/raid1/www/Hosts/bankrupt/TCR_Public/040113.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 13, 2004, Vol. 8, No. 8
Headlines
ACME PAD CORP: Case Summary & 20 Largest Unsecured Creditors
AIR CANADA: Asks Court to Approve GECAS Restructuring Agreement
ALPHASTAR INSURANCE: Section 341(a) Meeting Convenes on Jan. 26
AMERICA WEST: Vacation Subsidiary Merges into Airlines Affiliate
AMERICAN CASINO: S&P Assigns B Credit & Sr. Secured Debt Ratings
ANC RENTAL: Court Approves Gazes' Engagement as Special Counsel
ARVINMERITOR INC: S&P Affirms & Plucks Low-B Ratings from Watch
ATA HOLDINGS: Amends Exchange Offer for 10.50% and 9-5/8% Notes
AURORA FOODS: Brings-In PricewaterhouseCoopers as Accountants
AVADO BRANDS: Preparing to Restructure Debts through Chapter 11
BUILDERS PLUMBING: Wants Schedule-Filing Deadline Extension
CALPINE CORP: Closes Additional $250MM of 4.75% Sr. Note Offering
COMPANHIA SIDERURGICA: Fitch Rates $200-Mill. 10-Year Bond at B+
CONGOLEUM CORP: Court Approves DIP Financing on Interim Basis
CONSECO FIN: S&P Keeps Watch on Related Manufactured Housing Deals
COTTON STATES: A.M. Best Revises B FSR Implications to Positive
COVANTA ENERGY: Wins Clearance for Menzies Settlement Agreement
CRYOPAK INDUSTRIES: John Morgan Appointed as Board Vice-Chairman
CSK AUTO CORP: Prices $225MM Senior Subordinated Note Offering
CUMBRE COMMUNICATIONS: Voluntary Chapter 11 Case Summary
CYCLELOGIC INC: Final DIP Financing Hearing Convenes Today
DII INDUSTRIES: Gets Court Injunction Against Utility Companies
DIRECTV LATIN: Bankruptcy Court Approves Disclosure Statement
DIRECTV LATIN AMERICA: Settles Infront Rejection Claim Dispute
ELIZABETH ARDEN: Majority of Noteholders Tender 11.75% Notes
DUCANE GAS: Wants to Continue Using Lenders' Cash Collateral
EMAGIN CORP: Launches Private Placement for 3.3 Million Shares
ENRON: Creditors' Committee Sues Skilling to Recoup $5.6 Million
EXIDE TECH.: Wants to Pull Plug on Cash Road Branch Space Lease
FAIRCHILD SEMICONDUCTOR: Will Hold Q4 Conference Call on Thurs.
FLEMING COS.: Intends to Amend C&S Deal to Receive Prepayment
GASEL TRANSPORTATION: Hires Goff Backa Alfera as New Accountants
GAUNTLET ENERGY: Ketch Closes $18 Mill. Asset Disposition Deals
GENCORP: S&P Concerned About Likely Fin'l Profile Deterioration
GEO GROUP: $200 Million Shelf Gets S&P's 'B'/'B-' Debt Ratings
HECLA MINING: Proposes Exchange Offer for Preferred B Shares
HOUSTON EXPLORATION: Completes Exchange of 7% Senior Sub. Notes
IT GROUP: Outlines Chief Litigation Officer's Duties & Obligations
KAWIN ASSOCIATES: Case Summary & 8 Largest Unsecured Creditors
KMART: Asks Court to Expunge 219 Amended Claims Totaling $324 Mil.
LAMB-GRAYS HARBOR: Voluntary Chapter 7 Case Summary
LEAP WIRELESS: Susan G. Swenson Resigns as President and COO
LIN TV CORP: Will Publish Q4 and FY 2003 Results on February 10
LYONDELL CHEMICAL: Releases Full-Year 2004 CapEx Budget
MAGELLAN HEALTH: Amends Wachovia Warrant Agreement's Terms
MESABA AIRLINES: Management Reaches Tentative Deal with Pilots
METOKOTE CORP: S&P Affirms Corporate Credit Rating at B+
MIRANT CORPORATION: Extends Contract with Cape Light Compact
MIRANT CORP: Pushing for Approval of NGPCA Settlement Agreement
MOUNT SINAI NYU: S&P Affirms BB Rating & Revises Outlook to Neg.
MYCOM GROUP: Expects Strong Growth for Fourth Quarter & FY 2003
NATIONAL CENTURY: Claims Distribution Under Third Amended Plan
NATIONAL EQUIPMENT: Court to Consider Plan on January 23, 2004
NRG ENERGY: Remaining Debtors Want Exclusive Periods Extended
OLD UGC INC: Voluntary Chapter 11 Case Summary
PACIFIC LIFE: Fitch Rates Class A-3 and B Notes at B/CC
PARAON STEAK: Hot Brands Unsuccessful in Bid to Acquire Leases
PARMALAT: Fitch Sees Less Impact on Asset-Backed CP Conduits
PARMALAT: Centrale De Latte et al., Won't Seek Administration
PILLOWTEX CORP: Agrees to Let PBGC to File One Consolidated Claim
POTLATCH CORP: Will Publish Fourth-Quarter Results on January 26
PREFERREDPLUS TRUST: S&P Cuts Ser. ELP-1 Class A & B Ratings to B-
PREMIER FARMS: Brings-In Sonnenschein Nath as Legal Counsel
PRIDE INT'L: SVP and COO James W. Allen Retires from Company
RELIANT RESOURCES: Initiates Executive Management Reorganization
RYLAND GROUP: Continues Ongoing Share Repurchase Program
SANMINA-SCI: Will Host Q1 2004 Conference Call on January 20
SCHLOTZSKY'S: Amends & Extends Terms of Debt with NS Associates
SEITEL INC: HBV Mellon Commits to Buy $75 Million of New Equity
SINTER LLC: Case Summary & 20 Largest Unsecured Creditors
SK GLOBAL: Judge Kim Yeon-Hak Approves 10.4% SK Corp. Stock Sale
SLATER STEEL: Obtains Extension of CCAA Stay Until March 1, 2004
SOLUTIA INC: Wants Court to Deem Utility Cos. Adequately Assured
SPIEGEL GROUP: Earns Nod to Expend Funds on Subsidiary's Behalf
SWIFT & CO.: Reports Slight Improvement in 2nd-Quarter Results
TERADYNE: Appoints John M. Casey as SVP to Run Asian Activities
TERAYON COMM: Will Publish Q4 and FY 2003 Results on January 27
T.L.I. HOLDING CORP: Voluntary Chapter 11 Case Summary
TOMMY HILFIGER: S&P Drops Ratings to Non-Investment-Grade Level
TYCO INT'L: Schedules Annual Shareholders' Meeting for March 25
US AIRWAYS: S&P Ratchets Corporate Credit Rating Down a Notch
US AIRWAYS: Agrees to Speedy Arbitration with Flight Attendants
U.S. ENERGY: Units Enters LOI to Merge with Globemin Resources
WARNACO GROUP: Offers to Swap $210 Million of 8-7/8% Sr. Notes
WEIGHT WATCHERS: S&P Rates $500-Mil. Sr. Secured Bank Loan at BB
WEIRTON STEEL: Coke Shortage Forces Temporary Shutdown & Layoffs
WESTPOINT STEVENS: Initiates Manufacturing Capacity Realignment
WICKES INC: CEO James O'Grady Elected to Board of Directors
WORLDCOM: Wants Approval to Modify Plan Reimbursement Provisions
W.R. GRACE: Asks Court to Streamline Claim Objection Process
* Large Companies with Insolvent Balance Sheets
*********
ACME PAD CORP: Case Summary & 20 Largest Unsecured Creditors
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Debtor: Acme Pad Corporation
330 N. Warwick Avenue
Baltimore, Maryland 21223-1124
Bankruptcy Case No.: 04-10378
Type of Business: The Debtor is a manufacturer in the non-wovens
industry, producing laid random web, needled
felts and highloft fibers. Its markets include
apparel interlinings, medical, bedding & home
furnishings.
Chapter 11 Petition Date: January 7, 2004
Court: District of Maryland (Baltimore)
Judge: James F. Schneider
Debtor's Counsels: Matthew G. Summers, Esq.
Thomas D. Renda, Esq.
Miles & Stockbridge P.C.
10 Light Street
Baltimore, MD 21202
Tel: 410-385-3592
Fax: 410-385-3700
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
------ --------------- ------------
Barnhardt Manufacturing Co. Trade Debt $118,304
Stein Fibers, Ltd. Trade Debt $60,728
Kufner Textile Corporation Trade Debt $54,090
Aaron Mark Inc. Trade Debt $43,586
Lenzing Fibers Corporation Trade Debt $38,478
Leigh Fibers Inc. Trade Debt $33,697
MB. Preform S.P.A. Trade Debt $24,080
Ellin & Tucker Chartered Accounting Services $21,283
City of Baltimore/Director Property Taxes $20,639
Finance
Unite Cotton Benefit Fund $15,182
North American Electric, Trade Debt $15,106
Inc.
Hollingsworth, John D. Trade Debt $13,587
Facemate Corporation Trade Debt $13,580
HOF Textiles, Inc. Trade Debt $13,441
David C. Poole Co., Inc. Trade Debt $12,793
The American Coat Pad Co. Trade Debt $12,484
National Nonwovens Trade Debt $11,394
Gerber Technology, Inc. Trade Debt $11,242
Amalgamated Insurance Fund Trade Debt $7,909
Martin Inventory Management Trade Debt $7,844
AIR CANADA: Asks Court to Approve GECAS Restructuring Agreement
---------------------------------------------------------------
On July 3, 2003, the Air Canada Applicants reached a tentative
agreement with GE Capital Aviation Services Inc. pursuant to which
GECAS or an affiliate would restructure the leases or other
interests in 108 aircraft. GECAS would also provide a
$585,000,000 exit facility and up to $950,000,000 to finance the
future purchase of 43 regional jet aircraft. In return, the
Applicants agreed to recommence the payment of aircraft rent to
GECAS pending the completion of definitive documentation.
GECAS and GE Capital Corporation lease to or manage aircraft
leases for the Applicants. On the Petition Date, GE Capital
provided $700,000,000 in postpetition financing to the
Applicants.
With the agreement regarding the Exit Facility and RJ Facility
commitments in place and the restructuring of a significant
portion of their fleet addressed, M. Robert Peterson, Air Canada
Executive Vice President and Chief Financial Officer, reports
that the Applicants were able to turn their attention to finding
an equity plan sponsor and completing the lease restructuring of
the remainder of their fleet.
The Global Restructuring Agreement
On July 31, 2003, the Applicants reached memoranda of
understanding on new lease terms with three of their aircraft
lessor groups, including the largest group, those managed by
GECAS. The Applicants' agreements with GE Capital and certain of
its affiliates and the GECAS-managed entities are documented in
four Global Restructuring Agreements and a number of related
documents:
(a) The Global Restructuring Agreement dated as of July 1,
2003 among GE Capital and certain of its affiliates and
Air Canada, Air Canada Capital Ltd. and Simco Leasing Ltd.
and an amendment dated as of January 5, 2004;
(b) The Global Restructuring Agreement dated as of July 1,
2003 among LIFT Canada, LLC, Air Canada and Air Canada
Capital and an amendment dated as of January 5, 2004;
(c) The Global Restructuring Agreement dated as of July 1,
2003 among AFT Trust - Sub I, Air Canada and Air Canada
Capital and an amendment dated as of January 5, 2004; and
(d) The Global Restructuring Agreement dated as of July 1,
2003 among Airplanes Holdings Limited and certain of its
affiliates, Air Canada and Air Canada Capital and an
amendment dated as of January 5, 2004.
The GRA encompasses 108 Air Canada and Jazz Air Inc. operating,
parked and undelivered aircraft, including 12 GECAS-managed
aircraft and 22 aircraft the Applicants cross-collateralized
under the postpetition financing. The GRA represents the global
arrangements and concessions agreed to by the GRA Parties in
terms of lease rate reductions, cash flow relief and the
provision of new financing.
The GRA provides for, inter alia:
(1) a commitment to provide a $585,000,000 Exit Facility;
(2) a commitment to provide up to $950,000,000 in RJ Facility;
(3) a forbearance and waiver with respect to certain defaults
under the leases and other agreements;
(4) the immediate lease rate reductions on the 12 GECAS-
managed aircraft, two of which have now been returned to
GECAS;
(5) cash flow relief with respect to 68 aircraft owned by
GE Capital, which include 29 with cash flow relief, which
may be funded through the Exit Facility, and the remaining
39 aircraft with actual reduced rents;
(6) the restructuring of the termination provisions with
respect to two B747 aircraft, included in the DIP cross-
collateralized aircraft;
(7) the cancellation of four future aircraft lease commitments
and termination of the related lease arrangements; and
(8) the termination of certain obligations to GE Capital with
respect to 20 parked aircraft.
GECAS-Managed Aircraft
The lease rates of the 12 GECAS-managed aircraft, including two
B767-300ER aircraft recently returned, two B767-300ER aircraft
and eight A320 aircraft, have been reduced effective April 1,
2003. Outstanding pre-filing rent will constitute a claim in the
plan of compromise or arrangement to be filed. The Applicants
resumed payment of post-filing rent at the reduced rates on each
of these aircraft in July. The Applicants agree to meet all
original return conditions as mandated in the leases.
GE Capital-Owned Aircraft
(A) Cash Flow Relief
Upon emergence from the CCAA proceeding, the Applicants will
receive cash flow relief for five years through rental rate
reductions on 68 aircraft owned by GE Capital, including 20 of
the DIP cross-collateralized aircraft and three newly delivered
Airbus narrow body aircraft. A portion of the cash flow relief
will be funded through the Exit Facility. The Applicants agree
to meet all original return conditions as mandated in the leases.
The $268,000,000 -- this number is dependent on the date of
closing -- owed by Air Canada to GE Capital with respect to the
two DIP cross-collateralized B747-400 combi aircraft will be
restructured to provide cash flow relief for pre-July rents,
funded through the Exit Facility, and reduced rental rates from
July 1, 2003 through to the date of emergence from CCAA. Upon
emergence, Air Canada will purchase from GE Capital the two
aircraft. GE Capital will finance Air Canada's purchase
obligation. Air Canada will issue to GE Capital:
(i) a 7.5% secured convertible note for $116,000,000 --
$106,000,000 plus interest -- maturing seven years
after issuance. The GECAS Note is convertible at 125%
of the equity "buy in" price, convertible into voting
common shares to the extent possible, and otherwise
into non-voting shares;
(ii) a secured note for $102,000,000 -- $88,000,000 plus
adjustments in accordance with the GRA -- amortizing in
installments with the balance due four years from the
date of issuance; and
(iii) a $50,000,000 limited-recourse note -- on which
liability for principal and interest is limited to
recoveries on the aircraft -- maturing 10 years from
the date of issuance.
(B) Termination of Aircraft Deliveries & Rent Reductions
On the Petition Date, the Applicants were contractually obligated
to take delivery of six new aircraft, including five A320
aircraft and one A319 aircraft -- three aircraft in 2003 and
three aircraft in 2004. The GRA provides for the termination of
the commitment to take delivery of three A320 aircraft and
provides for rental rate reductions and shorter lease terms on
the remaining three new aircraft, two of which have been
delivered to Air Canada on a month-to-month basis pending court
approval of the GRA. The terms of the two leases will be
extended to December 10, 2008 and July 15, 2011. In addition,
the GRA provided for the termination of the commitment to take
delivery of one B767 aircraft.
Pursuant to the GRA, the Applicants returned three aircraft. The
Applicants will pay the redelivery payments with respect to one
aircraft totaling $13,000,000, subject to adjustment, to GECAS.
The lease amendments with respect to the aircraft owned by GE
Capital or its affiliates will become effective upon emergence
from CCAA.
The GRA provides that the Applicants are paying contract rent
from April 1, 2003 on the GE Capital-owned aircraft until
emergence from the CCAA proceedings. Upon emergence, GE Capital
will rebate the value of the rental reductions agreed to, less
amounts owing by the Applicants to cure specified payment
defaults that existed on April 1, 2003 -- and defaults thereafter
with respect to the simulator financing.
(C) Termination of Obligations on Parked Aircraft
The Applicants own 20 parked F28 aircraft. Pursuant to the
payments made by GE Capital in 2001 and 2002, the Applicants were
obligated to transfer title to these aircraft to a GE Capital
affiliate. Pursuant to an amendment to Master Aircraft Sale and
Lease Agreement made as of August 15, 2003 between Air Canada,
Jazz, GE Capital and certain other parties, GE Capital agreed to
terminate this obligation.
(D) Claim Distribution Letter
Air Canada and the applicable GRA Parties will enter into a
"Claim Distribution Letter" pursuant to which, inter alia, Air
Canada will acknowledge and agree to the existence of the claims
of the GRA Parties for the purposes of the Plan. The GRA Parties
will agree to:
(a) with respect to the owned aircraft and the managed
aircraft, vote their acknowledged claims in support of the
Plan; and
(b) with respect to the aircraft owned by GE Capital, and at
Air Canada's option, either forego any distribution in
respect of those claims under the Plan or assign the
distribution rights for the benefit of the Applicants'
other creditors, ratably.
Exit Facility and RJ Facility
The GRA contemplates a $585,000,000 Exit Facility to be provided
to Air Canada Enterprise, the intended holding company for Air
Canada and its affiliates, upon Air Canada's emergence from CCAA.
The Exit Facility will be guaranteed by the A/C Group -- Air
Canada Enterprise, Air Canada and its subsidiaries -- and secured
by first ranking security interests, hypothecs and fixed and
floating charges over all of the A/C Group's unencumbered
personal and real property. The GRA also contemplates up to
$950,000,000 in additional financing to finance the future
purchase of 43 regional jet aircraft.
The Exit Facility will be provided by GE Canada Finance Inc. or
another Canadian GE Capital entity. The Exit Facility
contemplates two tranches:
-- the Tranche A Facility, which is a non-revolving seven-year
term credit facility for $425,000,000 to be advanced in one
draw on emergence; and
-- the Tranche B Facility or Liquidity Facility, which is a
nine-year non-revolving credit facility for $160,000,000
that will be available to Air Canada Enterprise.
The Exit Facility will be used to refinance Air Canada's existing
working capital indebtedness on the effective date of the Plan,
enable Air Canada to consummate the Plan and for general
corporate purposes.
The Tranche A Facility will be repaid over the final four years
of its seven-year term -- with a balloon payment at maturity --
with level quarterly principal payments beginning on the last day
of the first calendar quarter immediately following the third
anniversary of emergence from CCAA. The Tranche A Facility will
bear daily interest and will be available, at Air Canada
Enterprise's option, in U.S. dollars at a one, two or three month
LIBOR Rate plus the applicable Tranche A LIBOR margin, or in
Canadian dollars at a 30, 60 or 90 day BA Rate plus the
applicable BA margin.
The Liquidity Facility will mature on March 31, 2013, and will be
amortized over four years, with level quarterly principal
payments beginning on April 1, 2009 on the outstanding principal
amount. The Liquidity Facility will bear daily interest and will
be available, absent a default, in U.S. dollars at a one, two or
three-month LIBOR Rate plus the applicable Tranche B LIBOR
margin.
The applicable margins under the Exit Facility initially will be
4.25% -- Tranche A LIBOR margin and Tranche A BA margin -- and
4.00% -- Tranche B LIBOR Margin. Beginning after the first 12
months of the term of the Tranche A Facility, the applicable
Tranche A margins will be subject to adjustment -- up or down --
based on Air Canada Enterprise's long-term, unsecured credit
rating from Standard & Poor's Ratings Group, or, if not
available, based on EBITDAR performance. In particular, if Air
Canada Enterprise achieves a "B+" or better S&P credit rating,
the Tranche A LIBOR and BA margins will be reduced to 3.25%. The
margins will be reduced to 3.75% if Air Canada Enterprise
achieves a "B" S&P credit rating.
Exit Facility Fees
Air Canada Enterprise will pay various fees:
* A $10,625,000 transaction fee;
* A $500,000 collateral monitoring fee per year during the
term of the Exit Facility; and
* A closing fee equal to 2.50% of the Tranche A Facility.
There is no closing fee on Tranche B Facility and there is
no commitment fee of any form for either tranche facility.
GE Capital Warrant
Upon emergence from CCAA, Air Canada will execute and deliver a
stock purchase warrant and an accompanying warrant registration
rights agreement to GE Capital or its affiliate. The Warrant
will grant GE Capital warrants to purchase up to 4.0% of Air
Canada Enterprise's non-voting common shares on a fully diluted
basis -- unless voting common shares can be issued to GE Capital,
in which case the Warrant will entitle GE Capital to purchase
voting common shares to the fullest extent possible.
Trinity Will Buy Warrant and GECAS Note
In November 2003, the Applicants reached an agreement with
Trinity Time Investments Inc. pursuant to which Trinity would
make a CND650,000,000 equity investment in Air Canada Enterprise.
The Investment was approved by the CCAA Court on December 8,
2003. A "topping process" then occurred. Trinity revised its
investment proposal, which was ultimately accepted by Air
Canada's Board of Directors on December 21, 2003.
A key component of Trinity's revised investment proposal involved
an agreement reached between GE Capital and Trinity. Both
parties agreed that, on closing, certain rights of GE Capital to
equity of the restructured Air Canada contemplated by the GRA
would be purchased by Trinity.
Trinity advised Air Canada and the Monitor that it will permit
Air Canada to repay the GECAS Note at its principal amount plus a
9% early redemption premium. Trinity confirmed to both Air
Canada and the Monitor that the Warrant will be cancelled upon
exit from CCAA protection without payment or other consideration
payable by Air Canada, and that under all circumstances the
consideration to be received by GE Capital for cancellation of
the Warrant will be paid by Trinity. All of the fully diluted
equity associated with the GECAS Note and the Warrant will be
transferred to the Applicants' unsecured creditors.
Other Salient Terms
(A) Exclusivity
Before the earlier of April 30, 2004 and emergence from CCAA, Air
Canada has agreed to an exclusivity period for any of the
transactions contemplated under the GRA.
(B) Cross Default and Cross
The GRA provides that effective upon emergence, a "Material
Default" under the GRA or certain other specified agreements will
be an "Event of Default" under every other document and that the
A/C Group's direct or indirect obligations to GE Capital will be
cross-collateralized with the Collateral.
(C) Snapback
The GRA provides that in certain circumstances where an event of
default has occurred, both before -- with respect to GE Capital-
managed aircraft only -- and after emergence from CCAA
proceedings, any rental reductions may "snapback" to original
contract rents retroactively to April 1, 2003 -- in the case of
managed aircraft -- and to the date of exit from CCAA proceedings
-- in the case of owned aircraft.
(D) Expenses
The Applicants agree to pay or reimburse, on demand, each GRA
Party for all reasonable out-of-pocket costs and expenses
incurred or payable by that GRA Party in connection with the GRA.
(E) Release and Indemnity
The GRA contains releases as between the Applicants and each GRA
Party and includes an indemnity in favor of the GRA Parties and
GECAS, as servicer, in respect of any damages, which may arise as
a result of the GRA or contemplated transactions.
Conditions Precedent
The GRA is subject to a number of conditions, including:
(a) Applicable court approvals;
(b) Conversion of all Air Canada unsecured debt into equity
under the Plan;
(c) Restructuring of Air Canada substantially under the same
terms as presented to GECAS by Air Canada;
(d) GECAS' and GE Canada Finance's satisfaction with the
amount of the overall exit financing and key terms of the
equity investment;
(e) GECAS' and GE Canada Finance's satisfaction with the Air
Canada business plan, ownership structure, capital
structure and governance structure under the Plan;
(f) Air Canada's emergence from CCAA by no later than
April 30, 2004; and
(g) No default occurring under any existing GRA Party
transaction.
Benefits of the GRA
The Exit Facility is essential to the Applicants' emergence from
the CCAA proceeding. The Applicants require a firm Exit
Financing commitment to accomplish their program of aircraft
lease restructurings and attract an equity sponsor for the Plan.
The GE Capital Exit Financing commitment permitted the airline to
achieve both.
A firm commitment to finance regional jets is essential to the
Applicants' emergence from the CCAA proceedings. The Applicants
required an agreement regarding a regional jet aircraft financing
commitment to attract an equity investor and move forward with
the Business Plan. The RJ Facility allowed the Applicants to
achieve both.
By this motion, the Applicants ask Mr. Justice Farley to uphold
their business judgment and approve the GRA. (Air Canada
Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
ALPHASTAR INSURANCE: Section 341(a) Meeting Convenes on Jan. 26
---------------------------------------------------------------
(Bernadette)
The United States Trustee will convene a meeting of AlphaStar
Insurance Group Limited's creditors on January 26, 2004, 2:30
p.m., at the Office of the United States Trustee, 80 Broad Street,
Second Floor, New York, New York 10004-1408. 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 New York, New York, AlphaStar Insurance Group
Limited, an insurance holding company, filed for chapter 11
protection on December 15, 2003 (Bankr. S.D. N.Y. Case No. 03-
17903). Schuyler G. Carroll, Esq., at Arent Fox Kintner Plotkin &
Kahn, PLLC, represents the Debtors in their restructuring efforts.
When the Company field for protection from their creditors, they
listed $8,000,000 in assets and $1,500,000 in debts.
AMERICA WEST: Vacation Subsidiary Merges into Airlines Affiliate
----------------------------------------------------------------
America West Holdings Corporation (NYSE: AWA) merged The Leisure
Company, a wholly-owned subsidiary, into America West Airlines,
Inc., the Company's other wholly-owned subsidiary.
As a result of the merger, The Leisure Company, which is one of
the nation's largest tour operators, will cease to exist as a
separate legal entity and will instead be a division of
the airline. This merger will save costs and streamline
operations for the Company and will not change any operating
procedures.
The Leisure Company was formed in 1997 as a subsidiary of America
West Holdings Corporation to market and sell vacation packages
under the brand America West Vacations. Vacation packages are
available in Arizona, California, Hawaii, Mexico, Nevada, New York
and Boston. Vacation packages may consist of hotel
accommodations, ground transportation, air transportation on
America West Airlines, America West Express, which is operated by
subsidiary airlines of Mesa Air Group, or Hawaiian Airlines as
well as other services.
America West Holdings Corporation is an aviation and travel
services company. Wholly owned subsidiary, America West Airlines,
is the nation's second largest low-fare carrier, with 13,000
employees serving 55,000 customers a day in 93 destinations in the
U.S., Canada, Mexico and Costa Rica.
As previously reported, Fitch Ratings initiated coverage of
America West Airlines, Inc., a subsidiary of America West Holdings
Corp., and assigned a rating of 'CCC' to the company's senior
unsecured debt. The Rating Outlook for America West is Stable.
AMERICAN CASINO: S&P Assigns B Credit & Sr. Secured Debt Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' rating to the
proposed $200 million senior secured notes due 2012 to be issued
jointly by American Casino & Entertainment Properties LLC and its
wholly owned subsidiary American Casino & Entertainment Properties
Finance Corp. The notes will be secured by substantially all
current and future assets of the company; however, its $20 million
proposed bank facility will benefit from a priority lien.
At the same time, a 'B' corporate credit rating was assigned to
ACEP. Pro forma for the transaction, Las Vegas-headquartered
casino owner and operator will have $201 million in total
consolidated debt outstanding. The outlook is positive.
The proceeds from the above transaction will be used to finance
the acquisition of two Las Vegas-based casinos, repay intercompany
indebtedness of one of the contributed entities, to fund
distributions to ACEP's direct parent, and to pay related fees and
expenses.
The ratings on ACEP reflect the entity's portfolio of second-tier
assets, reliance on a single market, the disadvantaged northern
Strip location of its largest cash flow generating entity (The
Stratosphere Casino, Hotel and Tower), the fact that one of the
properties has been unprofitable for the past few years, and a
relatively small cash flow base. These factors are tempered by a
healthy 'locals' market in Las Vegas, a stable regulatory
environment in Nevada, good credit measures for the rating, and
expected adequate liquidity upon closing of the transaction.
ACEP is a wholly-owned, unrestricted subsidiary of American Real
Estate Partners LP (AREP), a publicly traded entity engaged in the
business of acquiring and managing real estate and activities.
ACEP was created for the purpose of owning and operating three Las
Vegas casinos: the Stratosphere, Arizona Charlie's Decatur
(Decatur), and Arizona Charlie's Boulder (Boulder). Carl Icahn
currently owns about 85% of AREP, and 100% of the Arizona
Charlie's properties through a separate entity.
"Despite the second-tier quality of ACEP's portfolio of assets,
the company's pro forma capitalization provides some cushion
against an unanticipated weak operating environment in Las Vegas,"
said Standard & Poor's credit analyst Peggy Hwan. Ratings could
be raised if EBITDA and liquidity continue to improve, further
enhancing this cushion.
ANC RENTAL: Court Approves Gazes' Engagement as Special Counsel
---------------------------------------------------------------
The ANC Rental Debtors obtained permission from the Court to
employ Gazes & Associates LLP as counsel to represent them in
connection with the commencement and prosecution of various
avoidance actions and claims reconciliation work.
As special counsel, Gazes will:
(1) investigate, analyze and commence adversary proceedings in
the Court on behalf of the ANC Liquidating Trust and
represent the Liquidating Trust in connection with the
prosecution of these adversary proceedings; and
(2) perform all necessary claims reconciliation work,
including preparing and prosecuting claims objections in
the Court and represent the Liquidating Trust in
connection with the claims reconciliation work.
Gazes will charge these fees for the Avoidance Action Work:
(1) With respect to preferential transfers over $100,000 in
amount, Gazes will prosecute all actions on a contingency
fee basis, with the Liquidating Trust paying the filing
fees, and Gazes will be entitled to 33.3% of the gross
recoveries realized;
(2) With respect to preferential transfers ranging from $7,501
to $100,000, Gazes will prosecute all actions on a
contingency fee basis, fund the filing fees as an expense,
and will be entitled to receive 50% of the gross
recoveries received;
(3) With respect to the preferential transfers ranging from
$1,500 to $7,500, it will be in Gazes' sole discretion
whether to:
(a) commence lawsuit(s) against the parties; or
(b) simply send letter demands.
If Gazes commences lawsuits, then it will fund the
attendant filing fees as an expense, and will be entitled
to receive 50% of any gross recoveries received.
If Gazes sends letter demands, then it will be entitled
to receive 33.3% of any gross recoveries received.
At the conclusion of all the preference actions, if Gazes'
aggregate fees exceed 45% of the gross recoveries, then whatever
it receives in excess of the 45% threshold will be split 50/50
with the Liquidating Trust.
Gazes intends to charge its standard hourly rates for the Claims
Reconciliation Work. Gazes' standard hourly rates are:
Ian J. Gazes $450
Senior associates 400
Junior associates 250
Law clerks and para-professionals 125
Administrative staff 75
In addition, to the extent that Gazes is able to reduce the
amount of any filed priority and administrative expense claim,
the Liquidating Trust will pay Gazes 5% of every dollar so
reduced. Gazes' rates are subject to periodic increases in
January of each year.
Moreover, Gazes will seek reimbursement of its reasonable actual
out-of-pocket expenses incurred. Gazes agrees to carry its fees
and expenses as a receivable until the time as there are funds
available to the Liquidating Trust to pay the fees and expenses.
It is intended that Gazes will be retained by the Liquidating
Trust to be established pursuant to the Plan. After the
Liquidating Trust is established, Gazes will not file fee
applications pursuant to Sections 330 and 331 of the Bankruptcy
Code. The firm will submit invoices to be reimbursed by the
Liquidating Trust.
Headquartered in Fort Lauderdale, Florida, ANC Rental Corporation,
is the world's third-largest publicly traded car rental company.
The Company filed for chapter 11 protection on November 13, 2001
(Bankr. Del. Case No. 01-11200). Brad Eric Scheler, Esq., and
Matthew Gluck, Esq., at Fried, Frank, Harris, Shriver & Jacobson
represent the Debtors in their restructuring efforts. When the
Company filed for protection from their creditors, they listed
$6,497,541,000 in assets and $5,953,612,000 in liabilities. (ANC
Rental Bankruptcy News, Issue No. 45; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ARVINMERITOR INC: S&P Affirms & Plucks Low-B Ratings from Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'BB+' corporate
credit and other ratings on ArvinMeritor Inc. and related entities
and removed the ratings from CreditWatch where they had been
placed on July 8, 2003. The outlook is negative.
Troy, Michigan-based ARM is a supplier of systems, modules, and
components to the light and commercial motor vehicle industry.
Outstanding debt at Sept. 30, 2003, was about $1.6 billion.
Following termination of its unsolicited takeover offer for Dana
Corp. (BB/Watch Pos/--), "ArvinMeritor is expected to pursue an
organic growth plan, supplemented on occasion with tuck-in
acquisitions," said Standard & Poor's credit analyst Daniel
DiSenso. "Material debt-financed acquisitions are not expected and
are not factored into the ratings."
ArvinMeritor has strong market positions and diversity in its
customer base, geographic reach, and end-markets. The company
holds a No. 1 or No. 2 share for virtually all of its products
serving the North American market and for most products serving
the European market. However, market strength is partially offset
by intense competition, constant pricing pressures, and declining
demand for some products that limit margins and profit potential.
