluminum, Inc., is a primary aluminum producer. The Company, together with three affiliates, filed for chapter 11 protection on December 22, 2003 (Bankr. Or. Case No. 03-44107). Richard C. Josephson, Esq., represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed debts and assets of more than $100 million each. GOODWILL CARE: Begins Chapter 7 Liquidation Process in Seattle -------------------------------------------------------------- The owners of Goodwill Care, a company that once operated 10 adult homes in Snohomish County, Washington, have filed for chapter 7 bankruptcy and face a $6 million wrongful-death lawsuit filed by the family of a former resident, the Seattle Times reports. The state Department of Social and Health Services last year investigated the death of 73-year-old Adela De Los Santos, one of six residents at Goodwill Care's Snohomish home on Alice Avenue. The company, owned by Michael and Margaret Goodwill of Lake Stevens, earlier this year announced plans to close three of its homes and sell the remaining seven. (ABI World, Jan. 2, 2004) GOODWILL CARE: Voluntary Chapter 7 Case Summary ----------------------------------------------- Lead Debtor: Goodwill Care Inc. c/o Margaret Goodwill 2823 124th Ave NE Lake Stevens, Washington 98258-0000 Bankruptcy Case No.: 03-26472 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Michael L. Goodwill and Margaret A. Goodwill 03-26473 Type of Business: The Debtor operates an Adult Home Care Services. Chapter 11 Petition Date: December 26, 2003 Court: Western District of Washington (Seattle) Judge: Thomas T. Glover Debtors' Counsel: Jonathan S. Smith, Esq. Advantage Legal Group 11100 NE 8th Sreet # 750 Bellevue, WA 98004 425-452-9797 Fax: 425-453-2315 Total Assets Total Debts ------------ ----------- Goodwill Care Inc. $0 $6,204,013 Michael L. Goodwill and $551,900 $7,815,582 Margaret A. Goodwill HA-LO INDUSTRIES: Plan Confirmation Objections Due on Jan. 12 ------------------------------------------------------------- On November 3, 2003, the U.S. Bankruptcy Court for the Northern District of Illinois ruled on the adequacy of the Disclosure Statement prepared by Ha-Lo Industries, its debtor-affiliates and its Official Committee of Unsecured Creditors to explain their proposed Second Amended Liquidating Plan. The Court found that the Disclosure Statement contained the right kind and amount of information to enable creditors to make informed decisions whether to reject or accept the Plan. Accordingly, the Honorable Carol A. Doyle will convene a hearing to consider the confirmation of the Liquidating Plan for January 28, 2004, at 11:00 a.m. CST. Any party in interest objecting to the Plan must file with the Bankruptcy Court a written objection on or before January 12, 2004. Copies must also be sent to: 1. Counsel for the Debtors LeBoeuf, Lamb, Greene & MacRae One Embarcadero Center San Francisco, California 94111-3619 Attn: Neal L. Wolf, Esq. and Todd L. Padnos, Esq. 2. Counsel for the Committee Piper Rudnick, LLP 203 North LaSalle Street Suite 1800 Chicago, Illinois 60601-1293 Attn: Mark A. Berkoff, Esq. Steven Christenholz, Esq. 3. the Office of the United States Trustee 227 W. Monroe Street Suite 3350 Chicago, IL 60606 Attn: Kathryn Gleason Copies of the Plan and Disclosure Statement are on file with the Clerk of the Bankruptcy Court. They may also be obtained, upon request, from the Debtors' Counsel. Ha-Lo Industries, Inc., provides full service, innovative brand marketing in the custom and promotional products industry. The Company filed for chapter 11 protection on July 30, 2001. Adam G. Landis, Esq., Eric Lopez Schnabel, Esq., Mary Caloway, Esq., at Klett Rooney Lieber & Schorling represent the Debtors in their liquidating efforts. INDIGINET: Taps Russell Bedford as New Independent Accountants -------------------------------------------------------------- On November 18, 2003, Stark Winter Schenkein & Co., LLP, Indiginet Inc.'s independent auditors, notified Indiginet that they intended to resign from the client-auditor relationship with the Company. Stark Winter's letter stating that the auditor-client relationship with Indiginet was terminated was received by the Company on November 24, 2003. Stark Winter's reports on the Company's financial statements for the years ended December 31, 2001 and December 31, 2002 contained an explanatory paragraph regarding the substantial doubt about the Company's ability to continue as a going concern. The decision to change accountants was not approved or recommended by the Company's Board of Directors. In the course of its review of Indiginet's financial statements for the nine months period ended September 30, 2003, Stark Winter was unable to determine whether all issuances of common stock by the Company pursuant to S-8 registration statements complied with all applicable securities laws and regulations. In addition, Stark Winter was not satisfied that the receipt of approximately $253,000 of the proceeds received from the exercise of options to purchase stock registered on Form S-8 by the officer of Company did not violate the Sarbanes-Oxley Act. The subject matter of the disagreements was discussed between Stark Winter and the sole director of the Company and could not be resolved to the satisfaction of Stark Winter. Indiginet has authorized Stark Winter to respond fully to the inquiries of the successor accountant concerning the subject matter of each of the disagreements set forth above. On November 20, 2003 Indiginet engaged Russell Bedford Stefanou Mirchandani LLP, certified public accountants, as its independent accountants to report on the Company's balance sheet as of December 31, 2003, and the related statements of income, stockholders' equity and cash flows for the year then ended. The decision to appoint Russell Bedford Stefanou Mirchandani LLP was approved by Indiginet's Board of Directors. INFORMATION ARCHITECTS: Seeking New Funds to Continue Operations ---------------------------------------------------------------- Information Architects Corporation suspended all of its operations in December 2002. In January 2003, the Company restarted operations in connection with the intended acquisition of the assets of Perceptre, LLC which was completed on June 16, 2003 and, as a result, incurred a net loss for the nine months ended September 30, 2003 of $2,098,0123 compared with a net loss for the September 30, 2002 of $ 9,459,750. Information Architects had revenues of approximately $55,517 in 2002 compared to revenue of $112,368 in 2003. Most of the revenues were generated in the three month period ended September 30, 2003 amounting to $110,547 representing the revenue generated after the purchase of the assets of Perceptre, LLC. In 2002 the revenue for the same three month period was only $7,672, related to the fact the Company suspended operations in 2002 late in the year. On November 10, 2003, Greentech USA Corp acquired all interests in Perceptre. As part of that transaction Greentech agreed to assume two promissory notes owed to New Mexico Bank and Trust which has a security interest in the Company's software and which the Company is liquidating. These notes are also personally guaranteed by Messrs. Weinstein, Desiderio and Aguir, directors of the Company. Since inception, the Company had an aggregate net loss of approximately $72.4 million. In order to continue operations, Information Architects will once again seek additional funding from outside sources. Among the options that are currently being explored to raise capital are the issuance of stock and/or debt financing. Without additional funding, Information Architects will not be able to continue operations. INSCI CORP: Trading Symbol Changed to INCCV after Reverse Split --------------------------------------------------------------- INSCI Corp. (OTC Bulletin Board: INCCV), a leading provider of enterprise content management (ECM) solutions, announced that effective January 2, 2004, its trading symbol changed to INCCV from INSS. The symbol change came as expected as a result of the Company's previously announced reverse stock split. The Company anticipates that the V appearing in the symbol will be removed following verification and issuance of the new certificates reflecting the one-for-ten reverse split. INSCI Corp. (OTC Bulletin Board: INCCV) is a leading provider of solutions for the enterprise content management (ECM) market. INSCI's technology provides a strong foundation enabling companies to manage the full spectrum of enterprise content, from documents to e-mail, graphics and video. INSCI's ESP+ Solutions Suite enables financial services companies, call centers, health insurance organizations, utilities and government to provide Internet-based access for virtually unlimited users to their banking and financial statements, customer bills and similar content. INSCI's WebWare Digital Asset Management (DAM) products provide a powerful media services platform for integrating rich media into enterprise content management systems, marketing and communication portals, web publishing systems, and e-commerce portals. WebWare was named by eContent Magazine in its 2002 eContent 100 list of leading digital content industry companies, and recently was named the 2003 Product of the Year for excellence in information and communication technology by industry analysts Frost & Sullivan. The award will be formally presented in 2004. For more information about INSCI, visit http://www.insci.com/ At June 30, 2003, INSCI Corp.'s balance sheet shows a working capital deficit of about $2 million, and a total shareholders' equity deficit of about $3 million. INTERFERON SCIENCES: Recurring Losses Raise Going Concern Doubt --------------------------------------------------------------- On March 11, 2003, Interferon Sciences, Inc. sold all its inventory related to its ALFERON N Injection product and granted a license to sell the product to Hemispherx Biopharma, Inc. In exchange for the inventory and license, the Company received HEB common stock with a guaranteed value of $675,000, an additional 62,500 shares of HEB common stock without a guaranteed value, and a royalty equal to 6% of the net sales of ALFERON N Injection. The HEB common stock is subject to selling restrictions. In addition, HEB assumed approximately $408,000 of the Company's payables and various other commitments. The Company and HEB also entered into another agreement pursuant to which the Company will sell to HEB, subject to regulatory approval, the Company's real estate property, plant, equipment, furniture and fixtures, rights to ALFERON N Injection and all of its patents, trademarks and other intellectual property related to its natural alpha interferon business. In exchange, the Company will receive (if and when approved) $675,000 of HEB common stock with a guaranteed value, an additional 62,500 shares of HEB common stock without a guaranteed value and a royalty equal to 6% of the net sales of all products sold containing natural alpha interferon. HEB will assume approximately $2.5 million of the Company's indebtedness that currently encumbers its assets. In addition, pending the completion of this transaction, HEB will fund the operating costs of the Company's facility such as insurance, heat, light, air conditioning and equipment maintenance. Upon completion of the transaction with HEB, ISI will not be involved in the natural alpha interferon business and will not have a manufacturing and research facility. In addition, on August 29, 2003, ISI and Metacine, Inc. agreed to terminate their agreements. On October 17, 2003, ISI and Amphioxus Cell Technologies, Inc. entered into a non-binding letter of intent pursuant to which ISI (or a wholly owned subsidiary of ISI) will acquire ACT. ACT is a biotechnology company that applies liver biology solutions to problems in drug discovery and human therapeutics. The shareholders of ACT will receive preferred stock of ISI, convertible into a number of common shares of ISI equal to 75% of the fully diluted capitalization of ISI. At September 30, 2003, the Company had approximately $201,000 of cash and cash equivalents, with which to support future operating activities and to satisfy its financial obligations as they become payable. As of November 20, 2003, the Company has sold 388,000 of the shares of HEB common stock and received net proceeds of $965,000. The Company has experienced significant operating losses since its inception in 1980. As of September 30, 2003, the Company had an accumulated deficit of approximately $138.6 million. For the nine months ended September 30, 2003, the Company earned net income of $1,739,000 and for the years ended December 31, 2002, 2001 and 2000, the Company incurred losses of approximately $2.7 million, $6.4 million, and $2.7 million, respectively. Also, the Company has limited liquid resources. These factors raise substantial doubt about the Company's ability to continue as a going concern. Based on the Company's sale to HEB, estimates of revenue, expenses, and the timing of repayment to creditors, management believes that the Company has sufficient resources to enable the Company to continue operations until March 31, 2004. However, actual results may differ materially from such estimate, and no assurance can be given that additional funding will not be required sooner than anticipated or that such additional funding, whether from financial markets or from other sources, will be available when needed or on terms acceptable to the Company. Insufficient funds will require the Company to terminate operations. IT GROUP: Plan Provides for Global Compromise & Settlement ---------------------------------------------------------- The IT Group Debtors' proposed Plan provides for a global compromise and settlement of all Causes of Action as of the Effective Date by and between: -- the Prepetition Lenders and their Agent, Citicorp USA, Inc.; and -- the Debtors, the Subsidiaries that are not debtors, and the Committee. The Plan Settlement provides that, upon the occurrence of the Effective Date: (a) the Lender Claims will be deemed Allowed in full as provided in the Plan; (b) the Committee Lawsuit will be dismissed with prejudice; (c) any and all Claims and Causes of Action of the Debtors, the Subsidiaries that are not Debtors, and the Committee against the Agent and the Prepetition Lenders as of the Effective Date will be forever waived, discharged, released and enjoined; (d) the holders of Allowed Lender Claims will receive the treatment accorded the Claims under the Plan in complete satisfaction of any and all rights, claims and Causes of Action that comprise or arise under the Lender Claims, including without limitation, any subordination or other provisions in respect of the Old Notes, the holders thereof or the Indenture Trustee; and (e) any right to a Distribution on account of any deficiency Claim, Unsecured Claim or Administrative Claims, other than any claims for the reimbursement of all fees and expenses of the Agent that will remain in effect, which will be treated and paid as an Administrative Claim in accordance with the Plan, by the holders of the Lender Claims will be forever waived, discharged, released and enjoined, which Claims will be deemed satisfied in full by the treatment accorded the Lender Claims under the Plan. Pursuant to the Plan Settlement and subject to the occurrence of the Effective Date: -- Holders of an Allowed Lender Claim will receive under the Plan, in full and complete satisfaction of the Claim, its Pro Rata Share of: (a) 87.5% of the available Proceeds; (b) 90% of the Shaw Stock; (c) 20% of the Avoidance Action Recoveries; and (d) 75% of the first $10,000,000 of Estate Cause of Action Recoveries and 50% of the Estate Cause of Action Recoveries thereafter. -- Each holder of an Allowed General Unsecured Claim against a Debtor will receive on the Distribution Dates on account of its Allowed General Unsecured Claim, its Pro Rata Share of: (a) 12.5% of the Available Proceeds; (b) the proceeds from the sale of disposition of 10% of the Shaw Stock in accordance with the Plan; (c) 80% of he Avoidance Action Recoveries; and (d) 25% of the first $10,000,000 of Estate Cause of Action Recoveries and 50% of Estate Cause of Action Recoveries thereafter. With Respect to holders of: A. Litigation Unsecured Claims Each Litigation Unsecured claim will be liquidated and satisfied pursuant to the Plan ADR and to the extent any Claim becomes an Allowed Litigation Unsecured Claim as provided in the Plan ADR in excess of available insurance proceeds -- net of any deductible or self-insured retention payment -- to pay the Claim, if applicable, the holder of the Claim will receive on the Distribution Dates on account of its Allowed Litigation Unsecured Claim, its Pro Rata Share of the Distributions to holders of Allowed General Unsecured Claims under the Plan. B. Allowed Securities Litigation Claims and Allowed Subordinated Claims. Each holder of an Allowed Securities Litigation Claim will not receive or retain any Distribution on account of the Allowed Securities Litigation Claim or Allowed Subordinated Claim in accordance with Sections 510(b) and 510(c) of the Bankruptcy Code. C. Equity Interests in the Debtors All Equity Interests in each of the Debtors will be cancelled, annulled and extinguished on the Effective Date, and the Holders of the Equity Interests will not receive or retain any property under the Plan. The Confirmation Order will approve the Plan Settlement and authorize the parties to take all actions that are necessary or appropriate to implement and give effect to the Plan Settlement subject to the occurrence of the Effective Date. (IT Group Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., 215/945-7000) JAG MEDIA: Preparing Prospectus for 25-Mill. Class A Share Issue ---------------------------------------------------------------- Jag Media Holdings Inc. has prepared a prospectus relating to the resale of up to 24,911,807 shares of its Class A common stock, including 20,000,000 shares of its Class A common stock that Cornell Capital, L.P. may receive pursuant to an equity line purchase agreement entered into with JAG as of April 9, 2002. Cornell Capital is an "underwriter" within the meaning of the Securities Act in connection with the resale of these shares. In connection with the equity line purchase agreement, JAG