/raid1/www/Hosts/bankrupt/TCR_Public/040114.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, January 14, 2004, Vol. 8, No. 9
Headlines
AIR CANADA: Wants Approval of Trinity Investment Pact Amendments
AIRGAS: Forms Airgas Sakhalin to Serve Eastern Russia Projects
ALLIED WASTE: Will Publish Fourth-Quarter Results on February 10
ALPHA VIRTUAL: Veridicom Shareholders Disclose 35% Equity Stake
ALPHASTAR INSURANCE: Wants Schedule-Filing Deadline Extension
AMERCO: Real Estate Unit Sells Ariz. Property to New Home Builder
AMERICAN SEAFOODS: Extends Tender Offer for 10-1/8% Notes
ANC RENTAL: Lease Decision Period Extended to Plan Confirmation
ARCH COAL: Hosting Fourth-Quarter Conference Call on January 28
ARCHIBALD CANDY: Finalizing Negotiations to Sell Company
ARMSTRONG: Judge Newsome Signs Proposed Confirmation Order
AURORA FOODS: Turns to Miller Buckfire for Financial Advice
BAKE-LINE: Files for Voluntary Chapter 7 Liquidation in Delaware
BAKE-LINE GROUP: Voluntary Chapter 7 Case Summary
BUDGET GROUP: Plan Solicitation Period Extended Until February 25
BUILDERS PLUMBING: Gets Nod to Tap Ordinary Course Professionals
CHAMPIONSHIP AUTO: Four Directors Step Down from Company's Board
CHESAPEAKE: Reports Exchange Offer Early Participation Results
CHIQUITA BRANDS: Names Fernando Aguirre as President and CEO
CLS PROPERTIES: Case Summary & 20 Largest Unsecured Creditors
COGECO INC: Nov. 30 Working Capital Deficit Narrows to $55 Mill.
COGECO CABLE: Nov. 30 Working Capital Deficit Narrows to $75MM
CONSECO INC: Caps Price of Preferred Share Conversion
COVANTA ENERGY: Secured Nod to Reimburse DHC Investor Expenses
COX COMMS: Inks Licensing Agreement with Liberate Technologies
DII INDUSTRIES: Wants Nod to Hire Ordinary Course Professionals
DIRECTV LATIN AMERICA: Enters into Buena Vista Settlement Pact
EAGLEPICHER: Brian L. Swartz Promoted to V.P. and Controller
EBCO LAND: Case Summary & 20 Largest Unsecured Creditors
ELAN CORP: Presenting at JP Morgan Healthcare Conference Tomorrow
ENRON CORP: Fallon Demands Payment of $1.5 Million Admin. Claim
ENRON CORP: Provides Settlement Notices of 21 Retail Contracts
EVENFLO CO.: Taps Lazard to Explore Strategic Alternatives
EXCELLENT COMMERCIAL: Case Summary & Largest Unsecured Creditors
EXCO RESOURCES: S&P Assigns Low-B Credit & Sr. Unsecured Ratings
FACTORY 2-U STORES: Files for Chapter 11 Protection in Delaware
FACTORY 2-U STORES: Case Summary & 20 Largest Unsecured Creditors
FLEMING COMPANIES: Wants to Cancel Policies on Former Employees
FRANKLIN TEMPLETON: Fitch Affirms Low-B Rating on Class D Notes
GENCORP: Proposed $100M Subordinated Notes Gets S&P's B+ Rating
GENCORP: Fitch Assigns B Rating to Proposed Convertible Notes
GENERAL CHEMICAL: PMM GCG Investment Reports 37.7% Equity Stake
GENZYME CORP: Reports Strong Revenue Growth for Q4 and FY 2003
GLIATECH: January 26 Fixed as Administrative Claims Bar Date
GLOBAL AXCESS: Prepares Prospectus for 5-Million Share Issue
GOLDEN NORTHWEST: Brings-In Perkins & Company as Accountants
GRUPPO TMM: Bondholders Support Proposed Debt Restructuring
HARRAH'S ENTERTAINMENT: Will Acquire Binion's Horseshoe Hotel
HARRAH'S ENTERTAINMENT: Q4 Conference Call Slated for February 4
HEALTH CARE REIT: Completes $51-Million Gross Investments for Q4
HOUSTON EXPLORATION: Will Publish Q4 & FY 2003 Results on Feb. 5
INAMED CORP: Retires Additional $30 Million of Term Notes
INTERNET CAPITAL: Further Reduces Debt to About $147 Million
IT GROUP: Details Functions of IT Environmental Liquidating Trust
KAISER: Wants to Cut Cash Requirements for Pension & Benefit Plans
KMART: Asks Court to Disallow 52 Duplicate Claims Totaling $221M
LEAP WIRELESS: CellStar Will Discontinue Service with Cricket
METRO MASONRY: US Trustee Wants Case Dismissed or Converted
METROMEDIA INT'L: Delays Form 10-Q Filing Due to Restatements
MIRANT CORP: Agrees to Let Plan Administrators to File Claims
NAT'L CENTURY: Court Approves 3rd Amended Disclosure Statement
NORAMPAC INC: Fourth-Quarter Conference Call Slated for Jan. 23
NRG ENERGY: Intends to Issue Postpetition Guarantee to GEAC
OAKWOOD HOMES: S&P Hacks Junk Ratings on Six Related Classes
OAKWOOD HOMES: S&P Places Various Related Ratings on Watch Neg.
OWENS CORNING: Wants Nod to Acquire Plant Equipment for $13.3MM
OXFORD INDUSTRIES: Will Present at ICR Xchange Conference on Fri.
PACIFIC GAS: Agrees to Escrow $30 Million for Enron Claims
PARMALAT GROUP: Commissioner Wants to Administer 2 More Units
PASTA VENTURES: Case Summary & 20 Largest Unsecured Creditors
PILLOWTEX CORP: Enters Stipulation Allowing BofA to File Claims
PLAYBOY ENTERPRISES: Elects James F. Griffiths Senior EVP
POLYONE CORP: Acquires ResinDirect's North American Business
POPE & TALBOT: Schedules Q4 & FY 2003 Conference Call for Jan. 22
PORTOLA PACKAGING: Proposed Refinancing Spurs S&P's Stable Outlook
PRIMUS TELECOMMS: S&P Ups Corporate Credit Rating a Notch to B-
QWEST COMMS: Expands Network Services Agreement with Dictaphone
RAINIER CBO: Fitch Affirms Class B-1L & B-2 Note Ratings at B+/B-
REDBACK NETWORKS: Bridge Associates Serving as Crisis Managers
RICHTREE INC: Bank Lender Agrees to Forbear Until March 31, 2004
RURAL/METRO: Will Continue Exclusive Contract in Gilbert, Ariz.
SELECT MEDICAL: Will Present at 22nd Annual JPMorgan Conference
SK GLOBAL: Sovereign Asset Transfers 14.99% SK Stake to Units
SOLUTIA INC: Wants Nod to Hire Ordinary Course Professionals
SPIEGEL INC: Committee Hires Holster & Elsing as German Counsel
STELCO INC: Names Colin Osborne as New Chief Operating Officer
SUREBEAM CORP: Intends to Shutdown & Liquidate under Chapter 7
SYNTHETIC TURF: Completes Merger Transaction with ISC Acquisition
THAXTON GROUP: Brings-In Stephens Inc. as Investment Bankers
TRW AUTOMOTIVE: Sells Certain Assets to Universal Automotive
UNUMPROVIDENT: Declares Quarterly Dividend Payable on Feb. 20
U.S.I. HOLDINGS: Look for Q4 2004 Financial Results on Feb. 12
VERESTAR: Has Until January 21 to Complete and File Schedules
VINTAGE PETROLEUM: Will Redeem $150M of 9-3/4% Senior Sub. Notes
WARNACO GROUP: Sells White Stag Trademark to Wal-Mart Stores
WESTERN GLORY HOLE: Changes Name to Health Enhancement Products
WORLDCOM INC: Court Approves Settlement Agreement with Nextel
WRC MEDIA: S&P Maintains Ratings' Watch Following Bank Waiver
XM SATELLITE: Declares Quarterly Preferred Stock Dividend
XTO ENERGY: S&P Upgrade Corp. Credit Rating to Investment Grade
* Upcoming Meetings, Conferences and Seminars
*********
AIR CANADA: Wants Approval of Trinity Investment Pact Amendments
----------------------------------------------------------------
The Air Canada Applicants ask the CCAA Court to approve the
amendments to their November 8, 2003 investment agreement with
Trinity Time Investments. The Amended Trinity Investment
Agreement was submitted to Air Canada's Board of Directors for
review on December 19, 2003, in connection with the "topping
process." The Agreement was presented against the investment
proposal Cerberus Capital Management submitted on December 10,
2003. The Board accepted the Agreement on December 21, 2003.
Trinity has advised the Applicants and Ernst & Young, Inc., the
Court-appointed Monitor, that it secured the support of Air
Canada's major creditors, like Deutsche Bank Securities Inc. and
General Electric Capital Corporation. Trinity entered into an
agreement with GE Capital that requires it or its assignee,
including Air Canada, to purchase (i) the 7.5% secured
convertible note issued to General Electric Capital Aviation
Services and (ii) the warrants issued to GECAS for 4% of the
fully diluted equity of Air Canada Enterprise, which are to be
made available to GE Capital. The GECAS Note and the GE Warrants
are instruments created under the Global Restructuring Agreement
executed by Air Canada with GE Capital.
Pursuant to the new provisions of the Amended Agreement, Trinity
will permit Air Canada to repay the GECAS Note at its principal
amount of $106,000,000 plus a 9% early redemption premium. The
GE Capital Warrants will be cancelled upon the Applicants' exit
from CCAA without payment or other consideration payable by the
Applicants. Under all circumstances the consideration to be
received by GE Capital for the cancellation of the Warrants will
be shouldered by Trinity.
Trinity promises to make the transactions contemplated by the GE
Capital Agreement effective immediately on the Closing. Assuming
that the Applicants' Global Restructuring Agreement with GE
Capital is approved and that the GE Capital-Trinity transactions
are consummated, the Applicants' unsecured creditors will receive
an additional 9.56% of the fully diluted equity of Air Canada
Enterprise.
Trinity also entered into an agreement with Deutsche Bank to
amend the Standby Purchase Agreement. The amendment is subject
to further clarification.
On December 22, 2003, the Monitor circulated a report regarding
further developments in the equity solicitation process,
including details on the Amended Trinity Investment Agreement.
Copies of the Monitor's report and exhibits are available for
free at:
http://www.aircanada.com/notice/document/eighteenth_monitor_report.pdf
http://www.aircanada.com/notice/document/eighteenth_exh1_p1.pdf
http://www.aircanada.com/notice/document/eighteenth_exh1_p2.pdf
http://www.aircanada.com/notice/document/eighteenth_exh2.pdf
http://www.aircanada.com/notice/document/eighteenth_exh3.pdf
The Applicants also seek permission to make additional amendments
to the Trinity Agreement, including clerical and non-material
changes, as necessary.
Non-Union and ACPA Retirees Seek Clarity
On behalf of the Non-Union and ACPA Retiree Representatives,
solicitor John R. Varley, Esq., at Pallett Valo, LLP, in
Mississauga, Ontario, suggests that it would be helpful if the
Applicants or Trinity could circulate and file a line-by-line
summary of any changes made since the original offer, not
including purely clerical amendments, but including clarifying or
substantive amendments. Mr. Varley recounts that the Monitor had
suggested certain unspecified amendments.
Financial Creditors Will Conduct Probe
In a letter dated January 8, 2004 to Stikeman Elliot, Air Canada
counsel, Aubrey E. Kauffman, Esq., at Goodman and Carr LLP, in
Toronto, Ontario, advises that the ad hoc committee of holders of
Air Canada bonds and bank debts are preparing to respond to the
request. The Financial Creditors propose to cross-examine
M. Robert Peterson, Air Canada Executive Vice President and Chief
Financial Officer, and James Baillie, Esq., at Torys LLP, the
legal advisor to the Air Canada Board.
The Financial Creditors also want to examine these parties as
witnesses:
(i) A Cerberus Capital Management representative;
(ii) A Seabury Group representative;
(iii) a Merrill Lynch representative;
(iv) One independent director of Air Canada;
(v) A Trinity Time Investment representative;
(vi) A GE Capital Aviation Services representative; and
(vii) A Deutsche Bank representative.
"The selection of the equity sponsor is an issue of utmost
importance to any creditor recovery and it would be exceedingly
unfair if interested parties were not provided adequate
opportunity to protect their interests," Ms. Kauffman explains.
"It is not my client's intention to delay matters," Ms. Kauffman
assures Mr. Dunphy. The Financial Creditors do not anticipate
the individual examinations to be very lengthy.
The Financial Creditors propose to summon the witnesses. The
Financial Creditors will provide a CND50 daily attendance
allowance to each witness. The Financial Creditors warn that if
a witness fails to attend or remain in attendance pursuant to the
summons, a warrant of arrest may be issued for the witness'
arrest.
Air Canada Responds
"It is difficult to accept [Ms. Kauffman's] statement [in the
letter] that 'It is not my client's intention to delay matters',"
David R. Byers, Esq., at Stikeman Elliot, in Toronto, Ontario.
In a response letter to Goodman and Carr, Mr. Byers says that the
steps the Financial Creditors propose appear intended to achieve
that very result through adjournments and dilatory examinations.
"Delay may serve [the Financial Creditors'] objectives, but does
not serve the stakeholders of Air Canada as a whole," Mr. Byers
asserts.
Mr. Byers recounts that Mr. Justice Farley has recognized and
stressed the importance of proceeding expeditiously to finalize
the equity investor issue. Mr. Byers points out that the
Monitor's report regarding the Amended Investment Agreement was
circulated since December 22, 2003. The report is very detailed.
There is nothing new in the materials that will be served with
the Court.
"You should therefore have been in a position to consider your
client's position since December 22," Mr. Byers tells Ms.
Kauffman. "Any suggestion of 'inadequate notice' therefore is
ill founded."
Mr. Byers also reminds Ms. Kauffman that the Applicants are
merely seeking approval of certain beneficial amendments. The
Agreement itself has been approved by the CCAA Court.
To avoid any further delay, the Applicants will arrange for Mr.
Peterson and Mr. Baillie or an independent director to be
available in the offices of Stikeman Elliot for examination on
January 12, 2004. The Applicants advise the Federal Creditors to
choose whom to examine between Mr. Baillie and an independent
director. (Air Canada Bankruptcy News, Issue No. 24; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
AIRGAS: Forms Airgas Sakhalin to Serve Eastern Russia Projects
--------------------------------------------------------------
Airgas, Inc., (NYSE:ARG) formed Airgas Sakhalin LLC, a Russian
limited liability company, with Interramashservis, a Russian
company based on Sakhalin Island in Eastern Siberia.
The new entity will enable Airgas goods and services to qualify
under "Russian content" requirements mandated by Production
Sharing Agreements (PSAs) between the Russian Federation and
foreign oil and gas companies.
The PSAs require that 70% of all contractors' supplies and
services used in the Sakhalin oil fields meet certain minimum
Russian content criteria. Airgas Nor Pac, one of Airgas' regional
companies, has served the Sakhalin market since 1997 through
independent Russian distributor relationships from its operations
in Seattle, WA and Anchorage, AK. Airgas Sakhalin will
significantly enhance Airgas' ability to supply industrial gases,
welding supplies and safety products to the many development
projects underway in the region. Airgas will oversee the
management of the new company.
"Western companies involved in these projects are looking for
reliable, established suppliers to meet their needs for the latest
welding supplies and safety products," said Mark Bradley, who will
serve as general director of Airgas Sakhalin. "We have proven our
ability to supply gases, welding supplies and safety products to
remote oil and gas development projects in Alaska, under similar
Arctic environments to Sakhalin."
Bradley added, "The combined oil and gas development on Sakhalin
Island represents the largest construction project in the world
and we are excited about ramping up our presence on Sakhalin as
major development enters a new and expanded phase."
Airgas Sakhalin distributes industrial gases, welding equipment
and safety supplies from its offices and warehouse facility
located in Yuzhno-Sakhalinsk. In addition to Airgas products and
services, Airgas Sakhalin will offer Red-D-Arc Welderental
products and services in early 2004. Red-D-Arc, an Airgas company,
is North America's largest welding equipment rental company.
Airgas, Inc. (NYSE:ARG) (S&P, BB Corporate Credit Rating,
Positive) is the largest U.S. distributor of industrial, medical
and specialty gases, welding, safety and related products. Its
integrated network of nearly 800 locations includes branches,
retail stores, gas fill plants, specialty gas labs, production
facilities and distribution centers. Airgas also distributes its
products and services through eBusiness, catalog and telesales
channels. Its national scale and strong local presence offer a
competitive edge to its diversified customer base. For more
information, visit http://www.airgas.com/
ALLIED WASTE: Will Publish Fourth-Quarter Results on February 10
----------------------------------------------------------------
Allied Waste Industries, Inc. (NYSE:AW) will report financial
results for the fourth quarter and year ended December 31, 2003
and provide a financial outlook for 2004 after the close of the
stock market on February 10, 2004.
The Company has scheduled a conference call to discuss these
results on February 10, 2004 at 5:00 p.m. (Eastern Time).
To listen to the call, please dial 484-630-4132 approximately 10
minutes prior to the start of the call and ask the operator for
the Allied Waste conference call. To hear a simulcast of the call
over the internet, access the Home page of the Allied Waste Web
site at http://www.alliedwaste.com/
An on-line replay will be available after 7:00 p.m. February 10,
2004 and be accessible 24 hours a day through 5:00 p.m.,
February 24, 2004.
Allied Waste Industries, Inc. (S&P, BB Corporate Credit Rating,
Stable Outlook), is the second largest, non-hazardous solid waste
management company in the United States, providing non-hazardous
waste collection, transfer, disposal and recycling services to
approximately 10 million customers. As of June 30, 2003, the
Company operated 333 collection companies, 171 transfer stations,
171 active landfills and 64 recycling facilities in 39 states.
ALPHA VIRTUAL: Veridicom Shareholders Disclose 35% Equity Stake
---------------------------------------------------------------
On November 25, 2003, Alpha Virtual, Inc., a Delaware corporation
and Veridicom, Inc., a privately-held California corporation,
entered into an Agreement and Plan of Merger. In accordance with
the Merger, on November 25, 2003, Alpha Virtual, through its
wholly-owned subsidiary, A/V Acquisition Corporation, a Nevada
corporation, acquired Veridicom in exchange for 3,500,000 shares
of Alpha Virtual's common stock; 3,250,000 shares were issued to
the holders of Veridicom stock and 250,000 shares were issued into
escrow to cover indemnification obligations, if any, of Veridicom.
The transaction contemplated by the agreement was intended to be a
"tax-free" reorganization pursuant to the provisions of Section
351 and 368(a)(1)(A) of the Internal Revenue Code of 1986, as
amended.
The stockholders of Veridicom (five stockholders owning
approximately 3,250,00 shares), as of the closing date, now own
approximately 35.0% of Alpha Virtual's common stock outstanding as
of November 25, 2003 (excluding any additional shares issuable
upon outstanding options, warrants and other securities
convertible into common stock).
Under Delaware law, the Company did not need the approval of its
stockholders to consummate the Merger, as the constituent
corporations in the Merger were Merger Sub and Veridicom, which
are business entities incorporated under the laws of Nevada and
California, respectively. The Company is not a constituent
corporation in the Merger.
Upon consummation of the Merger, the members of the Board of
Directors of Alpha Virtual consisted of Charles Lesser, Saif
Mansour, Bill Cheung, Faysal Al-Zarooni, Wajid Mirza and Gyung Min
Kim.
At September 30, 2003, Alpha Virtual's balance sheet shows a
working capital deficit of about $1.1 million, and a total
shareholders' equity deficit of about $1 million.
Alpha Virtual, Inc., develops and markets innovative, real-time
Web collaboration products for business, consumer entertainment,
education, and government markets. The Company's patent pending
OneViewTM product platform meets the growing demand for new multi-
user interactivity-integrating browser, Instant Messaging, and
real-time group collaboration in an on-demand basis.
Veridicom designs, manufactures and distributes the FPS200 digital
silicon fingerprint sensor and matching fingerprint algorithms,
used by PC OEMs and other makers of personal security devices.
Veridicom also provides sensors to a variety of hardware PC
peripherals engineered to protect information accessed on a PC or
remotely through a network. Based on security and biometric
standards, these devices include USB peripherals, PCMCIA cards and
smart-card readers. Veridicom also provides (SDK Software
Development Kits) and application software that complements its
authentication devices, enabling a complete personal security
solution.
ALPHASTAR INSURANCE: Wants Schedule-Filing Deadline Extension
-------------------------------------------------------------
AlphaStar Insurance Group Limited asks the U.S. Bankruptcy Court
for the Southern District of New York to extend the time within
which it must file:
i) lists of equity security holders;
ii) schedules of assets and liabilities;
iii) schedules of current income and expenditures;
iv) schedules of executory contracts and unexpired leases;
and
v) statements of financial affairs.
On the Petition Date, the Debtors filed a list that includes the
name, address and estimated claim of the creditors that hold the
twenty largest unsecured claims, excluding insiders. However, the
Schedules required by Bankruptcy Rule 1007(a) and (b) were not
filed with the Debtors' Chapter 11 petitions.
Although at the time of filing the Debtors expected to be able to
complete the Schedules very shortly, due to a number of other
urgent matters that the management continues to address, that the
Debtors' expected would be completed prior to the commencement of
the Chapter 11 cases. Accordingly, the Debtors require additional
time to collect the data needed for the preparation and filing of
the Schedules pursuant to Section 521 of the Bankruptcy Code.
At this point, the Debtors estimate that an extension of 60 days
through February 28, 2003 will provide sufficient time to prepare
and file the require documents.
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 represent 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.
AMERCO: Real Estate Unit Sells Ariz. Property to New Home Builder
-----------------------------------------------------------------
AMERCO Real Estate Company has completed the sale of 13.6 acres of
land, located on the southwest corner of Elliott and Rural roads
in Tempe, Ariz. to Scott Homes II, L.L.C., a new home builder.
The land, which totals 593,723 square feet, sold for a gross sale
price of $4.57 million. An additional 2.5 acres of land in the
same location is scheduled to close May 1 under contract with CVS
drugstore.
AMERCO Real Estate has reported closing escrow on $15 million
worth of real estate in the third quarter ending December 31,
2003. The company currently has an additional $13 million worth
of real estate in escrow.
AMERCO Real Estate owns and is responsible for managing
approximately 90 percent of AMERCO's real estate assets, including
U-Haul center and storage locations, worth over $1.2 billion.
AMERICAN SEAFOODS: Extends Tender Offer for 10-1/8% Notes
---------------------------------------------------------
American Seafoods Group LLC and American Seafoods Finance, Inc.
announced that, as part of their previously announced tender offer
and consent solicitation for their outstanding 10-1/8% Senior
Subordinated Notes due 2010, they are extending the tender offer
expiration date.
The tender offer, which had been set to expire at 5:00 p.m., New
York City time, on January 9, 2004, will be extended to 5:00 p.m.,
New York City time, on Monday, March 1, 2004, unless extended by
American Seafoods.
American Seafoods Corporation said that it will not commence
marketing its proposed initial public offering until February
2004, at the earliest. The closing of the initial public offering
and the other financing transactions contemplated by the
registration statement on Form S-1 (Registration No. 333-105499)
is a condition precedent to the consummation of the tender offer.
The consent expiration date was 5:00 p.m., New York City time, on
September 26, 2003. Holders who desired to receive the consent
payment and the tender offer consideration must have both validly
consented to the proposed amendments and validly tendered their
Notes pursuant to the offer on or prior to the consent expiration
date. Holders who validly tender their Notes after the consent
expiration date will receive the tender offer consideration, which
is $1,170.00 per $1,000 principal amount of Notes, but not the
consent payment. As of the close of business on September 26,
2003, which was the consent expiration date and the last day on
which validly tendered Notes could have been withdrawn, American
Seafoods had received the requisite consents to the proposed
amendments to the Indenture governing the Notes. Consequently, the
proposed amendments were incorporated in the Third Supplemental
Indenture, which was executed and delivered on September 26, 2003,
by and among American Seafoods Group LLC, American Seafoods
Finance, Inc., the guarantors listed on Schedule A thereto and
Wells Fargo Bank Minnesota, National Association, as trustee. The
proposed amendments to the indenture, which will not become
operative unless and until the Notes are accepted for purchase by
American Seafoods, will eliminate substantially all of the
restrictive covenants, certain repurchase rights and certain
events of default and related provisions contained in such
indenture.
As of January 9, 2004, all of our existing senior subordinated
notes had been validly and irrevocably tendered.
Consummation of the offer is subject to certain conditions,
including consummation of certain financing transactions
contemplated by the registration statement on Form S-1 filed with
the Securities and Exchange Commission by American Seafoods
Corporation. Subject to applicable law, American Seafoods Group
LLC and American Seafoods Finance, Inc. may, in their sole
discretion, waive or amend any condition to the offer or
solicitation, or extend, terminate or otherwise amend the offer or
solicitation.
Credit Suisse First Boston, or CSFB, is the dealer manager for the
offer and the solicitation agent for the solicitation. MacKenzie
Partners, Inc. is the information agent and Wells Fargo Bank
Minnesota, National Association is the depositary in connection
with the offer and solicitation. The offer and solicitation are
being made pursuant to the Offer to Purchase and Consent
Solicitation Statement, dated September 15, 2003, and the related
Consent and Letter of Transmittal, each as modified by American
Seafoods' press release, dated September 24, 2003, which
collectively set forth the complete terms of the offer and
solicitation. Copies of the Offer to Purchase and Consent
Solicitation Statement and related documents may be obtained from
MacKenzie Partners, Inc. at 212-929-5500. Additional information
concerning the terms of the offer and the solicitation may be
obtained by contacting CSFB at 1-800-820-1653. Copies of the
registration statement may be obtained from the Securities and
Exchange Commission's Internet site. The site's Internet address
is http://www.sec.gov/
American Seafoods (S&P, BB- Corporate Credit Rating, Positive),
headquartered in Seattle, Washington, is the largest harvester and
at-sea processor of pollock and the largest processor of catfish
in the United States.
ANC RENTAL: Lease Decision Period Extended to Plan Confirmation
---------------------------------------------------------------
The Amended Joint Liquidating Plan and Disclosure Statement dated
December 4, 2003, proposed by ANC Rental Corporation, its
affiliates and its Official Committee of Unsecured Creditors,
provides that any executory contracts or unexpired leases, which
have not expired by their own terms on or prior to the
Confirmation Date, which have not been assumed, assumed and
assigned, or rejected with the approval of the Bankruptcy Court,
or which the Debtors have obtained authority to reject but have
not rejected as of the Confirmation Date, or which are not the
subject of a motion to assume the same pending as of the
Confirmation Date, will be deemed rejected by the Debtors on the
Confirmation Date, and the entry of the Confirmation Order by the
Bankruptcy Court will constitute approval of such rejections
pursuant to Sections 365(a) and 1123 of the Bankruptcy Code.
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)
ARCH COAL: Hosting Fourth-Quarter Conference Call on January 28
---------------------------------------------------------------
Arch Coal, Inc. (NYSE: ACI) will discuss its fourth quarter
financial results in a conference call that will be broadcast live
over the Internet on Wednesday, January 28, at 11:00 a.m. E.S.T.
Participating in the call will be Steven F. Leer, Arch's president
and chief executive officer, and Robert J. Messey, Arch's senior
vice president and chief financial officer.
The webcast will be accessible via the "investor" section of the
Arch Coal Web site at http://www.archcoal.com/ Following the live
event, replays of the webcast will be available on the site for
approximately three weeks.
Arch Coal's fourth quarter earnings release will be distributed
via PR Newswire before the market opens on Wednesday, Jan. 28 and
will be posted to the company's Web site at that time.
Arch Coal (S&P, BB+ Corporate Credit Ratying, Negative) is the
nation's second largest coal producer, with subsidiary operations
in West Virginia, Kentucky, Virginia, Wyoming, Colorado and Utah.
Through these operations, Arch Coal provides the fuel for
approximately 6% of the electricity generated in the United
States.
ARCHIBALD CANDY: Finalizing Negotiations to Sell Company
--------------------------------------------------------
On January 8, senior officers of Archibald Candy Corporation met
with Congressman Luis Gutierrez and five aldermen at the
Congressman's district office on West 18th Street.
The Archibald officials provided background on the sequence of
events that has led to the decision to sell the Fannie May and
Fanny Farmer businesses and the subsequent closing of the Chicago
manufacturing plant. Company officials have similarly informed the
City's Planning Department of these plans and appreciates the
City's offer of assistance to help affected employees find and
transition to new employment.
This week, several governmental agencies are providing job
counseling and training sessions for all Archibald employees.
Agencies involved include the U.S. Department of Labor, Illinois
Department of Commerce and Economic Opportunity, Illinois
Department of Employment Security, and the Mayor's Office of
Workforce Development. A Job Fair will also be held for Archibald
employees on Wednesday and Friday this week.
At the meeting last week with Congressman Gutierrez, the Archibald
managers expressed their appreciation for the efforts of employees
to keep the company operating in recent years, at a time the
company was struggling financially to remain in business. The
managers also expressed how difficult the decision to close the
plant had been, knowing the impact on employees and their
families. Numerous initiatives have been tried in recent years to
keep the business operating, postponing what has eventually become
necessary. All Archibald employees at the facility, both
manufacturing and office workers, are affected.
Meetings with unions representing Archibald employees are now in
process to discuss the impact of the closing. Union leaders are
communicating the progress of these discussions to the affected
employees.
The combination of decreasing sales volumes, rising costs, a
competitive retail environment and difficult economic conditions
have posed challenges for Fannie May and Fanny Farmer for a number
of years. In June 2002, Archibald filed for Chapter 11 bankruptcy
and emerged from bankruptcy four months later. Since then, the
company has continued to struggle financially, and ultimately the
Board decided earlier this year to put the Fannie May and Fanny
Farmer businesses up for sale.
Several prospective buyers have been in discussions with the
Company and there has been a great deal of interest in the
businesses. However, it became evident during the sale process
that the multi-story, 70-year-old manufacturing facility on West
Jackson Boulevard would not continue in operation as a candy
plant, regardless of ownership, due to its age and cost
inefficiencies.
Archibald is in final negotiations with a buyer and expects to
announce a sale agreement soon.
ARMSTRONG: Judge Newsome Signs Proposed Confirmation Order
----------------------------------------------------------
The dispute over entry of an Order confirming the Armstrong
Holdings Debtors' Plan, together with arguments over the wording
of proposed Findings of Fact and Conclusions of Law, continues.
Judge Newsome has signed the documents in the form drafted by the
Debtors, subject to approval by the Official Committee of
Unsecured Creditors within the next 20 days and subject further to
any response by the Debtors 20 days after that.
The proposed Findings of Fact and Conclusions of Law and
Confirmation Order were also transmitted to Judge Wolin in the
U.S. District Court for consideration of the channeling injunction
and trust provisions. (Armstrong Bankruptcy News, Issue No. 54;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
AURORA FOODS: Turns to Miller Buckfire for Financial Advice
-----------------------------------------------------------
The Aurora Foods Debtors seek the Court's authority to employ
Miller Buckfire Lewis Ying & Co., LLP as their financial advisor,
nunc pro tunc to December 8, 2003.
Miller Buckfire provides strategic and financial advisory services
in large-scale corporate restructuring transactions. The firm's
professionals possess extensive experience in providing financial
advisory and investment banking services to financially distressed
companies, and to creditors, equity constituencies, and government
agencies in reorganization proceedings and complex financial
restructuring, both in and out of court. Miller Buckfire likewise
has significant experience in marketing and selling companies that
are experiencing financial distress.
Ronald B. Hutchison, Aurora's Chief Restructuring Officer and
Assistant Secretary, submits that the resources, capabilities,
and experience of Miller Buckfire are crucial to the Debtors'
restructuring. Broadly speaking, Miller Buckfire is
concentrating its efforts on assisting the Debtors in carrying
out the restructuring and merger contemplated by the pre-
negotiated plan as well as contingency planning if the Merger
Agreement is terminated or abandoned.
Mr. Hutchison tells the Court that Miller Buckfire is intimately
familiar with the Debtors' businesses and financial affairs.
Through its prepetition activities since April 2003, Miller
Buckfire worked closely with the Debtors' senior management,
financial staff, and other professionals and has become well
acquainted with the Debtors' financial restructuring needs.
Accordingly, Miller Buckfire developed significant relevant
experience and expertise that will assist it in providing
effective and efficient services in these Chapter 11 cases.
Miller Buckfire's prepetition services were focused on developing
and implementing a strategy to resolve the Debtors' liquidity and
capital structure problems. The services included, and will
continue to include, valuation and debt capacity analysis,
capital structure design, plan formulation and negotiation, and
helping to structure and negotiate a debtor-in-possession loan
facility, as well as private equity and debt placement.
Prepetition Services
Since being retained by the Debtors in April 2003, Miller
Buckfire has played a crucial role in the Debtors' success in
stabilizing their business and in developing a comprehensive
restructuring proposal that maximizes the value of the Debtors'
estates. Some of its significant contributions include:
(a) extensive due diligence to understand, assess, and monitor
the operational, financial, and competitive position of
the Debtors;
(b) assistance in the review and evaluation of the Debtors'
five-year business plan and their operating plan for 2003;
(c) assistance in the evaluation of the Debtors' strategic and
restructuring alternatives, including the transaction
contemplated by the Merger Agreement;
(d) proposed and developed the vendor lien program to ensure
that the Debtors maintained trade support and liquidity;
(e) assistance in obtaining a commitment for $50,000,000 in
debtor-in-possession financing to fund the Debtors'
operating needs during the Chapter 11 cases; and
(f) worked closely with the Debtors and their legal counsel in
drafting the Plan of Reorganization and the related
Disclosure Statement.
Scope of Services
Miller Buckfire will continue to render financial advisory and
investment banking services contemplated by an engagement letter
between the Debtors and Miller Buckfire, dated as of April 2,
2003, and amended on December 2, 2003, throughout the course of
the Debtors' Chapter 11 cases. Among the specific tasks are:
A. Case Administration
The Debtors expect Miller Buckfire to play a significant role in
the administration of their Chapter 11 cases. Miller Buckfire
will assist the Debtors in complying with certain administrative
obligations arising out of the Chapter 11 filing, including
preparing management for any organizational meeting of creditors
and reviewing regulatory and other filings that may be required
to be made.
In addition, Miller Buckfire will assist the Debtors in seeking
relief on various matters and in preparing for hearings. The
hearings will include the Debtors' disclosure statement hearing
and confirmation hearing as well as a hearing on the Debtors'
request for approval of the DIP Credit Facility and the hearing
on the breakup payment contemplated by the Merger Agreement. To
the extent necessary, Miller Buckfire will provide litigation
support and testimony in connection with these hearings and other
matters.
Miller Buckfire will also participate in meetings and discussions
with the Debtors and their professionals and other parties-in-
interest regarding the status of the Chapter 11 cases.
B. Creditor Contacts
Miller Buckfire will continue to participate in discussions with
the prepetition bank group and the Official Committee of
Unsecured Creditors, as well as their legal and financial
advisors who are in constant contact with Miller Buckfire
regarding due diligence and other matters. Subsequent to the
Petition Date, the discussions will likely focus on:
(a) the status of these Chapter 11 cases;
(b) the Debtors' request for relief on various matters,
including obtaining debtor-in-possession financing and
making critical vendor payments;
(c) the performance of the Debtors relative to their 2003
operating plan;
(d) the Debtors' strategic business plan for 2004 and beyond;
and
(e) the Debtors' liquidity position and financing needs.
In addition, Miller Buckfire will work with the Debtors to keep:
-- the prepetition bank group, the lenders under the debtor-
in-possession credit facility, and the Committee and their
legal and financial advisors apprised of the Debtors'
operational performance as well as their ability to
stabilize operations subsequent to the filing of these
Chapter 11 cases; and
-- the major parties-in-interest informed about the Debtors'
progress in consummating the transaction contemplated by
the Merger Agreement by March 31, 2004.
C. Merger Agreement
The Debtors expect Miller Buckfire to:
-- take an active role in assisting them to consummate the
transaction contemplated by the Merger Agreement;
-- work with the Debtors in ensuring that the conditions
precedent to the merger transaction are fulfilled,
including the condition regarding the Debtors' EBITDA
performance for 2003;
-- assist in reviewing and analyzing what adjustments are
required to be made to the consideration being paid to the
holders of the Notes under the terms of the Merger
Agreement. The adjustments relate to the Debtors' working
capital and net debt position as of the closing date for
the merger transaction and to the election of cash or
equity by the holders of the Notes in the merger
transaction;
-- assist the Debtors in their transition planning and in
determining how to retain and motivate their workforce
pending the closing of the transaction contemplated by the
Merger Agreement;
-- work with the Debtors to respond to any information
requests from J.P. Morgan Partners LLC, J.W. Childs Equity
Partners III, L.P., and CDM Investor Group LLC or other
parties-in-interest in connection with the merger
transaction; and
-- continue to play a key role in helping the Debtors resolve
business issues that may potentially develop with respect
to the Merger Agreement.
Mr. Hutchison relates that prior to the Petition Date, Miller
Buckfire was instrumental in helping to resolve business issues
that had the potential to derail the discussions among the
Informal Committee, JPMP, J.W. Childs, and CDM.
D. Evaluation of Alternative Proposals
If requested, Miller Buckfire will:
-- assist the Debtors' board of directors in fulfilling their
fiduciary duties by reviewing and evaluating from a
financial standpoint any Alternative Proposal, as defined
in the Merger Agreement, received by the Debtors;
-- advise the board of directors regarding their strategic
alternatives, including performing an extensive analysis of
the valuation and other underlying fundamentals contained
in the Alternative Proposal;
-- advise the board of directors with respect to the strategic
implications of any Alternative Proposal; and
-- coordinate with the party submitting the Alternative
Proposal, if required, to negotiate a definitive agreement
and reach a successful closing.
E. Contingency Planning
Miller Buckfire will also:
-- continue monitoring the financial results of the Debtors
and advise senior management and the board of directors
with respect to the development of a contingency plan in
the event the transaction contemplated by the Merger
Agreement is abandoned or terminated; and
-- provide assistance in soliciting alternative proposals from
third parties, in the event that the merger transaction is
terminated or abandoned. Specifically, Miller Buckfire
would be needed to:
(1) identify and contact potential strategic and
financial buyers;
(2) assist in drafting and distributing an information
memorandum describing the Debtors' business;
(3) evaluate and negotiate proposals received by the
Debtors;
(4) facilitate any due diligence investigation of the
Debtors by potential strategic and financial buyers;
and
(5) prepare senior management for meetings with the
potential buyers.
