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/raid1/www/Hosts/bankrupt/TCR_Public/040316.mbx T R O U B L E D C O M P A N Y R E P O R T E R Tuesday, March 16, 2004, Vol. 8, No. 53 Headlines AADCO AUTOMOTIVE: Shareholders Approves Financial Restructuring ADELPHIA COMMS: Taps Heidrick & Struggles as Search Consultants AEARO CORP.: S&P Places Low-B Ratings on Watch Negative AEC HOLDING CORP: Case Summary & 40 Largest Unsecured Creditors AGCO: Files Resale Registration in re Previously Issued Sr. Notes AIR CANADA: Receives Confirmation of Financing for Embraer Orders AK STEEL: Plans to Increase Stainless Steel Prices by 3% in April ALAMOSA: Returns to Nasdaq Market Under "APCS" Trading Symbol ALLIED SERVICES REHAB: Fitch Affirms Revenue Bonds Rating at BB+ AMERCO: Successfully Emerges From Chapter 11 Bankruptcy AMERICAN HOSPITALITY: Hanify & King Tapped as Bankruptcy Counsel AMERICAN PACIFIC: Seth Van Voorhees to Succeed David Keys as CFO AMERIPATH: Releases Fourth Quarter & Full Year 2003 Results AMKOR TECHNOLOGY: Closes $250 Million Senior Debt Offering ARCHIBALD CANDY: Reaffirms March 30 Bid Deadline for April Auction ARMSTRONG: Gets Nod to Assume WAVE Pacts for AWI Grid Products ASTROPOWER INC: Court Approves $15 Million+ Sale of U.S. Assets BAY VIEW CAPITAL: Unit President James A. Badame Resigns BESS EATON: Selling Assets to Wendy's Int'l. for $35,520,000 BETHLEHEM STEEL: Court Amends Adversary Proceeding Protocol BIOPHAGE: Needs to Secure Funds to Continue as a Going Concern BOOTS & COOTS: Q4 & FY 2003 Conference Call Set for March 25 BOND TRANSFER CO: Case Summary & 20 Largest Unsecured Creditors CABLE SATISFACTION: Creditors to Discuss Plan Amendments Today CALPINE CORP: Prices CalGen Term Loans and Secured Notes CLB PUBLISHERS: Case Summary & 20 Largest Unsecured Creditors CONE MILLS: WL Ross Now Owns Company After $46MM+ Asset Sale CORBAN TOWERS INC: Voluntary Chapter 11 Case Summary DELTA AIR: Files Form 10-K With Revised March Quarter Guidance DIAMOND JO: S&P Rates Planned $230Mil. Senior Secured Notes at B DONLAR CORP: Gets Go-Signal to Hire Crane Heyman as Attorneys DT INDUSTRIES: S&P Withdraws Default-Level Corp. Credit Rating DUANE READE: Updates Fin'l Report in Light of NLRB Recommendation EASTERN SHORE: Case Summary & 6 Largest Unsecured Creditors ELIZABETH ARDEN: Inks Exclusive Agreement with Britney Spears EL PASO: Names Jeffrey Sherrick as Sr. VP -- Exploration Services ENRON: Says $7M Frontera Claim is Overstated & Wants it Expunged ENRON CORP: Wants Court to Enforce Stay on Dynegy Entities FEDERAL-MOGUL: Classification & Treatment of Claims Under Plan FLEMING COS.: Barry Roads Balks at Proposed Lease Rejection FOSTER WHEELER: Wins $6.8MM Oil Sector Management Contract in Iraq GARDEN RIDGE: Hires Gavin Anderson as PR Consultants GENTEK INC: Discloses Current Directors & Officers Information GEORGIA-PACIFIC: Cerberus Buying Products Distribution Business GMAC COMMERCIAL: S&P Affirms Ratings for Class G & H Notes HALL KINION: Balks at Kforce's Move to Terminate Merger Agreement HEALTHSOUTH: Obtains Temporary Order Preventing Debt Acceleration HEARTWOOD LUMBER: Case Summary & 20 Largest Unsecured Creditors JARDEN CORP: Dixon Extends Exclusivity Agreement to April 12 JOEAUTO INC: Turns to GulfStar Group for Financial Advice LOEWEN GROUP: Reorganized Debtors Want Fleegers Claim Disallowed MCDERMOTT: December 2003 Balance Sheet Insolvent by $363 Million MEAL SOLUTIONS: Case Summary & 20 Largest Unsecured Creditors MEDMIRA: 2nd Quarter Results Conference Call Set for March 23 MERCY HOSPITAL: S&P Raises Revenue Bonds' Rating to CC from D MILACRON INC: Secures $100MM to Repay Maturing Bonds and Bank Debt MIRANT: PricewaterhouseCoopers' Report on the Canadian Debtors NATIONAL BENEVOLENT: Taps Pranschke & Holderle as Special Counsel NAT'L CENTURY: Gets Okay to Use Cash Collateral Through April 30 NAT'L STEEL: UMWA Demands Partial Payment of Administrative Claim NET PERCEPTIONS: Stockholders to Reconvene on March 23 in Minn. NEW CONSTRUCTION: Section 341(a) Meeting Scheduled for March 24 NEXTEL COMMS: Improved Credit Profile Spurs Fitch to Up Ratings NORTHWESTERN CORPORATION: Files Reorganization Plan in Delaware NRG ENERGY: Moves to Sell Nelson Assets & Proposes Sale Protocol ONEIDA: Sr. Lenders Agree to Postpone $3.9M Payment Until Mar 31 ONEIDA: Sells Buffalo China Plant to Niagara Ceramics for $5.5MM OWENS CORNING: Committee Turns to Andrew Churg for Asbestos Advice PACIFIC GAS: Plans to Offer $6.7 Billion in First Mortgage Bonds PACIFIC GAS: Responds to Moody's Investment Grade Ratings PARMALAT: U.S. Units Obtain Interim Nod for GECC-Backed Financing PARMALAT FINANZIARIA: Investigators Recover EUR4 Million PDC MILFORD POWER: Case Summary & 3 Largest Unsecured Creditors PEABODY ENERGY: S&P Assigns BB- Rating to $200M Sr. Unsec. Notes PG&E NATIONAL: Wants Approval for $30-Mil. Trancanada Break-Up Fee RCN CORPORATION: Retains the Blackstone Group as Financial Advisor REAL MEX RESTAURANTS: S&P Rates Proposed Sr. Secured Notes at B- RENAISSANCE COSMETICS: Chapter 7 Conversion Approved ROUTIER INC: Case Summary & 20 Largest Unsecured Creditors ROYAL OLYMPIC: US Bankruptcy Court Dismisses Ch. 11 Proceedings SIRIUS: Extends Option to Purchase $50 Million Convertible Notes SK GLOBAL: Wants Plan-Filing Exclusivity Extended to June 16, 2004 SLATER STEEL: Closes $41-Mil. Sale of Sorel Forge to A. Finkl Unit SOLUTIA: Court Stretches Lease-Decision Time Through May 17, 2004 SOUTHWEST RECREATIONAL: Creditors' Committee Hires Morris Manning SPIEGEL GROUP: Unsecured Panel Taps Capstone as Financial Advisor STELCO INC: Awaits CCAA Court Approval for $75MM DIP Financing STILLWATER MINING: Amends 2003 Fourth Quarter and Year-End Results TITAN: Extends Exchange Offer & Consent Solicitation to April 12 TORCH OFFSHORE: Lenders Forgive Violations & Provide More Funding UNIGLOBE.COM: CCAA Creditors' Meeting Adjourned Sine Die UNITED AIRLINES: Pushing to Maintain Florida Self-Insurance UNITED AIRLINES: US Bank Auctions Off Aircraft Collateral Today US AIRWAYS: Prepays $250 Million to ATSB & Modifies $1B Loan Terms WARNER STREET INC: Case Summary & 1 Largest Unsecured Creditor WESTAR ENERGY: S&P Rates New $300MM Revolving Facility at BB+ WORLDCOM/MCI: Completes Restatement and 2002 Audit YUM! BRANDS: Fitch Raises Senior Debt Ratings to BBB- from BB+ * CenterOne Financial Services Adds Executive Directors * eXrP Launches Comprehensive Services for Indicted Corp Officials * Large Companies with Insolvent Balance Sheets ********* AADCO AUTOMOTIVE: Shareholders Approves Financial Restructuring --------------------------------------------------------------- AADCO Automotive Inc. obtained a disinterested shareholder vote at its February 19, 2004, annual general and special meeting of shareholders approving: (1) its recent financial restructuring, and (2) a possible change of control of the Company in favor of Mr. Robert Hodgkinson. The Company's January 27, 2004, press release and its January 13, 2004, Information Proxy Circular set out the details of the above noted items. Under the financial restructuring, the Inventory Pool program of the Company, previously used to finance operations, has been restructured into Series II Convertible Debentures, Series III Convertible Debentures, and common shares. The Company no longer utilizes an Inventory Pool program. At the same shareholders meeting, the Board of Directors was set to have three members, and Messrs. Robert Hodgkinson, Charles Hodgkinson, and Douglas Kemp-Welch were elected as the only directors of the Company. Mr. Philip Bookalam, the Company's founder, is no longer a director or on the board of the Company. The TSX Venture Exchange has accepted for filing the Company's final documents for its financial restructuring. With the completion of its financial restructuring, the Company will now be focusing primarily on its business operations, which will include: (a) Building business and marketing alliances with a view to increasing market share, and (b) Acquiring complementary assets or business operations, with a view to increasing revenue, where opportunities present themselves. The company's December 31, 2003, balance sheet discloses a total shareholders' deficiency of $3,674,102. ADELPHIA COMMS: Taps Heidrick & Struggles as Search Consultants --------------------------------------------------------------- The Adelphia Communications Debtors seek the Court's authority to employ Heidrick & Struggles, Inc. as executive search consultants, to continue to assist them with the placement of highly qualified candidates in key executive positions within the Debtors' organization. Since June 27, 2002, the Debtors employed Heidrick & Struggles, as an ordinary course professional. Shelley C. Chapman, Esq., at Willkie Farr & Gallagher LLP, in New York, informs Judge Gerber that it is now necessary to employ Heidrick & Struggles because its fees exceeded the cap for an ordinary course professional. Heidrick & Struggles provides its clients with executive search services and leadership consulting. Heidrick & Struggles has 50 years of experience locating executives for a broad spectrum of clients in a range of industries. Heidrick & Struggles also provides other services to its clients, including executive performance assessment and professional development consulting. With offices located worldwide, Heidrick & Struggles conducted over 1,400 executive searches for prominent firms, including: (1) Gap, Inc., (2) The Home Depot, Inc., (3) Maytag Corporation, and (4) The Nasdaq Stock Market, Inc. Heidrick & Struggles has been providing valuable services to the Debtors throughout these Chapter 11 cases, pursuant to the Court's June 27, 2002 OCP Order. According to Ms. Chapman, Heidrick & Struggles understand the ACOM Debtors' operations and businesses, and has substantial experience and expertise in locating the type of qualified executives the ACOM Debtors require to lead their organizations and business operations. The ACOM Debtors require the services of Heidrick & Struggles to provide executive search services in connection with their continuing search for qualified candidates to fill key positions, such as the position of Litigation Counsel. In consideration for Heidrick & Struggles' services, Heidrick & Struggles will be compensated on a per project basis, plus reimbursement of actual and necessary expenses incurred by Heidrick & Struggles. Heidrick & Struggles charges fees consistent with its peer firms. Within the industry, standard compensation for locating a candidate is a fee equal to one-third of the placed candidate's total first year compensation, paid in the form of a retainer. Heidrick & Struggles agreed to discount its standard rates in these cases by 10%. All of Heidrick & Struggles' rates are subject to periodic, ordinary course, adjustments. Ms. Chapman informs the Court that Heidrick & Struggles has no outstanding prepetition claims against the ACOM Debtors for fees and expenses. Since the Petition Date and pursuant to the OCP Order, the Debtors owe Heidrick & Struggles $102,397 for billed but unpaid fees and expenses through January 31, 2004. Since the Petition Date and pursuant to the OCP Order, the ACOM Debtors paid Heidrick & Struggles these fees and expenses: Period Amount ------ ------ June 2003 $40,500 July 2003 40,500 1,819 August 2003 40,500 3,637 September 2003 9,090 October 2003 33,333 November 2003 62,333 667 December 2003 2,445 Fritz E. Freidinger, Heidrick & Struggles' General Counsel and Corporate Secretary, informs the Court that upon evaluation of their client database and the Debtors' list of parties-in- interest, these relationships were found: (1) Clients. Heidrick & Struggles served these parties-in- interest: ABN Amro Bank, N.V.; AXA Financial, Inc.; Banc of America Securities; Banc of America Securities LLC; Bank of America; Bank of America National Trust & Savings Association; Bank of America, N.A., Bank of Hawaii; Bank of New York; Bank of Montreal; Bank One, N.A.; Barclays Bank PLC; Bayerische Landesbank Girozentrake; Citizen's Bank; CIBC World Markets Corp.; Fleet National Bank; J.P. Morgan Securities, Inc.; Long-Term Credit Bank of Japan, Ltd.; Merrill Lynch; Merrill Lynch Capital Corp.; Merrill Lynch & Co., Inc.; Morgan Stanley; Morgan Stanley & Co., Inc.; PNC Bank Corp.; PNC Bank, National Association; Salomon Smith Barney, Inc.; Wellington Management; Buchanan Ingersoll-Pitts; Deloitte & Touche; PriceWaterhouseCoopers LLP; Squire, Sanders & Dempsey LLP; Alliance Capital; BNP Paribas; Bear, Stearns & Co.; Bear, Stearns & Co., Inc.; Bayerische Landesbank Girozentrale; Highbridge; Highbridge Capital Corp,; Oppenheimer Funds; Fidelity Investments; Citizens Communications; Barclays Global; Oppenheimer; Columbia Management, Co.; General Electric; Disney; National Geographic; CNBC/NBC; American Movie Classics; Bravo; The Disney Channel; ADC Telecommunications; Cablevision Systems Corporation; California Public Employees; New York Life Insurance and Annuity, Co.; Northwestern Mutual Life Insurance Company; University of Chicago; Microsoft Corporation; Walt Disney Company and its Affiliates; ADC Telecommunications, Inc. J.P. Morgan Securities, Inc. provided more than 1% of Heidrick & Struggles' earned revenues. (2) Former Employees. Heidrick & Struggles had a former employee named Scott C. Miller; (3) Current Employees. Heidrick & Struggles has a current employee named Scott K. Johnson; (4) Vendors. These parties-in-interest served Heidrick & Struggles: ADC Telecommunications, Inc.; Adelphia Communications Corp.; Bloomberg LP; Cleary Gottlieb Steen & Hamilton; Comcast Cable Area One; Comcast Cablevision; Cox Communications, Inc.; Deloitte & Touche LLP; Ernst & Young LLP; JP Morgan Chase Manhattan Bank; Mercer Human Resource Consulting; Mercer Human Resource Consulting, Inc.; PricewaterhouseCoopers; PricewaterhouseCoopers LLP; Solomon Smith Barney, Inc.; Sidley, Austin, Brown & Wood; and (5) Potential Candidates for Client Positions: Heidrick & Struggles has these potential candidates for positions in one of their client companies: Ann Montgomery; Erland E. Kailbourne; James R. Brown; Jenny Brown; Keith Horn; Kenneth L. Wolfe; Leslie Brown; Mike Brady; Philip Lochner, Jr.; Philip R. Lochner, Jr.; Scott Johnson; Timothy J. Rigas; W.T. Schleyer; James E. Mundy; Richard W. Shore; Robert H. Stewart; Betsy S. Atkins; Peter L. Murphy; Ronald Cooper; William Schleyer; Ann M. Martinez; Alan Garner; Alexander Moreno; Alfred Jones; Andy Williams; Ann Jones; Barry Goldman; Bruce Hall; Byron Jones; Carol Prince; David Downey; David Fowler; David Powers; David Ray Jones; Deborah Wilson; Eric Montgomery; Gary & Lori Cooperstein; George Martinez; James Kennedy; James Miller; Jeff Maynard; John Fuller; John Marino; John McGarth; Jose Santiago; Joseph Stocke; Mark Davis; Mark Epstein; Michael Powers; Peter Mitchell; Richard J. Conti; Robert Brewer; Robert Fritz; Robert Hamilton; Ronald Moore; Rosemary Sullivan; Russel Thomas; Scott Miller; and James R. Brown. Mr. Freidinger assures the Court that Heidrick & Struggles: (1) does not represent any party, or hold any interest, adverse to the ACOM Debtors with respect to the matters on which Heidrick & Struggles is to be retained in these cases; and (2) has no connection with any of the Potential Parties-in- Interest that would affect Heidrick & Struggles' ability to provide search services to the ACOM Debtors in these cases. Mr. Freidinger relates that Heidrick & Struggles' employees may indirectly hold publicly traded securities of ACOM. Mr. Freidinger does not believe that any of these direct and indirect holdings will affect the firm's ability to provide the ACOM Debtors with search services. (Adelphia Bankruptcy News, Issue No. 53; Bankruptcy Creditors' Service, Inc., 215/945-7000) AEARO CORP.: S&P Places Low-B Ratings on Watch Negative ------------------------------------------------------- Standard & Poor's Ratings Services places its ratings on Aearo Corp. on CreditWatch with negative implications, including its 'BB-' corporate credit rating. This action follows the announcement that the company will be acquired by Bear Stearns Merchant Banking for $385 million, including the assumption of about $210 million in debt. Based on this purchase price and the amount of debt that will be needed to finance the purchase, there would be an increase in leverage beyond what is commensurate for the current rating. The deal is expected to close in early April 2004. The company's rated debt is $235 million. Indianapolis, Ind.-based Aearo Corp. is a leader in the hearing, eye, face, head, and respiratory segments of the personal protection equipment market with sales of $327 million for the 12 months ended December 2003. "Standard & Poor's will review with management the financing of the transaction and financial policies before taking further rating action," said credit analyst John R. Sico. If the deal closes as anticipated, the ratings on the existing bank loan and subordinated notes will be withdrawn. Standard & Poor's expects to rate the new debt financing. AEC HOLDING CORP: Case Summary & 40 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: AEC Holding Corp. 17951 West Austin Road Manchester, Michigan 48158 Bankruptcy Case No.: 04-10827 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- American Engineered Components, Inc. 04-10828 Manchester Stamping Corporation 04-10829 Johnson & Hoffman Manufacturing Corporation 04-10830 Type of Business: The Debtor is a leading manufacturer and developer of engineered and automotive components, including plug buttons, brackets, sealer plugs, bulb shields, air bag components, burst disk products, tie-downs and straps. Chapter 11 Petition Date: March 14, 2004 Court: District of Delaware Judge: Mary F. Walrath Debtors' Counsel: Eric Lopez Schnabel, Esq. Klett Rooney Lieber & Schorling 1000 West Street, Suite 1410 Wilmington, DE 19801 Tel: 302-552-4200 Fax: 302-552-4295 Estimated Assets Estimated Debts ---------------- --------------- AEC Holding Corp. $0 to $50,000 $10 M to $50 M American Engineered $0 to $50,000 $10 M to $50 M Components, Inc. Manchester Stamping Corp. $10 M to $50 M $10 M to $50 M Johnson & Hoffman $10 M to $50 M $10 M to $50 M Manufacturing Corporation Debtors' 40 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Wayne and Sue Hamilton Contract $499,800 505 E. Huron St., #607 Ann Arbor, MI 48104 Alkar Steel and Processing Trade $355,124 P.O. Box 388 Roseville, MI 48066-0388 TRW Engineered Fastners Trade $288,669 180 State Road East Westminster, MA 01473 L & L Products, Inc. Trade $268,567 160 McLean Drive Romeo, MI 48065-0308 Ulbrich Trade $260,940 P.O. Box 845164 Boston, MA 02284 5164 Maxable, Inc. Trade $234,773 Mill Steel Company Trade $232,164 Maes Tool & Dies Trade $191,641 Micro Metal Finishing Trade $156,655 Alcoa Mill Products Trade $150,152 Ernst & Young LLP Services $139,153 Advance Temporary Services Services $126,211 Manchester Township Government $122,526 ADCO Products, Inc. Trade $119,267 CEF and Associates, Inc. Services $117,083 Telefast Industries Trade $115,617 Atmosphere Heat Treating Trade $112,094 Progressive Coatings Trade $104,142 Federal Screw Works Trade $100,216 Faegre & Benson LLP Services $97,055 Arro Supply Company Trade $90,257 Charles Berman - Rec. of Trade $85,515 Taxes Spectrum Industries Trade $84,878 Hascall Steel Company Trade $82,554 RHL Investments Trade $78,505 Marsh USA Inc. Trade $78,473 Feroleto Steel Trade $76,534 Tecumseh Corrugated Trade $70,802 Olympic Steel Lafayet Trade $63,324 Washtenaw County Peas Trade $60,924 Ken Mac Metals, Inc. Trade $55,766 Rives Manufacturing, Inc. Trade $54,611 Gemini Plastics Trade $54,070 Michner Plating Company Trade $50,612 Rafferty-Brown Steel Trade $50,359 Product Action Trade $49,300 Volcor Finishing, Inc. Trade $41,321 Doral Steel, Inc. Trade $40,665 FWT & Div S&P Trade $39,986 A.J. Oster Co. Trade $39,570 AGCO: Files Resale Registration in re Previously Issued Sr. Notes ----------------------------------------------------------------- AGCO Corporation (NYSE: AG), a worldwide designer, manufacturer and distributor of agricultural equipment, announced that in connection with its December 2003 private offering of 1-3/4% Convertible Notes due 2033, it has filed a Registration Statement on Form S-3 with the Securities and Exchange Commission. The Registration Statement was filed in satisfaction of certain registration rights granted to the noteholders. When declared effective by the SEC, the Registration Statement will be available for use by the noteholders to resell the previously issued $201,250,000 principal amount of 1 3/4% Convertible Notes and the common shares that can be issued upon conversion of the notes. AGCO will not receive any proceeds from any resale of the convertible notes by the selling noteholders or the common stock that may be issued upon conversion of the notes. The Registration Statement relating to these securities has been filed with the SEC but has not yet become effective. These securities may not be sold nor may offers be accepted prior to the time the Registration Statement becomes effective. T AGCO Corporation, headquartered in Duluth, Georgia, is a global designer, manufacturer and distributor of agricultural equipment and related replacement parts. AGCO products are distributed in over 140 countries. AGCO offers a full product line including tractors, combines, hay tools, sprayers, forage, tillage equipment and implements through more than 8,600 independent dealers and distributors around the world. AGCO products are distributed under the brand names AGCO(R), Agco Allis(R), AgcoStar(R), Challenger(R), Farmhand(R), Fendt(R), Fieldstar(R), Gleaner(R), Glencoe(R), Hesston(R), LOR*AL(R), Massey Ferguson(R), New Idea(R), RoGator(R), SisuDiesel(TM), Soilteq(TM), Spra-Coupe(R), Sunflower(R), TerraGator(R), Tye(R), Valtra(R), White(TM), and Willmar(R). AGCO provides retail financing through AGCO Finance in North America and through Agricredit in the United Kingdom, France, Germany, Ireland, and Brazil. In 2003, AGCO had net sales of $3.5 billion. Visit its website at http://www.agcocorp.com/ * * * As reported in the Troubled Company reporter's January 9, 2004 edition, Standard & Poor's Rating Services assigned its 'BB+' senior secured bank loan rating, the same level as the corporate credit rating, to AGCO Corp.'s $750 million senior secured bank credit facility and placed the new rating on CreditWatch with negative implications. At the same time, Standard & Poor's assigned its recovery rating of '2' to the bank credit facility, indicating substantial recovery of principal (80%-100%) in the event of a default. The 'BBB-' rating on the previous bank credit facility was withdrawn. At the same time, Standard & Poor's said that the 'BB+' corporate credit and all other ratings on AGCO will remain on CreditWatch with negative implications, where they were placed on Sept. 10, 2003. AIR CANADA: Receives Confirmation of Financing for Embraer Orders ----------------------------------------------------------------- Air Canada received confirmation from Embraer that the aircraft manufacturer has secured financing on satisfactory commercial terms to Air Canada for the carrier's entire firm order of Embraer aircraft. On December 19, 2003, Air Canada announced that it had reached an agreement in principle to purchase 45 Embraer aircraft. The Embraer order consists of 45 firm 93-seat Embraer 190 aircraft. Deliveries are scheduled to begin in November 2005. The order also contemplates the potential for Air Canada to exercise options to acquire 45 additional aircraft. As announced, the purchase agreement is subject to a number of conditions including financing on satisfactory commercial terms, final documentation and requisite approvals. Headquartered in Saint-Laurent, Quebec Canada, Air Canada -- http://www.aircanada.ca/-- represents Canada's only major domestic and international network airline, providing scheduled and charter air transportation for passengers and cargo. The Company filed for CCAA protection on April 1, 2003 (Ontario Superior Court of Justice, Case No. 03-4932) and Section 304 petition with the U.S. Bankruptcy Court for the Southern District of New York (Case No. 03-11971). Matthew A. Feldman, Esq., and Elizabeth Crispino, Esq., at Willkie Farr & Gallagher serve as the Debtors' U.S. Counsel. When the Debtors filed for protection from its creditors, they listed C$7,816,000,000 in assets and 9,704,000,000 in liabilities. AK STEEL: Plans to Increase Stainless Steel Prices by 3% in April ----------------------------------------------------------------- AK Steel (NYSE: AKS) said it will increase the transaction prices of all 200, 300 and 400 series stainless steel sheet, strip and continuous mill plate products by approximately 3%, effective with shipments April 4, 2004, and by an additional 3%, effective with shipments May 2, 2004. The increases will be accomplished through one point reductions in the functional discount rate. AK Steel said that the price increases are necessary because of continuing increases in raw materials, energy and other input costs that are not covered by the current alloy surcharges. Headquartered in Middletown, AK Steel -- whose December 31, 2003 AK Steel's balance sheet shows a $52.8 million shareholders' equity deficit -- produces flat-rolled carbon, stainless and electrical steel products for automotive, appliance, construction and manufacturing markets, as well as tubular steel products. In addition, the company produces snow and ice control products. ALAMOSA: Returns to Nasdaq Market Under "APCS" Trading Symbol ------------------------------------------------------------- Alamosa Holdings, Inc. (OTC Bulletin Board: ALMO), the largest (based on number of subscribers) PCS Affiliate of Sprint (NYSE: FON; PCS), which operates the largest all-digital, all-CDMA Third- Generation (3G) wireless network in the United States, announced that Alamosa's application for listing its common stock on the Nasdaq National Market has been approved. Alamosa common stock was scheduled to begin trading on Monday, March 15, 2004, under the ticker symbol "APCS," subject to the Company maintaining a $5 minimum bid. "Our anticipated return to the Nasdaq National Market, where we first began trading after our initial public offering (IPO) in 2000, provides Alamosa with greater recognition in the investor community," stated David E. Sharbutt, Chairman and CEO of Alamosa Holdings, Inc. "Our new listing should offer our company and its shareholders many advantages of a broader market including: liquidity to our shareholders, increased visibility on our operating performance and inclusion among the list of many leading companies that currently trade on the Nasdaq National Market," Mr. Sharbutt concluded. ABOUT ALAMOSA Alamosa Holdings, Inc. (S&P, CCC+ Corporate Credit Rating, Developing Outlook) is the largest (based on number of subscribers) PCS Affiliate of Sprint (NYSE: FON, PCS), which operates the largest all-digital, all-CDMA Third-Generation (3G) wireless network in the United States. Alamosa has the exclusive right to provide digital wireless mobile communications network services under Sprint's PCS division throughout its designated territory located in Texas, New Mexico, Oklahoma, Arizona, Colorado, Utah, Wisconsin, Minnesota, Missouri, Washington, Oregon, Arkansas, Kansas, Illinois and California. Alamosa's territory includes licensed population of 15.8 million residents. ALLIED SERVICES REHAB: Fitch Affirms Revenue Bonds Rating at BB+ ---------------------------------------------------------------- Fitch Ratings affirms the 'BB+' rating on Allied Services Rehabilitation Hospitals' (ASRH) approximately $25 million outstanding Scranton-Lackawanna Health and Welfare Authority revenue bonds (Allied Services Rehabilitation Hospitals project) series 1994A. The obligated group is Allied Services Rehabilitation Hospitals (ASRH), which consists of Allied Services Institute of Rehabilitation Medicine and John Heinz Institute of Rehabilitation Medicine. The Rating Outlook is Stable. The rating affirmation reflects ASRH's improved operating performance, favorable market position, low-cost structure relative to other Pennsylvania rehabilitation services, and effective length of stay management. ASRH has been able to return to profitability recently since posting losses in fiscal 2001 due to rising utilization and improved reimbursement under Medicare prospective payment system (PPS). For fiscal years ending 2002 and 2003, operating margins were 0.8% and 4.3%, respectively, and 8.5% through the seven months ended Jan. 31, 2004. ASRH has received improved reimbursement under the Medicare PPS since July 1, 2002 which has provided increased reimbursements per discharge due to the hospital's higher patient acuity levels and effective cost management. Admission levels have been stable over the past 4 years, up through 7 months of fiscal 2004. Fitch's primary credit concerns are ASRH's weak historical financial profile, exposure to changes in Medicare reimbursement, historic and financial losses at the system-wide level until recently, and the nationwide nursing shortage, especially at its non-obligated nursing home. Despite recent operating improvements, ASRH's liquidity levels remain weak with 75 days cash on hand and cash to debt of 50% at fiscal year-end 2003. Allied's high reliance on Medicare payors exposes the system to any adverse changes in the reimbursement methodology. Financial performance at the system-wide level has historically been weak averaging a negative 4.5% operating margin from fiscal 2001-2003, which was mainly due to losses at its affiliated nursing home. The nursing home has recently been able to reduce losses; however, faces challenges with its nursing staff. Through the 6 months ended December 2003, operating margins for the system were 3.5%, due to improvement at other non-obligated group members. Additionally, the obligated group's defined benefit contribution pension plan's costs have exceeded expectations, and was underfunded by $8.3 million (of $26 million in obligations) at 6/30/03. Management expects to contribute a total $1.5 million in fiscal 2004. Fitch's outlook is stable due to the lack of competition ASRH faces in its service area, and to its recent financial stability. ASRH continues to be the only freestanding rehabilitation hospital in both Lackawanna County and Luzerne County, and has a good referral network with nearby hospitals. However, Fitch feels management will continue to be challenged in maintaining the improved financial profile of the whole system. ASRH has no major capital plans for the foreseeable future. Allied Services Institute of Rehabilitation Medicine is located in Scranton (Lackawanna County), PA and John Heinz Institute of Rehabilitation Medicine is located in Wilkes-Barre (Luzerne County), PA. Located approximately 120 miles from Philadelphia, the hospitals together operate 211 rehabilitation beds. Disclosure to Fitch has been adequate in terms of content and timeliness. There is not a separate audit committee, and ASRH does not have a policy to rotate auditors. AMERCO: Successfully Emerges From Chapter 11 Bankruptcy ------------------------------------------------------- AMERCO (Nasdaq: UHALQ), the parent company of U-Haul International, the nation's leader in the do-it-yourself household moving industry, has completed the necessary steps to effect its Plan of Reorganization and has successfully emerged from its Chapter 11 bankruptcy. "This is a very positive result for our shareholders and lenders," stated Joe Shoen, Chairman of AMERCO. "When we filed our voluntary petitions nine months ago, we said that our intention was to restructure, on a consensual basis, over $1.2 billion in debt and lease obligations with no dilution to equity holders. We have now achieved that goal and are poised to enhance our leadership position in the moving and storage industry. We could not have achieved such positive results without the continued contribution from our employees, the support of our customers, the cooperation from our creditors and new lenders and the confidence of our shareholders. We will continue to conduct operations in a manner to merit this trust and support." "With a strengthened balance sheet that includes new financing, we are continuing to focus our attention on our core business of helping families move across North America as the Company has done so for over 58 years," added Shoen. In conjunction with the emergence, AMERCO entered into a $550 million credit facility with a banking syndicate led and arranged by Wells Fargo Foothill, a part of Wells Fargo & Company (NYSE: WFC). Under the Plan of Reorganization, the Company's creditors are paid in full and its preferred and common stock is unimpaired by the bankruptcy. According to Richard Williamson, Regional Managing Director at Alvarez & Marsal, Inc., "AMERCO's completion of the necessary steps to effect its Plan or Reorganization marks the successful culmination of months of effort on the part of the Company, its stakeholders and its restructuring advisors." Alvarez and Marsal, Inc., have served as the financial advisor to AMERCO since May 2003, with respect to its negotiations with creditors and in the raising of exit financing and its capital restructuring. AMERCO will hold its third quarter investor call on tomorrow, March 17, 2003 at 10:30 a.m. Mountain Standard Time MST). To hear a simulcast of the call over the Internet, or a replay, visit http://www.amerco.com/ AMERCO is the parent company of Republic Western Insurance Company, Oxford Life Insurance Company, Amerco Real Estate Company and U-Haul, the nation's leading do-it-yourself-moving company with a network of over 14,000 locations in all 50 United States and 10 Canadian provinces. The 58-year old industry giant has the largest rental fleet in the world, with over 93,500 trucks and 85,000 trailers. U-Haul has also been a leader in the storage industry since 1974, with over 340,000 rooms and more than 33 million square feet of storage space and over 1000 facilities in throughout North America. Wells Fargo Foothill is a leading provider of senior secured financing to middle-market companies across the United States and Canada. It is part of Wells Fargo & Company, a diversified financial services company with $388 billion in assets, providing banking, insurance, investments, mortgage and consumer finance from more than 5,900 stores and the Internet (wellsfargo.com) across North America and elsewhere internationally. Wells Fargo Bank, N.A. is the only "Aaa"-rated bank in the United States. For more information, visit Wells Fargo Foothill on the Internet at http://www.foothill.com/ AMERICAN HOSPITALITY: Hanify & King Tapped as Bankruptcy Counsel ---------------------------------------------------------------- American Hospitality Concepts, Inc., and its debtor-affiliates want to employ Hanify & King, Professional Corporation as their bankruptcy counsel. The Debtors tell the U.S. Bankruptcy Court for the District of Massachusetts, Eastern Division, that Hanify & King has substantial experience and extensive knowledge and is well qualified to represent them in their chapter 11 cases. Hanify & King will: a) advise the Debtors with respect to its rights, powers and duties as debtors-in-possession in the continued conduct of their Chapter 11 is and the management of their assets; b) advise the Debtors with respect to any plan proposed by the Debtors and any other matters relevant to the formulation and negotiation of a plan or plans of reorganization in these cases; c) represent the Debtors at all hearings and matters pertaining to their affairs as debtors and debtors-in- possession; d) prepare on the Debtors' behalf all necessary and appropriate applications, motions, answers, orders, reports, and other pleadings and other documents, and review all financial and other reports filed in these chapter 11 cases; e) review and analyze the nature and validity of any liens asserted against the Debtors' property and advise the Debtors concerning the enforceability of such liens; f) advise the Debtors regarding their ability to initiate actions to collect and recover property for the benefit of the estate; g) advise and assist the Debtors in connection with any potential property dispositions; h) advise the Debtors concerning executory contract and unexpired lease assumptions, assignments and rejections and lease restructurings and recharacterizations; i) review and analyze various claims of the Debtors' creditors and the treatment of such claims and the preparation, filing or prosecution of any objections thereto; j) commence and conduct any and all litigation necessary or appropriate to assert rights held by the Debtors, protect assets of the Debtors' Chapter 11 estates or otherwise further the goal of completing the Debtors' successful reorganization other than with respect to matters to which the Debtors retains special counsel; and k) perform all other legal services and provide all other necessary legal advice to the Debtors as debtors-in- possession which may be necessary herein. As of the Petition Date, Hanify & King held an unapplied $75,000 retainer. The Debtors do not disclose the firm's current hourly rates. Headquartered in Braintree, Massachusetts, American Hospitality Concepts, Inc. -- http://www.groundround.com/-- runs the Ground Round Grill & Bar chain, a pioneer in the casual-dining segment that offers a variety of American standards and ethnic specialties. The Company filed for chapter 11 protection on February 19, 2004 (Bankr. D. Mass. Case No. 04-11240). Harold B. Murphy, Esq., at Hanify & King, P.C., represents the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed over $1 million in estimated assets and over $10 million in estimated debts. AMERICAN PACIFIC: Seth Van Voorhees to Succeed David Keys as CFO ---------------------------------------------------------------- American Pacific Corporation (Nasdaq: APFC) announced that is Chief Financial Officer, Executive Vice President, Secretary and Treasurer, David N. Keys, has resigned as an officer and director to pursue personal business interests. The Company has named Seth Van Voorhees, a long-time financial advisor to the Company, to replace Mr. Keys as CFO, effective immediately. "On behalf of the company, I want to thank David for his services as CFO," said John R. Gibson, Chairman, President and CEO of American Pacific. Mr. Gibson comments, that "David has been an energetic member of our executive team and we wish him the best." The new CFO, Mr. Van Voorhees, has held over the past 15 years various investment banking positions specializing in the chemical and advanced materials industries while employed at Merrill Lynch, Paine Webber/UBS Warburg, Wasserstein Perella and most recently, Young & Partners. Mr. Van Voorhees holds a Ph.D. in chemistry from the University of Pennsylvania and an MBA in finance from Columbia University. "Seth brings a complementary skill set to American Pacific both on the financial and industry sides," commented Mr. Gibson. "American Pacific has successfully worked with Seth in the past. We are confident in his ability to oversee the financial affairs of American Pacific," stated Mr. Gibson. American Pacific Corporation is a specialty chemical company that produces products used primarily in space flight and defense systems, automotive airbag safety systems, fire extinguishment systems and explosives. The company also designs and manufactures environmental protection products and is involved in real estate development. * * * As reported in the Troubled Company Reporter's March 8, 2004 edition, Standard & Poor's Ratings Services lowered its corporate credit rating on Las Vegas, Nevada-based American Pacific Corp. to 'B+' from 'BB-'. The outlook is negative. "The downgrade follows a sharp decrease in American Pacific's recent operating profitability, and material concerns over the company's longer-term cash generating capability due to the uncertain status of the Space Shuttle program," said Standard & Poor's credit analyst Franco DiMartino. AMERIPATH: Releases Fourth Quarter & Full Year 2003 Results ----------------------------------------------------------- AmeriPath, Inc., a leading national provider of cancer diagnostics, genomics, and related information services, reported its financial results for the fourth quarter and the year ended December 31, 2003. As noted in the consolidated financial statements, the merger of AmeriPath on March 27, 2003, resulted in a new basis of accounting for AmeriPath. In some cases, for ease of comparison purposes, financial data for the period after the merger, March 28, 2003 through December 31, 2003, has been added to the financial data for the period from January 1, 2003 through March 27, 2003 (predecessor period), to arrive at the 12-month combined period ended December 31, 2003. The financial data for the period January 1, 2003 through March 27, 2003 include the results of the predecessor operation for the period from January 1, 2003 through March 31, 2003 since operating results for the two business days from March 27, 2003 to March 31, 2003 are not material to either period presented. This combined data may be referred to herein as year 2003, 2003 or the combined twelve-month period ended December 31, 2003. Net revenues for the fourth quarter of 2003 were $124.1 million compared to $121.4 million in the fourth quarter of 2002. Net revenues for the combined twelve-month period ended December 31, 2003 were $485 million compared to $478.8 million for the year 2002. Net revenues for the combined twelve-month period ended December 31, 2003 were negatively impacted by charges to revenues of $4.5 million for the combined twelve-month period ended December 31, 2003 to reflect changes in our estimated contractual allowances resulting from the analysis of our managed care contracts. Same store net revenue, excluding revenue from national labs, for the fourth quarter of 2003 increased 3.4%, or $3.9 million when compared to the fourth quarter of 2002. Same store net revenue, excluding revenue from national labs, for the combined twelve- month period ended December 31, 2003 increased 3.4%, or $15.2 million, when compared to the year ended December 31, 2002. For the fourth quarter of 2003, national lab revenue was $0.3 million, down from $4.8 million in the fourth quarter of 2002. For the combined twelve-month period ended December 31, 2003, national lab revenue was $4.3 million, down from $23.2 million for the year ended December 31, 2002. This decline in national lab revenues is consistent with the notice we received in late 2002 and our previous financial statement disclosures that this business would be lost. EBITDA (earnings before interest, taxes, depreciation and amortization), which is a non-GAAP financial measure, for the fourth quarter of 2003 was $21.8 million compared to $18.8 million for the fourth quarter of 2002. EBITDA, excluding merger-related and restructuring costs of $15.7 million, $4.5 million of charges to revenues to reflect changes in our estimated contractual allowances and $6.5 million of increases in the provision for doubtful accounts, for the combined twelve-month period ended December 31, 2003 was $94.6 million and was $105.1 million for the year ended December 31, 2002 excluding merger-related costs and asset impairment and related charges of $5.6 million. Cost of services for the fourth quarter of 2003 increased to $65.3 million (52.6% of net revenues) from $64.1 million (52.8% of net revenues) in the fourth quarter of 2002. Cost of services for the combined twelve-month period ended December 31, 