ArvinMeritor's business strategies are aimed at enhancing its
leadership positions and capitalizing on existing customer,
product, and geographic strengths to boost sales, profitability,
and return on invested capital. The firm's objectives are to grow
content per vehicle through the development of modules and
integrated systems, and also to strengthen its presence in
emerging markets, especially China and South America. ArvinMeritor
has a continuous improvement program aimed at achieving
significant cost reductions, increasing productivity and
operational efficiencies and streamlining operations.
Benefits from cost-containment efforts, combined with anticipated
recovery of the heavy-duty truck market should enable ArvinMeritor
to generate free cash that is expected to be earmarked primarily
for debt reduction. Failure of the firm, within the next two
years, to strengthen credit protection measures to a level
commensurate for the ratings could result in a downgrade.
ATA HOLDINGS: Amends Exchange Offer for 10.50% and 9-5/8% Notes
---------------------------------------------------------------
ATA Holdings Corp. (Nasdaq: ATAH), the parent company of ATA
Airlines, Inc., amended the terms of its exchange offers for $175
million outstanding principal amount of its 10-1/2% Senior Notes
due 2004 and $125 million outstanding principal amount of its
9-5/8% Senior Notes due 2005 and solicitations of consents to
amend the indentures under which the Existing Notes were issued.
The Exchange Offers were initially launched on August 29, 2003.
The terms of the amended Exchange Offers supersede in all respects
the initial terms of the Exchange Offers.
Pursuant to the terms of the amended Exchange Offers, ATAH is
offering
* for each $1,000 principal amount of 2004 Notes tendered for
exchange, $1,050 principal amount of ATAH's new Senior
Notes due 2009 and cash consideration of $50, and
* for each $1,000 principal amount of 2005 Notes tendered for
exchange, $1,050 principal amount of ATAH's new Senior
Notes due 2010 and cash consideration of $50.
The 2009 Notes will initially bear interest at 13% per annum,
increasing to 14 percent per annum on August 1, 2006 until their
maturity on February 1, 2009. ATAH is required to redeem 2009
Notes, in an amount equal to 5% of the aggregate principal amount
of 2004 Notes tendered for exchange, pro rata from holders of the
2009 Notes on August 1, 2005. The 2010 Notes will initially bear
interest at 12-1/8% per annum, increasing to 13-1/8% per annum on
June 15, 2006 until their maturity on June 15, 2010. ATAH is
required to redeem 2010 Notes, in an amount equal to 5% of the
aggregate principal amount of 2005 Notes tendered for exchange,
pro rata from holders of the 2010 Notes on June 15, 2005. The
redemptions of 2009 Notes and 2010 Notes will equal, respectively,
approximately 4.76% of the principal amount of the 2009 Notes and
2010 Notes to be issued upon completion of the Exchange Offers.
Completion of the Exchange Offers is subject to a number of
significant conditions, including receiving valid tenders
representing at least $255 million in aggregate principal amount
of Existing Notes (without regard to series), completion of
definitive amendments to several of ATA's aircraft operating
leases and receiving the consent of the Air Transportation
Stabilization Board pursuant to ATA's government guaranteed term
loan. The Exchange Offers expire at 5 p.m., New York City Time,
on January 26, 2004, unless extended.
As of press time, holders of Existing Notes representing
approximately 6.6% ($11,510,000 outstanding principal amount) of
the 2004 Notes and approximately 23.6% ($29,550,000 outstanding
principal amount) of the 2005 Notes had tendered their Existing
Notes in the Exchange Offers. These holders will be permitted to
withdraw these tenders of Existing Notes until 5 p.m., New York
City Time, on January 16, 2004.
In addition, ATAH has entered into an agreement with certain
holders of Existing Notes, representing approximately 44.6%
($77,975,000 outstanding principal amount) of the 2004 Notes and
approximately 55.0% ($68,760,000 outstanding principal amount) of
the 2005 Notes (in each case without duplication of holders who
have already tendered), pursuant to which these holders have
agreed to tender their Existing Notes in the Exchange Offers. The
Lock-Up Agreement is subject to a number of significant
conditions, including receiving valid tenders representing at
least $255 million in aggregate principal amount of Existing Notes
(without regard to series), completion of definitive amendments to
several of ATA's aircraft operating leases and receiving the
consent of the Air Transportation Stabilization Board pursuant to
ATA's government guaranteed term loan. The holders who are party
to the Lock-up Agreement may withdraw their tenders of Existing
Notes in the event that ATAH seeks to complete the Exchange Offers
prior to the satisfaction or waiver of these conditions.
In addition, the Lock-up Agreement may be terminated by the
holders who are party to it in certain circumstances, including if
the Exchange Offers are not completed by January 31, 2004 or if a
material adverse change occurs with respect to ATAH's business.
If the Lock-up Agreement is terminated, all holders who have
tendered Existing Notes in the Exchange Offers, including those
holders who are party to the Lock-up Agreement, may withdraw their
tenders.
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 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: Brings-In PricewaterhouseCoopers as Accountants
-------------------------------------------------------------
Since 1998, PricewaterhouseCoopers LLP has been engaged by the
Aurora Foods Debtors to provide accounting, auditing, and tax
services. As a result, PwC has developed a great deal of
institutional knowledge regarding the Debtors' operations,
finance, and systems. The Debtors are convinced that PwC's
experience and knowledge will be valuable to its efforts to
reorganize.
By this application, the Debtors seek the Court's authority to
employ PwC to perform accounting, auditing, and tax advisory
services in their Chapter 11 cases, nunc pro tunc to December 8,
2003.
Aurora Chief Restructuring Officer and Assistant Secretary,
Ronald B. Hutchison, asserts that PwC's services are necessary to
enable the Debtors to maximize the value of their estates and to
reorganize successfully. Furthermore, PwC is well qualified and
able to represent the Debtors in a cost-effective, efficient, and
timely manner.
PwC is expected to provide these services, as the Debtors deem
appropriate and feasible:
A. Accounting and Auditing
* Audits of the financial statements of the Debtors as may be
required from time to time, and advice and assistance in the
preparation and filing of financial statements and
disclosure documents required by the Securities and Exchange
Commission including Forms 10-K as required by applicable
law or as requested by the Debtors;
* Audits of any benefit plans as may be required by the
Department of Labor or the Employee Retirement Income
Security Act, as amended;
* Review of the unaudited quarterly financial statements of
the Debtors as required by applicable law or as requested by
the Debtors; and
* Performance of other related accounting services for the
Debtors, as may be necessary or desirable.
B. Tax-Related Services
* Review of and assistance in the preparation and filing of
any tax returns;
* Advice and assistance regarding tax-planning issues,
including calculating net operating loss carry forwards and
the tax consequences of any proposed plans of
reorganization, and assistance in the preparation of any
Internal Revenue Service ruling requests regarding the
future tax consequences of alternative reorganization
structures;
* Assistance regarding existing and future IRS examinations;
and
* Any and all other tax assistance, as may be requested from
time to time.
Historically, the Debtors and PwC agreed to fixed-fee terms for
certain other accounting, auditing, and tax related services,
including annual audit and tax compliance services. The Debtors'
Audit and Compliance Committee has approved a fixed fee of
$544,000 for the audit of the financial statements for the year
ended December 31, 2003. For these fixed-fee services, PwC
intends to include as an exhibit to each interim fee application,
a summary in reasonable detail of the time spent by professionals
on various tasks, in lieu of contemporaneous time records in
partial hour increments.
The customary hourly rates charged by PwC's personnel,
anticipated to be assigned to the case, subject to periodic
adjustments and agreement by the Debtors, on a task-by-task
basis, are:
Partners $743
Managers/Directors 487 - 693
Associates/Senior Associates 197 - 389
Administration/Paraprofessionals 110 - 158
The Debtors and PwC additionally agreed and specified that:
(1) Any controversy or claim with respect to, in connection
with, arising out of, or in any way related to these
provisions or the services provided by PwC to the
Debtors, including any matter involving a successor-in-
interest or agent of any of the Debtors or of
PwC, will be brought to the Bankruptcy Court or the
District Court for the District of Delaware, if the
District Court withdraws the reference;
(2) The jurisdiction and venue of the court is the sole and
exclusive forum -- unless the court does not have or
retain jurisdiction over the claims or controversies --
for the resolution of the claims, causes of actions, or
lawsuits;
(3) PwC and the Debtors, and any and all successors and
assigns, may waive trial by jury, the waiver being
informed and freely made;
(4) If the Bankruptcy Court, or the District Court if the
reference is withdrawn, does not have or retain
jurisdiction over the claims and controversies,
PwC and the Debtors, and any and all successors and
assigns, will submit first to non-binding mediation, and,
if mediation is not successful, then to binding
arbitration, in accordance with the dispute resolution
procedures; and
(5) The judgment on any arbitration award may be entered in
any court having proper jurisdiction.
The Dispute Resolution Procedures will be used to resolve any
claim, controversy or dispute that may arise. The Procedures
involve processes of Mediation and Arbitration.
Mediation
(a) A dispute will be submitted to mediation by written
notice to the other party or parties;
(b) In the mediation process, the parties will try to resolve
their differences voluntarily with the aid of an impartial
mediator, who will attempt to facilitate negotiations;
(c) The mediator will be selected by agreement of the parties;
(d) If the parties cannot agree on a mediator, a mediator will
be designated by the American Arbitration Association or
JAMS/Endispute at the request of a party;
(e) Any mediator so designated must be acceptable to all
parties;
(f) The mediation will be conducted as specified by the
mediator and agreed upon by the parties;
(g) The parties agree to discuss their differences in good
faith and to attempt, with the assistance of the mediator,
to reach an amicable resolution of the dispute;
(h) The mediation will be treated as a settlement discussion
and therefore will be confidential;
(i) The mediator may not testify for either party in any later
proceeding relating to the dispute;
(j) No recording or transcript will be made of the mediation
proceedings;
(k) Each party will bear its own costs in the mediation; and
(l) The fees and expenses of the mediator will be shared
equally by the parties.
Arbitration
If a dispute has not been resolved within 90 days after
the written notice beginning the mediation process -- or a
longer period, if the parties agree to extend the mediation --
the mediation will be terminated and the dispute will be settled
by arbitration. The arbitration will be conducted in accordance
with these procedures and the Arbitration Rules for Professional
Accounting and Related Services Disputes of the American
Arbitration Association.
If any of these provisions are determined to be invalid or
unenforceable, the remaining provisions will remain in effect and
binding on the parties to the fullest extent permitted by law.
Kenneth P. Avery, a partner at PwC, tells Judge Walrath that PwC
does not hold any interest adverse to the Debtors' estates, and
is a "disinterested person" as defined within Section 101(14) of
the Bankruptcy Code.
Aurora Foods Inc. -- http://www.aurorafoods.com/-- based in St.
Louis, Missouri, produces and markets leading food brands,
including Duncan Hines(R) baking mixes; Log Cabin(R), Mrs.
Butterworth's(R) and Country Kitchen(R) syrups; Lender's(R)
bagels; Van de Kamp's(R) and Mrs. Paul's(R) frozen seafood; Aunt
Jemima(R) frozen breakfast products; Celeste(R) frozen pizza; and
Chef's Choice(R) skillet meals. With $1.2 billion in reported
assets, Aurora Foods, Inc., and Sea Coast Foods, Inc., filed for
chapter 11 protection on December 8, 2003 (Bankr. D. Del. Case No.
03-13744), to complete a pre-negotiated sale of the company to
J.P. Morgan Partners LLC, J.W. Childs Equity Partners III, L.P.,
and C. Dean Metropoulos and Co. Sally McDonald Henry, Esq., and
J. Gregory Milmoe, Esq., at Skadden, Arps, Slate, Meagher & Flom
LLP provide Aurora with legal counsel, and David Y. Ying at Miller
Buckfire Lewis Ying & Co., LLP provides financial advisory
services. (Aurora Foods Bankruptcy News, Issue No. 4; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
AVADO BRANDS: Preparing to Restructure Debts through Chapter 11
---------------------------------------------------------------
Avado Brands, Inc. (OTC: AVDO.PK), parent Company of Don Pablo's
Mexican Kitchen and Hops Grillhouse and Brewery, filed with the
Securities and Exchange Commission its third quarter Form 10-Q for
the quarter ended September 28, 2003.
Avado reports a $19.3 million loss for the quarter ending
Sept. 28, 2003, and a $38.9 million loss for the nine-months
ending Sept. 28, 2003. Avado's balance sheet at Sept. 28, 2003,
shows liabilities exceeding assets by $38.6 million.
A full-text copy of the filing is available at no charge at
http://www.sec.gov/Archives/edgar/data/849101/000084910104000003/0000849101-
04-000003.txt
On January 2, 2004, the Company entered into a forbearance
agreement with its Secured Credit Facility lender whereby the
lender has agreed not to exercise any remedies under the
Credit Facility during the forbearance period, which will
expire on January 31, 2004. The forbearance agreement also
provides the Company with $3.0 million of additional liquidity
for general corporate purposes.
Avado discloses that it "will be seeking to restructure its
existing capital structure, which is likely to involve a filing
under Chapter 11 of the Bankruptcy Code."
The Company did not make its December interest payment, due
December 1, 2003, on its 9.75% Senior Notes, due 2006 within the
30-day no default grace period, which expired on December 31,
2003. The Company is in discussions with the Senior Note Holders
and will attempt to negotiate a forbearance agreement. The
Company will not make its December interest payment, due December
15, 2003, on its 11.75% Senior Subordinated Notes, due 2009 within
the 30-day no default grace period provided for under the
indenture. Failure to make this required debt service payment
will result in an event of default under the Senior Subordinated
Notes.
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. The Company
maintains a Web site at http://www.avado.com/
BUILDERS PLUMBING: Wants Schedule-Filing Deadline Extension
-----------------------------------------------------------
Builders Plumbing & Heating Supply Co., along with its debtor-
affiliates, seeks to extend their time period to file their
schedules of assets and liabilities, statements of financial
affairs and lists of executory contracts and unexpired leases
required under 11 U.S.C. Sec. 521(1).
The Debtors tell the U.S. Bankruptcy Court for the Northern
District of Illinois that theirs is a complex matter with numerous
creditors and a large amount of debt. As a result, the schedules
and statements of financial affairs for each individual debtor
will require additional time to prepare and complete. Thus, the
Debtors propose to extend their schedules filing deadline through
January 19, 2004
A plumbing product distributor headquartered in Addison, Illinois,
Builders Plumbing & Heating Supply Co., filed for chapter 11
protection on December 5, 2003 (Bankr. N.D. Ill. Case No.
03-49243). Brian A. Audette, Esq., David N Missner, Esq., and Marc
I. Fenton, Esq., at Piper Rudnick represent the Debtors in their
restructuring efforts. When the Company filed for protection from
their creditors, they listed debs and assets of:
Total Assets Total Debts
------------ -----------
Builders Plumbing & Heating $62,834,841 $57,559,894
Supply Co.
Glendale Plumbing Supply Company $13,302,215 $8,068,738
Inc.
Southwest & Pipe & Supply Company, $8,743,763 $11,207,567
Inc.
Spesco Inc. $6,626,890 $7,742,802
CALPINE CORP: Closes Additional $250MM of 4.75% Sr. Note Offering
-----------------------------------------------------------------
Calpine Corporation (NYSE: CPN) received funding on an additional
$250 million of its 4-3/4% Senior Unsecured Convertible Notes Due
2023, pursuant to the exercise in full by the initial purchaser of
its remaining option to purchase additional notes.
The securities will be convertible into cash and into shares of
Calpine common stock at a price of $6.50 per share, which
represents a 38% premium over the New York Stock Exchange closing
price of $4.71 per Calpine common share on November 6, 2003, the
date the notes were originally priced. Upon conversion of the
notes, Calpine will deliver par value in cash and any additional
value in CPN shares. Net proceeds from the offering will be used
to repurchase or redeem existing indebtedness.
The 4-3/4% Senior Unsecured Convertible Notes Due 2023 were
offered in a private placement under Rule 144A, have not been
registered under the Securities Act of 1933, and may not be
offered in the United States absent registration or an applicable
exemption from registration requirements.
Calpine (S&P, CCC+ Senior Unsecured Convertible Note and B Second
Priority Senior Secured Note Ratings, Negative Outlook) is a fully
integrated power company that owns and operates electricity
generating facilities and natural gas reserves. The company
generates power at plants it owns or leases in 21 states in the
United States, three provinces in Canada and in the United
Kingdom. Calpine also owns nearly 900 billion cubic feet
equivalent of natural gas reserves, Calpine focuses its
marketing and sales activities on securing power contracts with
load-serving entities. The company has in-depth expertise in every
aspect of power generation from development through design,
engineering and construction management, into operations, fuel
supply and power marketing. Founded in 1984, Calpine is publicly
traded on the New York Stock Exchange under the symbol
CPN. For more information about Calpine, visit
http://www.calpine.com/
COMPANHIA SIDERURGICA: Fitch Rates $200-Mill. 10-Year Bond at B+
----------------------------------------------------------------
Fitch Ratings assigned a 'B+,' senior unsecured foreign currency
rating to Companhia Siderurgica Nacional's US$200 million 10-year
bond that was issued through its subsidiary CSN Islands VIII Corp.
on January 9, 2004. The Rating Outlook is Stable. CSN's foreign
currency rating is constrained by the Federative Republic of
Brazil's 'B+,' foreign currency rating.
Fitch also maintains ratings for CSN export securitizations issued
through CSN Islands VI Corp. Fitch rates both the series 2003-1
US$142 million fixed-rate notes and the series 2003-2 $125 million
floating-rate notes 'BBB-'. Fitch also rates CSN's senior
unsecured local currency obligations 'BB+,' and has a national
scale rating of 'A+(bra)'.
The proceeds from this issuance will be used primarily to
refinance existing obligations and extend the company's debt
maturity profile. With EBITDA of about BRL$2.2 billion as of
September 30, 2003, CSN's leverage, as measured by net debt-to-
EBITDA, was 1.8 times, while EBITDA-to-interest expense was about
5.0x. Due to increased production volumes, a higher value-added
product mix and a strong pricing environment, Fitch expects CSN to
continue to generate healthy operating cash flow into 2004. In
2003, CSN benefited from a lower overall cost of financing and has
been able to extend its debt maturity profile. Fitch also expects
to see a reduction in net debt in 2004 such that CSN's EBITDA-to-
interest expense ratio would be above 5.0x, while net debt-to-
EBITDA could improve to less than 1.5x; CSN management has stated
that it is committed to reducing the company's ratio of net debt-
to-EBITDA to 1.1x by the end of 2004.
Although a significant reduction in net debt is expected in the
near term, Fitch believes that further debt reduction will be
constrained over the next several years by the large debt-service
requirements of the company's controlling shareholder, Vicunha
Siderurgia S.A., which has a 46% stake in CSN but no operating
assets. In 2003, about one quarter of CSN's EBITDA, or about
BRL800 million, was needed for dividends in order for Vicunha to
meet debt service on its debentures of approximately BRL350
million. The estimated required dividend from CSN would likely be
about BRL700 million in 2004, BRL900 million in 2005 and BRL1.0
billion in 2006. These estimates are lower than prior ones as
Brazilian inflation and interest rates have declined recently.
With an expected EBITDA of at least BRL3.0 billion in 2004 and
capital expenditures of about BRL500 million (excluding the
potential Casa de Pedra expansion), Fitch believes that CSN will
be able to meet the estimated dividend requirement.
CSN seems especially poised to grow in the current global
environment of high commodity prices due to its ownership of the
Casa de Pedra mine, one of the world's largest high-quality iron
ore bodies. The combination of an improving global economy and
China's voracious appetite for raw materials has driven steel
prices to the high point of their cycles. These pricing benefits
are expected to be marginally offset by higher raw material costs
for items such as coking coal, coke and iron ore, as the increased
levels of steel production have created tight supplies. For a
typical integrated steel producer that must purchase iron ore from
third parties, these two inputs can now account for more than 40%
of steel production costs. Iron ore prices rose by about 10% in
2003 and are expected to have double digit increases again in
2004. By having a captive iron ore mine, CSN will not be
negatively affected by higher iron ore prices but rather will
benefit from the price increases since the company sells its
excess iron ore of approximately 8.0 million tons to third
parties.
CSN's ratings are also supported by its modern production
facilities, vertical integration and access to low-cost labor. The
ratings also factor in the concentrated nature of the Brazilian
steel industry, which limits competition based solely upon price.
In addition, transportation barriers minimize the amount of steel
imported into the Brazilian market. These factors allow CSN to
generate strong cash flows during troughs in the steel cycle and
in economic downturns in Brazil.
CSN ranks as one of the largest steel producers in Latin America
with annual production capacity of 5.8 million tons of crude
steel. CSN's fully integrated steel operations, located in the
state of Rio de Janeiro in Brazil, produce steel slabs and hot-
and cold-rolled coils and sheets for the automobile, construction
and appliance industries, among others. CSN also holds leading
market shares in the galvanized and tin-mill products.
CONGOLEUM CORP: Court Approves DIP Financing on Interim Basis
-------------------------------------------------------------
Congoleum Corporation (AMEX:CGM) announced that the Bankruptcy
Court has issued an interim financing order approving its Debtor-
in-Possession revolving credit facility.
The court also authorized Congoleum to pay its suppliers in the
ordinary course of business for amounts owed on account of goods
and services supplied prior to Congoleum's December 31, 2003
bankruptcy filing. Congoleum is pursuing a pre-packaged bankruptcy
proceeding as a means to resolve claims asserted against it
related to the use of asbestos in its products decades ago.
The Debtor-in-Possession credit facility is extended by Congress
Financial and provides up to $30 million in revolving credit based
upon advance formulas against inventory and receivables at a rate
of three-quarters of a percent over prime. Terms of the facility
are substantially similar to those of the revolving credit
facility Congoleum had with Congress prior to the bankruptcy
filing. A hearing on the final approval of the Debtor-in-
Possession financing will be held on February 2, 2004.
Roger S. Marcus, Chairman of the Board, commented, "We had our
first day in court this week to seek approval for a number of
motions related to operating our business. We were pleased with
the outcome of the hearings, particularly with respect to honoring
commitments to our suppliers. While we have a long journey ahead
of us, this was a good first step on the road to getting our plan
confirmed."
A copy of the interim court order approving the Debtor-in-
Possession credit facility has been filed with the Securities and
Exchange Commission as an exhibit to a Form 8-K. Copies of the
plan of reorganization and disclosure statement have also been
filed with the Securities and Exchange Commission as exhibits to a
Form 8-K. They can also be obtained by visiting Congoleum's Web
site at
http://www.congoleum.com/investor_relations/investor_1.shtml/
Congoleum Corporation is a leading manufacturer of resilient
flooring, serving both residential and commercial markets. Its
sheet and tile products are available in a wide variety of designs
and colors, and are used in remodeling, manufactured housing, new
construction and commercial applications. The Congoleum brand name
is recognized and trusted by consumers as representing a company
that has been supplying attractive and durable flooring products
for over a century. The Company filed for chapter 11 protection on
December 31, 2003 (Bankr. N.J. Case No. 03-51524). Domenic
Pacitti, Esq., at Saul Ewing, LLP represent the Debtors in their
restructuring efforts. When the Company filed for protection from
its creditors, it listed $187,126,000 in total assets and
$205,940,000 in total debts.
CONSECO FIN: S&P Keeps Watch on Related Manufactured Housing Deals
------------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on various
Conseco Finance Corp.-related manufactured housing transactions on
CreditWatch with negative implications.
The CreditWatch placements reflect the continued poor performance
trends displayed by the underlying pools of manufactured housing
contracts and the resulting deterioration in credit enhancement
since Standard & Poor's last rating actions in mid-2003. Series
included in more recent vintages have displayed greater signs of
stress relative to series issued in earlier vintages.
Conseco exited the manufactured home financing business and
suspended its loan assumption program in November 2002. The
discontinuation of its loan assumption program resulted in higher
repossessions, and the suspension of its manufactured home lending
business has limited its ability to liquidate repossessed units
through retail channels, causing it to be more reliant on
wholesale liquidation channels. In conjunction with the depressed
repossession resale market, these factors have resulted in the
further weakening of recovery rates associated with these
transactions. Recovery rates on all of Conseco's manufactured
housing transactions have dissipated substantially.
Although delinquency levels have decreased in some transactions,
the high level of repossessions and increased loss severities have
caused credit support in Conseco's manufactured housing
transactions to be significantly depleted. Most of the
transactions have experienced principal write-downs on their
subordinate classes and, in some cases, high losses have caused
the series' overcollateralization to reduce to zero, resulting in
the complete principal write-down on their B-2 classes and the
partial principal write-down of the B-1 classes.
In June 2003, Green Tree Investment Holdings LLC (formerly CFN
Investment Holdings LLC) completed its asset purchase from
Conseco. Green Tree Investment Holdings LLC is a joint venture
between Fortress Investment Group LLC, Cerberus Capital Management
L.P., and JC Flowers & Co. LLC.
Standard & Poor's expects to complete a detailed review of the
credit performance of the transactions listed below relative to
the remaining credit support in order to determine within the next
two months if any rating changes are necessary.
RATINGS PLACED ON CREDITWATCH NEGATIVE
Green Tree Financial Corp. Man Hsg Trust 1995-2
Rating
Class To From
M-1 AAA/Watch Neg AAA
B-1 AA/Watch Neg AA
Green Tree Financial Corp. Man Hsg Trust 1995-3
Rating
Class To From
M-1 AAA/Watch Neg AAA
B-1 AAA/Watch Neg AAA
Green Tree Financial Corp. Man Hsg Trust 1995-4
Rating
Class To From
M-1 AA+/Watch Neg AA+
B-1 BBB+/Watch Neg BBB+
Green Tree Financial Corp. Man Hsg Trust 1995-5
Rating
Class To From
M-1 AAA/Watch Neg AAA
B-1 A+/Watch Neg A+
Green Tree Financial Corp. Man Hsg Trust 1995-6
Rating
Class To From
M-1 AA-/Watch Neg AA-
B-1 BBB+/Watch Neg BBB+
Green Tree Financial Corp. Man Hsg Trust 1995-7
Rating
Class To From
M-1 AA/Watch Neg AA
B-1 BBB+/Watch Neg BBB+
Green Tree Financial Corp. Man Hsg Trust 1995-8
Rating
Class To From
M-1 AAA/Watch Neg AAA
B-1 BBB+/Watch Neg BBB+
Green Tree Financial Corp. Man Hsg Trust 1995-9
Rating
Class To From
M-1 AA-/Watch Neg AA-
B-1 BBB+/Watch Neg BBB+
Green Tree Financial Corp. Man Hsg Trust 1995-10
Rating
Class To From
M-1 AA-/Watch Neg AA-
B-1 BBB+/Watch Neg BBB+
Green Tree Financial Corp. Man Hsg Trust 1996-1
Rating
Class To From
M-1 AA/Watch Neg AA
B-1 BBB+/Watch Neg BBB+
Green Tree Financial Corp. Man Hsg Trust 1996-2
Rating
Class To From
M-1 AA-/Watch Neg AA-
B-1 BBB-/Watch Neg BBB-
Green Tree Financial Corp. Man Hsg Trust 1996-3
Rating
Class To From
M-1 AA-/Watch Neg AA-
B-1 BBB-/Watch Neg BBB-
Green Tree Financial Corp. Man Hsg Trust 1996-4
Rating
Class To From
M-1 A/Watch Neg A
B-1 B+/Watch Neg B+
Green Tree Financial Corp. Man Hsg Trust 1996-5
Rating
Class To From
M-1 A+/Watch Neg A+
B-1 B/Watch Neg B
Green Tree Financial Corp. Man Hsg Trust 1996-6
Rating
Class To From
M-1 AA-/Watch Neg AA-
B-1 B+/Watch Neg B+
Green Tree Financial Corp. Man Hsg Trust 1996-7
Rating
Class To From
M-1 AA-/Watch Neg AA-
B-1 BB+/Watch Neg BB+
Green Tree Financial Corp. Man Hsg Trust 1996-8
Rating
Class To From
M-1 A+/Watch Neg A+
B-1 B-/Watch Neg B-
Green Tree Financial Corp. Man Hsg Trust 1996-9
Rating
Class To From
M-1 AA-/Watch Neg AA-
B-1 BB/Watch Neg BB
Green Tree Financial Corp. Man Hsg Trust 1996-10
Rating
Class To From
M-1 AA-/Watch Neg AA-
B-1 BB-Watch Neg BB-
Green Tree Financial Corp. Man Hsg Trust 1997-4
Rating
Class To From
A-5 AAA/Watch Neg AAA
A-6 AAA/Watch Neg AAA
A-7 AAA/Watch Neg AAA
M-1 AA-/Watch Neg AA-
B-1 BB/Watch Neg BB
Green Tree Financial Corp. Man Hsg Trust 1997-6
Rating
Class To From
A-6 AAA/Watch Neg AAA
A-7 AAA/Watch Neg AAA
A-8 AAA/Watch Neg AAA
A-9 AAA/Watch Neg AAA
A-10 AAA/Watch Neg AAA
M-1 A+/Watch Neg A+
B-1 B+/Watch Neg B+
Green Tree Financial Corp. Man Hsg Trust 1997-7
Rating
Class To From
A-6 AAA/Watch Neg AAA
A-7 AAA/Watch Neg AAA
A-8 AAA/Watch Neg AAA
A-9 AAA/Watch Neg AAA
A-10 AAA/Watch Neg AAA
M-1 A+/Watch Neg A+
B-1 B+/Watch Neg B+
Green Tree Financial Corp. Man Hsg Trust 1997-8
Rating
Class To From
A-1 AAA/Watch Neg AAA
M-1 A+/Watch Neg A+
B-1 B+/Watch Neg B+
Green Tree Financial Corp. Man Hsg Trust 1998-2
Rating
Class To From
A-5 AAA/Watch Neg AAA
A-6 AAA/Watch Neg AAA
M-1 BBB+/Watch Neg BBB+
B-1 B-/Watch Neg B-
Green Tree Financial Corp. Man Hsg Trust 1998-3
Rating
Class To From
A-5 AA+/Watch Neg AA+
A-6 AA+/Watch Neg AA+
M-1 BBB+/Watch Neg BBB+
B-1 B-/Watch Neg B-
Green Tree Financial Corp. Man Hsg Trust 1998-5
Rating
Class To From
A-1 AAA/Watch Neg AAA
M-1 A-/Watch Neg A-
B-1 B-/Watch Neg B-
Green Tree Financial Corp. Man Hsg Trust 1998-6
Rating
Class To From
A-5 AA+/Watch Neg AA+
A-6 AA+/Watch Neg AA+
A-7 AA+/Watch Neg AA+
A-8 AA+/Watch Neg AA+
M-1 BBB+/Watch Neg BBB+
M-2 BB+/Watch Neg BB+
B-1 B-/Watch Neg B-
Green Tree Financial Corp. Man Hsg Trust 1998-8
Rating
Class To From
A-1 AA-/Watch Neg AA-
M-1 BBB+/Watch Neg BBB+
M-2 BB/Watch Neg BB
B-1 CCC/Watch Neg CCC
Manufactured Housing Senior/Sub Pass-Thru Trust 1999-1
Rating
Class To From
A-4 A/Watch Neg A
A-5 A/Watch Neg A
A-6 A/Watch Neg A
A-7 A/Watch Neg A
M-1 BBB-/Watch Neg BBB-
M-2 B/Watch Neg B
B-1 CCC/Watch Neg CCC
Manufactured Housing Senior/Sub Pass-Thru Trust 1999-2
Rating
Class To From
A-3 A/Watch Neg A
A-4 A/Watch Neg A
A-5 A/Watch Neg A
A-6 A/Watch Neg A
A-7 A/Watch Neg A
M-1 BB+/Watch Neg BB+
M-2 B/Watch Neg B
B-1 CCC/Watch Neg CCC
Manufactured Housing Senior/Sub Pass-Thru Trust 1999-3
Rating
Class To From
A-5 BBB+/Watch Neg BBB+
A-6 BBB+/Watch Neg BBB+
A-7 BBB+/Watch Neg BBB+
A-8 BBB+/Watch Neg BBB+
A-9 BBB+/Watch Neg BBB+
M-1 BB-/Watch Neg BB-
M-2 B-/Watch Neg B-
B-1 CCC-/Watch Neg CCC-
Manufactured Housing Senior/Sub Pass-Thru Trust 1999-4
Rating
Class To From
A-5 BBB-/Watch Neg BBB-
A-6 BBB-/Watch Neg BBB-
A-7 BBB-/Watch Neg BBB-
A-8 BBB-/Watch Neg BBB-
A-9 BBB-/Watch Neg BBB-
M-1 B-/Watch Neg B-
M-2 CCC/Watch Neg CCC
B-1 CCC-/Watch Neg CCC-
Manufactured Housing Senior/Sub Pass-Thru Trust 1999-5
Rating
Class To From
A-3 BBB-/Watch Neg BBB-
A-4 BBB-/Watch Neg BBB-
A-5 BBB-/Watch Neg BBB-
A-6 BBB-/Watch Neg BBB-
M-1 B-/Watch Neg B-
M-2 CCC/Watch Neg CCC
B-1 CCC-/Watch Neg CCC-
Manufactured Housing Contract Sr/Sub Pass-Thru
Trust 1999-6
Rating
Class To From
A-1 BBB-/Watch Neg BBB-
M-1 B-/Watch Neg B-
M-2 CCC/Watch Neg CCC
Manufactured Housing Sen/Sub Pass-thru Trust 2000-2
Rating
Class To From
A-3 BBB-/Watch Neg BBB-
A-4 BBB-/Watch Neg BBB-
A-5 BBB-/Watch Neg BBB-
A-6 BBB-/Watch Neg BBB-
M-1 B-/Watch Neg B-
M-2 CCC/Watch Neg CCC
B-1 CCC-/Watch Neg CCC-
Conseco MH Senior/Subordinate Pass-Through Trust 2000-3
Rating
Class To From
A BBB-/Watch Neg BBB-
M-1 B-/Watch Neg B-
M-2 CCC/Watch Neg CCC
B-1 CCC-/Watch Neg CCC-
Manufactured Hsg contract Sr/Sub Pass-thru Certs
Ser 2000-4
Rating
Class To From
A-3 BBB-/Watch Neg BBB-
A-4 BBB-/Watch Neg BBB-
A-5 BBB-/Watch Neg BBB-
A-6 BBB-/Watch Neg BBB-
M-1 B-/Watch Neg B-
M-2 CCC/Watch Neg CCC
Manufactured Hsg contract Sr/Sub Pass-thru Certs
Ser 2000-5
Rating
Class To From
A-3 BBB-/Watch Neg BBB-
A-4 BBB-/Watch Neg BBB-
A-5 BBB-/Watch Neg BBB-
A-6 BBB-/Watch Neg BBB-
A-7 BBB-/Watch Neg BBB-
M-1 B-/Watch Neg B-
M-2 CCC/Watch Neg CCC
B-1 CCC-/Watch Neg CCC-
Manufactured Hsg contract Sr/Sub Pass-thru Certs
Ser 2000-6
Rating
Class To From
A-3 BBB+/Watch Neg BBB+
A-4 BBB+/Watch Neg BBB+
A-5 BBB+/Watch Neg BBB+
M-1 BB+/Watch Neg BB+
M-2 B/Watch Neg B
B-1 CCC-/Watch Neg CCC-
Manufactured Hsg Contract Sr/Sub Pass-Thru Certs
Ser 2001-1
Rating
Class To From
A-3 A/Watch Neg A
A-4 A/Watch Neg A
A-5 A/Watch Neg A
M-1 BBB+/Watch Neg BBB+
M-2 BB/Watch Neg BB
Manufactured Hsg Contract Sr/Sub Pass-Thru Certs
Ser 2001-2
Rating
Class To From
M-1 BBB+/Watch Neg BBB+
M-2 BBB-/Watch Neg BBB-
B-1 CCC-/Watch Neg CCC-
Manufactured Housing Contract Sr/Sub Pass-Thru Certs
Series 2001-3
Rating
Class To From
A-2 A+/Watch Neg A+
A-3 A+/Watch Neg A+
A-4 A+/Watch Neg A+
M-1 A-/Watch Neg A-
M-2 BBB-/Watch Neg BBB-
B-1 BB-/Watch Neg BB-
Manufactured Housing Contract Sr/Sub Pass-Thru Certs
Series 2001-4
Rating
Class To From
A-2 A+/Watch Neg A+
A-3 A+/Watch Neg A+
A-4 A+/Watch Neg A+
M-1 A-/Watch Neg A-
M-2 BBB-/Watch Neg BBB-
B-1 BB-/Watch Neg BB-
Manufactured Housing Contract Sr/Sub Pass-Through
Certificates Series 2002-1
Rating
Class To From
A A+/Watch Neg A+
M-1-A BBB/Watch Neg BBB
M-1-F BBB/Watch Neg BBB
M-2 BB/Watch Neg BB
B-1 B+/Watch Neg B+
Manufactured Housing Contract Sr/Sub Pass-Through
Certificates Series 2002-2
Rating
Class To From
A-2 A+/Watch Neg A+
M-1 A-/Watch Neg A-
M-2 BBB-/Watch Neg BBB-
B-1 BB-/Watch Neg BB-
COTTON STATES: A.M. Best Revises B FSR Implications to Positive
---------------------------------------------------------------
A.M. Best Co., changed the implications of the under review status
to positive from negative of the financial strength ratings of B
(Fair) for Cotton States Mutual Insurance Company (Cotton States
Mutual) and its subsidiary, Shield Insurance Company (Shield), and
the financial strength rating of B++ (Very Good) of Cotton States
Life Insurance Company (Cotton States Life) (Nasdaq:CSLI). All
companies are located in Atlanta, GA.