If the transaction contemplated by the Merger Agreement is
terminated or abandoned, the Debtors would also require Miller
Buckfire's assistance in structuring a transaction that has the
support of the prepetition bank group. The prepetition bank
group has amended its prepetition credit agreement to support the
transaction contemplated by the Merger Agreement if:
-- the prepetition credit facility is paid in full by
March 31, 2004; and
-- the prepetition lenders receive $15,000,000 in certain fees
under the prepetition credit agreement.
The Financial Advisory and Investment Banking Services that
Miller Buckfire will provide to the Debtors are necessary to
enable the Debtors to maximize the value of their estates and to
reorganize successfully. Miller Buckfire will coordinate with
the Debtors and the Debtors' other retained professionals to
ensure that the Financial Advisory and Investment Banking
Services do not duplicate the services rendered by other
professionals.
Compensation
Under the terms and conditions of the Engagement Letter, Miller
Buckfire will receive:
(1) a $200,000 monthly fee; and
(2) a $8,500,000 transaction fee upon consummation of a
Transaction.
Fifty percent of the Monthly Fees will be credited against any
Transaction Fee, except for the April 2003 Monthly Fee. In
connection with any Restructuring that is intended to be
effected, in whole or in part, as a prepackaged, partial
prepackaged, or prearranged plan of reorganization anticipated to
involve the solicitation of acceptances of the plan in compliance
with the Bankruptcy Code, by or on behalf of the Debtors, from
holders of any class of the Debtors' securities, indebtedness or
obligations, the Transaction Fee will be payable:
-- 50% upon obtaining indications of support from the Debtors'
creditors that in the good faith judgment of the Debtors'
board of directors are sufficient to justify filing the
Pre-negotiated Plan; and
-- the balance upon consummation of the Restructuring.
Accordingly, on December 5, 2003, the Debtors paid $4,250,000,
representing 50% of the Transaction Fee, to Miller Buckfire. If
no Restructuring is consummated, the 50% of the Transaction Fee
paid by the Company prior to the Petition Date will be refunded
to the Debtors.
During the course of Miller Buckfire's negotiations with various
creditor constituencies prior to the commencement of these cases,
demands were made that Miller Buckfire reduce the compensation
contained in the Engagement Letter. The compensation agreed to
between the Debtors and Miller Buckfire was reasonable, based
upon the market rate for similar services and the complexity of
the engagement. Because of its strong desire to accomplish the
restructuring with a minimum of distraction, Miller Buckfire
voluntarily agreed to reduce its compensation by $2,000,000,
provided that the voluntary reduction will be null and void and
of no effect if the transactions contemplated by the Merger
Agreement are not consummated.
At this time, it is not possible to estimate:
(1) the number of months that will be required to perform the
services contemplated by the Engagement Letter;
(2) the exact nature of the transactions to be consummated by
the Debtors; or
(3) the aggregate amount of the fees payable under the
Engagement Letter.
Accordingly, it is not possible to state with certainty the total
compensation to be paid to Miller Buckfire under the Engagement
Letter.
However, if the transactions contemplated by the proposed plan of
reorganization and the Merger Agreement are consummated in March
2004, as is expected, then Miller Buckfire would receive after
the Petition Date $1,750,000 in total fees, representing:
-- $600,000 in Monthly Fees, for three months at a rate of
$200,000 per month; and
-- $1,150,000, as the unpaid balance of the Transaction Fee
net of applicable credits and Miller Buckfire's fee
concession.
In addition to any fees payable by the Debtors to Miller
Buckfire, the Debtors will reimburse Miller Buckfire on a monthly
basis for travel costs and other reasonable out-of-pocket
expenses. Out-of-pocket expenses include all fees,
disbursements, and other charges of counsel to be retained by
Miller Buckfire in connection with retention, fee, or indemnity
issues, and of other consultants and advisors retained by Miller
Buckfire with the Debtors' consent, incurred in connection with,
Miller Buckfire's activities under the Engagement.
Miller Buckfire will maintain records in support of any actual
and necessary costs and expenses incurred in connection with the
rendering of its services in the Debtors' cases. Although Miller
Buckfire does not charge for its services on an hourly basis, it
will nevertheless maintain records of time spent by its
professionals that render services for the Debtors by category
and nature of the services rendered, provided that it seeks
approval to maintain time records in half-hour increments.
Indemnification
The Debtors will indemnify, hold harmless, and defend Miller
Buckfire and its affiliates and their directors, officers,
members, managers, shareholders, employees, agents, and
controlling persons and their successors and assigns, under
certain circumstances. The parties believe that the
Indemnification Provisions are customary and reasonable for
financial advisory and investment banking engagements, both out-
of-court and in Chapter 11 proceedings.
To the best of the Debtors' knowledge, information, and belief,
other than in connection with these cases, Miller Buckfire:
-- has no connection with the Debtors, their creditors,
the U.S. Trustee, or any other party with an actual or
potential interest in these Chapter 11 cases or their
attorneys or accountants;
-- is not and has not been an investment banker for any
outstanding securities of the Debtors, and is not a
creditor of the Debtors; and
-- neither holds nor represents any interest adverse
to the Debtors or to their respective estates in the
matters for which it is to be retained.
David Y. Ying, Managing Director of Miller Buckfire, assures the
Court that Miller Buckfire is a "disinterested person," as
defined in Section 101(14) of the Bankruptcy Code and as required
by Section 327(a) 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)
BAKE-LINE: Files for Voluntary Chapter 7 Liquidation in Delaware
----------------------------------------------------------------
Bake-Line Group, LLC and certain of its affiliates including
Atlantic Baking Group (collectively the Company) have filed
voluntary petitions under Chapter 7 of the United States
Bankruptcy Code in the United States Bankruptcy Court in
Wilmington, Delaware.
The case numbers assigned are: Bake-Line Group, LLC (04-10104);
Atlantic Baking Group (04-10105); JA Realty (04-10106) and Bake-
Line Holdings, LLC (04-10107).
The Company has been in restructuring negotiations to reorganize
its cookie and cracker business. After the unexpected development
of not being able to secure sufficient financing from its
principal lender, the Company is ceasing operations at all of its
manufacturing plants and corporate headquarters.
Headquartered in Oakbrook Terrace, Illinois, Bake-Line Group, LLC
is a manufacturer of baked products for the private label and
branded markets. The Company has approximately 1,300 employees in
Pittsburgh, Pennsylvania; North Little Rock, Arkansas; Marietta,
Oklahoma; two plants in South Beloit, Illinois; and two facilities
in Chattanooga, Tennessee.
BAKE-LINE GROUP: Voluntary Chapter 7 Case Summary
-------------------------------------------------
Lead Debtor: Bake-Line Group, LLC
17 W. 220 22nd Street
Oakbrook Terrace, Illinois 60181
Bankruptcy Case No.: 04-10104
Debtors affiliate filing separate chapter 11 petitions:
Entity Case No.
------ --------
Atlantic Baking Group, Inc. 04-10105
J.A. Real Properties, LLC 04-10106
Bake-Line Holdings, LLC 04-10107
Type of Business: The Debtor is a manufacturer of quality private
label cookies, crackers, cones and organic
salty snacks to the grocery, drug, and mass
merchandise channels and also a supplier of
branded cookies, crackers and cones.
See http://www.bakelinegroup.com/
Chapter 11 Petition Date: January 12, 2004
Court: District of Delaware
Debtors' Counsels: Laura Davis Jones, Esq.
Christopher James Lhulier, Esq.
Pachulski Stang Ziehl Young & Jones PC
919 N. Market Street 16th Floor
Wilmington, DE 19899
Tel: 302-778-6405
Fax: 302-652-4400
Estimated Assets Estimated Debts
---------------- ---------------
Bake-Line Group, LLC More than $100 M More than $100 M
Atlantic Baking Group, Inc. $1 M to $10 M $10 M to $50 M
J.A. Real Properties, LLC $1 M to $10 M $0 to $50,000
Bake-Line Holdings, LLC More than $100 M $1 to $10 M
BUDGET GROUP: Plan Solicitation Period Extended Until February 25
-----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware granted the
Budget Group Debtors an extension of their Exclusive Period,
within which they must solicit acceptances of their Proposed Plan,
until February 25, 2004.
Headquartered in Daytona Beach, Florida, Budget Group, Inc.,
operates under the Budget Rent a Car and Ryder names -- is the
world's third largest car and truck rental company. The Company
filed for chapter 11 protection on July 29, 2002 (Bankr. Del. Case
No. 02-12152). Lawrence J. Nyhan, Esq., and James F. Conlan, Esq.,
at Sidley Austin Brown & Wood and Robert S. Brady, Esq., and
Edward J. Kosmowski, Esq., at Young, Conaway, Stargatt & Taylor,
LLP represent the Debtors in their restructuring efforts. When
the Company filed for protection from their creditors, they listed
$4,047,207,133 in assets and $4,333,611,997 in liabilities.
(Budget Group Bankruptcy News, Issue No. 31; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
BUILDERS PLUMBING: Gets Nod to Tap Ordinary Course Professionals
----------------------------------------------------------------
Builders Plumbing & Heating Supply Co., and its debtor-affiliates
sought and obtained approval from the U.S. Bankruptcy Court for
the District of Illinois, Eastern Division to employ and
compensate the professionals they utilize in the ordinary course
of their businesses.
During the day-to-day performance of their various duties, the
Debtors regularly call upon certain professionals, including
attorneys, accountants, consultants and third party contractors to
assist them in carrying out their assigned responsibilities.
The Debtors simply cannot continue to operate their businesses
with sound business practice unless they retain and pay for the
services of the Ordinary Course Professionals. The uninterrupted
services of the Ordinary Course Professionals are vital to their
continuing operations and their ultimate ability to reorganize.
Consequently, the Court grants the Debtors an authority to pay any
Ordinary Course Professional, 100% of the postpetition fees and
disbursements that do not exceed $10,000 per month upon the
submission of appropriate invoices setting forth in reasonable
detail the nature of the services rendered after the Petition
Date.
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
CHAMPIONSHIP AUTO: Four Directors Step Down from Company's Board
----------------------------------------------------------------
Championship Auto Racing Teams, Inc., (OTC Bulletin Board:
CPNT.OB) announced that James F. Hardymon, James A. Henderson,
Rafael A. Sanchez, and Frederick T. Tucker resigned as members of
the Championship Auto Racing Teams, Inc. Board of Directors,
effective January 9, 2004.
Christopher R. Pook is the sole member of the Board of Directors
following such resignations.
Christopher R. Pook, President and Chief Executive Officer of the
Company, offered his thanks for the contributions each director
has made to the Company. "On behalf of the Company and its
Shareholders, I wish to extend my heart felt thanks to Jim
Hardymon, Jim Henderson, Ralph Sanchez and Fred Tucker for their
guidance and dedication during their tenures as directors. They
have committed a substantial amount of time and energy in
fulfilling their obligations as directors, and we appreciate the
support each has provided to the Company and our sport. The
Company will no longer be actively engaged in business operations
and intends to wind up its affairs in an expeditious manner."
Championship Auto Racing Teams, Inc. (OTC Bulletin Board: CPNT.OB)
owns, operates and markets the 2003 Bridgestone Presents The Champ
Car World Series Powered by Ford. Veteran racing teams such as
Newman/Haas Racing, Player's/Forsythe Racing, Team Rahal, Patrick
Racing and Walker Racing competed with many new teams this year in
pursuit of the Vanderbilt Cup. CART Champ Cars are thoroughbred
racing machines that reach speeds in excess of 200 miles per hour,
showcasing the technical expertise of manufacturers such as Ford
Motor Company, Lola Cars, Walker Racing LLC, (Reynard) and
Bridgestone/Firestone North American Tire, LLC. The 18-race 2003
Bridgestone Presents The Champ Car World Series Powered by Ford
was broadcast by television partners CBS and SPEED Channel. CART
also owns and operates its top development series, the Toyota
Atlantic Championship. Learn more about CART's open-wheel racing
series at http://www.champcarworldseries.com/
* * *
On November 11, 2003, in response to a request by the management
of Championship Auto Racing Teams Inc., that Deloitte & Touche
LLP, the Company's independent auditor, reissue its report on the
Company's financial statements included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2002, and in
connection with the filing by the Company of a proxy statement on
November 13, 2003 relating to the pending transaction with Open
Wheel Racing Series LLC, Deloitte & Touche informed management
that its report on the Company's financial statements as of
December 31, 2002 and 2001, and for each of the three years in the
period ended December 31, 2002 would include an explanatory
paragraph indicating that developments during the nine-month
period ended September 30, 2003 raise substantial doubt about the
Company's ability to continue as a going concern.
CHESAPEAKE: Reports Exchange Offer Early Participation Results
--------------------------------------------------------------
Chesapeake Energy Corporation (NYSE: CHK) announced that pursuant
to its previously announced exchange offer for its 8.125% Senior
Notes due April 1, 2011 (CUSIP # 165167AS6), it has received valid
tenders of approximately $457.1 million aggregate principal amount
of 2011 Notes as of January 9, 2004, the early participation date.
Approximately $71.5 million aggregate principal amount of 2011
Notes have been tendered in exchange for new 7.75% Senior Notes
due 2015 and approximately $385.6 million aggregate principal
amount of 2011 Notes have been tendered in exchange for new 6.875%
Senior Notes due 2016.
Holders who validly tendered their 2011 Notes by 5:00 p.m.,
Eastern Standard Time, on January 9, 2004, the early participation
date, will receive, in addition to new notes, $10.00 in cash per
$1,000 principal amount of Notes validly tendered and accepted for
exchange. 2011 Notes tendered pursuant to the Offer may no longer
be withdrawn.
The Offer remained open until 12:00 midnight, Eastern Standard
Time, January 12, 2004, unless extended. Payment for all 2011
Notes validly tendered and accepted for exchange is expected to be
made today.
The terms of the Offer are described in the Company's Offer to
Exchange dated December 1, 2003, as extended by a prospectus
supplement dated December 24, 2003, copies of which may be
obtained from D.F. King & Co., Inc., the information agent for the
Offer, at (800) 431-9633 (U.S. toll-free) and (212) 269-5550
(collect).
Banc of America Securities LLC, Deutsche Bank Securities and
Lehman Brothers are the joint lead dealer managers in connection
with the Offer. Questions regarding the Offer may be directed to
Banc of America Securities LLC, High Yield Special Products, at
888-292-0070 (US toll-free) and 704-388-4813 (collect), Deutsche
Bank Securities, High Yield Capital Markets, 212-250-7466
(collect) or Lehman Brothers, 800-438-3242 (U.S. toll-free) and
212-528-7581 (collect).
Chesapeake Energy Corporation (Fitch, BB- Senior Note and B
Preferred Share Ratings, Positive) is one of the six largest
independent natural gas producers in the U.S. Headquartered in
Oklahoma City, the company's operations are focused on exploratory
and developmental drilling and producing property acquisitions in
the Mid-Continent region of the United States.
CHIQUITA BRANDS: Names Fernando Aguirre as President and CEO
------------------------------------------------------------
Chiquita Brands International, Inc. (NYSE: CQB) named Fernando
Aguirre as president and chief executive officer. Aguirre, 46,
succeeds Cyrus F. Freidheim, Jr., 68, who will continue to serve
as chairman of the company.
Aguirre has had more than 23 years of experience in brand
management, consumer marketing and turnarounds at Procter & Gamble
Co., where he headed two global businesses and served in several
countries.
Commenting on the appointment of his successor, Freidheim said,
"Now is the right time to bring in a new CEO with the knowledge
and experience to lead Chiquita into the future. In March 2002,
Chiquita's new board of directors laid out three main goals: (1)
build a solid financial base, (2) set a new direction for long-
term, profitable growth and (3) put in place a strong leadership
team for the future. I'm pleased with the excellent progress we
have made in focusing on the core, strengthening our balance sheet
and in setting a new growth strategy for the company. At our
Investor Day meeting in December, we reported our progress on
putting the leadership in place necessary to steer Chiquita to its
new goals. The most important part of that team for the future is
a new CEO.
"Fernando has the skills Chiquita needs to execute our strategy,"
continued Freidheim. "He has successfully built brands, increased
sales and market share, reduced costs, built management teams,
acquired and integrated companies, grown the bottom line and dealt
with global trade and regulatory issues. He has significant
experience in every geography important to Chiquita. He
understands and embraces our strategic plans, and we expect a
smooth and effective transition."
"Cyrus and the management team have delivered on Chiquita's
financial recovery and turnaround and laid out a clear course for
the future," said Aguirre. "I welcome this opportunity to lead the
transformation of Chiquita, which has a great brand that has been
undersupported and underutilized, to a more consumer- and
marketing-centric organization.
"My involvement across many different consumer product categories
has allowed me to gain broad experience in the creation of new
brands, consumer insights and marketing execution. I want to
build on the momentum created in the last 22 months while finding
new opportunities for growth based on bananas and branded, value-
added, fruit-based products," Aguirre said.
The company noted that Freidheim will continue to serve as
chairman to ensure continuity and a smooth transition. Aguirre
added: "Cyrus has provided great leadership, and I will do my best
to take advantage of his knowledge, experience, contacts and
guidance to build on the excellent base he created."
Aguirre began his P&G career in 1980, where he has held a variety
of positions in consumer marketing and brand management in Mexico,
Canada and the United States. In 1992, he became president and
general manager of P&G Brazil, and in 1996, he was named president
of P&G Mexico. In Brazil, he took over an unprofitable business
and turned it into P&G's second-largest and second-most-profitable
subsidiary in Latin America in four years. In Mexico, Aguirre
inherited a close-to-breakeven operation and delivered record
earnings and volumes two years in a row.
In 1999, Aguirre became vice president of P&G's global and U.S.
snacks and food products, where he delivered record sales and
profits and oversaw the development of a project that led to the
first national snack brand launch (Torengos) in several years. In
July 2000, Aguirre became the president of global feminine care,
where he achieved outstanding productivity improvements and one of
the highest before-tax margins in all of P&G. Over the last 18
months, Aguirre reported directly to the chairman and CEO, working
on strategy and reapplication of his global management experience.
A native of Mexico, Aguirre earned his bachelor of science degree
in business administration and marketing from Southern Illinois
University. He serves on the board of directors for Univision
Communications, Inc. and as chairman emeritus of the corporate
advisory board of the Marshall School of Business at the
University of Southern California. Aguirre has been elected to
Chiquita's board of directors.
In connection with his election and in accordance with the
requirements of Section 303A.08 of the New York Stock Exchange
Listed Company Manual, the company reported that Aguirre has been
granted a 10-year stock option to purchase 325,000 shares of
Chiquita common stock at $23.16 per share that will vest in equal
annual installments over four years.
Chiquita Brands International (S&P, B Corporate Credit Rating,
Positive) is a leading international marketer, producer and
distributor of high-quality fresh and processed foods. The
company's Chiquita Fresh division is one of the largest banana
producers in the world and a major supplier of bananas in North
America and Europe. Sold primarily under the premium Chiquita(R)
brand, the company also distributes and markets a variety of other
fresh fruits and vegetables. Additional information is available
at http://www.chiquita.com/
CLS PROPERTIES: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: CLS Properties LLC
P.O. Box 719
Lynnwood, Washington 98046
Bankruptcy Case No.: 04-10121
Type of Business: The Debtor buys and sells real estate
properties and conducts all phases of property
management. See http://www.clsfs.com/
Chapter 11 Petition Date: January 8, 2004
Court: Western District of Washington (Seattle)
Judge: Karen A. Overstreet
Debtor's Counsel: Larry B. Feinstein, Esq.
Vortman & Feinstein
500 Union Street #500
Seattle, WA 98101
Tel: 206-223-9595
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Barry Evans Profit $500,000
Sharing Trust
11700 SW Lynnidge Ave.
Portland, OR 97225
Morris Family Trust $407,750
6442 E. Crested
Saguaro Lane
Scottsdale, AZ 85262
RMX REIT $213,500
IMOB-Sched LLC $170,000
William & Evelyn Derocy $134,650
Joezone, Inc. $128,500
Trust Co. of America $123,333
Jack Adams $120,000
Donald & Sandra Hugill $120,000
Mel R. Codd $109,000
Charles Reasy $104,600
Kientz Living $104,015
Larry Howe $101,500
Tabernacle Baptist Foundation $100,000
Jeanette Deardorf $80,447
Adams Agricultural $80,000
Commerce Bank $76,500
Jimmie P. Joseph $66,303
Walt and Lenora Bone $60,000
Norman Slump $58,625
COGECO INC: Nov. 30 Working Capital Deficit Narrows to $55 Mill.
----------------------------------------------------------------
COGECO Inc. (TSX: CGO) announced its financial results for the
first quarter of fiscal 2004, ended November 30, 2003.
"COGECO has generated Free Cash Flow of $13.8 million in the first
quarter, thanks to very good customer retention and growth numbers
at Cogeco Cable. Cogeco Radio-Television has enjoyed good ratings
both at TQS television, and at RYTHME FM radio. However, lower
than anticipated advertising revenue growth has challenged the
first quarter and lead to a revision of the media sector's revenue
growth guidance down which is expected to reach between 1% and
3%," noted Mr. Louis Audet, President and Chief Executive Officer.
"The Company is recording a net loss because of non-cash
adjustments linked to an increase in the Ontario income tax rate
and a downward revision to the useful life of home terminal
devices at Cogeco Cable," concluded Mr. Audet.
During the first quarter, revenue rose by $14 million or 9.2%
compared to the same period last year. Cable revenues went up by
11.3% driven by improved penetration of high-speed Internet
services as well as rate increases. Media revenues grew by 2.9%
due to the strength of the TQS network in a more difficult
advertising market.
During the first quarter, operating income before amortization
moved up by 6.1% compared to the same period last year. The cable
sector contributed to an increase of $8 million and the media
sector to a decline of $4.7 million stemming from weaker radio
sales and higher television programming costs.
Excluding the effect of a $14 million increase mainly related to
the cable sector's revision in the estimated useful life of home
terminal devices, amortization in the first quarter amounted to
$29.5 million compared to $26.8 million for the same period last
year. Increased amortization stemmed mainly from capital
expenditures linked to high-speed Internet and digital services.
Effective September 1st, 2003, the estimated useful life of home
terminal devices rented to Cogeco Cable's customers was revised
downward as unit costs, converted in Canadian dollars, declined
significantly during the last year. Considering the lower unit
costs, it is now often more economical to replace defective
devices rather than repair them. The unit cost of cable modems has
declined by 59% and the unit cost of the DCT-2000 digital
terminal, including peripheral equipments, has declined by 20% in
the last year. As a result of this evolution, the estimated useful
life of cable modems was revised from seven years to three years
and since the digital terminal unit cost has declined more
gradually, their estimated useful life was revised from seven
years to five years. The change in useful lives of home terminal
devices and certain other long-term assets resulted in an increase
of $14 million to amortization expense recorded by the cable
sector.
For the first quarter, financial expense decreased compared to the
same period last year. This decline occurred as the level of
Indebtedness (defined as bank indebtedness, long-term debt and
deferred credit) was lower due to Free Cash Flow generated and
lower short-term interest rates on the Term Facilities.
INCOME TAXES
Last November, the Ontario government announced that corporate
income tax rates would increase to 14% effective January 1, 2004.
Prior to this announcement the tax rate was to decline from 11% in
2004 to 8% in 2007. As a result, a $34.6 million non-cash
adjustment was recorded for future income tax liabilities by the
cable sector. However, this amount was partly offset by a non-cash
reduction of future income taxes of $4.3 million related to the
decline in carrying value of home terminal devices and certain
other long-term assets.
Excluding the effect of a net income tax adjustment of $30.3
million income taxes in the first quarter amounted to $3.6 million
compared to $2.7 million for the same period last year. This
increase is mainly attributable to the cable sector's growth in
operating income before amortization.
NET INCOME (LOSS)
Net loss for the first quarter amounted to $15.1 million, or $0.92
per share, compared to a net income of $3.4 million, or $0.21 per
share, for the same period last year. The net loss is attributable
to COGECO's 39% share of Cogeco Cable's non-cash amortization and
income taxes adjustments as previously discussed. Excluding these
elements, COGECO would have recorded a net income of $2.3 million
or $0.14 per share.
For the first quarter, cash flow from operations was higher than
last year by $4.3 million or 12.9% attributable to the cable
sector's strong performance. Net changes in non-cash working
capital items declined by $6.8 million compared to last year
essentially due to accounts payable and accrued liabilities as
well as deferred and prepaid income declining by a lesser amount.
During the first quarter, investing activities related to capital
expenditures and increase in deferred charges declined from $40.9
million to $23.5 million. Capital expenditures related to scalable
infrastructure in the cable sector declined by $10.2 million
during the first quarter of 2004 as an initial investment of $7.7
million was incurred during the same period last year to introduce
Video-on-Demand. Capital expenditures linked to the cable network
upgrade and rebuild program have declined by $4.6 million as the
program has been reduced to a minimum, for the time being.
Management is currently analyzing a scenario to maximize the use
of bandwidth in an all- digital conversion scenario.
Free Cash Flow of $13.8 million was essentially attributable to
increasing cash flow from operations in the cable sector and
declining capital expenditures and deferred charges in the cable
and media sectors.
Long-term debt and bank indebtedness increased by $27.1 million
due to a $41 million decline in non-cash working capital items
offset by generated Free Cash Flow of $13.8 million. During the
first quarter of last year, long-term debt and bank indebtedness
grew by $56.4 million because of a Free Cash Flow deficit of $7.8
million and a decline of $47.8 million in non-cash working capital
items.
At November 30, 2003, the cable subsidiary had utilized $115
million of its $400 million Term Facility and COGECO had drawn
$18.5 million of its $40 million Term Facility. Going forward,
COGECO and Cogeco Cable expect to continue to generate Free Cash
Flow and consequently to further build liquidity.
FINANCIAL POSITION
Since August 31, 2003, significant changes in the balance sheet
include accounts receivable, fixed assets, accounts payable and
accrued liabilities, Indebtedness, future income tax liabilities,
non-controlling interest and shareholders' equity.
The $12.9 million increase in accounts receivable was mainly
related to TQS as first quarter television revenue is usually
higher than fourth quarter revenue due to seasonal factors. Fixed
assets declined by $19.2 million due to amortization exceeding
capital expenditures. As discussed above, an increase in
amortization of $14 million was recorded mainly as a result of a
change in estimated useful lives of cable modems and digital
terminals.
Accounts payable and accrued liabilities declined by $21.4 million
because working capital was managed tightly at fiscal year-end.
Indebtedness increased by $27.1 million due to the factors
discussed in the section above. Cogeco Cable's US$150 million
Senior Secured Notes Series A translated into Canadian dollars
declined by $13 million as the Canadian dollar appreciated. Since
the Senior Secured Notes Series A are fully hedged, the decline
was fully offset by an increase in the deferred credit. This
credit represents the difference between the quarter end exchange
rate and the exchange rate on the cross-currency swap agreements
which fix the liability for interest and principal payments on the
Senior Secured Notes Series A.
Future income tax liabilities increased by $32.5 million
essentially due to the income taxes adjustment described under the
"Income Taxes" section. The $24.3 million decrease in non-
controlling interest represented the 61% minority interest share
of Cogeco Cable's net loss. Finally, shareholders' equity declined
by $15.6 million due to Cogeco Cable's net loss recorded during
the first quarter. COGECO owns 39% of Cogeco Cable. Such loss is
attributable to amortization and income taxes non-cash adjustments
totaling $44.3 million as previously discussed.
At November 30, 2003, Cogeco's balance sheet shows that its total
current liabilities exceeded its total current assets by about $55
million.
CABLE SECTOR
More targeted advertising campaigns, an enhanced customer
retention strategy and a heightened focus on customer service have
lead to a 3.2% quarterly revenue generating unit growth and
significant basic service customer additions. Furthermore, the
success of the bundle offering resulted in greater digital
terminal additions.
During the first quarter, high-speed Internet additions exceeded
our expectations and were only slightly lower compared to the same
period last year. Cogeco Cable was able to maintain an attractive
product mix as Internet Lite, a lower margin service offered on a
retention basis only, represented only 8% of net additions.
Revenue
During the first quarter, revenue rose by $13 million or 11.3%
compared to the same period last year. This growth resulted mainly
from rate increases and the improved high-speed Internet access
penetration rate as discussed in the "Customer Statistics"
section. For customers subscribing to basic service only in
Ontario, average monthly rate increases of about $2.75 were
implemented in January 2003 as a result of rate deregulation.
Cogeco Cable introduced further rate adjustments effective in June
2003 for the Ontario customer base and in July 2003 for the Quebec
digital customer base. These adjustments resulted in incremental
average monthly rates of approximately $1.75 per basic service
customer in Ontario and approximately $2.20 per digital customer
in Quebec.
Operating Costs
For the first quarter, network fees increased compared to the same
period last year. The rise stemmed from increased penetration of
bundled services and program supplier fee increases. However,
network fees as a percentage of revenue have decreased partly due
to a one-third decline in bandwidth costs per high-speed Internet
customers. Further savings were achieved from relocating the TSN
channel to the basic service in Ontario in January 2003 and RDS to
the basic service in Quebec on September 1st, 2003. In addition,
contributions to the Canadian production fund have declined since
April 2003 as a result of changes to the Canadian Radio-Television
and Telecommunications Commission's (CRTC) regulation.
The rise in other operating costs is largely attributable to
increased customer care and technical support costs incurred to
offer an improved service to a growing client base and additional
marketing costs to grow revenue generating units. As first quarter
financial results have significantly improved compared to the same
period last year, the accrual for employee bonuses was increased.
Operating Income before Amortization
For the first quarter, operating income before amortization
improved by 18.9% compared to the same period last year as a
result of revenue growth outpacing operating cost increases.
Cogeco Cable's operating margin jumped to 39.2% from 36.7% during
the first quarter.
MEDIA SECTOR
Revenue
Radio revenue declined by 32.8% mainly as a result of the
departure, during the second quarter of fiscal 2003, of a FM 93
Qu,bec City station radio host. Furthermore, revenue from the
Montreal RYTHME FM station was weaker due to lower audience
ratings last Spring. However, RYTHME FM's market share in the
targeted 25-54 age group among the Montreal Franco area has
improved since last Spring. According to BBM audience rating
measurements, market share has increased from 11.6% in the Spring
of 2003 to 12.6% in the Fall of 2003. The station is third in
popularity in this age group.
Television revenue increased by 8.6% stemming from the launch of a
new morning show Cafeine and a daily reality show called Loft
Story, a strengthening of the pre-existing programming schedule
and an advertising rate card increase. Loft Story has attracted up
to 2 million viewers, an audience record for the network, which
has benefited from an increased profile. According to BBM meter
surveys, TQS's overall market share in the Franco 18-49 age group
was 18.3% during the first quarter compared to 16.3% during the
same period last year.
Operating Costs
Operating costs grew by 19.4% because of higher television
programming costs incurred to strengthen the programming schedule
such as Loft Story and Cafeine.
Operating Income before Amortization
The operating margin declined compared to the same period last
year mainly due to higher television programming costs and lower
radio revenue. The new television show Loft Story did not generate
similar financial returns to the pre-existing programming.
Furthermore, the national advertising market was much more
difficult than anticipated and therefore, among other things, has
impacted the profitability of Loft Story.
DIVIDEND DECLARATION
At its meeting of January 9, 2004, the Board of Directors of
COGECO declared a quarterly dividend of $0.0525 per share for
subordinate and multiple voting shares, payable on February 6,
2004, to shareholders on record on January 23, 2004.
FISCAL 2004 FINANCIAL GUIDELINES
Cable Sector
Cogeco Cable is maintaining its revenue and operating income
before amortization growth guidelines of 5% to 6% and 8% to 10%
respectively. However, the guideline for amortization has been
revised upward to $136 million due to adjustments made as
discussed above.
Media Sector
First quarter revenue growth and operating margin as well as
current advertising bookings are lower than anticipated in both
the radio and television operations. As a result, fiscal 2004
financial guidelines have been reviewed downwards. Management
expects that the media sector will achieve revenue growth between
1% and 3% compared to initial guidance of 10-13%. The forecasted
operating margin has been revised downward from 12-13% to 8-9%
mainly due to lower revenue growth. Because the network is
incurring higher fixed programming costs in fiscal 2004, slower
revenue growth has a greater impact on the operating margin.
Consolidated Financial Outlook
Given revised cable and media sector financial guidelines, net
loss of about $11 million should be incurred in fiscal 2004
compared to an estimated net income of $10 million initially
announced. The net loss will result from the amortization and
income taxes non-cash adjustments as previously discussed.
As Cogeco Cable's management is currently analyzing an all-digital
conversion scenario that could reduce the capital expenditures
related to cable network upgrades and rebuilds, capital
expenditures and Free Cash Flow guidelines could be modified
accordingly next quarter.
COGECO is a diversified communications company. Through its Cogeco
Cable subsidiary, COGECO provides about 1,226,000 units of cable
distribution and telecommunication services to about 1,405,000
households passed in its service areas. Through its two-way
broadband cable infrastructure, Cogeco Cable provides its mostly
residential customers with video and audio services, both in
analogue and digital form, as well as high-speed Internet access
services. Through its Cogeco Radio-Television subsidiary, COGECO
holds a 60% ownership interest and operates the TQS network, six
TQS television stations, and three CBC affiliated television
stations in partnership with CTV Television. Cogeco Radio-
Television also wholly owns and operates RYTHME FM radio stations
in Montreal and Qu,bec City as well as FM 93 in Qu,bec City. Two
other RYTHME FM stations in Sherbrooke and Trois-RiviSres should
be launched next Summer. COGECO's subordinate voting shares are
listed on the Toronto Stock Exchange (CGO). The subordinate voting
shares of Cogeco Cable are also listed on the Toronto Stock
Exchange (CCA).
Visit http://www.cogeco.ca/investorsfor more information.
COGECO CABLE: Nov. 30 Working Capital Deficit Narrows to $75MM
--------------------------------------------------------------
Cogeco Cable Inc. (TSX: CCA) reported its financial results for
the first quarter of fiscal 2004, ended November 30, 2003.
"Our first quarter results are very encouraging and bode well for
fiscal 2004. Cogeco Cable has generated free cash flow of $12.6
million in the quarter. Revenue has grown 11% and operating income
before amortization has grown even further by 19%. Nonetheless,
the Corporation has generated a net loss of $40.3 million. This
net loss resulted exclusively from non-cash adjustments linked to
the Ontario income tax rate increase and a downward revision to
the useful life of home terminal devices in line with sharp unit
price decreases," stated Mr. Louis Audet, President and Chief
Executive Officer.
"Our customer retention strategies have shown good traction while
high- speed Internet connections have continued to grow nicely,
and digital terminal additions strongly outpaced those of prior
year," concluded Mr. Audet.
OPERATING RESULTS
Revenue
During the first quarter, revenue rose by $13 million or 11.3%
compared to the same period last year. This growth resulted mainly
from rate increases and the improved high-speed Internet access
penetration rate as discussed in the "Customer Statistics"
section. For customers subscribing to basic service only in
Ontario, average monthly rate increases of about $2.75 were
implemented in January 2003 as a result of rate deregulation.
Cogeco Cable introduced further rate adjustments effective in June
2003 for the Ontario customer base and in July 2003 for the Qubec
digital customer base. These adjustments resulted in incremental
average monthly rates of approximately $1.75 per basic service
customer in Ontario and approximately $2.20 per digital customer
in Quebec.
Operating Costs
For the first quarter, network fees increased compared to the same
period last year. The rise stemmed from improved penetration of
bundled services and program supplier fee increases. However,
network fees as a percentage of revenue have decreased partly due
to a one-third decline in bandwidth costs per high-speed Internet
customers. Further savings were achieved from relocating the TSN
specialty channel to the basic service in Ontario in January 2003
and RDS to the basic service in Quebec on September 1st, 2003. In
addition, contributions to the Canadian production fund have
declined since April 2003 as a result of changes to the Canadian
Radio-Television and Telecommunications Commission's (CRTC)
regulation.
The rise in other operating costs is largely attributable to
improved customer care and technical support costs incurred to
offer an improved service to a growing client base and additional
marketing costs to grow revenue generating units. As first quarter
financial results have significantly improved compared to the same
period last year, the provision for employee bonuses was
increased.
Operating Income before Amortization
For the first quarter, operating income before amortization
improved by 18.9% compared to the same period last year as a
result of revenue growth outpacing operating cost increases.
Cogeco Cable's operating margin jumped to 39.2% from 36.7% during
the first quarter.
Excluding the effect of a $14 million increase mainly related to a
revision in the estimated useful life of home terminal devices,
amortization in the first quarter amounted to $28.3 million
compared to $25.6 million for the same period last year. Increased
amortization stemmed mainly from capital expenditures linked to
high-speed Internet and digital services.
Effective September 1st, 2003, the estimated useful life of home
terminal devices rented by the Corporation's customers was revised
downward as unit costs, converted in Canadian dollars, declined
significantly during the last year. Considering the lower unit
costs, it is now often more economical to replace defective
devices rather than repair them. The unit cost of cable modems has
declined by 59% and the unit cost of the DCT-2000 digital
terminal, including peripheral equipments, has declined by 20% in
the last year. As a result of this evolution, the estimated useful
life of cable modems was revised from seven years to three years
and since the digital terminal unit cost has declined more
gradually, their estimated useful life was revised from seven
years to five years. The change in useful lives of home terminal
devices and of certain other long-term assets resulted in an
increase of $14 million in amortization expense.
For the first quarter, financial expense decreased compared to the
same period last year. This decline occurred as the level of
Indebtedness (defined as bank indebtedness, long-term debt and
deferred credit) was lower due to Free Cash Flow generated and
lower short-term interest rates on the Term Facility.
INCOME TAXES
Last November, the Ontario government announced that corporate
income tax rates would increase to 14% effective January 1, 2004.
Prior to this announcement the tax rate was to decline from 11% in
2004 to 8% in 2007. As a result, a $34.6 million non-cash
adjustment was recorded for future income tax liabilities.
However, this amount was partly offset by a non-cash reduction of
future income taxes of $4.3 million related to the decline in
carrying value of home terminal devices and certain other long-
term assets.
Excluding the effect of the net income tax adjustment of $30.3
million, income taxes in the first quarter amounted to $3.1
million compared to $0.4 million for the same period last year.
This increase is mainly attributable to growth in operating income
before amortization.
NET INCOME (LOSS)
Net loss for the first quarter amounted to $40.3 million, or $1.01
per share, compared to a net income of $0.6 million, or $ 0.02 per
share, for the same period last year. The net loss is attributable
to amortization and income taxes non-cash adjustments totaling
$44.3 million as previously discussed. Excluding these elements,
the Corporation would have recorded a net income of $4 million or
$0.10 per share.
For the first quarter, cash flow from operations was greater than
last year by $8.5 million or 32.1% mainly due to growth in
operating income before amortization. Net changes in non-cash
working capital items declined by $6.2 million compared to last
year essentially due to accounts payable and accrued liabilities
as well as deferred and prepaid income declining by a lesser
amount.
During the first quarter, investing activities related to capital
expenditures and increase in deferred charges decreased from $39.5
million to $22.2 million.
Capital expenditures related to scalable infrastructure declined
during the first quarter of fiscal 2004 as an initial investment
of $7.7 million was incurred during the same period last year to
introduce Video-On-Demand (VOD). The network upgrade and rebuild
program has been reduced to a minimum, for the time being.