2003 increased to $251.9 million (51.9% of net revenues after charges; 51.5% of net revenues before charges) from $238.6 million (49.8% of net revenues) for the year ended December 31, 2002. The increase in cost of services as a percentage of net revenues is primarily due to increased medical malpractice costs and excess lab capacity. Selling, general and administrative expenses for the fourth quarter of 2003 decreased to $21.4 million (17.2% of net revenues) from $22.3 million (18.4% of net revenues) in the fourth quarter of 2002. Selling, general and administrative expenses for the combined twelve-month period ended December 31, 2003 increased to $87.3 million (18.0% of net revenues after charges; 17.8% of net revenue before charges) from $84.9 million (17.7% of net revenues) in the comparable period in 2002. The increases for the combined twelve-month period ended December 31, 2003 are primarily due to investments in information technology and expansion of the sales and marketing efforts. The provision for doubtful accounts for the fourth quarter of 2003 increased to $17.6 million (14.2% of net revenues) from $15.3 million (12.6% of net revenues) in the same period of 2002. The provision for doubtful accounts for the combined twelve-month period ended December 31, 2003 increased to $71.4 million (14.7% of net revenues) from $58.2 million (12.2% of net revenues) in the same period of 2002. The provisions for doubtful accounts for the combined twelve-month period ended December 31, 2003 were increased by charges of $6.5 million to reflect the net realizable value of certain receivables based on our analysis of the ability to collect historical revenues and billings associated with clinical professional component ("CPC") services. Net income for the fourth quarter of 2003 was $4.7 million compared to net income of $7.1 million for the same quarter of 2002. The net income was negatively impacted by higher interest expense of $10.6 million associated with the financing of the merger with Welsh, Carson, Anderson and Stowe. Net income for the combined twelve-month period ended December 31, 2003 was $5.4 million compared to net income of $44.6 million for the same period in 2002. The net income was negatively impacted by merger- related and restructuring costs of $15.6 million and higher interest expense of $31.6 million associated with the financing of the merger with Welsh, Carson, Anderson and Stowe. In February of 2004, the Company issued an additional $75 million of 10.5% senior subordinated notes due 2013 and reduced its borrowings under the term loan facility to $125 million. At the same time, the interest rate of the term facility and covenants of the facility were modified. More detailed information regarding the business, operations and financial performance of the Company through December 31, 2003, and related and other matters will be included in the Company's Form 10-K for the combined twelve-month period ended December 31, 2003, which is expected to be filed with the SEC on March 19, 2004. AmeriPath is a leading national provider of cancer diagnostics, genomics, and related information services. The Company's extensive diagnostics infrastructure includes the Center for Advanced Diagnostics (CAD), a division of AmeriPath. CAD provides specialized diagnostic testing and information services including Fluorescence In-Situ Hybridization (FISH), Flow Cytometry, DNA Analysis, Polymerase Chain Reaction (PCR), Molecular Genetics, Cytogenetics and HPV Typing. Additionally, AmeriPath provides clinical trial and research development support to firms involved in developing new cancer and genomic diagnostics and therapeutics. * * * As reported in the Troubled Company Reporter's February 16, 2004 edition, Standard & Poor's Ratings Services assigned its 'B+' secured bank loan rating and its recovery rating of '2' to anatomic pathology laboratory AmeriPath Inc.'s proposed $190 million, six-year credit facility. A recovery rating of '2' indicates the likelihood of substantial recovery of principal (80%-100%) in the event of a default. Standard & Poor's also assigned its 'B-' subordinated debt rating to the company's proposed $75 million, 10-year senior subordinated note issue. At the same time, Standard & Poor's affirmed its 'B+' corporate credit rating on AmeriPath. The outlook is stable. "The speculative-grade ratings reflect concern with AmeriPath's aggressive growth through acquisitions in the U.S. market for anatomic pathology services, a niche segment of the diagnostic services market that is subject to reimbursement risks and competitive uncertainties," said Standard & Poor's credit analyst Jordan Grant. "The ratings also reflect new management's challenge to improve performance, while saddled with a debt burden related to a 2003 LBO." AMKOR TECHNOLOGY: Closes $250 Million Senior Debt Offering ---------------------------------------------------------- Amkor Technology, Inc. (Nasdaq: AMKR) has closed an offering of $250 million of its 7 1/8% Senior Notes due 2011. The 7 1/8% Senior Notes were sold to qualified institutional buyers in reliance on Rule 144A and outside the United States in compliance with Regulation S under the Securities Act of 1933. The 7 1/8% Senior Notes have not been registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. $169 million of the net proceeds of the Senior Notes will be used to prepay the entire term loan outstanding under Amkor's senior secured credit facility. The remaining proceeds will be used for general corporate purposes. In connection with prepayment of the term loan, Amkor will incur a non-recurring charge of $2.9 million in the first quarter of 2004 consisting of $1.7 million for the early payment of the loan and a $1.2 million non-cash charge for amortization of deferred debt issuance costs. "This senior notes financing allows Amkor to take advantage of a favorable interest rate environment, while also providing the company with improved liquidity and greater flexibility to pursue our strategic growth initiatives," said Ken Joyce, Amkor's chief financial officer. About Amkor Amkor Technology, Inc. (Nasdaq: AMKR) is a leading provider of contract semiconductor assembly and test services. The company offers semiconductor companies and electronics OEMs a complete set of microelectronic design and manufacturing services. More information on Amkor is available from the company's SEC filings and on Amkor's web site: http://www.amkor.com/ * * * As reported in the Troubled Company Reporter's March 11, 2004 edition, Standard & Poor's Ratings Services assigned its 'B' rating to Amkor Technolgy Inc.'s $250 million senior unsecured notes due 2014 and affirmed its 'B' corporate credit on the company and its other ratings. West Chester, Pa.-based Amkor is expected to use the proceeds of the notes issue in part to repay its $170 million term loan and to bolster cash balances. The outlook is stable. "Although improvements in operating profits should improve debt-protection measures, debt balances are expected to remain high as Amkor implements its capital spending program in 2004," said Standard & Poor's credit analyst Emile Courtney. "However, sustained improvements in operating profitability, combined with reduced debt balances and adequate liquidity, could result in a positive outlook over the intermediate-term." ARCHIBALD CANDY: Reaffirms March 30 Bid Deadline for April Auction ------------------------------------------------------------------ As previously reported, the U.S. Bankruptcy Court for the Northern District of Illinois approved bidding procedures on February 19, 2004 in connection with sale of certain assets relating to Fannie May and Fanny Farmer. These bidding procedures set March 30, 2004 as the deadline for receipt of bids for an auction to be held on April 1, 2004. The date for the court hearing to approve the sale is April 2, 2004. The bidding procedures allow parties interested in purchasing selected assets of Archibald Candy Corporation to do so as long as Archibald will obtain greater value from such offers than under the $18 million offer submitted by Alpine Confections. As a result, parties interested in submitting a competing proposal will have the opportunity to bid for the Intellectual Property (i.e., the Fannie May and Fanny Farmer brand names), and 31 company-owned retail stores, either as two separate lots or as a combined package. Parties interested in purchasing only certain real estate assets are encouraged to submit a good faith, non-binding indication of interest by March 23, 2004. Archibald Candy Corporation directs any interested parties to contact Paragon Capital Partners LLC, the only investment banking firm that has been approved by the Bankruptcy Court, the Company and the Ad Hoc Bondholder Committee to market the company's assets in accordance with Section 363 of Chapter 11 of the U.S. Bankruptcy Code. Parties interested in exploring a potential acquisition of these assets are directed to contact Michael Levy of Paragon Capital Partners at 212-894-0275 or by email at mlevy@paragoncp.com . Paragon Capital Partners is located at 450 Park Avenue, Suite 2500, New York, New York 10022. ARMSTRONG: Gets Nod to Assume WAVE Pacts for AWI Grid Products -------------------------------------------------------------- Armstrong World Industries, Inc., sought and obtained the Court's authority to assume: (a) a support agreement between Worthington Armstrong Venture and AWI; (b) a supplemental agreement among Armstrong Ventures, Inc., Worthington Ventures, Inc., and AWI; (c) a trademark license agreement between AWI and WAVE; and (d) a sales representation agreement between AWI and WAVE. AWI included the Trademark and License Agreement and the Supplemental Agreement with WAVE as executory contracts to be assumed pursuant to the Plan. However, AWI inadvertently neglected to list the Sales Representation Agreement and the Support Agreement in the Plan exhibit. The WAVE Agreements On March 23, 1992, Armstrong Ventures, a wholly owned subsidiary of AWI, and Worthington Ventures, a wholly owned subsidiary of National Rolling Mills, signed an agreement to form WAVE as a joint venture. WAVE was formed to construct, equip and sell grid and related items for suspended ceiling systems. Concurrently with Armstrong Ventures' entry into the Joint Venture Agreement, AWI signed the WAVE Agreements and a guarantee agreement whereby AWI unconditionally guaranteed to National Rolling Mills and Worthington Ventures the full and prompt payment and performance of all financial obligations of Armstrong Ventures arising under the Joint Venture Agreement and related agreements. The Supplemental Agreement Pursuant to the Supplemental Agreement, AWI and National Rolling Mills agreed to make available to WAVE their current grid business systems subject to certain terms and conditions. The principal terms of the Supplemental Agreement as it relates to AWI are: * Contribution of Current Grid Business: AWI and National Rolling Mills will contribute their current grid business systems to WAVE. * Cash Contribution: AWI will make available to Armstrong Ventures, and National Rolling Mills will make available to Worthington Ventures, funds that are required in connection with the capital contributions of Armstrong Ventures and Worthington Ventures pursuant to the Joint Venture Agreement. AWI and National Rolling Mills have the option of making additional capital contributions to Armstrong Ventures and Worthington Ventures. * Retention of Certain Items: National Rolling Mills and AWI will retain certain items, which are not contributed to WAVE: (i) cash; (ii) accounts receivable; (iii) land and buildings, although WAVE may lease properties from National Rolling Mills or AWI; and (iv) existing liabilities, with the exception of those relating to compliance with purchase orders and sale orders that were contributed to, and accepted by, WAVE. * Warranty: National Rolling Mills and AWI will retain the responsibility for any warranty claims made with respect to grid products sold by it before the effective date of the Joint Venture Agreement. WAVE, however, is responsible for handling warranty claims provided that the party responsible for those claims reimburses WAVE for its out-of-pocket costs -- with the exception of employee salaries. * Environmental Liabilities: WAVE will assume responsibility for certain environmental liabilities caused by the operation of WAVE on or after the effective date of the Joint Venture Agreement and is obligated to indemnify, defend and hold harmless AWI and National Rolling Mills from all costs resulting from those liabilities. National Rolling Mills and AWI, however, will retain the liability for any environmental impairment that may have existed before the Joint Venture Effective Date, as well as any environmental impairment that does not arise from the operation of WAVE. * Employees: The Supplemental Agreement contains the terms and treatment of AWI and National Rolling Mills employees that are selected to work for WAVE. * Sales: AWI's sales force will be responsible for the sale of the Grid Products, although WAVE may employ additional sales representatives as needed. * Agreement to Enter into Support Agreements: AWI and National Rolling Mills may enter into support Agreements pursuant to which each company will provide administrative, advertising and product development assistance to WAVE. * Armstrong Trademark: The Supplemental Agreement entitles WAVE to use the "Armstrong" name and trademark and provides that AWI will enter into a separate Trademark License Agreement that will govern the terms of that use. * Non-Competition: The parties agree that neither will compete with the other in respect of any grid business sales and that each will bring to the attention of WAVE any business opportunities specifically relating to grid systems. Nothing in the Supplemental Agreement otherwise obligates the parties to bring any other business opportunities to the attention of WAVE. The Trademark License Agreement The Trademark License Agreement allows WAVE to use the "Armstrong" trademark only in connection with the Grid Products. The principal terms of the Trademark License Agreement are: * License: WAVE is granted a non-exclusive license to use the "Armstrong" trademark so long as the Grid Products are manufactured in accordance with the directions and specifications provided by AWI at certain specific times. * Inspection Duties: WAVE is obligated to provide AWI on a periodic basis: (i) copies of advertising materials in which the "Armstrong" trademark is used by WAVE; and (ii) samples of products to be sold under the "Armstrong" trademark. * Termination: The Trademark License Agreement will terminate in the event of the dissolution of WAVE or in the event that the interest of Armstrong Ventures in WAVE is transferred to a third party that is not affiliated with AWI. Within six months after termination, WAVE is obligated to remove the "Armstrong" trademark from any and all WAVE products. However, WAVE is entitled to finish selling any products that already bear the "Armstrong" trademark. * Ownership by AWI: AWI will retain all ownership interests in the "Armstrong" trademark. The Guaranty In accordance with the Plan, the Armstrong Guarantee will be reinstated and otherwise treated as an Allowed Class 10 Subsidiary Debt Guarantee Claim upon Plan confirmation. The Support Agreement AWI agrees to provide administrative, management and other support to WAVE. The principal terms of the Support Agreement are: * Services to be Provided: If requested by WAVE, AWI will assist in: (i) hiring and providing benefits to WAVE personnel; (ii) arranging for desirable insurance coverage. However, premiums and deductibles will be paid by WAVE or will be prorated between the parties if the insurance obtained also covers AWI; (iii) providing cash management services; and (iv) providing administrative, advertising, research and development and credit and collection services. * Provision of Employees: The parties may agree to have AWI "lease" AWI employees to WAVE. In the event AWI provides benefits services to WAVE, the parties will agree on a reasonable cost for AWI to be paid and reimbursed. The employment and management of the employees are AWI's responsibility. WAVE, however, has the entire proprietary right to the work performed by any personnel "leased" by AWI. The Support Agreement distinguishes between "direct employees" -- those who are assigned on a full-time basis to WAVE -- and "indirect employees" -- those who work primarily for AWI, but who work for WAVE when the need arises. * Expenses: Subject to certain provisions in the Support Agreement, all expenses incurred by AWI in the performance of its obligations under the Support Agreement will be paid or reimbursed by WAVE. Debts to third parties are the obligations of WAVE. AWI is reimbursed for expenses associated with the direct employees, not for wages or benefits provided to indirect employees. The Support Agreement also delineates a means of apportioning out-of-pocket expenses and other costs and allows the parties to renegotiate a different method of apportionment. * Indemnification: WAVE agrees to indemnify AWI for any act or omission of a direct employee arising in connection with WAVE's obligation. * Termination: The Support Agreement will terminate: (i) upon the dissolution of WAVE; (ii) in the event that neither AWI nor an affiliate of AWI is a member of WAVE; or (iii) by mutual agreement of the parties. To the extent the parties terminate the agreement upon dissolution of WAVE or in the event that neither AWI nor its affiliate is a member of WAVE, AWI is obligated to provide services for a reasonable period not to exceed six months. Sales Representation Agreement AWI agrees to be WAVE's agent in connection with WAVE's sale of the Grid Products. The principal terms of the Sales Representation Agreement are: * Duties: AWI will attempt to sell the Grid Products, employ salespersons as may be appropriate, and service the sales made on behalf of WAVE in the same manner that it services sales made on its behalf. AWI agrees to make all reasonable efforts to obtain business for WAVE to the same extent it does for AWI exclusively. * Pricing: All pricing and terms of any agreement between WAVE and its customers will be under the exclusive control of WAVE. * Sales Fee: AWI will receive a fee for its services. The fee is based on a fair and reasonable allocation of costs and expenses of the sales staff between AWI's business and WAVE's business. * Claims: AWI will report to WAVE any claims that it receives on account of its sale of the Grid Products. WAVE is responsible for handling the claims. The WAVE Credit Facility On October 13, 1999, WAVE entered into a Credit Agreement with Bank One, NA, pursuant to which Bank One agreed to provide WAVE with a term loan for $50 million. The extension of credit by Bank One to WAVE under the Credit Facility was subject to the existence and continued effectiveness of the Joint Venture Agreement and "other operative documents or Material Contracts" related to the joint venture, including the WAVE Agreements. Headquartered in Lancaster, Pennsylvania, Armstrong World Industries, Inc. -- http://www.armstrong.com/-- the major operating subsidiary of Armstrong Holdings, Inc., designs, manufactures and sells interior finishings, most notably floor coverings and ceiling systems, around the world. The Company filed for chapter 11 protection on December 6, 2000 (Bankr. Del. Case No. 00-04469). Stephen Karotkin, Esq., Weil, Gotshal & Manges LLP and Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $4,032,200,000 in total assets and $3,296,900,000 in liabilities. (Armstrong Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service, Inc., 215/945-7000) ASTROPOWER INC: Court Approves $15 Million+ Sale of U.S. Assets --------------------------------------------------------------- AstroPower, Inc. (OTC:APWRQ.PK) announced the US Bankruptcy Court presiding over AstroPower's Chapter 11 proceeding approved the sale of most of AstroPower Inc.'s US business assets to General Electric Company's designee Heritage Power LLC. The sale price was $15 million cash plus the assumption of certain liabilities. The sale is expected to close by the end of March. About AstroPower Headquartered in Newark, Delaware, AstroPower manufactures solar electric power products, and is a leading provider of solar electric power systems for the mainstream residential market. AstroPower develops, manufactures, markets and sells a range of solar electric power generation products, including solar cells, modules and panels, as well as its SunChoice pre-packaged systems for the global marketplace. Solar electric power systems provide a clean, renewable source of electricity in both off-grid and on- grid applications. More information at http://www.astropower.com/ BAY VIEW CAPITAL: Unit President James A. Badame Resigns -------------------------------------------------------- Bay View Capital Corporation announced that James A. Badame, President of Bay View Acceptance Corporation ("BVAC"), the Company's automobile finance subsidiary, will resign for personal reasons effective March 19, 2004. The Company has retained a recruiting firm to search for Mr. Badame's replacement. Until his replacement is found, Charles G. Cooper, the Company's President and Chief Executive Officer, will serve as interim President of BVAC. Bay View Capital Corporation is a financial services company headquartered in San Mateo, California and is listed on the NYSE: BVC. For more information, visit http://www.bayviewcapital.com/ As reported in Troubled Company Reporter's January 29, 2004 edition, Bay View Capital Corporation announced fourth quarter earnings and announced that it has discontinued its use of the liquidation basis of accounting and re-adopted the going concern basis of accounting effective October 1, 2003. From September 30, 2002 through September 30, 2003, the Company reported its results under the liquidation basis of accounting because the Company had adopted a Plan of Dissolution and Stockholder Liquidity in October 2002, pursuant to which the Company would sell all of its assets, pay all of its liabilities, then distribute the proceeds to the Company's stockholders and then dissolve. As previously announced during the fourth quarter, the Company's Board of Directors amended the Plan to become a plan of partial liquidation under which the Company will complete the liquidation of the assets and satisfaction of the liabilities of Bay View Bank, N.A., remaining after the Bank's September 30, 2003 dissolution, distribute the proceeds to its stockholders through a series of cash distributions, and continue to operate its auto finance subsidiary, Bay View Acceptance Corporation, on an ongoing basis. In accordance with the amended plan, the Company made an initial cash distribution of $4.00 per share to its stockholders on December 30, 2003. BESS EATON: Selling Assets to Wendy's Int'l. for $35,520,000 ------------------------------------------------------------ Bess Eaton Donut Flour Company Incorporated is asking the U.S. Bankruptcy Court for the District of Rhode Island to approve the sale of substantially all of its operating business assets and related real estates, free and clear of claims, liens, interests and encumbrances. The Debtor reports that on February 27, 2004, the Debtor, Gencarelli and Wendy's International, Inc., executed the Asset Purchase Agreement for the purchase of the assets for $35,520,000. The Debtor points out that this chapter 11 case was commenced to effectuate the sale and provide for the claims of Debtor's creditors and Gencarelli's. Of the aggregate purchase price, $28,882,302 has been allocated fir the Gencarelli Locations, and $6,637,698 for the Bess Eaton assets. Excluded from the proposed sale are the commercial bakery facility and equipment therein and the office building owned by Bess Eaton in Westerly, Rhode Island. Wendy's International, as the purchaser, is required to post $500,000 cash deposit under the Agreement. Headquartered in Westerly, Rhode Island, Bess Eaton Donut Flour Company Incorporated, is an operator of 48 retail coffee and bake shops in locations throughout Rhode Island, Massachusetts and Connecticut. The Company filed for chapter 11 protection on March 1, 2004 (Bankr. D. R.I. Case No. 04-10630). Allan M. Shine, Esq., at Winograd Shine & Zacks represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $9,700,000 in total assets and $17,600,000 in total debts. BETHLEHEM STEEL: Court Amends Adversary Proceeding Protocol ----------------------------------------------------------- The Court amends its ruling approving the Bethlehem Steel Debtors' Prosecution of Preference Actions Procedures to provide that: A. The time to file proof of service of the summons and complaint in any Preference Action under Local Bankruptcy Rule 9078-1 will be extended from three days to 90 days from the date of service; B. With respect to the settlement of any Preference Action where the amount demanded is less than $10,000, the Debtors will be authorized to consummate the proposed settlement without Court order or giving notice to, or receiving consent from, any other party; C. With respect to the settlement of any Preference Action where the amount demanded is greater than $10,000 but less than $1,500,000, the Debtors will provide 10 days' notice of any proposed settlement by overnight mail, fax, or e-mail solely to the Official Committee of Unsecured Creditors and the Office of the United States Trustee. If no written objection is received from the Committee or the U.S. Trustee within the 10-day period, the Debtors will be authorized to consummate the proposed settlement without Court order or consent of any other party; D. With respect to the settlement of any Preference Action where the amount demanded is $1,500,000 or greater, the Debtors will be required to move for Court approval of the settlement pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure upon limited notice to the Committee, the U.S. Trustee and the defendant in that particular Preference Action; E. Where an adversary proceeding has been commenced, upon consummation of the settlement as provided, the Debtors will dismiss the Preference Action: (a) by the filing of a Notice of Dismissal if no answer has been filed; and (b) by the filing of a Stipulation of Dismissal if an answer has been filed; F. These provisions will apply to any of the Debtors' Preference Actions including any settlements executed before March 3, 2004; G. The Debtors will submit to the Court, the Committee, the Liquidating Trustee and the U.S. Trustee a status report setting forth the Preference Actions settled and the amount of each settlement; H. As of December 31, 2003, the Liquidating Trust will be deemed substituted as plaintiff in all of the then pending Preference Actions; and I. As of December 31, 2003, the law firm of Kramer Levin Naftalis & Frankel, LLP will be substituted for the law firm of Weil, Gotshal & Manges LLP with respect to certain cases without the need for filing any further documentation. Headquartered in Bethlehem, Pennsylvania, Bethlehem Steel Corporation -- http://www.bethlehemsteel.com/-- is the second- largest integrated steelmaker in the United States, manufacturing and selling a wide variety of steel mill products including hot- rolled, cold-rolled and coated sheets, tin mill products, carbon and alloy plates, rail, specialty blooms, carbon and alloy bars and large diameter pipe. The Company filed for chapter 11 protection on October 15, 2001 (Bankr. S.D.N.Y. Case No. 01- 15288). Jeffrey L. Tanenbaum, Esq., and George A. Davis, Esq., at WEIL, GOTSHAL & MANGES LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $4,266,200,000 in total assets and $4,420,000,000 in liabilities. (Bethlehem Bankruptcy News, Issue No. 52; Bankruptcy Creditors' Service, Inc., 215/945-7000) BIOPHAGE: Needs to Secure Funds to Continue as a Going Concern -------------------------------------------------------------- Biophage Pharma Inc. (TSX:BUG.V), a Canadian biopharmaceutical company, reported its financial results for the fiscal year ended November 30, 2003. During Fiscal 2003, despite a difficult industry environment, Biophage continued to pursue the development of new therapeutic and diagnostic products for the management of life-threatening diseases in two large potential targeted markets, anti-infective and anti-inflammatory. Moreover, the Corporation continued to expand its contract research organization division raising its contract revenues to $1.35 million, a 22.5% increase over fiscal 2002. This important increase in revenues was mainly due to the sustained ramp-up of beryllium testing activities. In Spring 2003, Biophage streamlined and refocused its activities in order to reduce its burn rate, awaiting a general improvement in the market for small-cap biotech companies. These steps protected both the integrity of Biophage and the long-term value for the Corporation's shareholders. "Fiscal 2003 was a challenging year for the Corporation and for the biotechnology sector in general. However, Biophage's capacity to increase its revenues, collaborate with government agencies on funded research programs and reduce its overhead expenses has allowed us to be well positioned to move quickly as the market environment improves. The recent down-sizing in the biotech industry has created new opportunities and Biophage is ready to build a stronger pipeline of new therapeutic and diagnostic products and take them closer to commercialisation," declared Mr. Elie Farah, Chief Executive Officer of Biophage Pharma Inc. Contract revenues for the year ended November 30, 2003 increased to $1,347,291 compared with $1,100,074 in 2002. This substantial growth was mainly due to the continuous ramp-up of beryllium testing activities since their inception in 2002. Investment income for 2003 decreased to $14,825, compared with $29,007 in 2002, resulting from lower average cash balances in the current year. Research and development costs for 2003, before tax credits, decreased to $835,205 compared with $1,233,634 in 2002. During 2003, management decided to limit spending on R&D activities in order to maintain its cash position. Research and development tax credits were $249,388 in 2003 and $436,636 in 2002, representing 30% and 36% of the costs for 2003 and 2002 respectively. The reduction of tax credits for the year was attributable to an increase in non-admissible expenses for Quebec tax credit as well as a decrease of the tax credit rate from 40% to 35% in June 2003. Costs of contracts for 2003 amounted to $814,740 compared to $772,426 in 2002, representing 60% and 70% of contract revenues, respectively. The decrease was mainly due to a major increase in gross margin generated by the beryllium testing activities. General and administrative expenses totalled $905,871 in 2003, compared to $1,095,112 in the same period last year, a 17% reduction. This reflected management's decision to lower the corporate burn rate. Amortization of intangible assets for 2003 increased to $126,205 as compared to $92,248 for the same period in 2002, resulting from management decision to accelerate the amortization of certain assets following the on-going review of the Corporation's intellectual property portfolio due to the 2003 cash constraints. Amortization of capital assets totalled $76,746, compared with $85,994 in 2002. Biophage's net loss for the year ended November 30, 2003 amounted to $1,152,992 or $0.04 per share compared to a net loss of $1,738,244 or $0.07 per share for the year ended November 30, 2002. At November 30, 2003, Biophage had cash, cash equivalents and temporary investments of $848,333 compared to $1,447,705 at November 30, 2002. The decrease was mainly due to spending related to the operating activities for 2003. Cash flow used in operating activities averaged $76,480 per month in 2003 on a year-to-date basis, as compared to $129,942 in 2002, a 41% decrease related to the general reduction of expenses. During 2003, Biophage raised net proceeds of $188,286 through a private placement of 600,000 shares at $0.31667 and the exercise of 18,000 stock options at a purchase price of $0.14 per share. The Corporation reduced its long-term debt to $40,277 on November 30, 2003 from $86,087 at the end of 2002. In 2004, the Corporation will seek additional funding in order to pursue its anti-infective and anti-inflammatory programs. In the short term, Biophage's priority is to enhance its data, demonstrating in-vivo effectiveness of its technologies, while increasing its revenues, controlling costs and securing additional funding. The consolidated financial statements also include a going concern assumption note as the Corporation's ability to continue operating as going concern is dependant on its raising additional financing and achieving and maintaining profitable operations. Biophage Pharma -- http://www.biophage.com/--is a Canadian biopharmaceutical company engaged in the development of new therapeutics in two core domains: the treatment of antibiotic- resistant infections in livestock and inflammatory diseases in humans. Founded in 1995, Biophage is located at the Biotechnology Research Institute in Montreal and employs 16 people, including a team of 13 researchers. Through an active research and development program, as well as in-licensing and collaboration agreements, Biophage is building a portfolio of promising new therapeutics. BOOTS & COOTS: Q4 & FY 2003 Conference Call Set for March 25 ------------------------------------------------------------ Boots & Coots International Well Control, Inc. (Amex: WEL), a global prevention, emergency response and restoration company for the oil and gas industry, provided the following operational updates and earnings call schedule. Boots & Coots has been awarded a two-year contract from the Oil and Natural Gas Commission (ONGC) of India. The SafeGuard contract is for training, inspection and blowout control for ONGC's 28 offshore rigs and 94 land rigs. Under the terms of the contract, Boots and Coots will train 30 ONGC engineers in Houston, and then send two engineers to provide training in India at ONGC's six regional centers. The contract, which is expected to commence the beginning of the second quarter of 2004, also provides for the inspection of, and suggestion of remedial measures for, all of ONGC's well control equipment. The company also stated that, pending the transition to the new contract for the Restore Iraqi Oil (RIO) program in Iraq, it has temporarily demobilized its personnel in the region. The company remains positioned to respond immediately, however, whenever an emergency arises in Iraq. "While this delay in redeployment was unanticipated, it occurs during a period when our domestic response business has improved," said Jerry Winchester, Chief Executive Officer of Boots & Coots. "Additionally, the prevention side of our business continues to grow, especially in Venezuela and North Africa. We also expect our expanded relationship with ONGC to create additional opportunities for us in Asia. We have spent the last five years developing a strategy to build the prevention side of our business, and as a result our prevention services revenues have increased approximately 50 percent over the past year." The company will hold a conference call to discuss fourth quarter and year-end results for 2003 on Thursday, March 25, at 2:00 pm Central Time (3:00 pm Eastern Time). The dial-in number for the call is 800-901-5241, passcode Boots & Coots. A transcript of the call will be available on the investor relations page of the company's Web site within 24 hours of the call. About Boots & Coots Houston, Texas-based Boots & Coots International Well Control, Inc. -- whose September 30, 2003 balance sheet shows a total shareholders' equity deficit of about $2 million -- provides a suite of integrated oilfield services centered on the prevention of and emergency response to blowouts and well fires around the world and the restoration of affected wells to production. Boots & Coots' proprietary risk management program, WELLSURE(R), combines traditional well control insurance with post-event response and preventative services, providing oil and gas operators and insurance underwriters a medium for effective management of well control insurance premiums, claims and payments. The company's SafeGuard program, developed for regional producers and operators sponsored by Boots & Coots, provides dedicated emergency response services, risk assessment and contingency planning, and continuous training and education in all aspects of critical well management. For more information, visit the company's web site at http://www.bncg.com/ BOND TRANSFER CO: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Bond Transfer Company, Inc. 5501 Belle Grove Road Baltimore, Maryland 21225 Bankruptcy Case No.: 04-14910 Type of Business: The Debtor offers Full Truckload service, delivery of oversized loads and International Specialized transportation services. Chapter 11 Petition Date: March 1, 2004 Court: District of Maryland (Baltimore) Judge: E. Stephen Derby Debtor's Counsel: J. Daniel Vorsteg, Esq. Whiteford, Taylor & Preston L.L.P. 7 Saint Paul Street Baltimore, MD 21202 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 ------ --------------- ------------ Bond Logistics, LLC Trade debt $312,000 5501 Belle Grove Road Baltimore, MD 21225-3304 Ryder Transportation Trade debt $148,360 Services Penske Truck Leasing Co. Trade debt $145,804 CitiCapital Trailer Rental Trade debt $128,914 Amerada Hess Corp. Trade debt $113,691 American Express Trade debt $125,000 Fidelity Insurance Company Trade debt $106,655 Cananwill, Inc. $87,269 AMI Leasing Trade debt $82,664 Internal Revenue Service Trade debt $67,213 Carroll Independent Fuel Co. Trade debt $55,161 Lincoln Farms, Inc. Trade debt $35,600 ECBM Trade debt $33,731 IWIF Trade debt $18,049 Internal Revenue Service Trade debt $21,791 K.W. Restall Oil Company Trade debt $17,594 American Management Services Trade debt $16,000 Inc. Chesapeake Industrial Trade debt $14,639 Leasing Company, Inc. Creative Systems Corp. Trade debt $12,320 CRW Parts, Inc. Trade debt $11,698 CABLE SATISFACTION: Creditors to Discuss Plan Amendments Today -------------------------------------------------------------- Richter & Associes Inc., in its capacity as Monitor and Interim Receiver of Cable Satisfaction International Inc. pursuant to proceedings filed by Cable Satisfaction International Inc. under the Companies' Creditors Arrangement Act, received, on March 12, 2004, written notice from the attorneys for the Noteholder Committee stating that certain amendments to the Amended and Restated Plan of Arrangement and Reorganization would be put before the creditors at the upcoming Meeting of Creditors scheduled for today, at 10:30 a.m. at the offices of Richter. The written advice of the Noteholder Committee and the proposed amendments to the Plan relating thereto are available on Richter's Web site at http://www.richter.ca/ CALPINE CORP: Prices CalGen Term Loans and Secured Notes -------------------------------------------------------- Calpine Corporation (NYSE: CPN) announced that its wholly owned subsidiary Calpine Generating Company, LLC (CalGen), formerly Calpine Construction Finance Company II, LLC (CCFC II), has priced its offering of secured institutional term loans and secured notes. Calpine will realize total proceeds from the offering in the amount of $2.405 billion, before transaction costs and fees. The offering, which is expected to close on March 23, 2004, will include: -- $835 million in combination of non-recourse Super Priority Floating Rate Secured Institutional Term Loans and Notes Due 2009 priced at Libor plus 375 basis points, with a Libor floor of 125 basis points; -- $740 million in combination of non-recourse Floating Rate Senior Secured Institutional Term Loans and Notes Due 2010 priced at Libor plus 575 basis points, with a Libor floor of 125 basis points; -- $680 million of non-recourse Floating Rate Secured Notes Due 2011 priced at Libor plus 900 basis points, with a Libor floor of 125 basis points; and -- $150 million of non-recourse Fixed Rate Secured Notes Due 2011 priced at 11.50%. The term loans and secured notes described above will in each case be secured, through a combination of direct and indirect stock pledges and asset liens, by CalGen's 14 power generating facilities and related assets located throughout the United States, and the lenders' recourse will be limited to such security. None of the indebtedness will be guaranteed by Calpine Corporation. Net proceeds from the offerings will be used to refinance amounts outstanding under the $2.5 billion CCFC II credit facility, which matures in November 2004, and to pay fees and transaction costs associated with the refinancing. Current outstanding indebtedness and letters of credit under the CCFC II credit facility total approximately $2.3 billion. The secured institutional term loans will be placed in the institutional term loan market. The secured notes will be offered in a private placement under Rule 144A, have not been registered under the Securities Act of 1933, and may not be offered in the United States absent registration or an applicable exemption from registration requirements. Calpine Corporation (S&P, CCC+ Senior Unsecured Convertible Note and B Second Priority Senior Secured Note Ratings, Negative Outlook), celebrating its 20th year in power in 2004, is a leading North American power company dedicated to providing electric power to wholesale and industrial customers from clean, efficient, natural gas-fired and geothermal power facilities. The company generates power at plants it owns or leases in 21 states in the United States, three provinces in Canada and in the United Kingdom. Calpine is also the world's largest producer of renewable geothermal energy, and owns or has access to approximately one trillion cubic feet equivalent of proved natural gas reserves in Canada and the United States. The company was founded in 1984 and is publicly traded on the New York Stock Exchange under the symbol CPN. For more information about Calpine, visit http://www.calpine.com/ CLB PUBLISHERS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: CLB Publishers, Inc. 10580 Metropolitan Avenue Kensington, Maryland 20895 Bankruptcy Case No.: 04-13738 Type of Business: The Debtor provides printing and publishing services. Chapter 11 Petition Date: February 19, 2004 Court: District of Maryland (Greenbelt) Judge: Duncan W. Keir Debtor's Counsel: Ronald J. Drescher, Esq. Drescher & Associates 4 Reservoir Circle, Suite 107 Baltimore, MD 21208 Tel: 410-484-9000 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 ------ --------------- ------------ Enovation Graphics Systems Trade Debt $69,002 WWF Paper Corporation Trade Debt $65,000 RIS Paper Company Inc. Trade Debt $57,379 Frank Parsons Paper Company Trade Debt $50,755 Lindenmeyr Munroe Trade Debt $41,884 The Michael Companies, Inc. Trade Debt $41,773 Creo America, Inc. Trade Debt $31,274 XPEDX Trade Debt $25,511 Selective Insurance Company Trade Debt $25,000 Central Lawmar South Trade Debt $24,356 Case Paper Company Trade Debt $18,860 Montgomery County Government Trade Debt $15,220 United Parcel Service Trade Debt $13,186 Graphic Arts Benefit Corp. Trade Debt $12,461 C & J Graphics Trade Debt $11,096 Artisan II Trade Debt $9,570 Postal Logistics Trade Debt $7,213 International Performance Bindery Trade Debt $7,175 Kohl & Madden Printing Ink Trade Debt $6,836 Inc. Mitchell Nydish Trade Debt $6,347 CONE MILLS: WL Ross Now Owns Company After $46MM+ Asset Sale ------------------------------------------------------------ Cone Mills Corporation has completed the sale of the company's assets to WL Ross & Co. The sale was approved by the U.S. Bankruptcy Court on February 10, 2004. The company's operating segments -- consisting of Cone Denim, Carlisle Finishing and Cone Jacquards -- are now operating in the normal course of business under the ownership of WL Ross & Co. All of Cone's approximately 2300 employees are now employed by affiliates of WL Ross & Co. WL Ross & Co. LLC discloses that the company acquired the assets and business of Cone Mills Corporation for a price of $46 million in cash, plus assumption of certain specified liabilities. Wilbur L. Ross, Chairman of WL Ross & Co., commented: "We are delighted that the bankruptcy court approval process has been completed and that now we can help Cone's customers, management, employees and vendors benefit from a vastly reduced debt burden and synergies with Burlington Industries. I will be in Greensboro next week to discuss with the management and employees of both companies ways to maximize values." Founded in 1891, Cone Mills Corporation, headquartered in Greensboro, NC, is the world's largest producer of denim fabrics and one of the largest commission printers of home furnishings fabrics in North America. The Company's main operating segments include Cone Denim, Carlisle Finishing and Cone Jacquards. CORBAN TOWERS INC: Voluntary Chapter 11 Case Summary ---------------------------------------------------- Debtor: Corban Towers, Inc. 901 Jupiter Road Plano, Texas 75074 Bankruptcy Case No.: 04-33001 Type of Business: The Debtor is a carrier-neutral network services provider offering Point-to-Point Interconnect services and Transport services for TDM and IP networks. The Debtor is affiliated with Corban Communications Inc. which filed a chapter 11 petition on March 11, 2004 (Bankr. N.D. Tex. Case No. 04-32972). Chapter 11 Petition Date: March 12, 2004 Court: Northern District of Texas (Dallas) Debtor's Counsels: Judith Weaver Ross, Esq. Luckey McDowell, Esq. Baker Botts LLP 2001 Ross Avenue Dallas, TX 75201-2980 Tel: 214-953-6605 Fax: 214-661-4605 Estimated Assets: $10 Million to $50 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20-largest creditors. DELTA AIR: Files Form 10-K With Revised March Quarter Guidance -------------------------------------------------------------- Delta Air Lines (NYSE: DAL) filed its Annual Report on Form 10-K for the year ended Dec. 31, 2003. The Form 10-K contains updated guidance on Delta's March 2004 quarter net loss estimate. The estimated March quarter net loss is now expected to be approximately $400 million. Delta had previously estimated its net loss to range between $300 million and $350 million. Continued pressures on passenger revenue, sustained higher fuel prices and costs associated with the settlement of fuel hedge contracts drove this revision. Approximately $47 million, net of tax, of the increase in Delta's March 2004 quarter net loss estimate is attributable to the fuel-related costs. The continuing weakness on the revenue side, coupled with external cost pressures, including but not limited to fuel prices, further illustrate Delta's critical need to reduce costs to a competitive level for the long term. Delta Air Lines (S&P, B+ Corporate Credit Rating, Negative)is proud to celebrate its 75th anniversary in 2004. As the world's second largest airline in terms of passengers carried and the leading U.S. carrier across the Atlantic, Delta offers 7,737 flights each day to 494 destinations in 84 countries on Delta, Song, Delta Shuttle, Delta Connection and Delta's worldwide partners. Delta is a founding member of SkyTeam, a global airline alliance that provides customers with extensive worldwide destinations, flights and services. Go to http://www.delta.com/ DIAMOND JO: S&P Rates Planned $230Mil. Senior Secured Notes at B ---------------------------------------------------------------- Standard & Poor's Ratings Services assigns its 'B' rating to Diamond Jo, LLC's (DJL; formerly known as Peninsula Gaming Company, LLC) proposed $230 million senior secured notes due 2012. The notes have concurrently been placed on CreditWatch with positive implications. In addition, Standard & Poor's places its 'B' corporate credit and senior secured debt ratings on DJL, as well as its 'B-' corporate credit and senior secured debt ratings on the company's wholly owned subsidiary The Old Evangeline Downs LLC (OED) on CreditWatch with positive implications. Dubuque, Iowa-based DJL is a riverboat casino owner and operator, and Opelousas, La.