also agreed to pay to Cornell Capital a cash fee on each closing date under the equity line in an amount equal to five percent of the total advance made to JAG by Cornell Capital at such closing, which cash fee may be deducted by Cornell Capital from the gross proceeds due and payable to JAG. Accordingly, both the 5% discount on the purchase of the Class A common stock to be received by Cornell Capital and the 5% cash fee received by Cornell Capital on each closing date under the equity line will be underwriting discounts under the Securities Act. The following shares of JAG's Class A common stock are also being registered for resale under the prospectus: o 10,000 shares issuable to Westrock Advisors, Inc, as a placement agent fee in connection with the equity line, o up to 1,000,000 shares issuable to Company President and Chief Executive Officer, Gary Valinoti, upon exercise of a stock option, o up to 500,000 shares issuable to Company Executive Vice President and Chief Operating Officer, Stephen J. Schoepfer, upon exercise of a stock option, o up to 500,000 shares issuable to Company Executive Vice President and Chief Financial Officer, Thomas J. Mazzarisi, upon exercise of a stock option, o up to 750,000 shares issuable to M.S. Farrell & Co., Inc. upon exercise of a stock purchase warrant (which amount assumes conversion of all Series 1 Class B shares into Class A shares), o up to 25,000 shares issuable to Butler Gonzalez LLP upon exercise of a stock purchase warrant, o up to 500,000 shares issuable to Strategic Growth International, Inc., upon exercise of a stock option (which amount assumes conversion of all Series 1 Class B shares into Class A shares), o 441,807 shares issued to Strategic Growth International Inc. as payment for services rendered to JAG under an investor relations agreement (which amount assumes conversion of all Series 1 Class B shares into Class A shares), o 1,000,000 shares owned by First Allied Capital Group, LLC, o 110,000 shares owned by Thomas J. Mazzarisi (which amount assumes conversion of all Series 1 Class B shares into Class A shares), and o 75,000 shares owned by Stephen J. Schoepfer (which amount assumes conversion of all Series 1 Class B shares into Class A shares). JAG's Class A common stock is traded on the Nasdaq OTC Bulletin Board under the symbol "JGMHA." On November 26, 2003, the closing bid price of the Class A common stock as reported on the Nasdaq OTC Bulletin Board was $0.38. The shares of Class A common stock offered involve a high degree of risk. It is likely that the Class A common stock will be subject to "penny stock" rules, which generally require that a broker or dealer approve a person's account for transactions in penny stocks and the broker or dealer receive from the investor a written agreement to the transactions setting forth the identity and quantity of the penny stock to be purchased before a trade involving a penny stock is executed. JAG Media Holdings' October 31, 2003 balance sheet shows that total liabilities exceeded its total assets by about $255,000. KAISER ALUMINUM: Secure Self Pitches Best Bid for Spokane Assets ---------------------------------------------------------------- Secure Self Storage, LLC submitted the successful bid for Parcels 3 and 6B, in Spokane, Washington, pursuant to a Court- approved auction under the terms of the Sale Agreement between the Kaiser Aluminum Debtors and Secure LLC. Secure LLC will purchase Parcels 3 and 6B, free and clear of liens, claims, encumbrances and other interests, in accordance with Section 363(f) of the Bankruptcy Code. In addition, all liens, claims, encumbrances and other interests will attach to the proceeds of the sale with the same validity and priority as they attached to the assets, provided that these liens, claims, encumbrances and other interests will be on a super priority basis pursuant to Sections 363, 364 and 507(b). Judge Fitzgerald authorizes the Debtors to consummate the sale of Parcels 3 and 6B and enter into any appropriate agreements or transactions, including modifications or amendments to the Secure LLC Sale Agreement that would not have a material adverse effect on the Debtors, their creditors or the estate without any further delay. * * * Backgrounder The Kaiser Aluminum Debtors own several parcels of raw land located in Spokane, Washington. These surplus properties are near, but not contiguous with or utilized by the Debtors' alumina smelter in Mead, Washington. Two of these properties are located to the north and west of the actual plant site -- Parcels 3 and 6B -- and another is located to the east -- Parcel 4. Parcels 3 and 6B have never been used by the Debtors in the operation of the Mead facility or for any other purpose and, in fact, are zoned for residential use only. While zoned for industrial use, Parcel 4 also has not been used by the Debtors in the operation of Mead facility or for any other purposes. As undeveloped land, the Surplus Properties does not contain any buildings or other improvements and would require a full range of infrastructure, including streets, a sewer system and electricity, as a part of their development. The Sale Agreements As a result of the Debtors' marketing efforts concerning the surplus land, the Debtors and Secure Self Storage, LLC entered discussions about purchasing Parcels 3 and 6B. The Debtors subsequently entered into a purchase and sale agreement with Secure LLC, pursuant to which the Debtors agreed to sell Parcels 3 and 6B for $1,230,000. The Debtors also entered into discussions, and subsequently reached a purchase and sale agreement, with the Jack E. Hessel Trust to sell Parcel 4 for $1,370,000. Both Sale Agreements contain substantially similar terms: (a) The Surplus Properties are being sold on an "as is, where is" basis with all faults and without any warranties, representations or guarantees, either express or implied, as to the condition, fitness for any purpose, merchantability, or any other warranty or any kind, nature or type from or on behalf of the Debtors; (b) Secure LLC is required to deposit $50,000 and Jack Hessel is required to deposit $60,0000, in earnest money with a qualified title insurance company issuing the title policies for both of the Surplus Properties. The earnest amounts will be credited towards the applicable purchase price upon closing of each sale. Except in limited circumstances, the earnest amounts cannot be refunded after the expiration of due diligence periods identified in each of the Sale Agreements; (c) In the event that the Court orders that auctions are to be held for the sale of the Surplus Properties and Secure LLC or Jack Hessel are not the successful bidders of those properties, Secure LLC and Jack Hessel will each be entitled to receive reimbursement of the lesser of: -- their reasonable out-of-pocket expenses incurred in connection with purchases of the Surplus Properties; or -- 3% of the applicable purchase price. (Kaiser Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service, Inc., 215/945-7000) KSAT: Obtains Canadian Certificate of Intent to Dissolve -------------------------------------------------------- A certificate of intent to dissolve was issued to KSAT Satellite Networks Inc., under date of December 12, 2003 pursuant to the Business Corporations Act (Yukon) (the "YBCA"), as approved by the shareholders of KSAT at a special meeting duly called for the purpose and held on the 20th day of June, 2003, at which the shareholders passed a special resolution requiring KSAT to be liquidated and dissolved voluntarily under the provisions of the YBCA. As required by the provisions of the YBCA, KSAT will publish and deliver notice of the issuance of the certificate to each known creditor, which notice will state that any person who has any claim against KSAT must file proof of such claim with KSAT on or before February 26, 2004, after which time the property of KSAT will be distributed amongst the persons entitled thereto, having regard to the claims of which KSAT then has notice. Prior to commencing dissolution proceedings, KSAT was in the satellite telecommunications business in China. The common shares of KSAT trade on the Canadian NEX Board of the TSX Venture Exchange under the trading symbol "KSA.H". LAIDLAW: Greyhound Meets Revolving Credit Facility Requirements --------------------------------------------------------------- In October 2000, Greyhound Lines, Inc., entered into a revolving credit facility to fund working capital needs and for general corporate purposes. On May 14, 2003, Greyhound entered into an amended and restated revolving credit facility superceding the previous facility. Kevin E. Benson, President, Chief Executive Officer, and Director of Laidlaw International Inc., relates that letters of credit or borrowings are available under the Greyhound Facility based on the total of 80% of the appraised wholesale value of bus collateral, plus 65% of the quick sale value of certain real property collateral, minus $20,000,000 -- which at August 31, 2003, aggregated to $113,800,000 -- subject to a maximum of $125,000,000, inclusive of a $70,000,000 letter of credit sub- facility. Borrowings under the Greyhound Facility are available at a rate equal to Wells Fargo Bank's prime rate plus 1.5% per annum or LIBOR plus 3.5% per annum, as selected by Greyhound. Letter of Credit fees are 3.5% per annum. Borrowings under the Greyhound Facility mature on October 24, 2004. The Greyhound Facility is secured by liens on substantially all of Greyhound's assets and the stock and assets of certain of its subsidiaries. The Greyhound Facility is subject to certain affirmative and negative operating and financial covenants, including: -- maximum total debt to cash flow ratio; -- minimum cash flow to interest expense ratio; -- minimum cash flow; -- limitation on non-bus capital expenditures; -- limitations on additional liens, indebtedness, guarantees, asset disposals, advances, investment and loans; and -- restrictions on the redemption or retirement of certain subordinated indebtedness of equity interest, payment of dividends and transactions with affiliates, including Laidlaw International, Inc. As of August 31, 2003, Mr. Benson reports that Greyhound had $30,100,000 cash borrowings under the Facility, issued letters of $46,700,000, and had $37,000,000 in availability. As of August 31, 2003, Greyhound was in compliance with all covenants. But based on Greyhound's current financial forecast, the management is unable to predict with reasonable assurance whether Greyhound will remain in compliance with the terms of the Greyhound Facility for the remainder of Calendar 2003 and 2004. In the audit report dated March 26, 2003, Greyhound's auditors included an explanatory paragraph that stated that Greyhound's consolidated financial statements had been prepared assuming Greyhound will continue as a "going concern." If Greyhound fails to remain in compliance with the existing covenants, as modified, Greyhound will seek further modifications to the Greyhound Facility. Additional modifications or the cost of the modifications or other further changes to the Facility could have a material adverse effect on Greyhound, Mr. Benson admits. If the further modifications are required but are not obtained from the lenders under the Greyhound Facility, Greyhound may seek a replacement for the Facility from other financing sources. If alternate sources of financing are not then available, then Greyhound may not be able to satisfy its obligations as they become due and may not be able to continue as a "going concern." (Laidlaw Bankruptcy News, Issue No. 43; Bankruptcy Creditors' Service, Inc., 215/945-7000) LEIGH ENTERPRISES: Case Summary & 14 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Leigh Enterprises, Inc. dba A.D. Price Funeral Establishment POB 1291 Richmond, Virginia 23210-1291 Bankruptcy Case No.: 03-41964 Type of Business: Funeral Establishment Chapter 11 Petition Date: December 29, 2003 Court: Eastern District of Virginia (Richmond) Judge: Douglas O. Tice Jr. Debtor's Counsel: Robert A. Canfield Canfield, Shapiro, Baer, et al. 2201 Libbie Avenue, Suite 200 Richmond, VA 23230 Tel: 804-673-6600 Fax: 804-673-6604 Total Assets: $1,083,550 Total Debts: $2,154,316 Debtor's 14 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ BB&T All Assets of the $1,200,000 Business to include ($1,081,050 all real estate, secured.) vehicles and other assets. Consolidated Bank & Trust, All Real Estate $475,000 Inc. ($941,700 POB 26823 secured.) Richmond, VA 23261 Industrial Development Auth. 212 E. Leigh Street $212,000 Richmond, VA 23219 ($800,000 secured.) Batesville Casket Co. $135,000 Richmond Economic 212 E. Leigh Street $66,980 Development Richmond, VA 232190 ($800,000 secured.) Verizon $23,092 City of Richmond $15,758 B&L Cremations Systems $7,875 BB&T Bankcard $6,459 City of Richmond $3,973 Nextel Communications $2,868 LeClair Ryan $2,291 AT&T $1,576 Verizon $1,444 LITEGLOW INDUSTRIES: Bankruptcy Raises Going Concern Uncertainty ---------------------------------------------------------------- The financial statements of Liteglow Industries Inc. have been prepared assuming that Liteglow Industries, Inc. will continue as a going concern. The Company has suffered losses from operations during the nine months ended September 30, 2003. On October 2, 2003, Liteglow Industries, Inc. filed a voluntary petition of relief, pursuant to Chapter 11 of the United States Bankruptcy Act, in the United States Bankruptcy Court for the Southern District of Florida, case number 03-27244-BKC-RBR. Prior to the filing, the lender providing the line of credit to the Company, informed the Company that it was in technical default of a loan covenant. Furthermore, at September 30, 2003 the Company could not demonstrate that it had sufficient liquidity to meet its routine operating costs for the next year. These circumstances raise substantial doubt about the entity's ability to continue as a going concern. The Company believes that the following events necessitated the need to file for bankruptcy protection. Prior to the filing, the lender providing the line of credit to the Company informed the Company that it was in technical default of a loan covenant; however, the Company disputes the merit of this claim. Additionally, certain major chain store customers returned significant amounts of its unsold inventory under a guarantee clause, and took credits that offset invoices that were to be paid in the current period thereby impairing the Company's cash flow. Finally, litigation costs relating to a settled patent infringement case exceeded $250,000 and other threatened and pending lawsuits involving the Company necessitated the Company seeking relief. The Company is unsure of the post-petition impact the bankruptcy will have on operations. Since the date of filing of the Petition, the Company has entered into a Court approved cash collateral agreement with Merrill Lynch Business Financial Services, Inc. which authorizes the Company to use revenues to operate the business while in Chapter 11. The Company has the sole and exclusive right to file a Plan of Reorganization on or before February 2, 2004. LITFUNDING: Reports Events Leading to Bankruptcy Filing in Nov. --------------------------------------------------------------- On April 2, 2003 several persons who alleged that they were joint venturers and creditors of Litfunding Corporation, a Nevada corporation, filed an involuntary bankruptcy petition against the Company in the United States Bankruptcy Court, Central District of California, Case No. LA03-19005 ES. The filing of the Petition severely damaged the Company by, among other things, severely devaluing its stock price. The Company believes that the Petition was filed in bad faith, first because the Company does not believe that Petitioners hold any claims against the Company, and second because the Company believes that the Petitioners filed the Petition solely to advance collateral litigation objectives. The Company has spent the past eight months contesting the Petition, and it has expended significant resources on this effort. The material facts relative to this litigation, and the Company's recent entry into a Chapter 11 proceeding, are summarized below: o On May 15, 2003, the Company moved the United States Bankruptcy Court for an order of dismissing the Petition. The Court treated the Company's motion as one for summary judgment and denied it on the ground that there were disputed factual issues, which would require an evidentiary hearing. On June 19, 2003, the Petitioners moved the Court for an order appointing an interim trustee. The Court denied that motion. The Court also set the matter for trial on August 28 and August 29, 2003. o In July, the Court continued the trial, upon application by the Petitioners, until September 23, 2003. Subsequently, the Court continued the matter to November 24 and 25th, 2003 and ordered the parties to mediation. o A two day mediation occurred in September of 2003. Unfortunately, this mediation was unsuccessful. Approximately ten days after the mediation failed, counsel for the Petitioners sought a meeting to present another settlement proposal. A meeting was held on October 10, 2003, a Friday, to consider this proposal. This meeting was attended by the President of the Company and its counsel. At the conclusion of this meeting the parties entered into a stipulation. In summary, the Stipulation provided: (1) the Petitioners would convert their involuntary Chapter 7 proceeding to an involuntary Chapter 11 proceeding; (2) the Company would consent to the entry of an order of relief under Chapter 11; (3) the Company would reserve all of its rights to seek damages against the Petitioners relating to the bad-faith filing of the involuntary petition; and (4) the Petitioners agreed not to seek the appointment of a trustee for six months. o Since the Stipulation provided for a consensual Chapter 11 filing, the Company believed that it required the formal approval of the Company's Board of Directors prior to being valid and binding under Nevada law. Accordingly, on the very next business day, October 13, 2003, the Company's Board of Directors met to consider the Stipulation. After carefully considering the merits of the Stipulation, the Board of Directors voted to reject the Stipulation as written, because