Management is currently analysing a scenario to maximize the use
of bandwidth in an all-digital conversion scenario.
Free Cash Flow of $12.6 million was generated during the first
quarter as a result of increasing cash flow from operations and
declining capital expenditures and deferred charges.
Long-term debt and bank indebtedness increased by $20.3 million
due to a $32.9 million decline in non-cash working capital items
offset by generated Free Cash Flow of $12.6 million. During the
first quarter of last year, long- term debt and bank indebtedness
grew by $52.2 million because of a Free Cash Flow deficit of $13
million and a $39.2 million decline in non-cash working capital
items.
At November 30, 2003, the Corporation had utilized $115 million of
its $400 million Term Facility. Going forward, Cogeco Cable
expects to continue to generate Free Cash Flow and consequently to
further build liquidity.
FINANCIAL POSITION
Since August 31, 2003, significant changes in the balance sheet
include fixed assets, accounts payable and accrued liabilities,
Indebtedness, future income tax liabilities and shareholders'
equity.
Fixed assets declined by $19.2 million as amortization exceeded
capital expenditures. As discussed above, an increase in
amortization of $14 million was recorded mainly as a result of a
change in estimated useful lives of cable modems and digital
terminals.
Accounts payable and accrued liabilities declined by $35.2 million
as use of working capital was managed tightly at fiscal year-end.
Indebtedness increased by $20.4 million due to the factors
discussed in the section above. The US$150 million Senior Secured
Notes Series A translated into Canadian dollars declined by $13
million as the Canadian dollar appreciated. Since the Senior
Secured Notes Series A are fully hedged, the decline was fully
offset by an increase in the deferred credit. This credit
represents the difference between the quarter end exchange rate
and the exchange rate on the cross- currency swap agreements which
fix the liability for interest and principal payments on the
Senior Secured Notes Series A. Future income tax liabilities
increased by $32.4 million essentially due to the income taxes
adjustment described under the "Income Taxes" section. Finally,
shareholders' equity declined by $40.2 million because of the net
loss generated during the first quarter. Such loss is attributable
to amortization and income taxes non-cash adjustments totaling
$44.3 million as previously discussed.
At November 30, 2003, Cogeco Cable's balance sheet shows that its
total current liabilities outweighed its total current assets by
about $75 million.
FISCAL 2004 FINANCIAL GUIDELINES
The Corporation is maintaining its fiscal 2004 revenue and
operating income before amortization growth guidelines of 5% to 6%
and 8% to 10% respectively as well as its financial expense
forecast of $60.5 million. However, the guideline for amortization
has been revised upward to $136 million due to adjustments made as
discussed above. As a result of the amortization and income taxes
non-cash adjustments further detailed above, a net loss of about
$36 million should be incurred in fiscal 2004 compared to an
estimated net income of $11 million initially announced.
As management is currently analyzing an all-digital conversion
scenario that could reduce the capital expenditures related to
network upgrades and rebuilds, capital expenditures and Free Cash
Flow guidelines could be modified accordingly next quarter.
Cogeco Cable (S&P, BB+ Long-Term Corporate Credit Rating, Stable
Outlook) is the second largest cable operator in each of Ontario
and Quebec and the fourth in Canada based on the number of basic
service customers it serves. Cogeco Cable provides about 1,226,000
revenue generating units to about 1,405,000 households passed in
its service areas. Through its two-way broadband cable
infrastructure, Cogeco Cable provides its mostly residential
customers with video and audio services, both in analogue and
digital form, as well as high-speed Internet access services.
Cogeco Cable's subordinate voting shares are listed on the Toronto
Stock Exchange (CCA).
Visit http://www.cogeco.ca/investorsfor more information.
CONSECO INC: Caps Price of Preferred Share Conversion
-----------------------------------------------------
Conseco, Inc. (NYSE:CNO) announced that the conversion price of
its Class A Senior Cumulative Convertible Exchangeable Preferred
Stock (OTCBB:CNSJP) has been set initially at $20.35 per share,
which is subject to adjustment under certain circumstances.
In accordance with the terms of the Class A Preferred Stock, the
conversion price was established on January 8, 2004 at an amount
equal to the volume weighted average price of Conseco common stock
for the immediately preceding 60 calendar days. Shares of Class A
Preferred Stock are convertible by holders at any time on or after
September 30, 2005 into shares of Conseco common stock. The
conversion rate for each share of Class A Preferred Stock is equal
to its total liquidation preference plus cumulative unpaid
dividends thereon divided by the conversion price.
Conseco, Inc.'s insurance companies help protect working American
families and seniors from financial adversity: Medicare
supplement, long-term care, cancer, heart/stroke and accident
policies protect people against major unplanned expenses;
annuities and life insurance products help people plan for their
financial future.
COVANTA ENERGY: Secured Nod to Reimburse DHC Investor Expenses
--------------------------------------------------------------
The Covanta Energy Debtors, Bank One, N.A., and the Danielson
Holding Company, together with three investors it has organized
have executed a commitment letter dated December 2, 2003 in
connection with a second lien credit facility for up to
$118,000,000. Pursuant to the Credit Facility, Bank One will act
as agent and sole issuer of the letters of credit.
Pursuant to the Commitment Letter, the DHC Investors paid to Bank
One $125,000 in commitment fees and a $75,000 initial expense
deposit. The Commitment Letter provides that the Debtors will
guarantee the DHC Investors' obligations with respect to the DHC
Investors' indemnification of Bank One's out-of-pocket expenses
incurred in connection with the preparation, negotiation,
execution, syndication, distribution and enforcement of the
Commitment Letter, the term sheet for the Credit Facility, and
other loan documents. The obligations include the Commitment Fee
and Expense Deposit.
Accordingly, the Debtors sought and obtained the Court's
authority to reimburse the DHC Investors for their payment of the
Commitment Fee and the Initial Expense Deposit to Bank One.
James L. Bromley, Esq., at Cleary, Gottlieb, Steen & Hamilton, in
New York, explains that the $75,000 Expense Deposit is an initial
deposit for Bank One's actual expenses incurred in connection
with the Credit Facility. To the extent that Bank One's actual
and documented expenses do not amount to the full $75,000, any
excess amounts will be returned to the DHC Investors and the DHC
Investors will return the excess in full to the Debtors.
Mr. Bromley contends that the terms upon which Bank One has
committed to provide the necessary financing pursuant to the
Commitment Letter are fair and reasonable. The payment of the
$125,000 Commitment Fee in exchange for Bank One's commitment to
provide the Credit Facility plus the Expense Deposit for its out-
of-pocket costs, is appropriate in a transaction of this nature.
Commitment for $118,000,000
Under the Term Sheet, SZ Investments LLC, D. E. Shaw Laminar
Portfolios LLC, and Third Avenue Trust, on behalf of the Third
Avenue Value Fund Series, commit to provide a credit facility in
the aggregate principal amount of up to $118,000,000 for Covanta
Energy Corporation and its subsidiaries. The salient terms of
the contemplated financing are:
A. Lenders
D. E. Shaw will have a 50% interest in the Facility, SZ will
have a 25% interest while Third Avenue will have the other 25%
interest in the Facility.
B. Agent
Bank One, N. A. will act as Agent and sole issuer of letters
of credit and Bank One Capital Markets, Inc. as Arranger.
C. Facility Amount
A letter of credit facility for $118,000,000 will be available
for the issuance of standby letters of credit. The Letter of
Credit facility will contain a $10,000,000 revolving loan
sub-facility for direct borrowings. Until an event of default
exists, Bank One will fund the revolving loans on behalf of
Lenders in accordance with their pro rata shares. Each
Lender will purchase a risk participation in accordance with
its pro rata share of each revolving loan. Upon and after the
occurrence of an event of default, the Lenders will fund their
pro rata shares of any revolving loans.
The Facility will be permanently reduced, dollar for dollar,
by the face amount of any letter of credit that is issued on
the closing of the Facility and that expires or terminates.
No letter of credit issued under the Facility will have an
expiry date later than five business days before the end of
the scheduled Term. In addition to a collateral, the Facility
will be secured by a second lien on the Debtors' property
located in the United States, subject only to the first lien
in favor of Bank of America Lenders securing up to
$150,000,000 and other liens permitted under the Bank of
America First Lien Credit Agreement.
D. Maturity
The Facility will mature five years from date of initial
issuance of a Letter of Credit or initial funding, whichever
is earlier, under the Facility.
E. Letter of Credit Rate
The Letter of Credit will have a rate of 6.5% per annum of the
undrawn face amount of the issued Letters of Credit under the
Facility, payable quarterly in arrears. The unreimbursed
drawn amount of any Letter of Credit will bear interest at
Bank One's Prime Rate of interest plus 4.5%. In addition,
the Debtors will pay Bank One for its customary issuance,
negotiation, amendment, and other charges in connection with
Letters of Credit it issued. Upon the occurrence of an event
of default, the Letter of Credit rate and interest rate will
be increased by 200 basis points.
F. Revolving Loan Rate
Interest will float at 6.5% in excess of the London Interbank
Offered Rate. The Debtors may elect to cause all or a portion
of the principal outstanding on the line of credit to bear
interest using the LIBOR-based option in intervals of one
month, two months and three months. Principal outstanding
that does not bear interest using the LIBOR-based option will
bear interest at Bank One's Prime Rate of interest plus 4.5%.
Upon the occurrence of an event of default, the interest rate
will be increased by 200 basis points.
G. Unused Committee Fee
A fee for 0.5% on the unused commitment amount, calculated and
payable on a quarterly basis.
H. Arranger Fee
A $125,000 fee will be payable upon the acceptance of the
Commitment Letter.
I. Agency Fee
A $30,000 fee will be paid annually, from years one through
five, to Bank One on the initial issuance of a letter of
credit or initial funding, whichever is earlier, under the
Facility and each anniversary.
J. Investor Closing Fee
A fee for 2% of the Facility will be payable to the Investor
Group on the initial funding of the Facility.
K. Commitments of the Investor Group
Each member of the Investment Group will be required to become
a Lender and commit to an interest in the Facility equal to
its Pro Rata Share. Each member of the Investor Group will
secure its obligations as a Lender:
* The obligations of Third Avenue will each be secured by a
perfected first priority and exclusive security interest in
a Certificate of Deposit for $29,500,000 issued by Bank One
and either held by (i) Bank One pursuant to a custodial
arrangement mutually satisfactory to Bank One and Third
Avenue or (ii) a third party custodian mutually
satisfactory to Bank One and Third Avenue pursuant to a
custodial arrangement mutual satisfactory to both.
* The obligations of SZI will be secured by a perfected first
priority and exclusive security interest in a Certificate of
Deposit for $29,500,000 issued by and held at Bank One.
* The obligations of D. E. Shaw will be secured by a letter of
credit issued to Bank One for $59,000,000. The D. E. Shaw
Letter of Credit will have an expiry date no earlier than 60
days after the end of the scheduled Term. The Public
Debt Rating, via Standard & Poor's, of the issuing financial
institution is required to be at or above A- at all times
and the Public Debt Rating via Moody's, is required to be at
or above A3 at all times. The D. E. Shaw Letter of Credit
may be drawn on the occurrence of an event of default under
the Loan Documents, a failure of the issuing financial
institution to maintain the Public Debt Rating, or on any
date within the 60-day period before the expiration of the
Letter of Credit.
A drawing on the D. E. Shaw Letter of Credit alone will not
trigger an automatic drawing of the Third Avenue or SZI
collateral.
Bank One and the Investor Group agree to split these fees and
interest received by Bank One from Covanta:
* The Letter of Credit fee of 6.50% per annum described under
"Letter of Credit Rate" will be split as:
-- 0.25% per annum for the account of Bank One; and
-- 6.25% per annum for the account of the Investor Group.
* The interest equal to the Prime Rate plus 4.50% per annum
applicable to (i) the unreimbursed drawn amount of any
Letter of Credit and (ii) any direct borrowings under the
revolving loan sub-facility that bears interest with
reference to the Prime Rate, will be split as:
-- interest at a rate equal to the Prime Rate per annum
will be for the account of Bank; and
-- interest at a rate equal to 4.50% per annum will be
for the account of the Investor Group.
* The interest equal to LIBOR plus 6.50% per annum applicable
to any direct borrowings under the revolving loan sub-
facility that bears interest with reference to LIBOR, will
be split as:
-- interest at a rate equal to 0.40% plus LIBOR will be
for the account of Bank; and
-- interest at a rate equal to 6.10% will be for the
account of the Investor Group.
* The unused commitment fee of 0.50% per annum will be split
as:
-- 0.20% per annum will be for the account of Bank; and
-- 0.30% per annum will be for the account of the
Investor Group.
L. Expenses
A $75,000 initial good faith expense deposit is required
on acceptance of the commitment. Additional deposits may be
required. All deposits will be applied towards the fees and
expenses associated with the transaction. All excess amounts,
if any, will be refunded to the Investor Group.
Obtaining a commitment from Bank One to provide financing under
the Credit Facility is critical to the new reorganization plan
and the revised liquidation plan proposed by the Debtors and DHC.
The commitment ensures the viability of the Reorganized Debtors
following their emergence from bankruptcy, Mr. Bromley says.
(Covanta Bankruptcy News, Issue No. 45; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
COX COMMS: Inks Licensing Agreement with Liberate Technologies
--------------------------------------------------------------
Liberate Technologies (Pink Sheets: LBRT), a leading provider of
software for digital cable systems, announced a subscription-based
licensing agreement with Cox Communications (NYSE: COX - News),
one of the leading US cable systems operators.
Under the agreement, Liberate will supply Cox with software to
enable the delivery of multiple applications, such as DVR, HD and
VOD, across multiple platforms, including Motorola and Scientific-
Atlanta.
"With Liberate, we can offer more applications on more of our
currently deployed set-top boxes, to deliver the services our
customers demand today," said Dallas Clement, Senior Vice
President of Strategy and Development for Cox Communications. "In
addition, based on the technology roadmap we have developed with
Liberate, Cox will continue to drive the roll-out of digital cable
services."
"We are excited about our partnership with Cox Communications, a
world leader in communications, and an innovator in digital
cable," said David Lockwood, Chairman and CEO of Liberate
Technologies. "Our goal is to work with Cox to deploy industry-
leading digital services today and in the years ahead."
Liberate Technologies is a leading provider of software for
digital cable systems. Based on industry standards, Liberate's
software enables cable operators to run multiple services --
including High-Definition Television, Video on Demand, and
Personal Video Recorders -- on multiple platforms. Headquartered
in San Carlos, California, Liberate has offices in Ontario,
Canada, and the United Kingdom.
Cox Communications (NYSE: COX), a Fortune 500 company, is a multi-
service broadband communications company serving approximately 6.3
million basic customers nationwide. Cox is the nation's fourth-
largest cable television provider, and offers both traditional
analog video programming under the Cox Cable brand as well as
advanced digital video programming under the Cox Digital Cable
brand. Cox provides an array of other communications and
entertainment services, including local and long distance
telephone under the Cox Digital Telephone brand; high-speed
Internet access under the brands Cox High Speed Internet and Cox
Express; and commercial voice and data services via Cox Business
Services.
Cox Communications' 2.000% bonds due 2029 are currently trading at
about 33 cents-on-the-dollar.
DII INDUSTRIES: Wants Nod to Hire Ordinary Course Professionals
---------------------------------------------------------------
The DII Industries, LLC, and Kellogg, Brown & Root Debtors sought
and obtained, on an interim basis, the Court's authority to employ
ordinary course professionals under Sections 105(a) and 327 of the
Bankruptcy Code without the necessity of a separate, formal
retention application approved by the Court for each Ordinary
Course Professional. The Debtors are also allowed to pay the
Ordinary Course Professionals pursuant to Sections 330 and 331 in
the ordinary course of business for postpetition services rendered
and expenses incurred, subject to certain limits, without the need
for additional Court approval.
Eric T. Moser, Esq., at Kirkpatrick & Lockhart LLP, in Pittsburgh,
Pennsylvania, notes that the Ordinary Course Professionals are
distinct from the professionals that the Debtors employ in
connection with their Chapter 11 cases. The Debtors customarily
tap the services of various attorneys and accountants to represent
them in matters arising in the ordinary course of their businesses
that are unrelated to their reorganization cases. The Debtors
require the services of the Ordinary Course Professionals to
enable them to continue normal business activities that are
essential to their reorganization efforts. The work of the
Ordinary Course Professionals is directly related to preserving
the value of the Debtors' estates, even though the amount of fees
and expenses incurred by the Ordinary Course Professionals
represents only a small fraction of that value.
Mr. Moser explains that it would severely hinder the
administration of the Debtors' estates if they were required to
submit retention and fee applications to the Court for each
Ordinary Course Professional. Under these conditions, there is a
significant risk that some Ordinary Course Professionals will
simply be unwilling to provide needed services to the Debtors.
Others may suspend services pending a specific Court order
authorizing the performance of the services and the compensation.
Since many of the matters handled by the Ordinary Course
Professionals are active on a day-to-day basis, any delay or need
to replace these professionals could have significant adverse
consequences to the Debtors. If the expertise and background
knowledge of the Ordinary Course Professionals were lost with
respect to the particular matters for which they were responsible
before the Petition Date, the estates undoubtedly would incur
additional and unnecessary expenses because the Debtors would be
forced to retain other professionals without the background and
expertise and potentially at higher rates.
Requiring the Ordinary Course Professionals to file retention
applications and participate in the payment approval process
along with the Chapter 11 Professionals also would unnecessarily
burden the Clerk's Office, the Court, and the Office of the
United States Trustee, while adding significantly to the
administrative costs of the Debtors' Chapter 11 cases, without
any corresponding benefit to the Debtors' Estates.
The Debtors are permitted to pay -- without formal application to
the Court by any Ordinary Course Professional -- the fees and
expenses not exceeding a total of $100,000 per month for each
Ordinary Course Professional. Payments to a particular Ordinary
Course Professional would become subject to Court approval if the
payments would exceed the cap.
The monthly fee cap will be applied on an average or "rolling"
basis. Specifically, to the extent that any professional's fees
and expenses are in any month less than the Monthly Allowance for
any particular month, the Debtors will "bank" the remainder of
the Monthly Allowance and have the "banked" Monthly Allowance
available to be applied against professional fees incurred in
subsequent months. Conversely, to the extent that any
professional's fees and expenses exceed the Monthly Allowance in
any month, the Debtors will pay no more than the current
available Monthly Allowance in addition to any available banked
amount, and pay the excess professional fees only when and to the
extent that the Monthly Allowance from a subsequent month is
banked.
The Debtors will review all bills received from the Ordinary
Course Professionals to ensure that the fees charged were
reasonable and that the expenses incurred were necessary. The
Debtors will file an initial payment summary statement with the
Court as well as file periodic payment summary statements. The
Ordinary Course Professional Payment Summary will include these
information for each Ordinary Course Professional:
(a) the name of the Ordinary Course Professional;
(b) the aggregate amounts paid as compensation for services
rendered and reimbursement of expenses incurred by the
Ordinary Course Professional during the statement period;
and
(c) a general description of the services rendered by the
Ordinary Course Professional.
Although certain Ordinary Course Professionals may hold unsecured
claims against them, the Debtors do not believe that any of the
Ordinary Course Professionals have an interest materially adverse
to the Debtors, their Estates, creditors or Interest holders.
The Court will hold a final hearing to consider the Debtors'
request on February 11, 2004. The cap on the total fees
authorized to any Ordinary Course Professional will be decided at
the hearing.
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 AMERICA: Enters into Buena Vista Settlement Pact
--------------------------------------------------------------
On the Petition Date, DirecTV Latin America, LLC sought to reject
four prepetition Programming Agreements with Buena Vista
International, Inc. The Debtor's local operating companies
immediately ceased its delivery of The Disney Channel and other
Buena Vista programming to subscribers. On March 28, 2003, the
Court approved an agreement between the Debtor and Buena Vista
wherein the parties stipulated to the rejection of the
Programming Agreements, effective as of the Petition Date, but
reserved all of their claims and defenses. Subsequently, Buena
Vista timely filed a proof of claim asserting $633,000,000 for
damages resulting from the rejection and on account of other
prepetition amounts due.
The Debtor reviewed the Buena Vista Claim and assessed the extent
to which it can deliver The Disney Channel and certain other
programming licensed by Buena Vista on an economic manner. Thus,
the Debtor negotiated with Buena Vista to settle the Buena Vista
Claim and to allow the Debtor to resume the delivery of Buena
Vista programming to its ultimate subscribers.
Joel A. Waite, Esq., at Young, Conway, Stargatt & Taylor, LLP, in
Wilmington, Delaware, informs the Court that the parties agreed
that the Buena Vista Claim would be allowed as a general
unsecured claim against the Debtor for $275,000,000. This
agreement is conditioned, however, on the filing and ultimate
confirmation by the Debtor's Reorganization Plan providing for a
cash distribution to general unsecured claimholders in an amount
not less than 20% of each holders' allowed claims. In the event
the Debtor files a plan providing for a lesser or different
distribution to general unsecured creditors, or if the Debtor is
unable to ultimately confirm a plan, the proposed settlement of
the Buena Vista Claim will be null and void, and Buena Vista will
retain all its rights while the Debtor will retain all its
defenses.
Mr. Waite relates that Buena Vista and the Debtor agreed on the
terms of a new programming agreement pursuant to which Buena
Vista will license to the Debtor the rights to deliver "The
Disney Channel" and "Fox Kids" to its subscribers on a non-
exclusive basis as part of its packages. The New Buena Vista
Agreement is a short-term agreement that will terminate on
December 31, 2004, provided that on the Plan Effective Date, the
term of the New Buena Vista Agreement will automatically convert
to an eight-year term ending on December 31, 2011. As a result,
in the event the Plan Effective Date does not occur, and
therefore the proposed settlement will be null and void, the
Debtor will not have any liability to Buena Vista with respect to
the contemplated extended term of the New Buena Vista Agreement.
Accordingly, the Debtor seeks the Court's authority to settle the
Buena Vista Claim.
The Debtor believes that entering into the New Buena Vista
Agreement is within the ordinary course of its business and does
not require independent Court approval. However, in light of the
relationship between the New Buena Vista Agreement and the
settlement of the Buena Vista Claim, and to remove any
uncertainty regarding the enforceability of the Debtor's and
Buena Vista's rights and obligations under the New Buena Vista
Agreement before the Plan Effective Date, Buena Vista asked the
Debtor to obtain a Court order authorizing the parties to enter
into the New Buena Vista Agreement as part of the overall
settlement of the Buena Vista Claim.
Due to their proprietary nature, the terms, conditions and
related information set forth in the New Buena Vista Agreement
have not been disclosed to any unrelated third-party, except for
the professionals retained by the Creditors Committee to review
these terms. Broader disclosure of this information would likely
undermine the overall settlement between the Debtor and Buena
Vista. Without confidentiality, the Debtor's efforts to confirm
its Plan could be substantially impaired. The Debtor was advised
that the Creditors Committee supports its decision to enter into
the New Buena Vista Agreement as part of the overall settlement
of the Buena Vista Claim.
Mr. Waite asserts that the New Buena Vista Agreement incorporates
substantial differences from the terms contained in the rejected
Buena Vista agreements including critical reductions in per
subscriber rates to be paid by the Debtor and the elimination of
guaranteed minimums and reduction, if not full elimination, of
the currency-related risks associated with the Debtor operating
in Latin America. As a result, the Debtor believes that the New
Buena Vista Agreement, in the context of the overall Buena Vista
settlement, represents a significant and critical step toward its
ability to emerge from Chapter 11. (DirecTV Latin America
Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
EAGLEPICHER: Brian L. Swartz Promoted to V.P. and Controller
------------------------------------------------------------
EaglePicher Incorporated and EaglePicher Holdings, Inc., announce
the promotion of Brian L. Swartz to the position of vice president
and controller.
Swartz, formerly EaglePicher's director of Corporate Financial
Operations, will assume complete responsibility for all global
financial planning and analysis, internal management reporting,
external reporting to the Board of Directors, the SEC, financial
institutions and others.
On behalf of EaglePicher Incorporated, Tom Pilholski, senior vice
president and chief financial officer said, "We are delighted to
announce Brian Swartz as EaglePicher's new Controller. Brian is
an outstanding person with the highest level of integrity and
intellect in the financial arena. He brings a tremendous wealth
of experience to this key management position and will continue to
help us grow our businesses and maintain financial discipline.
The entire management team is confident and excited about Brian
assuming these new responsibilities and looks forward to his
financial insight, leadership and perseverance to succeed."
EaglePicher Incorporated, founded in 1843 and headquartered in
Phoenix, Arizona, is a diversified manufacturer and marketer of
innovative, advanced technology and industrial products and
services for space, defense, environmental, automotive, medical,
filtration, pharmaceutical, nuclear power, semiconductor and
commercial applications worldwide. The company has 4,000
employees and operates more than 30 plants in the United States,
Canada, Mexico, the U.K. and Germany. Additional information on
the company is available on the Internet at
http://www.eaglepicher.com/
EaglePicher Holdings, Inc. (S&P, D Preferred Share Rating) is the
parent of EaglePicher Incorporated.
EBCO LAND: Case Summary & 20 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: EBCO Land Development, LTD.
8100 Washington Avenue Ste. 1000
Houston, Texas 77007
Bankruptcy Case No.: 04-30519
Type of Business: The Debtor is a development, construction and
land management company.
Chapter 11 Petition Date: January 5, 2004
Court: Southern District of Texas (Houston)
Judge: Letitia Z. Clark
Debtor's Counsel: Calvin C. Braun, Esq.
Attorney at Law
8100 Washington Avenue Suite 120
Houston, TX 77007
Tel: 713-880-3366
Fax: 713-880-3225
Estimated Assets: $500,000 to $1 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Montgomery County Tax Property Taxes $500,000
Assessor
J.R. Moore, Jr.
400 N. San Jacinto
Conroe, Texas 77301
Internal Revenue Service Taxes $140,097
Dannenbaum Trade Debt $41,470
Caywood Enterprises, Inc. Trade Debt $29,029
d/b/a Automatic L.P. Gas Co.
Berg Oliver Trade Debt $26,546
Hibernia Visa Credit Card $21,175
Cockran & Cockran Trade Debt $5,835
Lonestar Testing Trade Debt $5,687
Hughes LP Gas Trade Debt $5,111
BDO Seidmen LLP Trade Debt $3,320
Signtex Imaging, Inc. Trade Debt $3,019
IOS Capital Trade Debt $2,183
Hasara Land Services Trade Debt $1,950
TXU Communications Trade Debt $1,570
Reliant Entergy Utilities $991
Mid South Synergy Trade Debt $824
HCN Classifieds Trade Debt $352
ADT Security Trade Debt $262
IKON Office Solutions Trade Debt $250
Waste Management Trade Debt $125
ELAN CORP: Presenting at JP Morgan Healthcare Conference Tomorrow
-----------------------------------------------------------------
Elan Corporation, plc will present at the JP Morgan 22nd Annual
Healthcare Conference in San Francisco on Thursday, January 15, at
3:00 p.m. Eastern Standard Time, 8:00 p.m. Greenwich Mean Time.
Interested parties may access a live audio webcast of the
presentation by visiting Elan's website at http://www.elan.com/
and clicking on the Investor Relations section, then on the event
icon.
Elan (S&P, B- Corporate Credit and CCC Subordinated Debt Ratings,
Stable) is focused on the discovery, development, manufacturing,
sale and marketing of novel therapeutic products in neurology,
severe pain and autoimmune diseases. Elan shares trade on the New
York, London and Irish Stock Exchanges.
ENRON CORP: Fallon Demands Payment of $1.5 Million Admin. Claim
---------------------------------------------------------------
James B. Fallon became Chief Executive Officer of Enron Wholesale
Services subsequent to the Petition Date. Pursuant to his role
as EWS's CEO, Mr. Fallon provided services that have substantially
benefited the Debtors' estates. Mr. Fallon remained with EWS and
assisted in formulating and effectuating a means for maximizing
value to the Debtors' estates.
By the end of February 2002, Patricia Williams Prewitt, Esq., at
Locke Liddell & Sapp LLP, in Houston, Texas, reports that Mr.
Fallon supervised the collection of $800,000 from EWS assets and
assisted in supervision of a plan for the collection of an
additional several billion dollars from EWS assets, which was to
occur over time. The EWS assets were a global portfolio
comprised of commodity-based assets as well as other types of
assets. These assets included open contracts that required the
supervision of senior level risk management, like Mr. Fallon, to
determine when and if contracts could and should be terminated to
maximize a return for the Debtors' estates.
In furtherance of maximizing value to the Debtors' estates, Ms.
Prewitt relates that Mr. Fallon was instrumental in assessing
staffing needs for EWS and securing those staffing needs through
various means, including implementing programs to retain key
employees. Those programs were approved by the Court as being in
the best interest of the Debtors' estates. Mr. Fallon worked
extensively with the "Safe Harbor" Subcommittee of the Official
Unsecured Creditors Committee, as well as with the Official
Unsecured Creditors Committee, and otherwise provided invaluable
strategic and tactical plans for maximizing value from Debtors'
global commodity contracts and other assets.
According to Ms. Prewitt, Mr. Fallon's expertise and the
necessity of retaining his expertise was quantified by the
Debtors, the Debtors' counsel and others, who approved a
$1,500,000 payment to Mr. Fallon in exchange for his agreement to
assist with the Debtors' operation on a postpetition basis for
90 days. Mr. Fallon agreed to pay the Debtors 125% of this
amount if he did not remain employed with the Debtors for 90 days
following his receipt of the payment. Mr. Fallon also agreed to
forego his right to a cash bonus in exchange for the agreed
payment.
Ms. Prewitt contends that the benefit to the Debtors' estates is
equal or in excess of the amount of the administrative expense
requested. Mr. Fallon applied his expertise to maximize Debtors
estates, on an uninterrupted postpetition basis, for more than 90
days following his receipt of the payment.
The Official Employment-Related Issues Committee is attempting to
characterize the compensation for Mr. Fallon's postpetition
services as a preference or fraudulent transfer so as to recover
this payment for the benefit of a select group of employee
creditors. Mr. Fallon asked the Court to declare that he is
entitled to retain the compensation he received for services
rendered on behalf of the Debtors' estates. The Court allowed
Mr. Fallon to intervene in a declaratory judgment action to
determine the validity of certain payments made to induce Mr.
Fallon and others to continue to provide their expertise to the
Debtors. The Employees Committee subsequently instituted an
action against Mr. Fallon and others in the United States
Bankruptcy Court for the Southern District of Texas, Houston
Division.
By this motion, Mr. Fallon asks the Court to require payment for
his agreement to remain with the Debtors through the critical
first 90 days of its reorganization, on a pari passu basis with
other comparable top level managers, for all postpetition
services provided, which amount totals $1,500,000 -- based in
part upon the Debtors' knowledgeable estimation of the value
of Mr. Fallon's service -- such payment to be made to Mr. Fallon
only in the event that the Employees Committee recovers the
$1,500,000 previously paid by the Debtors to Mr. Fallon to obtain
his assistance with these cases.
Ms. Prewitt contends that Mr. Fallon deserves the postpetition
claim because:
(a) his postpetition services were vital and necessary
expenses associated with the continued operation of the
Debtors' business and should not be differentiated from
other top-level employees' services that were recognized
as being of such value to the Debtors' estate; and
(b) he cannot be required to provide valuable services that
contributed to the continued operations of the Debtors'
estates, to work hand in hand with the Creditors
Committee for months, and to forego other opportunities
and compensation, while at the same time subjecting
himself to indebtedness to the Debtors' estates in an
amount of nearly $2,000,000 if he did not continue to
serve the Debtors' estates, without being fairly
compensated for the service. (Enron Bankruptcy News, Issue
No. 92; Bankruptcy Creditors' Service, Inc., 215/945-7000)
ENRON CORP: Provides Settlement Notices of 21 Retail Contracts
--------------------------------------------------------------
Pursuant to the Settlement Protocol of Retail Customer Contracts,
the Enron Corporation Debtors inform the Court that they entered
into Settlement Agreements with these Counterparties:
A. Silicon Graphics, Inc.
* Contract: Electric Energy Sales Agreement dated June 22,
1999 between Enron Energy Services, Inc. and Silicon
* Settlement Term: Silicon will pay to Enron Energy
$409,450
B. Valley Fresh, Inc.
* Contract: Enovative Energy Service Agreement, dated May 4,
2001, between Enron Energy and Valley Fresh
* Settlement Term: Valley Fresh will pay to Enron Energy
$309,363
C. Robert Wood Johnson University Hospital
* Contract: Enovative Energy Service Agreement, dated
August 1, 2001, between Enron Energy and Robert Wood
* Settlement Term: Robert Wood will pay to Enron Energy
$49,725
D. Robert Wood Johnson Health Network, Inc., et al.
* Contract: Electric Energy Services and Sales Agreement,
dated December 22, 2000, between Enron Energy and Robert
Wood Johnson Health Network, Inc., Robert Wood Johnson
University Hospital at Hamilton, Raritan Bay Health
Services Corporation, Robert Wood Johnson University
Hospital in Brunswick, New Jersey, Bayshore Community
Hospital and Rahway Hospital
* Settlement Term: Robert Wood Network, et al. will pay to
Enron Energy $390,541
E. Children's Specialized Hospital
* Contract: Enovative Energy Service Agreement, dated August
1, 2001, between Enron Energy and Children's
* Settlement Term: Children's will pay to Enron Energy
$24,181
F. Boscom Partners
* Contract: Electric Energy Sales & Services Agreement
Commonwealth of Massachusetts, dated June 9, 2000 between
Enron Energy and Boscom Partners
* Settlement Term: Boscom agrees to allow Enron Energy to
set off a $200,975 accounts receivable balance against its
proof of claim. As a result, Boscom will have a $3,005
allowed unsecured claim and the balance of its proof of
claim will be disallowed in connection with the settlement
agreement.
G. Seaport Hotel LP
* Contract: Electric Energy Sales & Services Agreement
Commonwealth of Massachusetts, dated June 9, 2000, between
Enron Energy and Seaport
* Settlement Term: Seaport will pay to Enron Energy $114,153
H. Richland Molded Brick Company
* Contract: Enovative Energy Service Agreement, dated
August 10, 2001, by and between Enron Energy and Richland
* Settlement Term: Richland will pay to Enron Energy $132,987
I. Nortel Networks, Inc.
* Contract: Power Sales Agreement, dated October 13, 1998,
as amended on April 1999, July 27, 1999 and November 29,
2000, between Enron Energy Marketing Corporation and Nortel
* Settlement Term: Nortel will pay EEMC $250,000
J. Rosemount Memorial Park
* Contract: Enovative Lite Energy Services Agreement, dated
June 11, 2001, between Enron Energy and Rosemount
* Settlement Term: Rosemount will pay to Enron Energy $7,747
K. Mega Management Corporation
* Contracts: Electric Energy Sales & Services Agreement
dated March 21, 2001 and Enovative Energy Services
Agreements between Enron Energy and Mega Management
* Settlement Term: Mega Management will pay to Enron Energy
$35,762
L. Bechtel McLaughlin, Inc.
* Contract: Enovative Lite Energy Service Agreement dated
August 28, 2001 between Enron Energy and Bechtel
* Settlement Term: Bechtell paid to Enron Energy $6,000
M. Aztec Perlite Co., Inc.
* Contract: Enovative Energy Service Agreement, dated July
27, 2001, between Enron Energy and Aztec
* Settlement Term: Aztec will pay to Enron Energy $82,000
N. Agriventures LLC, doing business as Herb Thyme Farms, Inc.
* Contract: Enovative Energy Service Agreement, dated April
26, 2001, between Enron Energy and Agriventures
* Settlement Term: Agriventures will pay to Enron Energy
$366,317
O. Springco Metal Coating
* Contracts:
-- Enovative Energy Service Agreement, dated May 14, 2001,
between Enron Energy and Springco;
-- Enron Spot Firm Sales Agreement, dated May 23, 2001,
between Enron Energy and Springco;
-- Enovative Energy Service Agreement between Enron Energy
and Springco for delivery during March 2001 at $6.75 per
Mcf;
-- Spot Transaction between Enron Energy and Springco for
delivery during February 2001; and
-- Spot Transaction between Enron Energy and Springco for
delivery during April 2001.
* Settlement Term: Springco will pay to Enron Energy $146,400
P. Edmund Kim International, Inc.
* Contract: Enovative Firm Natural Gas Services and Sales
Agreement, dated September 19, 2001, between Enron Energy
and Edmund Kim
* Settlement Term: Edmund Kim will pay to Enron Energy
$205,000
Q. Newark Marriott Hotel
* Contract: Custom Direct Gas Sales Agreement between Enron
Energy, Marriot International, Inc. and Newark Marriott
Hotel
* Settlement Term: Newark will pay to Enron Energy $75,712
Edward A. Smith, Esq., at Cadwalader, Wickersham & Taft, in New
York, adds that the parties will mutually release all claims
related to their contracts. (Enron Bankruptcy News, Issue No. 92;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
EVENFLO CO.: Taps Lazard to Explore Strategic Alternatives
----------------------------------------------------------
Evenflo Company, Inc., announced that its Board of Directors has
decided to evaluate strategic alternatives for the Company,
including a possible sale. It has retained investment banking
firm Lazard to help it in this process. Kohlberg Kravis Roberts &
Co., has been the controlling shareholder of Evenflo since
1996.
"This is the right time in the Company's development to pursue new
opportunities," said Wayne Robinson, Chief Executive Officer.
"Evenflo is performing very well. Our intense focus on product
innovation, quality, safety and customer service enables us to
offer products that are winning in the marketplace today. We also
have terrific new products hitting retail stores now, laying the
foundation for further growth in 2004. The people of Evenflo have
brought remarkable innovation, creativity, and dedication to
their work, strengthening our position as a leader in our
industry."
"We have been very pleased to contribute to the progress that
Evenflo has made during the past several years," said KKR
executive and Evenflo Board member Thomas Uger. "With its current
management team, Evenflo has enjoyed both operational and
competitive strength and has developed a broad product line that
has been well-received by retailers and consumers. As Evenflo
makes plans to enter the next phase of its growth, we feel it is
the appropriate time for KKR to consider alternatives that
continue to provide the Company with strong financial support
while realizing value for our own investors."
Evenflo is a leading manufacturer and marketer of a full line of
juvenile products. Committed to innovation, safety and comfort
for more than 80 years, Evenflo has been the trusted name in
almost everything babies need to grow, go, play and thrive. The
Company's offerings include stationary activity centers, juvenile
furniture, infant feeding accessories, safety products, car seats
and travel systems. Generating approximately $300 million of net
sales in 2003, Evenflo offers its products in 61 countries around
the globe and has one of the broadest product offerings in the
juvenile products industry, meeting the needs of children from
birth to the pre-school years. In addition to the Evenflo brand,
the Company also markets selected products under the Snugli(R) and
Exersaucer(R) sub-brands. More information can be found at
http://www.evenflo.com/
* * *
Liquidity and Capital Resources
In its Form 10-Q filed on November 14, 2002, the Company said
its principal sources of liquidity are from cash balances, cash
flows generated from operations and from borrowings under the
Company's $105,000 revolving credit facility. The Company's
principal uses of liquidity are to provide working capital, meet
debt service requirements and finance the Company's strategic
investments. At September 30, 2001, the Company had $8,063 of
cash. The revolving credit facility subjects the Company to
certain restrictions and covenants related to, among other
things, minimum interest coverage, maximum leverage ratio
restrictions on capital expenditures, and no dividend payments.