-based OED owns and operates a pari-mutuel horse racetrack and casino. The CreditWatch listing follows DJL's announcement that it plans to refinance the existing debt at each company (other than the OED FF&E credit facility) with a proposed $230 million senior secured note offering due 2012 and a new senior secured credit facility. In connection with the refinancing, and subject to regulatory approval, a new entity, Peninsula Gaming, LLC, will be formed to co-issue the proposed new notes along with The Old Evangeline Downs Capital Corp. (OED Corp.). DJL and OED will become separate wholly owned subsidiaries of Peninsula Gaming. Otherwise, DJL and OED Corp. will be co-issuers, and provided that the approval of regulatory authorities is obtained on or after the issue date, Peninsula Gaming will become an additional co-issuer. If the approval of regulatory authorities is obtained, OED Corp. will be renamed Peninsula Capital Corp. Standard & Poor's has determined that if the transaction closes under terms substantially in line with those described, the corporate credit rating on DJL and OED will be withdrawn and a new corporate credit rating on Peninsula Gaming of 'B+' will be assigned with a stable outlook. Similar to the corporate credit rating, the rating on the proposed notes will also be raised to 'B+' if the transaction closes under terms substantially in line with those described. Proceeds from the proposed notes, along with excess cash, and borrowings under the expected senior secured credit facility, will be used to repay outstanding borrowings under the companies' existing senior secured credit facilities (other than the OED FF&E credit facility), to redeem DJL's outstanding $71 million 12.25% senior secured notes due 2006, to tender for the existing $123.2 million 13% senior secured notes due 2010 outstanding at OED, and for related fees and expenses. The ratings on these existing notes will be withdrawn once the redemption and tender are consummated. Pro forma for this transaction, Standard & Poor's expects that total debt outstanding as at Dec. 31, 2003, would have been approximately $270 million. "The anticipated upgrade to the combined entity's corporate credit rating reflects a change in the company's financing strategy such that the funding for its subsidiaries will flow through the parent issuer, with such loans in turn guaranteed by such subsidiaries," said Standard & Poor's credit analyst Peggy Hwan. Lenders and bondholders will rely on a more diversified pool of assets for repayment. "The upgrade also reflects the company's successful completion of the major portion of its construction project at OED, which included slot machines opening in advance of the planned racetrack, as well as Standard & Poor's expectation that OED will significantly enhance the size of the company's consolidated EBITDA base in its first full year of operation," said Ms. Hwan. DONLAR CORP: Gets Go-Signal to Hire Crane Heyman as Attorneys ------------------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, gave its nod of approval for Donlar Corporation to retain and employ Crane, Heyman, Simon, Welch & Clar as its attorneys. The Debtor states that it selected Crane Heyman because of the firm's considerable experience in matters in this nature. The Debtor is convinced the Firm is well qualified to perform the required services. Crane Heyman will: a. prepare necessary applications, motions, answers, orders, reports and other legal papers; b. provide Debtor legal advice with respect to its rights and duties involving its property; c. appear in court and to litigate whenever necessary; d. perform any and all other legal services that may be required from time to time in the ordinary course of the Debtor's business during the administration of the estate herein. The Debtor reports that it paid Crane Heyman a $30,839 prepetition retainer. The Debtor does not disclose the Firm's current hourly billing rates. The professional who will primarily provide services to the Debtor are Scott R. Clar, Esq., and Arthur G. Simon, Esq. Headquartered in Summit Argo, Illinois, Donlar Corporation -- http://www.donlar.com/-- is a manufacturer of Biodegradable Specialty Chemicals that provides performance for various products and processes for the creation of non-toxic products. The Company filed for chapter 11 protection on February 26, 2004 (Bankr. N.D. Ill. Case No. 04-07455). Scott R. Clar, Esq., at Dannen Crane Heyman & Simon represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $10,880,022 in total assets and $27,371,432 in total debts. DT INDUSTRIES: S&P Withdraws Default-Level Corp. Credit Rating -------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'D' corporate credit rating on Dayton, Ohio-based DT Industries Inc. At the same time, Standard & Poor's withdrew the 'D' rating on DT Industries' $42 million senior secured credit facility. The corporate credit rating was lowered to D on Jan. 7, 2004, following the company's failure to make a mandatory principal prepayment totaling $2.7 million, due on Dec. 31, 2003. On March 11, 2004, the company announced it had used $10 million of proceeds from an asset sale to reduce outstanding debt under its senior credit facility including the $2.7 million prepayment. However, DT Industries is currently in violation of minimum net worth and EBITDA covenants under the credit facility. Although the company has requested a forbearance agreement from the senior lenders for these defaults, the lenders have neither waived the defaults nor issued a forbearance from accelerating payment under the credit facility. "There is no indication that the lenders will extend the credit facility beyond its maturity date of July 2, 2004, and the company and its lenders have not been able to agree upon the terms of any third-party financing to replace the credit facility," said Standard & Poor's credit analyst Nancy Messer. Therefore, DT Industries has engaged the services of an advisor to explore the sale of the company and/or a recapitalization. Pending any such transaction, DT Industries intends to continue operating its businesses. DT Industries makes equipment used to manufacture, test, or package a variety of industrial and consumer products. The company has suffered from falling sales and poor profitability during the past few years, primarily because of the weak U.S. manufacturing sector and low industrial capital investment that has increased DT Industries' financial stress and liquidity challenges. DUANE READE: Updates Fin'l Report in Light of NLRB Recommendation ----------------------------------------------------------------- Duane Reade Inc. (NYSE: DRD) commented on the financial reporting consequences of a recent National Labor Relations Board (NLRB) Administrative Law Judge (ALJ) recommendation in a litigation matter with the Allied Trades Council, a union representing employees in 139 of its stores. After a lengthy negotiating period in 2001, the Company determined that it had reached a bargaining impasse with the Allied Trades Council in August of that year. Its collective bargaining agreement expired on August 31, 2001. The Company continued to pay some benefits directly to its employees covered under that contract after the August expiration date and implemented its last and best offer of new contract terms for these employees in December 2001. This implemented contract included wage increases, vacation and sick pay, health and welfare benefits and a 401(k) retirement plan. On February 18, 2004, an initial unenforceable recommendation by an NLRB Administrative Law Judge concluded that the parties had not reached impasse and recommended that the Company make its employees whole by reimbursing them for any ensuing expenses and to make various benefit funds under the collective bargaining agreement whole for contributions the Company had not continued to make since the expiration of the last labor contract. The Company has been advised by its outside counsel that it has numerous meritorious responses and defenses to this recommendation and the Company remains confident in the validity of its position with regard to both the impasse matter as well as its obligations to union funds. In light of the foregoing, while it is the Company's belief that the final financial outcome of this litigation cannot be determined at this time, the Company, in accordance with Financial Accounting Standards Board Statement No. 5 has recorded a charge for the year ended December 27, 2003, representing its best estimate of the loss that would result upon application of the ALJ's recommendations. The Company notes that such charge is based upon the facts available to the Company as of this date and, in the Company's opinion, such charge could be subject to significant modification in the future, upon review by the full NLRB, the Federal Circuit Court of Appeals and the completion of a compliance hearing. On the date of the ALJ recommendation, the Company had not yet filed its Annual Report on Form 10-K for the 2003 fiscal year. It is therefore revising its previously reported 2003 earnings to reflect this subsequent event. The revised fiscal 2003 earnings now include an additional non-cash pre-tax charge of $12.6 million that represents an estimate of the contributions not paid into the various union benefit funds less a portion of the implemented contract benefits paid on behalf of the employees covered under the collective bargaining agreement plus an interest cost factor. Following are the revised earnings for the fourth quarter and full year ended December 27, 2003. Fourth Quarter Results For the fourth quarter the Company incurred a net loss of $4 million, or $0.16 per diluted share, compared to the previously reported net income of $2.8 million, or $0.12 per diluted share. Full Year Results For the full year net income was $5.1 million, or $0.21 per diluted share, compared to the previously reported net income of $11.9 million, or $0.49 per diluted share. Future Quarters' Results Until such time as further legal developments warrant a change in the application of this accounting standard, or until this matter is resolved, the Company expects to record additional non-cash pre-tax charges of approximately $1.1 million per fiscal quarter in future periods, assuming a continuation of current interest rates. The Company is continuing to move forward with its previously announced transaction pursuant to which it would be acquired for $17.00 per share. Founded in 1960, Duane Reade is the largest drug store chain in the metropolitan New York City area, offering a wide variety of prescription and over-the-counter drugs, health and beauty care items, cosmetics, greeting cards, photo supplies and photofinishing. As of December 27, 2003, the Company operated 241 stores. Duane Reade maintains a web site at http://www.duanereade.com * * * As reported in the Troubled Company Reporter's December 29, 2003 edition, Standard & Poor's Ratings Services placed its ratings on Duane Reade Inc., including the 'B+' corporate credit rating, on CreditWatch with negative implications. The CreditWatch placement follows Duane Reade's announcement that it has entered into a definitive merger agreement to be acquired by an affiliate of Oak Hill Capital Partners, L.P. Oak Hill Capital will be acquiring Duane Reade's outstanding common stock for $17.00 per share in cash. The aggregate value of the merger transaction exceeds $700 million, including the repayment of indebtedness. The transaction is subject to shareholder and regulatory approval and is expected to close in the second quarter of calendar 2003. "The CreditWatch listing reflects the possibility that ratings could be lowered based on a potential deterioration in Duane Reade's credit profile post merger," said credit analyst Diane Shand. Standard & Poor's will monitor the developments of the proposed offer. EASTERN SHORE: Case Summary & 6 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Eastern Shore Equipment Leasing Corp. 8055 Ritchie Highway, Suite 301 Pasadena, Maryland 21122 Bankruptcy Case No.: 04-14639 Chapter 11 Petition Date: February 27, 2004 Court: District of Maryland (Baltimore) Judge: James F. Schneider Debtor's Counsel: James P. Koch, Esq. 1101 Saint Paul Street, Suite 404 Baltimore, MD 21202 Tel: 410-539-7816 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 6 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Chesapeake Bank of Maryland Guaranty/Beka $600,000 2001 East Joppa Road Industries Baltimore, MD 21234 Ramina & Associates Accounting Services $6,544 Modern Equipment Sales & $6,300 Rental Alban Tractor $2,944 Bay Security $294 Comfort Air Service $211 ELIZABETH ARDEN: Inks Exclusive Agreement with Britney Spears ------------------------------------------------------------- Elizabeth Arden Inc. has signed an exclusive global licensing agreement with Britney Spears, the internationally acclaimed music star, to develop and market her own line of fragrance, skincare, and color cosmetics products. The licensing agreement includes the development, marketing, and distribution of fragrance, skincare, and color cosmetics with Britney Spears' exclusive endorsement. The first product to be introduced will be a fragrance, to debut in prestige department stores in Fall 2004. Britney is personally involved in all aspects of product development, in order to bring her own style and personality to the fragrance, packaging and marketing. "I love perfume and cosmetics," said Britney, "and am so excited to develop my own line with Elizabeth Arden." "We are delighted to be working with Britney Spears," said Paul West, president of Elizabeth Arden. "She is a talented, fashionable woman who appeals to a young and international consumer base. Together with our Department Store trade partners, we will introduce a glamorous fragrance concept to the U.S. market in the fall, and we look forward to the launch of the new brand." The agreement was arranged through Brand Sense Marketing, the Los Angeles-based marketing and licensing company. "We are thrilled to have Elizabeth Arden on board as a premier licensing partner for our client Britney Spears," said Robert Hollander, president of Brand Sense. "They have already demonstrated superb creativity and exceptional commitment to building this key category of Britney's licensing program into a huge retail success." Britney Spears is a multi-faceted performer whose extraordinary career and style is an inspiration to millions of fans around the globe. With the release of her latest CD, "In The Zone," she became the first female artist to have four number one albums in a row, with total sales exceeding 50 million copies. To date, "In The Zone" has sold more than 5 million CDs. Her performing career has evolved to include writing, producing and acting while her concerts continue to sell out. Her new concert tour, "The Onyx Hotel Tour" debuted March 2, 2004 and continues through the spring and summer with 75 stops in major US and European and Asian cities. Elizabeth Arden (S&P, B- Senior Subordinated Debt and B+ Corporate Credit Ratings, Stable Outlook) is a global prestige fragrance and beauty products company. The Company's portfolio of leading brands includes the fragrance brands Red Door, Red Door Revealed, Elizabeth Arden green tea, 5th Avenue, ardenbeauty, Elizabeth Taylor's White Diamonds, Passion, Forever Elizabeth and Gardenia, White Shoulders, Geoffrey Beene's Grey Flannel, Halston, Halston Z-14, Unbound, PS Fine Cologne for Men, Design and Wings; the Elizabeth Arden skin care line, including Ceramide and Eight Hour Cream; and the Elizabeth Arden cosmetics line. EL PASO: Names Jeffrey Sherrick as Sr. VP -- Exploration Services ----------------------------------------------------------------- El Paso Corporation (NYSE: EP) announced that Jeffrey B. Sherrick has been named senior vice president, Exploration and Production Services for El Paso Production and Non-regulated Operations. Sherrick, 49, is responsible for Reservoir Engineering; Business Development; Technology; Land Administration; Procurement; and Environmental, Health, and Safety. Sherrick was most recently president and chief executive officer of Enron Global Exploration and Production Company, an international oil and gas company. Prior to that, he held various positions with Enron Oil and Gas Company, including the position of senior vice president of Engineering, Business Development, and Planning. He holds a Bachelor of Science degree in petroleum engineering from Marietta College. "Jeff brings great experience, technical ability, and leadership to our production business," said Lisa A. Stewart, president of El Paso Production and Non-regulated Operations. El Paso Corporation's purpose is to provide natural gas and related energy products in a safe, efficient, dependable manner. The company owns North America's largest natural gas pipeline system and one of North America's largest independent natural gas producers. For more information, visit http://www.elpaso.com/ * * * As previously reported, Standard & Poor's Ratings Services lowered its corporate credit rating on natural gas pipeline and production company El Paso Corp. to 'B-' from 'B' to reflect a larger-than- expected write-down of the company's oil and natural gas reserves. The outlook remains negative. ENRON: Says $7M Frontera Claim is Overstated & Wants it Expunged ---------------------------------------------------------------- On October 11, 2002, Frontera Generation Limited Partnership filed Claim No. 10832 for $7,212,926 against Enron Power Marketing, Inc. Pursuant to a Transfer Agreement dated August 1, 2003, Frontera transferred its interest in Claim No. 10832 to Teco Energy, Inc. According to Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York, Claim No. 10832 arises out of amounts Frontera alleges are owed to it by: (i) the Electric Reliability Council of Texas and EPMI pursuant to that certain Energy Management Services Agreement effective as of April 10, 2001, between Frontera and EPMI and that arise in connection with EPMI's activities as a Qualified Scheduling Entity for the benefit of Frontera; and (ii) EPMI on account of energy sold to EPMI by Frontera and for three options for the purchase of power pursuant to an Edison Electric Institute Master Power Purchase and Sale Agreement dated April 10, 2001. That portion of the Frontera Proof of Claim dealing with the EMSA is the subject of an adversary proceeding in the Court styled Frontera Generation Limited Partnership v. Enron Power Marketing, Inc., Adv. Pro. No. 02-8004A. The Debtors determine that Claim No. 10832 is overstated. Based on the Debtors' books and records, Claim No. 10832 should only be $2,200,000. Accordingly, the Debtors ask the Court to disallow and expunge Claim No. 10832 or, to the extent Frontera is able to introduce sufficient documentation to support its Claim, allow Claim No. 10832 in an amount the Court determines. (Enron Bankruptcy News, Issue No. 101; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENRON CORP: Wants Court to Enforce Stay on Dynegy Entities ---------------------------------------------------------- Enron Corporation, Enron North America Corporation, Enron Power Marketing, Inc., Enron Energy Services, Inc., Enron Capital and Trade Resources International Corp., Enron Gas Liquids, Inc., Enron Broadband Services LP and EnronOnline LLC ask the Court to enforce the automatic stay under Section 362(a) of the Bankruptcy Code or, in the alternative, to enjoin prosecution of an Arbitration Against Non-Debtor affiliates under Section 105 of the Bankruptcy Code, against these Dynegy Entities: -- Dynegy Marketing and Trade, -- Dynegy Power Marketing, Inc., -- Dynegy Broadband Marketing and Trade, -- Dynegy Canada, Inc., -- Dynegydirect, Inc. -- Dynegy Global Liquids, Inc. -- Dynegy Liquids Marketing and Trade, formerly known as Warren Gas Liquids, Inc., and -- Dynegy UK Limited Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York, recalls that on October 18, 2002, the Dynegy Entities commenced the Arbitration against four Enron affiliates, three of which are non-debtors -- Enron Capital and Trade Resources Corp., Enron Capital and Trade Resources Limited, and Enron Canada Corp. The fourth entity is EnronOnline. The parties subsequently agreed to hold it in abeyance. On November 26, 2003, the Dynegy Entities sent notice that they will "advise the [arbitration forum] International Centre for Dispute Resolution of the need to activate the arbitration." Ms. Gray points out that, if allowed to proceed, the Arbitration will directly determine the rights and obligations not just of the Enron Affiliated Non-debtors, but also the Enron Debtors, due to the Dynegy Entities' position taken under a Master Netting, Set-off and Security Agreement between the Enron Affiliated Non- debtors and the Debtors on the one hand, and the Dynegy Entities on the other. The Dynegy Entities have made clear that what they intend to impact is the property of the Enron Debtors in the arbitration brought against the Enron Affiliated Non-debtors in an attempt to circumvent the automatic stay. According to the Dynegy Entities' view of the Master Agreement, they can set off and net the obligations of each Dynegy party against every Enron party. Accordingly, the arbitration against non-debtors could allow the Dynegy Entities to achieve both triangular and square setoff rights against property of the Debtors, and the Dynegy Entities could, therefore, achieve their true objective of adjudicating claims against the Enron Debtors outside the supervision of the Court. Ms. Gray contends that the negative consequences for the Debtors, their legitimate creditors, and the resources of such entities would be particularly egregious in Enron's case, where the issues at the heart of the Arbitration -- the meaning and effect of the Master Agreement, and the determination of amounts owed by one side to the other -- already are pending in the Court. Specifically, the Dynegy Entities filed proofs of claim on October 15, 2002, for amounts purportedly due them by the Debtors and Enron Affiliated Non-debtors under the very same Master Agreement and the underlying master agreements subject to the Master Agreement. More importantly, the Enron Debtors and Affiliated Non-debtors commenced an adversary proceeding in this Court -- Enron Corp., et al. v. Dynegy, Inc., et al., Adv. Pro. No. 02-03468 -- asserting that the Master Agreement and its non- mutual setoff, netting, termination, and purported joint and several liability provisions (if any) are unenforceable under numerous provisions of the Bankruptcy Code, and demanding judgment against certain of the Dynegy Entities for a total of $229,936,000 under various underlying master agreements. Furthermore, a similar master netting agreement between certain Enron entities and Reliant Energy Services, Inc. and certain Reliant affiliates is the subject of another adversary proceeding before the Court -- Enron Corp., et al. v. Reliant Energy Services, Inc., Adv. Pro. No. 03-02073. As in the Dynegy Adversary Proceeding, the Reliant Adversary Proceeding implicates substantially similar issues, namely whether the Reliant Master Agreement and its non-mutual setoff, netting, termination, and purported joint and several liability provisions (if any) are unenforceable under the Bankruptcy Code, and that certain of the Reliant Entities should pay the Enron Entities amounts due under various underlying master agreements. Both the Dynegy Adversary Proceeding and the Reliant Adversary Proceeding, being Trading Cases, were expressly made subject to the Mediation Order governing Trading Cases entered by the Court on March 5, 2003, amended as of March 20, 2003. Accordingly, Ms. Gray asserts, the Bankruptcy Court is already very familiar with the adjudication of issues related to the meaning, effect and enforceability of master netting agreements. Indeed, the Dynegy Entities and the Enron Entities already participated in two days of mediation before Judge Gropper on September 10 and 11, 2003. The mediation has been adjourned so that the parties may reconcile relevant data. Under the terms of the Master Agreement, a ruling by the Bankruptcy Court that the default and setoff provisions of the Master Agreement are unenforceable would render the Master Agreement "null and void in its entirety." Therefore, Ms. Gray argues that the outcome of the Dynegy Adversary Proceeding could render the Master Agreement unenforceable even against the Enron Non-debtor Affiliates named in the Arbitration. Accordingly, the Arbitration should be stayed at least until the Court rules on whether the Master Agreement is enforceable under the Bankruptcy Code. It does not make sense to determine the liabilities due under the Master Agreement in an arbitration when a pending case in the Court will determine whether the Master Agreement is even enforceable. According to Ms. Gray, the Debtors want to prevent the Dynegy Entities from further prosecuting the Arbitration, which seeks an award against the Enron Affiliated Non-debtors under a Master Agreement that already is sub judice in the Court and that the Court may hold unenforceable. The arbitration award the Dynegy Entities seek would have the effect of circumventing the Court's jurisdiction and imposing a judgment directly against the Debtors. Issues that the Dynegy Entities seek to resolve in the Arbitration would require adjudication of the same rights and obligations of the Debtors under both the Master Agreement and the master agreements subject to the MNA, necessarily impacting the property of the Debtors. Moreover, the Arbitration could effectively determine each of the Dynegy Entities' proofs of claim. Ms. Gray asserts that the Arbitration violates the automatic stay provisions of the Bankruptcy Code because it represents: (1) an "act to obtain possession of the property of the estate . . . or to exercise control over property of the estate"; and (2) a setoff of debt owing to the Debtor that arose prepetition. In the alternative, Ms. Gray contends that the Court should exercise its authority under Section 105 to enjoin the activation of the Arbitration on the grounds it would interfere with the Debtors' efforts to reorganize, diminish the value of their estates, necessarily have another tribunal determine for and impose upon the Debtors liability under a number of agreements, decide core bankruptcy issues with potentially preclusive effects against the Debtors, and adversely affect the rights of legitimate creditors of the Debtors' estates. Considering that issues related to the Master Agreement and the Reliant Master Agreement are already before the Court in the Dynegy and Reliant Adversary Proceedings -- including the baseline issue of whether provisions of the Bankruptcy Code render the Master Agreement unenforceable, halting the Arbitration is necessary if the Court is to maintain control over the reorganization process. (Enron Bankruptcy News, Issue No. 101; Bankruptcy Creditors' Service, Inc., 215/945-7000) FEDERAL-MOGUL: Classification & Treatment of Claims Under Plan -------------------------------------------------------------- The classification of Claims and Equity Interests under the Federal-Mogul Debtors' Amended Plan takes into account the differing nature and priority of the Claims against and Equity Interests in the Debtors. There are 157 Debtors in the Chapter 11 cases, 23 of which are U.S. Debtors and 134 are U.K. Debtors. Each Debtor has been assigned its own number for claims classification and treatment purposes as well as for balloting purposes. The Claims against and Equity Interests in each Debtor, in turn, have been assigned to separate lettered Classes with respect to each Debtor, based on the type of Claim involved. Not all of the Classes apply to every Debtor, and consequently not all of the lettered Classes appear in the case of each Debtor. However, whenever a Class of Claims or Equity Interests is relevant to a particular Debtor, that class of Claims or Equity Interests will be grouped under the appropriate lettered Class from this list: Class A - Priority Claims or Preferential Liabilities Class B - Secured Bank Claims Class C - Secured Surety Claims Class D - Noteholder Claims Class E - Other Secured Claims Class F - Convertible Subordinated Debenture Claims Class G - Environmental Claims Class H - Unsecured Claims Class I - Non-Priority Employee Benefit Claims Class J - Asbestos Personal Injury Claims Class K - Bonded Claims Class L - Affiliate Claims Class M - Federal-Mogul Preferred Stock Interests Class N - Subordinated Securities Claims Class O - Federal Mogul Common Stock Interests Class P - Equity Interests in Affiliates Class Description ----- ------------------------------------------------------ A For each of the 23 U.S. Debtors, consists of Priority Claims, which are non-tax Claims entitled to priority For each of the 134 U.K. Debtors, consists of Preferential Liabilities, which are Claims and Liabilities that would have been preferential had an order for the compulsory winding-up of the Debtor been made on the Petition Date. To the extent that a Priority Tax Claim against a U.K. Debtor also qualifies as a Preferential Liability in whole or part, the Priority Tax Claim or portion of it will be treated as a Preferential Liability. B Allowed Secured Bank Claims arising under the Bank Credit Agreement. JPMorgan Chase Bank, as Administrative Agent, filed a $1,988,386,803 Claim inclusive of the Tranche C portion of the DIP Facility, on the Bank Claimholders' behalf. C Secured Surety Claims arising in connection with any indemnity contract or guarantee between any of the Debtors signatory and the Sureties relating to the Center for Claims Resolutions Surety Bonds. Unsecured Claims of the Sureties against T&N Limited and Gasket Holdings, Inc. are not included in Class C. D Noteholder Claims evidenced by the Notes or the Indentures for the Notes and related documents. Class D does not include any Convertible Subordinated Debenture Claims or Subordinated Securities Claims. E All Secured Claims other than Secured Bank Claims, Secured Surety Claims, Noteholder Claims or Bonded Claims. An Other Secured Claim is a Claim that is: (a) secured in whole or in part as of the Petition Date, by a Lien which is valid, perfected and enforceable under applicable law and is not subject to avoidance; or (b) subject to set-off, but in each case, only to the extent of the value of the holder of the Claims interest in the particular Estate's interest in the property securing any of the Claim or the amount subject to set-off, as the case may be. F Convertible Subordinated Debenture Claims arising out of or related to the 7% Convertible Subordinated Debentures due 2027 issued by Federal-Mogul Corporation. G On-Site Environmental Claims against the U.S. Debtors arising from or related to property currently owned and that will continue to be owned by the U.S. Debtors after Plan confirmation. H Unsecured Claims, which are not specifically included in a separately identified Class of Claims or Equity Interests. Unsecured Claims will include: (a) any claim arising from the rejection of an executory contract or unexpired lease; and (b) any portion of a Claim to the extent the value of the holder's interest in the applicable Estate's interest in the property securing the Claim is less than the amount of the Claim, or to the extent that the amount of the Claim subject to set-off is less than the amount of the Claim, as determined. Unsecured Claims will also include: (1) Surety Claims against T&N Limited and Gasket Holdings, Ind.; (2) Other U.K. Claims, including, Environmental Claims and Asbestos Property Damage Claims against any U.K. Debtors to the extent that the Allowed Amounts of the Claims are not otherwise satisfied by any applicable insurance coverage; (3) any unsecured deficiency claims held by the holders of Bonded Non-Asbestos Claims and Surety Claims; (4) Asbestos Property Damage Claims against any U.S. Debtors to the extent that the Allowed Amounts of the Claims are not otherwise satisfied by any applicable insurance coverage, and to the extent that the Claims are not Bonded Claims; (5) Excluded Non-Qualified Pension Claims; (6) Off-Site Environmental Claims against U.S. Debtors; and (7) Claims arising from the provision of goods or services to the Debtors before the Petition Date, including the Claims of commercial trade creditors. I Any Claims arising from or relating to an Employee Benefit Plan, including but not limited to retiree benefit claims, but excluding Excluded Non-Qualified Pension Claims, that are neither secured nor entitled to priority under the Bankruptcy Code or a Final Court Order. J Claims that are liquidated or unliquidated against the Debtors or their non-Debtor Affiliates, or their present or former officers, directors or employees for asbestos personal injury claims. Asbestos Personal Injury Claims will include: (a) Indirect Asbestos Personal Injury Claims; (b) Asbestos Personal Injury Demands; (c) any Claim or Demand based on, arising under or attributable to an asbestos personal injury settlement agreement or protocol entered into by CCR on behalf of one or more of the Debtors; and (d) any Claims asserted by CCR against the Debtors or their non-Debtor Affiliates excluding any Claim asserted by the CCR for postpetition fees and expenses incurred in the Reorganization Cases. K The Secured portion of Bonded Asbestos Personal Injury Claims, Bonded Non-Asbestos Claims and the CCR Bond Claim. The unsecured portion, if any, of the Claims is not included in the Class. L All prepetition Claims against any of the Debtors held by a Debtor or a non-Debtor Affiliate, or any interest held by the entities in any property of the Debtors, but excluding Equity Interests and the Convertible Subordinated Debentures. M All Equity Interests represented by or arising from the Series C ESOP Convertible Preferred Stock issued by Federal-Mogul Corporation, of which there are 439,937 shares outstanding. N Claims that arise from the rescission of a purchase or sale of a security of any of the Debtors, or damages arising from the purchase or sale of the security, or reimbursement, indemnification, or contribution allowed under Section 502 of the Bankruptcy Code on account of the Claim, which Claims are subject to subordination under Section 510(6). O All Equity Interests represented by the common stock of Federal-Mogul Corporation, of which there were 87,131,298 outstanding as of November 3, 2003. P The Equity Interests in all of the Debtors except Federal-Mogul Corporation, which are represented by the shares of capital stock in the Debtors, whether or not issued. The Claims against and Equity Interests in the five primary U.S. Debtors and 15 U.K. Debtors are classified and treated as: U.S. Debtors Class ------------ ----- Federal-Mogul Corporation 1A through 1O Federal-Mogul Piston Rings Inc. 2A through 2P Federal-Mogul Powertrain Inc. 3A through 3P Federal-Mogul Ignition Company 4A through 4P Federal-Mogul Products Inc. 5A through 5P U.K. Debtors Class ------------ ----- T&N Limited 6A through 6P Federal-Mogul Ignition (U.K.) Limited 7A through 7P F-M Systems Protection Group Limited 8A through 8P Federal-Mogul Aftermarket U.K. Limited 9A through 9P Federal-Mogul Sintered Products Limited l0A through 10P F-M Sealing Systems (Slough) Limited 11A through 11P Federal-Mogul Friction Products Limited 12A through 12P F-M Sealing Systems (Rochdale) Limited 13A through 13P Federal-Mogul Camshaft Castings Limited 14A through 14E Federal-Mogul Bradford Limited 15A through 15E Federal-Mogul Camshafts Limited 16A through 16E Federal-Mogul Eurofriction Limited 17A through 17F F-M Powertrain Systems International 18A through 18E TBA Industrial Products Limited 19A through 19G Federal-Mogul Export Services Limited 20A through 20E Ferodo America, Inc. and Felt Products Manufacturing Co. are two U.S. Debtor non-operating companies that have pledged their assets to secure (a) their guarantees of the Bank Credit Agreement, (b) the Surety Claims and (c) the Noteholder Claims, and have known asbestos liabilities. The Plan provides for the classification and treatment of Claims against them: Class Classification ----- -------------- 21A through 22A Priority Claims 21B through 22B Secured Bank Claims 21C through 22C Secured Surety Claims 21D through 22D Noteholder Claims 21H through 22H Unsecured Claims 21J (Ferodo) Asbestos Personal Injury Claims 22J (Felt Products) Asbestos Personal Injury Claims 21L through 22L Affiliate Claims and Interests 21P through 22P Equity Interests Gasket Holdings, Inc. is another U.S. Debtor non-operating company that has pledged its assets to secure the Surety Claims and has known Asbestos liabilities. The Claims against Gasket Holdings are classified as: Class Classification ----- -------------- 23A Priority Claims 23H Unsecured Claims 23J Asbestos Personal Injury Claims 23L Affiliate Claims 23P Equity Interests Ten U.S. Debtor holding companies have pledged certain assets to secure (a) their guarantees of the Bank Credit Agreement, (b) the Surety Claims, and (c) the Noteholder Claims. The 10 U.S. Debtors do not have any Asbestos Personal Injury Claims asserted against them that is pending as of the Petition Date. The 10 U.S. Debtor Holding Companies are: 1. Carter Automotive Company, Inc., 2. Federal-Mogul Dutch Holdings Inc. 3. Federal-Mogul Global Inc., 4. Federal-Mogul Global Properties, Inc., 5. Federal-Mogul Mystic, Inc., 6. Federal-Mogul U.K. Holdings Inc., 7. Federal-Mogul Venture Corporation, 8. Federal-Mogul World Wide, Inc., 9. McCord Sealing, Inc., and 10. T&N Industries Inc. Under the Amended Plan, Claims against these Debtor Holding Companies are classified as: Class Classification ----- -------------- 24A through 33A Priority Claims 24B through 33B Secured Bank Claims 24C through 33C Secured Surety Claims 24D through 33D Noteholder Claims 24E through 33E Other Secured Claims 24H through 33H Unsecured Claims 31G and 33G On-Site Environmental Claims 24L through 33L Affiliate Claims 24P through 33P Equity Interests F-M U.K. Holding Limited is a U.K. Debtor holding company that has pledged its assets to secure (a) its guaranty of the Bank Credit Agreement, (b) the Surety Claims, and (c) its guaranty of the Noteholder Claims, and has no Asbestos Personal Injury Claim asserted against it. The Plan classifies the Claims against F-M U.K. Holding as: Class Classification ----- -------------- 34A Priority Claims & Preferential Liabilities 34B Secured Bank Claims 34C Secured Surety Claims 34D Noteholder Claims 34H Unsecured Claims 34L Affiliate Claims 34P Equity Interests The Plan proposes to classify the Claims against five U.S. Debtor holding companies or non-operating companies that have not guaranteed or pledged any assets to secure payment of the Bank Claims, the Surety Claims or the Noteholder Claims, and have no known asbestos liability. The five Debtors are: 1. Federal-Mogul FX, Inc., 2. Federal-Mogul Puerto Rico Inc., 3. Federal-Mogul Machine Tool Inc., 4. FM International LLC, and 5. J.W.J. Holdings, Inc. The Claims against the five Debtors are classified as: Class Classification ----- -------------- 35A through 39A Priority Claims 35H through 39H Unsecured Claims 35L through 39L Affiliate Claims 35P through 39P Equity Interests Potential Claims against four U.K. Debtor Companies that are terminating or have terminated operations are classified as: Class Classification ----- -------------- 40A through 43A Priority Claims & Preferential Liabilities 40H through 43H Unsecured Claims 40I through 43I Non-Priority Employee Benefit Claims 42J Asbestos Personal Injury Claims 40L through 43L Affiliate Claims 40P through 43P Equity Interests The liquidating Debtors are: 1. Federal-Mogul Sealing System (Cardiff) Limited, 2. Federal-Mogul Bridgewater Limited, 3. Federal-Mogul Engineering Limited, and 4. Federal-Mogul Technology Limited. There are 80 U.K. Debtor holding and non-operating companies that have neither guaranteed the Bank Claims or Noteholder Claims, nor given indemnities in respect of the Surety Claims, nor pledged any assets to secure any of the Claims, and have no known Asbestos Personal Injury Claims pending as of the Petition Date. The Plan provides for the classification of Claims against the 80 U.K. Debtors: Class Classification ----- -------------- 44A through 123A Priority Claims & Preferential Liabilities 44H through 123H Unsecured Claims 44L through 123L Affiliate Claims 44P through 123P Equity Interests On the other hand, 34 U.K. Debtor non-operating companies have Asbestos Personal Injury Claims asserted against them. These U.K. Debtors have neither guaranteed the Bank Claims or the Noteholder Claims, nor given indemnities in respect of the Surety Claims, nor pledged any assets to secure any of the Bank Claims, Surety Claims or Noteholder Claims. Under the Plan, the Claims against the 34 U.K. Debtors are classified as: Class Classification ----- -------------- 124A through 157A Priority Claims & Preferential Liabilities 124H through 157H Unsecured Claims 124J through 157J Asbestos Personal Injury Claims 124L through 157L Affiliate Claims 124P through 157P Equity Interests Under the Amended Plan, the treatment and recoveries of Administrative Claims, Administration Claims and Priority Tax Claims remain the same. However, the Debtors relate that most of the Priority Tax Claims have been paid and resolved. The Debtors estimate that the remaining Priority Tax Claims that may become Allowed aggregate $4,000,000. This estimate includes the claims filed by the State of Michigan. The State of Michigan has filed proofs of claim totaling in excess of $4,000,000 related to audits of sales and use taxes. The Debtors have provided additional information to the State of Michigan that it is currently reviewing. The Debtors expect that the claims will be reduced to $500,000. In addition, the U.S. Internal Revenue Service has filed proofs of claim for income taxes that the Debtors believe will be offset in their entirety by prepetition amounts owed to the Debtors. Although some additional Claims have been filed asserting an entitlement to treatment as Priority Tax Claims, the Debtors believe that most of these Claims do not represent valid Priority Tax Claims against their estates, either because: -- the Debtors are in the process of disputing or settling the asserted tax liability and believe that the Claims will be disallowed or resolved; or -- the claims were erroneously filed as Priority Tax Claims and are not properly entitled to priority. The Amended Plan provides for these modified creditor recoveries: Class Description Recovery Under the Plan ----- ----------- ----------------------- N/A Tranche C portion $328,000,000 plus the amount of DIP Facility of any draws before the Effective Date on letters of credit outstanding under the Tranche C portion will either be refinanced, in whole or in part, as part of the Exit Facilities. Any non-refinanced portion will be converted to a separate senior tranche of the Reorganized Federal-Mogul Secured Term Loan Agreement on market terms. Undrawn letters of credit will be replaced in connection with the Exit Facilities. 