there were provisions therein that could negatively impact the ability of the Company's operating subsidiary, California Litfunding, a California corporation to raise capital prospectively, even though California Litfunding was not entering into bankruptcy proceeding under this agreement. Although the Petitioners were informed of this vote, they elected to file the Stipulation with the Court, and thereafter they endeavored to enforce the Stipulation through a motion. In the Motion To Enforce, the Petitioners contended, among other things that the Stipulation was enforceable without the necessity of a vote of the Company's Board of Directors. o On November 14, 2003, a hearing was held on Motion To Enforce. A hearing on a motion filed by Litfunding Nevada seeking an order compelling the Petitioners to post a bond to secure any prospective damage judgment the Company might obtain against the Petitioners for the wrongful involuntary filing was heard on the same date. After considering the arguments of both parties, the Court concluded that the Stipulation was enforceable. Accordingly the Court granted the Motion To Enforce. An order for relief placing the Company into a Chapter 11 proceeding was entered by the Court on November 19, 2003. The Court also ordered the Petitioners to post a bond in the amount of $500,000. As a result of the foregoing: o The Company has been placed into Chapter 11 proceeding effective November 19, 2003. None of the Company's subsidiaries are in a bankruptcy proceeding. o The Company is a holding company. Accordingly, it has nominal operations. The operating entity is California Litfunding, a California company, which is not in a bankruptcy. The Company does not believe that the Petitioners hold any claims against the Company. o The Company has made several offers of settlement to the Petitioners. However, to date, none of these offers have been accepted. o California LitFunding, which is not in bankruptcy, is seeking new sources of capital to fund its business operations, and it is in negotiations with several parties to reach this goal. o The Company looks forward to promptly resolving its Chapter 11 proceeding, either through the dismissal of this proceeding, or through the confirmation of a Chapter 11 plan. LTV: ACC Files Preliminary Avoidance Suits Settlement Report ------------------------------------------------------------ The Official Committee of Administrative Claimants of The LTV Corporation Debtors presents a Preliminary Report Regarding Results Obtained from the Compromise and Settlement Proposal for all LTV Steel Avoidance Litigation to inform the Court of the preliminary results of the ACC's settlement of the LTV Steel avoidance actions. Matthew R. Goldman, Esq., at Baker & Hostetler LLP, in Cleveland, Ohio, recounts that the ACC's goal is to settle as many currently pending avoidance actions as possible in which LTV Steel is the Plaintiff. To achieve that goal, the ACC contacted hundreds of defendants and extended settlement offers to those defendants in a good faith effort to resolve as many of the pending adversary proceedings as possible. To date, Mr. Goldman reports that 261 avoidance actions have been successfully settled. Approximately $1,300,000 has been collected and forwarded to LTV Steel, and a substantial number of administrative claims have been reduced or eliminated. A number of the adversary proceedings could not be settled because some of the defendants have filed their own bankruptcy cases or are in receivership proceedings. According to Mr. Goldman, the vast majority of the settled cases do not require the filing of a motion to compromise under Fed. R. Bankr. P. 9019. Rather, the ACC is required to file a report with the Court disclosing those cases that have been settled. Mr. Goldman relates that the ACC will file a final report informing the Court of all settled cases. In addition, LTV Steel is in the process of counter-signing the settlement agreements, where applicable, and filing the stipulations and agreed orders dismissing the settled avoidance actions. (LTV Bankruptcy News, Issue No. 59; Bankruptcy Creditors' Service, Inc., 215/945-7000) LUBY'S INC: First-Quarter 2004 Net Loss Widens to $4.5 Million -------------------------------------------------------------- Luby's, Inc. (NYSE:LUB) announced the results of operations for the first quarter of fiscal 2004, ended November 19, 2003. Bank debt paydowns, primarily from the sale of real estate, totaled $2.8 million in the first quarter, resulting in an ending bank debt balance of $88.8 million. The Company also posted lower prime costs (food and labor) as a percent of sales compared to the same quarter last year. "The first quarter helps bring into focus the operational improvements that have occurred over the past year," said Chris Pappas, President and CEO. "As a Company, we are operating more efficiently at the restaurant level, which is indicative of our hard work. We also are continuing to implement the other components of our business plan, including selling properties to pay down our debt." For the first quarter, total Company sales declined approximately 3.9% to $70.0 million from $72.8 million a year ago. Of the total decrease, $1.5 million relates to a 2.2% decline in same-store sales. The remainder relates to net store closures not included in the business plan. Total prime costs for the first quarter decreased as a percentage of sales from 58.0% in the first quarter of 2003 to 55.3% in the first quarter of 2004. Food cost decreased from 27.7% a year ago to 27.2% this year, complemented by a labor cost decrease from 30.3% in 2003 to 28.1% this year. The Company was able to achieve a lower food cost, even in the face of higher beef, dairy, and produce prices, because of store closures and the efforts of the managers using food budgeting tools. The decrease in labor cost was primarily the result of the continued efforts to improve efficiency. "Our managers have worked especially hard for the Company over the past few quarters as we have introduced new systems, cost management tools, and the 'Classic Combo' meals in the restaurants. You can see the fruits of their work in our improved year-over-year operational results, despite factors outside of their control, like commodity food prices," said Pappas. "We salute them for their efforts." For the first quarter, general and administrative expenses declined $715,000 compared to the same period last year. This was due in part to increased efforts related to the Company's business plan to better control expenses at the corporate level. Interest expense was higher on a year-over-year basis, mostly due to an increase in the amortization on the discount on the Company's subordinated debt and an increase in the effective interest rate on the Company's outstanding debt. Luby's reported a loss from operations that compared favorably to the prior year, posting a loss of $371,000 in 2004 compared to a loss of $1.5 million in 2003. The Company experienced a decline in other income, net from $2.9 million a year ago to $192,000 this year, mostly due to gains on real estate property sold during the first quarter of fiscal 2003. The Company recognized two charges to its earnings during the first quarter as a result of store closures and changes in estimated fair value of properties held for sale. The first charge of approximately $276,000 -- shown as a provision for asset impairments and restaurant closings -- impacted the Company's income (loss) from operations. This provision primarily includes write-downs to properties marked for disposal under prior plans. The second charge of approximately $2.0 million -- shown as discontinued operations -- includes noncash charges of approximately $742,000 whereby applicable restaurants closed during the fiscal year were written down to their net realizable value. Additional charges within discontinued operations included operating losses from those closed locations, allocated interest expense, and termination costs associated with the implementation of the business plan to date, including lease settlements and carrying costs of closed stores. Luby's reported a loss before discontinued operations for the first quarter of $2.5 million and a net loss of $4.5 million. This compares to the first quarter of fiscal 2003, which featured a loss before discontinued operations of $13,000 and a net loss of $3.1 million. The Company posted an EBITDA of $4.2 million in the first quarter of 2004, compared to an EBITDA of $2.8 million in the first quarter of 2003 (see EBITDA reconciliation below). The Company previously announced that during the implementation of the business plan it will report same-store sales and cash flow results of the Company's core stores. Same-store sales for these core stores declined 2.0% for the first quarter of fiscal 2004 compared to a 2.6% decline for the same period last year. These stores achieved a cash flow margin of 13.7% compared to last year's results of 13.1%. Store-level cash flow margins are defined as sales minus food cost, payroll, and occupancy and other expenses, as a percent of sales. Luby's provides its customers with delicious, home-style food, value pricing, and outstanding customer service at its 142 restaurants in Dallas, Houston, San Antonio, the Rio Grande Valley, and other locations throughout Texas and other states. Luby's stock is traded on the New York Stock Exchange (symbol LUB). For more information about Luby's, visit the Company's website at www.lubys.com. As reported in Troubled Company Reporter's May 27, 2003 edition, Luby's was notified by its subordinated note holders, Chris and Harris Pappas, that as a result of the ongoing default under the Company's senior indebtedness (bank debt), the Company's subordinated debt held by the Pappases was also in default. The bank debt default also triggered an automatic suspension of interest payments on the subordinated debt. MACHINING CORPORATION: Signs-Up Brouse McDowell as Attorneys ------------------------------------------------------------ Machining Corporation of America, Inc., is asking for approval from the U.S. Bankruptcy Court for the Northern District of Ohio, Eastern Division, to retain and employ Brouse McDowell, LPA as Counsel. Brouse McDowell is particularly well suited for the type of representation required by the Company, having expertise in all aspects of the law that may arise in Debtor's Chapter 11 case. In particular, Brouse McDowell has bankruptcy, business restructuring, business law and litigation expertise, the Debtor adds. In this retention, Brouse McDowell will: a. advise Debtor of its rights, powers and duties as a debtor-in-possession in continuing to operate and manage its business and property; b. prepare on behalf of Debtor all necessary and appropriate applications, motions, pleadings, draft orders, notices, schedules and other documents, and reviewing all financial and other reports to be filed with the Court in its Chapter 11 case; c. advise Debtor concerning, and preparing responses to, applications, motions, pleadings, notices and other papers that may be filed and served in its Chapter 11 case; d. advise Debtor concerning, and assisting in the negotiation and documentation of, the refinancing or sale of Debtor's assets; debt and lease restructuring; executory contract and unexpired lease assumptions, assignments or rejections; and related transactions; e. review the nature and validity of liens asserted against Debtor's property and advising Debtor concerning the enforceability of such liens; f. advise Debtor concerning the actions that it might take to collect and recover property for the benefit of its estate; g. counsel Debtor in connection with the formulation, negotiation and confirmation of a plan of reorganization and related documents; and h. perform such other legal services for and on behalf of Debtor as may be necessary or appropriate in the administration of its Chapter 11 case and Debtor's business, including advising and assisting Debtors with respect to debt restructuring, corporate governance issues related to such restructuring, stock or asset dispositions and general business and litigation matters. Marc B. Merklin, Esq., a shareholder of Brouse McDowell reports that the current hourly rates the firm charges range from: Shareholders $190 to $315 per hour Associates $125 to $220 per hour Paralegals $85 to $125 per hour Law Clerks $35 per hour Headquartered in Barberton, Ohio, Machining Corporation of America, Inc., is a production manufacturing facility for high- volume and short-lot machining, heat treatment, and assembly. The Company filed for chapter 11 protection on December 24, 2003 (Bankr. N.D. Ohio Case No.: 03-56738). Marc B. Merklin, Esq., at Brouse McDowell, LPA represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed both estimated debts and assets of over $10 million. MAGELLAN HEALTH: Completes Financial Workout & Exits Chapter 11 --------------------------------------------------------------- Magellan Health Services, Inc., the nation's largest behavioral health care company, has successfully consummated its financial restructuring, establishing a sound capital structure that will support and enhance the long-term growth and potential of its business. Magellan's restructuring reduced its debt by approximately $600 million and added approximately $150 million in new equity. Accordingly, Magellan today exited from the Chapter 11 proceeding it commenced on March 11, 2003. Steven J. Shulman, chief executive officer of Magellan, said, "We set a goal of establishing a capital structure that would provide a healthy financial foundation for our business, and we are very proud to have achieved that goal while increasing the quality of service to our customers, members and providers. "The 'new Magellan' delivers unparalleled service, strength and solutions to all of our stakeholders, and our organization is energized to grow. With our debt concerns behind us, we can completely focus management's time and energy on our business and providing a platform for growth and enhanced service. Further, we can explore opportunities for innovation that leverage our expertise as the market leader," Shulman concluded. In giving effect to its restructuring plan, the Company exercised its right to increase proportionately the number of common shares to be issued pursuant to the plan and is issuing 2.3 shares for each share stated in the plan to be issued. As a result, Magellan is issuing an aggregate of approximately 35.3 million shares. The Company's common shares will begin trading today on the Nasdaq Stock Market under the ticker symbol "MGLN". Magellan also announced the appointment of the new Board of Directors as set forth in its plan of reorganization. The Board comprises the following individuals: -- Steven J. Shulman (board chairman), chief executive officer, Magellan Health Services -- Rene Lerer, M.D., president and chief operating officer, Magellan Health Services -- Saul E. Burian (compensation committee chair), director, Houlihan, Lokey, Howard & Zukin -- Michael Diament, portfolio manager and director of bankruptcies and restructurings, Renegade Swish, LLC -- Robert Haft, chairman, National Pharmacies Group -- Mark L. Hilson, managing director, Onex Corporation -- Robert M. Le Blanc (lead director), managing director, Onex Corporation -- Christopher Govan, managing director, Onex Corporation -- Michael P. Ressner (audit committee chair), adjunct professor of finance and accounting, North Carolina State University. The Company announced that, as part of its reorganization, it entered into a new credit agreement with Deutsche Bank and other lenders that provides the Company with $100.0 million in term loans, an $80.0 million letter of credit facility and a $50.0 million revolving credit facility. The term loans and any loans under the revolving credit facility will bear interest at an annual rate equal to LIBOR (or an alternate domestic reference rate) plus 2.5%, and the letter of credit facility will bear interest at an annual rate of 3.5%, subject to adjustment in certain circumstances as provided by the credit agreement. The facility will mature on August 15, 2008. There currently are no loans outstanding under the revolving facility. The Company used the proceeds from the term loans, together with other funds, to repay all loans outstanding under its previous credit facilities. As set forth in the plan, the common shares consist of two newly authorized classes of common stock. Approximately 26.9 million shares of Ordinary Common Stock are being issued to former creditors and shareholders and approximately 8.4 million shares of Multi-Vote Common Stock are being issued to an affiliate of Onex Corporation in consideration of a cash investment of approximately $100.6 million committed to by Onex as part of the restructuring plan. In general, shares of the two classes of common stock have the same powers, privileges and rights, except that the shares of Multi-Vote Common Stock collectively are entitled to cast 50% of the aggregate votes that may be cast by all common stockholders on matters that come before common stockholders for a vote, and are entitled to elect, voting as a separate class, four of the nine directors. The Ordinary Common Stock is entitled to elect, voting as a separate class, three of the nine directors. The remaining two directors are to be elected by all common stockholders voting together as one class (with the Multi-Vote Common Stock having 50% of the vote). Former common stockholders of Magellan as of the close of business today will receive under the plan, for every 310 shares of old common stock held, one share of Ordinary Common Stock and a warrant to purchase one share of Ordinary Common Stock for $30.20 at any time through January 5, 2011. In the aggregate, approximately 114,165 shares of Ordinary Common Stock and warrants for an additional 114,165 shares are being issued to former common shareholders. Former preferred shareholders receive warrants on the same terms to purchase an aggregate of 456,660 shares of Ordinary Common Stock, as well as 456,660 shares of Ordinary Common Stock. Pursuant to the plan, a warrant was issued to Aetna, Inc. to purchase 230,000 shares of Ordinary Common Stock at $10.48 per share at any time between January 5, 2006 and January 5, 2008. A