At September 30, 2001, the Company had $67,400 in borrowings
outstanding under the revolving credit facility and utilized
$11,415 banker's acceptances and letters of credit. In addition,
the Company had $10,641 in stand-by letters of credit and $263
of letters of credit that have not yet been executed. The
Company had $15,281 in available borrowing capacity under its
revolving credit facility. In addition, the Company has
outstanding $110,000 of 11-3/4% Series B Senior Notes due 2006,
issued on August 20, 1998 and $40,000 liquidation preference of
Cumulative Preferred Stock that bears a variable rate of
interest indexed to the ten-year U.S. Treasury Rate. As of
September 30, 2001 the average dividend rate on the Cumulative
Preferred Stock was approximately 14.11%.
The syndicate of financial institutions under the revolving
credit facility and the Company agreed to amend certain
financial covenants included in the revolving credit facility
for the period commencing with the third fiscal quarter 2000.
This amendment modified financial covenants relating to an
interest coverage ratio and a leverage ratio, increased the
bankers' acceptance limit and increased the additional margin on
the "eurodollar rate" and the "base rate" interest calculation.
The syndicate of financial institutions under the revolving
credit facility and the Company agreed to further amend certain
financial covenants included in the revolving credit facility
for the period commencing with the fourth fiscal quarter of
2000. This amendment (i) modified financial covenants relating
to an interest coverage ratio and a leverage ratio, (ii) imposed
stricter limits on the Company's ability to make capital
expenditures, (iii) required that the Company pledge certain
additional assets, (iv) modified certain other sections of the
revolving credit facility to tighten the covenants on the
Company and (v) further increased the additional margin on the
"eurodollar rate" and the "base rate" interest calculation.
The syndicate of financial institutions under the revolving
credit facility and the Company agreed to amend certain
financial covenants included in the revolving credit facility
effective September 30, 2001. This amendment added a covenant to
limit available borrowings based on a borrowing base formula and
made available to the Company an additional $10,000 in Liquidity
Facility loans. As of the third amendment the Company has a
total of $105,000 in available borrowings. Management does not
believe the borrowing base formula will further limit the
available borrowings.
At September 30. 2001, the Company was not in compliance with
certain financial covenants contained in the credit facility as
amended on March 16, 2001. On October 15, 2001, the lenders
granted a waiver for the debt covenant violations through
January 31, 2002. The principle reasons the Company did not meet
these covenants were a continued slowdown in the general economy
and changes in customer ordering patterns and supply chain
problems that led to order cancellations and reduced net sales.
The Company implemented various steps to improve its
profitability and liquidity, including more effective cost
controls, the closing of a manufacturing facility, other cost
cutting initiatives, and the introduction of new products. In
addition, the Company has taken steps to fix the supply chain
problem by securing additional suppliers of key materials. There
can be no assurance, however, that these initiatives will enable
the Company to meet its financial covenants going forward. As a
result, the Company has classified all debt under its credit
facility as current.
EXCELLENT COMMERCIAL: Case Summary & Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Excellent Commercial Cleaning, Inc.
600 Crawford Street, Suite 330
Portsmouth, Virginia 23704
Bankruptcy Case No.: 04-70171
Type of Business: The Debtor is a certified janitorial company
with over twenty years of experience in
cleaning medical facilities, office buildings,
industrial complexes, shopping centers,
military bases and education facilities.
See http://www.excellentcleaning.com/
Chapter 11 Petition Date: January 12, 2004
Court: Eastern District of Virginia (Norfolk)
Judge: David H. Adams
Debtor's Counsels: Gregory D. Stefan, Esq.
United States Attorney's Office
101 W. Main Street, 8000 World Trade Ctr.
Norfolk, VA 23510
Tel: 757-441-6331
Fax: 757-441-3286
- and -
Karen M. Crowley, Esq.
Marcus, Santoro & Kozak, P. C.
1435 Crossways Boulevard, Suite 300
Chesapeake, VA 23320
Tel: 757-222-2224
Fax: 757-333-3390
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Presidential Financial $446,424
Corporation of Chesapeake
Watson Industries, LLC Janitorial Supplies $97,529
Virginia Community $89,198
Development
Fidelity Investments $65,370
Southern Sanitary Co, Inc. Janitorial Supplies $65,351
Watchovia-4386550720019645 Line of Credit $50,203
Anthem Blue Cross/Blue $47,449
Shield
IRS-FUTA $42,417
Man-U-Service Contract $32,794
Kubota Credit Corporation $30,133
Williams Mullen Clark & Legal $28,343
Dobbins
Optimum Choice $27,763
IRS-Social Security Taxes $26,560
Xpedx Janitorial Services $24,795
Albemarle Supply Company Janitorial Supplies $24,161
IRS-Social Security Taxes $23,430
LIUNA National Pension Fund $21,783
Suntrust 04300004431535816 $17,838
Beach Commercial Finance $17,687
Chase Auto Finance $16,294
EXCO RESOURCES: S&P Assigns Low-B Credit & Sr. Unsecured Ratings
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to exploration and production company EXCO Resources
Inc. At the same time, Standard & Poor's assigned its 'B' senior
unsecured debt rating to EXCO's proposed $300 million senior
unsecured notes due 2011.
The outlook is stable.
As of Sept. 30, 2003, Dallas, Texas-based EXCO has $423 million of
debt.
"The ratings on EXCO reflect its aggressive debt leverage, high
cost structure, and acquisitive growth strategy," noted Standard &
Poor's credit analyst Paul B. Harvey. "These factors are offset by
high drilling success rates, a significant hedging program to help
ensure profitability, and a long reserve life," he continued.
EXCO is a small (568 billion cubic feet equivalent pro forma for
its acquisition of North Coast Energy Inc.) E&P company whose
strategy is to acquire and exploit long-lived, onshore properties
offering relatively steady production, low-risk drilling, and a
high level of operatorship. Reserves are geographically diverse,
with 10 fields or areas comprising nearly 70% of reserves as of
Sept. 30, 2003. EXCO's capital expenditures are largely devoted to
the development and exploitation of its reserves, of which roughly
86% are proved developed and 75% are proved developed producing.
Recent drilling activity resulted in a mediocre, three-year
average reserve replacement of 94% through the drillbit, although
2002 at 149% for 76 cents per thousand cubic feet equivlent is
much more competitive.
EXCO's financial profile is very aggressive. A high cost structure
combined with aggressive debt leverage and an acquisition-based
growth strategy will depend on EXCO's ability to successfully
hedge at prices considerably higher than the historical average.
Near-term profitability is expected to be a solid, 1.6x EBIT
coverage of interest expense, and is fairly secure given that EXCO
has hedged over 80% of 2004 proved developed producing production
and roughly 50% of 2005 PDP production.
Likewise, hedging supports good near-term EBITDA interest coverage
of around 3.5x; nevertheless, without hedges EBIT and EBITDA
coverage would weaken to below 1x and around 2.5x, respectively,
at Standard & Poor's midcycle prices of $20.00 WTI oil and $3.25
Henry Hub natural gas. EXCO's very aggressive capital structure is
reflected in its high debt leverage of around 70% and roughly 3.5x
debt to EBITDA, with some modest, near-term improvement expected.
The stable outlook reflects the near-term earnings support
provided by EXCO's hedged production and the low-risk nature of
its development and exploitation operations.
FACTORY 2-U STORES: Files for Chapter 11 Protection in Delaware
---------------------------------------------------------------
Factory 2-U Stores, Inc. (Nasdaq: FTUS), in order to implement a
comprehensive operational and financial restructuring, voluntarily
filed a petition to reorganize under Chapter 11 of the U.S.
Bankruptcy Code. The filing in Wilmington, Delaware is intended to
enable the Company to enhance its liquidity, reduce costs and
focus on generating profitable growth.
Factory 2-U is open and conducting normal business operations. In
accordance with the Bankruptcy Code, suppliers and vendors are
expected to be paid in full and under normal conditions for all
goods and services provided after today's filing. The Company has
filed motions with the Bankruptcy Court to pay employees as usual,
honor gift cards and layaway, and continue its refund policy.
Factory 2-U has received a commitment for a $45 million debtor-in-
possession financing facility from The CIT Group/Business Credit,
Inc. and GB Retail Funding, LLC. Subject to Court approval, the
Company intends to utilize this capital, in addition to cash flow
from operations, to fulfill its business obligations during the
Chapter 11 process and ensure that its stores are well stocked
with quality merchandise that appeals to its customers.
The Company also announced that Norman G. Plotkin and John W.
Swygert have been appointed by the Board of Directors as Chief
Executive Officer and Chief Financial Officer, respectively. Each
had previously been named to his position on an interim basis. In
addition, Melvin C. Redman has been named Chief Operating Officer,
completing the formation of Factory 2-U's Executive Committee,
which has responsibility for the Company's day-to-day business
affairs. The Executive Committee also includes A.J. Nepa,
Executive Vice President, General Merchandise Manager.
Mr. Plotkin said: "Following my recent appointment as CEO, our
senior management team has taken a hard look at our operations and
financial position. We believe -- and our Board of Directors
concurs -- that the Company has the foundation necessary for long-
term success: a solid operating strategy, a portfolio of
productive stores in good locations, and a strong management team
committed to achieving our objectives. We believe that initiating
the Chapter 11 process at this time is appropriate and necessary,
to enable us to move quickly and decisively to address our current
challenges and position the Company for future success."
He continued, "Factory 2-U has proven in the past that we can
perform extremely well by providing our traditional customer base
with branded apparel and other basic items at a great value. Our
team believes strongly that, with the right merchandise mix and
marketing plans, this strategy will be successful for us once
again in the future."
Factory 2-U has retained Crossroads, LLC, an international
consulting firm specializing in assisting underperforming
companies, as its restructuring and financial advisor in
connection with the Chapter 11 process.
Dennis I. Simon, Managing Principal of Crossroads, said: "Factory
2-U is a fundamentally sound business in need of operational and
financial improvements that can only be achieved through the
Chapter 11 process. We believe that the actions announced today
will not only provide the Company with greater liquidity and
financial flexibility, but also give management the time and
resources they need to successfully implement their business
strategy. I believe strongly that the restructuring process will
be productive and that we can develop a reorganization plan that
maximizes value."
In light of the Company's Chapter 11 filing, Factory 2-U expects
to begin filing monthly operating reports with the Bankruptcy
Court shortly. The Company intends to file these reports
simultaneously with the Securities and Exchange Commission on
Forms 8-K. Accordingly, the Company has discontinued its mid-month
sales updates and monthly sales press releases. Investor
information is available on the Company's Web site at
http://www.factory2-u.com/
Executive Committee
Members of Factory 2-U's Executive Committee are:
-- Norman G. Plotkin, Chief Executive Officer
Prior to being named Chief Executive Officer of Factory 2-U, Mr.
Plotkin was Executive Vice President, Store Development, Human
Resources and General Counsel. For a period in 2002 he also had
responsibility for store operations. Prior to joining the Company
in July 1998 as Senior Vice President, Store Development and
General Counsel, Mr. Plotkin was President of Normark Real Estate
Services, Ltd., a commercial real estate firm based in Des
Plaines, Illinois. From 1988 to 1996, Mr. Plotkin was Senior Vice
President of Finance and Administration and General Counsel of
Handy Andy Home Improvement Centers, Inc. Mr. Plotkin was engaged
in the private practice of law from 1978 to 1988.
-- Melvin C. Redman, Executive Vice President and Chief Operating
Officer
Mr. Redman joined Factory 2-U in January 2003 as Executive Vice
President, Store Operations and Distribution. He has extensive
experience in discount store operations, including leading the
successful turnaround of a group of former Woolco stores in Canada
that were acquired by Wal-Mart Stores. Prior to joining Factory 2-
U, he was President and Managing Partner of Alliance Consulting,
Inc., a management consulting firm he formed in 1995. From 1991 to
1995, Mr. Redman was Senior Vice President of Store Planning and
Store Operations for Wal-Mart Stores and from December 1984 to
October 1991 he was Regional Vice President of Store Operations
for Wal-Mart Stores.
-- A.J. Nepa, Executive Vice President, General Merchandise
Manager
Mr. Nepa joined Factory 2-U in November 2003. Mr. Nepa has
approximately 30 years of merchandising experience with
department, discount and off-price retail store chains. Most
recently, Mr. Nepa was the General Merchandise Manager for Forman
Mills, a privately held off-price retail chain headquartered in
Pennsylvania. He previously served as Senior Vice President and
General Merchandise Manager of One Price Clothing Stores from 1998
to 2000 and General Merchandise Manager for It's Fashion, a
division of Cato Stores, from 1992 to 1998.
-- John W. Swygert, Senior Vice President, Chief Financial Officer
Mr. Swygert's current tenure with Factory 2-U began in January
1999 and he has served as Vice President, Finance & Planning; Vice
President and Controller; Director of Accounting; and Manager,
Special Projects. He originally joined the Company in 1995 and
served as Director of Budgeting and Financial Planning until 1997.
Mr. Swygert previously held various positions, including
Controller, with Capin Mercantile Corporation, which was acquired
by Factory 2-U in 1995. From 1997 to 1999, Mr. Swygert was Manager
of Business Development and Analysis of Petco Animal Supplies,
Inc.
About Factory 2-U Stores, Inc.
Factory 2-U Stores, Inc. operates 243 "Factory 2-U" off-price
retail stores which sell branded casual apparel for the family, as
well as selected domestics and household merchandise at prices
which generally are significantly lower than the prices offered by
its discount competitors. The Company operates 32 stores in
Arizona, 2 stores in Arkansas, 65 stores in southern California,
63 stores in northern California, 1 store in Idaho, 8 stores in
Nevada, 9 stores in New Mexico, 1 store in Oklahoma, 14 stores in
Oregon, 34 stores in Texas, and 14 stores in Washington.
FACTORY 2-U STORES: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Factory 2-U Stores, Inc.
aka Factory 2-U
faka General Textiles, Inc.
faka General Textiles
aka Family Bargain Corporation
faka Family Bargain Center
4000 Ruffin Road
San Diego, California 92123-1866
Bankruptcy Case No.: 04-10111
Type of Business: The Debtor operates a chain of off-price
retail apparel and housewares stores in 10
states, mostly in the western and southwestern
US, sells branded casual apparel for the
family, as well as selected domestics,
footwear, and toys and household merchandise.
See http://www.factory2-u.com/
Chapter 11 Petition Date: January 13, 2004
Court: District of Delaware
Judge: Peter J. Walsh
Debtor's Counsels: M. Blake Cleary, Esq.
Robert S. Brady, Esq.
Young, Conaway, Stargatt, & Taylor, LLP
1000 West Street, 17th Floor
P.O. Box 391
Wilmington, Delaware 19899-0391
Tel: 302-571-6600
Fax: 302-571-1253
Total Assets: $136,485,000
Total Debts: $73,536,000
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Landmark Secondary Partners Subordinated Notes $5,410,725
IX
760 Hopmeadow Street
Simsbury, CT 06070
Scott Connors
American Endeavor Fund Subordinated Notes $5,294,373
Limited
c/o KB(US) Asset Managers
LLC
75 Wall Street
New York, NY 10005
Richard Wolf
Valassis Communications, Trade $2,218,982
Inc.
19975 Victor Parkway
Livonia, MI 48152
Jeff Blackman
Remedy Trade $1,549,275
File No. 92460
Los Angeles, CA 90074
Julie Osuna
Royal & SunAlliance Trade $1,394,431
P.O. Box 60010
Charlotte, NC 28260
Tom Biede
Prestige Global Co. Trade $815,994
1350 Broadway, Suite 1505
New York, NY 10018
Horizon Media Inc. Trade $542,219
Lock Box 10409
P.O. Box 10409
Newark, NJ 07193
One Step Up Trade $403,228
1407 Broadway 32nd Floor
New York, NY 10018
Harry Adjme
Kardar Industries Inc. Trade $382,722
4587 Maywood Ave
Vermon, CA 90058
A & B Honda Group Inc. Trade $376,701
1607 S. Campus Ave.
Ontario, CA 91761
Longstreet Trade $367,782
5 Paddock Street
Avenel, NJ, 07001
Elliot Tawille
Style Asia Inc. Trade $310,112
101 Moonachie Ave.
Moonachie, NJ 07074
OKK Trading Inc. Trade $287,770
5500 E. Olympic Blvd.
Suite A
Commerce, CA 90058
Frito Lay Trade $279,896
4953 Paramont Drive
San Diego, CA 92123
C W C Inventories Inc. Trade $278,041
2644 Metro Blvd.
St. Louis, MO 63043
Mark Gingherg
IFE Apparel, Inc. Trade $277,605
12 Horizon Blvd.
S. Hackensack, NJ 07606
Contact name - David Jung
Jordache Trade $270,746
1400 Broadway, 14th Floor
new York, NY 10018
Isaac Mossay
Apparel Trading Trade $266,038
International
141 West 36th Street
11th Floor
New York, NY 10018
Maurt Agimasli
Step by Step Fashion Trade $257,463
2078 Compton
Los Angeles, CA 90011
Republic Import Co., Inc. Trade $231,162
FLEMING COMPANIES: Wants to Cancel Policies on Former Employees
---------------------------------------------------------------
The Fleming Debtors seek Judge Walrath's authority to, in their
discretion, cancel life insurance policies currently covering
former employees, officers and directors.
In the ordinary course of business, the Debtors purchase life
insurance policies issued by various life insurance providers to
cover certain of their key employees, officers and directors.
The purpose of these policies is to help the Debtors mitigate
harm to their business that might be caused by the untimely death
of those individuals. The Debtors own these policies and, as
such, have the right to cancel the policies and receive the cash
surrender value of the policies upon cancellation.
Ordinarily, certain employees, officers and directors ceased
working for or on behalf of the Debtors, thus, eliminating the
Debtors' need for the Life Insurance Policies covering those
individuals. The Debtors currently own 40 policies. The cash
surrender value of these policies is estimated to be $5,000,000.
Upon cancellation, the Debtors will be entitled to receive the
money for their estates.
Before the Petition Date, the Debtors normally cancel the
policies in compliance with the terms of the cancellation
provision in each, and collect the cash surrender value. The
Debtors believe that the cancellation of the Life Insurance
Policies now is consistent with common business practice and will
be merely a continuation of their prepetition actions.
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. 21; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
FRANKLIN TEMPLETON: Fitch Affirms Low-B Rating on Class D Notes
---------------------------------------------------------------
Fitch Ratings affirms the ratings of Franklin Templeton CLO I,
Ltd. The transaction is a cash flow collateralized loan obligation
that enables investors to gain exposure to a diversified, high-
yield loan portfolio. The portfolio is managed by Franklin
Advisors, Inc.
The following securities have been affirmed:
-- $282,000,000 class A-1 notes 'AAA';
-- $15,000,000 class A-2 notes 'AAA';
-- $35,000,000 class B notes 'A-';
-- $23,000,000 class C notes 'BBB';
-- $16,000,000 class D notes 'BB-'.
As stated in the November 2003 transaction report, Franklin has
$331.7 million in collateral debt securities. In addition, the
transaction holds $54.3 million in principal proceeds, which will
be reinvested in additional collateral debt securities by the
portfolio manager. The A, B, C and D overcollateralization tests
are 127.1%, 113.7%, 106.4%, and 101.8%, respectively. The A, B, C
and D interest coverage tests are 283.2%, 247.3%, 237.5, and
202.3%, respectively. All coverage tests are currently passing.
The weighted average rating factor of the transaction is 2297
('B+/B'). There are $9 million (2.7%) in defaulted securities
outstanding.
A review of the transaction has led to the conclusion that the
ratings of the notes are representative of the current credit risk
to investors. Franklin benefits from strong cash flows associated
with the high-yield loans, below average defaults, and the general
recovery in the market value of the syndicated loans. The
portfolio manager's buy-and-hold strategy and careful underwriting
of the credits have also positively contributed to the performance
of Franklin. Excess spread continues to be strong with quarterly
distributions to the preference shares being consistently above $2
million.
The portfolio manager has been successful in 2003 of managing the
assets of Franklin. However, the current short supply of new loans
and the premium placed on secondary market trades in the
syndicated loan market, as well as historically low loan spreads
continue to create a challenging investment climate for cash rich
CLO managers. As such, Fitch will continue to monitor this
transaction.
GENCORP: Proposed $100M Subordinated Notes Gets S&P's B+ Rating
---------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' rating to
GenCorp Inc.'s proposed $100 million contingent convertible
subordinated notes due 2024 and placed the ratings on CreditWatch
with negative implications. Standard & Poor's other ratings on
GenCorp, including the 'BB' corporate credit rating, remain on
CreditWatch with negative implications, where they were placed
on Jan. 9, 2004.
The proceeds from the proposed notes will be used to pay down
outstanding balances on the company's revolver, prepay scheduled
2004 amortization on its term loan A, and for general corporate
purposes. The size of the offering can be increased $25 million at
the option of the initial purchasers. The notes are convertible
into shares of GenCorp's common stock upon the occurrence of
certain events and will be sold under SEC Rule 144A with
registration rights. The company's debt to capital will increase
slightly to around 60%, due to the modest increase in debt.
"The CreditWatch review is based on expectations that problems at
GenCorp's GDX Automotive unit and higher pension expense will
likely result in deterioration 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.
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.
GENCORP: Fitch Assigns B Rating to Proposed Convertible Notes
-------------------------------------------------------------
Fitch Ratings has assigned a rating of 'B' to GenCorp's proposed
$100 million convertible subordinated notes and has affirmed the
'BB' rating on GY's bank credit facilities, 'BB-' rating on GY's
senior subordinated notes and the 'B' rating on GY's existing
5-3/4% convertible subordinated notes.
The Rating Outlook is Stable.
GY intends to use the proceeds of the proposed $100 million
convertible subordinated notes to pay down a portion of GY's
outstanding bank facilities and for general corporate purposes.
Overall, Fitch considers this transaction to be relatively neutral
to GY's credit profile since approximately half of the new debt
will be used to pay down amounts outstanding under the revolver
and Term Loan A. Fitch expects that GY will continue to generate
weak cash flow in 2004 so the repayment of amounts drawn under the
revolver and the prepayment of a portion of Term Loan A will
provide GY additional financial flexibility in the current fiscal
year. In order to proceed with the note issue, GY received consent
from the senior secured lenders relating to the application of
note proceeds and certain financial covenant modifications.
Fitch's primary concern for the ratings continues to center on GDX
Automotive's weak results in 2003 which were below Fitch's
expectations. Revenues and operating income in 2003 were affected
by lower volumes, increased pricing concessions and lower non-cash
pension income. However, some of the weakness experienced in 2003
at this business reflects non-recurring events such as a labor
strike in East Germany and line difficulties at Volkswagen.
Subsequently, GY has addressed some of the issues at its
automotive segment by making personnel changes, approving the
closure of a French manufacturing facility and evaluating
additional cost reduction initiatives. However, Fitch remains
concerned that further restructuring actions will be needed
placing additional strain on GY's limited cash flow.
While GY has taken some steps to improve operations, Fitch expects
GDX Automotive to continue to experience revenue and margin
contraction as original equipment manufacturers continue to exert
pricing pressure on their suppliers. Ford Motor Co. and General
Motors Corp., which represent approximately 50% of GDX's revenues,
have restated their desire to reduce costs and require suppliers
to either meet or beat the pricing levels of low-cost rivals or
risk losing the business. While it would be difficult for the OEMs
to change suppliers on existing vehicle platforms, Fitch believes
that GDX may need to make additional pricing concessions in order
to stay competitive and win new vehicle platforms from the OEMs.
Additionally, Fitch believes that vehicle production levels in the
US and Europe are not likely to experience much growth in 2004 so
any margin improvement at GDX Automotive will have to come from
operational improvements.
GY's ratings also reflect solid performance at Aerospace & Defense
and AFC, the recent ARC Propulsion acquisition, the company's
position in the favorable defense spending environment, a fully
funded pension plan, and the additional cash flow and cushion that
may be derived from continued development of the company's sizable
real estate holdings. In fact, despite poor performance at GDX
Automotive resulting in a reduction in earnings guidance for the
third quarter, GY expects to exceed its earnings guidance for the
full year primarily as a result of increased real estate
transactions. Additional concerns for the ratings center on GY's
low free cash flow, limited liquidity (will be partially mitigated
by the proposed note issue), potential acquisition integration
issues and environmental liabilities.
As of August 31, 2003, GY's financial flexibility included $61
million in cash and $97 million of availability under its domestic
and foreign credit facilities, offset by $44 million in current
maturities and short-term debt. Including the proceeds of the note
issue, GY's liquidity position will increase by approximately $70
to $75 million. GY's leverage, as defined by debt to EBITDAP, rose
slightly from 3.7 times in 2002 to 4.0x for the latest 12 months
ending August 31, 2003. Interest coverage for the same period was
5.8x, down from 6.9x in fiscal year 2002. Credit protection
measures have deteriorated due to weaker performance at GDX
Automotive and the additional debt incurred in GY's two most
recent acquisitions. Fitch expects that GY's leverage and interest
coverage will further deteriorate in 2004 due to the additional
debt and interest expense associated with the proposed $100
million note issue, in addition to the additional interest expense
from recent acquisition related debt.
GENERAL CHEMICAL: PMM GCG Investment Reports 37.7% Equity Stake
---------------------------------------------------------------
On May 14, 2001, PMM GCG Investment LLC purchased 7,250,581 shares
of the common stock and 3,047,985 shares of the Class B Common
Stock of General Chemical Group Inc. by subscribing to such shares
in a rights offering by the Company. In the Rights Offering, the
Company granted to holders of its common stock and Class B common
stock, at no cost, 0.77 rights for each share of common stock and
Class B common stock they owned as of the close of business on
April 16, 2001. Each whole right entitled the holder to purchase
one share of common stock or Class B common stock, as applicable,
for a subscription price of $0.62 per share. In addition, pursuant
to the terms of the Rights Offering, holders who exercised their
rights in full also had the opportunity to subscribe for
additional shares that were not purchased by other eligible rights
holders.
PMM GCG Investment LLC purchased shares in the Rights Offering by
exercising subscription rights issued in respect of the shares of
common stock and Class B common stock owned by Paul M. Montrone
and the Montrone family trusts. As holders of a total of 5,953,000
shares of common stock and 3,958,421 shares of Class B common
stock, Mr. Montrone and the Montrone family trusts received rights
to subscribe for 4,583,811 shares of common stock and 3,047,985
shares of Class B common stock. Upon such receipt, 7,513,986 of
these rights were transferred to PMM GCG Investment LLC, which
exercised all such subscription rights. In addition, PMM GCG
Investment LLC purchased an additional 2,784,580 shares of common
stock through the exercise of its over-subscription privilege.
PMM GCG Investment LLC purchased these shares for a total
subscription price of $6,385,111. PMM GCG Investment LLC funded
this purchase with $985,111 provided by Bayberry Trust (the sole
member of PMM GCG Investment LLC) and with the proceeds of a $5.4
million loan from Mr. Paul M. Montrone.
All other shares of common stock beneficially owned by PMM GCG
Investment LLC, the Montrone and Montrone family trusts were
acquired prior to the registration of the common stock under the
Securities Exchange Act of 1934.
Paul M. Montrone, the Chairman of the Board of General Chemical
Group, and the Montrone family trusts, owned approximately 46.9%
of the outstanding shares of the Company prior to the Rights
Offering, which shares represented 80.4% of the aggregate voting
power of the Company. PMM GCG Investment LLC purchased 7,250,581
shares of common stock and 3,047,985 shares of Class B common
stock through the exercise of subscription rights granted to Paul
M. Montrone and the Montrone family trusts in the Rights Offering.
PMM GCG Investment LLC acquired these shares because Paul M.
Montrone considered such purchases at the subscription price of
$0.62 per share to represent a beneficial investment opportunity.
Sandra G. Montrone and Paul M. Meister have not purchased any
shares of General Chemical Group in the Rights Offering or
otherwise.
Sandra G. Montrone is the co-trustee of certain Montrone family
trusts and Paul M. Meister is a co-trustee of one such trust.
Paul M. Montrone beneficially owns 13,091,291 shares of common
stock and 7,006,406 shares of Class B common stock. PMM GCG
Investment LLC beneficially owns 7,250,581 shares of common stock
and 3,047,985 shares of Class B common stock. Sandra G. Montrone
beneficially owns 4,706,081 shares of common stock and 1,869,790
shares of Class B common stock. Paul M. Meister is a co-trustee of
the 1996 GRAT, which beneficially owns 1,238,987 shares of common
stock and 829,140 shares of Class B common stock. By virtue of his
position as a co-trustee of the 1996 GRAT, Mr. Meister may be
deemed a beneficial owner of such shares; Mr. Meister, however,
disclaims beneficial ownership of such shares. Mr. Meister owns
117,000 shares directly.
The number does not include the 177,000 shares held by the
charitable foundation.
The shares are owned as follows: (i) 1,182,419 shares of common
stock are held directly by Paul M. Montrone; (ii) 2,088,631 shares
of Class B common Stock are held directly by Paul M. Montrone;
(iii) 53,100 shares of common stock are held directly by Sandra G.
Montrone; (iv) 5,310 shares of common stock are held by a trust of
which Paul M. Montrone is the sole trustee and a beneficiary; (v)
1,238,987 shares of common stock and 829,140 shares of Class B
common stock are held by a grantor retained annuity trust formed
in 1996 (the "1996 GRAT"), of which Paul M. Montrone is the
settlor and annuity beneficiary and Sandra G. Montrone and Paul M.
Meister are co-trustees with shared investment and voting
discretion; (vi) 1,201,687 shares of common stock and 811,283
shares of Class B common stock are held by a grantor retained
annuity trust formed in December 1998 (the "1998 GRAT"), of which
Paul M. Montrone is the settlor and annuity beneficiary, and
Sandra G. Montrone and Paul M. Montrone are co-trustees with
shared investment and voting discretion, (vii) 1,212,307 shares of
common stock and 229,367 shares of Class B common stock are held
by a grantor retained annuity trust formed in March 1999 (the
"1999 GRAT"), of which Paul M. Montrone is the settlor and annuity
beneficiary and Sandra G. Montrone and Paul M. Montrone are co-
trustees with shared investment and voting discretion; (viii)
1,000,000 shares of common stock are held by Sewall Associates
Family, L.P., a Delaware limited partnership of which Sandra G.
Montrone and Paul M. Montrone are the sole general partners with
shared investment and voting discretion and Paul M. Montrone and a
grantor retained annuity trust formed in January 2000 (of which
Paul M. Montrone is the settlor and annuity beneficiary and Sandra
G. Montrone and Paul M. Montrone are co-trustees with shared
investment and voting discretion) are the limited partners; (ix)
7,250,581 shares of common stock and 3,047,985 shares of Class B
common stock are held by PMM GCG Investment LLC. An additional
177,000 shares of common stock are held by a charitable
foundation, of which Paul M. Montrone is a director and Sandra G.
Montrone is a director and officer. By virtue of their positions
with the foundation, Paul M. Montrone and Sandra G. Montrone may
be deemed to be beneficial owners of the shares of common stock
held by the foundation. Paul M. Montrone and Sandra G. Montrone
disclaim any beneficial ownership in the 177,000 shares of common
stock held by the foundation.
Paul M. Montrone has sole voting and dispositive power with
respect to the shares of common stock and Class B common stock
held directly by him, the shares of common stock held by the
Trust, and the shares of common stock and Class B common stock
held by PMM GCG Investment LLC.
Paul M. Montrone and Mrs. Montrone share voting and dispositive
power with one another, as co-trustee or general partners, with
respect to the shares held by the 1998 GRAT, the 1999 GRAT and
Sewall Associates Family L.P. Sandra G. Montrone and Paul M.
Meister share voting and dispositive power with one another, as
co-trustees, with respect to the shares held by the 1996 GRAT.
PMM GCG Investment LLC has sole voting and dispositive power with
respect to the shares of common stock and Class B common stock
held by it. Sandra G. Montrone has sole voting and dispositive
power with respect to the shares of common stock held directly by
her.
Each share of common stock entitles the holder to one vote and
each share of Class B common stock entitles the holder to ten
votes at each annual or special meeting of stockholders, in the
case of any written consent of stockholders, and for all other
purposes, including the election of directors of the Company. The
common stock and Class B common stock are substantially identical
except for the disparity in voting power, and the holders of
common stock and Class B common stock vote as a single class on
all matters submitted to a vote of stockholders except as
otherwise provided by law.
Assuming no conversion of any of the outstanding shares of Class B
common stock, the shares of stock and for which Paul M. Montrone
has or shares voting power constitutes 83.1% of the aggregate
voting power of the Company. Assuming no conversion of any of the
outstanding shares of Class B common stock, the shares of stock
for which PMM GCG Investment LLC has sole voting power constitutes
37.7% of the aggregate voting power of the Company.
PMM GCG Investment LLC financed the subscription price for the
shares of the Company purchased in the Rights Offering through a
$985,111 cash contribution by Bayberry Trust and a $5.4 million
borrowing from Paul M. Montrone evidenced by a promissory note.
The Note has an interest rate of 4.77% per annum and matures on
May 14, 2010.
At September 30, 2003, The General Chemical Group Inc.'s balance
sheet shows a working capital deficit of about $126 million, and a
total shareholders' equity deficit of about $135 million.
The General Chemical Group Inc., is a leading North American
supplier of soda ash and calcium chloride to a broad range of
industrial and municipal customers. The primary end markets for
soda ash include glass production, sodium-based chemicals,
powdered detergents, water treatment and other industrial end
uses. Calcium chloride is mainly used for dust control and roadbed
stabilization during the summer and melting ice during the winter.
The Company's recent financial performance has been negatively
impacted by lower soda ash prices, rising energy costs and the
weaker economic environment. The Company failed to make the
interest payments on its Subordinated Notes that were due on
May 1, 2003 and November 1, 2003. In addition, since April 1, 2003
the Company has not been in compliance with certain financial and
other covenants contained in its Credit Agreement, dated as of
April 30, 1999, among General Chemical Industrial Products, Inc.,
as Borrower, the banks and other financial institutions designated
as lenders, JPMorgan Chase (formerly The Chase Manhattan Bank), as
Administrative Agent, JPMorgan Chase of Canada (formerly The Chase
Manhattan Bank of Canada), as Canadian Administrative Agent, the
Bank of Nova Scotia, as Syndication Agent, and The First National
Bank of Chicago, as Documentation Agent. At September 30, 2003,
the Company owed $109.7 million, including accrued and unpaid
interest, in respect of its Subordinated Notes and $55.4 million
under its Senior Credit Agreement, all of which obligations are
classified as current. The Company has commenced discussions with
its creditors with respect to the restructuring of the Company's
indebtedness. The Company expects that such restructuring, if
successfully concluded, will result in the extinguishment of
the Company's existing equity interests and a reduction in the
amount of the Company's indebtedness to a level that the Company
believes that it can service out of its existing operations.
However, there can be no assurance that the Company will be able
to reach agreement with its creditors on the terms of any
restructuring; if no such agreement is reached, the Company would
be unable to repay its outstanding indebtedness and would have to
explore other alternatives, including a reorganization of the
Company, a sale of the Company's assets pursuant to Chapter 11 of
the United States Bankruptcy Code or a liquidation pursuant to
Chapter 7 of the Bankruptcy Code.
GENZYME CORP: Reports Strong Revenue Growth for Q4 and FY 2003
--------------------------------------------------------------
Genzyme Corporation (Nasdaq: GENZ) reported unaudited revenues for
the fourth quarter and full year at the JPMorgan 22nd Annual
Healthcare Conference in San Francisco.
In a presentation Monday, Chairman and Chief Executive Officer
Henri A. Termeer said that Genzyme's revenue rose to approximately
$1.58 billion in 2003, driven by two new product launches, and the
continued global expansion and growth of the company's primary
business units.
Revenue totals include only Genzyme General in the first and
second quarters, and the entire corporation after June 30, 2003,
when the company consolidated its financial structure by
eliminating its tracking stocks. In 2002, Genzyme General
recorded revenues of $1.08 billion.
Genzyme will report full audited financial results for the fourth
quarter and year on February 19, when it will also provide
detailed financial guidance for 2004.
"We are pleased to report a very productive year in 2003," said
Mr. Termeer. "Among our many major accomplishments was the
approval and launch of two important therapeutic products, and the
simplification of our financial structure. With the continuing
sales momentum of all our leading products, we enter 2004 with
confidence. Our strong top-line performance also allows us to
make larger investments in our research and development portfolio
and our worldwide infrastructure, which will help fuel our growth
in the years to come."
Genzyme achieved solid revenue growth across all of its major
product lines in 2003. Unaudited total revenues for the fourth
quarter were approximately $479 million, compared with $298
million for the Genzyme General division in the fourth quarter of
2002.
Sales of Renagel(R) (sevelamer hydrochloride), a phosphate binder
for patients with chronic kidney disease on hemodialysis, grew to
approximately $81 million in the fourth quarter of 2003, up 59
percent from revenues of $50.8 million a year ago. Renagel
revenues for 2003 totaled approximately $281 million, up from
$156.9 million in 2002. International growth was strong, led by
Europe and Brazil. The product was also launched in the second
quarter in Asia by Chugai Pharmaceutical Co., Ltd. and Kirin
Brewery Co., Ltd., and bulk sales of sevelamer to Chugai
contributed to Genzyme's 2003 revenues. U.S. sales were driven by
growth in the number of patients on treatment, and an increase in
the average dose that patients are taking.
During 2003 the National Kidney Foundation published its new
K/DOQI guidelines, which identified Renagel as a first-line option
for lowering phosphorus, and recommended aggressive new targets
for phosphorus and calcium levels. Genzyme also completed a major
expansion of its Renagel manufacturing capabilities in 2003, and
received regulatory approval of two plants late in the year.
Utilization of these facilities is expected to result in higher
product margins beginning in 2004.
Total Therapeutics revenue for the fourth quarter reached
approximately $243 million, a 38 percent increase from $176.4
million for the same quarter of 2002. For the year, Therapeutics
revenue rose to approximately $865 million, an increase of 28
percent from the $675.3 million achieved in 2002.
Sales of Fabrazyme(R) (agalsidase beta), an enzyme replacement
therapy for patients with Fabry disease, were approximately $32
million for the fourth quarter, compared with $8.9 million in the
same quarter a year ago. Revenue for the year totaled
approximately $81 million, more than triple the $26.1 million
revenue total from 2002. Fabrazyme sales in the United States
totaled approximately $12.6 million in the fourth quarter, and
$19.5 million since the US product launch in June. Sales in
Europe and other international markets continued to grow well. In
the fourth quarter, these markets accounted for approximately $20
million, an increase of 30 percent from the previous quarter. For
the year, international sales totaled approximately $61 million.