6A-20A Priority Claims Impaired 34A & Preferential On the Distribution Date, 40A-157A Liabilities each Allowed Claimholder will Against U.K. receive either (1) Cash equal to Debtors the Allowed Amount of the Priority Claim, or (2) other treatment as may be agreed upon in writing by the holder and the Reorganized Debtor. 1B-5B Secured Bank Impaired 21B-22B Claims On the Effective date, Claims 24B-34B arising under the Bank Credit Agreement will be deemed fully secured and allowed for [$1,648,136,464 (as adjusted on the Effective Date to convert foreign currencies to U.S. dollars)] and the Reorganized Debtors will: (a) enter into the Reorganized Federal-Mogul Secured Term Loan Agreement, which will provide for term Loans for: * [$1,305,352,118], plus * the amount of any draws before the Effective Date on letters of credit outstanding under the Bank Credit Agreement, and * the amounts, if any, required to be included in the loan agreement pursuant to the Plan; (b) replace with the Exit Facilities any letters of credit not drawn as of the Effective Date; (c) issue a total of $300,000,000 in Junior Secured PIK Notes to the holders of Allowed Secured Bank Claims; and (d) cause those subsidiaries, which guaranteed the Bank Claims, to also guarantee the payment of the Reorganized Federal-Mogul Secured Term Loan Agreement and the Junior Secured PIK Notes. 1C-5C Secured Surety Impaired 21C Claims On account of the Allowed Secured 22C Surety Claims, as determined by 24C-34C the CCR Litigation, the Holders will receive Secured Surety Notes and Junior Secured Surety PIK Notes with collective principal amounts equal to the Allowed Amounts of the Allowed Secured Surety Claims. The Notes will be secured by Liens on the same property that secured the Secured Surety Claims before the Petition Date -- subject to the Liens securing the Exit Facilities -- and which will provide for deferred cash payments of a present value equal to the Allowed Amounts of the Allowed Secured Surety Claims. The Debtors that guaranteed the Surety Claims on a secured basis will also guarantee on a secured basis Reorganized Federal-Mogul's obligations, if any, under the Secured Surety Notes and the Junior Secured Surety PIK Notes. The balance of the Surety Claims which are deemed unsecured will be treated as an Unsecured Claim against the Debtors obligated on the Surety Claims. 1D-5D Noteholder Impaired 21D Claims On the Distribution Date, the 22D Disbursing Agent will issue the 24D-34D Reorganized F-M Class A Common Stock for ultimate Pro Rata Distribution by the Indenture Trustees to the Allowed Noteholder Claimholders. If the Classes of Noteholder Claims and Asbestos Personal Injury Claims accept the Plan, and at least one of the Classes of holders of preferred stock, common stock or Subordinated Securities Claims accepts the Plan, then the holders of Allowed Noteholder Claims will also receive 50% of the Warrants, provided, however, that the Allowed Noteholder Claimholders have agreed to distribute any of the Warrants to the holders of preferred stock, common stock or Subordinated Securities Claims in accordance with the Plan provisions governing the treatment of the Claims and Interests, and subject to the Plan requirements pertaining to the issuance of Warrants. Allowed Noteholder Claimholders will also receive 100% of the equity of Reorganized Federal- Mogul Piston Rings, Inc., provided that the Claimholders will be deemed to have automatically transferred 100% of the equity of Reorganized FMPRI to Federal-Mogul Powertrain, Inc. as of the Effective Date. Claims arising under each Debtor's guaranty of the Noteholder Claims will be released, extinguished and discharged and holders of Noteholder Claims will receive no additional distribution under the Plan on account of the Claims. 1E-6E Other Unimpaired 24E-33E Secured At the Debtors' option: Claims (a) the Plan will leave unaltered the legal, equitable and contractual rights to which a Secured Claim entitles the holder; (b) any default before the Petition Date will be cured; the maturity of the Secured Claim will be reinstated as such maturity existed before any default; the Secured Claimholder will be compensated for any damages incurred as a result of that holder's reasonable reliance on any right to accelerate its claim; and the holder's legal, equitable and contractual rights will not otherwise be altered; (c) an Allowed Secured Claim will receive other treatment as the Debtor and the holder will agree; or (d) the Debtors will surrender all collateral for the Secured Claim to the holder on or as soon as practicable after the Effective Date. With respect to Allowed Claims against T&N Limited, the Plan will leave unaltered the legal, equitable and contractual rights to which the Allowed Claim entitles the holder. 1F Convertible Impaired Subordinated Holders will receive pro rata Debenture portion of the Reorganized Claims Federal-Mogul Class A Common Stock. To the extent necessary to comply with the contractual subordination provisions in the indentures for the Convertible Subordinated Debentures, the Disbursing Agent will hold in trust and cause all distributions of Reorganized Federal-Mogul Class A Common Stock allocable to the Allowed Convertible Subordinated Debenture Claims to be paid directly to the applicable Indenture Trustees on behalf of the Allowed Noteholder Claims. 1G-5G On-Site Unimpaired 31G Environmental Each holder of an Allowed Claim 33G Claims Against will retain unaltered, the legal U.S. Debtors equitable and contractual rights to which the Allowed Claim entitles the holder. Unsecured Claims Impaired Against: Each holder of an Allowed Unsecured Claim will 1H-5H * U.S. Debtors receive: 21H-33H 35H-39H (a) an initial payment equal to ___% of the holder's Allowed 34H * F-M U.K. Unsecured Claim in Cash on Holding the Distribution Date; Limited (b) a second payment equal to ___% of its Allowed Unsecured Claim in Cash on the first anniversary of the Distribution Date; and (c) a third payment equal to ___% of its Allowed Unsecured Claim in Cash on the second anniversary of the Distribution Date. 6H-20H Unsecured Claims Undisclosed 40H-157H Against U.K. Debtors other than F-M U.K. Holding Limited 1I-5I Non-Priority Unimpaired Employee Benefit Each holder of an Allowed Claim Claims Against will retain unaltered, the legal U.S. Debtors equitable and contractual rights to which such Allowed Claim entitles the holder. 6I-20I Non-Priority Undisclosed 40I-43I Employee Benefit Claims Against U.K. Debtors 1J Asbestos Personal Impaired 5J Injury Claims Except for Asbestos Personal 6J Injury Claims against the 8J Reorganized Hercules-Protected 11J-13J Entities, as of the Effective 17J Date, sole and exclusive 19J liability and responsibility for 21J-23J all Asbestos Personal Injury 42J Claims will automatically 124J-157J transfer to the Trust, and will be paid solely by the Trust in accordance with the Asbestos Personal Injury Trust Distribution Procedures, in consideration for which the Trust will receive the Trust Assets. 1L-5L Affiliate Claims Impaired 21L-39L Against U.S. At the Plan Proponents' option, Debtors and F-M all Allowed Affiliate Claims U.K. Holding against these Debtors will Limited either be (a) reinstated, in full or in part, or (b) discharged and extinguished, in full or in part, in which case the discharged and extinguished portion will not be eliminated and the holders will not be entitled to, and will not receive or retain, any property or interest on account of that portion under the Plan. Prior to the discharge and extinguishment, the Affiliate Claims may be contributed to capital, transferred, set-off or subject to any other arrangement at the Plan Proponents' option. If any of the Claim is reinstated, in full or in part, the reinstated Claim may be subordinated in legal right and priority of payment to all non- Affiliate Claims against the applicable Debtor. 6L-20L Affiliate Claims Unimpaired 40L-157L Against U.K. All Affiliate Claims in these Debtors other Classes will be subject to the Than F-M U.K. Subordination Deed, which will Holding Limited become effective on the Plan Effective Date, but not as a result of the Plan provisions, the Confirmation Order, the Voluntary Arrangement or the Scheme of Arrangement or the U.K. Court order sanctioning the Scheme of Arrangement. 1M F-M Corporation If the Classes of Noteholders Preferred Stock Claims, Asbestos Personal Injury Claims and Federal-Mogul Corporation preferred stock interests all accept the Plan, then each holder of Federal-Mogul Corporation preferred stock will receive Warrants in exchange for and in full satisfaction of its preferred stock interest. If the Class of Federal-Mogul Corporation preferred stock interests rejects the Plan, then no distributions will be made on account of those preferred stock interests, and the Warrants otherwise distributable to holders of preferred stock will be distributed Pro Rata to holders of Subordinated Securities Claims or Federal- Mogul Corporation common stock interests. 1N Subordinated Impaired 2N Securities If the Classes of Noteholders Claims Claims, Asbestos Personal Injury Against and Subordinated Securities Federal-Mogul Claims all accept the Plan, each Corp & FMPRI Claimholder will receive, in exchange for and in full satisfaction of its Allowed Class 1N Subordinated Securities Claim, its Pro Rata share of any applicable insurance and, with respect to any deficiency, the holder will receive Warrants, as calculated pursuant to the Plan. If Class 1N rejects the Plan, then no distributions of Warrants will be made on Account of the Subordinated Securities Claims, and the Warrants otherwise distributable to the holders of the Claims will be distributed Pro Rata to the holders of Federal-Mogul Corporation common stock or preferred stock. No distribution will be made on account of Class 2N Subordinated Securities Claims. All Subordinated Securities Claims against FMPRI will be discharged and extinguished on the Effective Date. 1O Federal-Mogul Impaired Corp Common If the Classes of Noteholders Stock Claims, Asbestos Personal Injury and Federal-Mogul Corporation common stock interests accept the Plan, then each holder of Federal-Mogul Corporation common stock will receive Warrants in exchange for and in full satisfaction of its common stock interest. If the Class of Federal-Mogul Corporation common stock interests rejects the Plan, then no distribution will be made on account of those common stock interests, and the Warrants otherwise distributable to holders of common stock will be distributed Pro Rata to holders of Federal-Mogul Corporation Preferred Stock or Subordinated Securities Claims in accordance with the Plan. 2P Equity Interests Impaired of FMPRI No Distribution will be made on account of Equity Interests in FMPRI. All Equity Interests in FMPRI will be cancelled on the Effective Date. 3P-157P Equity Interests Unimpaired of Subsidiaries Each holder of an Allowed Equity Interest will retain unaltered the legal, equitable and contractual rights to which the Allowed Equity Interest entitles the holder. Under the amended classification and treatment of Claims, Classes 35A to 39A were added to the Priority Claims Against U.S. Debtors. Classes 2I to 4I, 5J and 33H were taken out of the Bonded Claims and only Classes 1K to 5K remain. Asbestos Personal Injury Claims If the Classes of Noteholder Claims and Asbestos Personal Injury Claims accept the Plan, and at least one of the Classes of holders of preferred stock, Subordinated Securities Claims, or common stock accepts the Plan, then the holders of Allowed Asbestos Personal Injury Claims will receive 50% of the Warrants. However, the holders of Allowed Asbestos Personal Injury Claims have agreed to distribute any of the Warrants to the holders of preferred stock, Subordinated Securities Claims or common stock in accordance with the Plan provisions governing the treatment of the Claims and Interests, and subject to the Plan requirements pertaining to the issuance of Warrants. With respect to Asbestos Personal Injury Claims against the Reorganized Hercules-Protected Entities, the Trust will be liable for all the Claims in excess of both: (a) the GBP690,000,000 retention and the GBP500,000,000 layer of coverage under the Hercules Policy; and (b) all other sums as are attributable to or otherwise represent the Hercules Insurance Recoveries to the extent the amounts exceed the GBP500,000,000 layer of coverage. From and after the Hercules Policy Expiry Date, the Trust will assume sole and exclusive liability for all remaining Asbestos Personal Injury Claims against the Reorganized Hercules-Protected Entities, and the Reorganized Hercules-Protected Entities will be discharged and released from any and all liability with respect to Asbestos Personal Injury Claims. On the Effective Date, the liability for each Asbestos Personal Injury Claim will continue but recourse to the applicable Reorganized Hercules-Protected Entities on account of the Claims will -- by operation of the Plan, the Scheme of Arrangement or the Voluntary Arrangement and the Confirmation Order -- be limited in and to (i) all amounts actually recovered by the Reorganized Hercules-Protected Entities under or attributable to the Hercules Policy, (ii) the outstanding amounts of the Stock Repayment Obligation and (iii) such sums as may have been provided in the Reorganized Hercules-Protected Entity by the Trust or any other person, whether by loan or otherwise, for the purpose of enabling Asbestos Personal Injury Claims to be paid. Each holder of Asbestos Personal Injury Claims will have no other rights against or other recourse to any property or interests in property of the Reorganized Hercules-Protected Entities. The confirmation of the Plan and the resulting discharge of the Reorganized Hercules-Protected Entities will not discharge or release these entities from liability for all Asbestos Personal Injury Claims unless and until the Hercules Policy Expiry Date, at which time the Reorganized Hercules-Protected Entities will, without further Court order, be released and discharged from any and all liability for all Asbestos Personal Injury Claims. Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is one of the world's largest automotive parts companies with worldwide revenue of some $6 billion. The Company filed for chapter 11 protection on October 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan, Esq., James F. Conlan, Esq., and Kevin T. Lantry, Esq., at Sidley Austin Brown & Wood and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, they listed $ 10.15 billion in assets and $ 8.86 billion in liabilities. (Federal-Mogul Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., 215/945-7000) FLEMING COS.: Barry Roads Balks at Proposed Lease Rejection ----------------------------------------------------------- The Fleming Debtors deny the allegations by Barry Road Foods, Inc., that they wrongfully sold certain refrigeration equipment subject to an agreement without Barry's permission and contrary to the terms of the agreement. Barry and the Debtors are parties to an equipment lease, dated December 27, 1996, for various types of refrigeration equipment for use in the Debtors' stores. Barry has asserted that the payments remaining under the Agreement are allowable as an administrative expense. The Debtors contend that the Agreement is a disguised security agreement. But in an abundance of caution, the Debtors seek the Court's authority to reject the Agreement. The Debtors no longer use or possess the equipment. Barry Responds L. Jason Cornell, Esq., at Fox Rothschild LLP in Wilmington, Delaware, tells Judge Walrath that the equipment lease expressly provided that, during its term, the equipment remained the property of Barry. Neither Barry nor the Debtors could "pledge, lend, create a security interest in, sublet, sell or part with possession" of the equipment, or any part of the equipment, or attempt in any other manner to dispose of the equipment, without the other party's prior written permission. In September 1998, Steve A. Malecki, the Marketing Director for the Debtors, contacted Dan Birk and Nick Holaves, principle employees of Barry, and advised Barry that the Debtors had established a relationship with a retailer that was interested in operating the "Barry Road Food-4-Less" store and changing that store to a new concept called "Festival Foods." Mr. Malecki asked Mr. Holaves to provide the Debtors with written permission to move the equipment in the store, and otherwise upgrade the store to Festival Foods. To implement the changes required to make this conversion, the Debtors represented to Barry that the changes would require the movement of the equipment and upgrade of some of the equipment. If the deal to convert the store to a Festival Foods did not materialize, the letter signed by Barry would not be relied upon by the Debtors. Barry never received additional information from the Debtors that the Festival Foods conversion would take place. Based on the Debtors' prior representations, Barry reasonably assumed that the store conversion would not occur, and that the letter was a nullity. Barry signed the letter for the sole purpose of allowing the Debtors to remodel the store as part of the Festival Foods conversion. Under no circumstances did Barry Goods intend to convey to the Debtors the right to dispose of the equipment. Barry believes that, before the Petition Date, the Debtors sold some or all of the leased equipment to a non-debtor third party. The Debtors sold something they didn't have -- ownership of the equipment. Barry believes that the equipment the Debtors sold had a $1,200,000 market value as of the Petition Date. Barry complains that the Debtors, by their request, inappropriately seek to retain the benefits of the lease, namely, the sales proceeds, while at the same time discarding the burdens of the lease. At the time the Debtors sold the equipment, and at all times since, the Debtors have made no attempt to inform or otherwise notify Barry that they intended to sell the leased equipment. Furthermore, at no time have the Debtors received permission or consent from Barry to sell the equipment. However, Barry asserts that an executory contract must be either assumed or rejected in its entirety. A debtor cannot assume part of a contract and reject other parts. The Debtors contend that the letter permitted them to dispose of the equipment at will. However, the evidence will show that the Debtors "fraudulently misrepresented the purpose of the letter." Mr. Holaves never would have signed the letter were it not for the Debtors' representations that they intended merely to convert the store to a Festival Foods. Furthermore, the letter lacked any consideration in that the Debtors were still obligated to make the lease payments, regardless of whether Barry consent to the letter. Had Mr. Holaves not signed the letter, Barry would not suffer any detriment. The Debtors should not be permitted to reject the lease because they inappropriately disposed of the equipment. Due to the inequities of the Debtors' misrepresentations to Barry, the Debtors should be required to fully perform their lease obligations. 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. 27; Bankruptcy Creditors' Service, Inc., 215/945-7000) FOSTER WHEELER: Wins $6.8MM Oil Sector Management Contract in Iraq ------------------------------------------------------------------ Foster Wheeler Ltd. (OTCBB: FWLRF) announced that its UK subsidiary, Foster Wheeler Energy Limited, has been awarded the Oil Sector Program Management Office (SPMO) support contract in Iraq by the U.S. Department of Defense. Foster Wheeler will provide dedicated program management and coordination support for all design and construction activities being performed for the Program Management Office (PMO) in this sector. The initial value of the Foster Wheeler contract is $6.8 million, which covers the first six months' services. "We are delighted with news of the award," said Ian Bill, chairman and chief executive of Foster Wheeler Energy Limited. "This award reflects our world-class program management, engineering, procurement and construction skills and our extensive experience in the oil sector. We have a very successful track record in the Middle East, especially in the reconstruction of Kuwait. Our involvement with Iraq's oil sector began in the 1930s with the construction of the first oil processing units at Kirkuk and has included the development of the Daura and Basra facilities." The contract is part of the international effort to restore the damaged and neglected infrastructure of Iraq. It is one of six SPMO contracts covering various sectors under the general oversight of the Program Management Office established by the Coalition Provisional Authority (CPA). The Iraq Program Management Office (PMO), part of the Coalition Provisional Authority, manages the $18.4 billion appropriated by the U.S. Congress to support the reconstruction of Iraqi infrastructure. This office is responsible for all activities associated with program, project, asset, construction and financial management of that portion of the reconstruction effort undertaken by the U.S. The goal of PMO, and the prime contractors who are selected, is to maximize Iraqi capabilities, and to leave Iraq with the tools and processes to continue the work begun under the Coalition Provisional Authority. Part of the objective of the contract is, therefore, to work with the Iraqi Ministry of Oil and to provide training to Iraqi personnel. Foster Wheeler Ltd. is a global company offering, through its subsidiaries, a broad range of design, engineering, construction, manufacturing, project development and management, research and plant operation services. Foster Wheeler serves the refining, oil and gas, petrochemical, chemicals, power, pharmaceuticals, biotechnology and healthcare industries. The corporation is based in Hamilton, Bermuda, and its operational headquarters are in Clinton, New Jersey, USA. For more information about Foster Wheeler, visit its Web site at http://www.fwc.com/ Foster Wheeler's balance sheet shows the company is insolvent, with liabilities exceeding assets by nearly $900 million at September 26, 2003. GARDEN RIDGE: Hires Gavin Anderson as PR Consultants ---------------------------------------------------- Garden Ridge Corporation and its debtor-affiliates seek permission from the U.S. Bankruptcy Court for the District of Delaware to retain and employ Gavin Anderson & Company as their Public Relations Consultants. The Debtors believe that Gavin Anderson will be able to assist them in protecting, retaining acid developing the goodwill and confidence of their many constituencies. Gavin Anderson will: a. prepare materials to be distributed to the Debtors' employees explaining the impact of the chapter 11 cases; b. draft correspondence to creditors, vendors, employees and other interested parties regarding the chapter 11 cases; c. prepare written guidelines for head office and location managers to assist them in addressing employee and customer concerns; d. prepare news releases for dissemination to the media for distribution; e. interface and coordinate media reports to contain the correct facts and the Debtors' perspective as an ongoing business; f. assist the Debtors in maintaining their public image as a viable business and going concern during the chapter 11 reorganization process; g. assist the Debtors in handling inquiries, e.g., employees, vendors, customers, etc. and developing internal systems for handling such matters; h. coordinate public relations services with a third party making an investment in the Debtors; and i. perform other strategic communications consulting services as may be required by the Debtors during the chapter 11 cases. The Debtors point out that by having a public relations consultant provide these services, other professionals in these cases and officers who might otherwise handle public relations matters will be able to focus better on their respective duties in the management and reorganization of the Debtors. Gavin Anderson professionals will bill the Debtors for services at customary hourly rates: Position Billing Rate -------- ------------ President $500 per hour Managing Director $350 per hour Director $325 per hour Associate Director $250 per hour Senior Executive $185 per hour Executive $150 per hour The principal consultants presently designated to represent the Debtors and their current hourly rates are: Professional Title Current Rate ------------ ----- ------------ Robert Mead President $500 per hour Joel Weiden Managing Director $350 per hour Doug Morris Director $325 per hour Jerry Tolk Associate Director $250 per hour Headquartered in Houston, Texas, Garden Ridge Corporation -- http://gardenridge.com/-- is a megastore home decor retailer that offers decorating accessories like baskets, candles, crafts, home accents, housewares, party supplies, pictures and frames, pottery, seasonal items, and silk and dried flowers. The company filed for chapter 11 protection on February 2, 2004 (Bankr. Del. Case No. 04-10324). Joseph M. Barry, Esq., at Young Conaway Stargatt & Taylor LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of over $100 million each. GENTEK INC: Discloses Current Directors & Officers Information -------------------------------------------------------------- GenTek, Inc. disclosed information about the members of its board of directors and executive officers in a regulatory filing with the Securities and Exchange Commission on February 6, 2004. The Executive Officers are: * Richard R. Russell, 61, President and Chief Executive Officer and Director since April 1999. From 1994 until April 1999, he served as the President and Chief Executive Officer and a Director of The General Chemical Group Inc. Mr. Russell has also been the President and Chief Executive Officer of General Chemical Corporation since 1986. * Matthew R. Friel, 37, Vice President and Chief Financial Officer since September 2001. Mr. Friel also served as Treasurer from September 2001 to October 2003. From September 1997 to September 2002, Mr. Friel served as Managing Director of Latona Associates Inc. Latona Associates has provided GenTek with certain administrative functions and corporate support services since 1995. * Mark J. Connor, 37, Vice President - Corporate Development and Investor Relations since November 2003. From October 2000 to November 2003, Mr. Connor served as Assistant Treasurer. From 1998 through October 2000, Mr. Connor served as Assistant Treasurer of The Warnaco Group, Inc. * Ronald A. Lowy, 48, Chief Operating Officer of the Krone Group since January 2001. Mr. Lowy served as Vice President and General Manager - Automotive and Industrial Products of Prestolite Wire Corporation from January 2000 to December 2000, and Vice President and General Manager - Automotive Products of Prestolite Wire Corporation from 1995 to 2000. * Kevin J. O'Connor, 53, Vice President and Controller since April 1999. From March 1996 until April 1999, he served as the Controller of The General Chemical Group Inc. Mr. O'Connor has also served as Controller of General Chemical Corporation since 1986. * Ramanlal L. Patel, 58, President of the Manufacturing segment since December 2001. Mr. Patel has also served as President and Chief Executive Officer of Noma Company since January 2001. From 1997 to December 2000, he was Chief Executive Officer of Pram Filtration Corporation. * Charles W. Shaver, 45, Vice President and General Manager for Performance Products since November 2001. Mr. Shaver served as Vice President and General Manager for Performance Products for Arch Chemicals, Inc. from 1999 to November 2001. From September 1996 to 1999 he served as Vice President of Operations and Chief Operating Officer for MMT, Inc. * Scott Sillars, 48, Vice President and Treasurer since October 2003. Mr. Sillars served as Acting Treasurer from 2002 to October 2003. From 1998 through 2002, Mr. Sillars served as an Independent Consultant in general management and corporate finance. * Matthew M. Walsh, 37, Vice President and Operations Controller since December 2000. Mr. Walsh served as Vice President and Treasurer from January 2000 through December 2000. Mr. Walsh served as Group Controller-Performance Products of General Chemical Corporation from October 1997 to December 1999. The Directors are: * John G. Johnson, Jr., 63, Chairman of the Board. Mr. Johnson was previously President and Chief Executive Officer of Foamex International Inc. from 1999 through 2001 and serves as a Director of Thermadyne Industries, Inc. Mr. Johnson spent five years with Safety-Kleen Corporation where he served as President and Chief Executive Officer -- from 1995 to 1997 -- and President and Chief Operating Officer -- from 1993 to 1994. Prior to 1992, Mr. Johnson spent 34 years with ARCO where he was a director and president of ARCO Chemicals America from 1987 to 1992. * Dugald K. Campbell, 57. Mr. Campbell currently serves as a Director of MTS Systems Corporation and JL French Automotive Castings Inc. Mr. Campbell was President and Chief Executive Officer of Tower Automotive Inc. from 1993 to 2003. Prior to that, Mr. Campbell served in senior leadership roles within the automotive groups of Allied Signal Corporation and Siemens AG. * Henry L. Druker, 50. Mr. Druker is a Partner of Questor Management Company, a private investment firm, where he has been specializing in investing in turnaround and special situation companies since 1995. Previously, has was a partner of a Toronto based merchant bank, Gordon Capital, managing director and head of the leveraged buyout group at L.F. Rothschild, Inc. and an associate in corporate finance at Goldman Sachs & Co. Mr. Druker is a former Director of Aegis Communications, Thermadyne Holdings and Pathsource, Inc. * Kathleen R. Flaherty, 52. Ms. Flaherty currently serves as a Director of CMS Energy Corporation and Marconi Corporation, plc. Ms. Flaherty was previously President and Chief Operating Officer of Winstar International from 1999 through 2001. From 1997 through 1998, Ms. Flaherty was the Senior Vice President, Global Product Architecture for MCI. * Bruce D. Martin, 35. Mr. Martin is a Director of Angelo, Gordon & Co., a private investment firm. * John F. McGovern, 57. Mr. McGovern is Founder and a Partner of Aurora Capital LLC since 1999. Prior to joining Aurora Capital, Mr. McGovern worked for Georgia-Pacific Corporation from 1981 to 1999 serving in many different positions, most recently as Executive Vice President, Finance and Chief Financial Officer from 1994 to 1999. Mr. McGovern currently serves on the Board of Directors for Payless ShoeSource, Inc. and Forest2Market. Mr. McGovern was formerly a director of Golden Bear, Inc., ChanneLinx, Inc. and Seabulk International, Inc. * William E. Redmond, Jr. - Mr. Redmond has been a Director of World Kitchen Incorporated since January 2003 and a Director of Arch Wireless since June 2002. Previously he served as Chairman, President, and Chief Executive Officer for Garden Way Incorporated from December 1996 through February 2003. * Richard R. Russell, 61. Mr. Russell is the President and Chief Executive Officer and a Director of GenTek, Inc. since April 1999. From 1994 until April 1999, he served as the President and Chief Executive Officer and a Director of The General Chemical Group Inc. Mr. Russell has also been the President and Chief Executive Officer of General Chemical Corporation since 1986. Each of the Debtors' directors was appointed pursuant to the confirmed Reorganization Plan. Non-Employee Directors Compensation The non-employee directors of the Debtors are entitled to receive cash compensation and compensation pursuant to these compensation plans: (a) Cash Compensation Non-employee directors will receive $35,000 as compensation per year, with additional fees of $1,000 for attendance at Board or committee meetings. The board chairman receives an additional $35,000 per year. Committee chairpersons also receive additional compensation in the amount of $10,000, with the exception of the audit committee chair who receives $15,000; or (b) Equity-based Compensation At the time the members of the board of directors were appointed, an understanding was reached that each non- employee director of the Debtors would receive an annual grant of equity securities with a grant date value of $35,000. This agreement has not been implemented to date. New Management and Directors Incentive Plan As of the Effective Date of the Debtors' Reorganization Plan, the Debtors adopted the New Management and Directors Incentive Plan, whereby any full or part-time employee, officer or director of the Debtors or any of its subsidiaries are eligible to receive: -- incentive stock options, -- non-qualified stock options, -- stock appreciation rights, -- restricted stock, -- performance share awards, -- dividend equivalent rights, or -- any "other stock-based awards" Other stock-based awards are defined to include any awards that are valued in whole or in part by reference to, or are otherwise based on the fair market value of our common stock. The Compensation Committee has the authority to select participants and determine grants of awards. As of December 31, 2003, there were 1,000,000 shares of GenTek common stock available for issuance under the plan -- subject to equitable adjustment in the event of a change in capitalization of the Debtors. The maximum number of shares with respect to which any awards may be granted during a calendar year to any participant is 100,000. Pursuant to the Plan, within three months following the Effective Date, the Board is to designate participants to receive stock options that will, in the aggregate, constitute no more than 10% of the total common stock issued on the Effective Date. Upon a "change in control" of the Debtors, unless otherwise determined by the Compensation Committee, each outstanding award will automatically become fully exercisable. Performance Plan Each of the Executive Officers is eligible to participate in the Debtors' Performance Plan. Under the Performance Plan, key employees may be granted performance awards and annual bonuses that vest upon the achievement of certain corporate targets. The Compensation Committee of the Board has discretion to choose the recipients of performance awards and annual bonus and the amount of the awards and bonuses and to set the incentive targets. With respect to those employees who are "covered employees" under Section 162(m) of the Internal Revenue Code, no performance award may exceed -- when added to any annual bonus awarded under the Performance Plan -- the lesser of: (a) $2,000,000; or (b) 200% of the base salary of a "covered employee" as in effect on the date that the incentive targets are set. Upon the achievement of the incentive targets, a participant becomes vested in his or her award, which is payable in cash. Upon the occurrence of a change in control, the Compensation Committee has discretion to accelerate vesting of any outstanding performance awards. Pension Plans Certain employees, including Messrs. Russell, Friel and Shaver, participate in the General Chemical Corporation Salaried Employee's Pension Plan, a defined benefit plan that generally benefits full-time, salaried employees. A participating employee's annual retirement benefit is determined by the employee's credited service under the Pension Plan and average annual earnings during the five years of the final ten years of service credited under the Pension Plan for which such employee's earnings were highest. Annual earnings include principally salary, overtime and short-term incentive compensation. The Pension Plan provides that a participating employee's right to receive benefits under the Pension Plan becomes fully vested after five years of service. Under the Pension Plan, benefits are adjusted by a portion of the social security benefits received by participants. In addition, Messrs. Russell, Friel and Shaver participate in an unfunded non-qualified excess benefit plan, which pays benefits that would otherwise accrue in accordance with the provisions of the Pension Plan, but which are not payable under the Pension Plan by reason of certain benefit limitations imposed by the Internal Revenue Code of 1986, as amended. Under this formula, the average recognized compensation under the non-qualified excess benefit plan for each of the Executives as of December 31, 2002 are: Mr. Russell $804,000 Mr. Friel 200,400 Mr. Shaver 416,400 Each of the Executive Officers currently has account balances under these pension plans: (a) The General Chemical Corporation Supplemental Savings and Retirement Plan; (b) The Krone Incorporated Supplemental Executive Retirement Plan; or (c) The Prestolite Wire Corporation Supplemental Executive Retirement Plan. GenTek adopted a Key Employee Retention Plan pursuant to a Bankruptcy Court Order on January 21, 2003. Under the terms of the KERP, the Debtors were authorized to protect up to $215,000 of the supplemental retirement plan account balance of certain Executive Officers, provided that no distribution may be made to any Executive Officer before the second anniversary of the Debtors' emergence from Chapter 11. For each of Messrs. Russell, Friel and Shaver, the $215,000 includes a pension component of the Executive Officer's supplemental retirement plan balance. The supplemental retirement plan accounts of Messrs. Lowy and Patel include only a savings and not a pension component. With respect to Messrs. Russell and Lowy, all SERP balances in excess of $215,000 that is attributable to the savings component of a SERP -- including employee contributions, employer matching contributions, and accrued interest -- will be deemed to vest ratably over a four-year period commencing on the Plan Effective Date and will be otherwise paid in accordance with the terms of the SERPs, provided that: (a) No payment will be made before the second anniversary of the Effective Date or during the four-year vesting period. In addition, the entire excess SERP balance will accrue interest at the United States Treasury Bill rate. During the four-year vesting period, any non-vested portion of the SERP balance of any employee covered by this subsection will vest immediately on the earlier of: -- the date on which the employee's employment is terminated for any reason other than for "cause" or such employee terminates such employment for "good reason" as each such term is defined in the KERP; -- as to Mr. Lowy, the date on which the Debtors' businesses or the Debtors' communications segment is sold through a single transaction or series of related transactions; or -- as to Mr. Russell, the date on which the Debtors' businesses are sold through a single transaction or series of related transactions; and (b) All portions of the excess amount that is attributable to the pension component of Mr. Russell's SERP -- $2,633,897 -- have been treated as a general unsecured claim under the Plan. Severance and Change in Control Arrangements Pursuant to the terms of the KERP, certain key employees, including the Executive Officers are entitled to severance and change in control benefits. Under the KERP, an Executive Officer will receive a lump sum cash payment equal to two times -- or in the case of Mr. Russell, three times -- the annual salary on the termination date, in the event that a Executive Officer's employment is terminated: (a) by the Executive Officer for "good reason"; (b) by the Debtors for any reason other than "cause"; or (c) either by the Executive Officer or the Debtors for death or "disability". In addition, the Executive Officers will continue to be covered by all life, health care, medical and dental insurance plans and programs -- excluding disability -- for two years, or in the case of Mr. Russell, for three years. The KERP further provides for alternative severance protections to certain key employees, including the Executive Officers within twelve months following a change of control of the Debtors or a sale of the business segment by which they are then employed, provided that the change on control or sale of business segment occurs prior to the first anniversary of the Effective Date. If any payment or distribution to any Executive Officer is subject to excise tax pursuant to Section 4999 of the Internal Revenue Code, the Executive Officer is entitled to receive a gross-up payment from the Debtors in an amount that, after payment by the Executive Officer of all taxes -- including the excise tax imposed on the gross-up payment -- the amount of the gross-up payment remaining is equal to the excise tax imposed under Section 4999 of the Code. (GenTek Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., 215/945-7000) GEORGIA-PACIFIC: Cerberus Buying Products Distribution Business --------------------------------------------------------------- Georgia-Pacific Corp. (NYSE: GP) reached a definitive agreement to sell its building products distribution business to a new company owned by Cerberus Capital Management L.P., a private, New York- based investment firm, and members of the distribution business' management team. The overall transaction is valued at approximately $810 million, which assumes $630 million of working capital at closing and includes the separate sale of the business' real estate assets for $100 million. Georgia-Pacific expects the transaction to result in net after-tax proceeds of approximately $780 million, which will be used to reduce debt. Actual cash proceeds could be larger or smaller depending upon working capital levels in the business at closing. The company expects to record an after-tax gain on the sale of approximately $20 million in the second quarter. In addition, Georgia-Pacific will enter into a five-year agreement for the distribution business to continue purchasing structural panels, lumber and other building products manufactured by Georgia-Pacific. This agreement contains substantially similar terms as the current arrangement between Georgia-Pacific's building products manufacturing and building products distribution businesses. All current employees of the distribution business, including the current management team led by Charles McElrea, president - building products distribution, are expected to join the new company. Closing, which is expected to occur during the second quarter, is subject to customary conditions. Completion of the transaction is not subject to financing. "This agreement is yet another major step forward in reducing debt and sharpening the focus of Georgia-Pacific," said A.D. "Pete" Correll, Georgia-Pacific chairman and chief executive officer. "We believe this transaction represents a fair valuation of the distribution business, is consistent with our strategy and is in our shareholders' long-term interest." Distinct from the company's building products manufacturing segment, Georgia-Pacific's building products distribution business is the leading distributor of building products in the United States. The distribution division's 2003 net sales were $4.3 billion. The business employs approximately 3,400 people and operates 63 U.S.