These actions follow the December 30, 2003, announcement that
Cotton States Insurance Group and COUNTRY Insurance & Financial
Services (Bloomington, IL) have entered into definitive agreements
regarding the acquisition of Cotton States Life by merger and the
affiliation of Cotton States Mutual and Shield with COUNTRY.
According to the terms of the agreement, business from Cotton
States Mutual will be pooled with business from the existing
COUNTRY property/casualty pool. Each pool member will share
proportionally in the pool's premiums, losses and underwriting
expenses based on the surplus of each company. Shield will be 100%
reinsured by COUNTRY Mutual Insurance Company (Illinois), the lead
company of the COUNTRY property/casualty pool. The
property/casualty alliance is intended to allow both organizations
to diversify risk and spread costs over a larger geographical
area. COUNTRY will also assume control of Cotton States Mutual and
Shield's boards of directors.
The ratings will remain under review pending the completion of the
terms outlined in the definitive agreement and discussions with
management regarding future business plans. A.M. Best expects to
extend the higher financial strength rating of COUNTRY to Cotton
States Mutual and Shield at the close of the transaction.
Under the definitive agreement and merger plan of Cotton States
Life with a subsidiary of COUNTRY Life Insurance Company
(Illinois), Cotton States Life stockholders will receive $20.25
cash for each share of outstanding common stock of Cotton States
Life. Consequently, Cotton States Life will become a privately-
held company. The under review status with positive implications
reflects the anticipated benefits Cotton States Life will receive
from the proposed affiliation with the higher rated COUNTRY Life.
These definitive agreements -- which have been approved by the
boards of directors of Cotton States and COUNTRY -- are subject to
regulatory, shareholder and other customary approvals and
conditions. The transaction is expected to be completed in the
second quarter of 2004.
COVANTA ENERGY: Wins Clearance for Menzies Settlement Agreement
---------------------------------------------------------------
The Covanta Energy Debtors and John Menzies, PLC entered into an
Ogden Aviation Groundhandling & Cargo Acquisition Agreement, dated
July 24, 2000, as amended from time to time, pursuant to which
Menzies purchased from the Debtors all of the issued and
outstanding shares of capital stock of certain of the Debtors'
subsidiaries in the business of aviation cargo and aviation
groundhandling.
James L. Bromley, Esq., at Cleary, Gottlieb, Steen & Hamilton, in
New York, relates that one of the subsidiaries whose quotas were
sold to Menzies pursuant to the Acquisition Agreement was Ogden
Servico de Atendimento Aeroterrestre Ltda. However, at the time
of the closing of the Acquisition Agreement, the quotas of Ogden
Servico held by Debtor Ogden Aviation Service International
Corporation and Ogden do Brasil Participacoes S/C Ltda. could not
be registered with the Brazilian authorities and, therefore,
cannot be transferred. Instead, the articles of association of
Ogden Servico were amended to grant powers to persons nominated
by Menzies to run Ogden Servico. Menzies issued to the Debtors a
Deferred Brazil Closing Payment Obligation, dated November 20,
2000, which contemplated the deferral of the payment of
$2,800,000 of the purchase price.
After the closing of the Acquisition Agreement, disputes between
Menzies and the Debtors arose concerning the amounts owed by the
Debtors to Menzies and the terms of the Acquisition Agreement.
Mr. Bromley reminds the Court that Menzies summarized and
asserted its claims under the Acquisition Agreement in Claim No.
2640 filed against the Debtors on July 29, 2002 for an
unspecified but substantial amount. On November 14, 2002,
Menzies amended Claim No. 2640 by filing Claim No. 3943.
To avoid the cost and expense of litigation, the Debtors and
Menzies entered into a settlement agreement. The salient terms
of the Settlement Agreement are:
A. Settlement
As Settlement Amount, Menzies will pay the Debtors $1,100,000:
(i) $1,097,900 will be paid to OASIC, in New York, in
consideration for the Menzies Group Quotas; and
(ii) the equivalent of $2,100 in Brazilian Reais, will be
paid to Ogden do Brasil, in Sao Paulo, Brazil in
consideration for the Menzies Brazil Quotas.
Menzies will also deliver to the Debtors original
certifications that are valid to permit the transfer of the
Quotas from the Brazilian Social Security Agency, the
Brazilian Worker's Guarantee Fund and the Brazilian Federal
Tax Authorities.
B. Transfer of Quotas and Recreated Interest
Simultaneous with the receipt of the Settlement Amount, the
Debtors will transfer:
(i) 2,044,975 of the Quotas to Menzies Aviation Group
PLC -- the Menzies Group Quotas;
(ii) 2,766 of the Quotas to Menzies Aviation Group Holdings
LTDA -- the Menzies Brazil Quotas; and
(iii) recreated interest amounting to BRL596,013 to Menzies
Aviation Group PLC.
C. Delivery of Foreign Investment Certificates and Amended
Articles
Simultaneous with the receipt of the Settlement Amount, the
Debtors will deliver to Menzies:
(i) Foreign Investment Certificates for Ogden Servico for
BRL2,009,244; and
(ii) original counterparts of the Amendment of the Articles
of Association of Ogden Servico, duly registered before
the competent authorities, showing the elimination of
interest of BRL596,013 from the corporate capital of
Ogden Servico, so that stated capital for Ogden Servico
is BRL2,047,741.
D. Releases
Menzies will release the Debtors, and the Debtors' current and
former affiliates, excluding Greenway Insurance Company of
Vermont, from all actions, obligations, or claims, which
Menzies has or will have, relating to the Transaction
Documents, Claim Nos. 2640 and 3943. Notwithstanding, Menzies
will not release any insurance company or its subsidiaries.
The Debtors will release Menzies and its affiliates from all
actions, obligations or claims, which the Debtors have or will
have, relating to the Transaction Documents, Claim Nos. 2640
and 3943, other than claims arising under their Indemnity
Agreement, dated June 21, 2001.
E. License Agreement
The License Agreement dated November 13, 2000 will be rejected
pursuant to the Covanta Debtors' Amended Reorganization Plan
and the Ogden Debtors' Amended Liquidation Plan. Menzies will
continue using the Ogden Marks, as provided in the License
Agreement, despite the rejection.
Sections 2.1, 2.2, 2.3, 3.1, 3.2, 6.1, 6.2, 6.3, 6.4(a) and
7.3 of the License Agreement will constitute the operative
terms of a license for Menzies and its affiliates to use the
Ogden Marks beginning on the effective date of the Settlement,
with the understanding that the Ogden Marks are licensed on an
"as is" basis. In the event that the Debtors breach the
terms of the licenses under the Ogden Marks by granting other
parties an express license to use the Ogden Marks in a manner
that is inconsistent with the License Agreement, Menzies will
waive all claims for monetary or compensatory damages
resulting from the breach. The sole and exclusive remedy
available to Menzies will be for specific performance.
F. Insurance Claims
The Debtors deny any liability as to claims against Greenway
Insurance Company of Vermont and the Other Insurance Companies
that are not the subject of the release.
G. Repayment of Brazil Payment Obligation
Menzies' payment of the Settlement Amount will constitute
full and complete payment and discharge of its obligations
under the Brazil Payment Obligation.
H. Withdrawal of Proofs of Claim
After the transfer of the Quotas and the Recreated Interest
and the delivery of the Foreign Investment Certificates and
the Amended Articles, Menzies will withdraw Claim Nos. 2640
and 3943.
I. Effective Date
The effective date will occur on the later of the date on
which:
(i) the Brazilian Departamento de Aviacao Civil approves
the transfer of the Quotas; and
(ii) the Court approves the terms of the Settlement
Agreement, deeming it final and non-appealable.
Mr. Bromley attests that the Settlement Agreement is the product
of vigorous arm's-length bargaining between the parties and its
terms are well within the range of reasonableness. At the
Debtors' request, the Court approves the Menzies Settlement
Agreement.
Because the sale of Ogden Servico's Quotas to Menzies has already
occurred but the ministerial task of transferring the Quotas has
yet to be completed, Ogden do Brasil and OASIC hold the Quotas in
trust for Menzies subject to the delivery of the Settlement
Amount by Menzies. Judge Blackshear declares that the Quotas are
free and clear of any liens under the DIP Financing Documents,
the Prepetition Loan Documents and the Prepetition Security
Agreement. (Covanta Bankruptcy News, Issue No. 45; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
CRYOPAK INDUSTRIES: John Morgan Appointed as Board Vice-Chairman
----------------------------------------------------------------
Cryopak Industries Inc. (TSX-V:CII)(OTCBB:CYPKF) said that as part
of its ongoing succession planning, Mr. John Morgan has been
appointed Vice-Chairman of the Board of Directors.
To provide for his transition out of the day-to-day management of
the Company, Mr. Morgan has entered into a consulting agreement
with the Company and will focus his energies and expertise on
marketing initiatives for the Company's suite of products.
Mr. Martin Carsky, currently the Company's Chief Financial
Officer, has been named as the new President and Chief Executive
Officer. He will also be appointed to the Company's Board of
Directors. Mr. Carsky joined the Company in June 2003 and has been
leading the Company's re-positioning efforts since that time. A
Chartered Accountant by training, Mr. Carsky has extensive capital
markets, acquisitions and restructuring experience.
Mr. Chris Ebbehoj, currently the Company's Vice President,
Corporate Controller has been appointed Vice President, Operations
Controller responsible for implementation and maintenance of the
Company's operating and financial information systems. Mr. Ebbehoj
is a Chartered Accountant and has over 25 years financial and
operations experience in both public and private companies.
Mr. Craig Watson, a Certified General Accountant with over 10
years public company financial experience, has been promoted to
Corporate Controller responsible for day-to-day financial and
public company reporting.
Mr. Ebbehoj and Mr. Watson, who joined the Company during the
summer of 2003 and have been responsible for executing the re-
positioning, together will support Mr. Carsky in formulating and
executing the Company's financial strategies and practices going
forward.
Cryopak Industries Inc. develops, manufactures and markets quality
temperature-controlling products such as the premium patented
Cryopak Flexible Ice(TM) Blanket, as well as flexible hot and cold
compresses, gel packs, and instant hot and cold packs. For more
information about Cryopak Industries Inc. or its products, visit
the Company's Web site at http://www.cryopak.com/
* * *
At September 30, 2003, the Company's balance sheet shows that its
total current liabilities outweighed its total current assets by
about $6 million, while its net capital shrank to $2.8 million
from about $5 million at March 31, 2003.
Convertible Loan Agreement
The Company also announced that it has extended to December 5,
2003 the expiry date for the offer to the holders of the $3.6
million convertible loan agreement to amend and restate the CLA.
Completion of the amendment is subject to regulatory and other
approvals and is conditional upon a minimum overall acceptance of
the amended terms by holders representing not less than 80% of the
outstanding dollar amount of the CLA. To-date the Company has
received certificates representing 51% of the total outstanding
dollar amount of the CLA. Management continues to discuss the
amended terms of the CLA with representatives for the other
certificate-holders.
CSK AUTO CORP: Prices $225MM Senior Subordinated Note Offering
--------------------------------------------------------------
CSK Auto Corp. (NYSE: CAO), the parent company of CSK Auto Inc., a
specialty retailer in the automotive aftermarket, announced that
CSK Auto Inc., has priced its private placement of $225.0 million
of senior subordinated notes.
The senior subordinated notes will have a coupon of 7% and will
mature on Jan. 15, 2014. Due to strong demand from investors, the
size of the offering was increased from $200.0 million to $225.0
million.
The note offering is part of a refinancing by CSK Auto Inc. that
includes the execution of an amended and restated senior credit
facility, increasing borrowings by $75.0 million to $400.0
million, and the repurchase of its existing $280.0 million of 12%
Senior Notes due 2006 pursuant to a tender offer commenced on
Dec. 16, 2003. CSK Auto Inc. will use proceeds from the note
offering, borrowings under the amended and restated credit
facility and cash on hand to repurchase any of its Senior Notes
tendered pursuant to the tender offer.
As of Friday last week, approximately $265.0 million aggregate
principal amount of the Senior Notes had been tendered. The tender
offer expires on Jan. 15, 2004.
All of the refinancing transactions, including the private
placement of the senior subordinated notes, are expected to close
on Jan. 16, 2004.
The senior subordinated notes 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.
CUMBRE COMMUNICATIONS: Voluntary Chapter 11 Case Summary
--------------------------------------------------------
Debtor: Cumbre Communications Corporation
1185 North Main Street
Providence, Rhode Island 02908
Bankruptcy Case No.: 04-10065
Type of Business: The Debtor is a broadcasting company that
operates WALE, Super Max 990 AM, a 50,000 watt
AM radio station in Providence that broadcasts
Spanish-language programming.
Chapter 11 Petition Date: January 9, 2004
Court: District of Rhode Island (Providence)
Judge: Arthur N. Votolato
Debtor's Counsel: Peter P. D'Amico, Esq.
D'Amico & Testa
194 Waterman Street
Providence, RI 02906
Tel: 401-273-4400
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
CYCLELOGIC INC: Final DIP Financing Hearing Convenes Today
----------------------------------------------------------
CycleLogic, Inc., sought and obtained approval from the U.S.
Bankruptcy Court for the District of Delaware to obtain First
Priority Secured Postpetition Financing from Intelligent Mobile
Solutions, LLC.
The Debtor reports that it does not possess sufficient
unencumbered cash to manage and operate its business without
further loans or credit. An immediate need for the Debtor to
obtain funds in order to continue operations and administer its
estate under the Bankruptcy Code because absent such, the estate
will suffer immediate and irreparable harm.
The Debtor relates that it has been unsuccessful in its attempts
to obtain postpetition financing from sources other than
Intelligent Mobile on terms more favorable to the Debtor than the
financing made available.
For an interim period, the Court grants the Debtor authority to
borrow $200,000 to avoid immediate and irreparable harm to the
estate. As security for the full and complete repayment,
performance and satisfaction, the obligations will be secured by
all of the Debtor's existing and after-acquired real and personal,
tangible and intangible assets. The obligations of the Debtor
under the Loan Agreement will also constitute a super-priority
administrative expense claim.
The Debtor's projected expenses are:
January February
------- --------
Operating Expenses $483,835 $428,224
Cash Expenses 431,992 376,371
Net Burn 131,992 51,371
A hearing to consider final approval authorizing the Debtor to
obtain Postpetition Financing is scheduled for today, at 4:00 p.m.
before the Honorable Peter J. Walsh.
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 represent 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: Gets Court Injunction Against Utility Companies
---------------------------------------------------------------
The DII Industries, and Kellogg, Brown & Root Debtors use
electricity, telephone, heat, water, steam, gas, sewer, waste
collection, and other utility services essential to their
operations. These utility services are provided to the Debtors in
numerous states. The Debtors maintain 100 accounts with Utility
companies. Should the Utility refuse to provide or discontinue
providing services to the Debtors for even a brief period, their
operations would be severely disrupted, jeopardizing the Debtors'
reorganization efforts. Therefore, it is critical that utility
services continue without interruption.
Section 366 of the Bankruptcy Code protects a debtor from
termination of its utility services upon the filing of a
bankruptcy petition while also providing utility companies with
adequate assurance of payment for postpetition utility services.
Section 366 provides that:
"(a). . . a utility may not alter, refuse, or discontinue
service to, or discriminate against, the trustee or the
debtor solely on the basis of the commencement of a
[Chapter 11] case or that a debt owed by the debtor to
such utility for service rendered before the order for
relief was not paid when due.
(b) Such utility may alter, refuse, or discontinue
service if neither the trustee nor the debtor, within
20 days after the [Petition Date], furnishes adequate
assurance of payment, in the form of a deposit or other
security, for service after such date. On request of
a party-in-interest and after notice and a hearing,
the court may order reasonable modification of the
amount of the deposit or other security necessary to
provide adequate assurance of payment."
Michael G. Zanic, Esq., at Kirkpatrick & Lockhart LLP, in
Pittsburgh, Pennsylvania, notes that the facts and circumstances
of the Debtors' cases demonstrate that the Utilities are not
subject to an unreasonable risk of non-payment. The Debtors are
current on paying all the Utilities' charges and they intend to
pay, on a current basis, all the Utilities' charges during the
pendency of their cases. The Debtors maintain that they will
have the resources to meet their obligations through combined
cash reserves with their Affiliates -- an estimate of
$250,000,000 -- and the postpetition financing. Accordingly, the
Debtors will have more than sufficient liquidity to timely meet
all postpetition Utility obligations. The Utilities will not be
prejudiced if they continue to furnish and render to the Debtors
the services provided in the past.
At the Debtors' request, the Court determines that the Utilities
have adequate assurance of payment for future utility service in
the form of administrative priority claims. The Court precludes
the Utilities from interfering with, disturbing, or discontinuing
their services to the Debtors.
Notwithstanding, the Utilities may demand additional adequate
assurance from the Debtors in the form of deposit or other
security. The Utilities may make a request in writing until
January 14, 2003.
If a Utility makes a timely Request that the Debtors believe is
unreasonable, and if a consensual resolution of the Request is
not reached within 30 days after the Request is served on the
Debtors, the Debtors may file a motion for determination of
adequate assurance of payment with respect to the Utility and
obtain a hearing date that is more than 20 days after the filing
of the Determination Motion. If a Determination Motion is filed,
the relevant Utility will be deemed to have adequate assurance of
payment under Section 366 in the form of an administrative claim
until and unless the Court enters a final order finding
otherwise. Any Utility that does not timely file and serve a
Request will be deemed to have received adequate assurance under
Section 366 in the form of an administrative claim.
Headquartered in Houston, Texas, Kellogg, Brown & Root is engaged
in the engineering and construction business, providing a wide
range of services to energy and industrial customers and
government entities in over 100 countries. DII has no business
operations. The Company filed for chapter 11 protection on
December 16, 2003 (Bankr. W.D. Pa. Case No. 02-12152). Jeffrey N.
Rich, Esq., Michael G. Zanic, Esq., and Eric T. Moser, Esq., at
Kirkpatrick & Lockhart LLP represent the Debtors in their
restructuring efforts. (DII & KBR Bankruptcy News, Issue No. 3;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
DIRECTV LATIN: Bankruptcy Court Approves Disclosure Statement
-------------------------------------------------------------
The U.S. Bankruptcy Court in Wilmington, Delaware, approved the
Disclosure Statement filed by DIRECTV Latin America, LLC, in
connection with the Company's proposed Plan of Reorganization.
With this approval, DIRECTV Latin America remains on schedule to
emerge from the Chapter 11 process in early 2004.
As previously reported, the Company filed for Chapter 11 in March
2003 in order to aggressively address its financial and
operational challenges. The filing applied only to the U.S. entity
and did not include any of the operating companies in Latin
America and the Caribbean, which have continued regular
operations.
At a hearing Friday, Judge Peter J. Walsh ruled that the Company's
Disclosure Statement contained adequate information for the
purposes of soliciting creditor approval for the Plan. A
confirmation hearing at which the Court will consider approval of
the Plan has been scheduled for February 13, 2004.
DIRECTV Latin America mailed yesterday notice of the proposed
confirmation hearing together with the Plan, the Disclosure
Statement and ballots and begin the process of soliciting
approvals for the Plan from qualified claim holders. Assuming that
the requisite approvals are received and the Court confirms the
Plan under the current timetable, the Company presently expects to
emerge from Chapter 11 by the end of February 2004.
DIRECTV is a leading direct-to-home satellite television service
in Latin America and the Caribbean. Currently, the service reaches
approximately 1.5 million customers in the region, in a total of
28 markets. DIRECTV is currently available in: Argentina, Brazil,
Chile, Colombia, Costa Rica, Ecuador, El Salvador, Guatemala,
Honduras, Mexico, Nicaragua, Panama, Puerto Rico, Trinidad &
Tobago, Uruguay, Venezuela and several Caribbean island nations.
DIRECTV Latin America, LLC is a multinational company owned by
DIRECTV Latin America Holdings, a subsidiary of Hughes Electronics
Corporation; Darlene Investments, LLC, an affiliate of the
Cisneros Group of Companies, and an affiliate of Grupo Clarin.
DIRECTV Latin America and its principal operating companies have
offices in Buenos Aires, Argentina; Sao Paulo, Brazil; Cali,
Colombia; Mexico City, Mexico; Carolina, Puerto Rico; Fort
Lauderdale, USA; and Caracas, Venezuela. For more information on
DIRECTV Latin America please visit http://www.directvla.com/
Hughes Electronics Corporation is a world-leading provider of
digital multichannel television entertainment, broadband satellite
networks and services, and global video and data broadcasting.
DIRECTV LATIN AMERICA: Settles Infront Rejection Claim Dispute
--------------------------------------------------------------
DirecTV Latin America, LLC's principal goal in its Chapter 11 case
was to use the means provided under the Bankruptcy Code to
effectively address the increasing problems caused by its
uneconomic programming agreements. As an initial step in that
effort, the Debtor sought to reject certain uneconomic agreements,
including the agreement it has with Infront WM GmbH, formerly
known as Kirsch Media WM GmbH. Pursuant to the Agreement, the
Debtor licensed the right to broadcast and make available to its
ultimate subscribers the 2002 and 2006 FIFA World Cups, and was
afforded certain sublicensing and other rights.
M. Blake Cleary, Esq., at Young, Conway, Stargatt & Taylor, LLP,
in Wilmington, Delaware, relates that before the Petition Date,
Infront commenced litigation in Switzerland seeking damages for
alleged breaches by the Debtor under the World Cup Agreement.
The Debtor has taken the position in the Swiss Action that the
World Cup Agreement had terminated. The Swiss Action remains
pending but is presently stayed.
Mr. Cleary tells the Court that the Debtor rejected its remaining
obligations under the World Cup Agreement. Based on the
rejection, Infront timely filed a proof of claim for $272,500,000
in damages allegedly resulting from the Debtor's rejection.
Subsequently, the Office of the United States Trustee appointed
Infront to the Creditors Committee.
The Debtor has reviewed Infront's proof of claim and assessed the
extent to which, consistent with its five-year business plan, it
can broadcast the World Cup and certain other FIFA additional
events on an economic basis. The Debtor negotiated with Infront
to settle the Infront Rejection Claim and to continue
broadcasting the World Cup Soccer.
According to Mr. Cleary, Infront and the Debtor agreed that the
Infront Rejection Claim will be allowed as a general unsecured
claim for $185,000,000. The Agreement is conditioned, however,
on the filing and the ultimate confirmation of the Debtor's Plan,
which provides for a cash distribution to allowed general
unsecured claimholders in an amount not less than 20% of the
holder's allowed claims. On December 11, 2003, the Debtor filed
a Plan and Disclosure Statement providing for the requisite 20%
cash distribution to general unsecured creditors. The Debtor has
been advised that the Plan is acceptable to, and will be actively
endorsed by, the Creditors Committee.
As an integral part of the Settlement, Infront and the Debtor
have agreed on the terms of a new programming agreement pursuant
to which Infront will license to the Debtor certain non-exclusive
rights to broadcast the 2006 World Cup to its ultimate
subscribers. The effectiveness of the New Infront Agreement
remains expressly subject to the Plan Effective Date. As a
further integral part of the Settlement, the Debtor and Infront's
affiliate, Infront WM AG, have agreed to amend, and the Debtor
has agreed to assume, a certain Additional Events Agreement and
to pay Infront a compromised cure claim.
The New Infront Agreement incorporates substantial differences
from the terms contained in the original rejected Infront
Agreement including critical reductions in the rates to be paid
by the Debtor. The Additional Events Agreement also contains
significant rates reduction.
Mr. Cleary explains that due to their proprietary nature, the
terms, conditions and related information set forth in the New
Infront Agreement and the Additional Events Agreement have not
been disclosed to any unrelated third party, except for the
professionals of the Creditors Committee who reviewed the
information and assured the Debtor of the Committee's support
regarding its entry into the New Infront Agreements. Broader
disclosure would likely undermine the overall settlement between
the Debtor and Infront. Without confidentiality, the Debtor's
efforts to confirm its Plan could be substantially impaired.
Mr. Cleary notes that as part of the Settlement, all litigation
with respect to the World Cup Agreement, including the litigation
pending in Switzerland, will be dismissed with prejudice.
Accordingly, the Debtor asks the Court to approve the settlement
of the Infront Rejection Claim. (DirecTV Latin America Bankruptcy
News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
ELIZABETH ARDEN: Majority of Noteholders Tender 11.75% Notes
------------------------------------------------------------
Elizabeth Arden, Inc. (NASDAQ: RDEN), a global prestige fragrance
and beauty products company, received tenders from holders
representing over 85% of the outstanding principal amount of its
11-3/4% Senior Secured Notes due 2011 and consents to eliminate
substantially all of the restrictive covenants and related events
of default and to release all of the collateral securing the
11-3/4% Notes pursuant to its Offer to Purchase and Consent
Solicitation Statement and the related Consent and Letter of
Transmittal which was delivered to the holders of the 11-3/4 %
Notes on December 24, 2003.
As announced on December 24, 2003, the Company is tendering for
cash any and all $104,000,000 outstanding principal amount of its
11-3/4% Notes. The 85% threshold was one of the conditions that
the Company required to consummate the cash tender offer for the
11-3/4 % Notes. The tender offer will expire at 12:00 midnight,
New York City time, on Thursday, January 22, 2004, unless extended
or earlier terminated. The Company reserves the option to
terminate the tender offer at any time before the Company accepts
tendered 11-3/4% Notes for payment.
Following receipt of the requisite principal amount of 11-3/4%
Notes, the Company executed a supplemental indenture with HSBC
Bank USA, as trustee under the indenture governing the 11-3/4%
Notes, that will give effect to the elimination of the covenants
and related events of default and release all of the collateral
securing the 11-3/4% Notes. The effectiveness of the Supplemental
Indenture is conditioned on the payment of the tender offer price
to the holders of the 11-3/4% Notes that tendered by the
January 7, 2004 consent date.
The total consideration for each $1,000 principal amount of
11-3/4% Notes validly tendered and consenting on or prior to 12:00
midnight, New York City time, on the Consent Date was $1,200,
which includes $20 as a payment for consenting to the proposed
amendments set forth in the Supplemental Indenture. The Company
agreed to pay the additional $20 per $1,000 principal amount to
any holders of 11-3/4% Notes that tender by 5 p.m., New York City
time, yesterday. Holders that tender after that date and time will
receive $1,180 per $1,000 principal amount unless otherwise
determined by the Company.
Questions regarding the tender offer may be directed to Marcey
Becker, Senior Vice President, Finance of the Company at (203)
462-5809. Request for documents may be directed to D.F. King &
Co., Inc., the Information Agent, at (212) 269-5550 or (800) 859-
8508 (toll-free).
Elizabeth Arden (S&P, B+ Corporate Credit and Senior Secured Debt
Ratings, Stable Outlook) is a global prestige fragrance and beauty
products company. The Company's portfolio of leading brands
includes the fragrance brands Red Door, Red Door Revealed,
Elizabeth Arden green tea, 5th Avenue, ardenbeauty, Elizabeth
Taylor's White Diamonds, Passion, Forever Elizabeth and Gardenia,
White Shoulders, Geoffrey Beene's Grey Flannel, Halston, Halston
Z-14, Unbound, PS Fine Cologne for Men, Design and Wings; the
Elizabeth Arden skin care line, including Ceramides and Eight Hour
Cream; and the Elizabeth Arden cosmetics line.
DUCANE GAS: Wants to Continue Using Lenders' Cash Collateral
------------------------------------------------------------
Ducane Gas Grills, Inc., asks for permission from the U.S.
Bankruptcy Court for the District of South Carolina to use
Lenders' Cash Collateral while restructuring under chapter 11
protection.
As of the date of the filing of the petition, the Debtor's
accounts receivable which might constitute collateral have a total
value of $1,600,000 ($2,200,000 book value). Fleet Capital
Corporation asserts a first priority security interest and lien on
virtually all assets of the Debtor, including accounts receivable,
inventory, and general intangibles and, as of the petition date,
is owed approximately $4,700,000. Ullman Family Partnership
asserts a second-priority security interest and lien on virtually
all assets of the Debtor, including accounts receivable and, as of
the petition date, is owed approximately $3,100,000. In any
event, the total value of the collateral, including accounts
receivable and inventory, which may be under lien to Fleet and
Ullman is valued at $8,800,000.