management incentive plan providing for stock options and other equity incentive awards covering up to a total of approximately 6.4 million shares of Ordinary Common Stock also became effective in accordance with the restructuring plan, under which 167,516 shares were granted to executive management and options for approximately 4.3 million shares were granted to members of management (including executive management). As a result, on a fully diluted basis, Magellan would have an aggregate of 40.4 million shares outstanding or subject to outstanding options and warrants. The share issuances included approximately 5.1 million shares of Ordinary Common Stock purchased on the exercise of subscription rights provided to certain creditors under the restructuring plan at a price of $12.39 per share. Of the approximately 35.3 million shares being issued, approximately 0.5 million shares are being held pending the resolution of certain disputed claims in the bankruptcy. All previously outstanding shares and notes were cancelled effective yesterday and their former holders and other former creditors of the company will be receiving notices regarding the distributions to be made to them under the restructuring plan. All previously outstanding options and warrants also were cancelled as of 4:00 pm Eastern time yesterday. Further information regarding the transactions that became effective yesterday in accordance with the restructuring plan is included in the Current Report filed by Magellan on the same day with the Securities and Exchange Commission. Headquartered in Columbia, Md., Magellan Health Services is the country's leading behavioral managed care organization. Its customers include health plans, corporations and government agencies. MAGELLAN HEALTH: Secures Court Approval of Stipulation with MTS --------------------------------------------------------------- Magellan Health Services, Inc., obtained the U.S. Bankruptcy Court's approval of a Stipulation MTS Health Partners L.P., resolving claim dispute between the parties. The salient terms of the Stipulation are: (1) The Amended Proofs of Claim will be reduced and allowed for distribution purposes as one General Unsecured Claim against the Debtors for $2,100,000. Except for the Amended Proofs of Claim, as reduced and allowed pursuant to the Stipulation and Order, MTS will have no other claims against the Debtors in their Chapter 11 cases; (2) Pursuant to the Plan, MTS is deemed to elect the Partial Cash-Out Election in respect of the shares of New Common Stock that MTS is entitled to receive pursuant to the Plan; (3) The Agreement will be deemed rejected pursuant to Section 365 as of October 17, 2003; (4) The Stipulation constitutes a full and final compromise of any claims, legal or equitable, arising out of the Agreement, the services rendered pursuant to it, or the rejection of the Agreement or which were or could have been asserted by the Parties in the District Court Action, and the Parties mutually release those claims and agree that without further delay, they will file a stipulation of dismissal with prejudice of the District Court Action with the Clerk of the United States District Court for the Southern District of New York pursuant to Rule 41(a)(1)(ii) of the Federal Rules of Civil Procedure; and (5) The payment of the Amended Proofs of Claim will be in full and complete satisfaction of any and all claims or causes of action that MTS has or may have against the Debtors arising in connection with the District Court Action or the Amended Proofs of Claim. Backgrounder Prior to the Petition Date, the Magellan Health Debtors entered into a letter agreement with MTS Health Partners L.P., dated June 15, 2002, pursuant to which MTS agreed to provide certain financial advisory services to the Debtors. In the fall of 2002, the Debtors employed Gleacher Partners LLC to act as their financial advisors. In October 2002, alleging that the Debtors breached the Agreement, MTS filed a complaint against the Debtors in the United States District Court for the Southern District of New York seeking damages. On December 27, 2002, the Debtors answered the complaint denying all allegations and asserted counterclaims against MTS. On the Petition Date, all proceedings in the District Court Action were stayed. On March 13, 2003, MTS filed Claim Nos. 1 through 5 against certain of the Debtors, asserting claims aggregating $1,200,000 plus additional unliquidated amounts. On July 24, 2003, MTS amended the Proofs of Claim with Claim Nos. 4250, 4251, 4252, 4254, and 4255 to increase the claims to $11,000,000. On August 8, 2003, MTS asked the Court to compel the Debtors to allow or promptly object to the MTS Claim by establishing a date by which the Debtors must object to the Amended Proofs of Claim. On August 18, 2003, the Debtors objected to the Original Proofs of Claim, but not the Amended Proofs of Claim. On September 12, 2003, MTS withdrew its request and agreed that the Claims Objection would be deemed to object to the Amended Proofs of Claim. On September 18, 2003, the Debtors sought to reject the Agreement pursuant to Section 365 of the Bankruptcy Code. (Magellan Bankruptcy News, Issue No. 20: Bankruptcy Creditors' Service, Inc., 215/945-7000) Magellan Health Services is headquartered in Columbia, Maryland, and is the leading behavioral managed healthcare organization in the United States. Its customers include health plans, corporations and government agencies. The Company filed for chapter 11 protection on March 11, 2003, and confirmed its Third Amended Plan on October 8, 2003. Under the Third Amended Plan, nearly $600 million of debt will drop from the Company's balance sheet and Onex Corporation will invest more than $100 million in new equity. MIRANT CORP: Wants Nod to Hire Heller Ehrman as Special Counsel --------------------------------------------------------------- Pursuant to Section 327(e) of the Bankruptcy Code, Mirant Corp. seeks the Court's permission to employ Heller Ehrman White & McAuliffe LLP as their special counsel. According to Michelle C. Campbell, Esq., at White & Case LLP, in Miami, Florida, Heller served as project counsel on the Mirant Oregon-Cayote Springs 2 (Boardman, OR) project since its acquisition from Enron in 2000. At present, the project is jointly and equally owned by Avista Corporation and non-debtor Mirant Oregon LLC. Heller continues to represent the interest of both owners in connection with the development, permitting and operation of the facility. Ms. Campbell tells the Court that the Debtors engaged Heller in connection with the failure of the project's transformer, recovery of insurance funds and potential legal action against the transformer manufacturer. Heller will also issue an opinion letter regarding the project in connection with the Debtors' DIP financing facility. Ms. Campbell relates that Heller also served as project counsel on the Mint Farm Generation-Mint Farm Project (Longview, WA), since its inception. Heller performed services in connection with the development, permitting and construction of the facility. At present, construction on the project has been suspended. The Debtors anticipate that Heller will continue to serve as project counsel to the Cayote Springs 2 project and assist with non-bankruptcy related aspects of any sale or financing of the Mint Farm project. The Debtors believe that it is crucial to employ Heller in their Chapter 11 cases to ensure that they can draw on the firm's vast knowledge. The Debtors will require Heller to play a role in the Chapter 11 cases for them to receive as much value as possible and that none of the professionals are "reinventing the wheel." Ms. Campbell points out that if the Court does not authorize the Debtors to employ Heller, the Debtors, their estates and all parties-in-interest would be unduly prejudiced by the time and related expense for other counsel to familiarize themselves with the work required. Ms. Campbell explains that Heller will not render any services typically performed by the Debtors' bankruptcy counsel. Among other things, Heller will not ordinarily be involved in the interfacing with the Court nor will Heller render services in connection with the administration of the Debtors' Chapter 11 cases. Scot MacCormack, Esq., a partner of Heller, tells the Court that to best of his knowledge, his firm does not have any connection with or any interest adverse to the Debtors, their creditors, or nay other party-in-interest, or their attorneys and accountants. According to Mr. MacCormack, within one year prior to the Petition Date, Heller received $166,000 from the Debtors in connection with its prepetition services. Moreover, Heller is still owed $1,232 for services rendered to and cost incurred on behalf of, the Debtors prior to the Petition Date. Subject to the provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local Rules and the Court orders, Heller will seek compensation based on its customary hourly rates that are in effect at the time the services are rendered. Heller will also seek reimbursement of its reasonable out-of-pocket expenses. (Mirant Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) MOBILE TOOL: Product Liability Claims Bar Date Set for Jan. 31 -------------------------------------------------------------- By Order of the U.S. Bankruptcy Code for the District of Delaware, January 31, 2004, is fixed as the deadline for filing proofs of claim based on product liability and personal injury claims against Mobile Tool International, Inc., and its debtor- affiliates. Proof of claim forms for Product Claims must be received by the Claims Agent on or before 4:00 p.m. Eastern time on Jan. 31. Claims must be sent to: Delaware Claims Agency LLC c/o Mobile Tool International, Inc. and MTI-Insulated Products, Inc. PO Box 515 Wilmington, DE 19899 Tel: 800-838-6773 Four categories of claims are exempted from the bar date: 1. product claims already properly filed with the Clerk of the Bankruptcy Court; 2. claims not classified as product claims; 3. pre-petition claims already paid in full by the Debtors; and 4. Claims previously allowed by Order of the Court. Mobile Tool International, Inc., is an employee-owned manufacturer and distributor of equipment, including aerial lifts, digger derricks and pressurization and monitoring systems, for the telecommunications, CATV, electric utility and construction industries. The Company filed for chapter 11 protection on September 30, 2002 (Bankr. Del. Case No. 02-12826). Steven M. Yoder, Esq., and Christopher A. Ward, Esq., at The Bayard Firm represent the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, it listed $65,250,000 in total assets and $46,580,000 in total debts. MOODY'S CORP: CEO Will Present at Smith Barney Conference Today --------------------------------------------------------------- John Rutherfurd, Jr., Chairman and CEO of Moody's Corporation (NYSE: MCO), will speak at the Smith Barney Citigroup Entertainment, Media and Telecommunications Conference today in Phoenix, Arizona. Mr. Rutherfurd's presentation will begin at approximately 10:15 AM Mountain Time (12:15 PM Eastern Time) and will be webcast live. The webcast can be accessed at Moody's Shareholder Relations Web site at http://ir.moodys.com/ Moody's Corporation (NYSE: MCO), whose June 30, 2003 balance sheet shows a total shareholders' equity deficit of $139 million, is the parent company of Moody's Investors Service, a leading provider of credit ratings, research and analysis covering debt instruments and securities in the global capital markets, and Moody's KMV, a leading provider of market-based quantitative services for banks and investors in credit-sensitive assets serving the world's largest financial institutions. The corporation, which employs approximately 2,100 employees in 18 countries, had reported revenue of $1.0 billion in 2002. Further information is available at http://www.moodys.com/ NEXTEL PARTNERS: Repurchases $67.7-Mill. of 12-1/2% Senior Notes ---------------------------------------------------------------- Nextel Partners, Inc., (Nasdaq:NXTP) completed the redemption of $67.7 million aggregate principal amount at maturity of its 12-1/2% senior notes due Nov. 15, 2009. The total amount of the redemption, including accrued interest, of $77.2 million was funded with the net proceeds of the company's recently completed public equity offering. Immediately following the completion of this transaction, the remaining aggregate principal amount at maturity of the 12-1/2% senior notes was approximately $146.3 million. "Nextel Partners continues to take steps to reduce its cost of capital and strengthen its financial position," said Barry Rowan, Partners' chief financial officer and treasurer. "As a result of this most recent transaction we have reduced our weighted average cost of debt to 7.5%, a 34% improvement from 11.4% a year ago, and we have lowered our annualized cash interest obligation by approximately $8.5 million." Nextel Partners, Inc., (Nasdaq:NXTP) (S&P, B- Corporate Credit Rating, Positive Outlook), based in Kirkland, Wash., has the exclusive right to provide digital wireless communications services using the Nextel brand name in 31 states where approximately 53 million people reside. Nextel Partners offers its customers the same fully integrated, digital wireless communications services available from Nextel Communications including digital cellular, text and numeric messaging, wireless Internet access and Direct Connect(SM) digital walkie-talkie, all in a single wireless phone. Nextel Partners customers can seamlessly access these services anywhere on Nextel's or Nextel Partners' all-digital wireless network, which currently covers 293 of the top 300 U.S. markets. To learn more about Nextel Partners, visit http://www.nextelpartners.com/ To learn more about Nextel's services, visit http://www.nextel.com/ NEXTWAVE TELECOM: Wants 45 More Days to File Chapter 11 Plan ------------------------------------------------------------ NextWave Telecom Inc., asked the court overseeing its chapter 11 case for a 45-day extension of the company's exclusive right to propose a reorganization plan, according to Dow Jones Newswires. The wireless carrier, which has the sole right to file a chapter 11 plan until Jan. 9, said it wants court permission to stretch its exclusivity period until Feb. 27, long enough to close a $1.4 billion sale of wireless personal communication system licenses to Cingular Wireless LLC. The Federal Communications Commission has yet to approve transfer of the licenses, the company said in court papers asking for the extension of exclusive rights. If the FCC approves the deal, NextWave could get at least $666 million to fund its reorganization plan. The FCC, which is NextWave's largest creditor, also would collect a share of the sale proceeds. Since NextWave filed for bankruptcy protection in June 1998, it has proposed three strategies to exit chapter 11 and pay creditors, but continued litigation with the FCC has hindered the process. However, the company said it has made progress in coming to terms with the FCC over the Cingular transaction, and hopes to move toward an overall resolution of disputes with the agency-key to any reorganization plan, NextWave said in court papers. The company is also seeking permission to extend its severance program until May 7, 2004, or until a plan is confirmed. NextWave filed its first reorganization plan in June 1999. (ABI World, January 2, 2004) NOVADEL PHARMA: Hires J.H. Cohn as New Independent Accountants -------------------------------------------------------------- On November 26, 2003, Novadel Pharma Inc.'s independent accounting firm, Wiss & Company, LLP, advised the Company that it resigned as the independent accountant to audit the Company's financial statements. W&C's reports on the Company's financial statements for the periods ended July 31, 2003 and July 31, 2002 were modified as to an uncertainty relative to going concern. The Company's Board of Directors accepted the resignation of W&C. The Company engaged J.H. Cohn, LLC, as its new independent accountants as of November 26, 2003. ON SEMICONDUCTOR: Refinances About $48 Million of Term Loans ------------------------------------------------------------ ON Semiconductor (Nasdaq:ONNN) successfully refinanced approximately $48 million of the term loans under its senior secured bank facility with the proceeds of a new loan provided to the company's joint venture in Leshan, China by the China Construction Bank. This transaction reduces the interest rate on approximately $48 million of ON Semiconductor's bank debt from LIBOR plus 325 basis points to LIBOR plus 150 basis points. The new loan facility is comprised of two $24 million tranches, one with a 10-year term and one with a three-year term extendible for an additional three years under certain circumstances. "As we continue to increase our presence in China, this transaction is an important step in financing our development and investment in this rapidly growing market," said Donald Colvin, ON Semiconductor senior vice president and CFO. "Furthermore, the reduced borrowing rate is expected to save ON Semiconductor approximately $1 million per year in interest costs." ON Semiconductor -- whose July 4, 2003 balance sheet shows a total shareholders' equity deficit of about $750 million -- offers an extensive portfolio of power- and data-management semiconductors and standard semiconductor components that address the design needs of today's sophisticated electronic products, appliances and automobiles. For more information, visit ON Semiconductor's Web site at http://www.onsemi.com/ ON SEMICON.: Files Shelf Registration Statement for Common Stock ---------------------------------------------------------------- ON Semiconductor (Nasdaq:ONNN) has filed a shelf registration statement with the Securities and Exchange Commission relating to the offer, from time to time, of up to 46.0 million shares of common stock by the company and up to 17.25 million shares of common stock by TPG Advisors II Inc., a selling stockholder. The timing and amount of any offerings will depend on market and general business conditions. Unless otherwise described in connection with a particular offering, proceeds from the sale of the shares by the company will be used for general corporate purposes, which may