-based warehouses, plus one location in Canada, from which it distributes more than 10,000 products across 14 categories, including structural panels, hardwood plywood, roofing, insulation, metal products, lumber, paneling, vinyl siding and particleboard. These products are shipped via a fleet of 900 trucks, one of the nation's largest such fleets. "The building products distribution business has been a cornerstone of Georgia-Pacific for decades and these outstanding employees have built a truly world-class organization," said David J. Paterson, executive vice president and president - building products. "This new building products distribution company and our building products manufacturing business will each independently focus on their core strengths and strategies while maintaining a strong customer-supplier relationship. "The distribution business' separation from Georgia-Pacific will be an opportunity for it to grow and excel, while our building products manufacturing business will continue to focus on differentiating its products through branding and innovation," Paterson added. "In addition, we will remain a leading supplier to this distribution company as well as to the national home improvement retailers with which we maintain direct relationships." Goldman, Sachs & Co. is acting as financial advisor to Georgia- Pacific in this transaction. Headquartered at Atlanta, Georgia-Pacific (S&P, BB+ Corporate Credit Rating, Negative) is one of the world's leading manufacturers and marketers of tissue, packaging, paper, building products, pulp and related chemicals. With 2003 annual sales of more than $20 billion, the company employs approximately 60,000 people at 400 locations in North America and Europe. Its familiar consumer tissue brands include Quilted Northern(R), Angel Soft(R), Brawny(R), Sparkle(R), Soft 'n Gentle(R), Mardi Gras(R), So- Dri(R), Green Forest(R) and Vanity Fair(R), as well as the Dixie(R) brand of disposable cups, plates and cutlery. Georgia- Pacific's building products business has long been among the nation's leading suppliers of building products to lumber and building materials dealers and large do-it-yourself warehouse retailers. For more information, visit http://www.gp.com/ Headquartered in New York, Cerberus Capital Management, L.P. and its affiliated entities manage funds and accounts with capital in excess of $12 billion. GMAC COMMERCIAL: S&P Affirms Ratings for Class G & H Notes ---------------------------------------------------------- Standard & Poor's Ratings Services affirms its ratings on two classes from GMAC Commercial Mortgage Securities Inc.'s mortgage pass-through certificates series 1997-C1. The affirmations reflect credit enhancement levels that adequately support the ratings under various stress scenarios. However, Standard & Poor's has concerns regarding the watchlist and specially serviced assets, as well as several other assets with credit issues. As of Feb. 17, 2004, the trust collateral consisted of 266 loans with an aggregate outstanding principal balance of $1,180.3 million, down from 355 loans amounting to $1,697.0 million at issuance. The master servicer, GMAC Commercial Mortgage Corp. (GMACCM), provided partial-year 2003 net cash flow DSC figures for 75.2% of the pool. For the balance of the pool, full-year 2002 DSC figures were used when available. Based on this information, Standard & Poor's calculated a weighted average DSC of 1.53x for these loans, up from 1.36x at issuance. The DSC figures exclude 12 credit-tenant lease loans (7.4% of the pool), one defeased loan (0.6%), and an additional 16 loans (4.8%) for which 2002 and 2003 financial data is not available. Thirty-two loans, comprising 14.7% of the pool by balance, reported DSCs less than 1.0x. The trust has experienced three losses to date totaling $31.5 million (1.9% of the original pool balance) including a 100.0% principal loss in December 2003 on a healthcare asset in Connecticut that had a principal balance of $29.0 million. Despite this loss, the overall trust delinquency, as of Feb. 17, 2004, was 4.5%, up from 4.4% during Standard & Poor's last review in June 2003. Currently, there are two loans with appraisal reduction amounts (ARA) aggregating to $4.9 million (0.4%). The top 10 loans have an aggregate outstanding balance of $234.4 million(19.9%). Excluding the second-largest loan, which is a CTL, Standard & Poor's calculated a weighted average DSC of 1.77x, up from 1.32x at issuance. Partial-year 2003 data was used for all loans in this calculation, with the exception of the largest loan, for which only year-end 2002 data was available. The increase in DSC since issuance is largely due to three loans for which the DSC has approximately doubled since issuance. Three other loans reported partial-year DSC below 1.10x; two of these loans are on the watchlist and the third is in special servicing. There are seven loans with an outstanding balance of $52.8 million (4.5%) that are with the special servicer, also GMACCM. Four of these loans are delinquent, while the other three were delinquent as of the last remittance report, but are now current. The third- largest loan was 90-plus days delinquent as of the last remittance report but has recently been brought current. However, there remains a strong possibility that this loan will become delinquent once again. This property is secured by a 1.2-million-sq.-ft. industrial facility in Detroit, Mich. that was built in several phases, primarily between the 1950s and the 1970s. It has an outstanding balance of $24.3 million (2.1%) and $25.2 million in total exposure. According to a recently obtained rent roll, the property is 75.0% occupied and leases for all but 65,000 sq. ft. expire by July 2005. According to a recent CB Richard Ellis report, the amount of leasing activity for Detroit industrial space was down 70.0% in the fourth quarter 2003 compared to the same period in 2002. Standard & Poor's is concerned with this asset due to its size, age, occupancy, and very weak leasing market. Collectively, these characteristics could result in a protracted workout period, followed by a substantial loss. The remaining specially serviced assets are secured by retail, healthcare, and lodging properties. Two of the retail assets are REO and have ARA amounts outstanding. One is a 107,000-sq.-ft. retail property in Miami, Florida with a $4.7 million outstanding balance, $1.1 million in servicer advances, and a $2.2 million ARA. This property is currently under contract for sale. The other retail REO asset is a 159,000-sq.-ft. facility in Antigo, Wis. with a $4.7 million principal balance, $0.3 million in outstanding servicer advances, and a $2.7 million ARA. The property will be listed for sale shortly. Standard & Poor's anticipates losses equal to, or in excess of, the ARA amount for both of these properties. The healthcare assets are both 90-plus days delinquent. One is a 90-bed skilled nursing facility in Torrington, Conn. with an outstanding balance of $1.4 million and advances totaling $0.2 million. The borrower has filed for bankruptcy. The state has contemplated closing this property. Although this property is still operating, it is no longer accepting new patients. An appraisal is pending for this asset. The other healthcare asset a 117-bed skilled nursing facility in College Place, Wash. It has an outstanding principal balance of $1.1 million and $0.1 million in advances. This facility closed Feb. 29, 2004, but the licenses for these beds are valid in the county until February 2012. Principal losses are expected on both of these healthcare assets. The remaining two specially serviced assets, a 156-unit hotel in Fishkill, N.Y. and a 45,000-sq.-ft retail asset in Phoenix, Ariz. are current and could be returned to the master servicer in the next few months. GMACCM's watchlist consists of 70 loans with an outstanding principal balance of $288.1 million (24.4%) and includes two of the top 10 loans. The sixth-largest loan in the pool is secured by a 381-room hotel in Farmington, Conn. It has a principal balance of $20.1 million. This property appears on the watchlist because of a 1.09x DSC for year-to-date (YTD) third quarter 2003, down from 1.55x in 2002. The eighth-largest loan is secured by an 896- unit multifamily property in Oklahoma City, Okla. It has an outstanding balance of $18.9 million. This property has experienced a sudden and sharply deteriorating operating performance, as its YTD third quarter 2003 DSC was 0.97x, down from 1.23x in 2002. There are six healthcare assets on the watchlist with an aggregate principal balance of $35.3 million. All six of these loans are on the watchlist because of DSC issues. None of the healthcare loans reported a DSC greater than 0.81x, and two loans reported a negative DSC. The watchlist also contains six lodging assets (in addition to the sixth-largest loan), with a total principal balance of $27.8 million. These assets all appear on the watchlist because of DSC issues. The 58 other loans that are on the watchlist largely appear due to low DSCs. Standard & Poor's also examined 10 loans in the portfolio with an aggregate balance of $13.1 million for which financial data has been unavailable for the past two years. These loans exclude the defeased loan, CTL loans, and loans that already appear on the watchlist. Standard & Poor's also reviewed six loans with exposure to Kmart that are not with the special servicer or on the watchlist. The balance for these loans totals $38.1 million. Standard & Poor's analysis included stressing the specially serviced loans, loans on the watchlist, loans without recent financial data, and other loans with credit issues at various loss severities. The resultant credit support levels supported the affirmed ratings. RATINGS AFFIRMED GMAC Commercial Mortgage Securities Inc. Mortgage pass-through certificates series 1997-C1 Class Rating Credit Enhancement G B+ 6.68% H CCC- 1.65% HALL KINION: Balks at Kforce's Move to Terminate Merger Agreement ----------------------------------------------------------------- Hall, Kinion & Associates, Inc. (Nasdaq: HAKI), The Talent Source(R), expresses strong disappointment in Kforce Inc.'s announcement undermining the proposed merger. In its Form 10-K filed with the Securities and Exchange Commission, Kforce stated that its has notified Hall Kinion(R) that it believes certain conditions exist or will exist in the future that constitute a material adverse effect on Hall Kinion. It also stated that Kforce had failed to confirm its intention to recommend the merger to the Kforce shareholders, as requested by Hall Kinion. The failure by Kforce to confirm its recommendation is a violation of the merger agreement. Hall Kinion adamantly denies that any conditions exist that would permit Kforce to terminate the merger agreement. The merger agreement contains provisions requiring a party to provide written notice of an alleged breach of the agreement and also provides for an opportunity to cure any alleged breach. Hall Kinion has not received from Kforce a formal notice of alleged breach of the material adverse effect provisions of the merger agreement. Given the Kforce statements, the outcome of the merger is uncertain. "We are continuing discussions with Kforce representatives," the Company states. "We have a valid and binding contract with Kforce. We do not believe that we are in breach of the agreement, and we expect Kforce to live up to its obligations to complete the merger on the terms negotiated. We plan to take all steps necessary to protect our rights under the merger agreement," said Brenda Rhodes, CEO of Hall Kinion. For the fourth quarter of 2003, net revenues were $33.6 million, compared with net revenues of $39.2 million in the fourth quarter of 2002. Gross profit for the fourth quarter of 2003 was $9.2 million or 27.4% of net revenues, versus $12.0 million or 30.6% of net revenues, for the fourth quarter of 2002. The fourth quarter of 2003 net loss was $15.1 million, or a loss of $1.20 per share versus a net loss of $17.7 million, or a loss of $1.39 per share, for the fourth quarter of 2002. The fourth quarter and fiscal year ended December 28, 2003 results include an income tax provision of $14.2 million, of which $14.0 million results from a 100% valuation allowance recorded against the Company's deferred tax assets. For the year ended December 28, 2003, net revenues were $156.9 million, compared with net revenues of $120.4 million for the year ended December 29, 2002. Gross profit for fiscal year 2003 was $45.3 million or 28.9% of net revenues, versus $39.7 million or 32.9% of net revenues, for fiscal year 2002. Net loss for fiscal year 2003 was $18.6 million, or a loss of $1.47 per share compared with a net loss of $20.6 million, or a loss of $1.66 per share, for fiscal year 2002. The foregoing results are unaudited and the Company expects to file its audited financials in its Form 10-K on or around March 29, 2004. About Hall Kinion & Associates Hall, Kinion & Associates, Inc., The Talent Source for specialized professionals, delivers world-class talent on a contract and full- time basis to high-demand sectors. The Company finds, evaluates and places industry- specific Technology and Corporate Professionals. Founded in 1991, Hall Kinion completed its initial public offering in 1997. The Company operates two divisions, both of which provide consultants and direct-hire talent: The Technology Professional Division places highly- skilled experts in positions ranging from software engineering to CTO into technology, financial services, healthcare, government and energy sectors. The Corporate Professional Services Division (OnStaff) places specialists at all levels into real estate, financial services and healthcare sectors. For the most current corporate and financial information, visit the Company's Web site at http://www.hallkinion.com/ About OnStaff OnStaff is a premier national specialty staffing firm placing temporary and full-time professionals in the Title, Escrow, Mortgage, Financial Services and Healthcare industries. The Company operates industry-specific recruiting and placement Web sites including: http://www.titleboard.com/, http://www.escrowboard.com/, http://www.bankingboard.com/and MediCenter.com . OnStaff's Web site address is http://www.onstaff.com/ OnStaff is a wholly owned subsidiary of Hall Kinion & Associates, Inc. * * * In its latest Form 10-Q filed with the Securities & Exchange Commission, Hall, Kinion & Associates, Inc. reports: LIQUIDITY AND CAPITAL RESOURCES "Historically, we funded our operations and working capital needs through cash generated from operations, periodically supplemented by borrowings under a revolving line of credit. Our operating activities used $6 million for the nine months ended September 28, 2003. The use of these funds is primarily attributable to funding a $3.1 million increase in accounts receivable related to increased revenue and a decrease of $5.6 million in accrued liabilities, primarily from restructuring. "Net cash used by investing activities for the nine months ended September 28, 2003 was $0.4 million, primarily reflecting payments for software licenses and leasehold improvements. "Net cash provided by financing activities for the nine months ended September 28, 2003 was $0.6 million, primarily reflecting net additional borrowing on the credit line. The Company's banking arrangement requires that all cash deposits received be applied to reduce the outstanding balance on the bank line of credit. The Company then draws against the available line of credit the estimated amount required for operations. "The Company entered into an agreement dated June 13, 2003 with CIT Business Credit for a new three-year renewable credit facility of $16 million that replaced an existing credit facility of $12 million and is used primarily to fund operations. Significant terms and conditions of the agreement are as follows: -- Availability is determined by the lesser of (i) 85% of eligible accounts receivable, less certain receivable balances as defined in the agreement that totaled $5.5 million as of September 28, 2003, (ii) cash collected during the most recent 45-day period, or (iii) the full amount of the facility, less letters of credit and certain payables as defined in the agreement that totaled approximately $327,000 as of September 28, 2003. -- Interest is at prime plus 1.25% and starting June 27, 2004, the interest may be reduced to a rate that is as low as prime plus 0.5%, contingent upon the Company meeting specified levels of profitability. -- Financial covenants require meeting specific ratios of fixed charge coverage and maintaining a minimum combined average balance of cash and credit line availability of $2 million, calculated on a monthly basis. -- Borrowings are collateralized by all of the Company's assets. -- The Company may not declare or pay any dividends or distribution of any kind nor acquire, redeem, or retire any of its own capital stock. -- A bank lockbox was established, whereby all Company cash receipts are first applied to the line of credit. "As of September 28, 2003, outstanding borrowings under the line of credit were $10,904,000 and additional available borrowings were $2,620,000. "The Company expects to be able to fund current operations from cash flow from operations, its existing credit facility, and securing additional availability under the line of credit from the sale of real property not currently used in the operation of the business. The OnStaff acquisition agreement provides for an earnout with payments over a three-year period provided that certain revenue, gross margin, earnings and productivity targets are satisfied. The first earnout period will end on December 28, 2003, with payment of any earnout due on February 15, 2004. The maximum earnout payment for the first period is $4.3 million. If the maximum payment is earned, the Company will likely need to seek additional sources of funds in order to make the payment. The Company's cash flow is not sufficient to fund operations and cover the payment of the earnout. No additional sources of liquidity have been identified, and no assurance can be given that additional financing will be available." HEALTHSOUTH: Obtains Temporary Order Preventing Debt Acceleration ----------------------------------------------------------------- HealthSouth Corp. (OTC Pink Sheets: HLSH) announced that the Circuit Court of Jefferson County, Alabama, has granted its request and issued a temporary restraining order to prevent acceleration of its outstanding notes. HealthSouth said it sought this relief to prevent certain holders of its notes from accelerating their indebtedness, which HealthSouth believes would cause substantial harm to its enterprise value and all of its stakeholders. The suit also seeks a judicial determination regarding several indenture issues, including the applicability of certain acceleration and payment provisions. HealthSouth said it is hopeful these actions will assist the Company in reaching a consensual agreement with these noteholders with respect to certain technical defaults and in completing its restructuring. The Special Committee of HealthSouth's board, its new management team and its more than 46,000 employees have worked tirelessly since the events of March 2003 to restore credibility with its patients, doctors, employees, creditors, stockholders and other constituencies. HealthSouth said it is current on all principal and interest payments and has made great progress in its turnaround. About HealthSouth HealthSouth is the nation's largest provider of outpatient surgery, diagnostic imaging and rehabilitative healthcare services, with nearly 1,700 locations nationwide and abroad. HealthSouth's Web site is at http://www.healthsouth.com/ HEARTWOOD LUMBER: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Heartwood Lumber Company, Inc. 62277 Highway 11 Pearl River, Louisiana 70452 Bankruptcy Case No.: 04-11339 Type of Business: The Debtor offers a range of wood products and related services; from import/export services, to kiln drying, to the manufacture of high end wood products. See http://www.heartwoodlumber.com/ Chapter 11 Petition Date: March 2, 2004 Court: Eastern District of Louisiana (New Orleans) Judge: Jerry A. Brown Debtor's Counsel: Emile L. Turner, Jr., Esq. Law Office of Emile L. Turner, Jr., LLC 424 Gravier Street New Orleans, LA 70130 Tel: 504-586-9120 Fax: 504-581-4962 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 ------ --------------- ------------ Flettrich Services Vendor $45,061 Flettrich Engineering Vendor $27,000 John Muller Accounting services $13,416 Hogan Hardwoods Vendor $10,707 Downes & Reader Vendor $10,430 Atmos Energy Utilities $9,857 Timber Trading Company Vendor $8,577 Nu-Lite Vendor $7,982 Charter Industries Vendor $7,880 Cleco Power Utilities $6,306 Capitol Steel, Inc. Vendor $5,517 Foreverfood, Inc. Vendor $4,907 Will Branch Vendor $4,000 B & S Underwriters Insurance $3,141 AP Hubbard Lumber Vendor $2,760 Bart Leaveau Boilers Vendor $2,571 Pacific Wood Prod. Vendor $2,000 Mould - Rite Vendor $1,887 K & B Duct Vendor $1,580 Straitoplane, Inc. Vendor $1,378 JARDEN CORP: Dixon Extends Exclusivity Agreement to April 12 ------------------------------------------------------------ Dixon Ticonderoga Company (Amex: DXT) and Jarden Corporation (NYSE: JAH) have signed a third extension to the exclusivity agreement signed on January 9, 2004. The most recent extension will allow Jarden until 5:00 p.m. on April 12, 2004, subject to earlier termination under certain circumstances, to complete its due diligence review of a potential transaction among Jarden and Dixon in which Jarden or its affiliate may acquire specified assets of the company, and to continue to negotiate the terms of related definitive documentation. Jarden Corporation Corporation (S&P, B+ Corporate Credit Rating, Stable) is a leading provider of niche consumer products used in and around the home, under well-known brand names including Ball(R), Bernardin(R), Crawford(R), Diamond(R), FoodSaver(R), Forster(R), Kerr(R), Lehigh(R) and Leslie-Locke(R). In North America, Jarden is the market leader in several consumer categories, including home canning, home vacuum packaging, kitchen matches, branded retail plastic cutlery, toothpicks and rope, cord and twine. Jarden also manufactures zinc strip and a wide array of plastic products for third party consumer product and medical companies, as well as its own businesses. JOEAUTO INC: Turns to GulfStar Group for Financial Advice --------------------------------------------------------- JoeAuto, Inc., is seeking permission from the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division, to retain GulfStar Group as its financial advisor, nunc pro tunc to January 30, 2004. The Debtor reports that GulfStar has been providing financial advisory services since December 1, 2003. GulfStar has attained a necessary background to assist the Debtor in dealing effectively with many of the needs and problems that may arise in this case. GulfStar will: a) assist in developing cash flow and income forecasts for the Company; b) assist in analyzing the assets and operations of tile Company and evaluate alternatives for the business; c) review the existing debt and capital structure of the Company and assist in developing and evaluating the restructuring or amendment thereof; d) analyze and evaluate any restructuring proposals to the Company; and e) report to the Board of Directors and any appropriate committee thereof with respect to these matters. GulfStar will bill at its normal hourly rates: Position Billing Rate -------- ------------ Managing Directors $450 per hour Vice Presidents $350 to $400 per hour Associates and Analysts $250 to $225 per hour Administrative Staff $95 per hour The current hourly rates for GulfStar employees that may work on this matter are: Professional Name Billing Rate ----------------- ------------ F.W. "Colt" Luedde III $450 per hour H. Rey Stroube IV $400 per hour Christopher M. Hefty $225 per hour Headquartered in The Woodlands, Texas, JoeAuto, Inc., -- http://www.joeauto.com/-- an auto service and repair company, filed for chapter 11 protection on January 30, 2004 (Bankr. S.D. Tex. Case No. 04-31492). Christopher Adams, Esq., at Bracewell & Patterson, LLP represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $11,100,000 in total assets and $16,100,000 in total debts. LOEWEN GROUP: Reorganized Debtors Want Fleegers Claim Disallowed ---------------------------------------------------------------- The Reorganized Loewen Group Debtors object to the proof of claim jointly filed in these cases by Joe Fleeger, Sherry Dunn and Sandy Brenneis, the children and heirs of the late Harold and Billie Fleeger. Mrs. Fleeger died in 1985 and was supposed to be interred in a particular casket and tandem crypt, which was purchased from the Memorial Park Funeral Home & Cemetery -- the Debtors' predecessor- in-interest. The crypt was located in Memphis, Tennessee. The Debtors purchased the cemetery in June 1997. Approximately 14 years later, Mr. Fleeger passed away. During Mr. Fleeger's internment service, the Fleeger siblings were shocked to discover that their mother's casket in the crypt was of a much lesser quality than the one purchased for her remains. This led to an investigation, which resulted in further shock to the family. Not only was their mother buried in a cheap casket, she was interred in the wrong space. For 14 years, the Fleeger siblings and their late father had been visiting the wrong crypt. On July 12, 2000, the Fleeger siblings filed a proof of claim in the Debtors' bankruptcy cases against Debtor Memorial Park, Inc.: (a) asserting an unsecured, non-priority claim in an unliquidated amount estimated to be $6,000,000; and (b) asserting a second unsecured, non-priority claim in an unliquidated amount estimated to be $6,000,000. The claims are based on causes of action for: (1) fraud; (2) misrepresentation; (3) concealment; (4) outrage (tort); (5) willful and malicious conduct; (6) gross negligence; (7) negligence; (8) violations of consumer protection acts; and (9) breach of contract. In addition, the Fleeger siblings filed a complaint against the former shareholders, directors and officers of the Debtors' predecessor-in-interest in a state court in Tennessee. On November 9, 2001, the Debtors submitted the claims to non- binding arbitration under the Bankruptcy Court-approved alternative dispute resolution procedures. After the arbitration was conducted, the arbitrator issued an award to the Fleeger siblings amounting to $5,692.33. The Fleeger siblings did not accept the arbitrator's award, and on September 13, 2002, served a notice of intent to litigate the claims. The parties subsequently agreed in principle to a procedure to liquidate the claims. However, the stipulation documenting the agreed procedure was delayed by several months due to difficulty in obtaining a response from the Fleegers' counsel regarding the draft stipulation. On August 19, 2003, after the parties finally reached agreement on the procedure, the discharge injunction was modified by agreement to permit the procedure to be used. Disallow First Claim; Liquidate Second Claim The parties agreed that the first claim would be disallowed as duplicative of the second claim. With respect to the second claim, the parties agreed that the discharge injunction would be modified to the extent necessary to permit the Fleeger siblings to commence an action in an appropriate court in Tennessee and permit the Fleeger siblings and Alderwoods (Tennessee), Inc., to prosecute and defend the action -- but only for the purpose of liquidating the amount of the second claim. All hearings related to the claim in the Bankruptcy Court were continued indefinitely with respect to the second claim. However, by agreement, the Debtors could object to allowance of the surviving second claim by providing the Fleeger siblings with 30 days' written notice. The Debtors explain that they are moving forward with an objection to the second claim because, in the six months since the agreement was reached to proceed in Tennessee, the Fleeger siblings have done nothing to initiate a proceeding to liquidate the second claim under the terms of their agreement with Memorial and the other Debtors. Claim is Time Barred The Debtors argue that the second claim should be disallowed because the statute of limitations has expired with respect to the causes of action that constitute the gravamen of the second claim. Causes of action based in tort are subject to a one-year or three- year statute of limitations, depending on the nature of the alleged tort. Causes of action based on violations of consumer protection laws are subject to a one-year statute of limitations. As in most states, including Tennessee, causes of action accrue, and the statute of limitations begins to run, at the latest when the cause of action is discovered by the claimant. The Debtors do not address expressly the statute of limitations applicable to the Fleeger siblings' actions for breach of contract or negligence. The Bankruptcy Code provides protection from claimants who seek to commence an action against a debtor, but who are prohibited from doing so due to the operation of the automatic stay by extending the limitations period until the longer of: (1) the end of the applicable limitations period, including any suspension of the period occurring on or after the Petition Date; or (2) 30 days after notice of the termination or expiration of the stay with respect to the claim at issue. The Debtors note that the event terminating the "stay" for purposes of the Bankruptcy Code's saving statute was the agreement between the parties providing relief from the discharge injunction. The Bankruptcy Code does not toll the statute of limitations. It only calls for the applicable time deadlines to be extended for 30 days after notice of termination of the stay if any limitations period would have ended on an earlier date. The Fleeger siblings admit in the second claim that their causes of action were discovered in January 2000 at the time of the burial of Mr. Fleeger. Accordingly, absent the Debtors' bankruptcy cases, under Tennessee law the statute of limitations for the Fleeger siblings' tort and consumer protection causes of action would have expired no later than January 2003 -- three years after the January 2000 discovery date. The parties' agreement occurred on August 19, 2003, permitting the Claimants to bring a state court action to liquidate the second claim. By operation of the Bankruptcy Code, the statute of limitations was, therefore, extended to no later than September 18, 2003, or 30 days after the agreement. However, months after the statute of limitations has expired, the Fleeger siblings have done nothing to file any suit against Memorial. Therefore, the second claim should be disallowed. (Loewen Bankruptcy News, Issue No. 82; Bankruptcy Creditors' Service, Inc., 215/945-7000) MCDERMOTT: December 2003 Balance Sheet Insolvent by $363 Million ---------------------------------------------------------------- McDermott International, Inc. (NYSE:MDR) reported a loss from continuing operations of $81.4 million, or $1.26 per diluted share, for the fourth quarter of 2003, compared to a loss from continuing operations of $185.6 million, or $2.96 per diluted share, for the corresponding period in 2002. Including a loss of $1.3 million from discontinued operations, net loss for the 2003 fourth quarter was $82.7 million, or $1.28 per diluted share. Net loss for the fourth quarter of 2002 was $184.5 million, or $2.94 per diluted share, which included income from discontinued operations of $1.1 million. Weighted average common shares outstanding on a fully diluted basis were 64.6 million and 62.7 million for December 31, 2003 and December 31, 2002, respectively. Revenues in the fourth quarter of 2003 increased 31.5 percent, to $581.8 million, compared to the corresponding period in 2002. The growth in revenues is due to increased activity among J. Ray McDermott, S.A. and its subsidiaries ("J. Ray"), which comprise McDermott's Marine Construction Services segment, partially offset by lower revenues at BWX Technologies, Inc. ("BWXT"), the principle subsidiary in McDermott's Government Operations segment. The fourth quarter 2003 operating loss was $61.1 million, which included $64.7 million of losses on three J. Ray projects, including a $10.9 million increase in the estimated costs necessary to complete the Front Runner EPIC spar, a $24.6 million increase in the expected loss associated with the Carina Aries project in Argentina, and a $29.2 million loss on the Belanak FPSO project at J. Ray's Batam Island facility. Also included in the operating loss was an increase in an insurance charge to J. Ray of $5.4 million, and $18.9 million of corporate, non-cash qualified pension plan expense. Partially offsetting these items was a $4.5 million benefit at BWXT associated with a reimbursable corporate expense. As indicated in its March 1, 2004 press release, the Company is seeking to recover up to $25 million of the losses J. Ray recorded during 2003 through change orders, negotiated settlements or legal proceedings. The 2002 fourth quarter operating loss of $70.5 million included an increase of $47.2 million in expenses related to J. Ray's three EPIC spar contracts. "The fourth quarter 2003 was a step backwards in the turnaround process at J. Ray due to additional charges on the three projects, but I continue to believe that we will be successful in our efforts, particularly as we see the end in sight to these troubled projects," said Bruce W. Wilkinson, chairman of the board and chief executive officer of McDermott. "We have now substantially completed two of the EPIC spar projects that have plagued J. Ray, and these three remaining projects that are in loss positions will be behind us during 2004." The Company's other expense for the fourth quarter of 2003 was $15.8 million, compared to $91.0 million in the fourth quarter of 2002. The year-over-year improvement is primarily due to the $86.4 million establishment of the estimated costs related to The Babcock & Wilcox Company ("B&W") Chapter 11 settlement in the 2002 fourth quarter, compared to the $8.9 million revaluation of that expense in the 2003 fourth quarter. This revaluation will continue to fluctuate on a quarterly basis and is largely dependent on the quarterly price movement in McDermott's stock price. At December 31, 2003, McDermott International Inc.'s balance sheet shows a total stockholders' deficit of $363,177,000 compared to $416,757,000 the prior year. RESULTS OF OPERATIONS 2003 Fourth Quarter Compared to 2002 Fourth Quarter Marine Construction Services Segment Revenues from the Marine Construction Services segment increased 54 percent to $428.6 million in the 2003 fourth quarter. The revenue growth resulted from increased activity on fabrication and marine installation projects in all geographic areas where J. Ray operates, other than the Gulf of Mexico. Segment loss for the 2003 fourth quarter was $61.3 million compared to a segment loss in the fourth quarter 2002 of $81.9 million. Major projects contributing to the 2003 fourth quarter loss were the $64.7 million of aggregate charges on the projects referred to above (Carina Aries, Front Runner and Belanak), partially offset by $2.8 million of gains on sales of assets. Selling, general and administrative expenses were $17.4 million, $1.5 million lower in the 2003 fourth quarter compared to the 2002 fourth quarter. At December 31, 2003, J. Ray's backlog of $1.4 billion included $78.5 million related to uncompleted work on the Front Runner spar, $38.7 million on the Belanak project and $56.4 million related to the Carina Aries project. J. Ray's backlog was $1.5 billion and $2.1 billion at September 30, 2003 and December 31, 2002, respectively. Government Operations Segment Revenues from the Government Operations segment decreased $11.4 million to $153.3 million in the 2003 fourth quarter primarily due to lower revenues from a management and operations contract in Ohio, partially offset by higher volumes from the manufacture of nuclear components for certain U.S. government programs. Segment income increased 45 percent to $21.1 million in the 2003 fourth quarter, primarily due to the following: -- higher volumes and margins from the manufacture of nuclear components for certain U.S. government programs; -- the reimbursement of $4.5 million of a corporate expense; -- better margins from the commercial nuclear environmental services; and -- reduced spending on fuel cell research and development projects, and lower other G&A expenses. These items were partially offset by lower volumes from other commercial work. At December 31, 2003, BWXT's backlog was $1.8 billion, compared to backlog of $1.4 billion and $1.7 billion at September 30, 2003 and December 31, 2002, respectively. Corporate Corporate expenses were $21.0 million in the 2003 fourth quarter, an increase of $17.6 million over the 2002 fourth quarter, primarily due to an increase of $17.3 million in non-cash qualified pension plan expense as a result of year-end 2002 changes in the discount rate and plan asset performance. Other Income and Expense Net interest expense was $6.7 million in the 2003 fourth quarter compared to $0.9 million in the 2002 fourth quarter, due to higher interest rates associated with the Company's borrowings, and lower interest income due to a decrease in the amount of, and average interest rates earned on, investments. During the 2003 fourth quarter, revaluation of certain components of the estimated settlement cost related to the Chapter 11 proceedings involving B&W resulted in an increase in the estimated cost of the settlement to $127.9 million, resulting in the recognition of other expense of $8.9 million ($9.7 million after tax). The consideration to be provided in the proposed settlement includes, among other things, McDermott common stock, a related share price guaranty obligation and a promissory note. The increase in the fourth quarter 2003 estimated settlement cost is due primarily to an increase in the price of McDermott's common stock from $5.71 per share at September 30, 2003 to $11.95 per share at December 31, 2003. The Company is required to revalue certain components of the estimated settlement cost quarterly and at the time the securities are issued, assuming the settlement is finalized. Assuming issuance of the debt and equity securities, the Company will record such amounts as either liabilities or stockholders' equity based on the nature of the individual securities. Thereafter, only the three-year share price guaranty will be required to be revalued on an ongoing quarterly basis. The Company reported other expense of $0.2 million in the 2003 fourth quarter, compared to $3.7 million in the 2002 fourth quarter, due to minority interest income associated with a J. Ray joint venture, partially offset by an increase in foreign currency transaction losses. Provision for income taxes during the fourth quarter of 2003 was $4.5 million, compared to $24.1 million during the fourth quarter of 2002. The $19.6 million variance was due to the fourth quarter 2002 increase in provision for income taxes associated with the B&W Chapter 11 settlement. DISCONTINUED OPERATIONS In August 2003, the Company completed the sale of Menck GmbH, formerly a component of the Marine Construction Services segment. Accordingly, the Company has reported the results of operations for Menck as discontinued operations. In the fourth quarter 2003, the Company recorded a loss of $1.3 million associated with the resolution of open issues related to the sale of Menck. Hudson Products Corporation ("HPC") was sold in July 2002. Accordingly, the Company has reported the results of operations for HPC as discontinued operations during the year 2002. THE BABCOCK & WILCOX