In order to generate continuing accounts receivable, the Debtor
must have the resources to continue in business. The Debtor needs
to defray operational expenses, such as payroll and insurance. In
addition, over the next two months, Debtor also needs to "balance"
its inventory by purchasing $240,000 of additional inventory,
namely bases, to convert its goods on hand to fully finished gas
grills. In addition to the cost of the bases, Debtor estimates
that the manufacturing costs of producing the finished goods to be
$941,154.
Headquartered in Columbia, South Carolina, Ducane Gas Grills,
Inc., distributes cooking gas grills. The Company filed for
chapter 11 protection on December 5, 2003 (Bankr. S.C. Case No.
03-15219). G. William McCarthy, Jr., Esq., at Robinson, Barton,
McCarthy, Calloway & Johnson, P.A., represents the Debtor in its
restructuring efforts. When the Company filed for protection from
its creditors, it listed $10,715,764 in total assets and
$15,209,902 in total debts. The Debtor's Chapter 11 Plan and
Disclosure Statement are due to be filed with the Court on
April 5, 2004.
EMAGIN CORP: Launches Private Placement for 3.3 Million Shares
--------------------------------------------------------------
eMagin Corporation and a group of several institutional investors
entered into a Securities Purchase Agreement whereby the Investors
agreed to purchase an aggregate of approximately $4.2 million in
exchange for an aggregate of approximately 3.3 million shares of
common stock.
The purchased shares were priced at a 20% discount to the average
closing price of the stock from December 30, 2003 to January 6,
2004, which ranged from $1.38 to $1.94 per share during the period
for an average closing price of $1.26 per share. In addition, the
investors received warrants to purchase an aggregate of 2.0
million shares of common stock (subject to anti-dilution
adjustments) exercisable at a price of $1.74 per share for a
period of 5 years. The warrants were priced at a 10% premium to
the average closing price of the stock for the period.
eMagin also issued additional warrants to the investors to acquire
2.3 million shares of common stock. 1.2 million of such warrants
are exercisable within 6 months from closing at a price of $1.74
per share (a 10% premium to the average closing price of the stock
for the period), and 1.1 million of such warrants are exercisable
within 12 months from closing at a price of $1.90 per share (a 20%
premium to the average closing price of the stock for the period).
In connection with the completion of the transactions under the
Securities Purchase Agreement, eMagin and the investors also
entered into a Registration Rights Agreement dated as of
January 9, 2004 providing the investors with certain registration
rights under the Securities Act of 1933, as amended, with respect
to the Company's common stock issued and the common stock issuable
upon exercise of the warrants.
The issuance of the shares and the warrants was exempt from
registration requirements of the Securities Act of 1933 pursuant
to Section 4(2) of such Securities Act and Regulation D
promulgated thereunder based upon the representations of each of
the Investors that it was an "accredited investor" (as defined
under Rule 501 of Regulation D) and that it was purchasing such
securities without a present view toward a distribution of the
securities. In addition, there was no general advertisement
conducted in connection with the sale of the securities.
Chief executive Gary Jones noted that intended use of the funds
included increasing receivables, supply inventories, and finished
good inventories.
The world leader in organic light emitting diode (OLED)-on-silicon
microdisplay technology, eMagin combines integrated circuits,
microdisplays, and optics to create a virtual image similar to the
real image of a computer monitor or large screen TV. eMagin
invented the award-winning SVGA and SVGA-3D OLED microdisplays,
the world's first single-chip color video OLED microdisplay and
embedded controller for advanced virtual imaging. eMagin's
microdisplay systems are expected to enable new mass markets for
wearable personal computers, wireless Internet appliances,
portable DVD-viewers, digital cameras, and other emerging
applications for consumer, industrial, and military applications.
OLED microdisplays demonstrate performance characteristics
important to military and other demanding commercial and
industrial applications including low power consumption, high
brightness and resolution, wide dimming range, wider temperature
operating ranges, shock and vibration resistance, and
insensitivity to high G-forces. eMagin's corporate headquarters
and microdisplay operations are co-located with IBM on its campus
in East Fishkill, N.Y. Optics and system design facilities are
located at its wholly owned subsidiary, Virtual Vision, Inc., in
Redmond, WA. Additional information is available at
http://www.emagin.com/
At June 30, 2003, eMagin's balance sheet shows a total
shareholders' equity deficit of about $6 million.
ENRON: Creditors' Committee Sues Skilling to Recoup $5.6 Million
----------------------------------------------------------------
On the Enron Debtors' behalf, the Official Committee of Unsecured
Creditors seeks to avoid and recover the $5,600,000 transfer
Enron made to Jeffrey K. Skilling on February 1, 2001, pursuant
to Sections 544, 547, 548 and 550 of the Bankruptcy Code.
Susheel Kirpalani, Esq., at Milbank, Tweed, Hadley & McCloy LLP,
in New York, contends that the Transfer is avoidable and
recoverable as a preferential transfer under Sections 547(b) and
550(a) because the Transfer:
(a) is an Enron property;
(b) was made within one year prior to the Petition Date;
(c) was made to, or for the benefit of, a creditor;
(d) was made on account of an antecedent debt owed to Mr.
Skilling prior to the date on which the Transfer was
made; and
(e) enabled Mr. Skilling to receive more than it would have
received if:
-- this case was administered under Chapter 7 of the
Bankruptcy Code;
-- the Transfer was not made; and
-- Mr. Skilling received payment of the Debt to the extent
provided by the Bankruptcy Code.
In the alternative, Mr. Kirpalani states that the Transfer can be
considered as a fraudulent transfer in accordance with Section
548(a)(1)(B) since Enron received less than reasonably equivalent
value in exchange for some or all of the Transfer. Moreover, at
the time of the transfer, Enron was insolvent, or became
insolvent as a result of the Transfer.
Furthermore, Mr. Kirpalani contends that, in the alternative, the
fraudulent transfers may be avoidable and recoverable under
Bankruptcy Code Sections 544 and 550, Sections 270-281 of the New
York Debtors and Creditors Law or other applicable law given
that:
(a) As a direct and proximate result of the Transfer, Enron
and its creditors suffered losses by at least $5,600,000;
and
(b) At the time of the Transfer, there were Enron creditors
holding unsecured claims, and insufficient assets to pay
Enron's liabilities in full.
Thus, the Creditors Committee asks the Court to:
(a) declare the avoidance and setting aside of the Transfer
pursuant to Section 547(b);
(b) in the alternative, declare the avoidance and setting
aside of the Transfer pursuant to Section 548(a)(1)(B);
(c) in the alternative, declare the avoidance and setting
aside of the Transfer pursuant to Bankruptcy Code
Section 544, New York Debtor and Creditor Law Sections
270-281 or other applicable law;
(d) award to the Committee judgment in an amount equal to
the Transfers and direct Mr. Skilling to immediately
pay the Transfer pursuant to Section 550(a), together
with interest on the amount from the date of the
Transfers; and
(e) award to the Committee its attorneys' fees, costs and
other expenses incurred. (Enron Bankruptcy News, Issue No.
92; Bankruptcy Creditors' Service, Inc., 215/945-7000)
EXIDE TECH.: Wants to Pull Plug on Cash Road Branch Space Lease
---------------------------------------------------------------
The Exide Technologies Debtors seek the Court's authority to
reject a certain unexpired lease with Charter Brookhollow Partners
LP for branch space located at 4842-4848 Cash Road in Dallas,
Texas, effective February 15, 2004.
According to Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl,
Young, Jones & Weintraub PC, in Wilmington, Delaware, the Debtors
evaluated their operations and determined to close certain branch
locations as part of their restructuring. The Cash Road Lease is
one of the branches being closed. The Debtors no longer need to
utilize the facility and the Cash Road Lease is no longer
required for any business purpose. However, the Debtors will not
be able to vacate the leased premises until February 15, 2004.
Thus, the Debtors request that the Cash Road Lease be deemed
rejected as of February 15, 2004.
Ms. Jones relates that rejection of the Cash Road Lease will save
the Debtors over $60,000 per year in expenses for the lease term
duration until December 31, 2009 or, $350,000,000 in the
aggregate.
Headquartered in Princeton, New Jersey, Exide Technologies is the
world-wide leading manufacturer and distributor of lead acid
batteries and other related electrical energy storage products.
The Company filed for chapter 11 protection on April 14, 2002
(Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and
Kirk A. Kennedy, Esq., at Kirkland & Ellis, represent the Debtors
in their restructuring efforts. On April 14, 2002, the Debtors
listed $2,073,238,000 in assets and $2,524,448,000 in debts.
(Exide Bankruptcy News, Issue No. 38; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
FAIRCHILD SEMICONDUCTOR: Will Hold Q4 Conference Call on Thurs.
---------------------------------------------------------------
Fairchild Semiconductor (NYSE: FCS) will hold its fourth quarter
and full year 2003 financial results conference call on Thursday,
January 15 at 9:00 a.m. ET. The company will release its fourth
quarter and full year results before the market opens on
Thursday.
Listeners can access the conference call by dialing (800) 915-4836
(domestic) or (973) 317-5319 (international). The call is expected
to last approximately one hour. A dial-in replay will be available
from 11:00 a.m., January 15 until 11:59 p.m. ET, January 18. The
toll free dial-in replay number is (800) 428-6051 (domestic) or
(973) 709-2089 (international). The dial-in replay reservation
number is 325614.
Non-GAAP financial measures may be presented during the conference
call. Reconciliations of those non-GAAP measures to comparable
GAAP measures will be available at the time of the call at the
investor relations section of Fairchild Semiconductor's Web site
at http://investor.fairchildsemi.com
Fairchild Semiconductor (NYSE: FCS) is a leading global supplier
of high performance products for multiple end markets. With a
focus on developing leading edge power and interface solutions to
enable the electronics of today and tomorrow, Fairchild's
components are used in computing, communications, consumer,
industrial and automotive applications. Fairchild's 10,000
employees design, manufacture and market power, analog & mixed
signal, interface, logic, and optoelectronics products from its
headquarters in South Portland, Maine, USA and numerous locations
around the world. Visit http://www.fairchildsemi.com/for more
information.
As previously reported in Troubled Company Reporter, Standard &
Poor's assigned its 'BB-' rating to Fairchild Semiconductor
International Inc.'s new senior secured bank loan. The 'BB-'
corporate credit and 'B' subordinated note ratings were also
affirmed.
FLEMING COS.: Intends to Amend C&S Deal to Receive Prepayment
-------------------------------------------------------------
The Fleming Companies Debtors ask Judge Walrath to approve an
amendment to their Asset Purchase Agreement dated July 7, 2003
with C&S Acquisition LLC to allow for the immediate payment of
royalty amounts payable by C&S.
Under the C&S APA, Fleming is entitled to receive certain
prospective royalty payments from C&S -- on its own behalf and on
behalf of its third-party purchasers -- during the Royalty
Period. C&S -- only on behalf of its third-party purchasers --
may prepay the amount for the customer relationships or customer
agreements sold or transferred to a third-party purchaser equal
to the net present value, using a 10% discount rate, of 1% of the
estimate of the Sales to that customer over the four-year Royalty
Period -- the estimate to be based on the Average Actual Sales
annualized for the remaining four years.
To satisfy the Debtors' near-term liquidity needs, facilitate the
refinancing of the Debtors' current DIP facility, and alleviate
the administrative burdens associated with reconciling the
prospective payments, the Debtors find it important to promptly
monetize all remaining payments due from C&S.
The Debtors believe that additional liquidity is necessary for
two reasons. First, the Debtors are pursuing a refinancing of
their senior secured postpetition DIP Facility. The proposed new
facility requires minimum borrowing availability as of the
closing date of not less than $50,000,000. The receipt of the
C&S prepaid Royalty Amount is essential to ensure this required
borrowing availability as of the closing date. Second, the
Debtors have filed a reorganization plan. The successful
consummation of the Plan will require the funding of substantial
cash reserves necessary to meet both plan obligations and the
provision of adequate cash for the continuing operating
requirements of the Debtors' convenience operations.
Additionally, the prepayment relieves the Debtors of prospective
administrative costs and uncertainty associated with the
calculation and receipt of the C&S royalty payments. The
collection of millions of dollars in prospective royalty payments
will require extensive involvement by the Debtors' personnel or
personnel of the reorganized entities who are familiar with the
C&S APA, given the vast amount of data involved. Yet the
Debtors, like all debtors, have experienced attrition in key
positions, and believe this attrition is likely to continue.
Accordingly, there is a risk that those personnel with the
requisite knowledge of the C&S APA will not be employed by the
Debtors during the entire period.
The Debtors also seek to eliminate other risks inherent in the
C&S royalty payments. These payments are contingent on
prospective sales to Active Customers. However, there is no
guarantee that the underlying sales will be made. Further, if
C&S were to file for bankruptcy, C&S may be able to delay these
payments, or not make them at all. Further, if there are
disputes concerning prospective royalty payments, then Fleming
may be forced to litigate these differences, which will result in
additional uncertainty and delay concerning these payments.
The Amendment calls for C&S to make an immediate, one-time
payment to Fleming. The amount was determined by performing
substantially the same calculations for prepayment by third
parties that are outlined in the APA. However, for purposes of
determining the C&S prepayment, the parties used a royalty period
covering 4.25 years instead of the four-year period available to
third-party purchasers. This is a further benefit to the Debtors
because the longer period of time captures a larger amount of
anticipated sales, which, in turn, results in a larger royalty
amount.
The proposed prepayment would immediately provide the Debtors
with $14,764,179. This amount is net of a $3,383,249 initial
closing royalty payment paid by C&S and a 25% indemnity reserve
funding equal to $4,921,393. Thus, the Amendment directs that
the prepayment will total $19,685,573, made in full satisfaction
of all Royalty Amounts due or payable under the APA, other than
the Royalty Amounts owing to the Debtors in connection with
sales, transfers or dispositions to AWG Acquisition LLC or
Associated Wholesale Grocers, Inc., Associated Grocers
Acquisition Company or AG Florida, Supervalu Inc., and Grocers
Supply in their capacities as third-party purchasers.
C&S will make the prepayment immediately upon Court approval.
However, in accordance with the APA, 25% of the Royalty Amount,
or $4,921,393, will be deposited into the Indemnity Escrow. In
no event will this or any other deposit into the Indemnity Escrow
cause the total amount in the escrow to exceed $16,500,000.
The Debtors have reviewed the Amendment with the Creditors
Committee and their senior secured lenders. Neither of these
constituencies opposes the request.
Headquartered in Lewisville, Texas, Fleming Companies, Inc. --
http://www.fleming.com/-- is the largest multi-tier distributor
of consumer package goods in the United States. The Company filed
for chapter 11 protection on April 1, 2003 (Bankr. Del. Case No.
03-10945). Richard L. Wynne, Esq., Bennett L. Spiegel, Esq.,
Shirley Cho, Esq., and Marjon Ghasemi, Esq., at Kirkland & Ellis,
represent the Debtors in their restructuring efforts. When the
Debtors filed for protection from its creditors, they listed
$4,220,500,000 in assets and $3,547,900,000 in liabilities.
(Fleming Bankruptcy News, Issue No. 20; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
GASEL TRANSPORTATION: Hires Goff Backa Alfera as New Accountants
----------------------------------------------------------------
Gasel Transportations Lines, Inc. (OTCBB:GSEL), currently
operating as a debtor in possession under Chapter 11
Reorganization, has engaged Goff, Backa, Alfera & Company, LLC to
handle the Company's audit and accountancy needs.
Goff, Backa, Alfera amicably supplants Van Krevel & Company who
has represented the firm for the past five years.
Gasel management cited increasingly complex financial accounting
and a desire to insure the greatest level of accounting oversight
and visibility as the primary reasons for their decision. Gasel
would like to express its thanks to Van Krevel & Company for
providing them with excellent service during their tenure. Goff,
Backa, Alfera, which is located in Pittsburgh PA, will assume the
duties of auditing Gasel effective immediately and will be
responsible for Gasel's FY 2003 year-end audit.
Mike Post, President & CEO of Gasel commented that: "Our decision
to move to a larger, regional accountancy firm like Goff, Backa,
Alfera is purely a function of the growth of the Company. As we
vigorously prepare to exit reorganization proceedings, we want to
insure that Gasel's growth and the increasing complexity of our
financial structure is transparently and accurately represented to
ourselves, our investors and state and federal regulators. This
ends a long-standing and wholly-positive relationship with Van
Krevel & Company, whom we would like to thank for their diligence
and hard work. We would gladly recommend their services and wish
them continued success in their endeavors."
Mr. Post continued: "By contrast, we welcome Goff, Backa, Alfera &
Company. We have been duly impressed with their ethics, commitment
and accountancy skills and we look forward to working with them
from this point into the future."
Gasel Transportation Lines, Inc., based in Marietta, Ohio, with a
terminal and sales offices in Columbus, Ohio, is a national long
and regional haul truckload common and contract carrier, and
provides logistic services throughout the continental United
States and Canada. For more information, visit
http://www.gasel.net/
GAUNTLET ENERGY: Ketch Closes $18 Mill. Asset Disposition Deals
---------------------------------------------------------------
As part of the previously announced disposition plan, Ketch
Resources Ltd. completed two separate dispositions of the assets
of Gauntlet Energy Corporation totaling $18 million.
The assets being disposed include production of approximately 600
BOED effective December 2003. The net result to Ketch of the
Gauntlet acquisition is an addition of approximately 1,000 BOED
(96% natural gas) at a cost of $26.6 million.
Ketch's common shares are listed on the Toronto Stock Exchange
under the symbol KER. Ketch is a Canadian growth oriented energy
company engaged in the exploration, development and production of
crude oil and natural gas.
On June 17, 2003, the Court of Queen's Bench of Alberta granted an
Order that provided creditor protection to Gauntlet Energy
Corporation and permitted the company to develop a financial
restructuring plan to present to its creditors. The Order was
granted under the Companies' Creditors Arrangement Act.
GENCORP: S&P Concerned About Likely Fin'l Profile Deterioration
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings, including
the 'BB' corporate credit rating, on GenCorp Inc. on CreditWatch
with negative implications.
"The CreditWatch placement reflects expectations that problems at
GenCorp's GDX Automotive unit and higher pension expense will
likely result in a deterioration in the company's financial
profile in 2004 to a level subpar for the rating," said Standard &
Poor's credit analyst Christopher DeNicolo. GDX is a leading
provider of automotive vehicle sealing systems and accounts for
around 65% of GenCorp's revenues. Lower volumes, unexpected costs
associated with a new product launch, and pricing pressures
resulted in an operating loss in the third quarter of fiscal 2003.
GenCorp replaced management at the unit and instituted cost-saving
initiatives, including closing a plant in France. The unit is
expected to be profitable in the fourth quarter and in 2004, but
at a very low level. In addition, although GenCorp's defined
benefit pension plan remains fully funded, the amortization of
losses sustained in prior years is likely to result in a fairly
large noncash pension expense in 2004, putting further pressure on
earnings.
In addition to GDX, the Sacramento, Calif.-based company has two
other segments: aerospace and defense (Aerojet), and an operation
manufacturing chemical intermediates used in pharmaceuticals. The
firm also holds substantial real estate, subject to environmental
restrictions, in varying stages of remediation and qualification
for commercial development. Acquisitions over the past two years
significantly expanded Aerojet's operations and improved its
position in the space propulsion and tactical missile markets.
However, margins are expected to decline in 2004, due to a higher
proportion of lower-margin development work.
Consolidated margins improved in 2002 due to the restructured
automotive and fine chemicals operations, but are likely to weaken
in 2003 as a result of the current problems at GDX. An important
credit protection measure, funds from operations to total debt,
was a solid 30% in 2002, but will likely decline in 2003 due to
the increased debt from the ARC acquisition. Financial ratios are
expected to deteriorate further in 2004 due to higher pension
expense and weak profitability at GDX.
Standard & Poor's expects to resolve the CreditWatch following
further guidance from the company regarding the outlook for GDX
and its other businesses, which is expected as part of the
company's fiscal 2003 earnings release at the end of January.
GEO GROUP: $200 Million Shelf Gets S&P's 'B'/'B-' Debt Ratings
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
'B'/'B-' senior unsecured/subordinated debt ratings to prison and
correctional services company The GEO Group Inc.'s $200 million
universal shelf registration. (GEO was formerly known as Wackenhut
Corrections Corp.)
At the same time, Standard & Poor's affirmed its outstanding
ratings on GEO, including the company's 'B+' corporate credit
rating.
The outlook is stable.
Boca Raton, Florida-based GEO had about $311 million of total debt
outstanding at Sept. 28, 2003.
"The ratings on GEO reflect its narrow business focus, limited
size, customer concentration, and leveraged financial profile,"
said Standard & Poor's credit analyst David Kang. "Somewhat
mitigating these factors are the company's favorable market
position and demographic trends that could increase the size of
the prison population."
Boca Raton, Florida-based GEO is a narrowly focused company that
provides a range of prison and correctional services to federal,
state, local, and overseas government agencies. With about 27,500
beds in the U.S., GEO is the second-largest player in the U.S.
privatized corrections industry behind market leader Correction
Corp. of America (CCA, B+/Positive/--), which has about 60,000
beds. Standard & Poor's believes that GEO could face long-term
challenges from CCA given the latter company's relative size
advantage and improving financial condition.
Because GEO's customers are concentrated among government agencies
(and because sales are concentrated among these top customers),
budget constraints at the state and federal level present near-
term challenges for corrections industry participants. Also,
policy changes and changes in political leadership can affect
decisions about the outsourcing of prison services. Still, recent
economic and demographic trends have increased prospects for
growth of the domestic inmate population, and overcrowding in
state and federal systems should provide growth opportunities in
the privatized corrections market.
HECLA MINING: Proposes Exchange Offer for Preferred B Shares
------------------------------------------------------------
Hecla Mining Company (NYSE:HL) (NYSE:HL-PrB) intends to offer
$66.00 in value of Hecla Common stock, not to exceed 8.25 common
shares, in exchange for each share of Hecla's Series B Cumulative
Convertible Preferred stock.
The $66.00 in value of Common stock represents a 12% premium over
today's $59.00 preferred share closing price and a 6% premium over
the current redemption price for the Preferred stock. If all
464,777 remaining outstanding preferred shares were exchanged at
this price (and without considering fractional shares which would
be paid for in cash), Hecla would issue approximately 3,454,000
common shares, representing approximately 2.9 percent of shares
outstanding.
The exact number of common shares to be exchanged for each share
of Preferred stock will be determined by dividing $66.00 by the
volume weighted average price for Hecla Common stock on the NYSE
for the five trading days ending two trading days prior to the
expiration date of the exchange offer (but not to exceed 8.25
common shares). At the volume weighted average price for Hecla
Common stock for the five days ending today of $8.88 per share,
7.43 common shares would be exchanged for each share of Preferred
stock. Hecla will announce the exchange ratio at the end of the
five-day pricing period.
Hecla's Chief Executive Officer Phillips S. Baker, Jr., said,
"With the excellent performance of Hecla and its Common stock, now
is a great opportunity for our preferred shareholders to realize
both the face value of the preferred plus the past unpaid
dividends, and participate in any future increase in the value of
the Common stock. Our common shareholders also benefit as this
action eliminates the split capital structure and the impact of
past and future dividends. Following the completion of the
exchange offer, we will also evaluate exercising our right to
redeem any remaining preferred shares at the redemption price,
which is currently $62.25 per share."
The exchange offer will be open for 20 business days from the time
the final offer document has been mailed to preferred
shareholders, which is expected to occur within the next few days.
Hecla Mining Company (S&P, B- Corporate Credit Rating, Stable),
headquartered in Coeur d'Alene, Idaho, mines and processes silver
and gold in the United States, Venezuela and Mexico. A 112-year-
old company, Hecla has long been well known in the mining world
and financial markets as a quality silver and gold producer.
Hecla's common and preferred shares are traded on the New York
Stock Exchange under the symbols HL and HL-PrB. For more
information on the Company, visit http://www.hecla-mining.com/
HOUSTON EXPLORATION: Completes Exchange of 7% Senior Sub. Notes
---------------------------------------------------------------
The Houston Exploration Company (NYSE: THX) successfully completed
the exchange offer for its 7% Senior Subordinated Notes due 2013
that have been registered under the Securities Act of 1933 for any
and all outstanding 7% Senior Subordinated Notes due 2013 that
were issued on June 10, 2003, in a private offering.
At the time of the issuance Houston Exploration agreed to offer to
exchange the outstanding notes for registered exchange notes.
This exchange offer satisfies that requirement.
The form and terms of the exchange notes are substantially the
same as the form and terms of the outstanding notes issued on
June 10, 2003. The primary difference is that the exchange notes
have been registered under the Securities Act of 1933 and
therefore will not bear legends restricting their transfer. The
exchange notes evidence the same debt as the outstanding notes
they replace and are issued under and entitled to the benefits of
the indenture that governs the outstanding notes.
The exchange offer expired at 5:00 p.m. Eastern Standard Time on
January 7, 2004, after all of the outstanding notes were tendered
for exchange for a like principal amount of the exchange notes
that have been registered under the Securities Act of 1933. The
exchange offer was made solely by a prospectus dated December 5,
2003.
The Houston Exploration Company (S&P, BB Long-Term Corporate
Credit Rating, Stable) is an independent natural gas and oil
company engaged in the development, exploitation, exploration and
acquisition of natural gas and crude oil properties. The
company's operations are focused in South Texas, the shallow
waters of the Gulf of Mexico and the Arkoma Basin with additional
production in East Texas, South Louisiana and West Virginia. For
more information, visit the company's Web site at
http://www.houstonexploration.com/
IT GROUP: Outlines Chief Litigation Officer's Duties & Obligations
------------------------------------------------------------------
As of the Effective Date, a Chief Litigation Officer will be
appointed to prosecute the Avoidance Actions. The IT Group
Debtors' Plan contemplates that AlixPartners will serve as the
Chief Litigation Officer of Reorganized IT Group.
With the consent of the Committee Designees, the Chief Litigation
Officer may prosecute or decline to prosecute Avoidance Actions,
subject to the provisions of the Plan. The Chief Litigation
Officer may also settle, release, sell, assign, or otherwise
transfer or compromise the Avoidance Actions, in the exercise of
its business judgment, subject to the provisions of the Plan.
To fund the reasonable cost and expenses of administration and
implementation of the Plan, including prosecution of Estate
Causes of Action and Avoidance Actions, the Plan establishes an
Administrative Reserve for $1,500,000 from Cash on hand in the
Estates, as of the Effective Date.
To the extent the Administrative Reserve is insufficient to cover
the reasonable costs and expenses of administration and
implementation of the Plan post-Effective Date, the Bankruptcy
Court may impose an Administrative Surcharge on Estate Cause of
Action Recoveries and Avoidance Action Recoveries in accordance
with the Plan to pay the cost and expenses.
From and after the Effective Date, all Avoidance Actions may be
compromised and settled by the Chief Litigation Officer according
to these procedures:
A. Subject to the Plan, these settlements or compromises of
Avoidance Actions do not require the review or approval of
the Bankruptcy Court:
(a) The settlement or compromise of an Avoidance Action where
the amount of recovery sought in any demand or adversary
proceeding is $250,000 or less; and
(b) The settlement or compromise of an Avoidance Action where
the difference between the amount of the recovery sought
in any demand or adversary proceeding and the amount of
the proposed settlement is $250,000 or less; and
B. These settlements or compromises will be submitted to the
Bankruptcy Court for approval:
(a) Any settlement or compromise not described in the Plan;
and
(b) Any settlement or compromise of an Avoidance Action that
involves an "insider," as defined in Section 1Ol(31) of
the Bankruptcy Code.
With the consent of the Committee Designees, the Chief Litigation
Officer may retain the services of attorneys, accountants,
consultants, and other agents, to provide assistance and advise
in the performance of its duties under the Plan.
The Reorganized IT Group will pay its reasonable fees and
expenses. Any agreement on compensation for the Chief Litigation
Officer will be agreed to by the Committee, in consultation with
the Citicorp USA Inc., and disclosed at or prior to the
Confirmation Hearing, and is subject to approval by the
Bankruptcy Court.
Except as otherwise set forth in the Plan and to the extent
permitted by applicable law, the Chief Litigation Officer and any
attorneys, accountants, consultants, and other agents retained by
the Chief Litigation Officer in the performance of its duties
will be defended, held harmless and indemnified from time to time
by the Reorganized IT Group against any and all losses, Claims,
costs, expenses and liabilities to which the Indemnified CLO
Parties may be subject by reason of the Indemnified CLO Party's
execution of duties pursuant to the discretion, power and
authority conferred on the Indemnified CLO Party by the Plan or
the Confirmation Order.
However, this is provided that the indemnification obligations
arising pursuant to the Plan will not indemnify the Indemnified
CLO Parties for any actions taken by the Indemnified CLO Parties,
which constitute fraud, gross negligence or intentional breach of
the Plan, or the Confirmation Order.
Satisfaction of any obligation of the Reorganized IT Group
arising pursuant to the terms of the Plan will be payable only
from the assets of tire Reorganized IT Group, including, if
available, any insurance maintained by the Reorganized IT Group.
These indemnification provisions will remain available to and be
binding upon any future Chief Litigation Officer or the estate of
any decedent and will survive dissolution of the Reorganized IT
Group.
Headquartered in Monroeville, Pennsylvania, The IT Group, Inc. --
http://www.theitgroup.com/-- together with its 92 direct and
indirect subsidiaries, is a leading provider of diversified,
value-added services in the areas of consulting, engineering and
construction, remediation, and facilities management. The Company
filed for chapter 11 protection on January 16, 2002 (Bankr. Del.
Case No. 02-10118). David S. Kurtz, Esq., at Skadden Arps Slate
Meagher & Flom, represents the Debtors in their restructuring
efforts. On September 30, 2001, the Debtors listed $1,344,800,000
in assets and 1,086,500,000 in debts. (IT Group Bankruptcy News,
Issue No. 38; Bankruptcy Creditors' Service, Inc., 215/945-7000)
KAWIN ASSOCIATES: Case Summary & 8 Largest Unsecured Creditors
--------------------------------------------------------------
Debtor: Kawin Associates, L.P.
420 Bainbridge Street Suite 201
Philadelphia, Pennsylvania 19147
Bankruptcy Case No.: 04-10282
Type of Business: Real Estate
Chapter 11 Petition Date: January 5, 2004
Court: Eastern District of Pennsylvania (Philadelphia)
Judge: Bruce I. Fox
Debtor's Counsel: Walter Weir, Jr., Esq.
Weir and Partners LLP
The Widener Building
1339 Chestnut Street Suite 500
Philadelphia, PA 19107
Total Assets: $1,500,000
Total Debts: $4,585,558
Debtor's 8 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
1995 Series A Bondholders Nontaxable 1995 $4,329,890
c/o Blank, Rome Comisky & Series A Bonds
McCauley LLP
One Logan Square
Philadelphia, PA 19103-6998
N.D. Meyer & Co., Inc. Nontaxable 1995 Series $55,921
Biddle & Company Insurance Insurance Policy $30,948
RP Services Corp. $5,400
Jamco Heating & Air Trade Credit $5,400
Conditioning
HW & Associates Realty Corp. $1,946
Water Revenue Bureau Water $438
Water Revenue Bureau Water $422
KMART: Asks Court to Expunge 219 Amended Claims Totaling $324 Mil.
------------------------------------------------------------------
The Kmart Corporation Debtors ask the Court to expunge 219
amended and superseded claims:
Type of Claims Claim Amount
-------------- ------------
Secured $41,067,774
Administrative 8,385,205
Priority 80,945,089
Unsecured 194,162,763
The amended and superseded claims total $324,560,831. (Kmart
Bankruptcy News, Issue No. 67; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
LAMB-GRAYS HARBOR: Voluntary Chapter 7 Case Summary
---------------------------------------------------
Debtor: Lamb-Grays Harbor Co.
P.O. Box 359
Hoquiam, Washington 98550-0359
Bankruptcy Case No.: 04-40096
Type of Business: The Debtor designs, manufactures, and services
automated pulp and paper handling, finishing,
sheeting and pulper charging systems. The
Company's leading-edge technology paces the
industry in efficiency and reliability,
providing production solutions since 1903.
Chapter 11 Petition Date: January 8, 2004
Court: Western District of Washington (Tacoma)
Judge: Philip H. Brandt
Debtor's Counsel: Frederick P. Corbit, Esq.
Heller Ehrman White & McAulliffe LLP
701 5th Ave #6100
Seattle, WA 98104-7098
Tel: 206-447-0900
Total Assets: $0
Total Debts: $13,059,240
LEAP WIRELESS: Susan G. Swenson Resigns as President and COO
------------------------------------------------------------
Leap Wireless International, Inc. (OTC Bulletin Board: LWINQ), an
innovator of wireless communications services, announced that
Susan G. Swenson has, effective immediately, voluntarily resigned
her position as an officer and director of the Company to pursue
other interests.
Leap, headquartered in San Diego, Calif., is a customer-focused
company providing innovative communications services for the mass
market. Leap pioneered the Cricket Comfortable Wireless(R)
service that lets customers make all of their local calls from
within their local calling area and receive calls from anywhere
for one low, flat rate. For more information, please visit
http://www.leapwireless.com/
LIN TV CORP: Will Publish Q4 and FY 2003 Results on February 10
---------------------------------------------------------------
LIN TV Corp. (NYSE: TVL) will report its 2003 fourth-quarter and
full-year financial results before the opening of trading on
Tuesday, February 10, 2004.