Approximately 975 patients are currently being treated on
Fabrazyme in 31 countries, and Genzyme expects to launch the
product in Japan during the first half of 2004.
Sales of Cerezyme(R) (imiglucerase for injection), an enzyme
replacement therapy for patients with Type 1 Gaucher disease,
increased in the fourth quarter to approximately $198 million,
representing 25 percent growth from $158.9 million in the fourth
quarter of 2002. For the year, Cerezyme sales increased 19
percent to approximately $739 million, from $619.2 million for the
previous year. Cerezyme's revenue growth in 2003 was driven by a
favorable European exchange rate, and by increasing international
sales volume.
Revenue from sales of Aldurazyme(R) (laronidase) enzyme
replacement therapy for patients with MPS I totaled approximately
$6.7 million in the fourth quarter, and approximately $11.5
million for the year, in line with guidance given at the time of
European launch in June, 2003. Genzyme is commercializing
Aldurazyme under a joint venture with BioMarin Pharmaceutical Inc.
and, therefore, Aldurazyme sales are not included as part of
Genzyme's total revenues. The product is approved in the United
States and Europe, and the companies also recently began to treat
patients in Taiwan and Latin America.
Revenue from Thyrogen(R) (thyrotropin alfa for injection), an
adjunctive diagnostic used in follow-up screenings of thyroid
cancer patients, rose to approximately $12.5 million in the fourth
quarter, up from $8.1 million in the same quarter of 2002. For
the year, Thyrogen sales totaled approximately $43 million, more
than 50 percent higher than sales of $28.3 million in 2002. This
product's growth reflects its approval in new markets, strong
patient demand, and increased market penetration in the United
States.
Revenue in the Biosurgery business unit totaled approximately $54
million in the fourth quarter, and approximately $113 million for
the second half of the year, following the consolidation of the
financial structure. Sales of this unit's leading product,
Synvisc(R) (hylan G-F 20), used to treat knee pain from
osteoarthritis, rose to approximately $26 million in the fourth
quarter, compared with $18.4 million in the same quarter of 2002.
Synvisc sales totaled approximately $56 million for the second
half of the year, following the consolidation of Genzyme's
financial structure.
Revenue in the Transplant business unit totaled approximately $35
million in the fourth quarter, and $42 million since the merger
with SangStat Medical Corp. was completed on Sept. 12, 2003.
Sales of Thymoglobulin(R) (anti-thymocyte globulin, rabbit) and
Lymphoglobuline(R) (anti-Thymocyte-globulin, equine), used in
conjunction with immunosuppressive drugs to treat acute rejection
in renal transplant patients, totaled approximately $25 million in
the fourth quarter. Since the merger with SangStat was completed,
sales of these products totaled approximately $30 million.
Revenue from diagnostic products and services was approximately
$48 million for the fourth quarter, up from revenues of $45.4
million for the fourth quarter a year earlier. For the year,
diagnostics sales were approximately $191 million, an 11 percent
increase from $172.8 million in 2002.
In addition to presenting 2003 revenue totals, Mr. Termeer
highlighted the company's next wave of growth drivers, including
Myozyme(R) (alglucosidase alfa), an enzyme replacement therapy
being developed for the treatment of Pompe disease, DX-88 being
developed in a joint venture with partner Dyax Corp. for the
treatment of hereditary angioedema, and other product candidates.
"We are proud of the high level of productivity in our internal
research and development programs, which has resulted in a number
of important products now available for patients, and similarly
exciting candidates now in the clinic, including Myozyme and Genz-
29155," Mr. Termeer said. "While these development programs move
forward we continue to explore external opportunities to add to
our product portfolio or pipeline in our therapeutic areas of
focus, including cancer and immune-mediated diseases."
Genzyme Corporation (S&P, BB+ Subordinated Debt Rating, Positive)
is a global biotechnology company dedicated to making a major
positive impact on the lives of people with serious diseases. The
company's broad product portfolio is focused on rare genetic
disorders, renal disease, and osteoarthritis, and includes an
industry-leading array of diagnostic products and services.
Genzyme's commitment to innovation continues today with research
into novel approaches to cancer, heart disease, and other areas of
unmet medical need. Genzyme's more than 5,000 employees worldwide
serve patients in more than 80 countries.
GLIATECH: January 26 Fixed as Administrative Claims Bar Date
------------------------------------------------------------
The U.S. Bankruptcy Court for the Northern District of Ohio,
Eastern Division, directs all entities asserting post-petition
administrative claims, incurred on or before November 30, 2003,
against Gliatech, Inc. and its debtor-affiliates to file their
requests for administrative expense payment on or before
January 26, 2004.
All requests for payment of administrative expense claims must be
received by the Clerk of the Bankruptcy Court before 4:00 p.m.
Eastern Time on Jan. 26. Claims must be addressed to:
Clerk - US Bankruptcy Court
Northern District of Ohio
Key Tower, 31st Floor
127 Public Square
Cleveland, OH 44114-1309
Five categories of administrative claims are exempted from the bar
date:
1. Requests for allowance of compensation and
reimbursement of expenses of professionals;
2. Claims paid in the ordinary course of the Debtors'
business;
3. Claims of the Office of the U.S. Trustee;
4. Claims previously approved by Order of the Court; and
5. Claims incurred on or after December 1, 2003.
Gliatech Inc., is engaged in the discovery and development of
biosurgery and pharmaceutical products. Gliatech's pharmaceutical
product candidates include proprietary monoclonal antibodies
designed to inhibit inflammation. The company, together with its
debtor-affiliates sought Chapter 11 protection on May 9, 2002,
(Bankr. N.D. Ohio Case No. 02-15045). Shawn M. Riley, Esq., at
McDonald, Hopkins, Burke & Haber Co LPA, represents the Debtors as
it restructures. When the Debtors filed for protection from its
creditors, it listed total assets of $9 million and total debts of
$16 million.
GLOBAL AXCESS: Prepares Prospectus for 5-Million Share Issue
------------------------------------------------------------
Global Axcess Corporation has prepared a prospectus relating to
5,000,000 shares of common stock issuable pursuant to the 2002
Stock Incentive Plan. The stock is offered by certain holders of
its securities acquired upon the exercise of options issued to
such persons pursuant to the Company's 2002 Stock Incentive Plan.
The shares may be offered by the selling stockholders from time to
time in regular brokerage transactions, in transactions directly
with market makers or in certain privately negotiated
transactions. The Company will not receive any of the proceeds
from the sale of the shares by the selling stockholders. Each of
the selling stockholders may be deemed to be an "underwriter," as
such term is defined in the Securities Act of 1933.
Global Axcess' common stock trades on the Over the Counter
Bulletin Board under the symbol "GLXS." On December 9, 2003, the
closing sale price of the common stock was $.35 per share.
* * *
LIQUIDITY AND CAPITAL RESOURCES
In a Form 10-QSB filed with the Securities and Exchange
Commission, Global Axcess reported:
"Working Capital Deficit. As of September 30, 2003, the Company
had current assets of $997,338 and current liabilities of
$1,174,915, which results in a working capital deficit of
$177,577, as compared to current assets of $732,206 and current
liabilities of $2,144,841 resulting in a working capital deficit
of $1,412,635 as of December 31, 2002. The ratio of current assets
to current liabilities increased to .85 at September 30, 2003 from
.34 at December 31, 2002. Thus, the overall working capital
deficit decreased by $1,235,058. The decrease in the deficit
during the nine month period ended September 30, 2003 resulted
mainly from the reduction of Accounts Payable and Accrued Expenses
by $331,933, a pay-off of various current leases amounting to
$116,152, a reduction of Notes Payable to related parties of
$364,698, Notes Payable in the amount of $47,753 and a reduction
of amounts Due to Related Parties of $140,795.
Additional Funding Sources
"We have funded our operations and capital expenditures from cash
flow generated by operations, capital leases, from the settlement
of various issues with third parties and from the sale of
securities. Net cash provided by operating activities during the
nine month period ending September 30, 2003 and 2002 was $134,302
and $786,218, respectively. Net cash provided by operating
activities in the nine month period ending September 30, 2003
consisted primarily of a net income of $265,353 and depreciation
and amortization of $593,734 and an increase in prepaid expenses
of 34,175 and decrease of other assets by $42,185; offset by an
increase in accounts receivable of $100,839 and a reduction of
accounts payable and accrued expenses of $331,933. The cash
provided by operating activities allowed us to pay off or pay-down
$116,152 for various lease obligations, $30,711 on notes payable
and $140,795 on amounts due to related parties. The sale of our
common stock for $610,500 less fees, netted $589,249 in proceeds
for issuance of common stock, allowed us to pay down amounts on
notes to related parties of $100,000 and amounts due to related
parties of $50,000 and purchase fixed assets of $234,957.
"In order to fulfill its business plan and expand its business,
the Company must have access to funding sources that are prepared
to make equity or debt investments in the Company's securities.
"In order to address this potential for growth, the Company has
taken steps to raise additional funds to finance its operations,
including the potential for making strategic acquisitions, which
could better position the Company for growth. Historically, the
Company has relied primarily upon institutional investors for this
purpose. There can be no guarantee that institutional funding
will be available to the Company in the near future. The Company
has conducted a private placement offering and closed the offering
on July 28, 2003 with gross proceeds of approximately $610,500,
with fees of $21,251, through the sale of 12,210,000 shares of
common stock together with common stock purchase warrants to a
limited number of accredited investors. The Company's ability to
attract investors depends upon a number of factors, some of which
are beyond the Company's control. The key factors in this regard
include general economic conditions, the condition of ATM markets,
the availability of alternative investment opportunities, the
Company's past financial performance affecting the Company's
current reputation in the financial community.
"The Company is continuing its efforts to raise additional capital
through equity or debt financings. The Company estimates to
continue its current business plan and acquisition strategy, it
will require approximately $5,000,000 in additional working
capital to meet its needs for the next 12 months for such items as
new ATM leases, software development and acquisitions.
"The Company will require significant additional financing in the
future in order to satisfy its acquisition plan. To fund its
continued growth the Company intends to raise additional capital
through debt and equity financings, however, the Company cannot
guarantee that it will be able to raise funding through these
types of financings. The need for additional capital to finance
operations and growth will be greater should, among other things,
revenue or expense estimates prove to be incorrect, particularly
if additional sources of capital are not raised in sufficient
amounts or on acceptable terms when needed. Consequently, the
Company may be required to reduce the scope of its business
activities until other financing can be obtained.
"The Company does not use its own funds for vault cash, but rather
relies upon third party sources. The Company in general rents the
vault cash from financial institutions and pays a negotiated
interest rate for the use of the money. The vault cash is never in
the possession of, controlled or directed by the Company but
rather cycles from the bank, to the armored car carrier, and to
the ATM. Each days withdrawals are settled back to the owner of
the vault cash on the next business day. Both Nationwide Money and
its customers (the merchants) sign a document stating that the
vault cash belongs to the financial institution and that neither
party has any legal rights to the funds.
"As a result of certain factors, our working capital has increased
from the same period a year ago. We had negative working capital
of $1,608,116 on September 30, 2002 and this has been reduced to a
negative working capital of $177,577 at September 30, 2003. This
increase in working capital is partially due to the occurrence of
one-time events in 2003 that resulted from cancellation of debt
that totaled $261,023. As of September 30, 2003 we also received
from the Private Placement Offering in the amount of $589,249 net
proceeds. There was an exchange of $50,000 from an amount due to a
related party for stock. The cash portion was used to payoff
short-term debt in the form of notes payable and lease obligations
on ATM equipment. In 2002 we also issued $141,899 in stock in
lieu of cash for various current expenses and received several
loans totaling $229,675 from Cardservice International, Inc. the
proceeds of which were used to payoff various short term lease
obligations on ATM obligations. In addition, we have incurred
additional demands on our available capital in connection with the
settlement of various disputes with former officers and employees
and the start-up expenses associated with our expansion of the
Food Lion and Kash and Karry account of additional ATMs."
GOLDEN NORTHWEST: Brings-In Perkins & Company as Accountants
------------------------------------------------------------
Golden Northwest Aluminum, Inc., and its debtor-affiliates want to
employ Perkins & Company, PC as Accountants.
The Debtors report that Perkins & Company is an accounting and
financial advisory firm that is well qualified to serve as their
accounting firm.
Perkins & Company's resources, capabilities and experience are
crucial to Debtors' successful restructuring. Perkins provides a
critical service that complements the services offered by Debtors'
other restructuring professionals.
The Debtors have requested that Perkins & Company:
a) perform general due diligence to assist Debtors in
defining their financial and operational difficulties,
including gathering and analyzing data, interviewing
appropriate management and evaluating Debtors' existing
financial forecast and budget;
b) assist with the preparation for Debtors' negotiations
with lending institutions and creditors;
c) advise Debtors on the preparation of the Schedules of
Assets and Liabilities and the Statements of Financial
Affairs;
d) assist Debtors, as necessary, in the Chapter 11 process
with the goal of developing a confirmable plan of
reorganization;
e) assist Debtors, as necessary, in connection with
Debtors' preparation of required financial information,
including business plans, cash flow forecasts and other
financial analyses relating to Debtors' financial and
business operations and render accounting assistance in
connection with reports required by the Court;
f) perform such other accounting services related to the
restructuring of Debtors as requested;
g) consult with Debtors' management and counsel in
connection with operating, financial and other business
matters relating to the ongoing activities of Debtors;
h) to the extent requested, attend and participate in
creditors' committee meetings, and make appearances
before this Court.
i) prepare income tax returns for Debtors and their
subsidiaries, including related research and
consultations;
j) assist Debtors with preparation of their annual return
for each of its employee benefit plans, including the
associated audits of those plans; and
k) perform audits of Debtors' annual statements.
Patricia J. Schmitt reports that Perkins & Company's usual and
customary hourly rates presently vary between $80 and $280 per
hour.
Headquartered in The Dalles, Oregon, Golden Northwest Aluminum,
Inc., is a primary aluminum producer. The Company, together with
three affiliates filed for chapter 11 protection on December 22,
2003 (Bankr. Oreg. Case No. 03-44107). Richard C. Josephson,
Esq., represent the Debtors in their restructuring efforts. When
the Company filed for protection from its creditors, it listed
debts and assets of more than $100 million each.
GRUPPO TMM: Bondholders Support Proposed Debt Restructuring
-----------------------------------------------------------
Grupo TMM, S.A. (NYSE:TMM) and (BMV:TMM A) received voting
agreements executed by holders of approximately 64% of the
aggregate outstanding principal amount of its 9-1/2% Notes due
2003 and its 10-1/4% Senior Notes due 2006.
As previously announced, bondholders who execute voting agreements
agree to support the restructuring proposed by Grupo TMM and
agreed upon with the Ad Hoc Bondholders' Committee, subject to the
terms and conditions of the voting agreements.
As announced on December 18, 2003, the voting agreements provide
that the Company will implement the restructuring through a
registered exchange offer of new Senior Secured Notes due 2007 for
the Existing Notes, together with a consent solicitation to amend
the indenture governing any untendered Senior Notes due 2006. If
the conditions to the exchange offer are not met or waived, the
restructuring will be implemented through a prepackaged plan in
the United States or, if the Company elects, in Mexico.
The voting agreements became effective upon execution by holders
of a majority in aggregate principal amount of the outstanding
Existing Notes. As a result, the Company is proceeding with the
restructuring on the terms set forth in the voting agreements. In
addition, within two business days, the Company will deposit into
escrow approximately $21.1 million principal amount of the new
Senior Secured Notes due 2007, for the benefit of holders who
tender their Existing Notes in the exchange offer or, under
certain circumstances, who have entered into voting agreements and
are not in default thereunder. These notes, which represent a 5
percent incentive payment for participation in the restructuring,
will be released from the escrow to eligible holders of Existing
Notes upon completion of the restructuring, or earlier in certain
circumstances.
Questions regarding the proposed restructuring should be directed
to Martin F. Lewis and Ronen Bojmel at Miller Buckfire Lewis Ying
& Co., LLC, the Company's financial advisor, or Alan D. Fragen and
Oscar A. Mockridge of Houlihan Lokey Howard & Zukin Capital, the
Ad Hoc Bondholders' Committee's financial advisor. Akin Gump
Strauss Hauer & Feld LLP is legal counsel to the Ad Hoc
Bondholders' Committee.
Martin F. Lewis
Miller Buckfire Lewis Ying & Co., LLC
250 Park Avenue
New York, New York 10177
Telephone: (212) 895-1805
Email: martin.lewis@mbly.com
Ronen Bojmel
Miller Buckfire Lewis Ying & Co., LLC
250 Park Avenue
New York, New York 10177
Telephone: (212) 895-1807
Email: ronen.bojmel@mbly.com
and
Alan D. Fragen
Houlihan Lokey Howard & Zukin Capital
1930 Century Park West
Los Angeles, California 90067
Telephone: (310) 788-5338
Email: afragen@hlhz.com
Oscar A. Mockridge
Houlihan Lokey Howard & Zukin Capital
685 Third Avenue
New York, New York 10017
Telephone: (212) 497-4175
Email: omockridge@hlhz.com
Headquartered in Mexico City, Grupo TMM is a Latin American
multimodal transportation company. Through its branch offices and
network of subsidiary companies, Grupo TMM provides a dynamic
combination of ocean and land transportation services. Grupo TMM
also has a significant interest in TFM, which operates Mexico's
Northeast railway and carries over 40 percent of the country's
rail cargo.
Grupo TMM's Web site address is http://www.grupotmm.com/and TFM's
Web site is http://www.tfm.com.mx/
HARRAH'S ENTERTAINMENT: Will Acquire Binion's Horseshoe Hotel
-------------------------------------------------------------
Harrah's Entertainment, Inc. (NYSE: HET) reached an agreement in
principle with owners of Binion's Horseshoe Hotel & Casino to
acquire the downtown Las Vegas property.
The purchase is subject to execution of a definitive written
agreement and receipt of regulatory and other approvals. Terms of
the proposed transaction were not disclosed.
"The agreement in principle contemplates that Harrah's will assume
the property's liabilities to bona fide creditors who submit
verifiable evidence of claims," said Charles Atwood, Harrah's
Entertainment's chief financial officer. "We are also reviewing
options with the casino's owners for reopening the property as
soon as practicable."
"I am confident that this transaction will provide new
opportunities for both the property that has meant so much to me
and my family, as well as for the loyal employees who have worked
with us over the years," said Becky Behnen of Binion's Horseshoe.
Founded 65 years ago, Harrah's Entertainment, Inc. (Fitch, BB+
Senior Subordinated Rating, Stable Outlook) operates 26 casinos in
the United States, primarily under the Harrah's brand name.
Harrah's Entertainment is focused on building loyalty and value
with its target customers through a unique combination of great
service, excellent products, unsurpassed distribution, operational
excellence and technology leadership.
More information about Harrah's Entertainment is available on the
company's Web site, http://www.harrahs.com/
HARRAH'S ENTERTAINMENT: Q4 Conference Call Slated for February 4
----------------------------------------------------------------
Harrah's Entertainment, Inc. (NYSE: HET) will host a conference
call Wednesday, February 4, 2004, at 9:00 a.m. Eastern Standard
Time to discuss its 2003 fourth-quarter and full-year results.
Those interested in participating in the call should dial
1-888-399-2695, or 1-706-679-7646 for international callers,
approximately 10 minutes before the call start time. A taped
replay of the conference call can be accessed at 1-800-642-1687,
or 1-706-645-9291 for international callers, beginning at noon EST
Wednesday, February 4. The replay will be available through
11:59 p.m. EST on Tuesday, February 10. The passcode number for
the replay is 4956587.
Interested parties wanting to listen to the conference call on the
Internet may do so on the company's Web site --
http://www.harrahs.com/-- in the Investor Relations section
behind the "About Us" tab.
Founded 65 years ago, Harrah's Entertainment, Inc. (Fitch, BB+
Senior Subordinated Rating, Stable Outlook) operates 26 casinos in
the United States, primarily under the Harrah's brand name.
Harrah's Entertainment is focused on building loyalty and value
with its target customers through a unique combination of great
service, excellent products, unsurpassed distribution, operational
excellence and technology leadership.
More information about Harrah's Entertainment is available on the
company's Web site, http://www.harrahs.com/
HEALTH CARE REIT: Completes $51-Million Gross Investments for Q4
----------------------------------------------------------------
Health Care REIT, Inc. (NYSE:HCN) completed $51.6 million of gross
investments during the fourth quarter of 2003.
The investment activity during the quarter was approximately 84
percent real property investments and 16% loans. Facility-based
investments include 31 percent assisted living facilities, 46%
skilled nursing facilities and 23 percent specialty care
facilities. Aggregate funding was provided to 19 operators in 17
states. Also during the quarter, the company had $468,000 of asset
sales related to one assisted living facility. Net investments for
the quarter totaled $51.1 million.
For the year ended December 31, 2003, the company completed gross
investments of $575.5 million, offset by $75.8 million of asset
sales and loan payoffs, generating $499.7 million in net new
investments.
The company also confirmed that it will release its 2003 fourth
quarter and year end earnings results on February 2, 2004, before
the market opens. A conference call is scheduled for 11:00 a.m.
EST on February 2, 2004, to discuss these results. The information
to be discussed on the call will be contained in the company's
earnings release, which will also be available on the press
releases page of the company's Web site at http://www.hcreit.com/
The conference call will be accessible by telephone and through
the Internet. Telephone access will be available by dialing 973-
935-8504 or 800-231-5571. Callers to this number will be able to
listen to the company's business update. For those unable to
listen to the call live, a taped rebroadcast will be available
beginning two hours after completion of the live call on February
2, 2004 through February 9, 2004. To access the rebroadcast, dial
973-341-3080 or 877-519-4471. The conference ID number is 4410974.
To participate on the webcast, log on to http://www.hcreit.com/or
http://www.fulldisclosure.com/15 minutes before the call to
download the necessary software. A replay will be available on
these Web sites for 90 days.
Health Care REIT, Inc. (Fitch, BB+ Outstanding Preferred Share
Rating, Positive Outlook), with headquarters in Toledo, Ohio, is a
real estate investment trust that invests in health care
facilities, primarily skilled nursing and assisted living
facilities. For more information on Health Care REIT, Inc., via
facsimile at no cost, dial 1-800-PRO-INFO and enter the company
code - HCN. More information is available on the Internet at
http://www.hcreit.com/
HOUSTON EXPLORATION: Will Publish Q4 & FY 2003 Results on Feb. 5
----------------------------------------------------------------
The Houston Exploration Company (NYSE: THX) will release its
fourth quarter and full-year 2003 earnings results before the
market opens on Thursday, February 5.
In conjunction with the release, the company will hold a
conference call to review the results of the quarter. The call
will be broadcast live over the Internet at 12:00 p.m. Central
Time on Thursday, February 5, and can be accessed at
http://www.houstonexploration.com/
To participate in the conference call by telephone, dial (800)
374-0699 prior to the start.
In addition, the call will be available for delayed playback for
two weeks beginning at approximately 5:00 p.m. on February 5. To
access the playback, dial (706) 645-9291 and provide the
confirmation code, 4885547.
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/
INAMED CORP: Retires Additional $30 Million of Term Notes
---------------------------------------------------------
Inamed Corporation (Nasdaq: IMDC), a global healthcare company,
provided guidance for 2004 with diluted GAAP earnings per share
expected to be in the range of $1.90 to $2.00 and with total sales
expected to increase at a low-double digit over sales in 2003.
The Company also announced that it had expanded its facial
aesthetics franchise with a broad licensing agreement for Corneal
Group's Juvederm(R) dermal filler product line, which is based on
non-animal, cross-linked hyaluronic acid technology, in the United
States, Canada, Australia and Europe. Also, Inamed announced that
it has retired an additional $30 million in principal amount of
term notes.
"I am very proud of the great effort for our people in 2003 in
helping to establish a strong foundation of growth for the Inamed
Corporation. This foundation will provide the platform for Inamed
to strengthen and expand its leadership position, both in the
short and long term, in each of our franchises. Our current
product offerings are solid and our product development pipeline
continues to move forward," said Nick Teti, Chairman, President
and Chief Executive Officer. "The recent arrangement with Corneal
strengthens not only our immediate product offerings but also puts
the facial aesthetics business in a strong strategic position as
well. The Inamed team is looking forward, confidently, to the
opportunities and challenges in front of us in 2004 and beyond."
2004 Sales and Gross Profit Margin
Inamed expects total sales in 2004 to increase at a low-double
digit growth rate over sales in 2003. The Company expects the 2004
gross profit margin to be in the range of 72-74%.
Inamed Aesthetics -- Facial
Inamed expects 2004 sales of its facial aesthetics products to
decrease slightly in 2004 due to the introduction of a new
competitive product in the United States.
Additionally, Inamed announced earlier today that it acquired the
rights to Juvederm(R), a new generation of hyaluronic acid
products based on non-animal, cross-linked hyaluronic acid
technology. Inamed has the exclusive rights in the United States
and Canada, where the product is already marketed, and in
Australia. The Company also acquired the non-exclusive rights in
key European markets where the product is also currently marketed.
The clinical development program in the United States is
anticipated to commence within the next several months.
Additionally, Inamed will immediately begin to realize sales in
Canada and in the European markets where it is licensed.
Hylaform(R) Gel, Inamed's hyaluronic acid-based dermal filler
product licensed from Genzyme and under review by the FDA, is
expected to be approved in the United States in early 2004.
Furthermore, with the successful completion of the Phase II
clinical study for Inamed's botulinum toxin type A product, the
company expects to initiate the Phase III clinical study in early
2004.
Inamed Health
Inamed expects 2004 sales of its obesity intervention products to
increase in the 30% range over sales in 2003.
Inamed Aesthetics -- Breast
For 2004, the Company expects worldwide sales of breast aesthetics
products to grow at a mid-double digit rate over sales in 2003.
Expenses
Inamed provided the following guidance for its expenses in 2004:
-- Sales, General and Administrative
For 2004, Inamed expects sales, general and administrative
expenses to be in the range of 40% to 42% of sales as the
Company continues to invest in key business initiatives.
These include several product launches in the breast and
facial aesthetics businesses as well as an increase in
spending in the United States to enhance consumer
awareness of the Lap-Band(R) System.
-- Research and Development
Research and development expenses in 2004 will increase by
approximately $7 to $9 million over 2003 and be in the
range of $28 to $30 million, or about 7% to 9% of sales.
The increase in investment in R&D is essential to advance
the Company's strategic and leadership positions in its
three businesses, around the world.
-- Tax Rate
For 2004, Inamed expects that its effective corporate tax
rate will be between 24% and 26% of gross income as the
Company continues to benefit from improved tax management
and manufacturing in lower tax jurisdictions.
-- Capital Expenditures
Inamed anticipates spending $23 million to $26 million in
capital expenditures in 2004 to increase manufacturing
capacity, to support new product development programs and
to extend the Company's enterprise resource planning
system to international operations.
Earnings Per Share
GAAP Earnings per Share
Inamed reported that it will provide guidance for 2004 earnings
per share guidance based solely on Generally Accepted Accounting
Principles (GAAP). Inamed expects diluted GAAP earnings per share
to be in the range of $1.90 to $2.00 in 2004.
Debt Reduction
Inamed also announced that, in December 2003, it had retired an
additional $30 million of term notes. Associated with this debt
retirement, the Company expects to record approximately $400,000
of deferred loan fees which will be a non-cash charge recognized
in the fourth quarter 2003.
Inamed (Nasdaq:IMDC) (S&P, BB- Corporate Credit Rating, Positive
Outlook) is a global healthcare company with over 25 years of
experience developing, manufacturing and marketing innovative,
high-quality, science-based products. Current products include
breast implants for aesthetic augmentation and for reconstructive
surgery; a range of dermal products to treat facial wrinkles; and
minimally invasive devices for obesity intervention, including the
LAP-BAND(R) System for morbid obesity. The Company's Web site is
http://www.inamed.com/
INTERNET CAPITAL: Further Reduces Debt to About $147 Million
------------------------------------------------------------
Internet Capital Group, Inc. (Nasdaq: ICGE), issued an interim
update for the investment community.
Since its third quarter earnings release on November 6, 2003, the
following events transpired:
-- Continued Nasdaq listing through April 24, 2004 based on
Company's commitment to seek stockholder approval for reverse
split unless the Company's bid price closes at or above $1.00
for a minimum of ten consecutive trading days: In September
2003, Nasdaq submitted a proposal to the SEC that would afford
SmallCap Market issuers additional grace periods to remedy a
minimum bid price deficiency. Under the proposal, an issuer
could receive up to a two-year grace period provided that it
continued to meet certain listing requirements and provided
that it committed to seek stockholder approval for a reverse
stock split to address the bid price deficiency at or before a
meeting scheduled to occur no later than two years from the
original notification of bid price deficiency. ICG's two-year
deadline expires on April 24, 2004.
The SEC has approved the proposed rule change regarding grace
periods. Based on the SEC's approval of this proposed rule
change, Nasdaq has notified the Company that in order to remain
listed, it must commit to seeking stockholder approval for a
reverse stock split sufficient to remedy its bid price
deficiency prior to April 24, 2004.
On January 9, 2004, the Company notified Nasdaq of its
determination that, if its stock price does not regain
compliance with the SmallCap Market's minimum bid price
requirement, it will seek to obtain stockholder approval by
April 24, 2004 for a reverse stock split sufficient to support
the Company's compliance with the requirement. Based on this
determination, Nasdaq granted ICG an exception to the bid price
requirement through April 24, 2004. In the event that
the Company's business prospects change in the future such that
its Board decides that a reverse stock split is no longer in
the best interests of the stockholders, the Company may change
its decision to engage in the reverse stock split. The Board
has not established the terms of a reverse split, but will
consider the appropriate terms in light of prevailing market
conditions.
-- Debt Update: The Company has continued to enter into agreements
to exchange shares of common stock for its 5 1/2% convertible
subordinated notes. At January 9, 2004 the outstanding balance
of the notes, which are due December 2004, is $147.2 million
and the outstanding common shares amount to 500.8 million.
Under Statement of Financial Accounting Standards No. 84,
"Induced Conversion of Convertible Debt", the Company is
required to record a non-cash accounting expense equal to the
fair value of shares issued in excess of the fair value of
shares issuable pursuant to the original conversion terms. As
such, the Company's 2003 fourth quarter results will include a
non-cash charge of approximately $35 million relating to
exchanges.
-- Liquidity: ICG's corporate cash position at December 31, 2003
was approximately $51 million compared with $56 million at the
end of the third quarter of this year. During the fourth
quarter, the Company received $3.4 million in cash
monetizations (principally escrow releases), paid the semi-
annual interest payment of $4.8 million, funded $2.4 million to
existing partner companies and paid $1.2 million in corporate
and other net costs. The market value of our public securities
was approximately $36 million as of January 9, 2004. This
reflects our investments in our four public partner companies
which include: 6.9 million shares of eMerge Interactive
(Nasdaq: EMRG), 1.6 million shares of Onvia (Nasdaq: ONVI), 1.1
million shares of Universal Access (Nasdaq: UAXS) and 2.9
million shares of Verticalnet (Nasdaq: VERT).
-- Partner Company Activity:
eMerge Interactive (Nasdaq: EMRG) recently announced that its
animal tracking system, CattleLog(TM), has been designated as a
Process Verified Program (PVP) by the United States Department
of Agriculture (USDA). The system allows ranchers and feedlot
owners to collect and track information on individual cattle,
which may prove helpful in providing source and custody
information for animal health emergencies, including foot-and-
mouth-disease and BSE. eMerge is the first USDA-approved
provider of individual animal identification and life history
tracking services.
Verticalnet, Inc. (Nasdaq: VERT) recently announced that one of
the world's largest pharmaceutical and health care products
companies has licensed the Verticalnet(R) Spend Analysis
solution. The FORTUNE 500(TM) pharmaceutical company with over
50,000 employees will use the Verticalnet solution to gain
global visibility into its direct and indirect materials
spending and drive strategic sourcing initiatives
across its major divisions and more than 40 disparate spend
data sources, including its SAP system.
OneCoast Network Holdings, Inc. ("OCN") sold substantially all
of its assets to an unrelated third party on December 31, 2003.
The proceeds from the sale were used to satisfy OCN's bank
debt, which had been guaranteed by ICG. ICG has retained a
small minority stake in the acquiring company.
For the nine months ended September 30, 2003 OCN represented
approximately $18 million of the Company's consolidated revenue of
$71.2 million, while OCN's net results of operations were not
significant to the Company's consolidated net loss. The Company
will record an approximate $11 million non-cash charge related to
this transaction.
"We are pleased with the progress we made on several fronts. We
have reduced our debt to $147 million, reflecting our ongoing
effort to improve our balance sheet while focusing on our primary
mission of driving our partner companies to profitability," said
Walter Buckley, ICG's chairman and CEO. "The disposition of OCN
provided us the opportunity to reduce our future funding
commitments, allowing us to focus our resources, both human and
financial, on those partner companies that we believe hold the
greatest potential to deliver long-term stockholder value."
Internet Capital Group, Inc. -- http://www.internetcapital.com/--
is an information technology company actively engaged in
delivering software solutions and services designed to enhance
business operations by increasing efficiency, reducing costs and
improving sales results. ICG operates through a network of partner
companies that deliver these solutions to customers. To help drive
partner company progress, ICG provides operational assistance,
capital support, industry expertise, access to operational best
practices, and a strategic network of business relationships.
Internet Capital Group is headquartered in Wayne, Pa.
At September 30, 2003, Internet Capital's balance sheet shows a
total shareholders' equity deficit of about $47 million.
IT GROUP: Details Functions of IT Environmental Liquidating Trust
-----------------------------------------------------------------
Prior to the Petition Date, the IT Group Debtors, specifically IT
Corporation, IT Lake Herman Road LLCV and IT Vine Hill LLC,
operated four hazardous waste Landfills in northern California
known as the Panoche Facility, the Vine Hill Complex, the
Montezuma Hills Facility, and the Benson Ridge Facility. These
Landfills were used for the disposal of organic and inorganic
wastes including wastes from the production or manufacturing of
petroleum products, electronics equipment/components,
pharmaceuticals, paints, metal finishing, food processing,
contaminated soil remediation projects, and gas and geothermal
power exploration. All four of the Landfills received closure
certification from the California Department of Toxic Substances
Control, and none of the Landfills have accepted waste in the
past 15 years.
The California Hazardous Waste Control Act imposes, among other
things, closure and post-closure care requirements --
Environmental Operations -- including financial assurances, which
were the subject of a consent order between IT Corporation and
the State of California, as amended by stipulation dated
September 30, 1999.
Because the obligation to perform the Environmental Operations
extends far into the future, the Debtors agreed to establish an
IT Environmental Liquidating Trust. The purposes of the IT
Environmental Liquidating Trust are to perform the Environmental
Operations, and to liquidate and distribute the proceeds from the
IT Environmental Liquidating Trust Assets.
Pursuant to the IT Environmental Liquidating Trust Agreement to
be filed as a Plan Supplement, the Debtors will establish the
Trust by transferring, among other things:
(a) $1,000,000 of the Debtors' Cash on hand as of the
Effective Date; and
(b) the IT Environmental Liquidating Trust Assets, which
consist of, among other things, the Debtors' interest in
the Post-Closure Policies and all of the Debtors'
membership interests in certain limited liability
companies that own the real property containing two of the
Landfills.
The Committee and the Agent intend to appoint Brian Fournier, or
another Person as selected by the Committee and the Agent,
provided that the California Department of Toxic Substances
Control does not object, to serve as the IT Environmental
Liquidating Trustee.
The IT Environmental Liquidating Trustee will administer the IT
Environmental Liquidating Trust in accordance with the terms and
conditions of the IT Environmental Liquidating Trust Agreement,
the Plan, and the Confirmation Order, and will have those duties
and powers set forth in the IT Environmental Liquidating Trust
Agreement.
Among the duties and powers included are using funds derived from
the insurance policies to provide for post-closure management of
the Landfills. The IT Environmental Liquidating Trustee may also
coordinate development, lease or marketing of the Landfills to
produce revenue for the purpose of ensuring that the IT
Environmental Liquidating Trust is sufficiently funded, and to
pursue contribution or cost-recovery efforts or prosecute claims
against third parties liable or potentially liable for closure at
the Landfills.
The IT Environmental Liquidating Trustee is authorized to retain
the services of attorneys, accountants, consultants, and other
agents, in the business judgment of the IT Environmental
Liquidating Trustee, to assist and advise the IT Environmental
Liquidating Trustee in the performance of its, duties under the
Plan and the IT Environmental Liquidating Trust Agreement.
In addition to reimbursement of reasonable, actual and necessary
out-of-pocket expenses incurred, the IT Environmental Liquidating
Trustee is entitled to reasonable compensation and benefits that
will be payable in the ordinary course of business and not
subject to Bankruptcy Court approval. The IT Environmental
Liquidating Trust Agreement will set forth the amounts of
reasonable compensation and benefits that will be paid to the IT
Environmental Liquidating Trustee.
By agreeing to establish the IT Environmental Liquidating Trust,
the Debtors avoid incurring potential fines and penalties for
alleged violations of state and federal environmental laws and
regulations, as well as requirements for significant additional
financial assurances.
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)
KAISER: Wants to Cut Cash Requirements for Pension & Benefit Plans
------------------------------------------------------------------
Kaiser Aluminum filed three related motions with the U.S.
Bankruptcy Court for the District of Delaware to enable the
company to substantially reduce or eliminate ongoing/future cash
requirements for pension and post-retirement benefit plans as it
seeks to make further progress on its path to emergence from
Chapter 11 in mid-2004.
The company has stated since the inception of its Chapter 11
proceedings that these legacy items were among the major issues in
the cases that had to be addressed before the company could
successfully reorganize.
In particular, the company filed:
-- An 1114 motion seeking Court approval to terminate post-
retirement benefit programs (such as medical and life
insurance) for salaried and hourly employees and retirees.
Estimated 2003 post-retirement medical plan payments were in
the range of $60 million and such costs continue to escalate
significantly from year to year. Approximately 4,000 salaried
retirees and their dependents are enrolled in company-sponsored
retiree medical benefit programs. Approximately 7,000 hourly
retirees and their dependents are enrolled in company-sponsored
hourly retiree medical benefit programs.
-- A motion seeking Court approval for a distress termination of
Kaiser's U.S. defined benefit pension plans for hourly
employees. The motion also seeks approval for the
implementation of replacement benefits under defined
contribution arrangements for active hourly employees.
Approximately 7,000 hourly retirees or surviving spouses are
currently receiving monthly payments from various Kaiser-
sponsored defined benefit retirement plans. In a distress
termination of a pension plan, the Pension Benefit Guaranty
Corporation provides a guarantee of participants' vested
pension benefits up to certain monetary limits.