COMPANY The Company wrote off its remaining investment in B&W of $224.7 million during the second quarter of 2002 and has not consolidated B&W with McDermott's financial results since B&W's Chapter 11 bankruptcy filing in February 2000. B&W's revenues decreased $40.0 million, compared to the fourth quarter of 2002, to $356.3 million in the fourth quarter of 2003. B&W's net income for the 2003 fourth quarter was $24.1 million, an increase of $274.9 million versus the corresponding period in 2002, due to a $286.5 million expense in the fourth quarter 2002 related to an increase in B&W's expected asbestos liability. LIQUIDITY On a consolidated basis, the Company incurred negative cash flows for the fourth quarter and full-year 2003. J. Ray expects to incur negative cash flows from operations during three of four quarters in 2004, due to the cash outflow on the three spar projects, the Carina Aries project and the Belanak project, for which substantial income statement expenses have already been recorded. The Company expects negative cash flows on a consolidated basis for two of the four quarters in 2004, reflecting J. Ray's negative cash flows. Completion of these projects has and will continue to put a strain on J. Ray's current liquidity. J. Ray intends to fund its negative cash flow in 2004 with cash on hand, including cash expected to be made available when it obtains a new letter-of-credit facility, as well as through sales of non-strategic assets. In December 2003, J. Ray issued $200 million of 11 percent, senior secured notes due 2013. In addition, J. Ray is currently negotiating a $75 million secured letter-of-credit facility which is expected to be completed in the first half of 2004. Completion of this facility would enable J. Ray to replace most of the approximately $80 million of existing letters of credit which are currently cash collateralized. Also in December, BWXT completed a $135 million, three-year working capital facility with a syndicate of banks. J. Ray's ability to obtain a new letter-of-credit facility will depend on numerous factors, including market conditions, J. Ray's performance and the negotiation of acceptable terms and conditions. In addition, J. Ray's ability to use the proceeds from sales of assets to fund its working capital requirements is limited under the terms of the indenture governing its senior secured notes. If J. Ray is unable to obtain a new letter of credit facility or a sufficient amount of available proceeds from sales of non-strategic assets, J. Ray's ability to pursue additional projects, which often require letters of credit, and its liquidity will be adversely impacted. These factors continue to cause substantial doubt about J. Ray's ability to continue as a going concern. About the Company McDermott International, Inc. (S&P, CCC+ Corporate Credit Rating, Positive) is a leading worldwide energy services company. The Company's subsidiaries provide engineering, fabrication, installation, procurement, research, manufacturing, environmental systems, project management and facility management services to a variety of customers in the energy and power industries, including the U.S. Department of Energy. MEAL SOLUTIONS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Meal Solutions I, LLC aka Foodies Kitchen 720 Veterans Boulevard Metairie, Louisiana 70005 Bankruptcy Case No.: 04-11367 Type of Business: The Debtor is the first full-service meals market offering fine wines, artisan breads, the freshest produce and meats, and specialty food items. See http://www.foodieskitchen.com/ Chapter 11 Petition Date: March 3, 2004 Court: Eastern District of Louisiana (New Orleans) Judge: Thomas M. Brahney III Debtor's Counsels: Christopher T. Caplinger, Esq. Stewart F. Peck, Esq. Lugenbuhl, Wheaton, Peck, Rankin & Hubbard 601 Poydras Street, Suite 2775 New Orleans, LA 70130 Tel: 504-568-1990 Fax: 504-529-7418 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Commander's Family of Restaurants $30,000 Natco $26,912 Schneider Paper Products $22,456 Sysco $21,575 P.A. Menard $15,545 Farmer Fresh Produce $12,667 BakeMak - Cahokia Flour Company $7,230 Commander's Palace, Inc. $6,000 Barbe Dairy $5,344 Entergy $4,835 Louisiana Seafood Exchange $4,507 Rock-n-Sake $4,090 Swis Chalet $4,071 TLC Services, Inc. $3,509 New Orleans Fish House $2,699 Zapp's Potato Chips $2,509 Auto-Chlor System $2,474 Christina O'Malley $2,400 Southland Idealease $2,316 Louisiana Coca Cola Bottling $2,216 MEDMIRA: 2nd Quarter Results Conference Call Set for March 23 ------------------------------------------------------------- MedMira Inc. (TSX Venture: MIR) will host a conference call with analysts to discuss the company's second quarter financial results beginning at 11:30 a.m. Eastern Standard Time (12:30 p.m. Atlantic) on Tuesday, March 23, 2004. The call will be preceded by the release of the company's second quarter financial results, which will occur immediately after the market closes the previous day and will be available on the MedMira web site at: http://www.medmira.com/ In order to listen to the conference call, please either dial 800-814-4857 for toll-free anywhere in Canada or the USA, or 416- 640-4127 in the Toronto area. A replay of the call will be available until 23:59 ET Tuesday, March 30, 2004 and may be accessed by dialing 877-289-8525 for toll-free anywhere in Canada or the USA, or 416-640-1917 in the Toronto area and entering the pass code: 21041278 followed by the number sign anytime after the call has been ended. MedMira -- http://www.medmira.com/-- is a commercial biotechnology company that develops, manufactures and markets qualitative, in vitro diagnostic tests for the detection of antibodies to certain diseases, such as HIV, in human serum, plasma or whole blood. The United States FDA and the SFDA in the People's Republic of China have approved MedMira's Reveal(TM) and MiraWell(TM) Rapid HIV Tests, respectively. All of MedMira's diagnostic tests are based on the same flow- through technology platform, thus facilitating the development of future products. MedMira's technology provides a quick (under 3 minutes), accurate, portable, safe and cost-effective alternative to conventional laboratory testing. At October 31, 2003, the Company's balance sheet shows a total shareholders' equity deficit of about C$3 million. MERCY HOSPITAL: S&P Raises Revenue Bonds' Rating to CC from D ------------------------------------------------------------- Standard & Poor's Ratings Services raises its rating on Illinois Health Facilities Authority's $43.6 million series 1992 revenue bonds and $18.2 million series 1996 bonds, issued for Mercy Hospital and Medical Center, to 'CC' from 'D' due to Mercy making its principal payments to the trustee and bondholders on Feb. 17. Payments to bondholders included $3.5 million in principal and $29,989 in accrued interest. Mercy also made additional payments toward replenishing the debt service reserve fund, which had been partially depleted in calendar 2003. According to trustee's counsel, however, the debt service reserve fund is still only partially funded, although just shy of being completely funded. Mercy raised cash by selling two buildings that had been under contract for sale since September 2003, resulting in cash proceeds of $5.3 million. After not receiving the principal payment from Mercy in December for the January payment, the trustee used its discretionary right (according to master trustee and bond indenture documents) to not use the debt service reserve fund for principal payments on Jan. 1, 2004, and waited for the actual payment from Mercy. Interest payments were made by Mercy on time for the Jan. 1 payment to bondholders. Mercy missed quarterly debt service payments to the trustee in calendar 2003. The trustee used the debt service reserve fund to make interest payments in July, but until the recent building sales, Mercy did not replenish the debt service reserve fund. The developing outlook reflects the possibility that Mercy's rating could be raised or lowered over the next two years. Mercy's still-difficult business position and financial profile suggest another default is still possible, and this is compounded by management's failure to fully fund the debt service reserve despite available liquidity. However, if all required debt service payments are made, including full funding of the debt service reserve, and Mercy continues its recent improvement, a return to 'CCC' is possible. Standard & Poor's will monitor the rating over the next 6 to 12 months and adjust the rating and outlook accordingly. The 'CC' rating reflects Mercy's tenuous liquidity position, weak operating income, and the partially funded debt service reserve fund and recent late principal payment. Management anticipates making its upcoming quarterly debt service payments to the trustee and all remaining interest and principal payments, but did not say when it would fund the debt service reserve fund at the required level. Regarding sales discussions of Mercy that occurred in fall 2003, management believes no merger or sale is pending at this time. MILACRON INC: Secures $100MM to Repay Maturing Bonds and Bank Debt ------------------------------------------------------------------ Milacron Inc. (NYSE: MZ), a leading supplier of plastics processing equipment and supplies and industrial fluids, has reached a definitive agreement whereby Glencore Finance AG and Mizuho International plc are jointly providing Milacron with $100 million in new capital in the form of convertible securities. This new capital, together with existing cash balances, will be used to repay the company's $115 million outstanding senior U.S. notes due March 15, 2004. Milacron has also reached a separate agreement with Credit Suisse First Boston for a $140 million credit facility having a term of approximately one year to refinance existing facilities and provide additional liquidity. At close, extensions of credit under the facility in an aggregate amount of $84 million were utilized to refinance the company's existing revolving bank credit facility and its existing receivables purchase program. "We believe this infusion of capital will better position Milacron to benefit from a sustained economic recovery and will enable the company to realize its full potential as a leading global supplier of plastics-processing technologies and industrial fluids," said Ronald D. Brown, chairman, president and chief executive officer. "After careful consideration of proposed alternatives, we believe this refinancing plan represents the best solution for Milacron and our investors, creditors, employees, customers, suppliers and distributors. With a reinvigorated capital structure, we expect Milacron to be a financially stronger company with greater flexibility to refinance our EUR 115 million bonds due in April 2005." Glencore and Mizuho will initially purchase $100 million of exchangeable debt, $30 million of which will be convertible into Milacron common stock at the option of the holders without shareholder approval, in reliance on an exception to the New York Stock Exchange's shareholder approval policy available if securing such approval would seriously jeopardize the financial viability of the enterprise. Upon receipt of shareholder approval of both the authorization of additional shares of Milacron common stock and the issuance of preferred stock convertible into such common stock, the interest rate on all outstanding exchangeable debt shall be 6% per annum, applied retroactively to the date of closing. As soon thereafter as a condition relating to the refinancing of Milacron's EUR 115 million bonds due in April 2005 is satisfied or waived, all exchangeable debt and any common stock held by Mizuho and Glencore will automatically be exchanged for convertible preferred stock with a 6% cumulative dividend rate. Upon issuance of all the convertible preferred stock, Glencore and Mizuho would together own approximately between 40% and 60% of Milacron's fully diluted equity, depending on whether Milacron exercises an option to conduct a rights offering to its existing shareholders. After seven years, the convertible preferred stock would automatically be converted into common stock but may be converted prior to that time at the option of the holders. If shareholder approval is not obtained, the debt issued to Mizuho and Glencore will remain outstanding with an initial interest rate of 20%, increasing to 24% over time, and will be in default, and any common stock into which a portion of such debt had previously been converted will be exchanged for shares of the company's currently authorized, but unissued, serial preference stock with a liquidation preference equal to $2.00 per share of common stock exchanged. The new $140 million credit facility provided by Credit Suisse First Boston does not require shareholder approval and consists of a $65 million revolving facility, with a $25 million subfacility for letters of credit, and a $75 million term loan facility. The entire credit facility is secured by first priority liens on substantially all assets of Milacron and its domestic subsidiaries and includes pledges of stock of various domestic subsidiaries and certain foreign subsidiaries. Availability under the revolving facility is limited by a borrowing base calculated based upon specified percentages of eligible receivables and eligible inventory, a $10 million minimum availability covenant (resulting in aggregate availability of no more than $55 million) and other reserve requirements. Following the closing, additional availability under the revolving facility was approximately $20 million, after taking into account the minimum availability and existing reserve requirements. After giving effect to the termination of the existing revolving bank credit facility and the accounts receivable liquidity facility and repayment of the senior U.S. notes, Milacron's current cash balance is expected to be approximately $60 million. Milacron's agreements with Credit Suisse First Boston and with Glencore and Mizuho will be filed with the Securities and Exchange Commission. To seek shareholder approval authorizing additional shares of common stock of the company and the issuance of new preferred stock convertible into such common stock, Milacron will file with the SEC as soon as practicable a proxy statement, in which further details of the refinancing plan will be described. Investors and security holders of Milacron are urged to read the proxy statement when it becomes available regarding the authorization of additional shares of common stock of the company and the issuance of new preferred stock convertible into such common stock for which shareholder approval will be sought. The proxy statement will contain important information about the refinancing plan. A definitive proxy statement will be sent to the shareholders of Milacron. First incorporated in 1884, Milacron (NYSE: MZ) is a leading global supplier of plastics-processing technologies and industrial fluids. With 2003 consolidated sales of $740 million, the company employs 3,500 people and operates major manufacturing facilities in North America, Europe and Asia. * * * As reported yesterday in the Troubled Company Reporter, Standard & Poor's Ratings Services said that its 'CCC' corporate credit and its other ratings on Milacron Inc. remain on CreditWatch where they were originally placed Feb. 12, 2004, but the implications were revised to negative from developing. As Standard & Poor's has indicated previously, ratings would be lowered further to 'D', if the various mid-March maturities including the $115 million in principal amount of the company's senior notes and indebtedness under its revolving credit facility are not paid or if actions to reduce debt involve exchanges that Standard & Poor's considers a constructive default. "We believe that given the company's recent offer to bondholders and subsequent rejection by the bondholders, it now appears less likely that Milacron will be successful in meeting debt maturities without impairing creditors," said Standard & Poor's credit analyst Robert Schulz. MIRANT: PricewaterhouseCoopers' Report on the Canadian Debtors -------------------------------------------------------------- On February 13, 2004, PricewaterhouseCoopers, Inc., in its capacity as the CCAA Court-appointed Monitor for the Canadian Mirant Units, reports that based on the Canadian Debtors' application, the CCAA Court: (a) extended the stay of proceedings until March 31, 2004; (b) approved the proposed sale of certain assets; and (c) resolved various issues relating to TransCanada. Monitoring of Business and Financial Affairs The Canadian Debtors continued to provide the Monitor with access to their property and to their books, records, data and financial information to enable the Monitor to monitor and assess the Canadian Debtors' business and financial affairs. The Monitor has continued to monitor the Canadian Debtors' business and financial affairs and their compliance with the provisions of the Initial Order regarding their property and the carrying on of their business. Cash Flow Forecast According to the Monitor, the Canadian Debtors continue to trade on a conservative basis while they await the closing of the CCAA Court-approved sale transactions. Throughout this period, the Canadian Debtors' operations continue to have credit support from Mirant Corporation and they have continued to trade with their U.S. affiliate. After the closing, the Canadian Debtors advised that they would cease trading activities. Mirant Canada Energy Marketing, Ltd. Cash Flow Forecast For the period from January 1, to 31, 2004 Forecast Actual -------- ------ Opening cash balance Dec. 31, 2003 $92,478,902 $92,442,213 Trading activity 19,896 (609,684) General and administrative expenses (290,000) (387,673) ----------- ----------- Closing balance Jan. 31, 2004 $92,208,798 $91,453,855 Mirant Canada had closing cash balances of $91,500,000 equivalent at January 31, 2004 compared with its forecast of about $92,200,000 equivalent. The January 31, 2004 cash equivalent balance was represented by approximately $68,400,000 and CN$30,500,000. The Company's existing foreign exchange policy is to hold cash predominantly in U.S. Dollar deposits. However, Mirant Canada's U.S. Dollar requirements in relation to its monthly trading obligations have substantially declined and will be essentially eliminated when the sale to Tenaska Marketing of Canada closes in early March 2004. The Canadian Debtors and the Monitor are currently determining the necessity and desirability of paying dividends under the Plan in U.S. or Canadian dollars. In addition, the Canadian Debtors will be seeking input from their major stakeholders and experts in the area on whether to continue to hold U.S. Dollar deposits beyond February 2004, and if so, as to when a conversion of those deposits to Canadian dollars should be made. January 2004 Settlements In January 2004, the Canadian Debtors received $800,000 net and paid CN$1,700,000 net in respect of its contractual commitments with 14 Counterparties under the Trading Contracts who had not terminated their contracts with the Canadian Debtors. General and Administrative Disbursements The Monitor informs the CCAA Court that the Canadian Debtors have paid: (a) approximately $40,000 to various taxation authorities; and (b) approximately $286,000 in respect of Employee Obligations. Management has advised that it has submitted its recommendation for 2003 bonuses to the Canadian Debtors' U.S. affiliates for approval by the compensation committee. The current cash flow forecast includes approximately $1,000,000 of bonuses payable in March 2004. Management informs the Monitor that it will seek Monitor and CCAA Court approval prior to making any bonus payments. Intercompany Transactions As the Canadian Debtors have given an undertaking that no transfers to their U.S. affiliates will take place without the CCAA Court's approval, no transfer has occurred since the Initial Order. The Canadian Debtors continue to trade with the U.S. affiliate in the ordinary course. However, trading volumes with the U.S. affiliate have dropped significantly compared to levels prior to the Initial Order. In accordance with normal industry practices, during January 2004, the Canadian Debtors received payments from and made payments to a U.S. affiliate for transactions that occurred during December 2003. Claims Process As the CCAA Court directed, the Monitor is working with the Canadian Debtors and the U.S. affiliates and the significant non- related creditors, namely Enron Canada, Paramount Resources, Inc., and TCPL, to advance the process of determining the claim of the Canadian Debtors' U.S. affiliates. The related party claims, which were disallowed, are in excess of $1,000,000,000. The current status of the claims: Accepted in full - 22 Partial disallowance - 12 Rejected in full - 14 The Monitor received three late claims totaling $244,000. The Canadian Debtors advised that they will not oppose an application by a late claimant to have its $133,761 claim allowed in the CCAA proceedings. The Monitor agrees and will also not oppose the application. A determination of the merits of the remaining two late claims has not been made yet. Plan of Arrangement The Canadian Debtors are in the process of quantifying the total value of claims outstanding against them. This information will be used to structure voting on and participation in a Plan of Arrangement to be presented to the creditors. The Canadian Debtors have not indicated a time frame of a Plan of Arrangement to be presented. However, the Monitor expects that structuring a Plan of Arrangement will have to await the conclusion of the sales process and a determination of the claims made by the Canadian Debtors' U.S. affiliates. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- together with its direct and indirect subsidiaries, generate, sell and deliver electricity in North America, the Philippines and the Caribbean. The Company filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03- 46590). Thomas E. Lauria, Esq., at White & Case LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000) NATIONAL BENEVOLENT: Taps Pranschke & Holderle as Special Counsel ----------------------------------------------------------------- The National Benevolent Association of the Christian Church and its debtor-affiliates sought and obtained approval from the U.S. Bankruptcy Court for the Western District of Texas, San Antonio Division, to hire Pranschke & Holderle, L.C. as its special corporate counsel. The Debtors report that they've employed Pranschke & Holderle and its predecessor firm, Draheim & Pranschke, as outside general counsel for approximately 21 years. Pranschke & Holderle is a full-service law firm has experience and expertise in representing a wide variety of tax-exempt, non-profit organizations. The Debtors expect Pranschke & Holderle to: a. advise and represent the Debtors with respect to general legal matters, including, but not limited to, deferred and direct charitable giving and solicitation, federal, state and local taxation, corporate law, general business law, health care law, labor and employment law, employee benefit law, construction law, real estate and property law, real estate development law, securities law, secured and unsecured bond and HUD financing, acquisitions and divestitures, litigation oversight, commercial transactions, contracts, governmental regulation of non- profit organizations, constitutional law, environmental law, wills, trusts and probate, international law, insurance law, administrative law, and oversight of copyright and trademark registration; b. advise the Debtors with respect to the management and operation of their businesses, specifically excluding the representation of the Debtors in the prosecution of these chapter 11 cases; c. work with WG&M, the Debtors' reorganization counsel, as may be necessary from time to time; d. appear in court and before administrative bodies on the Debtors' behalf to protect the Debtors' interests; and e. provide other legal services, as requested by the Debtors. The professionals who will render services in these cases are: Professional Billing Rate ------------ ------------ Karl E. Holderle, III $241 per hour Leonard J. Pranschke $241 per hour Heidrun M. Buehner $228 per hour Ann T. Stillman $198 per hour Ravi Sundara $196 per hour Sandra B. Greenfield $182 per hour Lauren B. Homer $220 per hour Donna H. Baber $160 per hour Timothy R. Ramberger $163 per hour Christina M. Schultejans $140 per hour Headquartered in Saint Louis, Missouri, The National Benevolent Association of the Christian Church (Disciples of Christ) -- http://www.nbacares.org/-- manages more than 70 facilities financed by the Department of Housing and Urban Development (HUD) and owns and operates 18 other facilities, including 11 multi- level older adult communities, four children's facilities and three special-care facilities for people with disabilities. The Company filed for chapter 11 protection on February 16, 2004 (Bankr. W.D. Tex. Case No. 04-50948). Alfredo R. Perez, Esq., at Weil, Gotshal & Manges, LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed more than $100 million in both estimated debts and assets. NAT'L CENTURY: Gets Okay to Use Cash Collateral Through April 30 ---------------------------------------------------------------- National Century Financial Enterprises, Inc., and its debtor- affiliates sought and obtained the Court's permission to continue using their cash collateral through the earlier of the Effective Date of their Fourth Amended Joint Plan of Liquidation or April 30, 2004, in accordance with the Budget. The Court further orders that the aggregate funds transferred from the Restricted SPV Accounts during the period December 6, 2003 through and including the earlier of the Effective Date or April 30, 2004, will not exceed $20,500,000. National Century Financial Enterprises, Inc.'s Eleven-Week Projected Cash Flow report (updated February 23, 2004) for the period February 20 to April 30, 2004 is available for free at: http://bankrupt.com/misc/NCcashcollbudget_022004to043004.pdf National Century Financial Enterprises, Inc. Eleven-Week Cash Flow Forecast February 20 to April 30, 2004 Operating Cash Inflows A/R Receipts (Net) $0 Leases/Other 0 -------------- Total Operating Cash Inflows 0 Operating Cash Outflows Payroll 523,287 Legal 235,500 Sundry Services 691,500 Miscellaneous/Contingency 501,750 -------------- Total Cash Outflows from Ops. 1,952,037 Net Operating Cash Flow (1,952,037) Non-Operating In/(Out)flows Asset Sales 0 Other Non-Operating Cash Inflows 0 Restructuring Prof. Fees and Expenses Retained Debtor (5,875,882) Retained Creditor (4,718,420) Non-Retained Professionals and Other (18,462) -------------- (10,612,763) Total Non-Operating In/(Out)flows (10,612,763) TOTAL NET CASH FLOW (12,564,800) Beginning Cash Balance 4,424,516 Net Cash Flow (12,564,800) Transfers from Lockbox Funds 0 Transfers to NPF VI and NPF XII 0 Transfers from NPF VI and NPF XII 8,140,284 Total Available Net Cash Position 0 Cumulative Funding Need 8,140,284 ============== Cumulative Net Cash Flow ($21,064,570) ============== Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- is the market leader in healthcare finance focused on providing medical accounts receivable financing to middle market healthcare providers. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. D. Ohio Case No. 02-65235). Paul E. Harner, Esq., Jones, Day, Reavis & Pogue represents the Debtors in their restructuring efforts. (National Century Bankruptcy News, Issue No. 35; Bankruptcy Creditors' Service, Inc., 215/945-7000) NAT'L STEEL: UMWA Demands Partial Payment of Administrative Claim ----------------------------------------------------------------- The UMWA Combined Benefit Fund and the UMWA 1992 Benefit Plan ask the Court to allow the administrative tax expenses owed by the National Steel Debtors pursuant to the Coal Industry Health Benefit Act of 1992, and to compel the Debtors to pay the portion of the administrative claim that has become due as of January 20, 2004. Thomas J. Angell, Esq., at Jacobs, Burns, Orlove, Stanton & Hernandez, in Chicago, Illinois, explains that under the Coal Act, the Debtors are required to pay premiums to the UMWA Combined Benefit Fund and the UMWA 1992 Benefit Plan. These premiums are treated as federal taxes in bankruptcy and must be paid as administrative expenses to the extent they are incurred after the Petition Date. The obligation to pay Coal Act premiums is not discharged in bankruptcy, and premiums incurred following the completion of the bankruptcy proceeding are the reorganized Debtors' obligation. Because the Coal Act provides for joint and several liabilities among signatory operators and their related persons, all of the Coal Act Debtors and the Reorganized Debtors are jointly and severally liable for these obligations. Accordingly, the Coal Act Funds now seek immediate payment of the premiums that have come due during the administrative period, as well as an order requiring the Debtors or the National Steel Corporation Creditor Trust to continue paying premiums as they come due. Mr. Angell tells the Court that after the Petition Date, the Debtors continued to comply with their Coal Act obligations for some time. The Debtors paid premiums to the 1992 Plan and the Combined Fund, and they also continued to maintain their own retiree health plan pursuant to the Coal Act, which covered 770 beneficiaries as of January 15, 2004. The Debtors became delinquent, beginning January 2003, and ceased paying any premiums at all in September 2003. The Debtors have also ceased maintaining their Benefit Plan effective January 15, 2004 and, as a result, they are now obligated to pay additional premiums to the 1992 Plan on behalf of the beneficiaries formerly covered by that Plan. Mr. Angell notes that the Debtors' failure and refusal to pay the premiums required by the Coal Act is in direct violation of the statute and is not permitted by the Bankruptcy Code. The Debtors' recent assertions to the Coal Act Funds, that the consummation of their liquidating plan has resulted in the cessation of their Coal Act obligations, are both specious and incorrect. Mr. Angell relates that the Social Security Administration has assigned 593 Combined Fund Beneficiaries to Debtors National Steel Corporation and National Mines Corporation, and another 339 to non-debtor subsidiary Mathics Coal Company, pursuant to the Coal Act. For the Plan Year that began on October 1, 2002, the amount of the Debtors' Combined Fund per beneficiary premium obligation was $1,359,528. Of that amount, the Debtors are delinquent for $2,677, plus interest. The Debtors' delinquency to the 1992 Plan for monthly per beneficiary premiums through December 2003 is $8,093. This represents $4,708 owed by National Mines for the months of January through December for one beneficiary, and $3,835 owed by National Coal for the months of September through December for two beneficiaries. The Debtors are also delinquent to the 1992 Plan for $331,870 for the annual pre-funding premium that came due on January 15, 2004. In addition, as the result of the Debtors' termination of their individual employer health plan, 770 additional beneficiaries are being enrolled in the 1992 Plan. The amount per beneficiary premium is currently $465. Accordingly, the Debtors' monthly per beneficiary premium obligation will be $358,181. (National Steel Bankruptcy News, Issue No. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000) NET PERCEPTIONS: Stockholders to Reconvene on March 23 in Minn. --------------------------------------------------------------- Net Perceptions, Inc. (Nasdaq:NETP) announced that its special meeting of stockholders convened at the Company's headquarters this morning has been adjourned, as there were not enough shares present at the meeting to constitute a quorum for the transaction of business. The adjourned special meeting will be reconvened at 10:00 a.m. Central Standard Time on Tuesday, March 23, 2004 at the Company's headquarters located at 7700 France Avenue South, Edina, Minnesota. The original record date of January 13, 2004 will apply to the reconvened meeting. Tom Donnelly, the Company's President and Chief Financial Officer, stated "I strongly urge stockholders to return their proxy cards immediately with a vote in favor of the board-recommended plan of liquidation. We want stockholders to know that every vote counts. Because approval of the plan of liquidation requires the affirmative vote of a majority of the outstanding shares of our common stock, stockholders who do not return their proxy card or do not come to the special meeting to vote in person are effectively voting against the plan of liquidation. In the interest of resolving the Company's future in the near term, we sincerely hope that all stockholders will promptly cast their vote in favor of the plan of liquidation." The Company also said that stockholders who need additional copies of the Company's definitive proxy statement and proxy card previously sent to stockholders and filed with the Securities and Exchange Commission should contact the Company's President at (952) 842-5400. NEW CONSTRUCTION: Section 341(a) Meeting Scheduled for March 24 --------------------------------------------------------------- The United States Trustee will convene a meeting of New Construction, Inc.'s creditors at 10:00 a.m., on March 24, 2004, at 115 South Union Street, Suite 208, Alexandria, Virginia 22314. This is the first meeting of creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy cases. All creditors are invited, but not required, to attend. This Meeting of Creditors offers the one opportunity in a bankruptcy proceeding for creditors to question a responsible office of the Debtor under oath about the company's financial affairs and operations that would be of interest to the general body of creditors. Additionally, all creditors wishing to assert a claim against the Debtor's estate have until June 22, 2004, to file their proofs of claim or be forever barred from asserting that claim. Government units have until August 16, 2004, to file their proofs of claim. Proofs of claim should be filed with the Bankruptcy Clerk. Headquartered in Manassas, Virginia, New Construction, Inc., provides site development, road construction and utilities services. The Company filed for chapter 11 protection on February 17, 2004, (Bankr. E.D. Va. Case No. 04-10657). Linda Dianne Regenhardt, Esq., at Gary & Goodman PLLC represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $6,470,124 in total assets and $21,018,941 in total debts. NEXTEL COMMS: Improved Credit Profile Spurs Fitch to Up Ratings --------------------------------------------------------------- Fitch Ratings has upgraded the ratings on Nextel Communications Inc.'s senior unsecured notes to 'BB' from 'BB-', and Nextel's preferred stock rating to 'BB-' from 'B'. The rating on Nextel Finance Company's senior secured bank facility at 'BB+' remains unchanged. The Rating Outlook is Stable. The rating upgrade reflects Nextel's continued progress in improving its credit profile through its strong operating performance, which is driving greater cash flows, and on-going balance sheet reconstruction to reduce financial risk. Consequently, Nextel has materially reduced interest and preferred dividend obligations and extended maturities beyond 2010 while reducing medium-term maturity levels. The balance sheet improvements during the second half of 2003 include: -- The retirement of $3.5 billion of higher yield debt and the issuance of $2.5 billion of lower cost debt. -- The redemption of the majority (approximately $750 million) of its preferred stock obligation. -- Increased financial flexibility through the amendment of the terms to its secured credit facility and the repayment of $2.775 in term loans from the proceeds of $2.2 billion in a new term loan E and $575 million in cash. -- The issuance of over $1 billion in equity including $500 million from its direct stock repurchase program. Moreover, operational trends remain positive despite greater competitive threats from wireless number portability and push-to- talk offerings. Nextel strengthened credit protection measures in 2003 to 2.4 times Debt to EBITDA, which surpassed Fitch's revised expectations of 2.9x or less. Free cash flow improved to approximately $1.3 billion for 2003 compared to Fitch's expectations of at least $700 million. Expectations for 2004 are encouraging, with Nextel management providing guidance of at least $1.6 billion in free cash flow. This performance is being driven by expected net additions in excess of 1.8 million and relatively stable ARPU due to the increased usage of wireless data services and nationwide direct connect mitigating pressure on voice pricing. With approximately $2.2 billion of additional debt becoming callable in 2004, Fitch expects Nextel to pursue further improvements to its capital structure by utilizing its excess cash, free cash flow and availability under its shelf registration. Nextel has $2 billion available on its $5 billion shelf registration including $1 billion designated for the direct stock purchase program. Despite Nextel's aggressive de-leveraging efforts, liquidity remains solid with $2 billion in cash and over $1 billion availability through its unused revolver at the end of 2003. Significant uncertainty and event risk surrounds potential outcomes associated with the Federal Communications Commission's review of the Consensus plan proposal. Fitch believes that given the healthy growth prospects underpinning free cash flow expectations and debt reduction plans in 2004, Nextel has significant flexibility within its current rating to offset event risk associated with the Consensus Plan proposal even if the FCC requires Nextel to increase its funding commitment in exchange for PCS spectrum. Clearly, the allocation of 10 MHz of PCS spectrum and contiguous spectrum at 800 MHz benefits the company and offers additional strategic alternatives for Nextel's long-term technology needs. Upon the FCC reaching a final resolution, Fitch will evaluate the decision to determine if any future positive rating actions are warranted. Nextel has other options if a positive resolution is not reached with the FCC. Nextel has committed to spend approximately $200 million on acquiring a significant amount of spectrum at 2.1 GHz and 2.5 GHz covering 60 of the top 100 markets and could potentially deploy a wireless broadband data network utilizing this spectrum. However, it is worth noting that no other wireless operator has deployed a nationwide commercial network utilizing this spectrum, and the propagation characteristics of the MMDS spectrum would require significantly more cell sites to provide an equivalent level of coverage compared to a deployment in the 800 MHz spectrum band. The notching between the unsecured and secured ratings was compressed to one notch to reflect the rapidly improving credit profile of Nextel. In addition, the notching between the unsecured and preferred stock rating was also compressed to one notch given the improving credit profile and the significant reduction in total preferred stock thereby improving recovery prospects for the preferred stockholders. NORTHWESTERN CORPORATION: Files Reorganization Plan in Delaware --------------------------------------------------------------- NorthWestern Corporation (OTC Pink Sheets: NTHWQ) has filed a Plan of Reorganization and Disclosure Statement with the U.S. Bankruptcy Court for the District of Delaware. Under the proposed Plan, which is subject to creditor approval and confirmation by the Bankruptcy Court, NorthWestern's financial reorganization will be achieved through a debt-for-equity swap. NorthWestern's existing common stock will be cancelled, and no distribution will be available for current shareholders. The terms of the Plan include: -- Holders of senior unsecured notes of the Company and trade vendor claims in excess of $100,000 would receive, pro rata, 98 percent of newly issued common stock. -- Holders of secured bonds, including the Company's First Mortgage, Pollution Control and Gas Transition Bonds, will not be impaired and will be reinstated. -- Prepetition claims of trade vendors with claims of $100,000 or less will be paid in full. -- Holders of the Company's five series of Junior Subordinated Deferrable Interest Debentures (Trust Preferred Securities and QUIPs) would receive, pro rata, 2 percent of newly issued stock. -- Appointment of seven new members of the Board of Directors of the reorganized company by the Creditors Committee to include six independent directors and the Company's Chief Executive Officer. The Company said that its newly issued common stock will be listed on either the New York Stock Exchange or NASDAQ. The Plan anticipates that the reorganized company's new Board of Directors will consider paying a dividend on the new common stock, although there can be no assurance of when the first dividend will be paid. Upon emergence, the Plan contemplates that NorthWestern will have an enterprise value of approximately $1.5 billion. The Company's debt will total approximately $800 million, assuming an additional paydown of approximately $100 million of secured debt upon emergence. This represents a decrease of approximately $1.4 billion or 64 percent, from approximately $2.2 billion in Company debt as of Dec. 31, 2003. The Plan contemplates that the Company's equity position will be approximately $710 million at emergence, and the Company will have an expected debt-to-total capitalization ratio of 53 percent. Gary Drook, President and Chief Executive Officer, said, "The Plan we have filed is the result of a great deal of hard work with a number of our major creditor constituents and other interested parties and marks a significant milestone in our reorganization process. While the filing of the Plan is a major step forward, our intention is to continue our discussions with our Creditors Committee and other major creditor constituents and interested parties in the next several weeks in the hope that we can present a consensual plan to the Court. "Since our Chapter 11 reorganization filing six months ago, we've made a tremendous amount of progress in restoring stability to NorthWestern. We have divested most of our nonutility businesses and are working to divest the remainder, and we have resolved a number of other outstanding issues. None of the costs of the bankruptcy proceeding will be borne by our customers, and we will not be seeking to raise our utility rates as part of our reorganization plan," Drook said. "Under the Plan that we have submitted to the Court, upon emergence, NorthWestern will be a stable utility with a strong balance sheet and quality assets. We have initiated discussions with the rating agencies regarding our Plan and the Company's post-reorganization financial position with the goal of regaining an investment-grade rating. We will continue to be focused on reducing our debt and making the necessary investments in our utility operations to help ensure that we can build on what we will have accomplished during our reorganization." Utility Operations NorthWestern's Plan does not contemplate seeking increases in rates for its electric and natural gas customers in Montana, South Dakota or Nebraska. Costs associated with purchasing electricity and natural gas for NorthWestern's customers fluctuate based on market conditions and are a direct pass through to customers. The Company will increase