include the repayment of indebtedness. The company will not receive any of the proceeds from the sale of shares by the selling stockholder. ON Semiconductor -- whose July 4, 2003 balance sheet shows a total shareholders' equity deficit of about $750 million -- offers an extensive portfolio of power- and data-management semiconductors and standard semiconductor components that address the design needs of today's sophisticated electronic products, appliances and automobiles. For more information, visit ON Semiconductor's Web site at http://www.onsemi.com/ OTISH MOUNTAIN DIAMOND: Cash Sufficient to Continue Explorations ---------------------------------------------------------------- On November 30, 2003, Otish Mountain Diamond Company acquired 100% of the issued and outstanding shares of Otish Mountain Diamond Corp. in exchange for 15,000,000 shares of Otish Mountain Diamond Company's common stock. Upon 100% shareholder approval by Otish Corp. shareholders, there will be 15,107,750 shares of Otish Mountain Diamond Company's common stock outstanding. The Company has 1,000,000 shares of Series A Preferred Stock outstanding which are owned by Philipp Buschmann which vote 15,000,000 shares. It is anticipated that the Series A Preferred Stock will be redeemed or cancelled by the Company in the near future. Otish Corp. is engaged in diamond exploration activities in the Otish Mountain area of Northern Quebec, Canada. The current exploration program consists of aerial aeromagnetic surveys of Staked Property, ground sampling and laboratory testing of the gathered samples. The Staked Property is located in an under- explored area that is in close proximity to such diamond discovery properties as Ashton Mining and Majescor. The Staked Property is within such a distance to these diamond discovery properties that geologist Jim Chapman believes that there is good potential for the discovery of diamond bearing kimberlites on the Staked Property. The Company believes that it currently has adequate resources to explore the Staked Property in search of an economic deposit of rough diamonds and to complete its exploration program. If, as a result of its exploration program, the Company discovers an economic deposit of rough diamonds on the Staked Property, the Company will execute a feasibility plan for the development of a mining operation on the Property, at which time the Company will need additional funding to execute the plan and develop the mining operation. In the event that, after completion of the exploration program, the Company has not discovered an economic deposit of rough diamonds on the Staked Property, the Company will consider other high potential exploration projects. The Company currently does not offer any products or services. In the event that the Company, as a result of the exploration program, discovers an economic deposit of rough diamonds on the Staked Property, executes a feasibility plan, and develops a mining operation on the Property, the Company intends to offer gem-quality, commercial diamonds. The diamond exploration industry is very competitive. Several diamond exploration firms have operations in the Otish Mountains and in other areas throughout Canada. The Company does not have any existing customers. The Company has exclusive exploration rights to the Staked Property that it has acquired. The Company does not have any patent, trademark or license protection. The Company acquired all necessary licenses and permits required by the government of the Province of Quebec, Canada for mineral exploration on the Staked Property. The Company is conducting a two-year exploration program on approximately 65,000 acres of Staked Property. The Company expects to complete the exploration program either in 2005 or after it discovers an economic deposit of rough diamonds on the Property, whichever occurs first. The Company has spent roughly $130,000 to date and plans to spend another $350,000 for exploration purposes. The Company has two full-time employees and a varying number of subcontractors. The number of subcontractors that the Company uses varies depending on the type and amount of work that is required. The team responsible for developing the exploration program consists of an experienced geophysicist, a managing director with extensive experience in international business, and a governing Board of Directors. The Company selected this team based on skill and experience that it deemed necessary to complete the timely and efficient implementation of the exploration strategy including its proposed objectives. The Company acquired an undivided 100% right, title, and interest in and to certain mining claims covering 491 claims comprising approximately 62,000 acres of staked property in the Otish Mountain and Superior Craton regions of Quebec, Canada pursuant to an Assignment of Interest in Mineral Property Option Agreements, and the exercise of its option to acquire such mining claims pursuant to the following Mineral Property Option Agreements: (1) The "Lac Joubert" Mineral Property Option Agreement, as amended, covering 34 claims comprising approximately 4,341 acres; (2) The "Lac Orillat" Mineral Property Option Agreement, as amended, covering 39 claims comprising approximately 4,978 acres; (3) The "Lac Herve" Mineral Property Option Agreement, as amended, covering 277 claims comprising approximately 34,382 acres; (4) The "Lac Square Rock" Mineral Property Option Agreement, as amended, covering 74 claims comprising approximately 9,488 acres; (5) The "Lac Taffanel" Mineral Property Option Agreement, as amended, covering 60 claims comprising approximately 7,615 acres; (6) The "Lac Leran # 2" Mineral Property Option Agreement, as amended, covering one claim comprising approximately 129 acres; and (7) The "River Ruisseau" Mineral Property Option Agreement, as amended, covering 6 claims comprising approximately 750 acres. In addition, the Company has signed a Joint Venture agreement whereby the Company invested $55,000 with Miranda Gold Corp for a 45% interest in the Lac Leran exploration project which comprises 119 claims of approximately 15,000 acres. The Company currently has a 1-year lease for 300 square feet of office space located at One Penn Plaza, Suite 3600, 250 West 34th Street, New York, NY, 10119. The current lease commitment is $500 per month. The Company also has a 1-year lease for 300 square feet of office space located at 1000 de la Gauchetiere West, Suite 2400, Montreal, H3B 4W5 Canada. The current lease commitment, which varies depending on use of the office space, is an average $400 per month. * * * As previously reported, effective November 10, 2003, the client- auditor relationship between Otish Mountain Diamond Company (formerly First Cypress, Inc.) and BDO Dunwoody LLP, Chartered Accountants, ceased as the former accountant was dismissed, an action which was approved by the Board of Directors. On November 10, 2003, the Company appointed Morgan & Company, Chartered Accountants as its principal independent public accountant. The financial statements audited by BDO for the year ended December 31, 2002 contained an explanatory paragraph pertaining to the Company's inability to continue as a going concern. PACIFIC GAS: Investing $706 Mill. in Replacement Steam Generators ----------------------------------------------------------------- Pacific Gas and Electric Company seeks the Court's authority to enter into contractual commitments for and incur multi-year capital expenditures up to $706,000,000 for the design, fabrication, delivery, and installation of replacement steam generators at its Diablo Canyon Power Plant in support of the Diablo Steam Generator Replacement Projects. The Projects involve the replacement of the four Unit 1 and four Unit 2 steam generators. The anticipated expenditures in connection with the Projects will be incurred over a five-plus year period, with $486,000,000 to be incurred in the final three years of the Projects, between 2007 and 2009. Diablo Canyon is a nuclear power plant located in San Luis Obispo County, California. The plant is the largest generating station on the PG&E electric system and provides power for over 2,000,000 northern and central Californians from its two 1,100-megawatt units. The two units utilize eight steam generators to drive the turbine generators and produce electricity. The steam generators are large U-tube heat exchangers that convert heat into steam and are vital generation components. The tubing material used in the manufacturing of the steam generators has been shown over the years to be susceptible to various forms of age-related degradation. The steam generators require replacement within the next five or six years to avoid forced outages and the premature shutdown of this critical generating resource. PG&E is authorized to proceed, in the ordinary course of business: (a) without notice to or approval of the Court or the Official Committee of Unsecured Creditors, with any project costing less than $10,000,000; (b) with notice to and no objection by the Creditors Committee, with any project costing more than $10,000,000 and less than $50,000,000; and (c) only upon a motion noticed to the Committee and the United States Trustee on at least 10 business days' notice and approval of the Court, with any project anticipated to cost more than $50,000,000. In any case, the Replacement Projects exceed the limits. Barbara Gordon, Esq., at Howard, Rice, Nemerovski, Canady, Falk & Rabkin, in San Francisco, California, informs the Court that the approval of the California Public Utilities Commission is required for the rate base addition resulting from the Replacement Projects. A special ratemaking application to the CPUC will be necessary based on a certain proposed 2003-2006 Generation General Rate Case settlement. The CPUC application process normally requires 12 to 18 months. To meet the schedule for the first unit replacement, a contract must be awarded for construction of the new steam generators by June 2004. The application will request the CPUC to issue an interim decision authorizing PG&E to enter into long lead-time component contracts in June 2004 and, in the event that the Replacement Projects are not ultimately approved by the CPUC, authorization to fully recover expenditures to the point of decision and any cancellation charges in rates. Ms. Gordon assures the Court that the $706,000,000 expenditure is the most cost-efficient and least-risk methods to implement and attain the completion of the Replacement Projects. (Pacific Gas Bankruptcy News, Issue No. 68; Bankruptcy Creditors' Service, Inc., 215/945-7000) PENN TRAFFIC: Losses Climb to $27.2MM After Chapter 11 Filing ------------------------------------------------------------- The Penn Traffic Co.'s total losses since filing for bankruptcy protection in May have climbed to $27.2 million, Dow Jones Newswires reported. The Syracuse, New York-based regional grocer listed another $5.7 million in losses for November in documents filed with the U.S. Bankruptcy Court in White Plains, New York. The latest losses were nearly four times as large as Penn Traffic's losses in October, when the company lost $1.5 million. Before filing for bankruptcy in May, Penn Traffic operated 211 supermarkets in New York, New Hampshire, Vermont, Pennsylvania, Ohio and West Virginia. It now operates 144 stores in New York and Pennsylvania under the P&C, Quality and Bi-Lo names and has said more store closings are possible. The company has until Jan. 29 to file a reorganization plan with the court, but can ask for an extension. (ABI World, Jan. 2, 2004) PG&E NATIONAL: Court Okays Proposed Excess Asset Sale Procedures ---------------------------------------------------------------- National Energy & Gas Transmission, Inc. and its debtor-affiliates obtained permission from the Court to implement a streamlined procedure for the sale of certain non-core excess assets with a book value and fair market value not exceeding $200,000 per asset, free and clear of liens, claims and encumbrances. The NEG Debtors also obtained the Court's authority to retain brokers and appraisers to assist with the sales, as required. The Excess Assets consist of various items of equipment, office furniture, fixtures, vehicles, real property and residential real property that the NEG Debtors no longer need in connection with their ongoing businesses. Because of the administrative costs associated with carrying, storing and maintaining the Excess Assets, the NEG Debtors determined that their estates will benefit from the sale of the Excess Assets. The NEG Debtors will adopt these procedures: (a) Sales may only be completed upon 10 days written notice by fax or hand delivery to: -- the Office of the United States Trustee; -- the Creditors Committees' counsel; and -- any party known by the NEG Debtors to assert a lien on the asset to be sold; (b) The NEG Debtors may employ brokers and appraisers on usual and customary terms to assist in the sales process; (c) The NEG Debtors will keep a detailed accounting of the proceeds from all dispositions and the cost of any broker services used for each transaction; (d) The Sale Notice will include: -- a description of each Excess Asset to be sold; -- the purchase price being paid for the asset; -- the name and address of the purchaser, and a statement as to whether the purchaser is an insider or affiliate of the NEG Debtors; -- the name of the applicable Debtor; -- a copy of the proposed purchase agreement, if any, intended to govern the sale; and -- the name and address of the broker, if any, with a statement of the broker's disinterestedness and the amount of any commission of other fee payable to the broker upon consummation of the sale; (e) All sales will be made subject to higher and better written offers received by the NEG Debtors before the expiration of the 10-day notice period; (f) If a written objection by one of the Notice Parties to any sale is received by the NEG Debtors' counsel within the notice period then, absent a settlement, Court approval of the sale will be required. In the event that any objection relates solely to the use of proceeds from the sale, then the sale will proceed, but the NEG Debtors will hold the proceeds of the sale in a segregated account pending further Court order; and (g) All sales will be free and clear of liens, claims, and encumbrances, if any, with any liens, claims, and encumbrances to attach to the sale proceeds. (PG&E National Bankruptcy News, Issue No. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000) PHARMCHEM INC: Amends Bank Loan Pact and Extends Govt. Contract --------------------------------------------------------------- PharmChem, Inc. (OTCBB:PCHM) reached an agreement with its principal lender, Silicon Valley Bank, to amend the current Loan Agreement between the Company and the Bank. As a result of this amendment, the Company today made a one-time principal payment of $650,000 on its term loan bringing the balance to $600,000. In addition, monthly principal payments will increase from $41,667 to $83,334 beginning in January 2004 which would result in the term loan being fully amortized by July 2004. Also, so long as the term loan is outstanding, the interest rate on the revolving line of credit (which currently has a balance of $2.5 million) will increase to prime plus 2%. Once the term loan is fully paid, this interest rate will return to prime plus 1%. Further, the financial covenants have been restructured so that the three original covenants in place when the Loan Agreement was initially executed have been replaced with a monthly minimum tangible net worth covenant commencing December 2003. The Company believes that the Bank required these modifications because of the possible loss of all or a significant portion of the Administrative Office of U.S. Courts (AOUSC) drug testing contract which was previously announced on October 16, 2003. The Company has filed a protest with GAO seeking recovery of at least one-third of the AOUSC contract. On December 31, 2003, the Company agreed to yet another extension of the original contract whereby testing, by the Company on a national basis, may continue until April 30, 2004. The Company has granted numerous contract extensions to AOUSC since the expiration of the current contract late in 2002. Estimated sales from the AOUSC drug testing work for 2003 will be $7.4 million or 26% of the Company's total sales. The $650,000 payment to the Bank and the increase in the monthly principal payments will heighten the liquidity issues the Company is currently facing with the possible loss of the AOUSC contract. The Company is taking steps, including implementing significant cost cutting measures, to address this issue. PharmChem is a leading independent laboratory providing integrated drug testing services on a national basis to corporate and governmental clients seeking to detect and deter the use of illegal drugs. PharmChem operates a certified forensic drug- testing laboratory in Haltom City, Texas. PINE VALLEY SCHOOL: Case Summary & 11 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Pine Valley School and Group Home, Inc. P.O. Box 1101 Berkeley Springs, West Virginia 25411 Bankruptcy Case No.: 03-04542 Type of Business: The Debtor is a school and group home for Teens who have been expelled from public school systems. Chapter 11 Petition Date: December 29, 2003 Court: Northern District of West Virginia (Martinsburg) Judge: L. Edward Friend II Debtor's Counsel: James T. Kratovil, Esq. Kratovil & Amore PLLC 211 West Washington Street P.O. Box 337 Charles Town, WV 25414 Tel: 304-728-7718 Total Assets: $1,557,400 Total Debts: $785,270 Debtor's 11 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Bobby & Mary McBees Loan $352,086 Berkeley Springs, WV 25411 Internal Revenue Service Taxes $140,087 Centra Bank Loan $39,775 BB&T Loan $28,659 Jack Barnhart Loan $11,000 Berkeley Homes, Inc. Loan $10,000 J.C. Kunkle & Associates Other $5,340 Commonwealth Premium Loan $4,216 Frederick Produce Company, Purchases $4,180 Inc. Duane Householder Other $3,607 Farmers Mutual Insurance $2,757 PSYCHIATRIC SOLUTIONS: Files SEC Form S-3 to Permit Stock Resale ---------------------------------------------------------------- Psychiatric Solutions, Inc., (Nasdaq: PSYS) announced that on December 31, 2003, the Company filed a registration statement