-- An 1113 motion seeking Court approval to reject certain of its
U.S.-based collective bargaining agreements, including those
with the United Steelworkers of America and the International
Association of Machinists. The filing is being made solely to
allow Kaiser to proceed with the aforementioned distress
termination of the pension plans associated with each of the
union contracts. Because the USWA and the IAM have not agreed
to a termination of the pension plans, the Company has no
alternative but to make an 1113 filing. The affected collective
bargaining agreements cover the following Kaiser plants in the
United States: Trentwood and Mead, Washington; Gramercy,
Louisiana; Newark, Ohio; Sherman, Texas; Tulsa, Oklahoma; and
Richmond, Virginia.
A hearing on these motions has not yet been scheduled.
Kaiser President and Chief Executive Officer Jack A. Hockema said,
"This is a difficult but essential step in order for Kaiser to
complete its restructuring and emerge from Chapter 11 in mid-2004.
Unfortunately, the exhaustive analysis that we've done in support
of our business plan shows that the restructured Kaiser Aluminum
will be unable to continue to fund pension and other post-
retirement benefits as they are presently offered. We have
discussed possible compromise positions with organized labor - and
with the official committee of retired salaried employees. Despite
the filing of these motions, we expect to continue such
discussions."
Hockema added, "We have communicated to union representatives that
the 1113 motion is solely intended to address the defined benefit
pension plan issue and no other changes are contemplated. As a
result, we are confident that the filing will not affect the day
to day operation of the facilities covered by these collective
bargaining agreements."
Kaiser Aluminum Corporation (OTCBB:KLUCQ) is a leading producer of
fabricated aluminum products, alumina, and primary aluminum.
Headquartered in Houston, Texas, Kaiser Aluminum Corporation
operates in all principal aspects of the aluminum industry,
including mining bauxite; refining bauxite into alumina;
production of primary aluminum from alumina; and manufacturing
fabricated and semi-fabricated aluminum products. The Company
filed for chapter 11 protection on February 12, 2002 (Bankr. Del.
Case No. 02-10429). Corinne Ball, Esq., at Jones, Day, Reavis &
Pogue represents the Debtors in their restructuring efforts. On
September 30, 2001, the Company listed $3,364,300,000 in assets
and $3,129,400,000 in debts.
KMART: Asks Court to Disallow 52 Duplicate Claims Totaling $221M
----------------------------------------------------------------
Andrew Goldman, Esq., at Wilmer, Cutler & Pickering, in New York,
tells the Court that the Kmart Corporation Debtors object to 52
duplicate claims, aggregating $221,354,830:
Type of Claims Claim Amount
-------------- ------------
Secured $2,201,173
Administrative 69,316,143
Priority 339,409
Unsecured 149,498,105
Accordingly, the Debtors ask Judge Sonderby to expunge and
disallow the duplicate claims. (Kmart Bankruptcy News, Issue No.
67; Bankruptcy Creditors' Service, Inc., 215/945-7000)
LEAP WIRELESS: CellStar Will Discontinue Service with Cricket
-------------------------------------------------------------
CellStar Corporation (Nasdaq: CLST) will cease providing
fulfillment and logistics services for Cricket Communications'
company-owned and indirect sales channels when the current
agreement related to this service expires on February 24, 2004.
CellStar has provided those services for Cricket since 1998.
"While we are disappointed to end a long, successful customer
relationship, we feel that this decision is best for our company
and our shareholders," said Robert Kaiser, president and COO,
CellStar. "We continue to hold Cricket in the highest regard and
wish them continued success."
In April of 2003, Cricket's parent, Leap Wireless International,
Inc., announced that it had filed for Chapter 11 bankruptcy
protection. In an effort to reduce its working capital exposure,
CellStar converted the account to a primarily consignment model.
Since that time, CellStar has worked continuously with Cricket to
ensure that both parties have been able to achieve their
respective business goals.
"We are ending the relationship on good terms," added Kaiser.
"Unfortunately, the pricing which Cricket requested going forward
would not have supported our key profitability strategy. We have
committed to our stockholders that we will continue to operate
profitably by fostering relationships that are win-win for both
parties without compromising our quality of service. Our U.S. team
is working diligently on new product and service offerings that
will close the gap caused by the loss of this account. For
example, during CES last week we introduced the PocketSurfer
wireless Web viewer which is the first of several new offerings
that we are planning for this year."
Revenues from Cricket and its indirect sales channel represented
approximately 11% of the Company's consolidated revenues for
fiscal 2002 and approximately 6% in 2003. Due to several fee
reductions and volume decreases, net earnings on the account have
been steadily declining since 1999. Due to the loss of this
account the Company's earnings per share for Fiscal 2004 could be
impacted by approximately $0.03 to $0.05 per share.
CellStar Corporation is a leading global provider of value-added
logistics services to the wireless telecommunications industry,
with operations primarily in the Asia-Pacific, North American and
Latin American regions. CellStar facilitates the effective and
efficient distribution of handsets, related accessories and other
wireless products from leading manufacturers to network operator,
agents, resellers, dealers and retailers. CellStar also provides
activation services in some of its markets that generate new
subscribers for wireless carriers. For the year ended November 30,
2002, the Company generated revenues of $2.2 billion. Additional
information about CellStar may be found on its Web site at
http://www.cellstar.com/
METRO MASONRY: US Trustee Wants Case Dismissed or Converted
-----------------------------------------------------------
William T. Neary, the United States Trustee for Region 6, asks the
U.S. Bankruptcy Court for the Eastern District of Texas to dismiss
Metro Masonry Construction, Inc.'s chapter 11 cases or, in the
alternative, convert the cases to liquidation proceedings under
Chapter 7 of the Bankruptcy Code.
The Trustee points, even after more than fifteen days from the
petition date, these documents were not docketed:
a. schedules of assets and liabilities;
b. schedules of current income and expenses;
c. statements of financial affairs;
d. statements of executory contracts; and
e. lists of the twenty largest creditors.
Inwood Bank asserts that it has an interest in cash collateral.
Without the schedules and statements of financial affairs, it is
not possible for creditors to assess whether Inwood National Bank
is over-secured, whether other creditors claim an interest in the
collateral, or whether trust fund issues exist regarding the
proceeds of accounts receivable.
Additionally, without the schedules and statements of financial
affairs, the estate cannot be administered, so dismissal is in the
best interest of creditors. Alternatively, the Court should
convert the cases to chapter 7 or establish deadlines for
complying with the statutory requirements, the Trustee says.
Headquartered in Plano, Texas, Metro Masonry Construction, Inc.,
specializes in commercial construction and high-end residential
masonry. The Company filed for chapter 11 protection on
December 8, 2003 (Bankr. E.D. Tex. Case No. 03-45718). Eric A.
Liepins, Esq., represents the Debtor in their restructuring
efforts.
METROMEDIA INT'L: Delays Form 10-Q Filing Due to Restatements
-------------------------------------------------------------
Metromedia International Group, Inc. (currently traded as:
OTCPK:MTRM - Common Stock and OTCPK:MTRMP - Preferred Stock), the
owner of interests in various communications and media businesses
in Russia, Eastern Europe and the Republic of Georgia, will
restate certain reports made previously on Form 10-K and 10-Q to
reflect corrections of past accounting errors.
The Company does not, however, believe that the restatements,
individually or in the aggregate, will materially impact or alter
the Company's current financial position.
Preparation of the restated historical reports has delayed filing
of the Company's Quarterly Report on Form 10-Q for the period
ended September 30, 2003. The Company also announced that, in view
of the delay in filing its Current Quarterly Report, the trustee
of its Series A and B 10-1/2 % Senior Discount Notes Due 2007 has
issued a notice that the Company is not in compliance with
requirements of the indenture governing these Notes and that the
Company must resolve this compliance matter no later than March 8,
2004, the sixtieth day following the receipt of the trustee's
letter in order to avoid an event of default. The Company expects
that it will file all required reports shortly and well within the
60-day period required for compliance with its indenture. A
summary of significant items to be addressed in the restated
historical reports and the Current Quarterly Report follows.
Historical Errors in Accounting for Tax Refunds
and Preferred Stock Dividend Expenses
While preparing its Current Quarterly Report, the Company
determined that the following accounting errors had been made in
its past financial statements:
1. The Company has determined that it should have recorded a $2.1
million tax refund that it received on November 10, 2003 from
the United States Department of Treasury, related to the carry-
back of certain AMT losses which recovered taxes paid in prior
years, in fiscal year 2002;
2. The Company has determined that it should have recorded a $2.3
million tax refund from the United States Department of
Treasury, related to the carry-back of certain AMT losses which
recovered taxes paid in prior years, that the Company had
previously recorded within the "Income from discontinued
components" line item within its consolidated financial
statements for the three and twelve month periods ended
December 31, 2002 in an earlier accounting period in 2002; and
3. The Company historically accounted for unpaid dividends on its
7-1/4% cumulative preferred stock on a simple interest basis;
however, according to the Preferred Stock Certificate of
Designation, cumulative unpaid dividends are subject to
quarterly compounding. The Company has recalculated the
cumulative unpaid dividend amount for 2002 and 2003 based on
the date of the first unpaid dividend and has increased the
quarterly dividend expense amounts in the 2002 and 2003
quarterly periods by $0.2 million, $0.3 million, $0.4 million,
$0.4 million, $0.5 million and $0.6 million for the three
months ended March 31, 2002, June 30, 2002, September 30, 2002,
December 30, 2002, March 31, 2003 and June 30, 2003
respectively. Under-reported dividend expense amounts prior to
2002 were immaterial. With all quarterly compounding
corrections applied, as of September 30, 2003 the total
dividend in arrears was $41.4 million.
Matters Affecting Business Interests
in the Republic of Georgia
In the course of completing its Current Quarterly Report,
management reported to the Company's Board of Directors and its
independent auditor that the Company had received letters from,
and corresponded with, two Georgian individuals involved in the
initial formation, approximately eight to ten years ago, of
certain of the Company's business ventures in the Republic of
Georgia. These individuals alleged that the Company had not fully
complied with its obligations to them under certain contracts. In
addition, the individuals alleged that Company personnel may have
violated the Foreign Corrupt Practices Act and possibly engaged in
other improper or illegal conduct. However, the individuals have
so far refused to specify details of the alleged violations and
have provided no evidence in support of the allegations that they
have made.
The Company had entered into contracts with these Georgian
individuals. The contract with one of these individuals entitles
him to 5% of any dividends the Company receives from Telecom
Georgia. The contract with the other individual entitles him,
assuming certain conditions were satisfied, to up to a 1% portion
of the Company's equity interest in certain of the Company's
business ventures in the Republic of Georgia, which the Company
currently believes could only include Telecom Georgia, Ayety TV
and Paging One (a now defunct paging company).
The Company believes it has fully performed its obligations to
date under the aforementioned contracts and has so informed the
individuals. The Company also believes that the fair value of any
continuing interest that these individuals may have in the
Georgian businesses subject to the contracts is not material.
Furthermore, nothing presented in the unsupported allegations of
improper or illegal conduct of Company personnel has prompted the
Company to amend or alter the report that it made to the United
States Justice Department and the Securities and Exchange
Commission in the first quarter of 2003 regarding possible
violations of foreign and United States laws, including the
Foreign Corrupt Practices Act. As a matter of prudence and to
ensure the claims of these Georgian individuals are properly
considered, the Company's Board of Directors has authorized the
Company's outside counsel to conduct an independent inquiry into
both the Company's obligations under the contracts referred to
above and the allegations of possible improper or illegal conduct
of Company personnel. The Company is not in a position to predict
the outcome of this inquiry. However, due to the relatively low
current fair value of the businesses subject to contracts with
these Georgian individuals and in view of the unspecific and
unsupported nature of the individuals' allegations, the Company
believes that the inquiry will not result in any material adverse
effect on the Company's business, financial condition or results
of operations.
Furthermore, recent events in the Republic of Georgia arising from
widespread discontent over parliamentary elections, including the
premature resignation of President Eduard Shevardnadze, have
significantly increased the level of political uncertainty in that
country. This condition, which is expected to extend into the
foreseeable future, increases the level of economic and legal
risks that the Company faces with respect to its operations in
Georgia. In addition to those risks previously reported in the
Company's Form 10-K for the period ending December 31, 2002,
present conditions in Georgia significantly increase the
possibility of general economic distress, civil unrest, terrorism
and a collapse of consumer confidence in Georgia, each of which
could have a material adverse effect on the Company's operations
in that country.
Restatement of Historical Results of Discontinued Businesses
On September 30, 2003, the Board of Directors formally approved
management's plan to dispose of all remaining non-core media
businesses of the Company. In light of this, the Company concluded
that such businesses meet the criteria for classification as
discontinued business components as outlined in SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets",
and as a result these businesses must be presented as such within
the Company's condensed consolidated financial statements. This
has required the Company to restate its prior period financial
information, for these non-core media businesses, to conform to
the current period presentation appearing in the Company's third
quarter 2003 Form 10-Q.
Asset Sales
As previously communicated, the Company is continuing to pursue
the sale of its remaining non-core media businesses, including
most of the remaining cable television and radio broadcast
businesses. Management anticipates that these sales will be
completed during the first quarter of 2004. Following is a summary
of asset sales that have occurred during the fourth quarter of
2003 that the Company has not previously disclosed:
Sun TV: On October 12, 2003, the Company sold its interest in the
Moldovan cable television company Sun TV and Sun Constructie
S.R.L., a Moldovan trading company, to Lekert Management, LTD, a
company organized under the laws of British Virgin Islands for
cash consideration of $2.1 million. Lekert Management, Ltd. is an
affiliated company with Neocom S.R.L., which owned 35% of Sun TV
prior to the transaction. Such transaction resulted in the Company
recording a loss on the disposition of $0.4 million. The Company
recorded a charge to earnings in the third quarter of 2003 in the
amount of $0.4 million to reflect its investment in Sun TV and Sun
Constructie at the lower of cost or fair value less cost to sell.
Sun TV's fiscal year 2002 revenues were $2.2 million, with cost of
services of $0.3 million and operating expenses of $1.3 million,
which included $0.3 million of depreciation and amortization. Sun
TV's nine-month revenues were $1.6 million, with cost of services
of $0.3 million and operating expenses of $1.7 million, which
included $0.4 million of depreciation and amortization and a $0.4
million asset impairment charge in 2003. Sun TV had approximately
53,000 direct wire and wireless subscribers as of September 30,
2003.
Teleplus: On November 21, 2003, the Company sold all of its
interest in the St. Petersburg, Russia cable television company,
Teleplus, to a Russian company, "Svyaz-Kapital", and AVT Systems
Ltd., a company organized under the laws of Cayman Islands, for
cash consideration of $0.9 million. The Company anticipates
recognizing a gain of $0.7 million on the disposition, which will
be recorded in the three month period ended December 31, 2003.
Teleplus' fiscal year 2002 revenues were $0.4 million, with cost
of services of $0.1 million and operating expenses of $0.8
million, which included $0.3 million of depreciation and
amortization. Teleplus' nine-month revenues were $0.3 million,
with cost of services of $0.1 million and operating expenses of
$0.6 million, which included $0.3 million of depreciation and
amortization in 2003. Teleplus had approximately 7,000 direct wire
line and wireless subscribers as of September 30, 2003.
Capital Restructuring
During 2003, the Company engaged in discussions with
representatives of holders of a substantial portion of the
Company's Senior Discount Notes concerning a restructuring of the
Senior Discount Notes. To date, no restructuring has been agreed
upon and further restructuring discussions with these substantial
Senior Discount Note holders have been suspended. Opportunities to
restructure the Company's balance sheet, including to refinance
the Senior Discount Notes and the Company's Preferred Stock, which
had an aggregate preference claim of $248.4 million as of
September 30, 2003, are being pursued, but present Company plans
presume the continued service of the Senior Discount Notes debt on
current terms and the continued deferral of the payment of
dividends on the Preferred Stock. The Company cannot provide
assurances that any capital restructuring effort will be
undertaken or, if undertaken, that it will provide for sufficient
cash reserves to support long-term sustainable operations.
Preferred Stock Dividend
To facilitate any potential future capital restructuring of the
Company, the Board of Directors of the Company elected not to
declare a dividend on its Preferred Stock for the quarterly period
ending on December 15, 2003.
Notification from Trustee for the Company's Senior Notes
The Company received notification from the trustee of its Senior
Discount Notes concerning compliance with the covenants as
outlined in the indenture governing the Senior Discount Notes. The
trustee reported that the Company had not yet filed with the
Securities and Exchange Commission and furnished to the trustee
its Current Quarterly Report, the timely public filing of which is
required under Section 4.3(a) of the Indenture. The trustee
reported that, under the terms of the Indenture, the Company must
resolve this compliance item within 60 days of receipt of the
trustee's letter or the trustee will be required to declare an
event of default. If an event of default were declared, the
trustee or holders of at least 25% aggregate principal value of
Senior Discount Notes outstanding could declare all Senior
Discount Notes to be due and payable immediately.
Change of Corporate Headquarters Office
During the fourth quarter of 2003, the Company relocated its
corporate headquarters offices from New York City to Charlotte,
North Carolina. Accordingly, the Company's current corporate
office address is now as follows:
8000 Tower Point Drive
Charlotte, North Carolina 28277
Main Phone #: (704) 321-7380
In making these announcements, Ernie Pyle, Executive Vice
President Finance and Chief Financial Officer of MIG, commented,
"We encountered a series of largely unexpected issues while
completing work on our Current Quarterly Report, but we believe
that none of the consequences of these adjustments materially
alters the current financial position of the Company. Our much
reduced staff levels limited the speed with which this work could
be completed; however, we believe that we have sufficient
resources to ensure the timely filing of future reports with the
SEC. We apologize for any inconvenience the delay in filing our
Form 10-Q for the quarter ended September 30, 2003 may cause for
our investors."
Through its wholly owned subsidiaries, the Company owns
communications and media businesses in Russia, Eastern Europe and
Georgia. These include mobile and fixed line telephony businesses,
wireless and wired cable television networks and radio broadcast
stations. The Company has focused its principal attentions on
continued development of its core telephony businesses in Russia
and Georgia, while undertaking a program of gradual divestiture of
its non-core media businesses. The Company's non-core media
businesses are comprised of four cable television networks,
including operations in Russia, Romania, Belarus and Lithuania.
The Company also owns interests in nineteen radio businesses
operating in Finland, Hungary, Bulgaria, Estonia, Latvia and the
Czech Republic. The Company's core telephony businesses include
Peterstar, the leading competitive local exchange carrier in St.
Petersburg, Russia, and Magticom, the leading mobile telephony
operator in Georgia.
Visit http://www.metromedia-group.com/for more information on the
Company.
MIRANT CORP: Agrees to Let Plan Administrators to File Claims
-------------------------------------------------------------
The Mirant Corp. Debtors adopted various employee benefit plans
under which certain employees participated prior to the Petition
Date. A plan administrator administers each Plan. The Benefits
Committee or Mirant Services, LLC administers many, if not all, of
the Plans.
Meredyth A. Purdy, Esq., at Haynes and Boone LLP, in Dallas,
Texas, relates that the Benefits Committee is comprised of
individuals appointed either by the Board of Managers of Mirant
Services, for Plans adopted by Mirant Services, or by the Board
of Directors of Mirant Corporation for Plans adopted by Mirant.
The plan administrator interprets the Plan, prescribes, amends or
rescinds the rules and regulations relating to the Plan and makes
all other determinations necessary or advisable for the Plan
administration.
With the Debtors' Chapter 11 cases, the Employees may have claims
against Mirant or Mirant Services under the Plans. While the
Employees are entitled to file proofs of claim on their behalf,
Ms. Purdy asserts that this approach will result in an
unnecessary and untimely distraction from the Debtors' efforts to
reorganize and ultimately emerge from Chapter 11 as the Debtors'
management will be inundated with inquiries from the Employees
regarding how to file a proof of claim and how to determine the
amount of their claims against the Debtors under the various
Plans.
Accordingly, Mirant, Mirant Services and the Benefits Committee
entered into a stipulation to simplify the claims process for
employees participating in the Plan. The Debtors believe that
this process will enable them to focus on their reorganization
efforts rather than addressing the Employees' inquiries and
concerns regarding the proof of claim process.
The Stipulation provides that, upon its execution and Court
approval, the Benefits Committee and Mirant Services, as plan
administrators, will be authorized to file a proof of claim on
behalf of the Employees for claims arising against Mirant or
Mirant Services prior to the Petition Date under any of the Plans
administered by the Benefits Committee or Mirant Services
including, but not limited to:
1. Amended and Restated Mirant Corporation Deferred
Compensation Plan for Directors and Select Employees,
effective April 2, 2001;
2. Amended and Restated Mirant Services Supplemental
Executive Retirement Plan, originally adopted effective
June 25, 1998;
3. Mirant Services Supplemental Compensation Plan, adopted
March 28, 2001; and
4. Mirant Services Supplemental Benefit Plan, effective
January 1, 2001.
Moreover, the Stipulation provides that, to the extent that the
Employees have claims under the Plan that is administered by the
Benefits Committee or Mirant Services and is not identified
therein, the plan administrator of the Plan will have the same
authority granted by the Stipulation, upon its execution and
Court approval, to file a proof of claim on behalf of the
Employees that have claims under the Plan.
The Debtors sought and obtained the Court's approval of the
Stipulation. The plan administrators are authorized, but not
required, to file a proof of claim on behalf of the Employees.
Moreover, Judge Lynn rules that the Order does not bar or
prohibit any individual employee from filing proofs of claim on
his or her behalf. (Mirant Bankruptcy News, Issue No. 18;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
NAT'L CENTURY: Court Approves 3rd Amended Disclosure Statement
--------------------------------------------------------------
U.S. Bankruptcy Judge Calhoun finds that the National Century
Financial Enterprises Debtors' Third Disclosure Statement contains
adequate information within the meaning of Section 1125 of the
Bankruptcy Code.
Accordingly, the Court approved the Debtors' Disclosure Statement
on January 7, 2004. All objections to the Disclosure Statement
are overruled.
Furthermore, the Court authorizes the Debtors to make further non-
substantive modifications, clarifications and updates to the
Disclosure Statement prior to its dissemination. (National
Century Bankruptcy News, Issue No. 30; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
NORAMPAC INC: Fourth-Quarter Conference Call Slated for Jan. 23
---------------------------------------------------------------
Financial analysts are invited to attend Norampac Inc. fourth
quarter results conference call:
Friday, January 23, 2004 at 10:00 a.m. ET
Dial numbers: (514) 227-8860
(416) 913-8746
Replay: (416) 640-1917 access code:
21032422(pound key)
Media and other interested individuals are invited to listen to
the live or deferred broadcast on the Cascades corporate Web site
at http://www.cascades.com/
Norampac (S&P, BB+ Long-Term Corporate Credit Rating, Stable
Outlook) owns eight containerboard mills and twenty-five
corrugated product plants in the United States, Canada and France.
With an annual production capacity of more than 1.6 million short
tons, Norampac is the largest containerboard producer in Canada
and the 7th largest in North America. Norampac, which is also a
major Canadian manufacturer of corrugated products, is a joint
venture company owned by Domtar Inc. (symbol: DTC-TSE) and
Cascades Inc. (symbol: CAS-TSE).
NRG ENERGY: Intends to Issue Postpetition Guarantee to GEAC
-----------------------------------------------------------
Kelly K. Frazier, Esq., at Kirkland & Ellis, in New York, tells
the Court that NRG International LLC is a wholly owned, non-
debtor subsidiary of the Debtors. NRGenerating International
B.V. is a wholly owned, non-debtor subsidiary of NRG
International, which owns all of the outstanding shares of
NRGenerating Holdings (No. 4) B.V. In turn, Holdings owns a
25.37% interest in the Loy Yang Power Partnership, together with
these unrelated, non-NRG Companies:
* Horizon Energy Investment Group, which owns 25% of the
Partnership; and
* CMS Energy Inc., which owns 49.63% of the Partnership.
The Partnership was formed to own and operate the Loy Yang
Project -- a 2,000 megawatt power station and a brown coal mine
-- located in the Latrobe Valley in the state of Victoria,
Australia. The Power Station is one of the lowest cost fuel
plants in Australia, and the Mine is one of the largest of its
kind in the world, with allocated coal reserves in excess of
2,000 megatonnes. The Power Station initially was built in 1984
and was operated by the state government of Victoria until it was
subsequently privatized and sold to the Partnership in 1997.
The approximately AUD4.89 billion purchase of the Loy Yang
Project in 1997 was financed by:
(1) an AUD3.55 billion debt package with a consortium of both
senior secured lenders -- currently consisting of
approximately 31 lenders, with Australia and New Zealand
Banking Group Limited, as administrative agent -- and two
junior secured lenders; and
(2) an AUD 1.34 billion equity investment by the members of
the Partnership in their own partnership percentages.
Thus, Holdings initial equity investment in the Loy Yang
Partnership was approximately AUD340,000,000.
The Power Station is a market-based power generator, whose
revenues are subject to the prevailing market prices for
electricity in Australia's wholesale national electricity market.
In general, the electricity prices in Australia's wholesale
national electricity market have been lower than expected since
the private acquisition of the Power Station in 1997. Ms.
Frazier relates that the lower than expected revenues have
resulted in insufficient cash flows to satisfy certain covenants
set forth in the finance documents. As a result, the Lenders
placed the Loy Yang Project into lock-up, meaning that no equity
distributions have been available to the Partnership since 1999.
The Partnership currently has debt of AUD3,300,000,000,
consisting of AUD2,900,000,000 of senior secured debt, and
AUD422,000,000 of junior secured debt. A bullet payment of
AUD500,000,000 on account of the senior debt obligation was due
on May 12, 2003. The Bullet Payment was extended by agreement of
the senior secured lenders. The Partnership also has a second
senior debt bullet payment of AUD750,000,000 due in May 2006.
Both CMS and Horizon are unwilling or unable to inject additional
cash into the Partnership to finance the AUD 500,000,000 Bullet
Payment. Moreover, even if the individual partners were able to
fund their portions of the Bullet Payment, the Partnership would
not receive any cash dividends from the Loy Yang Project
operations in the foreseeable future as a result of continuing
failure to satisfy certain covenants set forth in the financing
documents.
The Divestiture of the Loy Yang Project
In February 2002, Generating and Holdings began marketing the Loy
Yang Project as part of the Debtors' then overall strategy to
divest themselves of their entire Asia-Pacific portfolio. In
February 2003, the members of the Partnership entered into a
Joint Sale and Restructure Agreement amongst themselves, which
provided for the process for jointly marketing the Loy Yang
Project. The Partnership retained ABN Amro, Morgan Stanley and
Macquarie Bank to aid with the marketing and sales process, and
to investigate solutions for funding the senior debt bullet
payments and to explore other strategic alternatives. The joint
sales effort resulted in four parties expressing an interest in
purchasing the Loy Yang Project, including GEAC Operations Pty
Ltd.
On July 3, 2003, Generating, together with CMS and Horizon,
entered into a Share Sale Agreement to sell the Partnership to
GEAC. Pursuant to the Sale Agreement, GEAC will purchase all of
the interests in the Partnership, including, without limitation,
all of Generating's shares in Holdings for the aggregate purchase
price of AUD165,000,000, subject to the satisfaction of certain
conditions precedent. One of those conditions precedent relates
to the Lenders and GEAC agreeing to certain variations of the
existing financing package, with the result that GEAC would
assume the existing financing, as modified. The proposed sales
transaction would result in approximately AUD38,000,000 to
AUD47,000,000 in net cash to Generating.
The Proposed NRG Guarantee
As a condition precedent to the consummation of the proposed
sales transaction, the Debtors are required to provide a
guarantee of Generating's warranties and other obligations under
the Sale Agreement. GEAC also requires Court approval of the
execution and delivery of the Guarantee as a condition precedent
to the completion of the sales transaction.
Accordingly, the Debtors and GEAC extensively and in good faith
negotiated the terms of the Guarantee, which provides that the
Debtors will:
"unconditionally and irrevocably guarantee[] to [GEAC] on
demand the accuracy of, and the due and punctual performance
by [Generating] of the [Generating] Warranties (including
without limitation the payment of any moneys payable as a
consequence of any representations and warranties included in
the [Generating] Warranties being untrue) and all other
obligations of [Generating] under the [SSA]."
Pursuant to Section 6 of the Guarantee, the Debtors' maximum
liability under the Guarantee is limited to an amount equal to
the total amount payable to Generating for the sale of its
interest in the Loy Yang Project under the Sale Agreement, which
is estimated to be approximately AUD38,000,000 to AUD47,000,000,
depending on the ultimate allocation of sales proceeds among the
partners and subject to working capital adjustments under the
Sale Agreement. In addition, pursuant to Section 4 of the
Guarantee, the Debtors have no liability if the sales transaction
does not close other than as a result of a breach of the Sale
Agreement by Generating. Moreover, pursuant to Sale Agreement,
there is also a minimum threshold limit for any breach of certain
specified warranties so that no payments for any breach by
Generating is due and payable until the amounts exceed
AUD4,500,000, in which case all outstanding amounts on account of
any breach are payable, including the first AUD4,500,000.
By this motion, the Debtors ask the Court to authorize its
issuance, execution and delivery of the Guarantee, in order to
satisfy one of the conditions precedent under the Sale Agreement.
Ms. Frazier asserts that good business reasons exist for the
Debtors to enter into the Guarantee. The Loy Yang Project has
been extensively marketed, and the Sale Agreement with GEAC
represents the culmination of those marketing efforts and yields
the best possible consideration to Generating under the
circumstances. The Debtors' issuance of the Guarantee as part of
the proposed sale is required by GEAC to proceed with the
transaction. Thus, failure to provide the Guarantee would
gravely threaten the sale of the Loy Yang Project and would
likely cause Generating, and ultimately the Debtors, to fail to
realize the greatest amount possible for its investment in the
project or to be unable to sell the investment altogether. (NRG
Energy Bankruptcy News, Issue No. 20; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
OAKWOOD HOMES: S&P Hacks Junk Ratings on Six Related Classes
------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
subordinate B-1 classes of Oakwood Mortgage Investors Inc.'s pass-
through certificates series 1998-A, OMI Trust 2000-A, OMI Trust
2000-C, OMI Trust 2001-D, and OMI Trust 2001-E. At the same time,
the rating on the class M-2 of OMI Trust 2000-D is lowered.
The lowered ratings reflect the unlikelihood that investors will
receive timely interest and the ultimate repayment of their
original principal investments. Oakwood Mortgage Investors Inc.'s
pass-through certificates series 1998-A, OMI Trust 2000-C, OMI
Trust 2001-D, and OMI Trust 2001-E all reported outstanding
liquidation loss interest shortfalls for their B-1 classes on the
December 2003 payment date. In addition, OMI Trust 2000-D reported
an outstanding liquidation loss interest shortfall for its class
M-2 notes. Standard & Poor's believes that interest shortfalls for
these deals will continue to be prevalent in the future, given the
adverse performance trends displayed by the underlying pools of
manufactured housing retail installment contracts originated by
Oakwood Homes Corp., and the location of B-1 and M-2 write-down
interest at the bottom of the transaction payment priorities
(after distributions of senior principal).
High losses during the past year have reduced the
overcollateralization ratios for all six transactions to zero,
resulting in the complete principal write-down of the B-2 classes
and the partial principal write-down of the B-1 classes. In
addition, OMI Trust 2000-D has begun to experience principal
write-downs on class M-2.
Standard & Poor's will continue to monitor the outstanding ratings
associated with these transactions in anticipation of future
defaults.
RATINGS LOWERED
Oakwood Mortgage Investors Inc.
Pass-thru certs series 1998-A
Rating
Class To From
B-1 D CC
OMI Trust 2000-A
Rating
Class To From
B-1 CC CCC-
OMI Trust 2000-C
Rating
Class To From
B-1 D CC
OMI Trust 2000-D
Rating
Class To From
M-2 D CC
OMI Trust 2001-D
Rating
Class To From
B-1 D CC
OMI Trust 2001-E
Rating
Class To From
B-1 D CC
OAKWOOD HOMES: S&P Places Various Related Ratings on Watch Neg.
---------------------------------------------------------------
Standard & Poor's Ratings Services placed various ratings on
Oakwood Homes Corp.-related manufactured housing transactions on
CreditWatch with negative implications.
The CreditWatch placements reflect the continued adverse
performance trends displayed by the underlying collateral pools of
manufactured housing loans and the resulting deterioration in
credit enhancement since Standard & Poor's last rating actions in
mid 2003. In addition, the unfavorable market conditions that
continue to plague the manufactured housing market have
contributed to the adverse performance of these transactions.
Loan servicing and transaction performance have each suffered
significantly following Oakwood's Nov. 15, 2002 decision to file
for Chapter 11 bankruptcy protection. Since that time, losses have
increased significantly, resulting in overcollateralization ratios
for most transactions being reduced to zero (excluding the 2002
vintage transactions), and principal write-downs of various
subordinate classes. In addition, Oakwood has transitioned its
liquidation of repossessed inventory to a wholesale strategy,
causing recovery rates to be significantly lower.
Clayton Homes, Inc., a subsidiary of Berkshire Hathaway Inc., and
Oakwood have executed an agreement under which Clayton would
acquire substantially all Oakwood's noncash operating assets,
subject to certain conditions and to higher offers.
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 if any rating
actions are necessary within the next two months.
RATINGS PLACED ON CREDITWATCH WITH NEGATIVE IMPLICATIONS
Oakwood Mortgage Investors Inc. Series 1997-A
Class Rating
To From
B-1 BBB/Watch Neg BBB
Oakwood Mortgage Investors Inc. Series 1997-B
Rating
Class To From
B-1 BBB/Watch Neg BBB
Oakwood Mortgage Investors Inc. Series 1997-C
Rating
Class To From
B-1 BBB/Watch Neg BBB
Oakwood Mortgage Investors Inc. Series 1998-A
Rating
Class To From
M-1 AA-/Watch Neg AA-
Oakwood Mortgage Investors Inc. Series 1998-B
Rating
Class To From
M-1 A+/Watch Neg A+
M-2 BBB/Watch Neg BBB
Oakwood Mortgage Investors Inc. Series 1998-D
Rating
Class To From
A AA-/Watch Neg AA-
A-1 ARM AA-/Watch Neg AA-
OMI Trust 1999-C
Rating
Class To From
A-2 A-/Watch Neg A-
M-1 BB/Watch Neg BB
M-2 B-/Watch Neg B-
OMI Trust 1999-D
Rating
Class To From
A-1 A+/Watch Neg A+
M-1 BBB-/Watch Neg BBB-
M-2 B/Watch Neg B
OMI Trust 1999-E
Rating
Class To From
A-1 A-/Watch Neg A-
M-1 BB/Watch Neg BB
M-2 B/Watch Neg B
OMI Trust 2000-A
Rating
Class To From
A-2 BBB/Watch Neg BBB
A-3 BBB/Watch Neg BBB
A-4 BBB/Watch Neg BBB
A-5 BBB/Watch Neg BBB
M-1 B/Watch Neg B
M-2 CCC+/Watch Neg CCC+
OMI Trust 2000-B
Rating
Class To From
A-1 BBB-/Watch Neg BBB-
M-1 B/Watch Neg B
OMI Trust 2000-C
Rating
Class To From
A-1 AA/Watch Neg AA
M-1 BBB+/Watch Neg BBB+
M-2 BB-/Watch Neg BB-
OMI Trust 2000-D
Rating
Class To From
A-2 BBB+/Watch Neg BBB+
A-3 BBB+/Watch Neg BBB+
A-4 BBB+/Watch Neg BBB+
M-1 B+/Watch Neg B+
OMI Trust 2001-C
Rating
Class To From
A-1 BBB+/Watch Neg BBB+
A-2 BBB+/Watch Neg BBB+
A-3 BBB+/Watch Neg BBB+
A-4 BBB+/Watch Neg BBB+
M-1 B/Watch Neg B
M-2 CCC+/Watch Neg CCC+
OMI Trust 2001-D
Rating
Class To From
A-1 BBB+/Watch Neg BBB+
A-2 BBB+/Watch Neg BBB+
A-3 BBB+/Watch Neg BBB+
A-4 BBB+/Watch Neg BBB+
M-1 BB/Watch Neg BB
M-2 B-/Watch Neg B-
OMI Trust 2001-E
Rating
Class To From
A-1 AAA/Watch Neg AAA
A-2 BBB+/Watch Neg BBB+
A-3 BBB+/Watch Neg BBB+
A-4 BBB+/Watch Neg BBB+
M-1 BB/Watch Neg BB
M-2 B-/Watch Neg B-
OMI Trust 2002-A
Rating
Class To From
A-1 AAA/Watch Neg AAA
A-2 AA-/Watch Neg AA-
A-3 AA-/Watch Neg AA-
A-4 AA-/Watch Neg AA-
M-1 A-/Watch Neg A-
M-2 BB+/Watch Neg BB+
B-1 B/Watch Neg B
OMI Trust 2002-B
Rating
Class To From
A-1 AAA/Watch Neg AAA
A-2 AA-/Watch Neg AA-
A-3 AA-/Watch Neg AA-
A-4 AA-/Watch Neg AA-
M-1 A-/Watch Neg A-
M-2 BBB-/Watch Neg BBB-
B-1 BB-/Watch Neg BB-
OMI Trust 2002-C
Rating
Class To From
A-1 A+/Watch Neg A+
M-1 BBB+/Watch Neg BBB+
M-2 BB+/Watch Neg BB+
B-1 B+/Watch Neg B+
OWENS CORNING: Wants Nod to Acquire Plant Equipment for $13.3MM
---------------------------------------------------------------
The Owens Corning seek the Court's authority pursuant to Section
363 of the Bankruptcy Code to exercise a purchase option with
respect to an equipment lease agreement with DrKW Finance, Inc.,
formerly known as Dresdner Kleinwort Benson North America Leasing,
Inc.
Norman L. Pernick, Esq., at Saul Ewing LLP, in Wilmington,
Delaware, informs the Court that Owens Corning, as lessee, and
Dresdner, as lessor, are parties to a Master Equipment Lease
Agreement, dated as of December 29, 1998, for certain equipment
and related personal property. The Equipment is used in Owens
Corning's insulation, composites and roofing businesses and
consists of, among other things:
(1) an asphalt shingle laminating system and related equipment
utilized in the manufacture of laminate shingles at the
Medina, Ohio plant;
(2) an asphalt shingle laminating line and related equipment
utilized in the manufacture of laminate shingles at the
Kearny, New Jersey plant;
(3) a shingle poly-packaging line and related equipment
utilized in the packaging and labeling of shingles at the
Jacksonville, Florida plant;
(4) winding systems and winding systems with conveyors and
automatic lifting system utilized in connection with
its composites operations at the Amarillo, Texas plant;
(5) wet electrostatic precipitators utilized in the treatment
of waste water at the Kansas City, Kansas plant;
(6) a hydro-laser cleaning system utilized to clean the
insulation producing equipment at the Kansas City, Kansas
plant; and
(7) a measurex system, automatic insulation batt folders and
insulation batt auto-bagger utilized to measure, fold,
package and label insulation products produced at the
Fairburn, Georgia plant.