The Company will host a teleconference at 11:00 AM (Eastern time)
to discuss the financial results.
The teleconference can be accessed live (listen-only) via the
Investor Relations section of LIN TV's Web site at
http://www.lintv.com/
To access the teleconference by telephone, dial:
800-231-9012 (within the U.S.)
719-457-2617 (outside the U.S.)
Reference code 502731
Those who intend to access the teleconference should register at
least ten minutes in advance to ensure access.
For those unavailable to participate in the live teleconference, a
replay can be accessed via the Investor Relations section of
http://www.lintv.com/from 2:00 PM on February 10 through midnight
on February 17.
To access the playback by telephone, dial:
888-203-1112 (within the U.S.)
719-457-0820 (outside the U.S.)
Reference code 502731
LIN TV Corp. operates 24 television stations in 14 markets, two of
which are LMAs. The Company also owns approximately 20% of KXAS-TV
in Dallas, Texas and KNSD-TV in San Diego, California through a
joint venture with NBC, and is a 50% non-voting investor in Banks
Broadcasting, Inc., which owns KWCV-TV in Wichita, Kansas and
KNIN-TV in Boise, Idaho. Finally, LIN is a 1/3 owner of WAND-TV,
the ABC affiliate in Decatur, Illinois, which it manages pursuant
to a management services agreement. Financial information and
overviews of LIN TV's stations are available on the Company's Web
site at http://www.lintv.com/
* * *
As previously reported in Troubled Company Reporter, Standard &
Poor's Ratings Services assigned its 'B' rating to LIN Television
Corporation's new $200 million senior subordinated note issue due
2013.
In addition, Standard & Poor's assigned its 'B' rating to the
company's new $100 million exchangeable senior subordinated note
issue due 2033. Proceeds are expected to be used to refinance
existing debt. At the same time, Standard & Poor's affirmed its
'BB-' corporate credit rating on LIN Television, an operating
subsidiary of LIN Holdings Corp. The outlook is stable. The
Providence, R.I.-based television owner and operator had
approximately $754.0 million of debt outstanding on March 31,
2003.
LYONDELL CHEMICAL: Releases Full-Year 2004 CapEx Budget
-------------------------------------------------------
Lyondell Chemical Company (NYSE: LYO) announced the 2004 capital
expenditure budget for Lyondell and its ventures, Equistar
Chemicals, LP and LYONDELL-CITGO Refining LP.
During 2004, capital spending in Intermediate Chemicals &
Derivatives will focus on maintenance and regulatory spending.
Spending in these categories is planned to be relatively unchanged
versus 2003.
Equistar's 2004 spending is expected to increase as a result of
environmental spending. This will be focused on investment at
Equistar's Gulf Coast plants related to tightened emission control
requirements for the eight-county Houston/Galveston region.
Equistar's estimated 2003 capital expenditures include $18 million
relating to the expiration of a railcar operating lease. Equistar
expects to refinance the majority of these cars under a new lease
arrangement in early 2004.
Lyondell's 2004 contribution to support LCR's capital spending is
currently expected to be approximately $53 million, reflecting
increased spending related to environmental regulatory compliance.
Lyondell Chemical Company -- http://www.lyondell.com/--
headquartered in Houston, Texas, is a leading producer of:
propylene oxide (PO); PO derivatives, including toluene
diisocyanate (TDI), propylene glycol (PG), butanediol (BDO) and
propylene glycol ether (PGE); and styrene monomer and MTBE as
co-products of PO production. Through its 70.5% interest in
Equistar Chemicals, LP, Lyondell also is one of the largest
producers of ethylene, propylene and polyethylene in North America
and a leading producer of ethylene oxide, ethylene glycol, high
value-added specialty polymers and polymeric powder. Through its
58.75% interest in LYONDELL-CITGO Refining LP, Lyondell is one of
the largest refiners in the United States processing extra heavy
Venezuelan crude oil to produce gasoline, low sulfur diesel and
jet fuel.
* * *
As previously reported, Fitch Ratings affirmed Lyondell Chemical
Company's senior secured credit facility rating at 'BB-',
Lyondell's senior secured notes at 'BB-', and Lyondell's senior
subordinated notes at 'B'.
Fitch also affirmed the 'BB-' rating on Equistar Chemicals
L.P.'s senior secured credit facility, and the 'B' rating on
Equistar's senior unsecured notes. The Rating Outlook remains
Negative for both Lyondell and Equistar.
The Negative Rating Outlook for both companies reflects Fitch's
concern that margins at Lyondell and Equistar will continue to
remain under pressure into 2004. In addition, Fitch is concerned
with the uncertainty in the overall economy, energy and raw
materials costs, and the pace of improvement in demand.
MAGELLAN HEALTH: Amends Wachovia Warrant Agreement's Terms
----------------------------------------------------------
On January 7, 2004, Magellan Health Services, Inc. amended the
terms of certain of its warrants to correct their exercise price
to be $30.46.
Magellan and Wachovia Bank, National Association, as Warrant
Agent entered into a Warrant Agreement, dated as of January 5,
2004 to create and provide for the issuance by Magellan of
570,826 warrants to purchase shares of Ordinary Common Stock, par
value $ 0.01 per share, of Magellan. This issuance of the
Warrants was required by the Third Amended Joint Plan of
Reorganization of Magellan and certain of its subsidiaries, as
confirmed by order of the U.S. Bankruptcy Court for the Southern
District of New York filed by the court on October 8, 2003.
However, in connection with the consummation of the Chapter 11
Plan and the preparation of the definitive form of the Warrant
Agreement as executed, a clerical error was made in calculating
the per share purchase price of a share of Common Stock pursuant
to the Warrants that is to be applicable in accordance with the
Chapter 11 Plan. Specifically, in Section 1 of the Warrant
Agreement, in the definition of the "Exercise Price" of a
Warrant, the amount of $30.20 appeared, which did not accord with
the requirements of the Chapter 11 Plan and the Confirmation
Order with respect to the exercise price of the Warrants. To
remedy the error, and in accordance with Section 14.4(b) of the
Warrant Agreement, which governs amendments thereto to cure
manifest errors, Magellan and the Warrant Agent entered into
Amendment No. 1 to the Warrant Agreement, dated as of January 7,
2004, to amend the definition of the "Exercise Price" of a
warrant to be the correct amount of $30.46. No other terms of
the Warrants were amended. In addition, and only in order to
avoid confusion regarding the terms of the Warrant Agreement, the
amended Warrant Agreement was also restated as an Amended and
restated Warrant Agreement on January 7, 2004.
A free copy of the Warrant Agreement Amendment is available at:
http://www.sec.gov/Archives/edgar/data/19411/000090951804000015/mv1-7_amdt.t
xt
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. (Magellan Bankruptcy News, Issue No. 21: Bankruptcy
Creditors' Service, Inc., 215/945-7000)
MESABA AIRLINES: Management Reaches Tentative Deal with Pilots
--------------------------------------------------------------
Having permitted negotiations to continue beyond their strike
deadline of 11:01 pm CST January 9, the Mesaba pilots' union
leaders Sunday evening announced they have reached a tentative
contract agreement with management.
A product of exhaustive negotiations, including around-the-clock
talks over the weekend, the proposed terms have already received
the approval of the pilots' Master Executive Council and
await a ratification vote of the membership.
"After two-and-a-half years of arduous negotiations, the union
leaders are gratified to present this tentative agreement to the
Mesaba pilots," said Capt. Tom Wychor, chairman of the Mesaba
pilots' unit of the Air Line Pilots Association, Int'l. "Our pilot
negotiators completed an impressive bargaining effort. I am very
proud of their skill, determination and patience in meticulously
working through all 31 contract sections to substantially improve
our pilots' work lives and advance our profession's standards."
"Mesaba pilots and their families, along with Northwest and
Pinnacle pilots, rallied behind our negotiating team and never
wavered in their support. This was truly a group effort," said
Wychor. "We held our ground on contract goals and believe that
this new agreement will satisfy the pilots' requirements for
strong job security, improved work rules, appropriate pay, and a
solid retirement plan. This tentative agreement allows Mesaba
pilots to move forward in their careers, but it also gives
management the latitude to grow our company."
The negotiators and union leaders will launch communications
including road shows to inform the pilots about the tentative
agreement as soon as all of the final language is drafted. Pilots
will vote electronically and a simple majority is required to
ratify the contract.
"We are heartened by our management team's willingness to remain
at the table and work with us to find a way to meet the goals of
our pilots and airline," said Wychor. "We hope that this
collaboration marks the beginning of a new era of labor relations
for our proud carrier."
Mesaba Airlines operates as a Northwest Jet Airlink and Northwest
Airlink partner for Northwest Airlines. Mesaba serves 112 cities
in 30 states and Canada from Northwest's three major hubs:
Detroit, Minneapolis/St. Paul, and Memphis. Mesaba employs 844
professional airline pilots who operate a fleet of 103 small-jet
and jet-prop aircraft.
Founded in 1931, ALPA is the world's largest pilot union
representing 66,000 pilots at 43 airlines in the U.S. and Canada.
Visit the ALPA Web site at http://www.alpa.org/
METOKOTE CORP: S&P Affirms Corporate Credit Rating at B+
--------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B+' corporate
credit rating on Lima, Ohio-based Metokote Corp. At the same time,
Standard & Poor's assigned its 'B+' bank loan and its recovery
rating of '3' to Metokote's proposed $155 million first-priority
senior secured credit facilities. The '3' recovery rating
indicates an expected meaningful recovery (50%-80%) of principal
in the event of a default.
The senior first-lien bank facilities consist of a $30 million
revolving credit facility due 2009 and a $125 million term loan
due 2010 and are secured by a first-priority perfected security
interest in all the tangible and intangible assets owned by
Metokote (but excluding certain property located in annex
facilities) and a first-priority pledge of the capital stock of
Metokote's domestic and first tier foreign subsidiaries (limited
to 65% of the voting stock of its foreign subsidiaries).
Standard & Poor's also assigned its 'B-' rating and a recovery
rating of '5' to Metokote's proposed $55 million senior second-
lien term loan due 2011. The '5' recovery rating indicates the
expectation of a negligible recovery (25% or less) of principal in
the event of default. Standard & Poor's rating on the company's
senior second-secured term loan incorporates the fact that the
lenders will have a second lien on the company's assets.
Proceeds will be used to make dividend payments to equity holders
or stock repurchases of not less than $30 million, with leverage
capped at 4x. In addition, proceeds will be used to refinance
certain existing debt and for working capital and general
corporate purposes.
Pro forma total debt outstanding was about $151 million at
Oct. 31, 2003, the end of Metokote's fiscal year. The outlook is
stable.
"The upside rating potential is limited by cyclical and
competitive characteristics of Metokote's operating environment
and the narrow application of the company's products and
services," said Standard & Poor's credit analyst Nancy Messer.
"Downside rating risk is mitigated by a disciplined growth
strategy and relatively stable cash flow generated by the
company's annex locations."
Metokote is the largest independent provider of industrial coating
in the U.S.
MIRANT CORPORATION: Extends Contract with Cape Light Compact
------------------------------------------------------------
Mirant announced that its contract with the Cape Light Compact has
been extended. The new contract extension will cover approximately
50,000 default supply customers for 2004.
The contract continues to provide savings to consumers in Cape Cod
and Martha's Vineyard. Mirant's contract offers per kilowatt-hour
prices that are lower than the rates available from the local
power utility. Mirant signed a contract with the Compact in 2002
and customers' total savings for the entire term of the contract
will exceed $4 million.
"We were able to develop an energy solution that addresses and
meets the requirements of the Compact," said Marce Fuller,
president and chief executive officer, Mirant. "The Compact had
been looking for a lower cost electricity alternative for some
time. Our past commitment and production of reliable, low cost
power allowed us to continue our contract uninterrupted."
The Cape Light Compact is a regional energy services organization
made up of 21 towns on Cape Cod, Martha's Vineyard, and Barnstable
and Dukes counties. The purpose of the Compact is to represent and
protect consumer interests in a restructured utility industry. As
authorized by each town, the Compact operates the regional energy
efficiency program and works with the combined buying power of the
region's 194,000 electric consumers to negotiate for low cost
electricity and other public benefits.
Mirant is a competitive energy company that produces and sells
electricity in North America, the Caribbean, and the Philippines.
Mirant owns or controls more than 22,000 megawatts of electric
generating capacity globally. We operate an integrated asset
management and energy marketing organization from our headquarters
in Atlanta. For more information, visit http://www.mirant.com/
MIRANT CORP: Pushing for Approval of NGPCA Settlement Agreement
---------------------------------------------------------------
The Mirant Debtors ask the Court to approve the Settlement
Agreement they entered into with Natural Gas Pipeline Company of
America, which provides the:
(a) release of certain claims of the Debtors against Natural
Gas Pipeline;
(b) rejection of a Negotiated Rate FTS Agreement No. 119394
and two Discounted Rate IBS Agreements, Nos. 119413 and
119465 with Natural Gas Pipeline, with rejection damages
to be satisfied through a draw on an existing letter of
credit; and
(c) assumption of the Negotiated Rate ITS Agreement No.
119412 with Natural Gas Pipeline.
On July 30, 2001, Mirant Americas Energy Marketing LP and Natural
Gas Pipeline entered into the Agreements to provide the
Wrightsville Plant with certain negotiated rates for natural gas
transportation and related balancing services to be provided by
Natural Gas Pipeline. To secure the payments due under the
Agreements, the Debtors procured a $3,535,000 letter of credit
issued by Wachovia Bank, N.A. in favor of Natural Gas Pipeline.
As a result of depressed market condition, Michelle C. Campbell,
Esq., at White & Case LLP, in Miami, Florida, relates that it is
not economically prudent to keep the Wrightsville Plant in a
ready-run state. Accordingly, the facility will be "mothballed"
meaning that it will largely be shut-down except for the minimal
services necessary to avoid deterioration, until market
conditions improve. While in this "mothball" state, MAEM will
provide limited amounts of gas to the Wrightsville Plant and can
most efficiently provide the gas under the ITS Agreement.
According to Ms. Campbell, the ITS Agreement is not linked to the
FTS Agreement or the Discounted Rate IBS Agreement, No. 119465.
While the Discounted Rate IBS Agreement, No. 119413 was entered
into to provide balancing service for the ITS Agreement, this
service is not needed for the "mothballed" facility. The ITS
Agreement provides the most efficient mechanism by which fuel can
be transported to the Wrightsville Plant.
Soon after the commencement of these cases, the Debtors began
analyzing a number of their executory contracts with the goal of
identifying unprofitable contracts that they should reject within
their business judgment. Among those contracts were the FTS, IBS
and ITS Agreements. With respect to the FTS and IBS Agreements,
the Debtors determined that ultimately those contracts were of no
benefit to the estates and could not be assigned to a third
party. Ms. Campbell tells the Court that the Debtors made this
decision based on their determination that:
(a) a variety of factors, including depressed market
conditions and transmission constraints, require that the
Wrightsville Plant be "mothballed" for an undetermined
period;
(b) the FTS and IBS Agreements have no asset-related trading
value to the Debtors; and
(c) the FTS and IBS Agreements have no stand-alone trading
value and cannot be assigned to a third party because
there is no market for the gas at the delivery point
provided for in those agreements, other than the
Wrightsville Plant.
On the other hand, MAEM determined that the ITS Agreement
benefits the estates and should be assumed because the agreement
provides the most efficient mechanism by which fuel can be
transported to the Wrightsville Plant.
Recognizing that there is value in the ITS Agreement and that the
FTS and IBS Agreements are of no benefit to the estates, MAEM
commenced negotiations with Natural Gas Pipeline regarding a
global compromise that would benefit both parties. The goal of
the negotiations was to create a situation where the ITS
Agreement would remain in effect, the FTS and IBS Agreements
would be rejected, and NGPL would be paid a limited amount in
full and final satisfaction of any rejection damage claim it
would have as the result of the Debtors' rejection of the FTS and
IBS Agreements.
The parties successfully reached a compromise. The salient terms
of the Settlement Agreement are:
* MAEM will assume the ITS Agreement. In connection with the
assumption, the Debtors will pre-pay $10,000 to secure
future performance under the ITS Agreement;
* MAEM will reject the FTS and IBS Agreements;
* In full satisfaction of Natural Gas Pipeline's claims
arising out of MAEM's rejection of the FTS and IBS
Agreements, the Debtors will pay Natural Gas Pipeline
$3,247,164, which payment will be satisfied through a draw
by Natural Gas Pipeline on an existing letter of credit;
and
* The Debtors and Natural Gas Pipeline will execute mutual
releases with respect to all claims and/or potential claims
relating to or arising from MAEM's rejection of the FTS and
IBS Agreements.
According to Ms. Campbell, the Settlement Agreement may be
approved under Rule 9019 of the Federal Rules of Bankruptcy
Procedure since, without it Natural Gas Pipeline would likely
assert a rejection damage claim against MAEM in excess of
$17,000,000, representing the present value of fixed capacity
payments over the remaining life of the FTS Agreement and certain
other liabilities incurred under the IBS Agreements. (Mirant
Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
MOUNT SINAI NYU: S&P Affirms BB Rating & Revises Outlook to Neg.
----------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook to negative
from stable on New York State Dormitory Authority's bonds issued
for Mount Sinai NYU Health. In addition, Standard & Poor's
affirmed its 'BB' rating on the bonds.
"The rating reflects continued weak operating performance,
modestly rising debt levels, and low liquidity," said Standard &
Poor's credit analyst Liz Sweeney.
The obligated group recorded a negative operating income of $76
million for the nine months ended Sept. 30, 2003, (a negative 6.0%
margin) and a negative $54 million change in unrestricted net
assets. The losses were expected and were largely factored into
the lowering of the rating to 'BB' from 'BBB-' in April 2003, but
losses are slightly larger than expected and the rate of
improvement in the third quarter was a disappointment, raising the
risk that the obligated group may not remain on track to stabilize
operations in the next two years.
The obligated group's already high debt level has grown this year
to $723 million as of Sept. 30, 2003, from $671 million as of Dec.
31, 2002, primarily due to two transactions: a $15 million
borrowing by NYU Hospitals Center for a new cancer center and a
$45 million refinancing of an accounts receivable transaction that
resulted in on-balance-sheet treatment as opposed to the former
off-balance-sheet treatment.
In addition, the obligated group's already thin liquidity has
declined further as a result of operating losses and a $15 million
reclassification from unrestricted to assets limited. Liquidity
should rebound somewhat in the fourth quarter as Mount Sinai
Hospital received $35 million in unrestricted cash in November
from a real estate transaction, equivalent to about 8 days' cash
to the obligated group, although this improvement is likely to be
diminished by continued losses in the fourth quarter.
An exacerbating credit factor is the high senior management
turnover experienced at Mount Sinai Hospital in the last few
years. During the past nine months, the hospital hired new chief
executive, chief financial, and chief operating officers. The
instability at the senior management level has made it very
difficult for the institution to implement long-term plans and the
turnaround efforts started in 2002 appear to be a casualty of the
lack of senior management continuity and commitment. In addition,
NYU Hospitals Center recently named a new president, although its
management team has been relatively stable in the last few years.
During the next couple of years, trustees of both institutions
need to demonstrate that they can attract and retain effective and
stable senior management teams.
Although operating losses were expected in 2003, the pace of
improvement needs to accelerate to keep the obligated group on
track for stabilized performance by 2005. Standard & Poor's
expects to review the obligated group's performance again in depth
by May 2004, when the obligated group's audits and first quarter
results become available.
MYCOM GROUP: Expects Strong Growth for Fourth Quarter & FY 2003
---------------------------------------------------------------
Mycom Group, Inc. (OTCBB:MYCO), a technology products, managed
services, and software development company headquartered in
Cincinnati, Ohio, announced fourth quarter 2003 revenue of $2.5MM
with growth of 10%. Annually, Mycom Group revenue grew 8%, to
$8.8MM in 2003.
Most of the Company's growth came from its' mycomPRO(TM) managed
services and consulting services business units. Mycom
repositioned its services business to focus on the IT Security
Category in February of 2003, with the acquisition of Maximize IT.
The acquisition provided the base of technology for Mycom to
develop and market its' anti-virus and spam filtering service,
mycomPRO(TM) mailMAX and its' intrusion detection service,
mycomPRO(TM) secureMAX. In 2003, Mycom's consulting and managed
services business grew 75% from $1.2MM to $2.1MM
The company's Chairman, CEO, Rob Bransom stated, "Although we have
not completed all of our closing and audit activities for 2003, we
can announce positive performance for the fourth quarter. This
performance was very important because we are testing a new more
effective and easy to use spam and virus filtering system that has
been developed by Mycom during the second half of 2003. We have
devoted extensive investment toward (R&D) product development and
we needed positive performance from our established software and
services businesses to support the investment."
Bransom continued, "In addition to growing our business in 2003,
we also secured about $.4MM in funding during the second half to
support product development. This capital infusion was secured via
the sale of Preferred Stock and loans. We are pleased with the
development of our new mycomPro(TM) mailMAXII spam and virus
filtering system. It is performing effectively in test and we will
be expanding the scope of testing in the near future. We plan to
introduce the new service during the first quarter of 2004."
Mycom Group, Inc. provides a complementary mix of technology
products and services. It markets a wide range of software,
hardware and enterprise solutions to customers throughout North
America. Mycom develops and markets new software applications and
services using the mycomPRO(TM) brand name. The company's
technical and communications services include email management,
technology security, and networking; ISP and co-location; design,
development and web enabling of e-business applications; database
applications; online and classroom training and instructional
design; communications services for large and medium-sized
businesses; and technical marketing and documentation services.
Mycom is headquartered in Cincinnati, Ohio. Mycom Group is on the
Web at http://www.mycom.com/and http://www.broughton-int.com/
* * *
As reported in Troubled Company Reporter's November 25, 2003
edition, Mycom Group sustained losses from operations and has net
capital and working capital deficits that raise substantial doubts
about its ability to continue as a going concern. According to the
Company, a contingency exists with respect to this matter, the
ultimate resolution of which cannot presently be determined.
On January 31, 2003, the Company completed an acquisition of a
managed services company that has improved the Company's working
capital position. This acquisition was made without any cash
outlay. Management believes that the financial resources
available, debt restructuring and increasing operating revenues
provide an opportunity to continue as a going concern.
On October 22, 2003, a Director of the Company purchased 666,667
preferred shares, series A, from the Company at a price of $.15
per share. This represented an investment of $100,000. The terms
of the preferred share purchase agreement include conversion
rights to common stock, on a one-for-one basis at any time within
a five-year term. The preferred shares pay dividends of 8% per
annum each quarter. If at the end of the five-year term the
Company's common stock is not trading at a price of $.15 per share
or higher, the Company will issue additional common shares to the
preferred shareholder so that the value of total shares owned by
the investor at the end of the term equals $100,000. There are
10,000,000 shares of series A preferred stock authorized of which
4,233,333 were issued as of September 30, 2003, and 4,900,000 have
been issued as of October 22, 2003.
NATIONAL CENTURY: Claims Distribution Under Third Amended Plan
--------------------------------------------------------------
National Century Financial Enterprises, Inc., and its debtor-
affiliates' Third Amended Plan provides that any entity that is
required to make an Avoidance Recovery Payment will have, in
accordance with Section 502 of the Bankruptcy Code, an Allowed
Avoidance Recovery Claim in Class C-2A or Class C-3A, as the case
may be, in an amount equal to the principal amount of the
obligations the repayment of which gave rise to the Avoidance
Recovery Payment. If an Avoidance Recovery Claim becomes an
Allowed Claim after the Effective Date:
(a) The NPF VI Percentage, the NPF XII Percentage and
distributions to holders of Class C-2A Claims and Class
C-3A Claims, including without limitation, the "Adjusting
Distribution, as defined in the Intercompany Settlement
Agreement, will be adjusted in accordance with the
Intercompany Settlement Agreement;
(b) The beneficial interests in the Trusts will be
recalculated and reallocated among holders of the
interests to reflect the adjustments to the NPF VI
Percentage and the NPF XII Percentage and the allowance of
the Avoidance Recovery Claim, and the changes will be
given effect in respect of all distributions from the
Trusts after the allowance of the Avoidance Recovery Claim
and the effectuation of the Adjusting Distribution;
(c) The allowed amount of the Noteholder Deficiency Claim will
be increased by the amount of the Avoidance Recovery
Claim, the Noteholder Deficiency Claim, as so increased,
will be reallocated among the NPF VI Class A Noteholders
and the NPF XII Class A Noteholders, including the holder
of the Avoidance Recovery Claim, in proportion to the
amounts of the noteholders' Allowed Claims, including
Secured Claims and Deficiency Claims, in respect of the
NPF VI Class A Notes and NPF XII Class A Notes; and
(d) The entity required to pay the Avoidance Recovery Payment
will be entitled to receive simultaneously with its
payment of the Avoidance Recovery Payment, the applicable
Prior Distribution Amount. Payment of the Prior
Distribution Amount to the entity will be effected by:
* a reduction of the amount of the Avoidance Recovery
Payment otherwise payable to the entity;
* payment by each Estate or Trust to the entity of the
portion of the Prior Distribution Amount attributable
to prior distributions by the Estate or Trust; and
* other method as may be agreed upon by the affected
parties or ordered by the Court to place the entity
and the affected Estates, Trusts and creditors in the
same position they would have occupied, had the
Avoidance Recovery Payment been paid and the
Avoidance Recovery Claim accordingly been allowed
prior to the Effective Date.
Adjustment to Final Distribution
From the Unencumbered Assets Trust With Respect
to the Amount of the Noteholder Deficiency Claim
Immediately prior to the final distribution from the Unencumbered
Assets Trust, the beneficial interests in the Unencumbered Assets
will be recalculated and reallocated among the holders of the
interests to reflect the amount of the Noteholder Deficiency
Claim, based upon the actual value or then-estimated value of
distributions made or anticipated to be made pursuant to the Plan
and from the VI/XII Collateral Trust to the NPF VI Class A
Noteholders on account of their Secured Claims. On the earlier
of the termination of the VI/XII Collateral Trust or immediately
prior to the final distribution from the Unencumbered Assets
Trust, the VI/XII Collateral trustee will determine the value of
then-estimated value of distributions made or to be made from the
VI/XII Collateral Trust for purposes of implementation of the
Plan.
Distributions on Account of Disputed Claims
in Class C-2A and Class C-3A
No distribution to any holder of a Claim in Class C-2A or Class
C-3A pursuant to the Plan will be delayed, deferred or reduced on
account of the pendency of an objection to the Claim, the
assertion of a right of set-off by a Debtor or the Claim
otherwise qualifying as a Disputed Claim. If a distribution to a
holder of a Claim in Class C-2A or Class C-3A is delayed,
deferred or reduced because the holder fails to establish its
financial wherewithal, any portion of a distribution otherwise
payable to the holder that is delayed, deferred or reduced be
held in escrow pending resolution of the relevant objection, set-
off or other dispute. (National Century Bankruptcy News, Issue No.
30; Bankruptcy Creditors' Service, Inc., 215/945-7000)
NATIONAL EQUIPMENT: Court to Consider Plan on January 23, 2004
--------------------------------------------------------------
On November 25, 2003, the U.S. Bankruptcy Court for the Northern
District of Illinois, Eastern Division, approved the Disclosure
Statement prepared by National Equipment Services, Inc., and its
debtor-affiliates, to explain their Second Amended Chapter 11 Plan
of Reorganization. The Court found that the Disclosure Statement
contains the right kind and amount of information to enable
creditors to make informed decisions whether to accept of reject
the Plan.
A hearing to consider confirmation of the Debtors' Plan is set for
January 23, 2004, at 10:00 a.m. Central Time, before the Honorable
Pamela S. Hollis.
Objections to confirmation of the Debtors' Plan must be received
by the Clerk of the Bankruptcy Court on or before 4:00 p.m. today.
Copies must also be sent to:
1. Counsel to the Debtors
Kirkland & Ellis LLP
200 East Randolph Drive
Chicago, IL 60601
Attn: James A. Stempel, Esq.
Evan R. Gartenlaub, Esq.
2. Debtors' Notice, Claim & Balloting Agents
Kurtzman Carson Consultants LLC
5301 Beethoven Street
Suite 102
Los Angeles, CA 90066
Attn: NES Notice, Claims and Balloting Agent
3. the Office of the United States Trustee for Region 11
227 West Monroe Street
Suite 3350
Chicago, IL 60606
Attn: Stephen G. Wolfe, Esq.
4. Counsel for the Secured Lenders
Jones Day
3500 Sun Trust Plaza
303 Peachtree Street
Atlanta, GA 30308
Attn: Christopher L. Carson, Esq.
-and-
77 West Wacker Drive
Chicago, IL 60606
Attn: Mark A. Cody, Esq.
5. Counsel for the Official Committee of Unsecured
Creditors
Millibank Tweed Handby & McClay LLC
601 S. Figurson Street
Los Anegeles, CA 90017
Attn: Thomas Kreller, Esq.
National Equipment Services, headquartered in Evanston, Illinois,
rents specialty and general equipment to industrial and
construction end users. The Company filed for chapter 11
protection on June 27, 2003, (Bankr. N.D. Ill. Case No. 03-27626).
James A. Stempel, Esq., at Kirkland & Ellis, represents the
Debtors in their restructuring efforts. When the Company filed
for protection from its creditors, it listed debts and assets of
over $100 million each.
NRG ENERGY: Remaining Debtors Want Exclusive Periods Extended
-------------------------------------------------------------
Pursuant to Section 1121(d) of the Bankruptcy Code, Debtors:
* LSP-Nelson Energy, LLC,
* NRG Nelson Turbines LLC and
* NRG McClain LLC
ask the Court to extend their exclusive period to file a plan of
reorganization through and including May 8, 2004 and their
exclusive period to solicit and obtain acceptances of that plan
through and including July 8, 2004.
Lisa G. Laukitis, Esq., at Kirkland & Ellis, in New York, reminds
the Court that since the Petition Date, the NRG Debtors have been
forced to expend substantial time and resources defending several
other contested matters that have been asserted in their
bankruptcy cases. In addition, the solicitation process and
confirmation of the NRG Plan and the Northeast and South Central
Plan required the focus of the NRG Debtors and their advisors for
a period of several months. Now that the plans have been
confirmed, the Debtors and their advisors can turn to the
disposition of the Chapter 11 cases of the remaining Debtors.
With respect to two of the three remaining debtor entities, LSP-
Nelson Energy LLC and NRG Nelson Turbines LLC, the Debtors have
no remaining equity in the assets. Accordingly, representatives
of the Nelson Entities have been engaged in discussions with the
lenders holding debt relating to the Debtors with regard to the
disposition of the Nelson Entities' Chapter 11 cases. The
parties are discussing various alternatives. However, a sale of
the Nelson Entities' assets to third parties appears likely.
After a sale of the assets, a plan or reorganization or other
disposition of the Chapter 11 cases can be accomplished.
On the other hand, the Court has approved the sale of
substantially all of the assets of the third remaining debtor
entity, NRG McClain LLC. NRG McClain is still awaiting the
Federal Energy Regulatory Commission's approval of the sale.
Once the approval is obtained, the sale transaction will be able
to close and a plan of reorganization or other disposition of the
NRG McClain Chapter 11 case can be accomplished.
The Remaining Debtors are making great strides with respect to
their Chapter 11 cases. Ms. Laukitis asserts that an extension
of the Exclusive Periods is both necessary and appropriate to
allow the Remaining Debtors to commence and consummate the next
stage in the administration of their estates. The extension will
afford the Remaining Debtors sufficient time to evaluate
strategic and financial alternatives and negotiate distributions
to creditors and parties-in-interest.
Additional time is required to:
(a) continue discussions with the Nelson Entities' creditors
and formulate the optimum method of maximizing the value
of the assets of the Nelson Entities; and
(b) obtain the FERC's approval of the McClain sale, effectuate
the closing of the sale, and determine whether a plan of
reorganization or other disposition of the NRG McClain
Chapter 11 case is appropriate.
Ultimately, the three remaining Debtors need additional time to
concentrate on the remaining elements that are critical to the
development and implementation of a plan of reorganization or
other deposition of their Chapter 11 cases. Ms. Laukitis argues
that terminating the Remaining Debtors' Exclusive Periods at this
critical juncture would be a significant setback and could cause
uncertainty at this critical point of time in the bankruptcy
process.
The Court will convene a hearing on January 28, 2004 to consider
the Remaining Debtors' request. The Remaining Debtors ask Judge
Beatty to enter a bridge order extending their exclusive filing
period until the conclusion of that hearing. (NRG Energy
Bankruptcy News, Issue No. 20; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
OLD UGC INC: Voluntary Chapter 11 Case Summary
----------------------------------------------
Lead Debtor: Old UGC, Inc.
aka UGC Holdings, Inc.
aka UnitedGlobalCom, Inc.
aka United International Holdings, Inc.