on Form S-3 relating to the resale by certain existing stockholders of common stock held by such stockholders and common stock issuable upon conversion of the Company's series A convertible preferred stock . The registration statement was filed in satisfaction of the Company's obligation under a registration rights agreement with such stockholders that was entered into in connection with the initial sale of the series A convertible preferred stock. All of the stockholders listed in the registration statement as selling stockholders remain subject to the terms of a lockup agreement under the registration rights agreement and a lockup agreement entered into in connection with Psychiatric Solutions' recent public equity offering that would prevent such stockholders from offering or selling any shares of common stock before April 1, 2004. Psychiatric Solutions, Inc. (S&P, B+ Corporate Credit Rating, Negative Outlook) offers an extensive continuum of behavioral health programs to critically ill children, adolescents and adults through its operation of 23 owned or leased freestanding psychiatric inpatient facilities with more than 2,800 beds. The Company also manages freestanding psychiatric inpatient facilities for government agencies and psychiatric inpatient units within general acute care hospitals owned by others. RESTAURANTS NORTHWEST: Case Summary & Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Restaurants Northwest, Inc. 3841 West Dimond Blvd. Anchorage, Alaska 99515 Bankruptcy Case No.: 03-01441 Type of Business: The Debtor is engaged in the restaurant business. It owns and operates most of the Burger King restaurants in Alaska. Chapter 11 Petition Date: December 29, 2003 Court: District of Alaska (Anchorage) Judge: Donald MacDonald IV Debtor's Counsel: Michael R. Mills, Esq. Bankston Gronning O'Hara Sedor Mill Givens & Heaphy PC 601 West 5th Avenue, Suite 900 Anchorage, AK 99501 Tel: 907-276-1711 Fax: 907-279-5358 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 ------ --------------- ------------ McCabe's Trade debt $100,600 Alaska Logistics Trade debt $90,200 Equity Marketing Trade debt $80,100 Internal Revenue Service Trade debt $62,900 Fairbanks North Star Borough Trade debt $61,000 Krass & Monroe Trade debt $59,200 Municipality Of Anchorage Trade debt $42,200 Ketchikan Gateway Borough Trade debt $41,900 Davison & Davison Trade debt $29,200 Alaska Fresh Cut Trade debt $27,900 State Of Alaska Trade debt $24,900 Kenai Peninsula Borough Trade debt $23,100 Chugach Electric Trade debt $20,300 Alaska Consolidators Trade debt $15,100 Thomas, Head & Greisen Trade debt $13,900 Matanuska Susitna Borough Trade debt $13,500 JR Simplot Trade debt $11,900 Xerox Corporation Trade debt $11,100 Matanuska Electric Trade debt $8,800 CSX Lines, Inc. Trade debt $5,000 ROHN INDUSTRIES: CEO Horace Ward & CFO John Castle Resign --------------------------------------------------------- Rohn Industries Inc., a manufacturer of telecommunications towers under chapter 11 protection, said its chief executive and chief financial officer have resigned, according to a Dow Jones Newswire report. CEO Horace Ward and Chief Financial Officer John Castle will continue to work for the company as it completes its liquidation, according to a Form 8-K filed Tuesday with the Securities and Exchange Commission. Radian Communication Services Corp., Mississauga, Ontario, outbid opening bidder SPX Corp. with a $7.9 million bid for Rohn Industries assets in an auction Dec. 8. The Frankfort, Indiana, company filed for bankruptcy protection on Sept. 9, listing $2.9 million in assets and $14.5 million in debts. (ABI World, Jan. 2, 2004) ROSS' TEAL LAKE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: Ross' Teal Lake Lodge, Inc. aka Teal Wing Golf Club 12425 North Ross Road Hayward, Wisconsin 54843 Bankruptcy Case No.: 1-03-19308 Type of Business: The Debtor provides lodging choices of Bed and Breakfast, Country Inns, Small Hotels, Resorts, Fishing, Fly-fishing, Skiing, Golf, Tennis and Boating. Chapter 11 Petition Date: December 29, 2003 Court: Western District of Wisconsin (Eau Claire) Judge: Thomas S. Utschig Debtor's Counsel: Denis P. Bartell, Esq. DeWitt Ross & Stevens S.C. 2 East Mifflin Street Suite 600 Madison, WI 53701 Tel: 608-255-8891 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 ------ --------------- ------------ Bruce Caldwell Loan to Debtor $65,000 North Lakes Co-op Trade Debt $48,240 PacJets Trade Debt $32,277 APEX Surveying Trade Debt $18,872 Wells Fargo Trade Debt $18,003 Jim Imse Loan to Debtor $15,000 UAP Trade Debt $12,037 Town of Spider Lake Personal Property $10,724 Taxes Tom Imse Membership Fee $10,000 Dale Jacobsen Membership Fee $10,000 Attorney Mike Kelsey Professional $10,000 Services Allan Nieml Membership Fee $10,000 Dick Ulhlein Membership Fee $10,000 Turf Supply Trade Debt $7,937 Bill Bowe Membership Fee $5,000 Tony's Candles Trade Debt $2,948 Allen Burdick Membership Fee $1,500 Bill Hise Membership Fee $1,500 Stan Regula Membership Fee $1,500 Art Smith Membership Fee $1,500 SATCON TECHNOLOGY: Books $2.2M in New Contracts in First Quarter ---------------------------------------------------------------- SatCon Technology Corporation(R) (Nasdaq NM: SATC), a manufacturer of electronic power control systems, booked approximately $2.2 million in industrial product contracts during the first quarter, which ended December 27, 2003. The contracts were comprised of approximately $1.1 million in vibration test systems including field service and parts. These test systems are used to test items from small electronics to missiles. The remaining $1.1 million in contracts was for rectifiers and power supplies also including field service and parts. The contracts are part of a projected $7.5 to $8.0 million in overall bookings for the first quarter of fiscal 2004, which supports our view that our business base is improving. Backlog at the beginning of the quarter totaled approximately $20 million. "We are seeing a renewed interest in industrial products," said David Eisenhaure, SatCon's president and chief executive officer. "The $1.1 million in vibration test systems business gives us confidence that there is potential for growth in that business in 2004, and is an important reason why we decided to retain that product line. In addition, we see continued evidence of quarterly improvement over the first quarter of last year." "Of particular importance to our business and bottom line is our cash usage. As we mentioned in our recent investors conference call, before considering approximately $2 million that we used to reduce our vendor accounts, we expect our cash usage from operations to be less than $1 million. We estimate that our cash balance at the end of the quarter will be above $5 million with no borrowings against our $6 million line of credit. We see this as further progress toward reaching our goal of being cash flow neutral in the near term, with an expected overall financial improvement for fiscal year 2004." SatCon Technology Corporation manufactures and sells power control systems for critical military systems, alternative energy and high-reliability industrial automation applications. Products include inverter electronics from 5 kilowatts to 5 megawatts, power switches, and hybrid microcircuits for industrial, medical, military and aerospace applications. SatCon also develops and builds digital power electronics, high-efficiency machines and control systems for a variety of defense applications with the strategy of transitioning those technologies into multiyear production programs. For further information, please visit the SatCon Web site at http://www.satcon.com/ * * * Liquidity and Going Concern Uncertainty In a Form 10-K filed with the Securities and Exchange Commission, SatCon reported: "As of September 30, 2003, we had $1.2 million of cash, of which $0.5 million was restricted, and an outstanding loan balance to Silicon Valley Bank of $1.8 million. In addition, at September 30, 2003 our trade payables totaled $4.7 million, of which $3.5 million were for invoices over 60 days old. In addition, we had $1.3 million of accrued accounts payable at September 30, 2003 for goods and services received but not yet invoiced. "In October 2003, warrants to purchase 1.6 million shares of our Common Stock were exercised for net proceeds of $1.5 million, we sold an additional $0.1 million of convertible subordinated debentures and we sold shares of series B preferred stock for proceeds of approximately $7.1 million, net of placement agent's fees. "In November 2003, with the proceeds from these financing transactions, we paid off the outstanding balance under the line of credit of $1.8 million and the Bank released $0.4 million of the $0.5 million of cash previously restricted. In addition, on December 12, 2003, we amended our agreement with the Bank. Under the amended agreement, the Bank will provide us with a line of credit of up to approximately $6.3 million (the "Amended Loan"). The Amended Loan is secured by most of the assets of the Company and advances under the Amended Loan are limited to 80% of eligible accounts receivables, which will permit borrowings up to $5.0 million. Interest on outstanding borrowings accrues at a rate equal to the Bank's prime rate of interest plus 1.5% per annum. In addition, we will pay to the Bank a collateral handling fee of 2.4% per annum of the average daily outstanding balance. The interest rate increases to the Bank's prime rate plus 3.0% per annum and the collateral handling fee increases to 3.0% per annum if we fail to meet certain financial ratios. We have also agreed to the following fees: (i) a $23,250 non-refundable facility fee upon the execution of the agreement; (ii) an unused line fee in an amount equal to 0.50% per annum on the difference between $5 million and the average daily principal balance of the loans outstanding during the month; and (iii) an early termination fee of $25,000 if we terminate the agreement before June 12, 2004. The Amended Loan contains certain financial covenants relating to tangible net worth, as defined, which we must satisfy in order to continue borrowing from the Bank. The Amended Loan matures on December 9, 2004. "We anticipate that our cash after these transactions, together with the availability under the Amended Loan will be sufficient to fund our operations through September 30, 2004. This assumes that we will achieve our business plan and remain in compliance with the Amended Loan. The business plan envisions a significant increase in revenue and significant reductions in the cost structure and the cash burn rate from the results experienced in the recent past. If, however, we are unable to realize our plan, we may not be in compliance with loan covenants which may cause a default, as defined, and we may be forced to raise additional funds by selling stock, restructuring its borrowing, selling assets, or taking other actions to conserve our cash position. "If additional funds are raised in the future through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders will be reduced and our stockholders may experience additional dilution. The terms of additional funding may also limit our operating and financial flexibility. There can be no assurance that additional financing of any kind will be available to us on terms acceptable to us, or at all. Failure to obtain future funding when needed or on acceptable terms would materially, adversely affect our results of operations. "We have recently reevaluated our business in light of recent results and our October financing transactions. As a result of this reevaluation, we have decided to retain our Ling Shaker product line. And although we continue to consider selling our patented smart predictive line control technology utilized by the electric arc steel manufacturing industry and patents acquired from Northrop Grumman related to hybrid electric vehicles, these together represent less than $2 million of our total assets. We have informed our financial advisor, Alliant Capital Partners (an affiliate of the Bank) of our intentions and we are no longer actively working with them to dispose of these assets. "Our financial statements for our fiscal year ended September 30, 2003, which are included in our Annual Report on Form 10-K, contain an audit report from Grant Thornton LLP. The audit report contains a going concern qualification, which raises substantial doubt with respect to our ability to continue as a going concern. The receipt of a going concern qualification may create a concern amongst our current and future customers and vendors as to whether we will be able to fulfill our contractual obligations. "We have incurred significant costs to develop our technologies and products. These costs have exceeded total revenue. As a result, we have incurred losses in each of the past five years. As of September 30, 2003, we had an accumulated deficit of $116.7 million. Since inception, we have financed our operations and met our capital expenditure requirements primarily through the sale of private equity securities, public security offerings, borrowings on our line of credit and capital equipment leases. "As of September 30, 2003, our cash and cash equivalents were $1.2 million, including restricted cash and cash equivalents of $0.5 million, a decrease of $0.9 million from September 30, 2002. Cash used in operating activities for the fiscal year ended September 30, 2003 was $7.3 million as compared to $15.3 million for fiscal year ended September 30, 2002. Cash used in operating activities during the fiscal year ended September 30, 2003 was primarily attributable to the net loss, net of realized gain from the sale of Beacon Power Corporation common stock and unrealized gain on warrants to purchase common stock, offset by non-cash items such as depreciation and amortization, increases in allowances for doubtful accounts and excess and obsolete inventory, unrealized loss from Series B warrants to purchase common stock, write-off of impaired long-lived, goodwill and intangible assets, write-down of investment in Beacon Power Corporation common stock, non-cash compensation expense and decreases in working capital. "Cash provided by investing activities during year ended September 30, 2003 was $1.5 million as compared to of $6.8 million for the fiscal year ended September 30, 2002. Cash provided by investing activities during the fiscal year ended September 30, 2003 was primarily the result from proceeds from the sale of our Beacon Power Corporation common stock of $1.7 million. "Cash provided by financing activities for the fiscal year ended September 30, 2003 was $4.8 million as compared to cash used by financing activities of $0.3 million for the fiscal year ended September 30, 2002. Net cash provided by financing activities during the fiscal year ended September 30, 2003 includes $3.2 million from the proceeds from the sale of the Series A Preferred Stock and the convertible subordinated debentures and $1.8 million of net borrowing under the bank line of credit offset by $0.3 million of repayment of long-term debt." SHARK IND.: U.S. Trustee Amends Creditors' Committee Membership --------------------------------------------------------------- The U.S. Trustee for Region 12 appointed and subsequently amended the members of the Committee of Unsecured Creditors in the Chapter 11 cases of Shark Industries, Ltd. Benjamin Halperin of Bruce Packaging has resigned and Ira Gary Pleason of Market Makers has joined the Official Committee of Unsecured Creditors. The Amended Unsecured Creditors Committee consists of: 1. Market Makers 425 Huehl #9 Northbrook, IL 60062 Attention: Ira Gary Pleason Tel. No.: 847-498-1818 2. Victor Equipment Company Airport Road Denton, TX 76207 Attention: Anthony SanGiovanni Tel: 940-381-1249 3. Ballard & Associates, Inc. 5117 West 105th Street Bloomington, MN 55437 Attention: John E. Ballard Tel. No.: 952-893-0695 Mr. SanGiovanni is designated as Acting Chairperson pending selection by the Committee members of a permanent Chairperson. Shark Industries Ltd. sells automotive after market products. The Debtor filed for Chapter 11 relief on November 14, 2003 (Bankr. Minn. Case No. 03-37759). Steven B. Nosek, Esq., represents the Debtor in its restructuring efforts. When the debtor filed for protection from its creditors, it listed total assets of $4,418,000 and total debts of $4,564,000. SHILOH INDUSTRIES: Look for Q4 and Fiscal 2003 Results Tomorrow --------------------------------------------------------------- Shiloh Industries, Inc. (Nasdaq: SHLO), a leading manufacturer of first operation blanks, engineered welded blanks, complex stampings and modular assemblies for the automotive and heavy truck industries, will announce earnings for the fourth quarter and fiscal year ended October 31, 2003 tomorrow. A conference call to discuss the results will be held tomorrow at 11:00 a.m. (ET). To listen to the conference call, dial (800) 374-0915 approximately five minutes prior to the start time and request the Shiloh Industries year-end conference call. A replay of the conference call will be available from 2:00 p.m. (ET) tomorrow through 5:00 p.m. (ET), Tuesday, January 13, 2004. To access the replay, call (800) 642-1687 and enter conference code 4769699. Headquartered in Cleveland, Ohio, Shiloh Industries (S&P, B Corporate Credit Rating) is a leading manufacturer of blanks, engineered welded blanks, engineered stampings and modular assemblies for the automotive and heavy truck industries. The Company has 11 operating locations in Ohio, Georgia, Michigan, Tennessee and Mexico, and employs approximately 2,500. SOLUTIA: Gets Interim Nod to Use Existing Investment Practices -------------------------------------------------------------- Section 345(b) of the Bankruptcy Code requires that any deposit or other investment made by a debtor, except those insured or guaranteed by the United States or by a department, agency or instrumentality of the United States or backed by the full faith and credit of the United States, must be secured by a bond in favor of the United States that is secured by the undertaking of a corporate surety approved by the United States Trustee or by the deposit of securities of the kind specified in 31 U.S.C. Section 9303. Section 345(b) provides further, however, that a bankruptcy