In an effort to resolve certain issues with respect to the
Debtors' use of the Equipment postpetition, Owens Corning and
Dresdner agreed on an interim business solution and entered into
an interim letter agreement dated September 27, 2001. Pursuant
to the Letter Agreement:
(1) Owens Corning made periodic payments to Dresdner
representing 80% of the postpetition quarterly payments
due and owing under the Equipment Agreement;
(2) Owens Corning was entitled to the continued use and
possession of the Equipment; and
(3) Dresdner stood still with respect to potential rights and
remedies it may have had pursuant to the Bankruptcy Code.
To ratify the payments that Owens Corning previously made to
Dresdner pursuant to the Letter Agreement and the parties'
continued course of dealings subsequent to the termination by its
terms of the Letter Agreement, and otherwise to modify the
economic terms of the Letter Agreement on a going-forward basis,
Owens Corning and Dresdner entered into a Stipulation dated as of
April 23, 2002, which the Court approved on June 5, 2002.
Pursuant to the Stipulation:
(1) Owens Corning made periodic payments to Dresdner
representing 100% of the postpetition quarterly payments
due and owing under the Equipment Agreement;
(2) Owens Corning paid to Dresdner an amount representing 20%
of the scheduled postpetition quarterly payments through
and including the quarterly payment that became due on
December 30, 2001;
(3) Owens Corning was entitled to the continued use and
possession of the Equipment;
(4) Dresdner waived any and all accrued, but unpaid,
expenses that were due and owing under the terms of the
Equipment Agreement, including, but not limited to,
attorneys' fees and appraisal costs, estimated by Dresdner
to be in excess of $75,000; and
(5) Dresdner stood still with respect to potential rights and
remedies it may have pursuant to the Bankruptcy Code.
The Purchase Option
Section 17 of the Schedule provides that Owens Corning has the
right, on March 30, 2004, to purchase all of the Equipment at the
pre-determined price of 40% of the cost of the Equipment. The
Purchase Option is predicated upon full quarterly payments up to
that date.
The parties agreed that, notwithstanding any provision to the
contrary in Section 17 of the Schedule, Owens Corning may
immediately exercise the Purchase Option, pursuant to these
terms:
(1) Owens Corning will pay to Dresdner:
(a) $13,353,792; plus
(b) continuing per diem interest calculated pursuant to
the terms of the Equipment Agreement until the date on
which Owens Corning pays to Dresdner $13,353,792;
(2) Upon payment of the Purchase Price, Dresdner will sell,
transfer, assign and convey to Owens Corning title to the
Equipment, free and clear of all liens, encumbrances,
charges and other exceptions to title, except liens
created by or on behalf of Owens Corning, and will deliver
to Owens Corning a bill of sale;
(3) Upon payment of the Purchase Price to Dresdner, Dresdner
will release all liens and security interests granted to
it or its affiliates, successors, predecessors, assigns,
parents or subsidiaries in the Equipment and will deliver
to Owens Corning all of the U.C.C. financing statements
filed against the Equipment and termination statements or
other appropriate documentation in form and substance
reasonably satisfactory to Owens Corning, as may be
reasonably necessary or appropriate to evidence the
termination of liens and security interests in the
Equipment;
(4) Upon payment of the Purchase Price to Dresdner and
delivery of the Bill of Sale and the Release Documents to
Owens Corning, the Equipment Agreement will be deemed
terminated, and the parties will have no additional
obligations under the Equipment Agreement;
(5) Upon payment of the Purchase Price to Dresdner, Dresdner
forever releases and discharges the Debtors from any and
all debts, claims, demands, liabilities, responsibilities,
disputes, causes, damages, actions and causes of action
and obligations of every nature whatsoever, whether
liquidated or unliquidated, known or unknown, matured or
unmatured, fixed or contingent, that the Dresdner
Releasors may have against the Owens Releasees in
connection with or relating to the Equipment Agreement or
the Equipment which arose or occurred prior to the payment
of the Purchase Price, except as set forth in the Bill of
Sale;
(6) Upon delivery of the Bill of Sale and the Release
Documents to Owens Corning, the Debtors, forever release
and discharge Dresdner from any and all debts, claims,
demands, liabilities, responsibilities, disputes, causes,
damages, actions and causes of action and obligations of
every nature whatsoever, whether liquidated or
unliquidated, known or unknown, matured or unmatured,
fixed or contingent, in connection with or relating to
the Equipment Agreement or the Equipment which arose or
occurred prior to the delivery of the Bill of Sale and
the Release Documents, except as set forth in the Bill of
Sale;
(7) The payment of the Purchase Price by Owens Corning to
Dresdner is in full and complete satisfaction of any and
all claims that Dresdner may have against the Debtors with
respect to the Equipment Agreement or the Equipment,
except as set forth in the Bill of Sale; and
(8) Upon payment of the Purchase Price by Owens Corning to
Dresdner, Dresdner will amend any and all proofs of claims
filed against the Debtors to $0.
Mr. Pernick qualifies that Owens Corning's exercise of the
Purchase Option and the payment of the Purchase Price should not
be construed as a characterization of the Equipment Agreement as
a true lease subject to Section 365 of the Bankruptcy Code or,
alternatively, a financing agreement.
According to Mr. Pernick, there is sound business justification
for Owens Corning's exercise of the Purchase Option and the
payment of the Purchase Price. The Debtors utilize the Equipment
in their core business operations and, in turn, in their
reorganization. Moreover, the Debtors believe that the Purchase
Price is reasonable, equivalent to the value of the Equipment.
If the Equipment is not purchased, Owens Corning would have to
expend substantially more money than the Purchase Price to
acquire replacement equipment and would suffer disruption of
production at its facilities while replacement equipment is
located, purchased and installed. (Owens Corning Bankruptcy News,
Issue No. 65; Bankruptcy Creditors' Service, Inc., 215/945-7000)
OXFORD INDUSTRIES: Will Present at ICR Xchange Conference on Fri.
-----------------------------------------------------------------
Oxford Industries, Inc. (NYSE: OXM) announced the Company will be
presenting at The Sixth Annual ICR XChange, Leisure and Lifestyle
Conference. The Oxford Industries presentation will be webcast
live at 11:45 a.m. Pacific Time on Friday, January 16, 2004 at
http://www.icrxchange.com/
Oxford Industries, Inc. (S&P, BB- Long-Term Corporate Credit
Rating, Stable) is a leading producer and marketer of branded and
private label apparel for men, women and children. Oxford provides
retailers and consumers with a wide variety of apparel products
and services to suit their individual needs. Oxford's brands
include Tommy Bahama(R), Indigo Palms(TM), Island Soft(TM), Ely &
Walker(R) and Oxford Golf(R). The Company also holds exclusive
licenses to produce and sell certain product categories under the
Tommy Hilfiger(R), Nautica(R), Geoffrey Beene(R), Slates(R),
Dockers(R) and Oscar de la Renta(R) labels. Oxford's customers are
found in every major channel of distribution including national
chains, specialty catalogs, mass merchants, department stores,
specialty stores and Internet retailers. The Company's common
stock has traded on the NYSE since 1964 under the symbol OXM. For
more information, visit its Web site at http://www.oxfordinc.com/
PACIFIC GAS: Agrees to Escrow $30 Million for Enron Claims
----------------------------------------------------------
On September 5, 2001, Enron Energy Services, Inc. asserted Claim
No. 8881 for $239,920,010 and Enron Energy Marketing Corp.
asserted Claim No. 8882 for $164,029,412 against Pacific Gas and
Electric Company.
After Enron filed Chapter 11 petitions before the U.S. Bankruptcy
Court for the Southern District of New York on December 2, 2001,
Enron Energy Services filed Claim No. 13378 against PG&E in
Enron's Chapter 11 proceeding to assert an additional
$437,590,460 on account of claims which had been filed in Enron
Energy Services' Chapter 11 case by former retail electric
customers in PG&E's service territory. Enron Energy Marketing
also filed Claim No. 13379, amending Claim No. 8882, to assert an
additional $73,393,160 on the same account. The additional
proofs of claim were filed on February 17, 2003.
Under the PG&E Settlement Plan, Reorganized PG&E is required to
establish one or more escrows, and deposit sufficient cash into
them, to make distributions with respect to disputed claims. The
Settlement Plan provides that the Court will determine the cash
amount to be deposited in the Disputed Claims Escrow.
Pursuant to specific provisions under the Settlement Plan, Judge
Montali approves a stipulation that resolves the several claims
held by Enron Energy Services and Enron Energy Marketing against
PG&E. The Stipulation establishes the amount to be deposited in
the Disputed Claims Escrow. The parties agree that:
(a) Reorganized PG&E will deposit $30,000,000 into the
Disputed Claims Escrow, which will be held on account of
Enron's Additional Claims; and
(b) If, before the Settlement Plan Effective Date, Enron's
Additional Claims have become Allowed Claims, no
deposit in the Disputed Claims Escrow will be required
because the Allowed Claims will be paid in Cash in full in
accordance with the Settlement Plan. If, after the
Effective Date, Enron's Additional Claims become allowed,
the Allowed Claims will be paid in Cash in full. The
Disputed Claims Escrow will be reduced to reflect the
difference between the Allowed Amount and $30,000,000.
(Pacific Gas Bankruptcy News, Issue No. 69; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
PARMALAT GROUP: Commissioner Wants to Administer 2 More Units
-------------------------------------------------------------
Milan, 30 December, 2003 | Milano, 30 dicembre 2003
-- Parmalat Finanziaria Spa | -- Parmalat Finanziaria Spa
communicates that Dr. Enrico | comunica che in data odierna
Bondi, Extraordinary | il Dr. Enrico Bondi,
Commissioner of its subsidiary | Commissario Straordinario
company Parmalat Spa, today | della controllata Parmalat
requested that the Minister of | Spa, ha richiesto e ottenuto
Productive Activities admit | dal Ministro delle Attivita
Parmalat Finanziaria SpA, | Produttive, ai sensi dell'art.
Eurolat Spa & Lactis Spa to the | 3 comma 3 del Decreto Legge
Extraordinary Administration | n. 347 del 23 dicembre 2003,
procedure referred to under | l'ammissione della stessa
article 3, section 3 of | Parmalat Finanziaria Spa,
Legislative Decree no. 347 of | nonche delle societa
23 December 2003. This request | controllate Eurolat Spa e
has been accepted and Dr. Bondi | Lactis Spa, alla procedura di
has been named Extraordinary | amministrazione straordinaria.
Commissioner for the above | Il Dr. Enrico Bondi e stato
three companies. On | nominato Commissario
24 December 2003, the | Straordinario delle tre
subsidiary company Parmalat Spa | suddette Societa. Con Decreto
was placed under Extraordinary | del Ministro delle Attivita
Administration by Decree from | Produttive, in data
the Minister of Productive | 24 dicembre 2003 la
Activities in accordance with | controllata Parmalat Spa era
the same Legislative Decree | stata ammessa, ai sensi del
no. 347 of 23 December 2003 | Decreto Legge n. 347 del
which relates to urgent | 23 dicembre 2003 relativo
measures for the restructuring | a misure urgenti per la
of major companies. Dr. Bondi | ristrutturazione delle grandi
was appointed Extraordinary | imprese, all'Amministrazione
Commissioner for the Company on | Straordinaria e il Dr. Enrico
the same date. | Bondi era stato nominato
| Commissario Straordinario
| della Societa.
A full-text copy of Legislative Decree No. 347 was published in
Italy's Official Gazette on Dec. 24, 2003, and a copy is
available at no charge at:
http://gazzette.comune.jesi.an.it/2003/298/1.htm
The new law implements four important changes:
(A) One Powerful Commissioner
"The new law gives much more power to both the industry ministry
and the extraordinary commissioner and less to the court,"
Gianmatteo Nunziante, a managing partner of the Rome-based
Nunziante Magrone legal firm tells PK Semler writing for
Mergermarket. Under the old law, the Industry Ministry would
name three commissioners to be appointed by the court, which
would have supervisory power over the commissioners. For big
companies like Parmalat, there's one Commissioner with greater
autonomy.
(B) 120 Days
Another change to the law is that the extraordinary commissioner
will have sixty days that can be extended by another sixty days
to prepare their report to determine whether the company can be
rescued, disposed of or file for bankruptcy.
(C) Flexibility
The new decree also stipulates that a company under extraordinary
administration is not forced to choose between rescuing the
company or selling assets.
(D) Walking Away from Contracts
"One of the real new powers under the law is that of
'revocatoria' in which Bondi can decide to revoke any contract
made by Parmalat over the past two years if it is deemed against
the company's interest," Mr. Nunziante explained to Mergermarket.
"This power was only available under the old law if the company
was in liquidation".
Minister Marzano's Decree approving Parmalat S.p.A.'s entry into
Extraordinary Administration and appointing Mr. Bondi as
Commissioner is published at:
http://gazzette.comune.jesi.an.it/2003/300/10.htm
(Parmalat Bankruptcy News, Issue No. 2; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
PASTA VENTURES: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: Pasta Ventures, Inc.
dba Fazoli's (Draper, West Jordan, West Valley,
Midvale & Tooele)
138 East 12300 South
Suite C #182
Draper, Utah 84020
Bankruptcy Case No.: 04-20447
Type of Business: The Debtor operates a fast food Italian
restaurant. See http://www.fazolis.com/
Chapter 11 Petition Date: January 12, 2004
Court: District of Utah (Salt Lake City)
Debtor's Counsel: R. Mont McDowell, Esq.
McDowell & Gillman
Twelfth Floor
50 West Broadway
Salt Lake City, Utah 84101
Tel: 801-359-3500
Estimated Assets: $500,000 to $1 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Fazoli's Systems, Inc. Franchise, royalty & $130,000
c/o Fazoli's Management Inc. other fees
Sysco Trade debt secured by $27,124
Deposits of approx.
Brimley $ Associates rent, West Jordan $26,161
Novasource Development, L.C. Management Agreement $25,000
Wadsworth Fort Union LLC rent, Midvale $20,093
5600 Associates January rent, West $19,897
Valley
William Bone rent, Tooele $19,200
Salt Lake County Assessor property tax - West $7,606
Valley City
South Valley Water Rec. sewer/water, West $3,223
Jordan
Kasteler & Associates Accountants $2,500
South Valley Water Rec. sewer/water, Midvale $2,373
Muir Produce - Midvale $2,007
Michael's repairs - Draper $1,869
Franke Systems - Admin Equipment $1,583
Muir Produce - West $988
Valley City
South Valley Water Rec. sewer/water, Draper $980
Franke Systems Midvale - Equipment $876
Muir Produce - Draper $727
Tooele City Water water, Tooele $718
Waste Management trash removal $643
PILLOWTEX CORP: Enters Stipulation Allowing BofA to File Claims
---------------------------------------------------------------
To facilitate the processing of claims, to ease the burden on the
Court, and to reduce any unnecessary expense to the Pillowtex
Corporation Debtors' estates, Bank of America, N. A., for itself
and as administrative agent for the Term Loan Lenders, together
with the Debtors and the Official Committee of Unsecured Creditors
agree that Bank of America will be permitted to file proofs of
claim on behalf of the Term Loan Lenders against the Debtors
according to these procedures:
(a) On or before the last day to file claims against the
Debtors, Bank of America will file a single proof of
claim, as agent, evidencing the claims of all of the
current members of the Term Loan Lenders -- the Master
Proof of Claim -- together with a copy of Supporting
Documents in the jointly administered bankruptcy cases of
In re Pillowtex Corporation, et al., Case No. 03-12339.
If filed on or before the Bar Date, the Master Proof of
Claim will be deemed filed against Pillowtex, as if Bank
of America filed a separate proof of claim against
Pillowtex on behalf of each member of the Term Loan
Lenders;
(b) On or before the Bar Date, Bank of America will file a
single proof of claim, as agent, evidencing the claims of
all of the current members of the Term Loan Lenders -- the
Additional Proofs of Claim -- in the bankruptcy cases for
each of the Subsidiaries, together with a list of the
Supporting Documents. The Additional Proofs of Claim will
not include a copy of the Supporting Documents. The
Additional Proofs of Claim will indicate that the
Supporting Documents have been filed in the Pillowtex case
on or before the Bar Date;
(c) Bank of America will serve a copy of the Supporting
Documents on the Debtors' counsel. Bank of America will
also keep a copy of the Supporting Documents at:
Winstead Sechrest & Minick P.C.,
1201 Elm Street, 5400 Renaissance Tower,
Dallas, Texas 75270
Upon reasonable request, Winstead will make the Supporting
Documents available for inspection and copying by parties-
in-interest;
(d) Upon the filing of the Proofs of Claim, each member of the
Term Loan Lenders will be deemed to have filed proofs of
claim against each of the Debtors in accordance with
Section 501 of the Bankruptcy Code and Rule 3003 of
Federal Rules of Bankruptcy Procedure. Bank of America
may amend the Proofs of Claim from time to time to reflect
a change in the holders of claims or a reallocation among
holders of the claims resulting from any transfer of any
claims, provided the amendment does not conflict with any
order of the Bankruptcy Court, the Bankruptcy Code, the
Bankruptcy Rules or the Local Rules; and
(e) The terms of Stipulation in relation to the filing of the
Proofs of Claim are intended solely for the purpose of
administrative convenience and neither the Stipulation nor
the Proofs of Claim will affect the substantive rights of
any member of the Term Loan Lenders, any Debtor, or the
Committee.
Accordingly, the Debtors ask Judge Walsh to approve the
Stipulation. (Pillowtex Bankruptcy News, Issue No. 57; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
PLAYBOY ENTERPRISES: Elects James F. Griffiths Senior EVP
---------------------------------------------------------
Christie Hefner, chairman and chief executive officer of Playboy
Enterprises, Inc., (NYSE: PLA, PLAA) announced the election of
James F. Griffiths to the newly created post of senior executive
vice president.
Griffiths will be responsible for business development across the
company as well as for global television and location-based
entertainment.
Griffiths, 49, joins PEI from Metro-Goldwyn-Mayer (MGM) where he
spent six years as president, worldwide television distribution.
He oversaw the global distribution of movies and television
programs and supervised MGM Networks, Inc., the company's cable
and satellite channel ventures. Griffiths joined MGM from
Creative Artists Agency where he served as director of the
Entertainment Ventures Group and helped create Tel-TV and the
Sundance Channel as well as other business and content
opportunities.
Hefner said: "Given our financial momentum and the global
opportunities created by technology and multi-media trends, this
is an ideal time to add a business development executive. In
addition, Jim's focus and deal-making skills will be valuable in
helping us realize our potential in gaming/location-based
entertainment. Jim also will be partnering with our current
senior managers, including Jim English, president of our
Entertainment Group, and Dick Rosenzweig, chairman of Alta Loma
Entertainment, to build on our rapidly growing international TV
business and the early success of our Alta Loma productions."
"Playboy's global brand recognition gives it a unique status in an
increasingly complex and fragmented entertainment industry,"
Griffiths said. "The company's strong management team and the
opportunities across its business lines make this an even more
attractive position and I am pleased at this chance to work with
Christie and her team to create additional value."
A graduate of Colgate University, Griffiths also holds an MBA from
New York University. He began his professional career as a senior
accountant with Price Waterhouse and was recruited to Home Box
Office where he spent eight years. Griffiths later served as
president of worldwide pay television and international home video
at Twentieth Century Fox before joining Star Television in 1993 as
managing director in Hong Kong.
In his new position, Griffiths will be based in the company's Los
Angeles offices effective January 20, 2004.
The search was handled by Mike Speck, global practice leader,
media and entertainment, Heidrick & Struggles.
Playboy Enterprises (S&P, B Corporate Credit Rating) is a brand-
driven, international multimedia entertainment company that
publishes editions of Playboy magazine around the world; operates
Playboy and Spice television networks and distributes programming
via home video and DVD globally; licenses the Playboy and Spice
trademarks internationally for a range of consumer products and
services; and operates Playboy.com, a leading men's lifestyle and
entertainment Web site.
POLYONE CORP: Acquires ResinDirect's North American Business
------------------------------------------------------------
PolyOne Corporation (NYSE: POL), a leading global polymer services
company, completed its acquisition of the North American
distribution business of ResinDirect LLC, a wholly owned
subsidiary of Louis Dreyfus Energy Services L.P.
Terms of the transaction were not disclosed.
ResinDirect is a worldwide procurement, distribution and marketing
company dealing in the purchase and sale of prime commodity
plastic resins. In North America, ResinDirect distributes
approximately 60 million pounds of commodity plastic resins
annually.
ResinDirect's North American distribution business will be
integrated into PolyOne's Distribution business, a leading North
American supplier of engineered and commodity plastic resins of
more than a dozen major chemical companies. PolyOne Distribution
has six customer service centers; more than 30 stocking locations,
including 10 repackaging plants; and a state-of-the-art Design
Center in Suwanee, Georgia. In 2003 PolyOne Distribution had sales
that exceeded $500 million.
"The acquisition of ResinDirect substantially enhances PolyOne's
commodity resin market position," said Michael L. Rademacher, vice
president and general manager of PolyOne Distribution.
"ResinDirect's customers also will benefit because we will provide
them with an expanded product offering."
PolyOne will continue to operate ResinDirect's customer service
office in Davidson, North Carolina.
PolyOne Corporation (Fitch, B Senior Unsecured Debt and BB- Senior
Secured Debt Ratings, Negative) with 2002 revenues of $2.5
billion, is an international polymer services company with
operations in thermoplastic compounds, specialty resins, specialty
polymer formulations, engineered films, color and additive
systems, elastomer compounding and thermoplastic resin
distribution. Headquartered in Cleveland, Ohio, PolyOne has
employees at manufacturing sites in North America, Europe, Asia
and Australia, and joint ventures in North America, South America,
Europe and Asia. Information on the Company's products and
services can be found at http://www.polyone.com/
POPE & TALBOT: Schedules Q4 & FY 2003 Conference Call for Jan. 22
-----------------------------------------------------------------
Pope & Talbot (NYSE:POP), an Oregon-based pulp and wood products
company, will hold its fourth quarter conference call on Thursday,
January 22, 2004, at 2:00 p.m. Eastern Time (11:00am Pacific
Time). To participate, please dial: 416-695-5259.
This call will also be webcast by CCBN and can be accessed at Pope
& Talbot's Web site at http://www.poptal.com/in the Investor
Relations section. The webcast will be available on the Web site
for two weeks following the call.
Pope & Talbot (S&P, BB Corporate Credit Rating, Negative) is
dedicated to the pulp and wood products businesses. The Company is
based in Portland, Oregon and traded on the New York and Pacific
stock exchanges under the symbol POP. Pope & Talbot was founded in
1849 and produces market pulp and softwood lumber at mills in the
U.S. and Canada. Markets for the Company's products include the
U.S., Europe, Canada, South America, Japan and the other Pacific
Rim countries. For more information on Pope & Talbot, Inc., please
check the Web site at http://www.poptal.com/
PORTOLA PACKAGING: Proposed Refinancing Spurs S&P's Stable Outlook
------------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Portola
Packaging, Inc. to stable from negative and affirmed its 'B+'
corporate credit rating following a review of the company's
proposed refinancing plan and the expected improvement to
liquidity. Total debt outstanding was approximately $153 million
as of Nov. 30, 2003.
"At the same time, Standard & Poor's assigned its 'BB-' rating and
its recovery rating of '1' to the proposed amended and restated
$50 million senior secured revolving credit facility due 2009. The
'1' recovery rating indicates a high expectation of full recovery
of principal in the event of a default," said Standard & Poor's
credit analyst Paul Blake.
Furthermore, Standard & Poor's assigned its 'B-' rating to
Portola's proposed $180 million senior notes due 2012,two notches
below the corporate credit rating. The lower rating on the
proposed unsecured notes reflects the note holders' recovery
prospects in the event of a default, relative to Portola's secured
lenders' claims, and Standard & Poor's view that the increased
amount of unsecured notes will dilute recoveries for the note
holders. Proceeds of the notes will be used to repay the $110
million of existing senior notes due 2005 and to repay
approximately $40 million outstanding under the existing revolving
credit facility. In addition, Portola intends to use up to
approximately $20 million of the net proceeds to redeem
outstanding warrants and to repurchase outstanding shares of its
common stock. Any remaining net proceeds will be used for general
corporate purposes.
The outlook revision reflects an expected improvement in liquidity
and financial flexibility following completion of the transaction.
In September 2003, Portola acquired Tech Industries for
approximately $36 million in cash using borrowings under its
credit facility, severely limiting its liquidity. In response to
the tightened liquidity, Standard & Poor's revised its outlook on
Portola to negative from stable. The proposed transaction limits
any near-term liquidity concerns, provides the financial
flexibility for the successful integration of Tech Industries,
and eliminates refinancing concerns as the existing credit
facility and senior notes were due in 2004 and 2005, respectively.
PRIMUS TELECOMMS: S&P Ups Corporate Credit Rating a Notch to B-
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on McLean,
Virginia-based international long-distance carrier Primus
Telecommunications Group Inc. The corporate credit rating was
raised to 'B-' from 'CCC+'. The outlook is positive.
At the same time, Standard & Poor's assigned a 'CCC' rating to the
proposed $200 million senior notes due 2014 (to be sold under Rule
144A with registration rights) of newly created intermediate
holding company Primus Telecommunications Holding Inc. These notes
are guaranteed by Primus. Proceeds from the notes will be used to
repurchase other high-coupon debt, including Primus' 9.875% senior
notes due 2008 and its 11.25% senior notes due 2009, as well as to
repay certain other debt. The new notes are rated two notches
below Primus' corporate credit rating due to the fact that the
value ascribable to the company's assets in a distressed case
would not be expected to provide significant value. As such, the
concentration of priority obligations (which consist principally
of the liabilities at the operating subsidiaries) relative to
asset value is expected to continue to be well above Standard &
Poor's 30% threshold for rating the debt two notches below the
corporate credit rating.
"The upgrade reflects the fact that the company has been able to
continue to improve its financial profile over the last several
quarters," explained Standard & Poor's credit analyst Catherine
Cosentino. The new financing, in particular, provides the company
increased liquidity, since nearly $160 million in maturities in
the 2008-2009 time frame will be extended to 2014. Pro forma for
repayments from the planned note issue, maturities through 2006
remain modest, at only about $25 million (including operating
lease payments), with the first significant maturity of about $73
million not until 2007. Moreover, the company has begun to
generate net free cash flow after capital expenditures and is
expected to continue to generate net free cash flow over the next
several years even under relatively conservative growth
assumptions.
"The ratings reflect the high degree of competition facing the
company, both in the residential and small business markets that
it serves," said Ms. Cosentino. The residential market in
particular has been characterized by high churn, although Primus'
overall churn has remained relatively stable over the last several
quarters, even with a higher attrition from the acquired Cable &
Wireless U.S. business. The attendant pricing pressures have
adversely affected the long-distance sector as a group over the
past few years, although pricing stabilized somewhat in 2003 for
Primus. The business market, though more sustained and subject to
somewhat lower pricing pressures, has been adversely affected by
economic weakness and associated bankruptcies, as well as the
scale-back of telecom spending by many customers. These factors
have also pressured demand from Primus' carrier customers, which
still constitute about 20% of the company's revenues. These
factors have caused many of Primus' peers to file for bankruptcy
protection or liquidate. The company's long-term business
prospects therefore continue to remain somewhat uncertain.
Still, as a result of significantly de-levering and improving
EBITDA, the company generated positive net free cash flow for the
nine months ended Sept. 30, 2003. Moreover, given EBITDA growth
rates in recent periods, the company has reasonable prospects to
achieve a growth rate in the upper single-digit area. Even with
modest EBITDA growth, the company should easily be able to meet
the estimated $25 million in upcoming maturity requirements (pro
forma for repayments from the planned note issue, including
operating lease payments) through at least 2006.
QWEST COMMS: Expands Network Services Agreement with Dictaphone
---------------------------------------------------------------
Qwest Communications International Inc. (NYSE: Q) announced that
Dictaphone, a leader in voice recognition, dictation and medical
transcription software, has expanded its service agreement with
Qwest. Dictaphone will use Qwest Web Contact Center(SM) -- an
interactive, voice recognition solution designed to meet the needs
of call-centers and businesses with inbound and outbound customer
contact needs.
Dictaphone will use the QWCC platform to enhance its proprietary
employee communications system, which enables customers to
immediately contact Dictaphone employees via telephone regardless
of their locations.
Dictaphone began its relationship with Qwest in December, 2001. In
addition to the contract expansion, Qwest provides Dictaphone with
long-distance voice services, toll-free solutions for its call-
centers, dedicated Internet access and QWCC solutions.
Dictaphone's success with those services led to its additional
investment in Qwest's premium network technology, enabling it to
upgrade and enhance its systems, and prepare for a disaster such
as a hurricane or a power outage.
QWCC is one of the critical technologies used in Dictaphone's
communications system, known as Find(TM). The Find application is
critical to Dictaphone because it is the company's primary means
for customers to get in touch with Dictaphone representatives,
even if they are traveling and only reachable by a mobile phone.
Find also allows Dictaphone to prepare for an emergency because it
can re-direct calls from one call-center to another in the event
of a disaster.
"Find's success is attributable to Qwest's call-center solutions,"
said Robert Moon, senior manager telecommunications, Dictaphone
Corporation. "Qwest was able to implement Find on its QWCC
platform almost immediately and, as a result, we were able to
reduce costs associated with delivering Find and we can easily add
additional features, such as integrating it with fax transmissions
and other data functions. QWCC combined with the rest of the
services we're getting from Qwest has significantly improved our
business because it helps us reduce our overall communications
spend and our customers are getting better service than ever
before."
"At Qwest we are dedicated to helping our business customers
deliver excellent service to their customers," said Cliff Holtz,
executive vice president, Qwest business markets group. "One way
we do that is through our industry-leadership in contact center
solutions, which are based on cutting-edge technology that enables
businesses to create custom applications and solutions to fit
their needs. Dictaphone is taking advantage of those solutions and
we're very pleased to be their service provider of choice again."
Qwest has valuable toll-free, long-distance and next-generation
solutions designed to meet the needs of businesses with customer
contact centers. QWCC is an industry-leading interactive voice
response and voice recognition solution for both inbound and
outbound calls based on the Voice XML industry standard. It works
as a stand-alone application or integrates with Web, computer
telephony integration platforms and database information. With
QWCC, customers can reduce operating costs, increase customer
satisfaction and minimize capital investment.
Qwest Communications International Inc. (NYSE: Q) is a leading
provider of voice, video and data services to more than 25 million
customers. The company's 47,000 employees are committed to the
"Spirit of Service" and providing world-class services that exceed
customers' expectations for quality, value and reliability. For
more information, please visit the Qwest Web site at
http://www.qwest.com/
RAINIER CBO: Fitch Affirms Class B-1L & B-2 Note Ratings at B+/B-
-----------------------------------------------------------------
Fitch Ratings has affirmed Rainier CBO I, Ltd. as follows:
-- $88,549,059 class A-1L notes 'AAA';
-- $137,000,000 class A-2L notes 'AAA';
-- $62,000,000 class A-3L notes 'A+';
-- $35,000,000 class A-4C notes 'BB+';
-- $13,000,000 class B-1L notes 'B+';
-- $8,000,000 class B-2 notes 'B-';
Rainier CBO, a collateralized bond obligation, is managed by
Centre Pacific, LLC. The CBO was established in July of 2000 to
issue debt and equity securities and to use the proceeds to
purchase high yield bond collateral. According to the Nov. 17,
2003 trustee report, Rainier CBO's collateral currently includes a
par amount of $14.367 million (4.04%) in defaulted assets. The
senior class A overcollateralization test and the class A OC test
are passing at 124.7% and 110.6% with triggers of 117% and 106%,
respectively. The class B OC test is failing at 102.4% with a
trigger of 103%.
Fitch has reviewed the credit quality of the individual assets
comprising the portfolio, including discussions with Centre
Pacific, LLC. In addition, Fitch has conducted cash flow modeling
using various default timing and interest rate scenarios. Based on
the modeling results and the stable performance of the underlying
collateral, Fitch has affirmed all of the rated liabilities issued
by Rainier CBO.
Fitch will continue to monitor Rainier CBO.
REDBACK NETWORKS: Bridge Associates Serving as Crisis Managers
--------------------------------------------------------------
Redback Networks, Inc., seeks permission from the U.S. Bankruptcy
Court for the District of Delaware to employ Bridge Associates LLC
as its Crisis Manager.
The Debtor is familiar with Bridge's professional standing and
reputation. The Debtor understands that Bridge has a wealth of
experience in providing turn around advisory services in
restructurings and reorganizations and enjoys an excellent
reputation for services it has rendered in large and complex
chapter 11 cases on behalf of debtors and creditors throughout the
United States.
In this engagement, Bridge will:
a) serve as an interface between the Debtor's chief
executive officer and senior management and the Debtor's
senior lenders to assure accurate and timely sharing of
information as required under the terns of the debtor-
in-possession financing agreement(s);
b) assist Senior Management to prepare, refine, and present
cash flow, liquidity and financial forecasts as may be
required by the Debtor's senior lenders;
c) evaluate the Debtor's cash flow and liquidity, make
recommendations regarding and assist Senior Management
in implementing improvements;
d) work with the Debtor's outside counsel to provide
support and assistance as needed to the Debtor's Senior
Management during the bankruptcy process. Be available
to testify regarding Bridge's role and work as performed
for the Company;
e) upon request, assist Senior Management in the
development and presentation of any business plans or
projections that are required in connection with the
Debtor's bankruptcy case;
f) upon request, assist Senior Management to review,
develop and implement organization rightsizing
activities;
g) as appropriate or upon request, prepare and present
reports from time to time to the Board of Directors; and
h) assist in such other matters as maybe mutually agreed
upon with the Debtor's chief executive officer or Senior
Management or as may be directed by the Board.
Anthony H.N. Schnelling, Managing Director of Bridge, discloses
the Firm's current hourly rates:
Managing Directors $400 to $450 per hour
Principals and Senior Consultants $300 to $450 per hour
Senior Associates $250 to $350 per hour
Associates $175 to $250 per hour
Headquartered in San Jose, California, Redback Networks, Inc. is a
leading provider of advanced telecommunications networking
equipment. The Company filed for chapter 11 protection on
November 3, 2003 (Bankr. Del. Case No. 03-13359). Bruce Grohsgal,
Esq., Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young,
Jones & Weintraub P.C., and G. Larry Engel, Esq., Jonathan N.P.
Gilliland, Esq., at Morgan Lewis & Bockius, LLP represent the
Debtor in its restructuring efforts. When the Company filed for
protection from its creditors, it listed $591,675,000 in total
assets and $652,869,000 in total debts.
RICHTREE INC: Bank Lender Agrees to Forbear Until March 31, 2004
----------------------------------------------------------------
Richtree Inc., (TSX-MOO.b) entered into revised credit
arrangements with its bankers.
Under its credit agreement, Richtree was obligated to prepay its
term credit facilities by 50% of any monies obtained through
equity financing. In January 2003, the Company completed an equity
financing of $1,500,000 and therefore became obligated to prepay
$750,000 to its bankers. Furthermore, the Company was to make a
principal repayment of $850,000 as per the payment schedule on
July 31, 2003. These payment obligations and other defaults arose
under the credit agreement prior to or just following the fiscal
year end of July 27, 2003. However, all interest payments called
for under the credit facilities have been made.
Beginning in February 2003, Richtree entered into discussions with
the bank to amend its credit facilities. The discussions with the
bank continued until late December 2003, and resulted in the
entering into of a forbearance agreement under which the bank has
agreed to forbear from exercising its rights until March 31, 2004
or such later date as the bank may determine is warranted. During
the period of forbearance, the Company is not required to make
principal payments, will continue to pay interest as due and will
abide by certain reporting requirements of the bank.
Richtree is currently exploring with third parties the raising of
sufficient funds through new debt or equity, or by the sale of
particular assets, so as to reduce or fully retire the bank
indebtedness.
RURAL/METRO: Will Continue Exclusive Contract in Gilbert, Ariz.
---------------------------------------------------------------
Rural/Metro Corporation (Nasdaq:RURL) was awarded a long-term
contract to continue as the exclusive emergency ambulance provider
in Gilbert, Ariz., through its Southwest Ambulance division.
The contract was awarded on a unanimous vote of the Gilbert Town
Council. The award includes an initial term of three years,
followed by two, three-year renewal periods, for a total possible
length of nine years.
Jack Brucker, president and chief executive officer, said, "We are
very proud to continue providing the highest levels of care to the
citizens of Gilbert and pleased that the Town recognizes the long-
term value of our services in the future. We believe our
longstanding commitment to the communities we serve continues to
result in new contract awards and renewals and further underscores
our solid customer-retention record."
Southwest Ambulance has provided exclusive emergency ambulance
service to the community since 1988, transporting more than 4,500
patients per year. Gilbert is among the fastest-growing suburbs in
the Phoenix metropolitan area, encompassing 76 square miles and a
population of 154,000 residents.
Barry Landon, president of Southwest Ambulance, said, "During the
past 16 years, Southwest Ambulance has grown along with the Town
of Gilbert. That relationship also has resulted in a fundamental
understanding and appreciation for the Town's emergency medical
transportation system. We are pleased by the opportunity to
continue to enhance our presence in the community and look forward
to serving Gilbert's citizens in the future."
Rural/Metro Corporation provides emergency and non-emergency
medical transportation, fire protection, and other safety services
in 24 states and more than 400 communities throughout the United
States. For more information, visit the company's Web site at
http://www.ruralmetro.com/
At June 30, 2003, Rural/Metro Corp.'s balance sheet shows a total
shareholders' equity deficit of about $209 million.
SELECT MEDICAL: Will Present at 22nd Annual JPMorgan Conference
---------------------------------------------------------------
Select Medical Corporation (NYSE: SEM) filed a Current Report
today on Form 8-K with the Securities and Exchange Commission.
The Form 8-K furnished, for purposes of Regulation FD, an Investor
Presentation that will be given by Select Medical Corporation at
the JPMorgan 22nd Annual Healthcare Conference. The Investor
Presentation includes revenues and earnings guidance of Select for
the quarter ended December 31, 2003, as well as for the year
ending December 31, 2004. The guidance provided in the Investor
Presentation does not reflect a change to the guidance provided by
Select in its third quarter earnings release that was issued on
October 29, 2003, and has only been adjusted to reflect Select's
subsequent 2-for-1 split of its common stock, which became
effective on December 22, 2003. The guidance provided in the
Investor Presentation does not reflect any actual results for the
quarter ended December 31, 2003, and was not intended to represent
a change in Select's business outlook.
Select Medical Corporation (S&P, BB- Corporate Credit Rating,
Stable) is a leading operator of specialty hospitals in the United
States. Select operates 77 long-term acute care hospitals in 24
states. Select operates four acute medical rehabilitation
hospitals in New Jersey. Select is also a leading operator of
outpatient rehabilitation clinics in the United States and Canada.