capital spending in 2004 to approximately $77 million, and is targeting an additional $287 million in capital investments from 2005 to 2008 to further enhance its transmission and distribution system. Additionally, the Company said that it is in the process of contracting with an independent, third-party engineering firm to review system integrity and reliability. Mike Hanson, Chief Operating Officer, said, "We have stated all along that NorthWestern's ability to operate its utility business would not be adversely affected by the Chapter 11 reorganization. Our studies indicate that our utility customers believe we are meeting their daily needs, and our system reliability has been maintained and remains significantly better than industry averages. We're proud that our employees have continued to deliver quality service to our customers despite adversities." Milltown Dam Settlement NorthWestern, the United States and the State of Montana have reached an understanding on the economic and certain other terms of an agreement in principle that would resolve claims regarding the Milltown Reservoir Superfund site near Missoula, Mont. The parties are working to incorporate these understandings into an overall settlement that can be presented to the Bankruptcy Court. Previously, NorthWestern and Atlantic Richfield Company executed a settlement agreement which caps NorthWestern's potential liability for remediation of the Milltown site at no more than $10 million. NorthWestern is currently seeking approval of this settlement agreement from the Bankruptcy Court. Employee Issues NorthWestern said that employee wages, welfare benefits and qualified pension plans will not change under the Plan. Additionally, the Company said that it will be making approximately $86 million in contributions to its qualified pension plans over the next five years. The Company has approximately 1,270 full-time employees in Montana, South Dakota and Nebraska. Likewise, the Plan will not change welfare and qualified pension benefits for its approximately 1,000 retirees. Securities Litigation Settlements NorthWestern has entered into a tentative settlement agreement with parties involved in certain pending class actions and derivative lawsuits involving the Company, its subsidiaries and certain present and former officers and directors. Under the terms of the proposed settlement, all claims against the Company, its subsidiaries and other parties would be dismissed without admission of liability or wrongdoing. The Company will establish a settlement fund for class members in the amount of $41 million of which approximately $37 million will be contributed by the Company's insurance carriers and $4 million would be contributed from other persons or parties. In addition, if the Company's nonoperating subsidiary, Netexit, Inc., formerly Expanets, Inc., determines to utilize a bankruptcy proceeding to wind-up its affairs, the class action plaintiffs would receive a liquidated securities claim in such proceeding of $20 million. The fees and expenses of class counsel and administration costs will be paid from the settlement fund. The settlement is subject to approval by the Bankruptcy Court and by the U.S. District Court for the District of South Dakota, where the consolidated class actions are pending. Assuming receipt of necessary judicial approvals, a notice containing a more complete description of the proposed settlement and the steps class members must take in order to share in the proposed settlement will be mailed to class members. Disclosure Statement and Solicitation The Company said it expects the Bankruptcy Court to hold a hearing to approve the Disclosure Statement for the Plan of Reorganization on May 17, 2004. Upon approval of the Disclosure Statement, the Company will commence a solicitation of votes of creditors to approve the Plan. "We are focused on successfully completing reorganization and emerging as a financially strong and publicly traded company in the fourth quarter of 2004," said Drook. "If we are successful, we will have completed the reorganization process in approximately one year, which is substantially faster than other recent or pending regulated utility bankruptcy proceedings." About NorthWestern NorthWestern Corporation is one of the largest providers of electricity and natural gas in the Upper Midwest and Northwest, serving approximately 608,000 customers in Montana, South Dakota and Nebraska. NRG ENERGY: Moves to Sell Nelson Assets & Proposes Sale Protocol ---------------------------------------------------------------- Debtors LSP-Nelson Energy, LLC and NRG Nelson Turbines LLC own certain assets, which are related to the partially constructed 1,180-MW combined cycle Power Project located in Illinois. Robbin L. Itkins, Esq., at Kirkland & Ellis, in New York, reports that the Nelson Entities have no equity in the Nelson Assets. The Nelson Project is not complete and therefore is not operating. The Nelson Assets have significant carrying costs and the completion of the Nelson Project is not a viable option for the Debtors. Accordingly, the Debtors seek the Court's permission to sell the Nelson Assets by sales, which Thomassen Amcot International, LLC, on the Debtors' behalf, will negotiate subject to certain procedures. With Credit Suisse First Boston's consent, the Debtors propose to sell each of the Nelson Assets for the highest and best offer received taking into consideration the exigencies and circumstances. CSFB is the agent of the Nelson Entities' Prepetition Credit Agreement. The Debtors and Thomassen propose to follow these procedures with respect to the pending sales: A. The Debtors will notify interested parties of the filing of their request: * Any known affected creditor asserting a lien on any Nelson Asset subject to Sale; * The United States Trustee; * The Agent's counsel; and * The Committee's counsel. B. The Debtors propose to sell each of the Nelson Assets for no less than the minimum prices: Individual Asset Quantity Description Minimum (per asset) -------- ----------- ------------------- 1 GE Frame 7FA GTG set $15,000,000 4 GE D-11 STG set 6,500,000 each 4 Foster Wheeler HRSG 3,000,000 each ------------------- TOTAL ASSET MINIMUM $53,000,000 =================== C. If the Debtors determine that they are unable to sell one of the Nelson Assets for an amount equal to or greater than the Individual Asset Minimum, the Debtors will give additional notice. The notice will set forth the Nelson Asset to be sold and the price at which the Debtors propose to sell the asset. If none of the Interested Notice Parties objects within 7 days of receipt of the notice, the Debtors may consummate the Sale of the Nelson Asset. If an objection is received within that period that cannot be resolved, the Nelson Asset will not be sold except upon further order of the Court after notice and a hearing. D. The Debtors propose to send notice to all creditors in these cases. The notice will set forth a list of the Nelson Assets and will provide information regarding the procedures to be used to sell the assets. The Notice, together with a copy of the Sale Approval Order, will be served on the Notice Parties: (a) Governmental Entities: * the Office of the United States Trustee, * the Federal Energy Regulatory Commission, * the Internal Revenue Service, * the United States Environmental Protection Agency, * any applicable Illinois environmental agencies, * the Securities and Exchange Commission, and * all relevant federal, state and local taxing authorities. (b) The Debtors' significant creditors: * CSFB's counsel, * All other persons who are known by the Debtors to have liens on or are asserting a security interest in the Nelson Assets, * All financial institutions that have provided loans to the Debtors, * Holders of the 20 largest unsecured claims against the Debtors, and * the Committee's counsel. (c) All known parties that have expressed an interest to the Debtors in the last 12 months in acquiring the Nelson Assets; and (d) Any entity that has filed a notice of appearance and demand for service of papers in this bankruptcy case pursuant to Rule 2002 of the Federal Rules of Bankruptcy Procedure as of the date of service of the Notice in the NRG Debtors' cases and Nelson Entities' cases. Mr. Itkins points out that the fairness and reasonableness of the consideration to be received by the Debtors will ultimately be demonstrated by a "market check" through an auction process. The Sale to the highest bidders for each of the Nelson Assets is intended to result in proceeds of at least $53,000,000. (NRG Energy Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000) ONEIDA: Sr. Lenders Agree to Postpone $3.9M Payment Until Mar 31 ---------------------------------------------------------------- Oneida Ltd. (NYSE:OCQ) has obtained further waiver extensions through March 31, 2004 from its lenders in regard to the company's financial covenants and in respect to certain payments that are due. Previously announced waivers were effective through March 15, 2004. Oneida's bank lenders agreed to further postpone, until March 31, 2004, reductions of $5 million, $10 million and $20 million in the company's credit availability that originally were scheduled to take effect on November 3, 2003, January 30, 2004 and February 7, 2004, respectively, under the company's revolving credit agreement. Morgan, Lewis & Bockius LLP and Alvarez & Marsal are providing professional advice to the bank lending consortium, comprised of: * JPMorgan Chase Bank * Banc of America Strategic Solutions, Inc. * Fleet National Bank * HSBC Bank USA * Manufacturers and Traders Trust Company * The Bank of Nova Scotia * Citibank, N.A. and * Banca Nazionale del Lavoro S.p.A. Oneida's senior note holders also agreed to further defer until March 31, 2004 a $3.9 million payment from the company that was originally due on October 31, 2003. As was indicated in the previous waiver announcements, Oneida continues to work with its lenders to make appropriate modifications to its credit facilities, and continues to provide lenders with updated financial information regarding the company's operations and restructuring plans. The company expects there will be further deferrals of the above credit availability reductions and principal payment until such modifications have been agreed upon. Oneida Ltd. is a leading source of flatware, dinnerware, crystal, glassware and metal serveware for both the consumer and foodservice industries worldwide. ONEIDA: Sells Buffalo China Plant to Niagara Ceramics for $5.5MM ---------------------------------------------------------------- Oneida Ltd. (NYSE:OCQ) has completed its sale of certain assets of its Buffalo China dinnerware factory in Buffalo, N.Y., to Niagara Ceramics Corporation of Buffalo for $5.5 million in cash. Oneida previously announced on January 20, 2004 an agreement to sell the assets to BC Acquisition Company LLC, which has since assigned its interests to Niagara Ceramics Corporation, an entity comprised of the same principal leadership as BC Acquisition Company, LLC. The sale includes the factory buildings and associated equipment, materials and supplies. The Buffalo China name and all other active Buffalo China trademarks and logos will remain the property of Oneida. The sale does not include the Buffalo China warehouse in Buffalo, N.Y., which Oneida will continue to operate for the foreseeable future. As was previously announced, the buyers will operate the Buffalo factory as an independent supplier. Niagara Ceramics is headed by Robert L. Lupica, who previously was Oneida's Senior Vice President and General Manager for Buffalo Operations. Oneida had announced on October 31, 2003 that it decided to close the Buffalo factory, along with four other factory sites, because of factors involving manufacturing costs. The Buffalo site has remained in operation through the completion of the sale. The other four locations that were closed included a dinnerware factory in Juarez, Mexico; flatware factory in Toluca, Mexico; holloware factory in Shanghai, China; holloware factory in Vercelli, Italy. Those facilities' assets also are in the process of being sold. "With the completion of the Buffalo factory sale, we have finalized a key element in our restructuring," said Peter J. Kallet, Oneida Chairman and Chief Executive Officer. "We wish all the best to Niagara Ceramics in their operations, and we look forward to working with them as one of our key suppliers to Oneida Foodservice." Mr. Lupica of Niagara Ceramics said, "We would like to express our thanks to local and state government leaders whose assistance helped make this transaction possible. We are focused on enabling the factory to continue as an important presence in Buffalo, and on building a wide-ranging dinnerware business." Oneida Ltd. is a leading source of flatware, dinnerware, crystal, glassware and metal serveware for both the consumer and foodservice industries worldwide. OWENS CORNING: Committee Turns to Andrew Churg for Asbestos Advice ------------------------------------------------------------------ On January 13, 2004, the Official Committee of Unsecured Creditors appointed in the Chapter 11 cases of Owens Corning and its debtor-affiliates selected Dr. Andrew M. Churg to provide them with asbestos medical consulting services during the pendency of these Chapter 11 cases. The Commercial Committee selected Dr. Churg as an asbestos medical consultant because of his extensive and diverse experience, knowledge and reputation in the field of pathology, especially with regard to asbestos-related illness, and because the Commercial Committee believes that Dr. Churg is well-qualified to provide the asbestos medical consulting services and expertise that are required by the Commercial Committee in these Chapter 11 cases. Dr. Churg's experience includes extensive research of lung-related diseases and mesothelioma. Dr. Churg has written numerous medical journal articles and books regarding the pathology of asbestos related disease. The Commercial Committee believes that Dr. Churg's services are both necessary and appropriate and will assist them with evaluating and responding to the plan of reorganization, including formulating and developing an estimate of future asbestos-related injury claims and the appropriate medical standards for evaluating the claims. Accordingly, the Commercial Committee seeks the Court's permission to retain Dr. Churg as an asbestos medical consultant, nunc pro tunc to January 13, 2004, to provide expert services regarding exposure to, identification of, and treatment for asbestos-related injuries. As consultant, Dr. Churg will be: (1) providing advice with respect to the pathology of asbestos-related illness; (2) assisting in the development of medical standards to be used in claims procedures in any future trust; (3) assisting the Commercial Committee's counsel in preparing for expert depositions; (4) testifying on behalf of the Commercial Committee, if necessary; and (5) performing any other necessary services as the Commercial Committee or the Commercial Committee's counsel may request from time to time with respect to any asbestos- related issue. Dr. Churg is willing to coordinate with the Commercial Committee's other advisors and counsel, as appropriate, to avoid duplication of effort. According to Gregory T. Donilon, Esq., at Morris, Nichols, Arsht & Tunnel, in Wilmington, Delaware, Dr. Churg will be compensated on an hourly or daily basis for the services rendered. The current hourly rate to be paid is $400 for work performed in Vancouver, British Columbia, where Dr. Churg resides. For any work conducted outside of Vancouver, Dr. Churg will be paid $4,000 daily. In addition, Dr. Churg will be paid a $1,200 non- refundable retainer. Hourly and daily rates do not include out-of-pocket expenses like travel, long distance calls, messenger service, express mail, bulk mailing, photocopies, or entertainment. Any expenses are billed at cost in addition to the hourly and daily rates. This compensation arrangement is consistent with and typical of the arrangements entered into by Dr. Churg regarding the provision of similar services for clients like the Commercial Committee. The Commercial Committee further asks Judge Fitzgerald not to subject Dr. Churg's compensation to the 20% holdback adopted by the Delaware Bankruptcy Court. Dr. Churg's usual and customary practice is to be paid in advance and on retainer, and he only makes his services available on that basis. The Commercial Committee makes this request in light of Dr. Churg's pre-eminence in the field of pathology and the benefit that will inure to the creditors, the Debtors and the Debtors' estates as a result of his services. Dr. Churg assures the Court that: (1) he is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code and as required by Section 328 of the Bankruptcy Code and holds no interest adverse to the Debtors and their estate for the matter for which he is to be employed; and (2) he has no connection to the Debtors, their creditors or their related parties. Dr. Churg will conduct an ongoing review of his files to ensure that no conflicts or other disqualifying circumstances exist or arise. If any new facts or relationships are discovered, Dr. Churg will disclose it to the Court. Headquartered in Toledo, Ohio, Owens Corning -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. The Company filed for chapter 11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837). Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom represents the Debtors in their restructuring efforts. On Jun 30, 2001, the Debtors listed $6,875,000,000 in assets and $8,281,000,000 in debts. (Owens Corning Bankruptcy News, Issue No. 69; Bankruptcy Creditors' Service, Inc., 215/945-7000) PACIFIC GAS: Plans to Offer $6.7 Billion in First Mortgage Bonds ---------------------------------------------------------------- Pacific Gas and Electric Company intends to offer $6.7 billion in first mortgage bonds as part of its financing plan to emerge from Chapter 11. The proceeds of the offering, subject to satisfaction of certain conditions to implement the company's confirmed plan of reorganization, will be used to pay allowed creditor claims as the company emerges from Chapter 11. The offering will be completed under a shelf registration statement previously filed with the Securities and Exchange Commission. The $6.7 billion in first mortgage bonds will be sold in multiple tranches. Lehman Brothers and UBS Investment Bank will act as joint bookrunners for this offering. A written prospectus supplement and the related prospectus may be obtained from Lehman Brothers at 745 Seventh Avenue, New York, NY 10019 or UBS Investment Bank at 677 Washington Boulevard, Stamford CT 06901. PACIFIC GAS: Responds to Moody's Investment Grade Ratings --------------------------------------------------------- Pacific Gas and Electric Company issued the following statement after Moody's Investors Service upgraded the company's credit rating to investment grade level at Baa3 and assigned a prospective investment grade level of Baa2 to the company's senior secured debt that would be issued as part of the Chapter 11 financing plan. Moody's prospective rating would become effective upon closing of the company's senior secured debt financing: "Moody's announcement is another positive development in PG&E's effort to complete the necessary exit financing to implement the plan of reorganization." Moody's also upgraded the company's preferred stock to Ba2 from B1 and assigned a Baa2 rating to the company's $850 million secured bank revolving credit facility that has also been arranged as part of the company's exit financing plan. The rating agency stated that the rating outlook for the company is stable. PARMALAT: U.S. Units Obtain Interim Nod for GECC-Backed Financing ----------------------------------------------------------------- According to Stephen B. Selbst, Esq., at McDermott, Will & Emery, in New York, the U.S. Parmalat Debtors' liquidity crisis has left them with virtually no available cash to fund their ongoing operations pending a possible sale of their business. The U.S. Debtors urgently need new credit to purchase raw materials and inventory, pay their employees, maintain their manufacturing and distribution systems, and otherwise continue their businesses and operations. Without the immediate availability of new credit, the Debtors' operations would be severely disrupted and they would be forced to cease or sharply curtail operations of some or all of their businesses, which in turn would limit or eliminate their ability to generate operating revenue. Liquidity Crisis On the Petition Date, the U.S. Debtors have outstanding obligations under prepetition credit arrangements with Citibank, N.A., General Electric Capital Corporation and other banks: -- Citibank Financing Debtors Farmland Dairies, LLC and Milk Products of Alabama, LLC, as sellers and initial servicers, are parties to the Parmalat Receivables Purchase Agreement dated November 2, 2000, with Eureka Securitisation Plc, as purchaser, and Citibank, London Branch, as agent. Under the Purchase Agreement, Farmland and Milk Products sell trade receivable interests to Eureka thereby generating immediate liquidity. On December 11, 2003, Eureka sold and assigned to Citibank all of its rights and interest in, and under, the Receivable Interests and the Purchase Agreement. On December 26, 2003, the Debtors received notice from Citibank that a default may have occurred under the Purchase Agreement. The Purchase Agreement provides for certain purchase price and related formulas based on a number of factors, including, without limitation, purchase eligibility standards. From time to time as a result of the formulas, Citibank may have overpaid for Receivable Interests purchased from Farmland and Milk Products. As of the Petition Date: (i) the aggregate Capital in respect of the Receivable Interests purchased from Farmland and Milk Products is $48,990,000; (ii) the gross amount of receivables of Farmland and Milk Products, which Citibank may collect and apply against the outstanding aggregate Capital, is $53,000,000; and (iii) the aggregate Purchase Price Overpayment is $2,900,000. -- GE Capital Financing Farmland is a party to an April 30, 2003 Master Lease Financing Agreement with GE Capital Public Finance, Inc., for itself and as agent for certain participants. GE Public Finance purchases from and leases to Farmland most of the equipment owned by Farmland located at its Wallington, New Jersey, Brooklyn, New York, and Grand Rapids, Michigan facilities -- the Prepetition Collateral -- for $100,000,000. GE Public Finance later sold participations in its rights under the Prepetition Master Lease to other financial institutions and assigned to GE Capital the role of Agent for the Prepetition Lessors. On December 16, 2003 and December 30, 2003, Farmland received notices of default from GE Capital in connection with the Prepetition Master Lease. As of the Petition Date, Farmland missed a $3,200,000 lease payment on February 1, 2004. The outstanding payment balance under the Prepetition Master Lease is $95,000,000. The Debtors were also liable to certain fees and expenses incurred in connection with the Prepetition Master Lease. To secure their Prepetition Indebtedness, the Debtors granted GE Capital and the Prepetition Lessors, valid, duly perfected, first priority liens upon and security interests in the Equipment and its proceeds. -- Other Financing Parmalat USA has outstanding unsecured obligations to three banks under separate notes: (i) $5,000,000 due on demand to Banca Di Roma; (ii) $5,000,000 due on demand to Intesa BCI; and (iii) $10,000,000 due on demand to Comerica Bank. Parmalat SpA guaranteed Parmalat USA's obligations to Intesa BCI and Comerica. Parmalat USA is also party to a $7,000,000 credit arrangement with Citibank, and a $5,000,000 credit arrangement with UniCredito Italiano. In December 2003, however, following demands by Citibank and UniCredito Italiano pursuant to the terms of the relevant financing documents, Parmalat USA repaid all of the $2,500,000 due thereunder. Citibank and UniCredito Italiano thereafter refused to advance further credit under their credit arrangements. Farmland and Milk Products also owe other creditors, consisting primarily of equipment and real property lessors, milk producers, vendors of packaging materials, customers owed rebates, and brokers owed commissions. Except for Citibank's interests in the Receivable Interests, and the Prepetition Lessors' interest in the Prepetition Collateral under the Prepetition Master Lease, the Debtors' assets are unencumbered. On December 19, 2003, Westchester Fire Insurance Company demanded cash collateralization of bonds or a standby letter of credit backstop. The bonding program with Westchester included surety bonds aggregating close to $9,300,000 issued by Westchester to secure the Debtors' payment obligations to their raw milk suppliers. As the Milk Bonds or certain other forms of security are a licensing requirement for dairy operations in New York, New Jersey, Pennsylvania, and Michigan, the termination of the Milk Bonds could have had potentially catastrophic consequences for the Debtors. Following extensive negotiations, Westchester agreed to reissue the bonds at that time, and the Debtors agreed to provide a $1,000,000 cash collateral to secure their reimbursement obligations to Westchester. In mid-January 2004, the Debtors defaulted on several large payments to milk suppliers. On January 21 and 27, 2004, the Debtors received $5,000,000 and $3,600,000 in loans from Parmalat SpA as a temporary measure to address their most immediate and critical funding needs. Although the Parent Loans provided a measure of relief, they were insufficient to enable the Debtors to meet ongoing cash requirements and ensure the continuity of their supply of raw milk. $35,000,000 GE Capital Commitment Mr. Selbst relates that the Debtors were unable to procure financing in the form of unsecured credit allowable under Section 503(b)(1) of the Bankruptcy Code, as an administrative expense under Section 364(a) or (b), or in exchange for the grant of an administrative expense priority pursuant to Section 364(c)(1) without the grant of liens on assets. Accordingly, the Debtors, their attorneys and financial advisors, sought proposals for postpetition financing from GE Capital, as well as a number of outside institutions. Because they have been unable to procure the necessary financing from any other source, the Debtors have determined to accept a financing proposal put forward by GE Capital. The Debtors believe that the GE Capital financing proposal addresses their working capital and liquidity needs. Pursuant to a Credit Agreement dated February 24, 2004, among Farmland, as Borrower, Parmalat USA and Milk Products as Guarantors, GE Capital, as Postpetition Agent, and a consortium of postpetition lenders, the Debtors will obtain cash advances and other extensions of credit in an aggregate principal amount of up to $35,000,000 on a revolving credit basis. The DIP Loan Facility will operate in two stages: (1) Under an interim facility, the initial loans and advances will be limited to $17,500,000; and (2) Upon final Court approval of the Facility, all of the Postpetition Loans will become available for the Debtors' use. "The availability of post-petition financing will provide more than just the necessary cash for the Debtors to operate their businesses pending the sale. Equally important is the sense of confidence that the financing will instill in the suppliers, customers, and employees. The failure of the Debtors' suppliers to extend credit and services to the Debtors at this time, and the loss of customer patronage, could have a profound negative impact on the Debtors' ability to reorganize or preserve value pending a sale of the businesses," Mr. Selbst tells the Court. By this motion, the Debtors ask the Court to approve the DIP Loan Facility. $2,000,000 Carve-Out The DIP Loan Facility includes at least a $2,000,000 commitment available only under certain circumstances to fund the payment of the Permitted Fee Expenses following an Event of Default. The Interim Facility also includes a commitment to pay Permitted Fee Expenses. Borrowings under the DIP Loan Facility are subject to a weekly budget established by the Debtors. Use of Proceeds The Debtors will use the DIP proceeds to: (a) fund ongoing working capital and general corporate needs during their Chapter 11 cases; (b) pay the fees, costs, expenses, and disbursements of professionals retained by the Debtors and any statutory committees appointed in the Chapter 11 cases; (c) pay the costs and expenses of members of the Committees as approved by the Court, and other bankruptcy-related costs as allowed by the Court; and (d) pay the fees and expenses, including, without limitation, reasonable attorneys' fees and expenses, owed to the DIP Lenders under the DIP Loan Facility and the other loan documents. DIP Liens To secure their obligations under the DIP Loan Facility, the Debtors will grant the DIP Lenders security interests in, and liens on, all of their assets, including, without limitation, land, vehicles, and intangibles owned by Farmland and Milk Products, and Parmalat USA's equity interest in Farmland. Prepetition Lenders Consent The Prepetition Lenders have agreed that the payment of the Debtors' obligations to the Prepetition Lessors under the Prepetition Master Lease will be subordinate and subject to the prior payment of the Financing Obligations. Moreover, the Prepetition Lessors have consented to the deferral and accrual, rather than the payment in cash, of all sums due pursuant to the Prepetition Master Lease. The Debtors have also agreed to grant the Prepetition Lessors a junior lien in certain of the Collateral to secure any diminution in value as a result of the Subordination Arrangements, plus, junior liens -- not limited to diminution in value -- on certain parcels of real property owned by the Debtors located in Wallington, New Jersey, Brooklyn, New York, and Grand Rapids, Michigan. Citibank Consents Too Citibank has agreed, among other things, to continue to provide funds to the Debtors under the Receivables Purchase Agreement. Citibank will be granted a first priority security interest -- shared with the Postpetition Lenders -- in the Postpetition Collateral, to secure the Debtors' obligations to Citibank with respect to any Purchase Price Overpayments but only to the extent of the lesser of: * $3,000,000; and * the portion of the aggregate amount of the Purchase Price Overpayment that exceeds $1,500,000. Sale of Substantially All Assets The DIP Loan Facility obligates the Debtors to file a request with the Court seeking approval of the sale of substantially all of their assets. The Debtors will also seek Court approval of certain procedures for competitive bidding. The Debtors are obligated to proceed with and accomplish the Sale pursuant to the Procedures. $1,000,000 DIP Fees The Debtors agree to pay to GE Capital a non-refundable arrangement fee of $300,000, and another non-refundable facility fee of $700,000 for the ratable benefit of DIP Lenders. The Fees will be fully earned as of the Closing Date and are payable as: (a) Closing Date: On the Closing Date, the Debtors will pay $150,000 of the arrangement fee and $350,000 of the facility fee; and (b) Entry of the Final Order: On the date that the Final Order is entered, the Debtors will pay the remaining $150,000 of the arrangement fee and the remaining $350,000 of the facility fee. Termination of Commitment Except for the obligations with respect to Permitted Fee Expenses, all obligations and commitments of Citibank, GE Capital and DIP Lenders, and the Debtors' authorization to use Cash Collateral, will terminate at the earliest of: (i) August 23, 2004; (ii) the effective date of any reorganization plan; or (iii) entry of a Court order converting any of the Chapter 11 cases to a case under Chapter 7 of the Bankruptcy Code, or dismissing any of the Chapter 11 cases. GE Capital is not obligated to give notice of Termination Events. Events of Defaults Events of Default under the DIP Loan Facility include: (a) the filing of any challenge by the Debtors, the Committee, or any party-in-interest, to the validity, priority, or extent of any liens of the DIP Lenders or the Prepetition Lessors, or the validity and enforceability of the claims of the DIP Lenders and the Prepetition Lessors; (b) the filing of any challenge by the Debtors, the Committees, or any party-in-interest, to the true sale nature of the Receivables Agreement, including, without limitation, to the validity or enforceability of any rights or claims granted to Eureka or Citibank; (c) the failure to continue to retain AlixPartners as the Debtors' consultants on terms acceptable to the DIP Agent; (d) the failure to continue to retain Lazard Freres & Co., as the Debtors' financial advisors; and (e) the Debtors' failure to meet any of these milestones with respect to the sale of their businesses and assets: * Approval of the Debtors' interim retention of Lazard by March 10, 2004; * Execution of definitive documentation with respect to the Sale on or before March 20, 2004; * Court approval of sales procedures by April 15, 2004; * Court approval of the Sale or a comparable sale to any higher bidder by May 30, 2004; and * Closing of the Sale or a comparable sale to any higher bidder on or before June 30, 2004. Creditors May Challenge Prepetition Lenders' Liens The DIP Loan Facility provides that the creditor committee appointed in these cases or other party-in-interest may file an adversary proceeding or contested matter challenging the amount, validity, enforceability, perfection, or priority of a prepetition lender's claim and liens: -- within 75 days after the Petition Date if no Committee is appointed; or -- if a Committee is appointed, no later than 60 days after the appointment of the Committee. The adversary proceeding or contested matter may proceed to settlement or judgment solely with respect to any claim which had been asserted in the adversary proceeding or contested matter before the conclusion of the Investigation Period. This provision is an extraordinary provision because the 60-day statute of limitations for the committee begins to run on the appointment of the committee rather than on the appointment of counsel for the committee. The deadlines are not subject to extension upon a showing of good cause. Daniel R. Murray, Esq., and Michael S. Terrien, Esq., at Jenner & Block, LLP, in Chicago, Illinois, represent GE Capital. * * * The Court finds that an immediate and critical need exists for the Debtors to obtain funds to continue the operation of their business. On an interim basis, Judge Drain permits the Debtors to draw up to $17,500,000 from the DIP Loan Facility. Judge Drain also authorizes the Debtors to pay the necessary fees. Headquartered in Wallington, New Jersey, Parmalat USA Corporation -- http://www.parmalatusa.com/-- generates more than 7 billion euros in annual revenue. The Parmalat Group's 40-some brand product line includes milk, yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices and employs over 36,000 workers in 139 plants located in 31 countries on six continents. The Company filed for chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04- 11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP represent the Debtors in their restructuring efforts. On June 30, 2003, the Debtors listed EUR2,001,818,912 in assets and EUR1,061,786,417 in debts. (Parmalat Bankruptcy News, Issue No. 7; Bankruptcy Creditors' Service, Inc., 215/945-7000) PARMALAT FINANZIARIA: Investigators Recover EUR4 Million -------------------------------------------------------- Italian officials on Wednesday, March 10, confiscated about EUR4 million (US$4.9 million) belonging to a former Bank of America executive, according to Agence France-Presse. The amount, deposited with a bank not named by the news wire, belongs to Luca Sala. He reportedly acknowledged in late February having misappropriated US$27 million in bonuses in relation to Parmalat's bond issue. Mr. Sala is the head of the bank's business finance unit, supervising several bond issues for which the bank received commissions. He is currently under investigation for money laundering in the northern city of Parma. PDC MILFORD POWER: Case Summary & 3 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: PDC Milford Power, LLC 1900 West Loop South, Suite 770 Houston, Texas 77027 Bankruptcy Case No.: 04-11521 Type of Business: The Debtor is a subsidiary of Power Development Company, Inc., a developer of independent power generation facilities in the United States. Chapter 11 Petition Date: February 27, 2004 Court: District of Massachusetts (Boston) Judge: William C. Hillman Debtor's Counsel: Jay F. Theise, Esq. Rubin and Rudman LLP 50 Rowes Wharf Boston, MA 02110 Tel: 617-330-7000 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 3 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ El Paso Energy Corp. Contract claims for $3,310,055 1001 Louisiana Street capital contributions Houston, TX 77002 advanced to debtor Internal Revenue Service Unknown Mass. Depart. of Revenue Unknown PEABODY ENERGY: S&P Assigns BB- Rating to $200M Sr. Unsec. Notes ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed all its ratings on Peabody Energy Corp. and assigned its 'BB-' rating to the company's $200 million senior unsecured notes due 2016. In addition, Standard & Poor's assigned its '1' recovery rating to Peabody's $1.3 billion senior secured credit facility. This and the existing 'BB+' rating on the credit facility (which is one notch higher than the corporate credit rating) indicate a high expectation of full recovery of principal in the event of a default. Proceeds from the bond offering, in conjunction with a $266 million equity offering, will be used to finance the acquisition of three coal mines from RAG Coal International AG. The subsidiaries that guarantee the notes accounted for 97% of the company's EBITDA generated in 2003. "The ratings on St. Louis, Mo.