court may allow the use of alternatives to these approved investment guidelines "for cause." Prepetition Investment & Deposit Practices Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher LLP, in New York, relates that, as part of their Cash Management System, the Solutia Debtors developed a practice and guidelines for deposits and investments of excess funds within the Cash Management System as permitted by the terms of the Debtors' prepetition secured credit facility. Under the Prepetition Practices, excess funds within the Cash Management System are either: (a) maintained in domestic bank accounts below amounts insured by the United States; (b) maintained in domestic banks that appear on the approved bank list of the Office of the United States Trustee for Region 2; or (c) invested by the Debtors in the Dreyfus Government Prime Cash Management Fund. The only exceptions are the checking, savings, and payroll accounts maintained by the Debtor Axio Research Corporation with Silicon Valley Bank for which the combined average balance is less than $300,000. Although the instances when the balances with Silicon Valley exceed Federal Deposit Insurance Corporation insured amounts are limited, the Debtors are working with the U.S. Trustee to have Silicon Valley added to the Approved Bank List. Mr. Reilly informs the Court that, although the Debtors' cash receipts are swept on a daily basis into an account owned and controlled by their Existing Lenders, all funds transferred to disbursement accounts either remain in those accounts or are transferred by manual wire transfers to the Debtors' overnight investment account, the Dreyfus Government Fund. The Debtors' disbursement accounts that may hold funds in excess of FDIC- insured amounts until the disbursements clear are: (A) the Debtors' four disbursement accounts maintained with Citibank, N.A.; (B) the Debtors' 11 disbursement accounts maintained with Bank of America, N.A., and (C) the Debtors' Operating Account maintained with J.P. Morgan Chase, from which wire transfers are made for Solutia and CPFilms and from which payroll tax payments are made. The Debtors' Cash Management System allows them to transfer funds overnight from the Citibank and Chase Accounts into the Dreyfus Government Fund. Citibank, Bank of America, and Chase are all on the U.S. Trustee's Approved Bank List. Although at any given time the amounts on deposit in these Accounts to prefund disbursements may exceed the limits insured by the FDIC, the Debtors believe that these deposits are, nevertheless, safe. The Dreyfus Government Fund is not insured or guaranteed by the FDIC or any other government agency, but it invests only in securities issued or guaranteed by the U.S. government or its agencies or instrumentalities. The Need to Maintain the Prepetition Practices "The Debtors have determined, in their business judgment, that it is desirable to maintain their excess cash in income-producing investments to the fullest extent possible. These investments must be primarily short term in nature, however, because of the need for liquidity in the operation of the Debtors' businesses," Mr. Reilly relates. Mr. Reilly tells the Court that the Debtors' conservative Prepetition Practices reflect the primary goals of preserving principal, maintaining liquidity, diversifying investment risk and maximizing earnings on the invested funds. Mr. Reilly explains that the yield on investments under the Prepetition Practices will be greater than if the Debtors were restricted to direct investments in government securities. If the Debtors were limited to investing directly in government securities, liquidity considerations would limit their investments to very short-term securities that would produce a lower return on the investments. Although the investment of excess cash in this manner may not strictly comply with the approved guidelines for investing funds under Section 345, the Debtors believe that the investment of funds, nevertheless, would be safe and prudent and will yield the maximum reasonable net return on the funds invested, taking into account the safety of the investment. On an interim basis, Judge Beatty authorizes the Debtors to continue using their Prepetition Practices to the extent permitted by the DIP Loan Agreement. To the extent necessary, the Court waives the Section 345(b) guidelines with respect to the Debtors' continued practice of depositing and investing excess funds in accordance with the Prepetition Practices. The Debtors will work with each of the banking institutions and the U.S. Trustee to maintain the Accounts. The Court also permits the Debtors to continue investing excess cash in the Dreyfus Government Fund to allow them to maximize the yield and liquidity while protecting the principal. The Debtors are also allowed to transfer $200,000 to the Dreyfus Government Fund from the Dreyfus Cash Management Plus Fund to be set aside pursuant to a litigation settlement agreement. Judge Beatty will convene a hearing on January 16, 2004 to consider final approval on the Debtors' request. Objections are due on January 9, 2004. (Solutia Bankruptcy News, Issue No. 3; Bankruptcy Creditors' Service, Inc., 215/945-7000) STARWOOD HOTELS: Acquires Le Meridien's Outstanding Senior Debt --------------------------------------------------------------- Lehman Brothers Holdings Inc., and Starwood Hotels & Resorts Worldwide, Inc. (NYSE:HOT) announced the acquisition of all of the outstanding senior debt (approximately $1.3 billion), at a discount, of Le Meridien Hotels and Resorts Ltd. Starwood will fund $200 million through a high yield junior participation in the debt. As part of this funding, Lehman and Starwood have entered into an exclusive agreement to negotiate the recapitalization of Le Meridien in the coming months. The Le Meridien portfolio includes more than 120 upscale hotels and resorts with significant concentration in major European cities and resort destinations. For Starwood, the Le Meridien asset and customer base are largely complementary to Starwood's own. Starwood Hotels & Resorts Worldwide, Inc. (Fitch BB+ Convertible Debt Rating, Negative) is one of the leading hotel and leisure companies in the world with 740 properties in more than 80 countries and 105,000 employees at its owned and managed properties. With internationally renowned brands, Starwood is a fully integrated owner, operator and franchisor of hotels and resorts including: St. Regis, The Luxury Collection, Sheraton, Westin, Four Points by Sheraton, W brands, as well as Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts. For more information, visit http://www.starwood.com/ Lehman Brothers (ticker symbol NYSE:LEH), an innovator in global finance, serves the financial needs of corporations, governments and municipalities, institutional clients, and high-net-worth individuals worldwide. Founded in 1850, Lehman Brothers maintains leadership positions in equity and fixed income sales, trading and research, investment banking, private equity, asset management and private client services. The Firm is headquartered in New York, London, and Tokyo and operates in a network of offices around the world. For further information about Lehman Brothers' services, products, and recruitment opportunities, visit Web site at http://www.lehman.com/ STELCO INC: Courtney Pratt Assumes Post as President & CEO ---------------------------------------------------------- Stelco Inc. announced that Mr. Courtney Pratt has assumed his responsibilities as President and Chief Executive Officer. In November 2003, Mr. Pratt was appointed President and Chief Executive Officer effective January 1, 2004. Mr. Pratt commented on his new responsibilities: "Stelco's current circumstances provide a major challenge for me and our senior management team. While many companies in the North American steel sector are experiencing appreciating share prices, reflecting improved pricing on a variety of steel products and higher sales volume from a general rebound in the manufacturing sector, Stelco continues to produce losses and consume considerable amounts of cash." Commenting on the business review currently underway at Stelco, Mr. Pratt advised that the challenge is to redeploy Stelco's assets, improve productivity, and lower costs to restore the competitive capabilities of the Corporation. Competition from U.S.-based restructured steel mills has become a critical issue for Stelco. Reducing costs significantly is required to allow Stelco to remain viable. "We will be looking to our stakeholders to work cooperatively to achieve necessary cost reductions and undertake other measures to make Stelco competitive in the marketplace and to rebuild its operational and financial capability," added Mr. Pratt. Stelco Inc. (S&P, B- Long-Term Corporate Credit Rating, Negative) is Canada's largest and most diversified steel producer. Stelco is involved in all major segments of the steel industry through its integrated steel business, mini-mills, and manufactured products businesses. Stelco has a presence in six Canadian provinces and two states of the United States. Consolidated net sales in 2002 were $2.8 billion. To learn more about Stelco and its businesses, visit its Web site at http://www.stelco.ca/ TENFOLD CORP: Chairman Will Present at Needham Conference Friday ---------------------------------------------------------------- TenFold(R) Corporation (OTC Bulletin Board: TENF), provider of the EnterpriseTenFold(TM) platform for building and implementing enterprise applications, announced that Jeffrey L. Walker, Chairman and Chief Technology Officer, will speak at the Sixth Annual Needham Growth Conference in New York 9:00 a.m. EST on Friday, January 9th in the Spellman conference room at the Plaza Hotel. "Another sign of TenFold emerging as a growth technology company is our being invited to speak at the prestigious Sixth Annual Needham Growth Conference in New York," said Dr. Nancy Harvey, TenFold's President and CEO. "We were invited by a highly regarded software analyst who recently became impressed with TenFold technology after having discovered our Tsunami product, installing it from the Internet, and using it to build an enterprise CRM application in a few hours." Jeff Walker's presentation will broadcast live on the Internet via the TenFold corporate Web site at http://www.10fold.com/on Friday, January 9, 2004 at 9:00 a.m. EST. To access the live webcast presentation, go to http://www.10fold.com/and click on the Jeffrey L. Walker Live At Needham Growth Conference link in the Latest News section at the top right of the TenFold's home page, then register to view the presentation. We recommend that you go to http://www.10fold.com/at least 10 minutes early to register and to download and install any necessary audio software. You may access a replay of the presentation following the conclusion of the live event. TenFold (OTC Bulletin Board: TENF) licenses its patented technology for applications development, EnterpriseTenFold(TM), to organizations that face the daunting task of replacing obsolete applications or building complex applications systems. Unlike traditional approaches, where business and technology requirements create difficult IT bottlenecks, EnterpriseTenFold technology lets a small, business team design, build, deploy, maintain, and upgrade new or replacement applications with extraordinary speed and limited demand on scarce IT resources. For more information, visit http://www.10fold.com/ Tenfold Corporation's September 30, 2003 balance sheet shows total stockholders' deficit of $11,510,000 compared to a deficit of $25,225,000 as of December 31, 2002 TRINITY OF VIRGINIA: Case Summary & 20 Largest Unsec. Creditors --------------------------------------------------------------- Debtor: Trinity of Virginia, LLC dba New Fitness for Ladies P.O. Box 677 Lambertville, Michigan 48144 Bankruptcy Case No.: 03-78885 Type of Business: Fitness center for ladies. Chapter 11 Petition Date: December 30, 2003 Court: Eastern District of Virginia (Norfolk) Judge: David H. Adams Debtor's Counsel: Karen M. Crowley, Esq. Marcus, Santoro & Kozak, P.C. 1435 Crossways Boulevard, Suite 300 Chesapeake, VA 23320 Tel: 757-222-2224 Fax: 757-333-3390 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Monroe Bank & Trust Bank $143,530 Village at Waterford Lease Arrearage $34,733 Richmond Times-Dispatch Trade $21,854 Hungarybrook Limited Lease Arrearage $21,813 Lynnhaven Mechanical Trade $20,600 A/H Charleston Associa Lease Arrearage $16,288 Weber-Obrien Ltd. Trade $14,344 Richfield Associates Lease Arrearage $13,280 SL Nusbaum Realty Co. Lease Arrearage $12,029 Visa Trade $6,720 Coverall of Virginia Trade $5,345 County of Henrico-14 Taxes $4,728 Chesterfield Treasurer Taxes $2,536 Dominion of Virginia Power Trade $2,416 James River Heating Trade $2,163 Cananwill, Inc. Trade $1,542 John T. Atkinson, Treasurer Taxes $1,541 Verizon Trade $1,508 Airborne Express Trade $1,471 Boise Cascade Ofc Products $1,034 US AIRWAYS: Agrees to Allow Verizon Capital's $3.4 Million Claim ---------------------------------------------------------------- On November 4, 2002, Verizon Capital Corp. filed Claim Nos. 4408 and 4409 for $319,902 each, against the US Airways Debtors. In addition, Verizon asserts liability for other contingent and unliquidated amounts, including various tax indemnity claims relating to Aircraft bearing N576US, N577US and N584US. On January 24, 2003, the Reorganized Debtors objected to Claim Nos. 4408 and 4409. Verizon responded. To settle the matter, the Parties agree to allow Claim No. 4408 as a General Unsecured Class USAI-7 Claim for all purposes under the Plan for $3,404,359. Claim No. 4409 is withdrawn. Any and all other Verizon Claims relating to the Aircraft are disallowed. (US Airways Bankruptcy News, Issue No. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000) U.S. STEEL: Completes Voluntary Contribution to Pension Fund ------------------------------------------------------------ United States Steel Corporation (NYSE: X) said that in late December it completed the voluntary contribution of timber cutting rights, which were valued at $59 million by an independent appraisal, to its defined benefit pension plan. As a result, the company will record a pre-tax gain of approximately $55 million in the fourth quarter of 2003 to reflect the excess of the fair value of the contributed assets over their net book value. In addition, U. S. Steel voluntarily contributed $16 million in cash to its defined benefit pension plan, bringing total 2003 contributions to $75 million. In other company matters, U. S. Steel stated that it will record pre-tax equity-based compensation expense of approximately $69 million in the fourth quarter of 2003 primarily for outstanding stock appreciation rights. This charge is principally due to the increase in the company's common stock price in the fourth quarter of 2003 from $18.38 to $35.02 per share. These stock appreciation rights were issued over the last ten years and allow the holders to receive cash and/or common stock equal to the excess of the fair market value of shares of common stock over the option price. In accordance with FASB Interpretation No. 28 Accounting for Stock Appreciation Rights and Other Variable Stock Option or Award Plans, stock appreciation rights are accounted for on a mark-to-market basis. The company also reported that the Federal Trade Commission and the Department of Justice Antitrust division have granted early termination of the waiting period under the Hart-Scott-Rodino Act, concerning its potential acquisition of Rouge Steel's 50 percent interest in Double Eagle Steel Coating Company. The early termination clears the way for U. S. Steel to pursue the purchase free of antitrust considerations. On matters affecting its coking operations, U. S. Steel noted that one of its major suppliers of coking coal to the Clairton Coke Works (Clairton) has declared force majeure under a coal supply agreement and, at this time, the company has been unable to consistently purchase the quantity and quality of coking coal necessary to support full coke operations. As a result, U. S. Steel has been compelled to reduce coke operations and declare force majeure under its coke sales agreements from Clairton, and shipments from Clairton have temporarily and proportionally been reduced for both internal and external customers of coke until the situation can be resolved. U. S. Steel is attempting to replace this lost volume of coking coal from other sources at current market prices, which are higher than the contract price from the original supplier. Regarding the company's consolidation and cost-cutting efforts, U. S. Steel Chairman and CEO, Thomas J. Usher said, "We expect to achieve our goal of more than $400 million in annual repeatable costs savings by the end of 2004. We have achieved our targeted domestic plant workforce reductions, made significant progress integrating the assets acquired from National into our operations and are implementing our domestic administrative cost reduction programs." "Steel prices continue to recover reflecting increased demand as the domestic economy improves. Imports have declined due in part to the relative value of the dollar, significant increases in ocean freight and an improved demand for steel globally. Most of our mini-mill competitors have initiated scrap surcharges as costs for all raw materials continue to escalate. We will continue to aggressively pursue price increases as market conditions warrant," Usher added. With recent increases in global demand for steelmaking raw materials, prices and related transportation costs are increasing for commodities such as coking coal, coke, iron ore and scrap. Future results will be affected by market prices for, and availability of, these purchased commodities; however, U. S. Steel's balanced domestic raw materials position and limited dependence on steel scrap should mitigate the effects and improve the competitive position of U. S. Steel's domestic operations. In the United States, U. S. Steel purchases all of its coking coal requirements and a portion of its scrap requirements, but is self- sufficient in iron ore and is a net seller of coke. In Europe, U. S. Steel purchases all of its coking coal and iron ore requirements and a modest portion of its coke and scrap requirements. United