4643 S. Ulster Street Suite 1300
Denver, Colorado 80237
Bankruptcy Case No.: 04-10156
Debtors affiliate filing separate chapter 11 petitions:
Entity Case No.
------ --------
UPC Polska, Inc. 03-14358
United Pan-Europe Communications N.V. 02-16020
(aka United and Philips Communications BV)
Dates Filed: July 7, 2003
December 3, 2002
Type of Business: The Debtor an affiliate of UPC Polska, Inc.
(Bankr. S.D.N.Y. Case No. 03-14358) and
United Pan-Europe Communications N.V. aka
United and Philips Communications BV (Bankr.
S.D.N.Y. Case No. 02-16020). UGC is one of
the largest broadband providers outside the
United States. It also provides full range
of video, voice, high-speed Internet,
telephone and programming services, to
residential and business customers throughout
the world. See http://www.UnitedGlobalcom.com/
Chapter 11 Petition Date: January 12, 2004
Court: Southern District of New York (Manhattan)
Judge: Burton R. Lifland
Debtors' Counsels: David A. Levine, Esq.
Cooley Godward, LLP
One Maritime Plaza
20th Floor
San Francisco, CA 94111-3580
Tel: 415-693-2000
Fax: 415-951-3699
- and -
Jay R. Indyke, Esq.
Kronish, Lieb, Weiner, & Hellman, LLP
1114 Avenue of the Americas
New York, NY 10036
Tel: 212-479-6080
Fax: 212-479-6195
Total Assets: $846,050,022
Total Debts: $1,371,351,612
PACIFIC LIFE: Fitch Rates Class A-3 and B Notes at B/CC
-------------------------------------------------------
Fitch Ratings upgrades one class, affirms two classes and
downgrades one class of notes issued by Pacific Life CBO 1998-1
Ltd./Corp. The following rating actions are effective immediately:
-- $30,710,292 class A-1 notes affirmed at 'AAA';
-- $47,271,325 class A-2 notes upgraded to 'AAA' from 'AA';
-- $38,000,000 class A-3 notes downgraded to 'B' from 'BB';
-- $32,000,000 class B notes affirmed at 'CC'.
Pacific Life is a collateralized bond obligation managed by the
Pacific Life Insurance Company. The Pacific Life notes are backed
by a pool of $113 million high yield securities, of which
approximately 90% are high yield bonds and 10% are high yield
loans. Fitch has reviewed in detail the portfolio performance of
Pacific Life. Included in this review, Fitch discussed the current
state of the portfolio with the asset manager and their portfolio
management strategy going forward.
Since the last rating action in May 2002, the portfolio has
continued to see additional defaults and overcollateralization
ratios have deteriorated further. According to the Dec. 2, 2003
trustee report, the class A OC ratio was 97.3%, down from 109.6%
in April 2002 relative to a test level of 130%. The class B OC
ratio was 75.6%, down from 91.5% in April 2002 relative to a test
level of 110%. The class A OC test has been failing since April
2001, and the class B OC test has been failing since March 2000.
As of the most recent trustee report, defaulted collateral
represented 15.4% of the total portfolio balance. Due to the
deterioration of the collateral and the failing OC levels, Pacific
Life has been in an event of default since February 2002. This
continued deterioration has resulted in the downgrade of the class
A-3 notes to 'B' from 'BB'.
The collateral deterioration has made it unlikely for Pacific Life
to cure the OC test levels in the near future. When any of the
transaction's coverage tests are failing, the priority of payments
effectively subordinate the class A-1 notes to the class A-2 notes
in terms of receiving interest and principal proceeds. This
subordination was structured into the deal in order to maintain
the portfolio's interest rate hedging strategy. This structural
feature has strengthened the class A-2 notes in this stressed
environment, resulting in an upgrade to that tranche. The
effective subordination is apparent in the redemption rates of the
class A-1 and A-2 notes. The class A-1 notes have redeemed 43% of
the original notes issued compared to 62% for the class A-2 notes.
At this time, the 'AAA' rating of the class A-1 notes continues to
reflect the current risk to noteholders. The class A-2 notes,
however, warrant an upgrade to 'AAA' from their current rating of
'AA' due to their structural seniority and their priority position
to receive excess interest while the deal continues to fail its
coverage tests.
Fitch will continue to monitor and review the performance of
Pacific Life for future rating adjustments.
PARAON STEAK: Hot Brands Unsuccessful in Bid to Acquire Leases
--------------------------------------------------------------
Hot Brands Inc. (OTC: HTBI) -- http://www.hotbrands.biz/-- a
Nevada corporation, announced today it was unsuccessful in its bid
to acquire eight Paragon Steak House leases through the bankruptcy
bidding procedure in Riverside, California.
"In our opinion the bidding for the lease assumption of these
eight properties was overpriced and, therefore, did not represent
value for the company or its shareholders," stated Mr. Bill
Curtis, CEO and Chairman of the Board.
Hot Brands operates 43 Hot 'N Now fast food restaurants in
Michigan, Wisconsin and Indiana, of which 23 are company owned and
20 are franchised. System-wide 2002 gross sales for the units were
approximately $25 million annually. The Hot 'N Now Business
currently has over 450 employees, all of which either work for the
corporate office or at the operations of the corporate owned
locations.
Hot Brands is launching an aggressive effort to acquire other
restaurant assets that are synergistic with the Hot 'N Now
Business. These acquisitions may be structured as mergers, stock
exchanges or cash purchases. Hot Brands will favor companies with
strong operating revenues that lend themselves to the
establishment of a franchise program or similar means of rapid
establishment of a distribution network. Hot Brands management has
significant experience in the turnaround of distressed restaurant
and food properties and will be looking for sound assets that can
be bought inexpensively and overhauled quickly towards
profitability.
Steakhouse Partners, Inc., through its wholly owned subsidiary
Paragon Steakhouse Restaurants owns and operates 65 steakhouses in
11 states. The Company filed for Chapter 11 protection on
February 15, 2002, in the U.S. Bankruptcy Court for the Central
District of California, Riverside (Bankr. Case No. 02-12648).
PARMALAT: Fitch Sees Less Impact on Asset-Backed CP Conduits
------------------------------------------------------------
In light of the bankruptcy and criminal investigation into the
alleged fraud at Parmalat SpA, Fitch has reviewed all of its rated
asset-backed commercial paper conduits and identified two programs
with direct exposure to the Italian dairy company.
In each identified case the exposure has been removed under the
respective programs' liquidity facilities.
In addition, Fitch identified one instance of indirect exposure to
Parmalat through CDO holdings that were placed on Rating Watch
Negative by Fitch on December 24, 2003. The ratings of these
conduits have not been affected as a result of these holdings.
Fitch will closely monitor any future developments.
PARMALAT: Centrale De Latte et al., Won't Seek Administration
-------------------------------------------------------------
Parma, 2 January, 2004 -- | PARMA, 2 gennaio 2004 --
The subsidiary company Parmalat | La controllata Parmalat S.p.A.
S.p.A. communicates that there | comunica che per Centrale del
won't be any request for | Latte di Roma S.p.A. e per
admission to the Extraordinary | Latte Sole S.p.A. non sara
Administration procedure for | richiesta l'ammissione alla
Centrale del Latte di Roma | procedura di amministrazione
S.p.A. and Latte Sole S.p.A. | straordinaria in quanto le
since the two companies are | due Societa sono in grado di
able to guarantee continuity in | assicurare l'equilibrato
the economic and financial | andamento della gestione
management. | economica e finanziaria.
(Parmalat Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
PILLOWTEX CORP: Agrees to Let PBGC to File One Consolidated Claim
-----------------------------------------------------------------
Pension Benefit Guaranty Corporation is a wholly owned United
States government corporation that administers the defined
benefit pension plan termination insurance program under Title IV
of the Employee Retirement Income Security Act of 1974 as amended
under Sections 1301 to 1461 of the Labor Code. PBGC has
concluded that it must file six separate claims against each of
the 16 Pillowtex Debtors. These claims would represent the claims
for which the Debtors are jointly and severally liable to two
defined benefit pension plans under Sections 1082(c)(11),
1307(e)(12), 1362(a) of the Labor Code.
Pursuant to the Bar Date Order and the Notice of Claims Bar Date,
a claimant with claims against more than one of the Debtors is
required to file a separate proof of claim in the case of each
Debtor against whom that claimant assert a claim. Therefore,
literal compliance with the Bar Date Order and Notice of Claims
Bar Date would require PBGC to file 96 separate proofs of claim.
These multiple claims would impose a significant administrative
burden on the Debtors, PBGC, and the Court.
For administrative convenience, the Debtors and PBGC entered into
a stipulation, which provides that the filing of proofs of claim
by PBGC on its own behalf or on behalf of the Pension Plans in
Chapter 11 Case No. 03-12339 will be deemed to constitute the
filing of the Proofs of Claim in Case No. 03-12339 and in each of
the other Debtors' Chapter 11 cases. Consequently, with respect
to the two Pension Plans, PBGC will be permitted to file six
claims. The Debtors acknowledge that each proof of claim filed
on or before the Bar Date will be deemed timely filed for all
purposes under the Bar Date Order and Notice of Claims Bar Date.
(Pillowtex Bankruptcy News, Issue No. 57; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
POTLATCH CORP: Will Publish Fourth-Quarter Results on January 26
----------------------------------------------------------------
Potlatch Corporation (NYSE:PCH), an integrated forest products
company, has scheduled its Fourth Quarter Conference Call for
Monday, January 26, 2004, at 8:00 a.m. Pacific time. Fourth
quarter results will be released via Business Wire on Friday,
January 23, 2004, at approximately 2:30 p.m. Pacific time.
Conference call participants will include Potlatch Chairman and
Chief Executive Officer L. Pendleton Siegel and Chief Financial
Officer Gerald L. Zuehlke.
Investors can access the conference call by dialing US/Canada 800-
901-5241 or International 617-786-2963. Participants will be asked
to provide passcode number 87699003.
For those unable to participate in the call, an archived recording
will be available through the Potlatch Corporation Web site at
http://www.potlatchcorp.com/for approximately one week following
the conference call.
Potlatch Corporation (Fitch, BB+ Senior Unsecured and BB Senior
Subordinated Ratings, Negative) is an integrated forest products
company with 1.5 million acres of timberland in Idaho, Minnesota
and Arkansas. Products include lumber, panels, bleached pulp,
paperboard and consumer tissue.
PREFERREDPLUS TRUST: S&P Cuts Ser. ELP-1 Class A & B Ratings to B-
------------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on two
classes from PreferredPLUS Trust Series ELP-1 to 'B-' from 'B'.
The lowered ratings reflect the lowering of the corporate credit
and senior unsecured debt ratings on El Paso Corp. on Dec. 15,
2003.
PreferredPLUS Trust Series ELP-1 is a swap-independent synthetic
transaction that is weak-linked to the underlying collateral, El
Paso Corp.'s senior unsecured debt. The lowered rating reflects
the credit quality of the underlying securities issued by El Paso
Corp.
RATINGS LOWERED
PreferredPLUS Trust Series ELP-1
$81 million fixed-rate preferred plus trust certs series ELP-1
Rating
Class To From
A B- B
B B- B
PREMIER FARMS: Brings-In Sonnenschein Nath as Legal Counsel
-----------------------------------------------------------
Premier Farms, LC is asking for permission from the U.S.
Bankruptcy Court for the Northern District of Iowa to retain
Sonnenschein Nath & Rosenthal LLP as Legal Counsel.
The Debtor first retained Sonnenschein in August 2003, in
connection with the bankruptcy filing. Because of Sonnenschein's
extensive experience and knowledge in the field of debtors' and
creditors' rights and business reorganizations under Chapter 11 of
the Bankruptcy Code, the Debtor wants to employ the firm in this
case.
The current standard hourly rates for the attorneys and legal
assistants who will be primarily responsible for this
representation are:
Professional Position Billing Rate
------------ -------- ------------
Robert E. Richards Partner $400 per hour
Pin Thompson Associate $330 per hour
Patrick Maxey Associate $300 per hour
Monika Machen Associate $280 per hour
Toni Alford Legal Assistant $160 per hour
Diane Bird Legal Assistant $160 per hour
In this engagement, Sonnenschein will:
a. provide legal advice with respect to Debtor's rights and
duties as debtor in possession and continued business
operations;
b. assist, advise and represent Debtor in analyzing
Debtor's capital structure, investigating the extent and
validity of liens, cash collateral stipulations or
contested matters;
c. assist, advice and represent Debtor in postpetition
financing transactions;
d. assist, advise, and represent Debtor in the sale of
certain assets or companies;
e. assist, advise and represent Debtor in the formulation
of a joint disclosure statement and plan of
reorganization and to assist Debtor in obtaining
confirmation and consummation of a joint plan of
reorganization;
f. assist, advise and represent Debtor in any manner
relevant to preserving and protecting Debtor's estates;
g. investigate and prosecute preference, fraudulent
transfer and other actions arising under Debtor's
bankruptcy avoiding powers;
h. prepare on behalf of Debtor all necessary applicat1ions,
motions, answers, orders, reports, and other legal
papers;
i. appear in Court and to protect the interests of Debtor
before the Court;
j. assist Debtor in administrative matters;
k. perform all other legal services for Debtor that may be
necessary and proper in these proceedings;
l. assist, advise and represent Debtor in any litigation
matter; and
m. provide other legal advice and services, as requested by
Debtor, from time to time.
Headquartered in Clarion, Iowa, Premier Farms, L.C., filed for
chapter 11 protection on December 8, 2003 (Bankr. N.D. Iowa, Case
No. 03-04632). Donald H. Molstad, Esq., represents the Debtor in
its restructuring efforts. When the Company filed for protection
from its creditors, it listed $22,614,949 in total assets and
$93,907,881 in total debts.
PRIDE INT'L: SVP and COO James W. Allen Retires from Company
------------------------------------------------------------
Pride International, Inc. (NYSE: PDE) announced several
organizational changes, including the retirement of its Chief
Operating Officer and the promotion of several executive officers.
James W. Allen, the Company's Senior Vice President and Chief
Operating Officer, has retired from the Company. Mr. Allen served
the Company since 1993 and was its Chief Operating Officer since
1999. He concludes an oilfield career of more than 35 years.
John C.G. O'Leary has been appointed the Company's President. Mr.
O'Leary has served as Vice President - International Marketing
since 1997, and has been with Pride (including an affiliate
acquired in 1997) since 1985.
John R. Blocker, Jr. has been appointed Senior Vice President -
Operations. Most recently, Mr. Blocker has been the Company's
Vice President - Latin American Operations. Mr. Blocker joined
Pride in 1993 and has 33 years of oilfield experience.
Paul A. Bragg, Pride's Chief Executive Officer, stated the
following, "We are grateful for the many years of excellent
service that Jim Allen has given the Company. He has been
instrumental in growth and development of the Company to become
one of the world's best and largest drilling organizations. The
depth of our operating team leaves us well positioned for the
future, however. The Company's substantial growth in the past few
years makes it appropriate to expand our senior management team by
appointing a separate position of President. John O'Leary will,
no doubt, provide valuable insight and energy to the Company in
his new role. Likewise, I believe we will substantially benefit
from the additional role of John Blocker. His broad range of
skills and vast experience will help us to continue to excel and
further improve our world-class operations."
Pride International, Inc. (Fitch, B+ Senior Unsecured Debt Rating,
Stable Outlook), headquartered in Houston, Texas, is one of the
world's largest drilling contractors. The Company provides
onshore and offshore drilling and related services in more than 30
countries, operating a diverse fleet of 328 rigs, including two
ultra-deepwater drillships, 11 semisubmersible rigs, 35 jackup
rigs, and 29 tender-assisted, barge and platform rigs, as well as
251 land rigs.
RELIANT RESOURCES: Initiates Executive Management Reorganization
----------------------------------------------------------------
Reliant Resources, Inc. (NYSE: RRI) announced a restructuring of
the company that is an important step in achieving a lower-cost
operating model that will also deliver superior service and value
to Reliant customers.
The new structure creates a more efficient, functionally oriented,
single operating company structure to replace the separate
corporate, wholesale and retail units that had existed previously.
"The new structure recognizes that we are in only one business,
the business of generating, supplying and marketing electricity to
customers," said Joel Staff, chairman and chief executive officer.
"These structural realignments are part of our ongoing effort to
reposition Reliant as one of the lowest-cost competitors in the
industry. A low-cost operating model, combined with well-
positioned and diverse power generation assets, an improving
balance sheet and distinctive retail capabilities, will position
Reliant to compete successfully in the rapidly evolving merchant
power industry."
As part of the reorganization, the company has realigned the
responsibilities of its executive management team to reassign some
members and expand the responsibilities of others. Reporting
directly to Staff in the new structure are:
-- Karen Dyson - senior vice president, human resources and
administration;
-- Robert W. Harvey - executive vice president, power
generation and supply;
-- Mark M. Jacobs - executive vice president and chief
financial officer;
-- Michael L. Jines - senior vice president and general
counsel;
-- Suzanne L. Kupiec - senior vice president, risk and
structuring;
-- Brian Landrum - senior vice president, customer
operations and information technology;
-- Jerry J. Langdon - executive vice president, public and
regulatory affairs; and
-- James B. Robb - senior vice president, retail marketing.
Separately, Dan Hannon will assume the role of senior vice
president, finance and corporate development, reporting to Jacobs.
Reliant Resources, Inc. (Fitch, B+ Senior Secured Debt, B Senior
Unsecured Debt and B- Convertible Senior Subordinated Debt Ratins,
Stable Outlook), based in Houston, Texas, provides electricity and
energy services to retail and wholesale customers in the U.S.,
marketing those services under the Reliant Energy brand name. The
company provides a complete suite of energy products and services
to approximately 1.7 million electricity customers in Texas
ranging from residences and small businesses to large commercial,
industrial and institutional customers. Reliant also serves large
commercial and industrial clients in the PJM (Pennsylvania, New
Jersey, Maryland) Interconnection. The company has approximately
20,000 megawatts of power generation capacity in operation, under
construction or under contract in the U.S. For more information,
visit the Company's Web site at http://www.reliantresources.com/
RYLAND GROUP: Continues Ongoing Share Repurchase Program
--------------------------------------------------------
The Ryland Group, Inc. (NYSE: RYL), one of the nation's largest
homebuilders, will continue its ongoing share repurchase program.
The Company plans to begin repurchasing as many as 500,000 shares
of Ryland common stock beginning Tuesday, January 13, 2004. The
Company has remaining authorization to repurchase approximately
900,000 shares.
With headquarters in Southern California, Ryland is one of the
nation's largest homebuilders and a leading mortgage-finance
company. The Company currently operates in 28 markets across the
country and has built more than 210,000 homes and financed over
185,000 mortgages since its founding in 1967.
As reported in Troubled Company Reporter's November 4, 2003
edition, Standard & Poor's Ratings Services raised its corporate
credit rating on The Ryland Group Inc. to 'BBB-' from 'BB+'. In
addition, ratings on $547 million of the company's senior
unsecured and senior subordinated notes were raised. The outlook
is now stable.
SANMINA-SCI: Will Host Q1 2004 Conference Call on January 20
------------------------------------------------------------
In conjunction with Sanmina-SCI Corporation's (Nasdaq: SANM)
Fiscal 2004 First Quarter earnings release, you are invited to
listen to its conference call that will be broadcast live over the
Internet on Tuesday, January 20, 2004 at 5:00 PM EST.
Mr. Jure Sola, Chairman and Chief Executive Officer of Sanmina-SCI
Corporation will lead the call.
What: Sanmina-SCI Corporation's Fiscal 2004 First Quarter
Earnings
When: Tuesday, January 20, 2004 at 5:00 PM EST
Web Link:
http://www.firstcallevents.com/service/ajwz396033372gf12.html/
Teleconference Dial in Number: (877) 273-6760 - Domestic
Information: (706) 634-6605 - Int'l
Contact: Sanmina-SCI's Investor Relations at (408) 964-3610
Sanmina-SCI Corporation (Fitch, BB+ First-Lien Senior Secured Bank
Facility, BB Second-Lien Senior Secured Bank Facility and B+
Senior Subordinated Note Ratings, Stable Outlook) and is a
leading electronics contract manufacturer serving the fastest-
growing segments of the $125 billion global electronics
manufacturing services market. Recognized as a technology leader,
Sanmina-SCI provides end-to-end manufacturing solutions,
delivering unsurpassed quality and support to large OEMs primarily
in the communications, defense and aerospace, industrial and
medical instrumentation, computer technology and multimedia
sectors. Sanmina-SCI has facilities strategically located in key
regions throughout the world. Information about Sanmina-SCI is
available at http://www.sanmina-sci.com/
SCHLOTZSKY'S: Amends & Extends Terms of Debt with NS Associates
---------------------------------------------------------------
Schlotzsky's Inc. (Nasdaq:BUNZ) modified and extended the terms of
its note payable with its largest creditor, NS Associates I Ltd.,
to reduce the interest rate on the principal (current outstanding
balance of approximately $18 million) from 8% to 3% and the
monthly payments from $520,000 to $120,000, for 12 months.
Beginning December 2004, the monthly payments will increase to
$420,000 and the interest rate will vary pursuant to the
agreement. In addition, the balloon payment due date was extended
from June 30, 2005, to Dec. 15, 2006.
"These changes are very positive for the Company as they
significantly decrease the Company's debt service requirements for
the next two years," stated Monica Landers, Company spokesperson.
In exchange for the reduced payments and interest rates, NS
Associates received a security interest in Schlotzsky's trademarks
and other intellectual property. In addition, John C. Wooley,
president and CEO of Schlotzsky's, and Jeffrey J. Wooley, senior
vice president, each agreed to extend certain prior loans that
they have made to the Company and to subordinate those loans to
the security interest held by NS Associates. The transaction also
allows for the use of the trademarks and intellectual property in
connection with a first lien term loan in the amount of $3
million, which the Company is currently pursuing.
* * *
Liquidity and Capital Resources
In a Form 1O-Q filed with the Securities and Exchange Commission,
Schlotzsky's Inc., reported:
"Cash and cash equivalents decreased $187,000 in the nine months
ended September 30, 2003, and decreased $2,277,000 in the nine
months ended September 30, 2002. Cash flows are impacted by
operating, investing and financing activities.
"Operating activities provided $5,862,000 of cash in the first
nine months of 2003 and $3,844,000 of cash in the first nine
months of 2002. The increase in cash provided was the net result
of a decreased use of cash for certain working capital accounts,
increased provision for uncollectible accounts and debt
guarantees, increased depreciation and amortization and a decrease
in the amount of deferred revenue amortized, partially offset by a
net loss for the period and provision (credit) for deferred taxes.
"Investing activities provided $402,000 and used $2,688,000 of
cash in the first nine months of 2003 and 2002, respectively.
The decrease in cash used in 2003 compared to 2002 was the net
result of an increase in proceeds from the sale of real estate
held for sale and increase in collections of notes receivable,
partially offset by a decrease in expenditures for intangible
assets and new Company-operated restaurants.
"Financing activities used $6,450,000 and $3,434,000 of cash in
the first nine months of 2003 and 2002, respectively. The
increase in cash used in the first nine months of 2003 compared to
the comparable period of 2002 is primarily the net result of
increased repayments of debt, partially offset by increased
borrowings and reduced sales of common stock.
"At September 30, 2003, we had approximately $50,420,000 of total
debt outstanding. Scheduled maturities of debt through September
30, 2004 approximate $9,771,000 (including short-term debt). In
addition, one of our mortgages requires the application to the
mortgage of the net cash proceeds from the sale of certain real
estate held for sale.
"Certain of our mortgage debt require the maintenance of certain
financial ratios, including debt-to-equity and working capital.
At September 30, 2003, the Company was in compliance with or had
obtained waiver of such covenants. However, any failure to remain
in compliance with the restrictive covenants of the Company's
mortgages in the future could have material adverse consequences
to the Company.
"We have experienced net reductions in the number of restaurants
systemwide quarterly since early 2000 and have experienced
negative same store contractual sales quarterly since mid-2001.
While we have developed and implemented strategies, including the
re-imaging of restaurants, the introduction of an enhanced menu
with new items and combinations, workforce reductions, general and
administrative expense reductions, salary adjustments, and the
resumed marketing of our franchise licensing program, in an effort
to reverse and mitigate the impact of these trends, we expect that
the number of restaurants will continue to decline during the
fourth quarter of 2003 and possibly thereafter. Continuation of
these trends would have a material adverse impact on our royalty
revenue, brand contribution, cash flow and liquidity.
"On July 31, 2003 we effected a reduction in force eliminating 39
positions on the corporate staff, reducing the personnel employed
at our corporate headquarters or as field personnel to
approximately 110. We believe that these reductions, along with
certain salary adjustments, began to impact operating results in
the third quarter of 2003, but were offset by separation expenses
incurred during the third quarter of 2003. The impact of these
position reductions and salary adjustments will begin to be
reflected in the fourth quarter of 2003, but we will not see the
full effect until 2004. We have developed and are implementing
plans to significantly reduce non-compensation general and
administrative expenses and certain employee benefits in an effort
to achieve a reduction in total general and administrative
expenses of at least $4 million on an annualized basis.
"We plan to develop additional Company-operated restaurants in the
future. One Company-operated restaurant opened in the Austin area
in June 2003. We also have acquired building sites for four
additional restaurants in the Austin area and entered into a lease
for a site in the Houston area. Sites for additional restaurants
in Texas and other markets are under consideration. However, we
do not plan to pursue development of these sites until we have
obtained the necessary financing to fund this growth in our
Company-operated restaurants.
"We are currently attempting to generate additional working
capital with third party financing and are pursuing financing
alternatives, including senior debt, real estate mortgages, and
asset-backed financing secured by our intellectual property and
related royalty rights and agreements. While we are in
discussions with several potential lenders at this time, there can
be no assurances that such financing will be available or
accomplished. Should these discussions not result in an
acceptable financing, we would need to continue to seek additional
financing that would be sufficient, with our operating income, to
allow us to fund our operating expenses and debt service. If the
Company is unable to obtain adequate financing during the fourth
quarter of 2003 or is unable to negotiate waivers or favorable
payment terms with creditors, the Company's ability to fund its
continuing operations and working capital needs would be
materially adversely affected.
"Because of the decline in restaurant count and the debt
obligation under certain seller financed debt which matures in
2005, the Company has increased its accounts payable during 2003.
The Company has extended the payment terms for many of its
vendors, and this change in terms is primarily responsible for the
$3,953,000 shown as changes in accounts payable. Waivers and
deferred payment terms have been negotiated and, in some cases,
are being negotiated with certain of these creditors. The Company
intends to improve vendor terms once its liquidity situation
improves, and plans on using future financing to reduce accounts
payable and improve aging of vendor accounts.
"Schlotzsky's Franchisor, LLC entered into a loan agreement in
November 2003 in the amount of approximately $2,500,000 with John
C. Wooley and Jeffrey J. Wooley. The Loan is secured generally by
our intellectual property, contract rights, and other intangibles.
The Loan matures in January 2004 and has an interest rate of
6.75%. The proceeds of the Loan will be used to pay certain
accounts payable and to provide additional liquidity to the
Company while we seek a longer term financing solution. In
connection with the Loan, the Wooleys will receive $1.00 as
payment. The Wooleys have provided several additional personal
guarantees in the past for other loans and leases to the Company
and its affiliates, including our advertising fund."
SEITEL INC: HBV Mellon Commits to Buy $75 Million of New Equity
---------------------------------------------------------------
Seitel, Inc. (OTC Bulletin Board: SEIEQ; Toronto: OSL) signed a
standby funding commitment letter with HBV Mellon Alternative
Strategies LLC whereby Mellon has committed to purchase up to $75
million of reorganized Seitel's common stock in the event such
stock is not purchased by Seitel's shareholders through the
exercise of warrants to be issued to such shareholders under
Seitel's proposed amended chapter 11 plan of reorganization.
The Mellon commitment was obtained with the assistance and support
of the Official Committee of Equity Holders of Seitel appointed in
the bankruptcy case. The Company expects to file with the
bankruptcy court an amended reorganization plan and a related
amended disclosure statement in mid-January, a Bankruptcy Court
hearing to approve the disclosure statement is presently scheduled
for January 30, 2004, and a confirmation hearing on the
reorganization plan is presently scheduled for March 9, 2004.
Effectiveness of the Mellon standby funding commitment letter is
subject to approval of the bankruptcy court, which will be sought
at the January 30, 2004 hearing, and consummation of the
transactions contemplated thereby is subject to certain
conditions, including the negotiation and execution of definitive
documentation, confirmation by the bankruptcy court of the amended
plan, the absence of material adverse changes, the receipt of
requisite regulatory approvals, consummation of certain other
financing transactions sufficient to make all payments required
under the amended plan, as well as other customary conditions.
Under Seitel's proposed amended plan, which is subject to various
conditions to effectiveness, including confirmation by the
bankruptcy court, Seitel's pre-petition creditors would receive
payment of 100% of their claims in cash, together with all post-
petition interest. Each of Seitel's equity holders, as of a record
date expected to be two days prior to the effective date of the
proposed amended plan, would have the right to receive an
equivalent number of shares of reorganized Seitel's common stock
and warrants entitling the holder thereof to purchase such number
of shares of reorganized Seitel common stock to retain its
percentage equity ownership in Seitel (subject to adjustment and
dilution as set forth below). The warrants would have an exercise
price of 60 cents per share, subject to adjustment for certain
recapitalization events. The aggregate exercise price of the
warrants would be $75 million. The Company intends that the
warrants will be freely transferable and exercisable for 30 days
following the effective date of the proposed amended plan. Each
equity holder who does not exercise its warrants would, as a
result, suffer approximately 83.4% dilution in its percentage
equity ownership of reorganized Seitel not including the
additional warrants to be issued to Mellon as described below.
Mellon has agreed to act as a standby purchaser for up to $75
million (or 83.4%) of the shares of reorganized Seitel's common
stock not purchased by equity holders upon exercise of the
warrants. Mellon presently owns approximately 8% of Seitel's
outstanding common stock. As compensation for its standby
commitment, Mellon will be issued additional warrants to acquire
up to 10% of the fully diluted shares of common stock of
reorganized Seitel. The exercise price of Mellon's additional
warrants would be 72 cents per share, subject to adjustment for
certain recapitalization events, and would expire on the seventh
anniversary of their issuance.
The funding of all payments of claims under the proposed amended
plan would be provided from a portion of Seitel's existing cash
balances, and not less than $180 million in proceeds of a high
yield debt placement. Financial advisors working with Seitel,
without any commitment, have expressed confidence in their ability
to complete the required high yield debt placement. The Company
also anticipates entering into a new revolving credit facility to
supplement its working capital needs following the effective date
of the amended plan and is engaged in preliminary discussions with
certain lending sources.
There can be no assurance that the amended plan will be confirmed
by the Bankruptcy Court or will become effective or the timing
thereof.
Seitel markets its proprietary seismic information/technology to
more than 400 petroleum companies, licensing data from its library
and creating new seismic surveys under multi-client projects.
SINTER LLC: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------
Debtor: Sinter, LLC
dba Metro Area Property Solutions
449 Beech Hollow Trail
Loganville, Georgia 30052
Bankruptcy Case No.: 04-90163
Type of Business: Provides property management and solutions for
metro areas.
Chapter 11 Petition Date: January 6, 2004
Court: Northern District of Georgia (Atlanta)
Judge: W. Homer Drake
Debtor's Counsel: George M. Geeslin, Esq.
3355 Lenox Road, Suite 875
Atlanta, GA 30326-1357
Tel: 404-841-3464
Fax: 404-816-1108
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
------ --------------- ------------
Ohio Savings Bank 1775 Little Willeo $287,364
P.O. Box 94674 Road, Marietta, GA,
Cleveland, OH 44101 30068
Aurora Loan Servicing 2502 Rosebud Road, $237,500
Grayson, GA 30017
John Butler 2490 Rosebud Road, $189,528
Grayson, GA, 30017
Green Point Mortgage 449 Beech Hollow $146,568
Trail, Loganville,
GA, 30052
Ohio Savings Bank 6373 Hawthorne Terrace $124,873
Norcross, GA 30092
Ohio Savings Bank 391 April Court, $107,634
Statham, GA, 30666
Cenlar Bank 3080 Wedgewood Drive $105,513
GMAC Mortgage 1699 Stafford Drive, $103,549
Snellville, GA 30078
Ohio Savings Bank 850 Idlewood Road, $94,842
Winder, GA, 30680
Ohio Savings Bank 3707 Allen Drive, $93,984
Flowery Branch, GA,
30549
Ohio Savings Bank 5155 Newark Avenue, $83,153
Clarkdale, GA, 30020
Countrywide Home Loans 926 Hall Street, $53,660
Atlanta, GA, 30318
Sinter, LLC 3080 Wedgewood Drive $42,712
Phyllis Folsy 2502 Rosebud Road, $39,200
Grayson, GA 30017
Harold Waynae Tingle 1985 Sandcreek Drive $27,000
Atlanta, GA, 30331
Phyllis Folsy 2502 Rosebud Road, $26,750
Grayson, GA 30017
Household Financial 499 Beech Hollow Trail $20,059
Loganville, GA 30052
J & L Properties 6373 Hawthorne Terrace $20,000
Norcross, GA 30092
Morequity 499 Beech Hollow Trail $19,020
Loganville, GA, 30052
Randy and Crystal Bassett 1699 Stratford Drive, $16,500
Snellville, GA, 30078
SK GLOBAL: Judge Kim Yeon-Hak Approves 10.4% SK Corp. Stock Sale
----------------------------------------------------------------
SK Corp. wants to sell 10.4% of its shares to Korean allies, like
Hana Bank, and other local bank lenders, which would give them
stock voting rights.