Select operates approximately 829 outpatient rehabilitation
clinics in the United States and Canada. Select also provides
medical rehabilitation services on a contract basis at nursing
homes, hospitals, assisted living and senior care centers, schools
and worksites. Information about Select is available at
http://www.selectmedicalcorp.com/
SK GLOBAL: Sovereign Asset Transfers 14.99% SK Stake to Units
-------------------------------------------------------------
Sovereign Asset Management Ltd. transferred some of its 14.99%
stake in SK Corp. to wholly owned units after the stock exchange
reported that a 12% stake, or 15.27 million shares in SK Corp.
had been traded between overseas investors.
The transfers, Bloomberg News reports, were undertaken for
internal risk management purposes and do not reduce Sovereign's
holdings. (SK Global Bankruptcy News, Issue No. 10; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
SOLUTIA INC: Wants Nod to Hire Ordinary Course Professionals
------------------------------------------------------------
In connection with the day-to-day operation of their businesses,
the Debtors require the services of certain professionals,
including attorneys, accountants, appraisers, auctioneers,
actuaries, brokers, engineers, title companies, surveyors,
intellectual property maintenance service providers,
environmental consultants, pharmaceutical consultants, design
consultants, logistics consultants, information technology
consultants, marketing and business consultants, medical service
personnel and lab technicians. To avoid disruption in their
operations, the Solutia Debtors intend to continue to employ these
Ordinary Course Professionals to render services to their estates
similar to those services rendered before the Petition Date.
However, the Debtors believe that, in light of the additional
cost associated with the preparation of employment applications
for professionals who will receive relatively small fees during
their Chapter 11 cases -- and who are not "professional persons"
as contemplated by Section 327 of the Bankruptcy Code -- it would
be impractical and inefficient for them to submit individual
applications and proposed employment orders for each Ordinary
Course Professional and Service Provider. By this motion, the
Debtors seek the Court's authority to employ the Ordinary Course
Professionals and the Service Providers in the ordinary course of
business without requiring each Ordinary Course Professional and
Service Provider to submit separate employment and fee
applications.
The Debtors propose that each Ordinary Course Professional will
file with the Court and serve on the United States Trustee for
the Southern District of New York:
(a) a declaration certifying, pursuant to Rule 2014 of the
Federal Rules of Bankruptcy Procedure, that it does not
represent or hold any interest adverse to the Debtors or
their estates with respect to the matter on which the
professional is to be employed; and
(b) a completed employment questionnaire.
The Debtors also propose to compensate, without any prior Court
application, the fees and disbursements of each Ordinary Course
Professional who has filed the required declaration and
employment questionnaire, upon submission and approval by the
Debtors of an appropriate invoice setting forth in reasonable
detail the nature of the services rendered and disbursements
incurred. The payments will range from $5,000 to $50,000 per
month for each Ordinary Course Professional. However, the
Debtors' total aggregate payments will not exceed $10,000,000,
unless the aggregate limitation is increased by further Court
order.
To the extent that an Ordinary Course Professional is paid less
than the full permitted amount of compensation in any one month,
the Debtors propose that that professional will be entitled to
carry forward its unused portion of that month's permitted amount
and add it to the permitted amount of compensation for the
immediately succeeding month. The Debtors also suggest that if
any Ordinary Course Professional becomes materially involved in
the administration of the Chapter 11 cases, that professional
will be employed pursuant to Section 327.
Section 327 generally governs a debtor-in-possession's employment
of "professional persons" to represent it in carrying out its
duties under the Bankruptcy Code. The Ordinary Course
Professionals and the Service Providers provide services to the
Debtors unrelated to the Chapter 11 cases.
Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher LLP, in New
York, tells the Court that employment of the Ordinary Course
Professionals and Service Providers allows the Debtors to
continue using their essential services while:
(a) saving the estates substantial expenses associated with
applying separately for the employment of each
professional;
(b) eliminating the costs pertaining to preparing and
prosecuting fee applications; and
(c) relieving the Court and the U.S. Trustee of the burden
of reviewing numerous fee applications involving
relatively small amounts of fees and expenses. (Solutia
Bankruptcy News, Issue No. 4; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
SPIEGEL INC: Committee Hires Holster & Elsing as German Counsel
---------------------------------------------------------------
The Creditors Committee of the Spiegel Group Debtors sought and
obtained the Court's authority to retain Holters & Elsing as its
special German litigation counsel, nunc pro tunc to October 28,
2003.
On September 5, 2003, Stephen J. Crimmins, the Independent
Examiner appointed in the Securities and Exchange Commission's
enforcement action against Spiegel, which is pending in the
United States District Court for the Northern District of
Illinois, filed his report concerning Spiegel. Based on the
statements and conclusions made in the Examiner's Report, as well
as other information available to the Committee, the Committee's
counsel is investigating claims against numerous parties,
including these German persons and entities:
(a) the indirect holders of 90% of the parent Debtor's stock,
Dr. Michael Otto and his family;
(b) the Spiegel board of directors, of which Otto was
chairman; and
(c) Otto's huge multinational retail empire, originally known
as Otto Versand GmbH and now known as Otto GmbH & Co. KG.
To ensure that the rights of Debtors' estates are protected, the
Committee requires special German litigation counsel to assist
and advise it in the review, investigation, and, if appropriate,
pursuit of, claims against the Otto Entities in Germany.
As the Otto Entities are each German persons or entities and
certain related actions likely must be prosecuted in Germany, it
is necessary and reasonable for Holters, as special German
counsel, to represent the Committee with respect to these
matters. The Committee selected Holters as its German counsel
because of the firm's litigation experience. In the event the
investigations to be conducted by the Committee require Holters
to file suit in Germany against the Otto Entities, the Committee
believes that Holters has the ability and requisite experience to
represent it.
As special counsel, Holters will be:
* assisting in the review of claims and causes of action
against German parties, including the Otto Entities, and
exploring the Committee's options with regard to the
prosecution of claims and causes of action under German law;
* if appropriate, prosecuting claims or causes of action in
Germany against German parties, including the Otto Entities;
* appearing before any German tribunal to protect the
interests of the estate;
* performing all other necessary legal services requested by
the Committee in connection with the matters for which
Holters is being retained; and
* otherwise representing the Committee in German litigation
related matters where the Committee so directs.
Dr. Siegfried H. Elsing, a partner of the firm, assures the Court
that Holters does not have any connection with the Debtors, their
estates, any other party-in-interest, or their attorneys and
accountants, and the United States Trustee. Dr. Elsing also
attests that the firm is a "disinterested person" as that term is
defined in Section 101(14) of the Bankruptcy Code. Holters also
does not hold or represent any interest adverse to the Debtors'
estates or creditors.
Holters will be compensated on an hourly basis and will be
reimbursed for actual, necessary expenses incurred. The
attorneys presently designated to represent the Committee and
their hourly rates are:
Dr. Siegfried H. Elsing, LL.M. EUR450
Dr. Benedikt Burger EUR335
Dr. Denis Gebhardt, LL.M. EUR230
Holters may use one or more additional lawyers in connection with
the engagement. The hourly rates for Holters' partners vary
between EUR310 to EUR450. The hourly rates for associate time
vary between EUR205 to EUR260. These hourly rates are subject to
periodic adjustments from time to time and are set at a level
designed to compensate fairly the firm for the work of its
attorneys and paralegals and to cover fixed and routine overhead
expenses.
It is Holters' practice to bill time in 1/4-hour increments.
This practice appears to be consistent with the practice of the
majority of German law firms, which are not branches of, or
otherwise related to, American or British law firms. Holters
has, nevertheless, examined changing its minimum hour increments
to 1/10th hour to be consistent with common United States
bankruptcy professional billing practices. But Holters
determined that this change would be cost prohibitive as it would
require the firm to purchase a new billing program. (Spiegel
Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
STELCO INC: Names Colin Osborne as New Chief Operating Officer
--------------------------------------------------------------
Courtney Pratt, President and Chief Executive Officer, announced
the appointment, effective immediately, of Mr. Colin Osborne to
the position of Chief Operating Officer. In his role as Chief
Operating Officer of Stelco Inc., Mr. Osborne will be responsible
for Stelco's Integrated Business located in Hamilton and
Nanticoke, Ontario. Mr. Osborne will also retain his current title
and responsibilities as Executive Vice President - Strategy.
Commenting on the appointment, Mr. Courtney Pratt, President and
Chief Executive Officer, said, "I am very pleased to make this
appointment. Colin has held senior operating and general
management positions at a number of the company's business units,
and as such, brings a wealth of knowledge and skill to this
important position. His continuing responsibility for the
company's strategic activities complements what he will be doing
in respect to these integrated operations. Colin will be reporting
to me in both of these important roles."
Stelco Inc. (S&P, B- Long-Term Corporate Credit Rating, Negative)
is Canada's largest and most diversified steel producer. Stelco is
involved in all major segments of the steel industry through its
integrated steel business, mini-mills, and manufactured products
businesses. Stelco has a presence in six Canadian provinces and
two states of the United States. Consolidated net sales in 2002
were $2.8 billion.
To learn more about Stelco and its businesses, please refer to the
company's Web site at http://www.stelco.ca/
SUREBEAM CORP: Intends to Shutdown & Liquidate under Chapter 7
--------------------------------------------------------------
SureBeam Corporation (Pink Sheets: SURE) will file for bankruptcy
under Chapter 7 of the United States Bankruptcy Code.
SureBeam has been unable to reach a restructuring agreement with
its senior secured lender, and such lender has indicated an intent
to accelerate the maturity and to demand payment of SureBeam's
debt. In addition, SureBeam Corporation has been unable to raise
additional funds it needs to continue its operations.
The Board of SureBeam has determined that it is in the best
interest of all of the Company's constituencies that protection of
the Bankruptcy Court is obtained under Chapter 7 of the United
States Bankruptcy Code. Under Chapter 7, a Trustee will be
appointed by the Court to liquidate the Company and its principal
operating subsidiary, SB OperatingCo., LLC.
SureBeam will cease to operate its business by the end of day,
January 16, 2004.
Headquartered in San Diego, California, SureBeam Corporation was a
leading provider of electron beam food safety systems and services
for the food industry. SureBeam's technology significantly
improves food quality, extends product freshness, and provides
disinfestation that helps to protect the environment. The SureBeam
patented system is based on proven electron beam and x-ray
technology that destroys harmful food-borne bacteria much like
thermal pasteurization does to milk. This technology can also
eliminate the need for toxic chemical fumigants used in pest
control that may be harmful to the earth's ozone layer.
SYNTHETIC TURF: Completes Merger Transaction with ISC Acquisition
-----------------------------------------------------------------
On December 9, 2002, Synthetic Turf Corp. of America entered into
an Agreement and Plan of Merger with ISC Acquisition Inc., a
Nevada corporation and a wholly owned subsidiary of the Company,
International Surfacing of Colorado, Inc., a Colorado corporation,
and shareholders of International Surfacing (who together own all
of the issued and outstanding capital shares of that company).
Under the terms of the Agreement, on the closing date, Synthetic
Turf will issue 15,000,000 shares of restricted common stock for
all of the issued and outstanding common stock of International
Surfacing (100,000 shares), which will merge with ISC.
On January 7, 2003, these shares, after being issued, were
actually delivered to the shareholders of International Surfacing
and this transaction closed.
Synthetic Turf Corporation of America's September 30, 2003 balance
sheet shows a total shareholders' equity deficit of about
$460,000.
In a SEC filing, the Company reported an accumulated deficit of
$8,935,068, as of September 30, 2003. The industry in which the
Company operates is very dynamic and extremely competitive. The
Company's ability to generate net income and positive cash flows
is dependent on the ability to continue to increase sales while
reducing operating costs, as well as the ability to raise
additional capital.
As of September 30, 2003, these factors raise substantial doubt
about the Company's ability to continue as a going concern.
THAXTON GROUP: Brings-In Stephens Inc. as Investment Bankers
------------------------------------------------------------
The Thaxton Group, Inc., and its debtor-affiliates are seeking
permission from the U.S. Bankruptcy Court for the District of
Delaware to employ Stephens Inc., as their Investment Bankers,
nunc pro tunc to October 17, 2003.
Stephens is expected to:
a) provide investment banking services on any proposed
Business Combination involving the Debtors and any other
party;
b) provide investment banking services any Financial
Restructuring of the Debtors' existing indebtedness owed
to FINOVA Capital Corp, holders of the Debtors'
outstanding subordinated notes, or any other creditor of
the Debtors;
c) assist the Debtors in preparing confidential offering
documents, designing and implementing marketing plans,
identifying and contacting potential purchasers,
coordinating the data room, facilitating potential
purchasers' due diligence investigations, formulating
negotiation strategies and conducting negotiations;
d) analyze and advise on the financial implications of
offers, preparing and making presentations to the Board
of Directors, structuring any proposed Business
Combination;
e) if requested by the Board of Directors, render an
opinion as to the fairness, from a financial point of
view, of the consideration payable to the Debtors or its
shareholders, or the exchange ratio, as the case may be,
in connection with any purposed Business Combination;
f) if requested by the Debtors in connection with a
proposed Financial Restructuring, assist the Debtors and
their restructuring advisors in preparing any valuation
analyses, preparing and making presentations to the
Board of Directors, preparing a restructuring plan for
Creditors and preparing analyses on the financial
implications of such plan(s), formulating negotiation
strategies with a potential committee formed on behalf
of Creditors and conducting negotiations, as
appropriate, with such committee;
g) if requested by the Debtors, assist the Company in
preparing a confidential information memorandum
describing the Debtors, assist the Debtors in developing
a list of prospective new investors, and assist in
negotiations with such prospective investors; and
h) render such other investment banking services as may be
agreed upon by Stephens and the Debtors in connection
with any of the foregoing or other matters as may arise.
Stephens will charge Debtors:
a) 6 months after the date of the Agreement, a monthly
investment banking fee of $50,000 per month
b) a fee for the rendering of any fairness opinion in an
amount equal to the greater of either:
(i) 0.50% of the Transaction Value or
(ii) a minimum fee of $250,000
c) Success Fee(s) for the successful closing of a Business
Combination with any Purchaser or series of Purchasers
based upon the Transaction Value and determined as:
(1) for transactions with a value greater than
$100,000,000 - 1.25%;
(2) for transactions with a value between $50,000,001
and $100,000,000 - 1.50%;
(3) for transactions with a value between $12,500,001
and $50,000,000 - 2.00%; and
(4) for transactions with a value less than or equal to
$12,500,000 - a flat fee of $250,000.
Headquartered in Lancaster, South Carolina, The Thaxton Group,
Inc., is a diversified consumer financial services company. The
Company filed for chapter 11 protection on October 17, 2003
(Bankr. Del. Case No. 03-13183). Michael G. Busenkell, Esq., and
Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell
represent the Debtor in their restructuring efforts. When the
Company filed for protection from it creditors, it listed
$206,000,000 in total assets and $242,000,000 in total debts.
TRW AUTOMOTIVE: Sells Certain Assets to Universal Automotive
------------------------------------------------------------
Universal Automotive Industries, Inc. (Nasdaq: UVSL), a leading
manufacturer and distributor of aftermarket brake parts, announced
that its Universal Automotive, Inc., subsidiary has completed the
acquisition of certain North American business assets of TRW
Automotive Inc.'s Kelsey-Hayes Company subsidiary, based in
Livonia, MI, for $11 million in cash plus additional contingent
payments.
With the acquisition, annualized sales of Universal Automotive are
expected to exceed $100 million. Assets being acquired from
Kelsey-Hayes generated sales in 2003 of approximately $55 million.
Universal Automotive Industries had 2003 net sales of
approximately $58 million.
Universal said it has acquired the Autospecialty, ValuMaxx and
Power Stop brands from the TRW subsidiary. It also has entered
into a licensing agreement for the use of the TRW trademark for
premium quality brake rotors and drums and a supply agreement for
TRW suspension products.
"This transaction marks a decisive turning point in the growth and
development of our company," said Arvin Scott, Universal's
president and chief executive officer. "The acquisition nearly
doubles the size of our company, strengthens our management team,
significantly broadens our product and offerings with well
established brands, and reduces delivery times to customers
through the addition of an East Coast distribution center.
Customers will be better served by our enlarged organization,
which in addition to our strong respective brand names, now
includes Autospecialty's industry-leading catalog and first-to-
market product philosophy, along with additional undercar
products.
"We expect to realize substantial cost savings from economies of
scale, as well as measurable manufacturing and distribution
efficiencies," Scott said. "Importantly, we believe the
transaction will provide the critical mass that will enable
Universal to achieve profitable operations during 2004."
Universal, headquartered in the Chicago area, specializes in
distribution and manufacture of brake rotors and other brake
parts, under its trademarks "UBP -- Universal Brake Parts," and
"Ultimate" in the United States and Canada.
TRW Automotive (S&P, BB Corporate Credit Rating, Positive) is one
of the world's largest manufacturers of original equipment
automotive parts. The company's product lines include active
safety systems and components in the areas of braking, steering,
and suspension; passive safety systems and components such as
inflatable restraints (airbags), seat belts, and steering wheels;
and other automotive components such as engine valves, engineered
fasteners, and body control systems.
UNUMPROVIDENT: Declares Quarterly Dividend Payable on Feb. 20
-------------------------------------------------------------
On January 12, 2004, the Board of Directors of UnumProvident
Corporation (NYSE: UNM) declared a quarterly dividend of 7.5 cents
per share of its Common Stock, to be paid on February 20, 2004, to
stockholders of record on January 26, 2004.
UnumProvident (S&P, BB+ Preferred Share Rating, Negative) is the
largest provider of group and individual disability income
protection insurance in the United States and United Kingdom.
Through its subsidiaries, UnumProvident insures more than 25
million people and paid US$4.8 billion in total benefits to
customers in 2002. With primary offices in Chattanooga, Tenn.,
and Portland, Maine, the company employs more than 13,000 people
worldwide. For more information, visit
http://www.unumprovident.com/
U.S.I. HOLDINGS: Look for Q4 2004 Financial Results on Feb. 12
--------------------------------------------------------------
U.S.I. Holdings Corporation (Nasdaq: USIH) will release 2003
Fourth Quarter and Year End Financial Results on Thursday,
February 12, 2004 after the close of the market.
The company will hold a conference call and audio webcast to
review the results at 9:00 AM (EST) on the following day, Friday,
February 13, 2004. To access the audio webcast, please visit USI's
website at http://www.usi.biz/on February 13, 2004 and follow the
link.
To access the conference call, dial toll free 888-276-0010 or
612-332-0345 for international callers, five minutes before the
teleconference. A replay of the conference call will be available
on the Investor Relations section of the USI Web site at
http://www.usi.biz/
Founded in 1994, USI (S&P, BB- Counterparty Credit and Bank Loan
Ratings, Stable) is a leading distributor of insurance and
financial products and services to businesses throughout the
United States. USI is headquartered in Briarcliff Manor, NY, and
operates out of 63 offices in 19 states.
VERESTAR: Has Until January 21 to Complete and File Schedules
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Southern District of New York
gave Verestar, Inc., and its debtor-affiliates an extension of
time 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 have until January 21, 2004 to file these financial
disclosure documents.
Headquartered in Fairfax, Virginia, Verestar, Inc., is a provider
of satellite and terrestrial-based network communication services.
The Company and two if its affiliates filed for chapter 11
protection on December 22, 2003 (Bankr. S.D.N.Y. Case No. 03-
18077). Matthew Allen Feldman, Esq., at Willkie Farr & Gallagher
LLP represent the Debtors in their restructuring efforts. When
the Company filed for protection from its creditors, it listed
assets and debts of more than $100 million each.
VINTAGE PETROLEUM: Will Redeem $150M of 9-3/4% Senior Sub. Notes
----------------------------------------------------------------
Vintage Petroleum, Inc. (NYSE:VPI) called for redemption of all
$150 million of the company's outstanding 9-3/4% senior
subordinated notes due 2009.
The notes will be redeemed on February 11, 2004, at a redemption
price of 104.875% of the principal amount of the notes, plus
accrued interest to February 11, 2004.
Vintage Petroleum, Inc. (S&P, BB- Debt Rating, Negative) is an
independent energy company engaged in the acquisition,
exploitation, exploration and development of oil and gas
properties and the gathering and marketing of natural gas and
crude oil. Company headquarters are in Tulsa, Oklahoma, and its
common shares are traded on the New York Stock Exchange under the
symbol VPI.
For additional information visit the company Web site at
http://www.vintagepetroleum.com/
WARNACO GROUP: Sells White Stag Trademark to Wal-Mart Stores
------------------------------------------------------------
To bolster its post-confirmation operations, Warnaco entered into
an agreement to sell its White Stag(R) trademark to Wal-Mart
Stores, Inc. Wal-Mart had licensed the trademark on an exclusive
basis from Warnaco since 1993. Warnaco will continue to design
the White Stag women's sportswear line at Wal-Mart's expense
through 2006.
In a press release, Joe Gromek, President and Chief Executive
Officer of Warnaco, said, "We are committed to continually
working to reduce costs, improve efficiency and enhance margins
to enable our brands to compete more effectively. It is also
important that we focus our energy and resources on the
development and expansion of our core brands. We believe we are
taking the right steps to accomplish these strategic objectives."
In a regulatory filing with the Securities and Exchange
Commission, Jay A. Galluzzo, Vice President, General Counsel and
Secretary of Warnaco, disclosed that under the terms of the sale
agreement for the White Stag trademarks, Wal-Mart will pay
Warnaco $10,000,000 in cash and an additional net present value
of $18,700,000 -- at a discount rate of 8% -- in cash over the
next three years.
In reference to Warnaco's continuation of the White Stag women's
sportswear line, Mr. Galluzzo says, Warnaco will be receiving a
$3,600,000 design incentive fee in the aggregate through 2006.
(Warnaco Bankruptcy News, Issue No. 57; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
WESTERN GLORY HOLE: Changes Name to Health Enhancement Products
---------------------------------------------------------------
Pursuant to an Agreement and Plan of Reorganization dated
October 30, 2003 between Western Glory Hole Inc., and Health
Enhancement Corporation, 9,000,000 shares of Western Glory Hole's
common stock were exchanged for all of the issued and outstanding
shares of Health Enhancement Corporation, making Health
Enhancement Corporation a wholly owned subsidiary of the Company.
This transaction, which closed on November 21, 2003, created a
change in control of the Company. On November 21, 2003, the
current officer and director, Kevin Baer appointed Howard R. Baer
to the Board of Directors and then resigned as an officer and
director. Mr. Howard R. Baer is now the sole director and officer
of the Company and owns 6,402,450 shares of the Company's common
stock, that represents 62.55% of the Company's currently issued
and outstanding common stock. Mr. Baer exchanged an equal number
of Health Enhancement Corporation shares for the Company's shares.
Howard R. Baer is father to Kevin Baer.
As a part of the Agreement, the Company will change its name to
Health Enhancement Products, Inc.
The Company will pursue the business of Health Enhancement
Corporation, a nutraceutical company focused on identifying and
marketing natural, health related products. The Company's new
address is 2530 Rural Road, Tempe, AZ, 85282, telephone (480) 731-
9100.
Description of the Business
Health Enhancement Corporation was organized under the laws of the
State of Nevada on October 9, 2003. HEC plans to identify, produce
and market natural health related products. HEC has not yet
generated any revenues from its planned operations and is
considered a development stage company. At the present time HEC's
primary product is ProAlgaZyme, an immune system enhancing water
that is produced from an algae grown in 100% distilled water. The
algae produces a protective barrier as a means of protecting
itself and this enzyme is drawn off, filtered, tested and bottled
for consumption.
Recent clinical trials performed by HEC have indicated that PAZ
may increase and activate the white blood cells in individuals
whose white cells are low or inactive, in effect enhancing the
immune system. HEC is currently performing clinical trials on
several illnesses and diseases with ProAlgaZyme, including various
types of cancer, HIV/AIDS, and Chronic Fatigue Syndrome.
HEC is committed to locating and bringing to market a variety of
heath related products intended to address and correct a wide
variety of illnesses by restoring health and "normal" function to
the human body. HEC's approach is that the products will be, to
the maximum level possible, wholly "natural", with the ingredients
being naturally grown or derived and will not be chemically
synthesized. It is HEC's intent that the products it markets will
be produced under the strictest condition of purity.
In addition to ProAlgaZyme, HEC has identified several other
vitamin-related and other special purpose products that may fit
into its product line.
Management
Howard R. Baer, 61 years old is the Company's sole officer and
director. He attended Burdette College in Boston, MA from 1959 to
1960 where he studied business law and accounting. He also
attended the New York Institute of Finance. Mr. Baer has been in
the investment banking business for approximately 40 years. >From
1989 to the present he has been President of Carriage House
Capital, Inc. Mr. Baer is also Chairman of Politics.com, Inc.
Changes in Company's Certifying Accountant
The Company's independent auditor for the years ended December 31,
2001 and 2002 was Sellers and Andersen, LLC. On or about
November 24, 2003, the Company terminated the engagement of
Sellers and Andersen, LLC as its independent auditor. The Board of
Directors approved the accounting firm of Pritchett, Siler and
Hardy, P.C. to serve as independent auditor of the Company for the
year ended December 31, 2003 and any interim periods.
The Company was incorporated under the laws of the State of Nevada
on March 28, 1983 with the name of "L. Peck Enterprises, Inc."
with authorized common stock of 2,500 shares at no par value. On
May 27, 1999 the authorized capital stock was increased to
100,000,000 shares with a par value of $0.001 in connection with a
name change to "Western Glory Hole, Inc".
On May 27, 1999 the Company completed a forward common stock split
of 225 shares for each outstanding share. This report has been
prepared showing after stock split shares with a par value of
$.001 from inception.
The Company has been engaged in the activity of seeking and
developing mining properties and was inactive after 1990.
* * *
Going Concern Uncertainty
In a Form 10-QSB filed with the Securities and Exchange
Commission, Western Glory Hole reported:
"The Company intends to acquire interests in various business
opportunities which, in the opinion of management, will provide a
profit to the Company, however there is insufficient working
capital for any future planned activity which raises substantial
doubt about its ability to continue as going concern.
"Continuation of the Company as a going concern is dependent upon
obtaining additional working capital and the management of the
Company has developed a strategy, which it believes will
accomplish this objective through additional equity funding and
long term debt which will enable the Company to conduct operations
for the coming year.
"The Company's management is seeking and intends to acquire
interests in various business opportunities which, in the opinion
of management, will provide a profit to the Company but it does
not have the working capital to be successful in this effort.
"Continuation of the Company as a going concern is dependent upon
obtaining the working capital necessary for its planned activity.
The management of the Company has developed a strategy, which they
believe can obtain the needed working capital through additional
equity funding and long term debt which will enable the Company to
continue operations for the coming year.
"Since the end of the quarter ending September 30, 2003, the
Company has entered into a letter of intent to acquire all of the
outstanding shares of Health Enhancement Products Inc. for up to
8,000,000 shares of the common stock of the Company, subject to
due diligence, execution of a definitive contract, and further
final negotiations. At this time the Company is undertaking the
steps necessary to consummate this transaction but is unable to
predict whether it will close or not.
"The Company will need additional working capital to finance its
planned activity, especially if it closes the Health Enhancement
Products, Inc. transaction. In the event it can not obtain that
additional working capital, this would have a detrimental affect
on the Company's operations and planned operations."
WORLDCOM INC: Court Approves Settlement Agreement with Nextel
-------------------------------------------------------------
Before the Petition Date, MCI WorldCom Network Services, Inc.
doing business as UUNET, and Nextel Communications, Inc. entered
into these agreements, pursuant to which, UUNET provides
telecommunications services to Nextel:
-- Digital Services Agreement dated November 1, 1999; and
-- Telecommunication Services Agreement dated July 6, 2000.
However, certain disputes arose between UUNET and Nextel
concerning their rights and obligations under the Nextel
Agreements. Particularly, Nextel disputes owing $11,000,000 in
charges billed by UUNET pursuant to the Nextel Agreements. UUNET
disagrees with the disputed amount and alleges that it has
previously issued credits to Nextel on account of the disputes.
Under a Court-approved Settlement Agreement, Nextel agrees to pay
UUNET $5,930,512 by wire transfer. UUNET will issue a credit to
Nextel for $5,129,764, by no later than the second invoice which
UUNET would present to Nextel. The parties exchange mutual
releases. (Worldcom Bankruptcy News, Issue No. 46; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
WRC MEDIA: S&P Maintains Ratings' Watch Following Bank Waiver
-------------------------------------------------------------
Standard & Poor's Ratings Services said that its ratings on WRC
Media Inc., including its 'B' corporate credit rating, remain on
CreditWatch with negative implications, where they were placed on
June 6, 2003.
The company has received a waiver until March 31, 2004, from its
lenders for the expected breach of certain financial covenants as
of Dec. 31, 2003. However, the company does not expect to be in
compliance with certain of its financial covenants as of March 31,
2004. WRC Media is discussing with its lenders an amendment of its
existing credit facility and is pursuing the potential refinancing
of a portion of its bank borrowings. The company has borrowing
availability of $13 million under its revolving credit facility,
which should be sufficient to fund seasonal working capital needs
through April 2004, after which it will begin to have shortfalls
in liquidity. In addition, Standard & Poor's continues to be
concerned about the lackluster outlook for supplemental
educational funding, which may undermine profitability over the
near term.
Standard & Poor's will reevaluate WRC Media's future business and
financial strategies. A key input would be the company's progress
in amending its credit facilities and the extent to which any
amendments resolve liquidity strains. WRC Media's corporate credit
rating may be affirmed if the company successfully resolves its
liquidity issues and Standard & Poor's believes the company's
profitability will stabilize the over the near-intermediate term.
XM SATELLITE: Declares Quarterly Preferred Stock Dividend
---------------------------------------------------------
XM Satellite Radio Holdings Inc. (Nasdaq: XMSR) declared a regular
quarterly dividend on its 8.25% Series B Convertible Redeemable
Preferred Stock.
The dividend is payable in shares of the Company's Class A Common
Stock at a rate of $1.0313 per share of Series B Preferred Stock
owned, with fractional shares to be paid in cash. The shares of
Class A Common Stock to be issued will be valued at 95% of the
average daily price of the Class A Common Stock for the 10
consecutive trading days ending on January 15, 2004. The dividend
is payable on February 1, 2004, to Series B convertible preferred
stockholders of record of XM Satellite Radio Holdings Inc. as of
January 22, 2004.
XM is America's #1 satellite radio service. With nearly 930,000
subscribers, XM is on pace for 1.2 million subscribers later this
year. Broadcasting live daily from studios in Washington, DC, New
York City and Nashville, Tennessee at the Country Music Hall of
Fame, XM provides its loyal listeners with 101 digital channels of
choice: 70 music channels, more than 35 of them commercial-free,
from hip hop to opera, classical to country, bluegrass to blues;
and 31 channels of premiere sports, talk, comedy, kid's and
entertainment programming. For more information about XM, visit
http://www.xmradio.com/
* * *
As previously reported in Troubled Company Reporter, Standard &
Poor's Ratings Services lowered its corporate credit ratings on
satellite radio provider XM Satellite Radio Inc., and its parent
company XM Satellite Radio Holdings Inc. (which are analyzed on a
consolidated basis) to 'SD' from 'CCC-'.
At the same time, Standard & Poor's lowered its rating on the
company's $325 million 14% senior secured notes due 2010 to 'D'
from 'CCC-'.
These actions follow XM's completion of its exchange offer on the
senior secured notes, at par, for new 14% senior secured notes due
2009.
All ratings were removed from CreditWatch with negative
implications where they were placed on Nov. 18, 2002.
XTO ENERGY: S&P Upgrade Corp. Credit Rating to Investment Grade
---------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on Ft. Worth, Texas-based XTO Energy Inc. to 'BBB-' to
'BB+'. Standard & Poor's also raised its senior unsecured debt
rating on the company to 'BBB-' from 'BB'.
The outlook is stable.
The rating upgrade reflects the company's more moderate financial
policies, which have been demonstrated by the company's decision
to exploit a strong 2003 to reduce debt leverage to about 48% from
about 56% at the start of 2002.
"During that period, XTO also improved the scope and scale of
operations that have somewhat lessened its depletion risk. In the
future, we expect XTO to maintain a balanced capital structure,
with rating actions likely being swayed by the company's
compliance with its debt leverage target of 50%," said Standard &
Poor's credit analyst Bruce Schwartz.
Based on the company's proposed capital and acquisition budget of
$1.15 billion for 2004, Standard & Poor's believes that XTO's debt
leverage is likely to remain at least unchanged in 2004 and could
strengthen if current futures pricing were to hold.
The senior unsecured debt rating on XTO was raised two notches to
'BBB-' because XTO has insufficient outstanding senior secured
debt to warrant "notching".
* Upcoming Meetings, Conferences and Seminars
-------------------------------------------
February 5-7, 2004
AMERICAN BANKRUPTCY INSTITUTE
Rocky Mountain Bankruptcy Conference
Westin Tabor Center, Denver, CO
Contact: 1-703-739-0800 or http://www.abiworld.org
March 5, 2004
AMERICAN BANKRUPTCY INSTITUTE
Bankruptcy Battleground West
The Century Plaza, Los Angeles, CA
Contact: 1-703-739-0800 or http://www.abiworld.org
March 18-19, 2004
BEARD GROUP & RENAISSANCE AMERICAN MANAGEMENT
Healthcare Transactions
The Millennium Knickerbocker Hotel, Chicago
Contact: 1-800-726-2524; 903-592-5168;
dhenderson@renaissanceamerican.com
April 15-18, 2004
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
J.W. Marriott, Washington, D.C.
Contact: 1-703-739-0800 or http://www.abiworld.org
April 29-May 1, 2004
ALI-ABA
Partnerships, LLCs, and LLPs: Uniform Acts, Taxation,
Drafting, Securities, and Bankruptcy
Fairmont Hotel, New Orleans
Contact: 1-800-CLE-NEWS or http://www.ali-aba.org
May 3, 2004
AMERICAN BANKRUPTCY INSTITUTE
New York City Bankruptcy Conference
Millennium Broadway Conference Center, New York, NY
Contact: 1-703-739-0800 or http://www.abiworld.org
June 2-5, 2004
AMERICAN BANKRUPTCY INSTITUTE
Central States Bankruptcy Workshop
Grand Traverse Resort, Traverse City, MI
Contact: 1-703-739-0800 or http://www.abiworld.org
June 17-18, 2004
BEARD GROUP & RENAISSANCE AMERICAN MANAGEMENT
Corporation Reorganizations
The Millennium Knickerbocker Hotel, Chicago
Contact: 1-800-726-2524; 903-592-5168;
dhenderson@renaissanceamerican.com
June 24-26,2004
AMERICAN BANKRUPTCY INSTITUTE
Hawaii Bankruptcy Workshop
Hyatt Regency Kauai, Kauai, Hawaii
Contact: 1-703-739-0800 or http://www.abiworld.org
July 15-18, 2004
AMERICAN BANKRUPTCY INSTITUTE
The Mount Washington Hotel
Bretton Woods, NH
Contact: 1-703-739-0800 or http://www.abiworld.org
July 28-31, 2004
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz-Carlton Reynolds Plantation, Lake Oconee, GA
Contact: 1-703-739-0800 or http://www.abiworld.org
September 18-21, 2004
AMERICAN BANKRUPTCY INSTITUTE
Southwest Bankruptcy Conference
The Bellagio, Las Vegas, NV
Contact: 1-703-739-0800 or http://www.abiworld.org
October 10-13, 2004
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
Seventy Seventh Annual Meeting
Nashville, TN
Contact: http://www.ncbj.org/
November 2004
BEARD GROUP & RENAISSANCE AMERICAN MANAGEMENT
Distressed Investing 2004
The Plaza Hotel, New York
Contact: 1-800-726-2524; 903-592-5168;
dhenderson@renaissanceamerican.com
December 2-4, 2004
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Marriott's Camelback Inn, Scottsdale, AZ
Contact: 1-703-739-0800 or http://www.abiworld.org
April 28- May 1, 2005
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
J.W. Marriot, Washington, DC
Contact: 1-703-739-0800 or http://www.abiworld.org
July 14 -17, 2005
AMERICAN BANKRUPTCY INSTITUTE
Ocean Edge Resort, Brewster, MA
Contact: 1-703-739-0800 or http://www.abiworld.org
July 27- 30, 2005
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
Kiawah Island Resort and Spa, Kiawah Island, SC
Contact: 1-703-739-0800 or http://www.abiworld.org
November 2-5, 2005
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
Seventy Eighth Annual Meeting
San Antonio, TX
Contact: http://www.ncbj.org/
December 1-3, 2005
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Hyatt Grand Champions Resort, Indian Wells, CA
Contact: 1-703-739-0800 or http://www.abiworld.org
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via e-mail
to conferences@bankrupt.com are encouraged.
*********
Monday's edition of the TCR delivers a list of indicative prices
for bond issues that reportedly trade well below par. Prices are
obtained by TCR editors from a variety of outside sources during
the prior week we think are reliable. Those sources may not,
however, be complete or accurate. The Monday Bond Pricing table
is compiled on the Friday prior to publication. Prices reported
are not intended to reflect actual trades. Prices for actual
trades are probably different. Our objective is to share
information, not make markets in publicly traded securities.
Nothing in the TCR constitutes an offer or solicitation to buy or
sell any security of any kind. It is likely that some entity
affiliated with a TCR editor holds some position in the issuers'
public debt and equity securities about which we report.
Each Tuesday edition of the TCR contains a list of companies with
insolvent balance sheets whose shares trade higher than $3 per
share in public markets. At first glance, this list may look like
the definitive compilation of stocks that are ideal to sell short.
Don't be fooled. Assets, for example, reported at historical cost
net of depreciation may understate the true value of a firm's
assets. A company may establish reserves on its balance sheet for
liabilities that may never materialize. The prices at which
equity securities trade in public market are determined by more
than a balance sheet solvency test.
A list of Meetings, Conferences and Seminars appears in each
Wednesday's edition of the TCR. Submissions about insolvency-
related conferences are encouraged. Send announcements to
conferences@bankrupt.com.
Each Friday's edition of the TCR includes a review about a book of
interest to troubled company professionals. All titles are
available at your local bookstore or through Amazon.com. Go to
http://www.bankrupt.com/books/to order any title today.
For copies of court documents filed in the District of Delaware,
please contact Vito at Parcels, Inc., at 302-658-9911. For
bankruptcy documents filed in cases pending outside the District
of Delaware, contact Ken Troubh at Nationwide Research &
Consulting at 207/791-2852.
*********
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter is a daily newsletter co-published by
Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania,
USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L.
Metzler, Bernadette C. de Roda, Donnabel C. Salcedo, Ronald P.
Villavelez and Peter A. Chapman, Editors.
Copyright 2004. All rights reserved. ISSN: 1520-9474.
This material is copyrighted and any commercial use, resale or
publication in any form (including e-mail forwarding, electronic
re-mailing and photocopying) is strictly prohibited without prior
written permission of the publishers. Information contained
herein is obtained from sources believed to be reliable, but is
not guaranteed.
The TCR subscription rate is $675 for 6 months delivered via e-
mail. Additional e-mail subscriptions for members of the same firm
for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher
Beard at 240/629-3300.
*** End of Transmission ***