States Steel Corporation (S&P, BB- Corporate Credit Rating, Negative) is engaged domestically in the production, sale and transportation of steel mill products, coke and taconite pellets (iron ore); steel mill products distribution; the management of mineral resources; the management and development of real estate; engineering and consulting services; and, through U. S. Steel Kosice in the Slovak Republic and U. S. Steel Balkan, d.o.o. in Serbia, in the production and sale of steel mill products and coke primarily for the central and western European markets. As mentioned in Note 5, effective June 30, 2003, U. S. Steel is no longer involved in the mining, processing and sale of coal. For more information about U.S. Steel visit http://www.ussteel.com/ USEC INC: Secures Regulatory Recertification of Uranium Plants -------------------------------------------------------------- USEC Inc. (NYSE:USU) announced that its uranium enrichment plants in Paducah, Kentucky and Piketon, Ohio have been recertified by the U.S. Nuclear Regulatory Commission for five years. The recertification represents the commission's determination that the plants are in compliance with NRC safety, safeguards and security regulations. "Our production operations are focused on the fundamental principles of safety, security, reliability and efficiency," said Morris Brown, USEC's vice president of operations. The gaseous diffusion plants, which began operations in the 1950s, are required to be recertified by the NRC every five years. NRC also is required, in consultation with the U.S. Department of Energy and the U.S. Environmental Protection Agency, to submit a report to Congress on the operation of the plants. The latest report, covering the five-year period through September 30, 2003, stated that the plants "provide adequate protection of public health, safety, safeguards, security, and the environment." The new NRC certificates, effective December 29, 2003, are valid until December 31, 2008. USEC ended enrichment operations at the Piketon plant in May 2001, but the Company is maintaining the plant in standby condition under a contract with DOE. USEC has also applied to the NRC for a license to construct and operate the American Centrifuge Demonstration Facility at the Piketon site. This facility will demonstrate USEC's next generation gas centrifuge uranium enrichment technology. USEC Inc. (NYSE:USU) (S&P, BB Corporate Credit Rating, Stable), a global energy company, is the world's leading supplier of enriched uranium fuel for commercial nuclear power plants. VERESTAR INC: US Trustee Appoints Official Creditors' Committee --------------------------------------------------------------- The United States Trustee for Region 2 appointed 5 creditors to an Official Committee of Unsecured Creditors in Verestar, Inc.'s Chapter 11 cases: 1. PanAmSat Corporation 20 Westport Road Wilton, CT 06897 Attn: Zachary C. Green, Associate General Counsel Phone: (203) 210-8210 Fax: (203) 210-8683 2. Loral Spacecom Corporation d/b/a Loral Skynet 600 Third Avenue New York, New York 10016 Attn: Russell Mack Phone: (212) 338-5354 Fax: (212) 867-5248 3. iDirect, Inc. 10803 Parkridge Boulevard Reston, VA 20191 Attn: David Mountcastle, Director of Finance Phone: (703) 648-8022 Fax: (703) 648-8014 4. WilTel Communications, LLC One Technology Center, 15-L Tulsa, OK 74103 Attn: Kevin L. Ward, Esq. Phone: (918) 547-1888 5. BT plc 350 Madison Avenue New York, New York 10017 Attn: William McNamara, General Manager Phone: (646) 487-3874 Fax: (646) 487-3988 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 Fairfax, Virginia, Verestar, Inc., is a provider of satellite and terrestrial-based network communication services. The Company and two if its affiliates filed for chapter 11 protection on December 22, 2003 (Bankr. S.D.N.Y. Case No. 03- 18077). Matthew Allen Feldman, Esq., at Willkie Farr & Gallagher LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed assets and debts of more than $100 million each. VOLUME SVCS: Will Make Cash Payment on Income Deposit Securities ---------------------------------------------------------------- Volume Services America Holdings, Inc. (AMEX:CVP) (TSX:CVP.UN) announced that a cash payment of U.S.$0.173 per Income Deposit Security will be payable on January 20, 2004 to holders of record of Income Deposit Securities at the close of business on January 9, 2004. Each of the Income Deposit Securities issued by the company in its recent public offering is comprised of one share of common stock and a subordinated note. The total payment of U.S.$0.173 reflects a cash dividend of U.S.$0.088 per share of common stock (U.S.$0.066 for the monthly period beginning December 20, 2003 and ending January 19, 2004 and U.S.$0.022 for the initial stub period beginning December 10, 2003 and ending December 19, 2003), as announced yesterday by the company. The total payment of U.S.$0.173 also includes an interest payment of U.S.$0.085 (U.S.$0.064 for the monthly period beginning December 20, 2003 and ending January 19, 2004 and U.S.$0.021 for the initial stub period beginning December 10, 2003 and ending December 19, 2003), as provided in the subordinated note. Centerplate, the tradename for Volume Services America Holdings, Inc.'s operating businesses, is a leading provider of catering, concessions, merchandise and facilities management services for sports facilities, convention centers and other entertainment venues. Visit the company online at http://www.centerplate.com/ * * * As previously reported, Moody's Investors Service withdrew all its ratings for Volume Services, Inc. Withdrawn Ratings - B1 $184 million secured Bank Loan rating - B3 $100 million 11.25% senior subordinated notes (2009) rating - B1 Senior implied rating, and - B2 Long-term issuer rating. WINSTAR: Chapter 7 Trustee Wins Clearance for Lucent Settlement --------------------------------------------------------------- The Winstar Communications' Chapter 7 Trustee Christine C. Schubert sought and obtained the Court's approval of a settlement stipulation with Lucent Technologies Inc., which fully and finally resolves all secured claims that Lucent asserted or may hold against the Debtors' estates with respect to the proceeds from IDT Winstar Acquisition, Inc.'s acquisition of substantially all the Debtors' assets. The Trustee and Lucent originally disagreed whether Lucent had a valid, properly perfected, first priority lien in any portion of the Sale Proceeds, and whether and to what extent a portion of the Sale Proceeds should be allocated to any lien. The parties engaged in extensive discovery and each party retained experts in prosecuting the Lien Adversary Proceeding. After extensive negotiations, both parties agreed to settle the dispute according to these primary terms: (a) The Trustee agrees that Lucent holds a $5,500,000 valid, properly perfected, first priority secured lien in the Sale Proceeds, which represents the total value of Lucent's lien in the Acquired Assets; (b) Without further delay, the Trustee will place $5,500,000 of the Sale Proceeds into an escrow account and will not release the funds to Lucent or any other party, except pursuant to a further final and non-appealable Court order, after notice and a hearing, or written agreement by the parties directing the Trustee to distribute the funds; (c) Lucent may seek relief from the Bankruptcy Court to compel the Trustee to distribute the $5,500,000 plus interest in satisfaction of its lien in the Acquired Assets on the earlier to occur of: (i) a resolution by the Bankruptcy Court or District Court through entry of a final and non-appealable order of, or resolution through written agreement of the parties with respect to, Count Eleven (Equitable Subordination) of the Trustee's Second Amended Complaint in the Contract Adversary Proceeding in a manner that some or all of Lucent's claims under the Lucent Credit Agreement, Supply Agreement or related agreements are not subject to equitable subordination; or (ii) a written agreement by the parties that Lucent may take such action; (d) Upon the transfer of the $5,500,000 into the Escrow Account, that portion of Lucent's secured proofs of claim relating to the Collateral constituting the Acquired Assets will be permanently reduced to $5,500,000, plus interest. Any related deficiency claim will be deemed part of Lucent's unsecured proofs of claim. Lucent's rights in connection with the remaining portion of its secured proofs of claim with respect to the Collateral not constituting the Acquired Assets will not be affected in any respect; (e) Lucent will be deemed to hold an allowed secured claim equal to $5,500,000 plus interest on account of its interest in the Sale Proceeds. The Trustee will not distribute funds from the Escrow Account to Lucent in satisfaction of the Allowed Sales Proceeds Secured Claim; (f) Upon the Trustee's transfer, Lucent will waive, release and forever discharge any secured claims that it has or may have against the Sale Proceeds, except the Allowed Sales Proceeds Secured Claim. Lucent will have a valid, properly perfected, first priority secured lien, without further action or filing, on account of the Allowed Sales Proceeds Secured Claim for the $5,500,000, plus interest, transferred to the Escrow Account; (g) The resolution of Lucent's secured claims against the Debtors' estates with respect to the Acquired Assets will have no effect on any rights that Lucent may have, if any, with respect to any general unsecured claims that Lucent may have asserted against the Debtors' estates. The Resolution will have no effect on any rights that Lucent may have with respect to any secured claim asserted against the Debtors' estates with respect to: (i) any assets that constitute the Collateral and are not the Acquired Assets; or (ii) any proceeds from any sales that are not the Sale Proceeds; (h) The resolution of Lucent's secured claims with respect to the Acquired Assets will have no effect on Lucent's rights with respect to a stipulation the parties entered in April 2003, lifting the automatic stay and, alternatively, providing adequate protection with respect to certain investment and disbursement accounts; (i) The Trustee will not use any estate funds in which Lucent has an interest pursuant to any Bankruptcy Court order, stipulation, or settlement for any purpose in these cases without Lucent's prior written consent or further Court order; and (j) Upon the Trustee's transfer of the Sale Proceeds into the Escrow Account, Lucent will waive, release and forever discharge any and all claims that it may have against the Debtors' estates, the Trustee or her affiliates arising in connection with the Lab Equipment. The Debtors believe that the Settlement avoids lengthy, burdensome and expensive litigation, represents a reasonable compromise of the value of the claims resolved and is well within the range of litigation possibilities. (Winstar Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., 215/945-7000) XECHEM: Closes Acquisition of Ceptor, Increasing Drug Pipeline -------------------------------------------------------------- Xechem International, Inc. (OTCBB: XKEM) has completed the acquisition of Ceptor Inc., a privately held bio-technology company, significantly increasing Xechem's drug pipeline. Xechem will issue $6,000,000 of Convertible Preferred Stock to Ceptor's shareholders, and assume approximately $300,000 of debt. Under the terms of the agreement, no shares will be converted until at least 12 months. "Ceptor provides Xechem a neuromuscular platform technology that will produce both orphan drug products for the Company to develop under its business model as well as large-market products appropriate for partnering with major companies. This proprietary technology includes the carrier molecules carnitine and taurine to target any passenger molecules to skeletal muscle cells and nerve cells, respectively. This will provide potential products for muscular dystrophy, multiple sclerosis, ALS, epilepsy, ototoxicity, nerve damage, and muscle wasting," said William Pursley, Vice-Chairman and President of Xechem International. Ceptor, is led by Dr. Alfred Stracher, Distinguished Professor and Chairman of Biochemistry at Downstate Medical Center in Brooklyn, New York. Dr. Stracher commented, "We are excited about the merger and are looking forward to a higher profile for the Ceptor technology." Ceptor will operate as a wholly-owned subsidiary of Xechem. Ceptor's lead product, MYODUR, includes the carnitine carrier and the peptide, leupeptin, a known calpain inhibitor. Calpain is the primary protease that degrades skeletal muscle. Because calpain is up regulated in muscular dystrophy, the Company believes the inhibiting effect of leupeptin along with the targeting effect of carnitine makes MYODUR an ideal candidate for this orphan disease. Xechem plans to file an IND for MYODUR to initiate a phase Ib clinical trial in muscular dystrophy in 2004. The Company estimates that muscular dystrophy represents a $1B+ market opportunity. For a larger indication such as epilepsy, NEURODUR, another product candidate, has also been shown effective in animal models. NEURODUR combines the nerve cell targeting molecule, taurine, with valproic acid. Valproic acid, alone, represents the primary therapy for epilepsy today but has proven to be very difficult to regulate as a therapeutic. Too little provides no benefit and too much can cause serious adverse effects. The Company believes NEURODUR will offer a strong advantage because of the preciseness and efficiency of its nerve cell targeting. Epilepsy is a multibillion dollar market opportunity and represents an excellent out-licensing candidate. Finally, because carnitine, leupeptin, taurine and valproic acid, individually, are all well known, safe and established molecules to the FDA, the Company believes they represent a low-risk development pathway as their combinations have shown no denaturing of the individual components. Dr. Ramesh Pandey, Chairman & CEO of Xechem International stated, "The Ceptor technology is unique and will provide a platform for treating many different diseases. We are gratified that the merger has been completed." Xechem International, Inc. is a fully integrated biopharmaceutical company focusing on proprietary technologies for orphan diseases. Its mission is to increase the quality and quantity of life of the people who suffer from these diseases. * * * As previously reported, Xechem International, Inc. received a letter, on October 4, 2003, from Wiss & Company, LLP, the Company's independent public accountants, dated September 30, 2003. In the letter, Wiss informed the Company that it had decided to discontinue providing audit services to SEC clients and was exiting this practice area. However, Wiss also advised the Company by letter dated November 10, 2003 that it would continue to provide services to the Company through December 1, 2003, which would include review of the Company's financial statements for the three months ended September 30, 2003. The Company had engaged Wiss on December 13, 2002. In its letter, Wiss stated that its decision was based on a variety of business factors, including the recent rash of legislation changes enacted following the passing of the Sarbanes-Oxley Act of 2002. The Company has not yet selected replacement independent public accountants for Wiss; however, it is presently interviewing candidates. Wiss' reports on the Company's consolidated financial statements for the past year, which is the only year for which it provided accounting services during its recent engagement, contained a statement that there were doubts about the ability of the Company to continue as a going concern. * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- Alliance Imaging AIQ (39) 683 43 Akamai Technologies AKAM (168) 230 60 Alaris Medical AMI (32) 586 173 Amazon.com AMZN (1,353) 1,990 550 Aphton Corp APHT (11) 16 (5) Arbitron Inc. ARB (100) 156 (2) Alliance Resource ARLP (46) 288 (16) Atari Inc. ATAR (97) 232 (92) Actuant Corp ATU (7) 361 31 Avon Products AVP (91) 3,327 73 Saul Centers Inc. BFS (13) 389 N.A. Blount International BLT (369) 428 91 Cincinnati Bell CBB (2,104) 1,467 (327) Cubist Pharmaceuticals CBST (7) 221 131 Choice Hotels CHH (114) 314 (37) Columbia Laboratories COB (8) 13 5 Caraco Pharm Labs CPD (20) 20 (2) Centennial Comm CYCL (579) 1,447 (98) Echostar Comm DISH (1,206) 6,210 1,674 D&B Corp DNB (19) 1,528 (104) Education Lending Group EDLG (26) 1,481 N.A. Graftech International GTI (351) 859 108 Hexcel Corp HXL (127) 708 (531) Integrated Alarm IASG (11) 46 (8) Imax Corporation IMAX (104) 243 31 Imclone Systems IMCL (186) 484 139 Inkine Pharm INKP (6) 14 5 Gartner Inc. IT (29) 827 1 Journal Register JRC (4) 702 (20) KCS Energy KCS (30) 268 (16) Kos Pharmaceuticals KOSP (75) 69 (55) Lodgenet Entertainment LNET (101) 298 (5) Lucent Technologies LU (3,371) 15,747 2,818 Level 3 Comm Inc. LVLT (240) 8,963 581 Memberworks Inc. MBRS (21) 281 (100) Moody's Corp. MCO (327) 631 (190) McDermott International MDR (417) 1,278 154 McMoRan Exploration MMR (31) 72 5 Maguire Properti MPG (159) 622 N.A. Microstrategy MSTR (34) 80 (7) Nuvelo Inc. NUVO (4) 27 21 Northwest Airlines NWAC (1,483) 13,289 (762) ON Semiconductor ONNN (525) 1,243 195 Petco Animal PETC (11) 555 113 Primus Telecomm PRTL (168) 724 65 Per-Se Tech Inc. PSTI (39) 209 32 Qwest Communications Q (2,830) 29,345 (475) Quality Distribution QLTY (126) 387 19 Rite Aid Corp RAD (93) 6,133 1,676 Ribapharm Inc RNA (363) 199 92 Sepracor Inc SEPR (392) 727 413 Sigmatel Inc. SGTL (4) 18 (1) St. John Knits Int'l SJKI (76) 236 86 I-Stat Corporation STAT 0 64 33 Syntroleum Corp. SYNM (1) 47 14 Town and Country Trust TCT (2) 504 N.A. Tenneco Automotive TEN (75) 2,504 (50) Thermadyne Holdings THMD (665) 297 139 TiVo Inc. TIVO (25) 82 1 Triton PCS Holdings TPC (60) 1,618 173 Tessera Technologies TSRA (74) 24 20 UnitedGlobalCom UCOMA (3,040) 5,931 (6,287) United Defense I UDI (30) 1,454 (27) Ultimate Software ULTI (7) 31 (10) UST Inc. UST (47) 2,765 829 Valassis Comm. VCI (33) 386 80 Valence Tech VLNC (17) 36 4 Ventas Inc. VTR (54) 895 N.A. Warnaco Group WRNC (1,856) 948 471 Western Wireless WWCA (464) 2,399 (120) Xoma Ltd. XOMA (11) 72 30 ********* 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. 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