Sovereign Asset Management Ltd., SK Corp.'s biggest foreign
shareholder, however, objects to SK Corp's plan. Sovereign asked
a Seoul court to stop SK Corp. from proceeding with the sale.
Bloomberg News' In-soo Nam reports that Sovereign fears that the
sale would dilute its voting rights. Sovereign, together with
Hermes Investment Management Ltd. and other shareholders, plan to
vote out members of SK Corp.'s board, at a shareholders' meeting
in March 2004, when six of the 10 board members are up for re-
election. Sovereign believes that the shares should be offered
to all shareholders.
Judge Kim Yeon-hak of South Korea's Seoul District Court,
however, finds that the sale does not violate any of South
Korea's laws. Accordingly, Judge Kim Yeon-hak permits SK Corp.
to consummate the sale. (SK Global Bankruptcy News, Issue No. 10;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
SLATER STEEL: Obtains Extension of CCAA Stay Until March 1, 2004
----------------------------------------------------------------
The Ontario Superior Court of Justice has extended the Court
protection period granted to Slater Steel Inc., under the
Companies' Creditors Arrangement Act to March 1, 2004, from
January 30, 2004, in order to allow the company to proceed with
an orderly wind down of both the Atlas Stainless Steels and
Hamilton Specialty Bar facilities under the protection of the
CCAA.
The Company said that while the details have not yet been
finalized, the Company is working with customers, its lenders and
the Monitor to develop a systematic approach to winding down the
two facilities.
The Company also stated that RBC Capital Markets will continue to
seek buyers for each of the Atlas Stainless Steels and Hamilton
Specialty Bar facilities and that, notwithstanding the
commencement of the wind down and in order to preserve as much as
possible the value of such facilities for prospective buyers, the
Company will also seek to enter into negotiations with the unions
representing the hourly employees of Atlas Stainless Steels and
Hamilton Specialty Bar in order to significantly lower the labor
costs of these facilities. In addition, the Company will also
continue its efforts to obtain extensions from the Ontario and
Quebec governments of the periods for funding the solvency
deficits of its Hamilton Specialty Bar and Atlas Stainless Steels
defined benefit pension plans.
Slater also announced that six of its ten directors had resigned.
Continuing as directors are Anthony Griffiths, who remains
chairman of the board, Paul Kelly, Dennis Belcher and Pierre
MacDonald. The remaining directors are well qualified to guide the
Company through the wind down of the Hamilton and Tracy facilities
and the sale of assets of the Company.
Slater Steel is a mini mill producer of specialty steel products.
The Company's mini mills are located in Fort Wayne, Indiana;
Hamilton and Welland, Ontario and Sorel-Tracy, Quebec.
SOLUTIA INC: Wants Court to Deem Utility Cos. Adequately Assured
----------------------------------------------------------------
The Solutia Debtors obtain electricity, natural gas, water,
telephone and other similar services from numerous companies. M.
Natasha Labovitz, Esq., at Gibson, Dunn & Crutcher LLP, in New
York, relates that the services provided by the Utility Companies
are essential to the Debtors' operations and must continue
uninterrupted during the pendency of their Chapter 11 cases. The
Debtors' business operations involve the manufacturing of high-
performance chemical-based materials at complex facilities, which
depend upon the constant and reliable provision of utility
services. Should the Utility Companies refuse or discontinue
service, even for a brief period of time, the Debtors' business
operations would be severely disrupted. In light of the nature
of the Debtors' business operations, any interruption in utility
services could also have adverse environmental consequences, at
least, cause employee safety concerns, or significant loss in
value of work in progress.
Section 366 of the Bankruptcy Code protects a debtor from
termination of its utility services upon the filing of a
bankruptcy petition while also providing utility companies with
adequate assurance of payment for postpetition utility services.
Section 366 provides that:
"(a). . . a utility may not alter, refuse, or discontinue
service to, or discriminate against, the trustee or the
debtor solely on the basis of the commencement of a
[Chapter 11] case or that a debt owed by the debtor to
such utility for service rendered before the order for
relief was not paid when due.
(b) Such utility may alter, refuse, or discontinue
service if neither the trustee nor the debtor, within
20 days after the [Petition Date], furnishes adequate
assurance of payment, in the form of a deposit or other
security, for service after such date. On request of
a party-in-interest and after notice and a hearing,
the court may order reasonable modification of the
amount of the deposit or other security necessary to
provide adequate assurance of payment."
According to Ms. Labovitz, the Debtors have an excellent payment
history with the Utility Companies. Other than utility bills not
yet due and owing as of the Petition Date, which they will be
prohibited from paying as a result of the commencement of their
Chapter 11 cases, the Debtors, historically, have paid their
undisputed prepetition utility bills in full when due. Before
the Petition Date, the Debtors paid, on average, $20,000,000 per
month to the Utility Companies on account of utility services.
The Debtors also have sufficient availability of funds to pay all
postpetition charges for utility services by virtue of cash on
hand as of the Petition Date, expected cash flows from
postpetition business operations and anticipated access to
debtor-in-possession financing.
Ms. Labovitz states that the Debtors' prepetition history of
prompt and full payment to the Utility Companies, their ability
to pay future utility bills, the administrative priority status
afforded the Utility Companies' postpetition claims and the
existing cash security deposits and other forms of security that
are held by certain of the Utility Companies all constitute
adequate assurance of payment for future utility services that
the Utility Companies will be providing in the Chapter 11 cases.
The Debtors believe, therefore, that providing additional cash
security deposits to the Utility Companies is unnecessary and
would be an improvident use of cash.
In this regard, the Debtors ask Judge Beatty to:
(a) determine that "adequate assurance of payment" for
postpetition utility services has been furnished to the
Utility Companies, without the need to provide additional
deposits or security; and
(b) prohibit the Utility Companies from:
(i) altering, refusing or discontinue utility services
on account of outstanding prepetition invoices;
(ii) requiring additional adequate assurance of payment
as a condition to providing utility services; or
(iii) drawing upon any existing security deposit, surety
bond or other form of security to secure future
payment for utility services.
The Debtors also ask the Court to establish procedures to resolve
any request by a Utility Company for additional adequate
assurance of future payment. The Debtors propose that:
(a) they will serve a copy of the Utility Injunction Order
on each Utility Company;
(b) any Utility Company may request additional adequate
assurance of payment. Any request will be in writing and
addressed to:
Solutia Inc.
575 Maryville Centre Drive
St. Louis, Missouri 63141
Telephone: (314) 674-1000
Facsimile: (314) 674-5469
Attn: David McCool, Esq.
Assistant General Counsel
and
Gibson, Dunn & Crutcher LLP
200 Park Avenue
New York, New York 10166-0193
Telephone: (212) 351-4000
Facsimile: (212) 351-4035
Attn: Craig A. Bruens, Esq.
(c) without further Court order, they may enter into
agreements granting Utility Companies additional
assurance of future payment that, in their discretion,
is reasonable;
(d) if a Utility Company makes a timely request for additional
adequate assurance of future payment that they believe
is unreasonable, and if the parties are unable to resolve
the request consensually within 60 days from the date
they received the request, then they will file a request
to determine adequate assurance of payment with respect to
that Utility Company;
(e) if a Determination Motion is filed, the Utility Company
asking for additional assurance will be deemed to have
adequate assurance of payment for future utility services
under Section 366, and will be prohibited from
discontinuing, altering or refusing service without the
need for payment of additional deposits or other security
unless and until the Court enters a final order to the
contrary;
(f) the burden of proof with respect to any Determination
Motion at any Determination Hearing will remain unaffected
by entry of the Utility Injunction Order; and
(g) any Utility Company that does not timely ask for
additional assurance in accordance with the Determination
Procedures will be deemed to have adequate assurance under
Section 366 without the payment of any deposits or
provision of further security and prohibited from
discontinuing, altering or refusing service. (Solutia
Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
SPIEGEL GROUP: Earns Nod to Expend Funds on Subsidiary's Behalf
---------------------------------------------------------------
The Spiegel Group Debtors seek the Court's authority to expend
funds on behalf of Spiegel Credit Corporation III, a non-debtor
subsidiary, in defense of a certain postpetition litigation
commenced by MBIA Insurance Corporation.
Credit Card Securitization Program
James L. Garrity, Jr., Esq., at Shearman & Sterling LLP, in New
York, tells the Court that First Consumers National Bank is a
national bank that is chartered, supervised and examined by the
Office of the Comptroller of the Currency. FCNB is a wholly
owned subsidiary of Spiegel but is not a debtor in their Chapter
11 cases. Before the Petition Date, many of the Merchant
Companies' customers received credit through private-label credit
cards issued by FCNB. FCNB also issued MasterCard and VISA
bankcards to the general public.
Mr. Garrity states that FCNB securitized the receivables
generated by the use of its private-label cards and bankcards by
selling them to securitization vehicles, which, in turn, financed
their purchase of the receivables by selling asset backed
securities to investors. Before the Petition Date, these
securitization vehicles issued six series of ABS, three of which
are backed, on a revolving basis, by private-label receivables
and the other three are backed, also on a revolving basis, by
bankcard receivables. MBIA insured the ABS issued with regard to
two of the private-label Series.
Spiegel Acceptance Corporation, SCC III and Financial Services
Acceptance Corp. are wholly owned subsidiaries of Spiegel. Each
participated in those securitization transactions, although none
are Debtors in Spiegel's bankruptcy cases. A principal source of
the Spiegel Group's liquidity was FCNB's ability to securitize
substantially all the private-label credit card and bankcard
receivables generated. In the ordinary course of business, the
securitization transactions returned a significant portion of the
proceeds of collections on receivables sold into the
securitization transactions to FCNB in exchange for the deposit
of additional receivables. FCNB used these proceeds to reimburse
the Merchant Companies for charges made with the private-label
credit cards.
Mr. Garrity explains that the transaction documents for the
securitization transactions provided that on the occurrence of
certain events specified in transaction documents, substantially
all the proceeds of receivables that would otherwise be paid to
FCNB in exchange for the deposit of additional receivables
would be allocated to the repayment of amounts owed to the ABS
holders. Notwithstanding this fact, during any Pay-Out Event
FCNB was nevertheless still required under the securitization
transaction documents to deposit new receivables into the
securitization transactions irrespective of whether or not it had
sufficient funds to reimburse the Merchant Companies for charges
made with the private label credit cards it issued.
Pay-Out Event Under Credit Card Securitization Program
On March 7, 2003, FCNB notified the trustees for all its six
asset backed securitization transactions that a Pay-Out Event had
occurred on each series. The Pay-Out Events on certain Series
occurred because each of these Series failed to meet certain
minimum performance requirements for the reporting period ended
February 28, 2003 due to the receivables generating insufficient
cash to meet the obligations under the transaction documents
governing the Series. The performance and credit quality of
these securitized receivables declined significantly due to
higher charge-off rates and lower revenue.
Mr. Garrity notes that as a result of the Pay-Out Events,
substantially all monthly excess cash flow remaining after the
payment of debt service and other expenses was diverted to repay
principal to the holders of the ABS on an accelerated basis,
rather than to pay the excess cash flow to FCNB for use in
reimbursing the Merchant Companies for their acceptance of the
private-label cards issued by FCNB.
Due to the Pay-Out Events realized on the private-label Series
and the reallocation of cash flow, FCNB ceased reimbursing the
Merchant Companies for charges made with the private-label credit
cards issued. In response to these Pay-Out Events, beginning
March 11, 2003, the Merchant Companies ceased honoring the
private-label credit cards. FCNB also discontinued charging
privileges, effective March 7, 2003, on all MasterCard and Visa
bankcards issued by FCNB to its customers.
FCNB Is Liquidated
Due to FCNB's financial condition, on May 15, 2002, FCNB entered
into an agreement with the Office of the Comptroller of the
Currency, the FCNB's primary federal regulator. The agreement
provided for FCNB to comply with certain requirements, and among
other things, the agreement:
-- contained restrictions on transactions between FCNB and its
affiliates and required FCNB to complete a review of all
existing agreements with affiliated companies and to make
necessary and appropriate changes;
-- required FCNB to obtain $198,000,000 in guarantees;
-- restricted FCNB's ability to accept, renew or roll-over
deposits;
-- placed restrictions on FCNB's ability to issue new credit
cards and make credit line increases;
-- required FCNB within 30 days of the agreement to file with
the OCC a disposition plan to either sell, merge or
liquidate FCNB;
-- required FCNB to maintain sufficient assets to meet daily
liquidity requirements;
-- required FCNB to complete a comprehensive risk management
assessment;
-- established minimum capital levels for FCNB;
-- provided for increased oversight by and reporting to the
OCC; and
-- provided for the maintenance of certain asset growth
restrictions.
The OCC approved a disposition plan providing for the sale or
liquidation of the Company's bankcard portfolio by
April 30, 2003, as part of an agreement with the OCC to liquidate
FCNB at some point. Under the terms of the plan, if FCNB did
not receive an acceptance of an offer to buy the bankcard
portfolio in January 2003, it was required to implement plans to
liquidate this bankcard portfolio. FCNB did not receive any such
acceptance.
On February 14, 2003, the OCC required FCNB to immediately begin
the process of liquidating the bankcard portfolio and set forth
the steps FCNB should follow. Specifically, FCNB was required by
the OCC to:
(a) notify the trustee for each Series that FCNB would either
amend the relevant securitzation documents to replace it
with a successor servicer and administrator or resign;
(b) cease all credit card solicitations for its bankcards;
(c) cease accepting new bankcard applications and credit lines
and offering credit line increases to any existing
bankcard account;
(d) notify cardholders that FCNB will no longer honor bankcard
charges on or before March 31, 2003; and
(e) cease accepting new charges on existing bankcards on or
before April 1, 2003.
On March 7, 2003, FCNB notified existing holders of its bankcards
that it was discontinuing charging privileges. Beginning
March 11, 2003, the Merchant Companies ceased honoring the
private-label cards issued by FCNB to their customers.
Pursuant to the disposition plan approved by the OCC, FCNB is
currently in the process of a solvent liquidation under the
provisions of The National Bank Act. While there can be no
assurances as to timing, FCNB hopes to be in a position to
conclude the liquidation in the first half of 2004.
The MBIA Action
MBIA filed a lawsuit in New York against FCNB and SCC III on
September 16, 2003 seeking damages, imposition of a constructive
trust, and declaratory relief arising out of several alleged
breaches of contract and other conduct.
On November 18, 2003, MBIA filed its Amended Complaint and Jury
Demand that, among other things added Spiegel Acceptance
Corporation as a Defendant, and asserted additional factual
allegations. In part, the Amended Complaint states that it is an
action for damages, imposition of a constructive trust,
indemnification, declaratory relief, and injunctive relief
arising out of several breaches of contract, fraud, and other
conduct.
FCNB is providing its own defense to the MBIA Action. SCC III
cannot do the same. Mr. Garrity points out that SCC III is a
special purpose, bankruptcy remote entity, without funds to pay
the defense costs of the MBIA Action. Due to its status as a
bankruptcy remote entity, SCC III's Charter and Bylaws prohibit
it from borrowing funds to pay these costs.
Mr. Garrity informs the Court that among SCC III's assets are two
prepetition $15,000,000 demand Promissory Notes payable to SCC
III by the Debtors. Historically, these Notes have been carried
on the Debtors' books as inter-company debt. In addition, SCC
III believes that it is entitled to a return of $19,000,000 cash
on deposit with the Bank of New York. Those funds are in a
surplus account formerly maintained as a part of the private
label Securitization Trust. FCNB is in the process of attempting
to recover these funds for SCC III's benefit.
Given the substantial assets held by SCC III, the Debtors believe
that it is in the best interests of their estates and creditors
to fund SCC III's defense in the litigation. More specifically,
the Debtors propose to pay the fees and expenses associated with
SCC III's defense of the MBIA Action. Mr. Garrity clarifies that
the Debtors are not liable for any claims against SCC III. The
Debtors seek to expend funds for the benefit of SCC III in
defense of the MBIA Action solely to preserve SCC III's assets
for the benefit of the Debtors' estate and that of their
creditors.
Mr. Garrity contends that there is a valid business justification
for expending funds. SCC III has substantial assets and if it is
able to resolve the MBIA Action and the claims of its remaining
creditors, those assets may be available to satisfy the claims of
the Debtors' creditors. Mr. Garrity assures the Court that the
Debtors have discussed the matter with representatives of the
Committee. The Debtors have agreed, among other things, that
they will provide the Committee with copies of the bills to be
paid by Spiegel and to cap the monthly fees at $75,000 per month.
* * *
The Debtors orally modified their request during the December 17,
2003 hearing so as to provide for similar authority to expend
funds for the benefit of Spiegel Acceptance Corporation in
defense of the MBIA Action.
Accordingly, Judge Blackshear authorizes the Debtors to expend
funds for both SCC III and SAC's benefit in the defense of the
MBIA Litigation subject to the DIP Lenders' approval. (Spiegel
Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
SWIFT & CO.: Reports Slight Improvement in 2nd-Quarter Results
--------------------------------------------------------------
Swift & Company reported net income of $15.4 million for its
second quarter ended November 23, 2003, compared to net income of
$13.7 million for the second quarter ended November 24, 2002,
comprised of a net loss of $3.6 million for the predecessor
company and net income of $17.3 million for the successor company.
"Given the difficult drought conditions in Australia and the
impact that the influx of Canadian boxed beef had on the U.S. beef
industry in the last six weeks of our quarter, we are quite
pleased with our operational and financial results," said John
Simons, president and CEO of Swift & Company. "Our net income was
driven by excellent growth in Swift Pork and steady performance in
Swift Beef, which offset the reduced earnings of Swift Australia
as a result of the record drought that has impacted the entire
Australian beef industry. At the same time, we have continued to
implement strategic initiatives to further enhance our operations
and to introduce new, value-added products."
Simons highlighted several key performance areas for the quarter:
* Swift & Company net sales increased 23% to $2.538 billion
* Swift Pork operating income increased 87% to $32.1 million
* Swift Beef operating income increased 8% to $8.3 million
* Swift & Company net income was $15.4 million
* Operating cash flow was $18.4 million and capital spending
was $13.5 million
* Earnings before interest, income taxes, depreciation and
amortization ("EBITDA") was $60.5 million
* Last Twelve Months EBITDA was $261.8 million, including a
one-time gain of $21.2 million related to a fire insurance
settlement at our Garden City, Kansas, facility
"Overall, Swift & Company's performance continues to be in line
with our expectations," said Simons. "We are pleased that our
pork business continues to lead that protein sector in financial
performance, and our U.S. beef segment continues to improve. We
recently formed a food processing team to focus exclusively on
expanding our presence and brand in all value-added distribution
channels and I am pleased with the early signs of success from
the launch of Swift Premium deli meats."
Simons also emphasized that Swift continues its leadership role in
food safety. "We recently announced the U.S. beef industry's
first cattle traceability program, Swift Trace(TM), in conjunction
with Optibrand Ltd. This is an aggressive food safety step that
will give us the ability to trace from individual animal to boxed
beef, and we believe it can be ultimately expandable forward to
the consumer."
"The solid second-quarter performance was the result of our
diversified business model," said Simons. "While our Australian
operations were impacted by the record drought, our U.S. pork
business delivered outstanding results. Our U.S. beef segment
performed well in spite of the impact of Canadian box imports on
the U.S. beef industry. We ended the quarter with cash of $112.1
million and zero revolver borrowings in spite of record-high
cattle and beef prices. We are pleased with our progress and are
continuing our focus on growing the company through our
diversified business model."
The following discussion compares the current year actual
consolidated and segment results to the prior year, pro forma
results. The prior-year quarter amounts reflect the sum of the
unaudited historical financial statements of the predecessor
company after deducting the results of the businesses not acquired
for the 24-day period from August 26, 2002, through September 18,
2002, and including pro forma adjustments related to the
September 19, 2002, transaction that established Swift & Company,
plus the results of the Acquired Business for the 67-day period
from September 19, 2002, to November 24, 2002.
Consolidated Results
Net sales for the fiscal 2004 second quarter were $2.538 billion,
an increase of $465.4 million or 23% over the prior-year second
quarter. Net income for the fiscal 2004 second quarter was $15.4
million.
Segment Information
Swift & Company is organized into three reportable business
segments: Swift Beef, Swift Pork, and Swift Australia.
Swift Beef
Net sales of Swift Beef were $1.676 billion for the 13 weeks ended
November 23, 2003, compared to $1.388 billion for the 13 weeks
ended November 24, 2002 (pro forma). The net sales increase of
$288.2 million, or 21%, reflects an approximately 32% increase in
sales prices partially offset by reduced volumes of approximately
8%.
Volumes were impacted by the U.S. decision, in September 2003, to
lift the ban on importing Canadian boxed beef but not live
animals. Material volumes of Canadian boxed beef were not
imported into the U.S. until the latter part of the quarter, at
which time selling prices and operating margins declined. The
company believes the decreases reflected the benefit received by
Canadian meat packers of lower-priced raw materials and their need
to sell the large backlog of supply.
Operating income of Swift Beef was $8.3 million for the 13 weeks
ended November 23, 2003, compared to $7.7 million for the 13 weeks
ended November 24, 2002 (pro forma). The increase of $0.6
million, or 8%, primarily reflects higher selling prices.
Swift Pork
Net sales were $477.1 million for the 13 weeks ended November 23,
2003, compared to $385.8 million for the 13 weeks ended
November 24, 2002 (pro forma). The increase of $91.3 million, or
24%, reflects a 17% increase in selling prices and a 5% increase
in volume. The higher pork selling prices were primarily
attributable to the escalating prices of competing protein
products such as beef, which in turn raised the price of pork
products. Gross margins grew to 8.8% for the current 13 weeks
from 4.2% for the prior 13 weeks (pro forma).
Operating income of Swift Pork was $32.1 million for the 13 weeks
ended November 23, 2003, compared to $17.2 million for the 13
weeks ended November 24, 2002 (pro forma). The increase of $14.9
million, or 87%, reflects an increase in the spread between
selling price and raw material cost per pound.
Swift Australia
Net sales of Swift Australia were $384.4 million for the 13 weeks
ended November 23, 2003, compared to $301.9 million for the 13
weeks ended November 24, 2002 (pro forma). The increase in net
sales of $82.5 million, or 27%, primarily reflects a 29% increase
in sales prices and relatively flat volumes. The increase in net
sales was due to the ongoing drought, which reduced cattle
supplies significantly and drove increased selling prices, and
an Australian dollar to U.S. dollar exchange rate movement of an
average 24% between the two periods.
Swift Australia incurred an operating loss of $0.3 million for the
13 weeks ended November 23, 2003, compared to operating income of
$15.6 million for the 13 weeks ended November 24, 2002 (pro
forma). The decrease of $15.9 million is primarily the result of
an increase in livestock prices caused by continued drought
conditions. The severe drought conditions continued through most
of the second quarter but prices remained high with sustained
processor competition for cattle.
Swift & Company (S&P, BB- Corporate Credit and B+ Senior Unsecured
Debt Ratings) is one of the world's leading beef and pork
processing companies - processing, preparing, packaging,
marketing, and delivering fresh, further processed and value-added
beef and pork products to customers in the United States and in
international markets. For more information, please visit
http://www.swiftbrands.com/
TERADYNE: Appoints John M. Casey as SVP to Run Asian Activities
---------------------------------------------------------------
Teradyne (NYSE:TER) announced the appointment of John M. Casey as
Senior Vice President responsible for all of the company's
activities in Asia.
Casey has been with the company since 1977. He served in a number
of sales positions early in his career and was appointed a Vice
President of the company in 1990. After heading Teradyne's
broadband test and logic test businesses, he moved to his current
position of President of the Assembly Test Division. Replacing
Casey as President of Assembly Test is Jeffrey R. Hotchkiss.
Hotchkiss joined Teradyne in 1971 and served in a variety of
sales, marketing and product management positions, mostly in the
assembly test area. He became a Teradyne Vice President in 1990
and he was appointed as the company's Chief Financial Officer in
1997. In 2000, Hotchkiss left Teradyne to become CEO of Empirix,
Inc., a spin-off from Teradyne which provides test and monitoring
products for telecom and Internet applications.
"Over the last several years, Teradyne has dramatically increased
our capability in Asia in account management, engineering,
material sourcing, manufacturing and service," said Teradyne
President Michael Bradley. "The region currently represents about
half of our sales and is growing faster than any other region. In
recognition of the strategic importance of Asia, it is important
that we continue to move the 'center of gravity' of our operations
towards the region. John will be responsible for building our
organizational capability and our business across Asia over the
next several years.
"We are fortunate that Jeff Hotchkiss will be rejoining Teradyne
to replace Casey," Bradley continued. "In his 20 year career at
Teradyne, Jeff was a key member of the management team that built
our Assembly Test business. That Teradyne experience, combined
with his experience as CEO of Empirix, makes him an ideal
candidate to continue to build on our current momentum in Assembly
Test." Both of these changes are effective immediately.
Teradyne (NYSE:TER) (S&P, B+ Corporate Credit & Senior Unsecured
Note Ratings, Stable) is the world's largest supplier of Automatic
Test Equipment, and a leading supplier of interconnection systems.
The company's products deliver competitive advantage to the
world's leading semiconductor, electronics, automotive and network
systems companies. In 2002, Teradyne had sales of $1.22 billion,
and currently employs about 6700 people worldwide. For more
information, visit http://www.teradyne.com/
TERAYON COMM: Will Publish Q4 and FY 2003 Results on January 27
---------------------------------------------------------------
Terayon Communication Systems, Inc. (Nasdaq: TERN), a the leading
innovator of intelligent broadband access, will release financial
results for its fourth quarter and full year 2003 after market
close on Tuesday, January 27, 2004.
Terayon will host a conference call to discuss its financial
results at 2 p.m. Pacific Time (5 p.m. Eastern Time) on
January 27, 2004. A live audio webcast of the call will be
available to the public from Terayon's Web site at
http://www.terayon.com/investor/
A replay of the conference call will be available via webcast at
http://www.terayon.com/investor/beginning at 4 p.m. Pacific Time
on January 27, through February 27, 2004. In addition, a replay
can be accessed via telephone during this period by dialing 877-
213-9653 (U.S.) or 630-652-3041 (international). The access code
for the telephonic replay is 8246781.
Terayon Communication Systems, Inc. (S&P, B- Corporate Credit and
CCC Subordinated Debt Ratings, Negative) provides innovative
broadband systems and solutions for the delivery of advanced,
carrier-class voice, data and video services that are deployed by
the world's leading cable television operators. Terayon,
headquartered in Santa Clara, California, has sales and support
offices worldwide, and is traded on the NASDAQ under the symbol
TERN. Terayon is on the Web at http://www.terayon.com/
T.L.I. HOLDING CORP: Voluntary Chapter 11 Case Summary
------------------------------------------------------
Debtor: T.L.I. Holding Corporation
40 Karydan Court
St. Charles, Missouri 63301
Bankruptcy Case No.: 04-40319
Type of Business: The Debtor rents and leases transportation
equipment to businesses throughout the Midwest.
Chapter 11 Petition Date: January 8, 2004
Court: Eastern District of Missouri (St. Louis)
Judge: Kathy A. Surratt-States
Debtor's Counsel: Spencer P. Desai, Esq.
Polsinelli, Shalton et al.
100 South Fourth Street, Suite 1100
St. Louis, MO 63102
Tel: 314-231-1950
Estimated Assets: $500,000 to $1 Million
Estimated Debts: $1 Million to $10 Million
TOMMY HILFIGER: S&P Drops Ratings to Non-Investment-Grade Level
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered the corporate credit
and senior unsecured debt ratings on Tommy Hilfiger USA Inc. to a
non-investment-grade rating of 'BB+' from 'BBB-'. At the same
time, the preliminary shelf registration ratings were also lowered
to 'BB+' from 'BBB-'. The ratings are removed from CreditWatch,
where they were placed Nov. 17, 2003.
Approximately $351 million in long-term debt was outstanding at
the company as of Sept. 30, 2003. The outlook is stable.
"The rating actions follow Standard & Poor's review of the
company's fundamental business position within the fashion-
oriented segment of the competitive apparel industry," said credit
analyst Susan Ding. "The company's operating environment is
characterized by intense competition, softness at the retail
level, and the continued loss of market share by department
stores--the company's primary channel--to other retail venues."
The company itself is suffering from lackluster revenue
performance and the weakening of operating results and related
financial measures. At the same time, it has announced its
intention to purchase another branded company, and such an
acquisition could likely lead to more aggressive financial
policies.
For the past several years, Tommy Hilfiger's revenues have
remained relatively flat at about $1.8 billion, a lack of growth
reflecting the intensely competitive industry conditions. It is
also a result of weakness in the company's men's wholesale
business, though this has been partially offset by growth in the
European and U.S. women's segments. Standard & Poor's will
continue to monitor the firm's strategy to revitalize sales by
expanding its women's business and European operations, reducing
over-distribution in U.S. department stores (including Dillard's),
and diversifying beyond the Tommy Hilfiger brand name.
The ratings on Tommy Hilfiger U.S.A. Inc. reflect the company's
vulnerability to changing consumer preferences in the better-
priced segment of the apparel industry and its overall customer
concentration, as well as difficult industry conditions. The
ratings are supported by the company's strong brand name, moderate
financial policy, and solid liquidity position. The revised
ratings provide room for small-to-medium size debt-financed
acquisitions.
New York, N.Y.-based Tommy Hilfiger is a strong participant in the
competitive, full-priced sector of the apparel market,
distributing its clothing primarily through a concentrated group
of department stores, including Dillard's Inc., Federated
Department Stores Inc., and May Department Stores Co. Sales to
these customers have historically been more than 50% of wholesale
revenue.
TYCO INT'L: Schedules Annual Shareholders' Meeting for March 25
---------------------------------------------------------------
Tyco International Ltd. (NYSE: TYC; BSX: TYC) filed its
preliminary proxy statement with the U.S. Securities and Exchange
Commission (SEC). Tyco shareholders will consider seven proposals
at the company's Annual General Meeting (AGM) on March 25, 2004.
In the filing, the Board has proposed amendments to the company's
bylaws that strengthen shareholder rights. The Board also
recommends continuing the company's charter in Bermuda.
"The Board listened to the concerns of our shareholders and
carefully evaluated the pros and cons of incorporating in the
United States," said Tyco Chairman and Chief Executive Edward D.
Breen. "Following a thorough review, the Board concluded that the
interests of shareholders would be best served by making
fundamental changes to our bylaws that strengthen shareholder
rights and remaining a Bermuda company."
Tyco has been a Bermuda company since its 1997 combination with
ADT Ltd., a British company chartered in Bermuda since 1984.
Following that transaction, the combined entity was renamed Tyco
International Ltd.
The company also announced in the preliminary proxy that the Audit
Committee of the Board of Directors is undertaking a comprehensive
auditor selection process to review qualified audit firms
including PricewaterhouseCoopers LLP, the company's current
auditor. The Audit Committee plans to make a decision on the
external auditor in the near future.
Tyco International Ltd. (Fitch, BB+ Senior Unsecured Debt and B
Commercial Paper Ratings, Stable Outlook) is a diversified
manufacturing and service company. Tyco is the world's leading
provider of both electronic security services and fire protection
services; the worlds' leading supplier of passive electronic
components and a leading provider of undersea fiber optic networks
and services; a world leader in the medical products industry; and
the world's leading manufacturer of industrial valves and
controls. Tyco also holds a strong leadership position in plastics
and adhesives. Tyco operates in more than 100 countries and had
fiscal 2003 revenues from continuing operations of approximately
$37 billion.
US AIRWAYS: S&P Ratchets Corporate Credit Rating Down a Notch
-------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on US
Airways Group Inc. and its US Airways Inc. subsidiary, including
lowering the corporate credit ratings of both entities to 'B-'
from 'B'. In some cases, ratings on pass-through certificates were
lowered by more than one notch, reflecting continuing review of
recovery prospects for bondholders. Ratings, excepting 'AAA'
rated, bond-insured pass-through certificates, remain on
CreditWatch with negative implications, where they were placed
on Dec. 10, 2003.
"US Airways faces rapidly rising competition from low-cost, low-
fare airlines, and needs to address a potential covenant default
on its $1 billion loan, $900 million of which is federally
guaranteed," said Standard & Poor's credit analyst Philip
Baggaley. "The company's non-executive Chairman, who is head of
its principal shareholder, recently confirmed that US Airways is
considering asset sales to pay down debt under that loan facility,
in addition to continuing to seek employee cooperation in lowering
operating costs," the credit analyst continued. Collateral for the
$1 billion loan includes gates and slots at several key East Coast
airports, which could probably attract bids from other airlines.
Stock in regional airline subsidiaries and assets at one or more
of its hubs are reported to be other potential sale candidates.
Sale of an entire hub, particularly one of the two largest
(Philadelphia and Charlotte), could hurt revenue generation in the
rest of the system, however. Most large airline competitors are
seeking to conserve cash in the current airline environment,
though some, as well as rapidly growing low-cost airlines, might
be tempted to purchase selected US Airway assets.
Financial covenants under the $1 billion loan include minimum $1
billion of unrestricted cash through the second quarter of 2004
(only $376 million thereafter), at least 1.0 fixed-charge coverage
(first measured at June 30, 2004, cumulative from Jan. 1), and
7.5x adjusted debt to EBITDAR, also first measured at June 30. The
latter two covenants may be difficult to meet, depending on
operating performance during the first half of the year. Although
the Air Transportation Stabilization Board (ATSB), which granted
the federal loan guarantee, would presumably not be eager to
accelerate the loan and force US Airways into bankruptcy
(particularly in an election year), the price of covenant waivers
might be debt paydown or some form of compensation. Southwest
Airlines Co. announced in November 2003 that it plans to begin
operations at Philadelphia, US Airways' largest hub, and US
Airways' CEO has told the airline's employees that further cost
reductions will be necessary to meet this competitive threat.
The initial reaction from union leaders has been very negative,
and even if concessions are eventually accepted, agreement could
take many months.
US AIRWAYS: Agrees to Speedy Arbitration with Flight Attendants
---------------------------------------------------------------
After the union that represents the US Airways flight attendants
(the Association of Flight Attendants-CWA, AFL-CIO) filed a
lawsuit to stop the illegal process used in the involuntary
furlough of 552 flight attendants, airline management agreed to
expedited arbitration to resolve the issue.
"We already fought this battle with management once and won," said
AFA US Airways Master Executive Council President Perry Hayes.
"Management could make the operation of its airline a lot easier
by working with its employees on tough issues, rather than
fighting us on everything."
In December, US Airways management announced that it was
involuntarily furloughing 552 flight attendants. According to the
collective bargaining agreement between AFA and US Airways, before
flight attendants are involuntarily furloughed, the airline must
first offer a voluntary furlough. Once, during a furlough in June
2003, management attempted to by-pass the voluntary process but
was ultimately forced to follow the contract after an arbitrator
ruled in favor of the flight attendants in an expedited process.
"Management agreed to this voluntary process as part of the
restructuring contract in which flight attendants sacrificed over
$101 million per year to help save this airline," Hayes said.
"It's in particularly bad taste for airline management to break
the deal in which the flight attendants gave so much to the
airline at the expense of their own families."
On Jan. 8 AFA filed the lawsuit in the U.S. District Court for the
Western District of Pennsylvania. After the suit was filed,
management agreed to expedited arbitration of the dispute.
The arbitration will be heard on Jan. 14 before any of the
furloughs begin. If AFA prevails, US Airways will have to first
offer a voluntary furlough before anyone is involuntarily put on
the street. If not enough flight attendants apply for a voluntary
furlough then the remaining furloughs will be made through the
involuntary process.
More than 45,000 flight attendants, including the 5,200 flight
attendants at US Airways, join together to form AFA, the world's
largest flight attendant union. AFA is an affiliate of the
700,000 member strong Communications Workers of America, AFL-CIO.
U.S. ENERGY: Units Enters LOI to Merge with Globemin Resources
--------------------------------------------------------------
U.S. Energy Corp. (Nasdaq: USEG) and Crested Corp. (OTC Bulletin
Board: CBAG), d/b/a USECC, announced that U.S. Energy Corp's.
majority owned subsidiary, Sutter Gold Mining Company has entered
into a Letter of Intent to merge, via reverse takeover, with
Globemin Resources Inc. (TSX-VX: GBM), a public company
headquartered in Vancouver Canada.
The SGMC properties are located in the historic Mother Lode
District some 50 miles east of Sacramento, California and covers
about 2-1/4 miles of strike length on which there were 16 historic
gold mines. The SGMC development consists of a 2,850 foot 12' X
15' decline on a grade of -12% with cross cuts driven at 200 foot
intervals under the Comet and Lincoln mineralized zones. In the
1990's, SGMC had produced over 4,000 tons of .42 ounces per ton of
gold to confirm mill recovery of the ore and to check other costs.
SGMC plans to begin further exploration work and the construction
of a new secondary access raise to comply with US Mine Safety
Health Administration regulations and improve ventilation as well
as to better define known mineralization. The exploration work
will be run through the Comet mineralized zone as soon as funds
are made available through equity or debt financing. The current
resource production plan is to produce a stockpile of up to 300
tons-per-day (tpd). The second stage of development will be to
construct a conventional 300 ton per day (tpd) mill on site, which
will be designed so that it can easily be expanded to accommodate
the planned production of 500 tpd. The underground mine was fully
permitted in the past, but because of a change in the tailings
disposal design which will reduce start-up and operational costs
substantially, SGMC has applied for a necessary water discharge
permit which it anticipates receiving early in 2004.
Globemin Resources Inc. is an exploration stage company, focused
on finding and acquiring valuable precious metal properties for
exploration and development and has a gold concession in Ecuador
that has had limited exploration. Further work on this concession
will be evaluated after the SGMC transaction is closed.
Hal Herron, CEO for Sutter, commented that "subject to regulatory
approvals being obtained for the merger and other legal
requirements, a successful merger with Globemin has numerous
positive benefits. Sutter Gold Mining Company will become a
public company traded on the TSX-Venture Exchange (Canada) which
will provide liquidity to shareholders. Being public in Canada
provides access to needed capital for mill construction and other
purposes as the Canadian market understands both exploration and
advanced stage gold mining projects."
John L. Larsen, CEO of U. S. Energy Corp. stated that "the merger
of Sutter with Globemin is consistent with U. S. Energy's ongoing
business plan to concentrate on its natural gas investments.
After the merger, Sutter Gold (Globemin) will be responsible for
its own corporate development as a stand alone entity as USECC
will no longer be funding Sutter costs. USE and CC shareholders
should be pleased that we have been able to hold on to this
valuable resource while gold values went as low as $250/oz.
However, today, gold is being sustained at better than $400/oz.
Once the property is put into production and becomes profitable,
the results of the gold operations will have a positive affect on
USE, because USE will continue to consolidate Sutter in its
financial statements."
U.S. Energy Corp. and its majority owned subsidiary, Crested
Corp., are engaged in joint business operations as USECC, and
through their subsidiary Rocky Mountain Gas, Inc., own interests
in over 320,000 gross acres prospective for coalbed methane in the
Powder River Basin of Wyoming and Montana and acreage adjacent to
the Greater Green River Basin in southwest Wyoming. Certain
properties are subject to a definitive agreement with a division
of Carrizo Oil & Gas, Inc. of Houston, TX to develop and expand
RMG's CBM properties dated July 10, 2001. Other properties are
held by another CBM company (Pinnacle Gas Resources, Inc.) to
develop and expand CBM properties. U.S. Energy's and Crested's
subsidiary, Rocky Mountain Gas, Inc. owns an equity interest in
Pinnacle. USECC owns control of Sutter Gold Mining Company, which
owns gold properties in California. USECC also owns various
interests in uranium properties in Wyoming and Utah.
* * *
In a Form 10-Q filed with the Securities and Exchange Commission,
U.S. Energy Corp., reported:
"The [Company's] condensed financial statements have been prepared
in conformity with accounting principles generally accepted in the
United States of America, which contemplate continuation of the
Company as a going concern. We have sustained substantial losses
from operations in recent years, and such losses have continued
through September 30, 2003. In addition, we have used, rather than
provided, cash in our operations.
"In view of the matters described in the preceding paragraph,
recoverability of a major portion of the recorded asset amounts
shown in the condensed consolidated accompanying balance sheet is
dependent upon continued operations of the Company, which in turn
is dependent upon our ability to meet our financing requirements
on a continuing basis, to maintain present financing, and to
succeed in our future operations.
"On August 1, 2003, we received a Judgment entered by the United
States District Court of Colorado wherein we were awarded a
Judgment of $20,044,180 in the Nukem case. If collection of this
Judgment is successful, it would provide significant working
capital to the Company.
"We also continue to pursue several items that will help us meet
our future cash needs. We are currently working with several
different sources, including both strategic and financial
investors, in order to raise sufficient capital to finance our
continuing operations. Although there is no assurance that funding
will be available, we believe that our current business plan, if
successfully funded, will significantly improve our operating
results and cash flow in the future."
WARNACO GROUP: Offers to Swap $210 Million of 8-7/8% Sr. Notes
--------------------------------------------------------------
Warnaco Inc. offers to exchange $210,000,000 aggregate principal
amount of 8-7/8% Senior Notes CUSIPs 934391 AE3 and U93439 AA2
for $210,000,000 aggregate principal amount of 8-7/8% Senior
Notes due 2013 CUSIP __________ which have been registered under
Securities Act of 1933, as amended. Warnaco, a wholly owned
subsidiary of the Warnaco Group, will exchange the new notes to
be issued for all outstanding old notes that are validly tendered
and not withdrawn pursuant to an exchange offer. The exchange
offer will expire at ____ p.m., New York City time, on
__________, unless Warnaco extends the exchange offer in its sole
and absolute discretion.
On January 2, 2004, Jay A. Galluzzo, Esq., Warnaco Group, Inc.'s
Vice President, General Counsel and Secretary, disclosed with the
Securities and Exchange Commission that the New Notes will be
fully and unconditionally guaranteed, jointly and severally, on a
senior unsecured basis by Warnaco Group and substantially all of
its domestic subsidiaries. Warnaco Group's direct and indirect
foreign subsidiaries will not guarantee the new notes. As of
October 4, 2003, Warnaco Group and the guarantors on a
consolidated basis had no senior debt -- excluding unused
commitments made by lenders and intercompany debt -- that is pari
passu with the notes or the guarantees, and none of Warnaco's or
any guarantor's debt was subordinated to the notes or the
guarantees.
According to Mr. Galluzzo, the terms of the new notes are
substantially identical to those of the old notes, except that
the transfer restrictions and registration rights relating to the
old notes will not apply to the new notes. The exchange of old
notes for new notes will not be a taxable transaction for U.S.
federal income tax purposes. Neither Warnaco nor any of the
guarantors will receive any cash proceeds from the exchange
offer. In addition, noteholders may withdraw tenders of old
notes at any time before the expiration of the exchange offer.
Mr. Galluzzo relates that Warnaco issued the old notes in a
transaction not requiring registration under the Securities Act,
and as a result, their transfer is restricted. Warnaco is making
the exchange offer to satisfy the Noteholders' registration
rights, as a holder of the old notes.
There is no established trading market for the new notes or the
old notes. The new notes are expected to be eligible for trading
in the private offerings, resales and trading through Automatic
Linkages Market.
By tendering the old notes, a Noteholder represents that:
(a) it is not an affiliate of Warnaco or a broker-dealer
that acquired the old notes directly from Warnaco;
(b) the new notes acquired pursuant to the Exchange Offer are
being obtained in the ordinary course of business of the
person receiving the new notes, whether or not the person
is the holder; and
(c) neither it nor any other person has any arrangements or
understanding with any person, to participate in the
distribution of the old notes or the new notes.
On or before the expiration or termination of the Exchange Offer,
to participate in the Exchange Offer, a Noteholder must transmit
a properly completed and duly executed letter of transmittal,
including all other documents required by the letter of
transmittal. In the case of a book-entry transfer, a Noteholder
must transmit an agent's message in lieu of the letter of
transmittal, to Wells Fargo Bank Minnesota, National Association,
as exchange agent, before the expiration date. The "agent's
message" means a message transmitted by the DTC to and received
by the exchange agent and forming a part of a book-entry
confirmation, which states that DTC has received an express
acknowledgement from the tendering participant stating that the
participant has receive and agrees to be bound by the letter of
transmittal and that Warnaco may enforce the letter of
transmittal against the participant.
The exchange agent's address and contact numbers are:
Wells Fargo Corporate Trust
c/o The Depository Trust and Clearing Company
1st Floor -- TADS Dept.
55 Water Street
New York, NY 10041
Telephone Number: (800) 344-5128
Facsimile Number: (612) 667-4927
Attention: Warnaco Administrator
If a registered holder of the old notes wants to tender the old
notes but the notes are not immediately available, or time will
not permit the old notes or other required documents to reach
Wells Fargo before the expiration date, and the procedure for
book-entry transfer cannot be completed before the expiration or
termination of the Exchange Offer, a tender may be effected if:
-- before the expiration date, Wells Fargo received from an
Eligible Institution a notice of guaranteed delivery, in
the form Warnaco provides -- by telegram, telex, facsimile
transmission, mail or hand delivery:
(a) setting forth:
(i) the Noteholder's name and address; and
(ii) the amount of old notes tendered;
(b) stating that the tender is being made thereby; and
(c) guaranteeing that within three New York Stock Exchange
trading days after the date of execution of the notice
of guaranteed delivery the certificates for all
physically tendered old notes, in proper form for
transfer, or a book-entry confirmation, as the case may
be, together with a properly completed and duly
executed appropriate letter of transmittal, facsimile,
or agent's message, with any required signature
guarantees and any other documents required by the
letter of transmittal will be deposited by an Eligible
Institution with Wells Fargo; and
-- the certificates for all physically tendered old notes
together with a properly completed and duly executed
appropriate letter of transmittal or facsimile, or agent's
message, with any required signature guarantees and all
other documents required by the letter of transmittal, are
received by Wells Fargo within three NYSE trading days
after the date of execution of the notice of guaranteed
delivery.
Broker-dealers that receive new notes for their own account in
exchange for old notes, where the old notes were acquired as a
result of market-making activities or other trading activities,
must acknowledge that they will deliver a prospectus that meets
the requirements of the Securities Act in connection with any
resale of the new notes. By delivering a prospectus, a broker-
dealer will not be deemed to admit that it is an "underwriter"
within the meaning of the Securities Act.
If a beneficial owner, whose old notes are registered in the name
of the broker, dealer, commercial bank, trust company or other
nominee, wants to tender its old notes in the exchange offer,
that beneficial owner should promptly contact the person in whose
name the old notes are registered and instruct that person to
tender on the beneficial owner's behalf. If the beneficial owner
wants to tender in the exchanger offer on its behalf, before
completing and executing the letter of transmittal and delivering
the old notes, appropriate arrangements must be made to either
register ownership of old notes in the beneficial owner's name,
or obtain a properly completed bond power from the person in
whose name the old notes are registered.
A full-text copy of Warnaco's exchange offer prospectus is
available for free at:
http://www.sec.gov/Archives/edgar/data/801351/000095011703005494/a36778.txt
(Warnaco Bankruptcy News, Issue No. 57; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
WEIGHT WATCHERS: S&P Rates $500-Mil. Sr. Secured Bank Loan at BB
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' bank loan
rating and its recovery rating of '3' to commercial weight-loss
service provider Weight Watchers International Inc.'s proposed
$500 million senior secured credit facilities due 2010. The 'BB'
bank loan rating is at the same level as the corporate credit
rating; this and the '3' recovery rating indicate that the lenders
can expect meaningful (50%-80%) recovery of principal in the event
of a default. The ratings on the proposed credit facilities are
based on preliminary offering statements and are subject to review
upon final documentation.
Proceeds from the new credit facilities will be used to refinance
the company's existing senior secured bank debt. The new
facilities comprise a $250 million, five-year revolving credit
facility maturing 2009, and a $250 million, six-year term loan B
facility maturing 2010. The bank loan rating on the company's
existing bank debt will be withdrawn upon the closing of the
proposed transaction.
At the same time, Standard & Poor's affirmed its outstanding
ratings, including its 'BB' corporate credit rating, on WWI.
The outlook is stable.
Woodbury, New York-based WWI had about $476 million of total debt
outstanding at Sept. 27, 2003.
"The ratings on WWI reflect the company's narrow business focus,
participation in the highly competitive weight-loss industry, and
substantial debt levels," said Standard & Poor's credit analyst
David Kang. "These factors are somewhat mitigated by the company's
leading market position, geographic diversity, predictable cash
flows, and favorable demographic trends."
WWI is a narrowly focused provider of commercial weight-loss
services. In the U.S. (WWI's largest market), the commercial
weight-loss segment represents only about 7% of the highly
competitive weight-loss industry, which includes other segments
such as self-help weight-loss products, weight-loss drugs, and
weight-loss services administered by doctors, nutritionists, and
dieticians. Still, WWI is the world's largest provider of
commercial weight-loss services and is the market leader in most
of the 30 countries in which it operates. The company's
international operations, which represented about 35% of sales for
the nine months ended Sept. 27, 2003, provide some geographic
diversity to WWI's revenue stream.
Consistent member reenrollment also provides a steady, predictable
cash flow stream. Favorable demographic factors such as
increasingly sedentary lifestyles, an aging population, and an
increasing percentage of adults worldwide who are overweight or
obese should help support growth in the weight-control industry.
WEIRTON STEEL: Coke Shortage Forces Temporary Shutdown & Layoffs
----------------------------------------------------------------
Citing the global shortage of ironmaking coke, Weirton Steel Corp.
(OTC Bulletin Board: WRTLQ) reported it will temporarily curtail
certain operations which will lead to temporary layoffs.
Operating reductions will include certain finishing and rolling
processes, but the number of affected employees has yet to be
determined. The situation also could cause the company to
temporarily idle one of its two blast furnaces.
"At this time, we cannot provide specifics on the number of
layoffs or the degree of operating cutbacks. The well-publicized
coke shortage fluctuates daily. However, as we move closer to mid-
January, when we believe we'll feel the full effects of the
shortage, we'll be able to make a more precise decision on
operations and manpower," said D. Leonard Wise, Weirton Steel
chief executive officer.
"The coke issue has impacted several other domestic steel
producers, including several that already have reduced their
operations. Our employees and our customers should know that we're
working diligently to minimize any negative effects on them."
U.S. Steel, which is Weirton Steel's primary coke supplier, was
forced last month to reduce coke shipments following a fire at a
West Virginia coal mine which has not yet resumed operations. The
mine provided metallurgical coal to U.S. Steel's coke making plant
in Clairton, Pa.
Reduced coke production from U.S. Steel has aggravated an already
worldwide shortage of coke.
Coke is manufactured when metallurgical coal is baked in the
absence of air. This material is one of several components used in
blast furnaces to help produce molten iron, which is mixed with
other ingredients to produce raw steel.
"We have contacted coal companies and coke sources throughout the
world to help us overcome our coke shortage. Our attempts will not
end until the problem is solved," Wise explained.
Weirton Steel annually uses approximately 1.2 million tons of coke
in its ironmaking operations.
Adding to the coke situation is China's increasing demand for the
material to feed its massive steelmaking operations.
According to a recent steel analyst report, China produced 129
million tons of steel in 2000. This year, the country is expected
to produce 265 million tons. The report also stated that China is
spending approximately $29 billion per year on steel industry
expansion.
Weirton Steel is the fifth largest U.S. integrated steel company
and the nation's second largest producer of tin mill products. The
company, which employs 3,300, filed for bankruptcy protection on
May 19, 2003.
WESTPOINT STEVENS: Initiates Manufacturing Capacity Realignment
---------------------------------------------------------------
WestPoint Stevens (OTC Bulletin Board: WSPT) --
http://www.westpointstevens.com/-- announced a further
realignment of manufacturing capacity in which the Company will
close DIXIE and DUNSON plants, LaGrange, Ga., FAIRFAX GREIGE
PLANT, Valley, Ala., and COUSHATTA (La.) PLANT. LANIER PLANT,
Valley will be converted to towel production. The expenses
associated with this realignment were included in an additional
restructuring charge approved by the Company's Board of Directors
during the third quarter of 2003.
The consolidation within the Company's Bath Products segment will
close two older, multi-level towel units -- Fairfax Greige Plant
and Dixie Plant -- and move some production equipment from those
plants into Lanier-Carter facility, putting modern equipment into
a one-level facility with an efficient workflow. Carter Plant,
Lanier's sister facility under the same roof, was converted to
towel production in 2002.
Production at Dunson Plant, also an older, multi-level facility,
will be folded into other Bed Products plants with more modern
manufacturing layout.
Capacity created by the addition of Coushatta Plant to the Basic
Bedding Division is no longer needed because of increased
manufacturing efficiencies achieved at other Basic Bedding plants
that are better geographically located for the Company's
distribution system.
"Overall, these moves will strengthen the Company with greater
production efficiency and better-aligned capacity and allow us to
compete more effectively in a global economy," said WestPoint
President and CEO M.L. (Chip) Fontenot. "We greatly appreciate the
associates at these plants -- indeed all our associates -- whose
skills and perseverance over the years have helped WestPoint
Stevens become a home fashions leader, and we deeply regret that
continuing changes in the global marketplace make necessary such
restructuring in manufacturing."
Layoffs will begin in mid-March, affecting approximately 200
associates at Dixie, 350 at Dunson, 300 at Fairfax Greige and 125
at Coushatta. Relocation of equipment to Lanier-Carter gets under
way also mid-March, with towel production at Lanier scheduled to
begin early-to-mid-summer.
Attempts will be made to place laid-off associates in jobs at
other area WestPoint Stevens facilities as the consolidation is
completed. The move will also create a limited number of new jobs
at Lanier's sister plant, Carter, which was converted to toweling
in 2002. A layoff at Lanier Plant was announced on Nov. 18,
allowing the Company to finalize plans for improved plant
utilization.
WestPoint Stevens Inc. is the nation's premier home fashions
consumer products marketing company, with a wide range of bed
linens, towels, blankets, comforters and accessories marketed
under the well-known brand names GRAND PATRICIAN, PATRICIAN,
MARTEX, ATELIER MARTEX, BABY MARTEX, UTICA, STEVENS, LADY
PEPPERELL, SEDUCTION, VELLUX and CHATHAM - all registered
trademarks owned by WestPoint Stevens Inc. and its subsidiaries -
and under licensed brands including RALPH LAUREN HOME, DISNEY
HOME, GLYNDA TURLEY and SIMMONS BEAUTYREST. WestPoint Stevens is
also a manufacturer of the MARTHA STEWART and JOE BOXER bed and
bath lines. WestPoint Stevens can be found on the World Wide Web
at http://www.westpointstevens.com/
WICKES INC: CEO James O'Grady Elected to Board of Directors
-----------------------------------------------------------
Wickes Inc. (OTCBB: WIKS.OB), a leading distributor of building
materials and manufacturer of value-added building components,
announced the election of James O'Grady, Wickes President and
Chief Executive Officer, to the Company's Board of Directors.
The Company also regrettably reported the resignations of Claudia
Slacik and Jon Hanson from their positions on the Wickes Board of
Directors. There were no disputes between the Company and the
directors indicated in their resignation letters.
Commenting on the changes, Robert E. Mulcahy III, Wickes Chairman
stated, "We welcome Jim O'Grady to the board and anticipate that
he will continue to play an instrumental role, both as a director
and a member of senior management, in seeking to resolve our
current liquidity crisis."
Mr. Mulcahy also stated, "Both Claudia and Jon have been
invaluable in guiding the other directors and senior management
through the many challenges faced by the Company. Their advice,
input and leadership were important components of positioning
Wickes for its current turnaround efforts. We wish them the best
of luck in their future endeavors."
The Company also reported that the Board of Directors has
authorized senior management to engage the services of a
restructuring firm to assist the Company in developing and
implementing any available strategies to secure the long term
viability of its operations.
WICKES INC. -- whose September 27, 2003 balance sheet shows a
total shareholders' equity deficit of about $12.7 million -- is a
leading distributor of building materials and manufacturer of
value-added building components in the United States, serving
primarily building and remodeling professionals. The Company
distributes materials nationally and internationally, operating
building centers in the Midwest, Northeast and South. The
Company's building component manufacturing facilities produce
value-added products such as roof trusses, floor systems, framed
wall panels, pre-hung door units and window assemblies. Wickes
Inc.'s Web site -- http://www.wickes.com/-- offers a full range
of valuable services about the building materials and construction
industry.
WORLDCOM: Wants Approval to Modify Plan Reimbursement Provisions
----------------------------------------------------------------
Alfredo R. Perez, Esq., at Weil, Gotshal & Manges LLP, in
Houston, Texas, relates that, in consonance with their charters,
by-laws, and agreements, the Worldcom Debtors had certain
indemnification and expense reimbursement obligations to current
and former employees, officers, and directors, as of the Petition
Date. Recognizing the unity of interests between them and their
current employees, officers, and directors, the Debtors' confirmed
Plan provides for the continuation, post-Chapter 11, of these
obligations to reimburse the legal fees and expenses of the
current officers, directors, and employees -- other than
"Culpable Individuals" as provided in the Plan -- up to
$25,000,000.
Since the confirmation of the Plan, however, the Debtors
determined that the legal fees and expenses for former employees
and certain former officers and directors should have been
included within the $25,000,000 basket.
According to Mr. Perez, Section 1127 of the Bankruptcy Code, in
relevant part, provides that:
"(b) The proponent of a plan or the reorganized debtor may
modify the plan at any time after confirmation of the plan
and before substantial consummation of the plan, but may
not modify the plan so that the plan as modified fails to
meet the requirements of Sections 1122 and 1123 of the
Bankruptcy Code. The plan as modified under this
subsection becomes the plan only if circumstances warrant
the modification and the court, after notice and a
hearing, confirms the plan as modified, under Section
1129;
(c) The proponent of a modification will comply with Section
1125, with respect to the plan as modified; and
(d) Any holder of a claim or interest that has accepted or
rejected a plan is deemed to have accepted or rejected, as
the case may be, the plan as modified, unless, within the
time fixed by the court, the holder changes the holder's
previous acceptance or rejection."
By this motion, the Debtors seek Judge Gonzalez's permission to
modify the Plan to revise the section concerning "Survival of
Corporate Reimbursement Obligations" to read:
"Except as set forth on Schedules 8.01(A) and 8.01(B), any
prepetition indemnification obligations of the Debtors
pursuant to their corporate charters and by-laws or
agreements entered into any time, prior to the Petition Date,
will be limited to the reimbursement of current and former
employees, other than Culpable Individuals, and directors and
officers who served in their capacities at any time on or
after the Petition Date, other than Culpable Individuals, for
legal fees and expenses and will continue as obligations of
the Reorganized Debtors in an amount not to exceed
$25,000,000, provided, however, that by accepting a
distribution under Section 8.07, an officer or director who
served in that capacity as of the Petition Date, but not as
of the Confirmation Date, will be deemed to have waived any
and all Claims against the Debtors that meet the requirements
of Section 502(e)(1)(B) of the Bankruptcy Code. Other than
stated in the preceding sentence, nothing in this provision
would be deemed to be an assumption of any other prepetition
indemnification obligation and any obligation will be
rejected pursuant to the Plan."
Mr. Perez explains that after the announcement of the accounting
fraud in June 2002, certain members of the Debtors' Board of
Directors continued in their board positions to ensure the smooth
transition to Chapter 11. Other members continued for even a
longer period, participating in the search for new management for
the Debtors. Similarly, certain of the Debtors' officers
continued during the postpetition period and were important
contributors to the prosecution of the Chapter 11 cases. The
Debtors believe that all the directors and officers, other than
"Culpable Individuals," if any, who served in their capacities at
any time during the pendency of the Chapter 11 cases should be
entitled to participate in the $25,000,000 reimbursement basket.
Many of these individuals have been assisting the Debtors by
cooperating with government investigations in furtherance of the
Debtors' policy of full cooperation with the investigations. Mr.
Perez notes that the directors and officers have made themselves
available as witnesses at trials to the Debtors' benefit, and
have otherwise assisted the Debtors in connection with legal
actions in which WorldCom is involved. The service of counsel is
required to represent the employees in connection with these
investigations and legal actions.
The Debtors have already undertaken efforts to continue the
advancement of the legal defense expenses of these individuals.
For instance, the Debtors obtained the Court's permission to pay
legal fees and expenses of their then-current employees and
certain officers on October 15, 2002. On March 25, 2003, the
Debtors also obtained a Court order modifying the retention of
Simpson, Thacher & Bartlett, their special counsel, to authorize
them to advance Simpson for the reasonable fees and expenses
incurred in connection with Simpson's representation of certain
former WorldCom directors and officers.
Additionally, the Debtors settled a dispute with National Union
Fire Insurance Company of Pittsburgh, Pennsylvania to ensure that
the primary layer of their prepetition D&O insurance policy is
available to cover the expenses up to $15,000,000. However, the
actual disbursement of the policy proceeds has not yet been
resolved. The Debtors also, for the benefit of such individuals,
sought and obtained a stay of lawsuits filed to rescind the D&O
insurance policy and prosecuting affirmative cases on their
behalf in the Bankruptcy Court against the D&O insurer.
Equally important to the Debtors' rehabilitation is the inclusion
in the $25,000,000 basket of the legal fees and expenses of
former employees, many of whom are bearing the costs of defending
routine actions. The Debtors believe that obtaining the best
defense possible for these individuals inures directly to their
benefit, not only from a public relations perspective, but
importantly, in minimizing the risk of adverse judgments and
findings that may be detrimental to them in the future.
Mr. Perez assures the Court that the modification does not:
-- increase the $25,000,000 cap on the aggregate amount the
Debtors will advance to directors, officers, and employees
for legal fees and expenses. It merely expands the scope
of the participants and sends a message to current
management and employees and to highly qualified management
and employment candidates in the future, that MCI will not
abandon its dedicated personnel; and
-- affect the classification or treatment of claims and, thus,
does not implicate the Court's previous holding that the
Plan satisfies the requirements of Sections 1122, 1123,
and 1129.
Section 1127(c) requires that, any proposed modification to a
plan must comply with the disclosure requirements of Section
1125. In this regard, the Debtors further ask the Court to
declare that the modification is proper, without need for further
disclosure or the resolicitation of votes.
According to Mr. Perez, the modification does not require further
disclosure or resolicitation since the legislative history of
Section 1127(c) makes clear that not all modifications to a
confirmed plan require new disclosure. A number of courts have
held that disclosure and resolicitation of votes is required only
when the modification materially and adversely impacts parties
who previously voted for the plan. Since the proposed
modification is neither material nor adverse, the Debtors are,
therefore, not required to provide a further disclosure, or to
resolicit the votes of any parties-in-interest. (Worldcom
Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
W.R. GRACE: Asks Court to Streamline Claim Objection Process
------------------------------------------------------------
The W.R. Grace Debtors ask Judge Fitzgerald to waive certain
requirements and restrictions imposed by a local court rule to
ease their burden of cost and time in making objections to claims.
Specifically, the Debtors want the local rule's limitations on
the number of claims that may be included in a substantive
omnibus objection waived, as well as the requirement that the
Debtors file all substantive objections to a particular claim in
a single objection.
Rather than raising all substantive objections with respect to
each claim in the first instance, the Debtors intend to file
initial omnibus objections to groups of claims according to
certain "gateway" deficiencies, while maintaining their right to
raise subsequent, substantive objections with respect to those
same claims.
The Debtors have received thousands of claims. Many of these
claims contain dispositive, gateway substantive deficiencies.
The gateway deficiencies include proof of claim forms which are:
-- incomplete,
-- contain materially deficient supporting information,
-- fail to include any product identification information, or
-- are barred by applicable statues of limitation or repose,
laches, or by prior settlements.
Now that the potential claimants "have been given adequate time
in which to file their claims," the Debtors seek an "orderly
method" by which to assert objections to those claims. The
Debtors recognize that there are certain dispositive, substantive
objections applicable to large numbers of claims -- some well in
excess of the number restrictions set out in the local rules of
court. As a result, the Debtors believe that the most efficient
manner in which to proceed is to streamline these matters by
filing omnibus objections against all claims subject to a
particular gateway objection. The Debtors also reserve the right
to assert multiple omnibus objections with respect to separate
and distinct gateway objections. Furthermore, all of the claims
should be included in one omnibus objection without limitation on
how many claims are included.
The Debtors' suggested protocol is efficient because it allows
for the quick disposition of claims that contain the same
foundational and dispositive substantive defects. The Debtors
will not have to invest the same time and resources to determine
any and all of the additional substantive objections that may
apply to the claims subject to the gateway objections, which may
not be relevant if the dispositive gateway objection is resolved
first. Moreover, addressing a gateway objection against all
applicable claims in one forum will also preserve the Court's
resources. The Court will be spared from issuing multiple,
duplicative rulings spread out over months pertaining to the
exact, identical legal principles.
Numerous claims are "woefully incomplete," lacking product
identification or adequate supporting information. Accordingly,
the Debtors are unable to ascertain all of the substantive
objections that may apply to these claims. By first pursuing
gateway objections, the claims will either be expunged or the
Debtors will be provided with further information pertaining to
the fundamental nature of the claim. Only then will the Debtors
be in a reasonable position to determine which, if any, other
substantive objections are available to them.
The Debtors believe that their proposed approach is likely to
result in a substantial reduction in the number of claims and
save them time and money to devote to the orderly disposition of
the remaining claims. (W.R. Grace Bankruptcy News, Issue No. 52;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
* 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
*********
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*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published by
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USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L.
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Copyright 2004. All rights reserved. ISSN: 1520-9474.
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