-based Peabody Energy Corp. reflect its aggressive financial leverage, including its significant debt- like liabilities," said Standard & Poor's credit analyst Thomas Watters. "The ratings also reflect the company's leading market position; its substantial, diversified reserve base; and contractual coal sales." Peabody is North America's largest coal producer, with approximately 203 million tons of coal sold (including 26 million from its trading and brokerage operations) during the 12 months ended Dec. 31, 2003, and 9.2 billion tons of reserves. Since the implementation of the Clean Air Act's Phase II provision on Jan. 1, 2000, which requires utilities to further reduce sulfur emissions, coal utilities have been increasing consumption of low-sulfur compliance coal to generate electricity. Through a series of acquisitions, Peabody has shifted its production and reserve profile to emphasize low-sulfur coal, especially in the Southern Powder River Basin (SPRB) in Wyoming. Indeed, 78% of Peabody's sales volume and 42% of its reserves are low sulfur. Given its significant position in the low-sulfur producing SPRB, Peabody is positioned to take advantage of the expected continued, though gradual, growth in Powder River Basin coal production. Peabody prefers to contract most of its production under long-term contracts, reducing exposure to spot market volatility and ensuring some predictability in its financial performance. Indeed, approximately 90% of Peabody's estimated 190 million to 195 million tons of 2004 coal production is contracted. Standard & Poor's has a favorable near-term outlook for the coal industry, because the factors responsible for the surge in spot coal prices remain in place and likely will persist in 2004. U.S. coal production decreased 2% in 2003, largely because of a 4% decline in eastern coal production. These declines have been caused by depleted reserve bases in the Central Appalachia regions, along with geologic difficulties and difficulties in permitting brownfield and greenfield expansions; lack of surety bond issuances; environmental lawsuits; and increased regulation. These difficulties are not expected to ease in 2004 and will continue to restrain new production. PG&E NATIONAL: Wants Approval for $30-Mil. Trancanada Break-Up Fee ------------------------------------------------------------------ Martin T. Fletcher, Esq., at Whiteford, Taylor & Preston, LLP, in Baltimore, Maryland, tells the Court that, pursuant to the Stock Purchase Agreement, TransCanada will be entitled to payment of a break-up fee and reimbursement of expenses if the Purchase Agreement is terminated by: (a) TransCanada if: (i) NEG willfully breach the Purchase Agreement; (ii) the Court has not approved the Bidding Procedures and the Purchase Agreement within specified periods of time, and the orders do not remain final, non- appealable orders as originally entered on the Bankruptcy Court docket, not subject to stay. However, the Break-up Fee is only payable in this case if NEG enters into an agreement with one or more third parties relating to an alternative transaction or consummate an alternative transaction within six months after the termination. In this event, the Break-up Fee is only paid upon the consummation of the alternative transaction; (iii) NEG or the "Acquired Companies" enter into an agreement with respect to an alternative transaction or the Court enters an order approving an alternative transaction, subject to the obligations of any Back-up Bidder in accordance with the terms of the Bidding Procedures. The Break-up Fee is only paid upon the consummation of the alternative transaction; (iv) the Court confirms a reorganization plan or a liquidation plan that rescinds, avoids or is otherwise inconsistent with the Purchase Agreement or the transactions contemplated by the Purchase Agreement; or (b) TransCanada or NEG if: (i) the Closing does not occur by November 20, 2004, so long as: -- certain conditions to closing set forth in the Purchase Agreement have been satisfied; and -- NEG enter into an agreement with one or more third parties for an alternative transaction or consummate an alternative transaction within six months after the date of the termination. The Break-up Fee is only paid upon a consummation of an alternative transaction; (ii) the auction is held and TransCanada American is not the Winning Bidder or the Back-up Bidder, or TransCanada American was the Back-up Bidder but is no longer obligated to remain as the Back-up Bidder pursuant to the terms of the Bidding Procedures. In this event, the Break-up Fee is only paid upon the consummation of transaction with the Winning Bidder or Back-up Bidder, or the consummation of an alternative Transaction with a third party within nine months of the date the Back-up Bidder transaction fails; or (iii) after the conclusion of the auction and before the approval of the Purchase Agreement, if NEG elects to seek confirmation and consummation of a stand-alone reorganization plan that does not contemplate a sale of GTNC to TransCanada or the Winning Bidder. In this event, the Break-up Fee is paid at or before the termination, if terminated by NEG, or within three business days of the termination, if terminated by TransCanada American. Pursuant to the Purchase Agreement, the parties agree to a $30,000,000 Break-up Fee. The Break-Up Fee is equal to 2.5% of the $1,203,000,000 cash consideration being provided to NEG under the Purchase Agreement. The Expense Reimbursement is equal to TransCanada's actual documented reasonable fees and expenses incurred in connection with the transactions contemplated by the Purchase Agreement not to exceed $3,500,000, plus $500,000 for each 30-day period from 30th day after the Bidding Procedures is approved through the Termination Date, but in no event more than $5,000,000. By this motion, NEG seeks the Court's authority to pay the Break- up Fee and reimburse TransCanada's expenses. Headquartered in Bethesda, Maryland, PG&E National Energy Group, Inc. -- http://www.pge.com/-- develops, builds, owns and operates electric generating and natural gas pipeline facilities and provides energy trading, marketing and risk-management services. The Company filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md. Case No. 03-30459). Matthew A. Feldman, Esq., Shelley C. Chapman, Esq., and Carollynn H.G. Callari, Esq., at Willkie Farr & Gallagher represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $7,613,000,000 in assets and $9,062,000,000 in debts. (PG&E National Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) RCN CORPORATION: Retains the Blackstone Group as Financial Advisor ------------------------------------------------------------------ RCN Corporation (Nasdaq: RCNC) has retained the Blackstone Group as financial advisor in connection with its continuing negotiations, with its senior secured lenders, members of an ad hoc committee of noteholders of its senior notes and others, towards a successful financial restructuring of its balance sheet and possible capital raising opportunities. Merrill Lynch will no longer advise the company in this capacity. In addition, RCN announced that John Dubel, RCN's President and Chief Operating Officer, will lead the continuing financial restructuring negotiations. Douglas Bradbury, who was appointed in October 2003 to assist in the restructuring effort, has left the company. About RCN RCN Corporation (Nasdaq: RCNC) is the nation's first and largest facilities-based competitive provider of bundled phone, cable and high speed Internet services delivered over its own fiber-optic local network to consumers in the most densely populated markets in the U.S. RCN Business provides carriers and enterprises with high capacity bandwidth to meet a variety of communications needs. RCN provides service in the Boston, New York, Philadelphia/Lehigh Valley, Chicago, San Francisco, and Washington D.C. metropolitan markets. About Blackstone Group The Blackstone Group -- http://www.blackstone.com--, a private investment firm with offices in New York, London and Hamburg, was founded in 1985. Blackstone's Private Equity Group has raised a total of approximately $14 billion across five funds including Blackstone Capital Partners IV, the largest institutional private equity fund ever raised. Blackstone's Real Estate Group has raised five funds, representing over $6 billion in total equity, and a long track record of investing in hotels and other commercial properties. In addition to Private Equity and Real Estate, The Blackstone Group's core businesses include, Corporate Debt Investing, Marketable Alternative Asset Management, Mergers and Acquisitions Advisory, and Restructuring and Reorganization Advisory. * * * As reported in the Troubled Company Reporter's March 3, 2004 edition, RCN Corporation announced that negotiations with its senior secured lenders, members of an ad hoc committee of holders of its Senior Notes and others on a consensual financial restructuring of its balance sheet are continuing. In connection with the continuing negotiations, the Company, the Lenders and members of the Noteholders' Committee have agreed to extend expiration of their previously announced forbearance agreements until March 15, 2004. RCN remains hopeful that these negotiations will lead to agreement on a consensual financial restructuring plan in the near term, although there is no assurance this will occur. Under the forbearance agreements, the Lenders and members of the Noteholders' Committee have agreed not to declare any Events of Default, which they would be entitled but not required to do, under RCN's senior credit facilities or RCN's senior notes, respectively, as a result of RCN not making an interest payment on its 10 1/8% Senior Notes due 2010. RCN has said that it expects any financial restructuring to be implemented through a reorganization of RCN Corporation under chapter 11. RCN believes that a consensual financial restructuring pursuant to a chapter 11 reorganization would achieve the most successful financial outcome for the company and its constituents. RCN does not intend that its market operating subsidiaries be included in such a chapter 11 filing, although there is no assurance this will occur. REAL MEX RESTAURANTS: S&P Rates Proposed Sr. Secured Notes at B- ---------------------------------------------------------------- Standard & Poor's Ratings Services assigns its 'B-' rating to casual restaurant operator Real Mex Restaurant Inc.'s proposed $105 million senior secured note offering due 2010. The notes will be issued under Rule 144A with registration rights. The proceeds will be used to repay existing debt. Standard & Poor's also assigned its 'B' corporate credit rating to the company. The outlook is stable. The notes, which are secured by a second lien, are rated one notch below the corporate credit rating because of the significant priority debt ahead of the notes. "The ratings reflect Real Mex's participation in the highly competitive restaurant industry, its small size and regional concentration, weak cash flow protection measures, and a highly leveraged capital structure," said Standard & Poor's credit analyst Robert Lichtenstein. "These risks are somewhat offset by the company's established brand in California and its relatively stable operating performance." Long Beach, California-based Real Mex is a small player in the highly competitive casual dining sector of the restaurant industry. Although the company has an established presence in California, where its El Torito and Acapulco concepts are the first- and third-largest casual dining Mexican restaurant chains, the company maintains a relatively small market share among overall casual dining chains. Many of its competitors have substantially greater financial and marketing resources and continue to expand rapidly, while the company has closed some units over the past several years. Moreover, Real Mex is regionally concentrated, with about 90% of its restaurants in California. The company's strategy is to expand and selectively convert restaurants to the El Torito concept, as the El Torito restaurants have better brand recognition, higher margins, and stronger unit economics than Acapulco. Standard & Poor's believes the company will maintain its growth at a measured pace. Operating performance has been relatively stable over the past three years despite a weak economy and highly competitive restaurant environment. Same-store sales performance has been consistent with the restaurant industry, showing improvement in the second half of 2003 after a weak 2002. Pro forma for the transaction, cash flow protection measures are weak, with lease-adjusted EBITDA coverage of interest expense of about 1.5x and funds from operations to total debt approaching 15%. The company is highly leveraged, with lease-adjusted total debt to EBITDA of more than 5.5x. Ratios are highly variable due to the company's small EBITDA base of about $28 million. RENAISSANCE COSMETICS: Chapter 7 Conversion Approved ---------------------------------------------------- Judge Walrath approved Renaissance Cosmetics, Inc.'s request to convert its chapter 11 case to a chapter 7 liquidation proceeding. The Company told Judge Walrath it was hopeful that the resolution of various causes of action would result in adequate funds to pay administrative expenses in full and a small dividend to unsecured creditors. That didn't happen. Renaissance filed for chapter 11 protection on June 2, 1999 (Bankr. D. Del. Case No. 99-02136), and sold substantially all of its assets to DPC Acquisition Corp., on July 30, 1999, for $29 million. After terminating all but one employee, the Debtor sought authority to terminate 401(k) benefit plans, began the process of marshalling the remaining assets for the benefit of creditors, and litigating avoidance actions. The Debtor struck a deal with General Electric Capital Corp., its secured lender, to pursue avoidance actions for the benefit of unsecured creditors. The Debtor thought all of this would culminate in a Liquidating Chapter 11 Plan and a dividend to unsecured creditors. Because it's impossible for the Company to propose a confirmable plan, since administrative claims can't be paid in full, Judge Walrath finds that a chapter 7 conversion is appropriate under 11 U.S.C. Sec. 1112(a). The Company did not disclose the extent of its administrative insolvency in connection with the request to convert. The United States Trustee has appointed a chapter 7 trustee to oversee the estate's liquidation: Montague S. Claybrook P.O. Box 1310 Wilmington, Delaware 19899-1310 The U.S. Trustee will convene a meeting of creditors on March 24, 2004, at 3:00 p.m. in Room 2112 at 844 King Street in Wilmington, Delaware. Creditors are directed to file proofs of claim with the Bankruptcy Court by June 22, 2004. ROUTIER INC: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Routier, Inc. 5818 Johnston Street Lafayette, Louisiana 70503 Bankruptcy Case No.: 04-50374 Chapter 11 Petition Date: February 20, 2004 Court: Western District of Louisiana (Opelousas) Judge: Gerald H. Schiff Debtor's Counsel: Thomas E. St. Germain, Esq. Weinstein Law Center P.O. Box 8 Opelousas, LA 70571-0008 Tel: 337-948-4700 Estimated Assets: $0 to $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Farmers & Merchants Bank $580,000 Shannon E. Richardson $200,000 Internal Revenue Service 940 and 941 taxes $150,000 State of Louisiana sales and payroll $50,000 Lafayette Parish School sales taxes $40,000 Board Conco Food Services $28,534 Lafayette Parish Property taxes $9,741 Arrow-SYSCO $6,649 Lafayette Utilities $4,360 Alliant Food Service $4,213 G.E. Capital $3,994 Transwestern Publishing $3,507 Clark Services $2,823 Wright, Moore, Dehart, Dupuis $2,750 KRKA $2,275 LA Restaurant Assoc. $1,915 LAMM Food Service $1,816 KADN $1,776 Bano Produce Co. $1,676 Chile Pepper Magazine $1,500 ROYAL OLYMPIC: US Bankruptcy Court Dismisses Ch. 11 Proceedings --------------------------------------------------------------- Royal Olympic Cruises ("ROCL") (Nasdaq: ROCLF) announced that the U.S. Bankruptcy Court for the District of Hawaii has entered orders dismissing the Chapter 11 proceedings applicable to the owning companies of the vessels OLYMPIA EXPLORER and OLYMPIA VOYAGER, which companies are subsidiaries of ROCL. The dismissal of these proceedings was entered on consent of debtors and the creditor banks in view of the imminent sale of the vessels, the sole assets of their respective owners, at auction As announced by the company on March 10th, the OLYMPIA EXPLORER and OLYMPIA VOYAGER will be sold at judicial auction, on March 24 and March 26 respectively, under process initiated by creditor banks and pursuant to a settlement agreement between ROCL, the owners, and the banks. The judicial auction of the OLYMPIA EXPLORER is scheduled to take place on March 24 in Long Beach California, and the auction of OLYMPIA VOYAGER will be held on March 26 in Miami, Florida. SIRIUS: Extends Option to Purchase $50 Million Convertible Notes ---------------------------------------------------------------- SIRIUS Satellite Radio (Nasdaq: SIRI) has extended the exercise date of the option it granted to Morgan Stanley & Co. Incorporated to purchase up to $50 million in principal amount of its 2-1/2% Convertible Notes due 2009. The option, which was granted to Morgan Stanley & Co. Incorporated, as the initial purchaser, in connection with the company's offering of $250 million of 2-1/2% Convertible Notes due 2009 last month, will now expire on April 13, 2004 to the extent it is not exercised. Each $1,000 in principal amount of the notes will be convertible, at the option of the holder, into 226.7574 shares of SIRIUS' common stock, an effective price of $4.41 per share. SIRIUS plans to use the net proceeds for general corporate purposes. The notes were offered only to qualified institutional buyers in reliance upon Rule 144A of the Securities Act of 1933. The notes, and the common stock issuable upon conversion of the notes, have not been registered under the Securities Act, or any state securities laws, and may not be offered or sold in the United States absent registration under, or an applicable exemption from, the registration requirements of the Securities Act and applicable state securities laws. About SIRIUS SIRIUS -- http://www.SIRIUS.com-- is the only satellite radio service bringing listeners more than 100 streams of the best music and entertainment coast-to-coast. SIRIUS offers 61 music streams with no commercials, along with over 40 world-class sports, news and entertainment streams for a monthly subscription fee of only $12.95, with greater savings for upfront payments of multiple months or a year or more. SIRIUS is also the official satellite radio partner of the NFL. Stream Jockeys create and deliver uncompromised music in virtually every genre to our listeners 24 hours a day. Satellite radio products bringing SIRIUS to listeners in the car, truck, home, RV and boat are manufactured by Kenwood, Panasonic, Clarion and Audiovox, and are available at major retailers including RadioShack, Circuit City, Best Buy, Car Toys, Good Guys, Tweeter, Ultimate Electronics, Sears and Crutchfield. SIRIUS is the leading OEM satellite radio provider, with exclusive partnerships with DaimlerChrysler, Ford and BMW. Automotive brands currently offering SIRIUS radios in select new car models include BMW, MINI, Chrysler, Dodge, Jeep(R), Nissan, Infiniti, Mazda, Audi, Ford and Lincoln-Mercury. Automotive brands that have announced plans to offer SIRIUS in select models include Mercedes-Benz, Jaguar, Volvo, Volkswagen, Land Rover and Aston Martin. Genmar Holdings, the world's largest manufacturer of recreational boats, Formula Boats and Winnebago, the leading supplier of recreational vehicles and motor homes, also offer SIRIUS. Hertz currently offers SIRIUS in 29 vehicle models at 53 major locations around the country. * * * As previously reported, Standard & Poor's Ratings Services assigned its 'CCC-' rating to Sirius Satellite Radio Inc.'s new $250 million convertible notes due 2009. At the same time, Standard & Poor's affirmed its existing ratings, including its 'CCC' corporate credit rating, on the satellite radio broadcaster. The outlook is stable. The New York, New York- based firm has approximately about $450 million in debt. "The company is expected to use the proceeds for general corporate purposes, including expanding distribution and product development," according to Standard & Poor's credit analyst Steve Wilkinson. He noted, "The added liquidity is important to ratings stability given the considerable cash being consumed as Sirius works to accelerate subscriber growth." SK GLOBAL: Wants Plan-Filing Exclusivity Extended to June 16, 2004 ------------------------------------------------------------------ Scott E. Ratner, Esq., at Togut, Segal & Segal LLP, in New York, points out that SK Global America Inc. has only been operating in Chapter 11 for less than eight months. As an international trading company, the Debtor's business and financial affairs are extremely complex, with vendors and creditors located in the United States and abroad. Notwithstanding the complexities of the Chapter 11 case, the Debtor has already made significant strides toward taking steps necessary to establish the pre-conditions for a confirmable plan. Among the meaningful and tangible progress made by the Debtor since the Petition Date are: * increasing its cash on hand from $80,000,000 to more than $103,000,000 as of January 30, 2004; * obtaining consensual use of its cash collateral pursuant to the Cash Collateral Stipulations; * completing and filing on a timely basis its schedules of assets and liabilities and statement of financial affairs; * successfully negotiating a stipulation with Bank One regarding the release of more than $70,000,000 frozen by the bank pursuant to a prepetition restraining order; * obtaining Court Orders fixing various deadlines for the filing of proofs of claim against its estate, including (i) November 24, 2003 as the general bar date and (ii) January 24, 2004 as the governmental unit bar date; * commencing the claims reconciliation and resolution process and, in that connection, shortly will file its first omnibus objection to claims; * identifying and disposing of certain non-essential assets in an effort to maximize the value of its estate, including the rejection of leases for former office space located in Stanford, California, Newport, California, and Houston, Texas; and * coordinating efforts to prepare a liquidation analysis for plan confirmation and other purposes -- a preliminary draft of the liquidation analysis has been provided to the Debtor's secured creditors, Cho Hung and KEB. In addition, the Debtor has commenced and maintained an active dialogue with various parties -- including its Parent SK Networks Co. Ltd., Cho Hung, KEB and others -- aimed at achieving a consensual plan by, among other things, identifying and refining various plan parameters and concepts. However, the Debtor requires more time to develop and promulgate a plan. Although it has already made significant progress in its Chapter 11 case, Mr. Ratner explains the Debtor has not yet had a meaningful opportunity o develop and explore with its major creditors the terms of a confirmable and consensual plan. During the initial stages of its Chapter 11 case, the Debtor focused primarily on stabilizing its business operations, making the transition to debtor-in-possession status, and responding to the concerns and information requests of parties-in-interest, including the Banks, the Liquidators, the Foreign Bank Steering Committee, its customers, employees, vendors and other creditors. The Debtor has only recently been able to devote meaningful time and resources to the process of developing a plan. Moreover, until only recently, the time was not yet ripe for meaningful plan discussions to take place between the Debtor and its creditor constituents. For instance, the recent successful consummation of the Global Restructuring has resulted in a dramatic change in the make-up of the Debtor's creditor body. As a result of its acquisition of the claims of the Foreign Creditors and the Korean Creditors, SK Networks has now succeeded to ownership of a substantial majority of the unsecured claims against the Debtor. To attempt to formulate a Chapter 11 plan without SK Networks' participation would have been a wasteful exercise in futility, Mr. Ratner says. The Debtor was simply not in a position to engage in meaningful and realistic plan discussions until the Global Restructuring was consummated in late October 2003. And, due to the presence of certain factors related to the nature of the creditors and other parties involved in the desired plan process, plan discussions have proceeded at a slower than desired pace. If given more time, Mr. Ratner asserts that the Debtor can make progress with its creditors in negotiating the framework for a confirmable and consensual plan. Thus, given the facts and circumstances surrounding the Debtor's Chapter 11 case, particularly the size, complexity and early stage of the case and the progress made so far, Mr. Ratner points out that ample cause exists for the Court to grant a 90-day extension of the exclusive periods. Specifically, pursuant to Section 1121(d) of the Bankruptcy Code, the Debtor asks the Court to extend its exclusive periods: (a) to file a plan through and including June 16, 2004; and (b) to solicit acceptances of that plan through August 19, 2004. "It is still premature and unreasonable to expect the Debtor -- at this still early stage -- to be in a position to promulgate a plan, let alone a plan premised upon negotiated agreements with its significant creditor groups," Mr. Ratner remarks. (SK Global Bankruptcy News, Issue No. 13; Bankruptcy Creditors' Service, Inc., 215/945-7000) SLATER STEEL: Closes $41-Mil. Sale of Sorel Forge to A. Finkl Unit ------------------------------------------------------------------ Slater Steel Inc. (SSI) completed the sale, on a going concern basis, of substantially all the assets of Sorel Forge to a subsidiary of A. Finkl & Sons Co. for approximately $41 million. Slater once again stated that it does not expect that shareholders will receive any value from the insolvency proceedings. Located in Sorel-Tracy, Quebec, Sorel Forge is the largest integrated open-die forging plant in Canada. Sorel produces mold, tool and die steels, custom forgings and forged steel bars and is among the few facilities in the world that is capable of producing large mold blocks of up to 55,000 pounds. Sorel employs approximately 270 hourly and salaried employees. A. Finkl & Sons Co. of Chicago is a leading North American specialty steel company. With more than 100 patents to its credit, Finkl's steel formulations and steel-making technologies are worldwide standards. Finkl processes approximately 100,000 tons of steel each year, and distributes its products domestically and to more than 18 countries. The company has been in business 125 years, and has 350 employees. Slater Steel Inc. and its subsidiaries sought creditor protection under applicable Canadian and U.S. legislation on June 2, 2003 and have announced either the wind down and orderly realization or the sale of its remaining assets. In press releases, Slater has stated on six occasions -- October 7, 2003, November 20, 2003, December 19, 2003, January 7, 2004, February 23, 2004 and March 8, 2004 -- that it does not expect that shareholders will receive any value from the insolvency proceedings. Slater Steel is a mini mill producer of specialty steel products. SOLUTIA: Court Stretches Lease-Decision Time Through May 17, 2004 ----------------------------------------------------------------- Solutia, Inc., and its debtor-affiliates sought and obtained an extension of the deadline by which it must decide whether to assume, assume and assign, or reject their non-residential real property leases. The U.S. Bankruptcy Court for the Southern District of New York extends the Company's Lease Decision Period through and including May 17, 2004, pursuant to 11 U.S.C. Sec. 365(d)(4). Headquartered in St. Louis, Missouri, Solutia, Inc. -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Company filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. (Solutia Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000) SOUTHWEST RECREATIONAL: Creditors' Committee Hires Morris Manning ----------------------------------------------------------------- The Official Unsecured Creditors' Committee appointed in the Southwest Recreational Industries, Inc.'s chapter 11 proceeding seeks authority to employ Morris, Manning & Martin, LLP as its bankruptcy counsel. The Committee expects Morris Manning to: a) prepare pleadings, motions and conducting examinations incidental to the administration of this estate; b) investigate, provide analysis and appropriate action, if required, in connection with the disposition of assets; c) investigate, provide analysis and appropriate action, if required, for recovery of assets of the estate and the prosecution of claims on behalf of the estate; and d) any and all other necessary action incident to the preservation, administration and recovery of assets of the estate for the benefits of creditors in this case. The Committee submits that Morris Manning has knowledge and experience in this area, and is well qualified to represent the Committee in Southwest Recreational's case. The hourly rates for Morris Manning professionals designated to perform services in this engagement are: Professional Position Billing Rate ------------ -------- ------------ Frank W. DeBorde Partner $360 per hour David W. Cranshaw Partner $360 per hour Beth E. Rogers Associate $295 per hour Daniel P. Sinaiko Associate $250 per hour Darlene Parks Paralegal $115 per hour Headquartered in Leander, Texas, Southwest Recreational Industries, Inc. -- http://www.srisports.com/-- designs, manufactures, builds and installs stadium and arena running tracks for schools, colleges, universities, and sport centers. The company filed for chapter 11 protection on February 13, 2004 (Bankr. N.D. Ga. Case No. 04-40656). Jennifer Meir Meyerowitz, Esq., Mark I. Duedall, Esq., and Matthew W. Levin, Esq., at Alston & Bird, LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, they listed $101,919,000 in total assets and $88,052,000 in total debts. SPIEGEL GROUP: Unsecured Panel Taps Capstone as Financial Advisor ----------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the Chapter 11 cases involving The Spiegel Group and its debtor- affiliates seeks the Court's authority to retain Capstone Corporate Recovery, LLC as its financial advisors to replace FTI Consulting, Inc., nunc pro tunc to February 6, 2004. The Committee explains that the purpose of the proposed substitution is principally to permit the Committee to continue using former FTI employees who have been principally involved in the Committee's financial matters. Specifically, Jay Borow, Andrew Cowie, Norman Haslun, Christopher Kearns, and Andrea Will have recently moved to Capstone from FTI. The Committee seeks to retain Capstone as its financial advisors because of Capstone's extensive expertise and knowledge in the field of restructuring consulting, and so as to continue to utilize the services of the professionals who have been most actively involved in this matter from its inception. The Committee notes that these professionals are very familiar with the Debtors' businesses and affairs and all of the business issues that have arisen in the Debtors' Chapter 11 cases and are best able to provide the advice and financial advisory services the Committee will require during the remainder of these cases in the most efficient and cost effective manner. The Committee relates that it needs Capstone to: (a) advise and assist the Committee in its analysis and monitoring of the Debtors' historical, current and projected financial affairs, including without limitation, its business plan, schedules of assets and liabilities, statement of financial affairs, periodic operating reports, analyses of cash receipts and disbursements, analyses of cash flow forecasts, analyses of trust accounting, analyses of various asset and liability accounts, analyses of cost-reduction programs, analyses of any unusual or significant transactions between the Debtors and any other entities, and analyses of proposed restructuring transactions; (b) review the Debtors' expense structure and identify opportunities for further reductions, including store closings and arrangements for liquidation sales; (c) develop a monitoring report to enable the Committee to effectively evaluate the Debtors' performance on an ongoing basis; (d) analyze and critique actual and proposed debtor-in- possession financing arrangement; (e) analyze arrangements with trade creditors regarding postpetition credit extension, including inventory return programs and other related issues; (f) advise and assist the Committee in: -- reviewing executory contracts, including leasing arrangements and provide recommendations to assume or reject; -- identifying and reviewing preference payments, fraudulent conveyances and other causes of action; and -- reviewing the Debtors' books and records for related party and potential avoidance actions; (g) perform liquidation analyses of the Debtors and advise the Committee and its counsel; (h) assist and advise the Committee in evaluating and analyzing restructuring plans proposed by the Debtors, review and provide analysis of any plan of reorganization and disclosure statement, assist and advise the Committee in implementing a plan of reorganization, and ascertain the reasonableness of the Debtors' long-term viability and plan of reorganization; (i) analyze alternative reorganization scenarios in an effort to maximize the recovery to the Committee and develop negotiation strategies to support the Committee's position, assist the Committee and its counsel in the negotiation of any aspects of a restructuring, and advise and assist the Committee in reviewing any proposed sales or acquisitions of strategic or non-strategic assets or business units; (j) advise and assist the Committee in its: -- assessments of the Debtors' management team, including a review of any existing or proposed bonus, incentive and retention plans, including key employee retention plans; and -- review of the Debtors' existing management processes, including but not limited to organizational structure, cash management and management information and reporting systems; (k) render expert testimony and litigation support services, as requested from time to time by the Committee and its counsel, regarding the feasibility of a plan of reorganization and other matters; (l) attend Committee meetings and court hearings as may be required in the role as financial advisor to the Committee; (m) assist and advise the Committee and counsel in reviewing and evaluating court motions filed or to be filed by the Debtors or any other parties-in-interest; and (n) provide such other bankruptcy and related financial advisory services as are consistent with the Committee's role and duties. Mr. Borow assures the Court that Capstone has no connection with, and holds no interest adverse to, the Debtors, their estates, their creditors, or any party-in-interest in their Chapter 11 cases. Mr. Borow further attests that: (i) Capstone does not hold or represent any interest adverse to the Committee in the matters for which it is retained; and (ii) Capstone is a "disinterested person" as that phrase is defined in Section 101(14) of the Bankruptcy Code. Capstone will be compensated on an hourly basis and reimbursed for actual, necessary expenses incurred. Member $475 - 495 Professional Staff 200 - 450 Support Staff 125 - 175 Headquartered in Downers Grove, Illinois, Spiegel, Inc. -- http://www.spiegel.com/-- is a leading international general merchandise and specialty retailer that offers apparel, home furnishings and other merchandise through catalogs, e-commerce sites and approximately 560 retail stores. The Company filed for Chapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No. 03-11540). James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq., at Shearman & Sterling represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $1,737,474,862 in assets and 1,706,761,176 in debts. (Spiegel Bankruptcy News, Issue No. 21; Bankruptcy Creditors' Service, Inc., 215/945-7000) STELCO INC: Awaits CCAA Court Approval for $75MM DIP Financing -------------------------------------------------------------- Stelco Inc. (TSX:STE) substantially completed the documentation relating to its $75 million debtor-in-possession financing. Availability under the facility depends on satisfaction of conditions precedent of the financing and the outcome of the motion before the Ontario Superior Court of Justice with respect to the granting of the initial court order to Stelco Inc. and other applicants pursuant to the Companies' Creditors Arrangement Act. Stelco is awaiting the decision of the Ontario Superior Court of Justice following a hearing of the motion on March 5, 2004. The Corporation also announced that fourth quarter 2003 financial information will be provided in conjunction with the 2003 annual audited financial statements that Stelco Inc. expects to issue by not later than mid-May 2004. Stelco Inc. 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, refer to the company's Web site at http://www.stelco.ca/ STILLWATER MINING: Amends 2003 Fourth Quarter and Year-End Results ------------------------------------------------------------------ Stillwater Mining Company (NYSE: SWC), with the conclusion of its annual audit, announced an amendment to its fourth quarter and year ended December 31, 2003 results, which were unaudited and originally announced on February 27, 2004. As a result of the amendment, the net loss for the fourth quarter of 2003 is $300.6 million or $3.35 per share, instead of the $308.9 million, or $3.44 per share originally reported. The net loss for the year 2003 is $323.3 million or $4.77 per share, instead of the $331.5 million or $4.89 per share originally reported. The amendment resulted from audit review and analysis by management of the provision for a valuation allowance for net deferred tax assets which is recorded in the company's statement of operations. As a result of the review, net deferred tax liabilities of $8.3 million, originally shown on the balance sheet, have been removed and credited to income reducing the provision for the valuation allowance for net deferred taxes to $70.3 million instead of $78.6 million previously recorded. The amendment noted above does not affect any previously filed 10- Q's for the company. All amendments will be reflected in the 2003 10-K when filed. Stillwater Mining Company (S&P/BB+ Corporate Credit/Developing) is the only U.S. producer of palladium and platinum and is the largest primary producer of platinum group metals outside of South Africa. The Company's shares are traded on the New York Stock Exchange under the symbol SWC. The company's Web site is at http://www.stillwatermining.com/ TITAN: Extends Exchange Offer & Consent Solicitation to April 12 ---------------------------------------------------------------- The Titan Corporation (NYSE: TTN) has extended its exchange offer and consent solicitation relating to its outstanding 8% Senior Subordinated Notes due 2011. The exchange offer and consent solicitation will expire at 1:00 p.m. EST on April 12, 2004, which is the same date to which Titan intends to adjourn the special meeting of its stockholders for consideration of its pending merger with Lockheed Martin Corporation (NYSE: LMT). As of the close of business on March 11, 2004, approximately 99.2% of the $200,000,000 aggregate principal amount of 8% Senior Subordinated Notes issued and outstanding had been tendered for exchange with Deutsche Bank Trust Company Americas, the exchange agent for the exchange offer and consent solicitation. As previously announced, all of the tendered notes were accompanied by the holders' consents to the proposed amendments to the indenture governing the notes and the related registration rights agreement made by Titan for the benefit of the note holders. Titan has entered into a supplemental indenture with the indenture trustee to effect the proposed amendments to the indenture and has entered into an amendment to the registration rights agreement providing for its termination. Accordingly, the proposed amendments to the indenture and the registration rights agreement are effective and the notes tendered with consents are irrevocable; however, the proposed amendments will not become operative until immediately prior to the completion of Titan's pending merger with Lockheed Martin. If the merger is completed, Lockheed Martin will guarantee the surviving entity's obligations as the obligor of the notes. If the merger is not completed, the amendments will not become operative. Until that point, the indenture and the registration rights agreement, without giving effect to the proposed amendments, will remain in effect. Holders who validly tendered and delivered consents prior to 5:00 p.m., New York City Time, on February 25, 2004 will receive a consent fee equal to 1.0% of the principal amount of the notes validly tendered by the holders if the merger is completed. Other holders may tender their notes and consent to the proposed amendments, without receiving the consent fee, at any time prior to the expiration date. The dealer-manager and solicitation agent for the exchange offer and consent solicitation is Credit Suisse First Boston LLC. About Titan Headquartered in San Diego, The Titan Corporation is a leading provider of comprehensive information and communications systems solutions and services to the Department of Defense, intelligence agencies, and other federal government customers. As a provider of national security solutions, the company has approximately 12,000 employees and annualized sales of approximately $2 billion. * * * As reported in the Troubled Company Reporter's March 11, 2004 edition, Standard & Poor's Ratings Services revised its CreditWatch listing of Sept. 16, 2003, on Titan Corp. to developing from positive, following a Justice Department probe into whether overseas consultants for Titan Corp. made illegal payments to foreign officials, which may jeopardize the completion of its acquisition by Lockheed Martin Corp. (BBB/Stable/A-2). Standard & Poor's also placed its 'BB-' corporate credit and senior secured debt ratings, and 'B' subordinated rating of Titan on CreditWatch with positive implications following the announced acquisition of Titan by Lockheed Martin. The transaction is valued at $2.4 billion, including the assumption of approximately $580 million of Titan's debt outstanding. Standard & Poor's will continue to monitor the situation. TORCH OFFSHORE: Lenders Forgive Violations & Provide More Funding ----------------------------------------------------------------- Torch Offshore, Inc. (Nasdaq:TORC) announced updated guidance for its earnings estimates based upon management's unaudited review. The Company expects to record a net loss for the fourth quarter of 2003 in the range of $6.8 million to $7.5 million. Lower than expected utilization of the Company's vessels combined with a very competitive pricing market in the Gulf of Mexico negatively impacted the Company's quarterly revenues and gross margin. In addition, several significant charges are expected to be included in the fourth quarter 2003 financial results. The Company expects to record a $1.6 million (pre-tax) asset impairment charge and to take additional charges of $2.6 million (pre-tax) relating to claims and settlements for work completed in prior periods. The net loss for the fourth quarter is also expected to be negatively impacted by approximately $1.3 million in reduced deferred tax benefits as the Company plans to establish a valuation allowance limiting a portion of the tax benefits that would otherwise result from the Company's operating losses associated with fourth quarter operations. Regions Bank and Export Development Canada (EDC) have committed to waive the covenant violations the above mentioned events have created as of December 31, 2003 and have committed to adjust the covenant thresholds going forward. Regions Bank and EDC have also committed to provide the Company an additional $19 million of financing to complete the conversion of the Midnight Express. The budget on the conversion of the Midnight Express has increased to a range of $107 million to $112 million. The completion of the vessel, including sea trials, is expected in the second half of 2004. The Company will release its December 31, 2003 financial results in late March 2004 and will announce the day and time of the release and related conference call information at a later date. Established in 1978, Torch Offshore, Inc. is involved in offshore pipeline installation and subsea construction for the oil and natural gas industry. Torch Offshore, Inc. is expanding beyond its established shallow water niche market in order to serve the industry's worldwide growing needs in the deep waters. UNIGLOBE.COM: CCAA Creditors' Meeting Adjourned Sine Die -------------------------------------------------------- Uniglobe.com Inc. (TSX Venture: UTO.B) has adjourned indefinitely the creditors' meeting to approve the reorganization plan Uniglobe.com filed in November 2003, under the Companies' Creditors Arrangement Act of Canada as the Company has not been able to come to agreement with one of its major creditors. The Company has no current plans to seek approval for a new or amended reorganization plan. Also, in an unrelated development, the Company announced that Roger Moore and Christopher Charlwood have resigned from its Board of Directors. Uniglobe.com operates independently and has no operational or financial impact on Uniglobe Travel (International) Inc. or any of its member regions or their franchises. Uniglobe.com outsourced the fulfillment activities for the http://www.uniglobe.com/Web site in January 2003 to OneTravel.com Inc. Customers of the http://www.uniglobe.com/Web site are unaffected by the announcement and continue to be serviced by OneTravel.com under the outsource agreement. UNITED AIRLINES: Pushing to Maintain Florida Self-Insurance ----------------------------------------------------------- United Airlines Inc. and its-affiliates ask Judge Wedoff for permission to continue to self-insure their workers' compensation liabilities in Florida. The Debtors also want to recover a cash security deposit currently held by the Florida Department of Financial Services and the Florida Division of Treasury, Bureau of Collateral Management. James H.M. Sprayregen, Esq., at Kirkland & Ellis, relates that the Debtors self-insure their workers' compensation programs in 16 states, including Florida. In the other 39 states, the Debtors rely on third-party insurers. To self-insure in Florida, employers must post a security deposit with the State to cover liabilities in the event of default. Unlike most states, however, in Florida, an employer cannot post cash. Rather, an employer must post either surety bonds or irrevocable Letters of Credit. Prior to the Petition Date, the Debtors entered into an agreement with the Florida Department of Insurance to post $6,377,313 in cash, with the understanding that the cash would be replaced with a bond or Letter of Credit. The State of Florida, by and through the Florida Self-Insurers Guaranty Association, Inc., and the Florida Department of Financial Services, has now demanded replacement of the cash deposit and an $800,000 increase in the security deposit to maintain the Debtors' right to self-insure in Florida. The Debtors sent Florida a $7,191,000 Letter of Credit issued under the DIP Facility and requested release of their cash deposit. To date, the Insurance Department has declined to release the Debtors' cash balance because the LOC does not conform to its guidelines. Mr. Sprayregen explains that under Florida law, an LOC securing self-insurance obligations must include an "Evergreen Clause," providing that the LOC will automatically renew upon its expiration unless the issuing bank sends a notice of termination at least 90 days prior to expiration. Because of the terms of the DIP Facility and its July 1, 2004 expiration date, which is also the expiration date of the LOC, the DIP Facility agent and the Lenders will not issue such an LOC with an Evergreen Clause. As a result, Florida demands that the Debtors replace the LOC by May 1, 2004, with a qualifying LOC. If the Debtors fail to replace the LOC, Florida may draw upon it. Also, if the Debtors do not receive any Court order, Florida has threatened to revoke the Debtors' right to self-insure. Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. the Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at KIRKLAND & ELLIS represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. (United Airlines Bankruptcy News, Issue No. 41; Bankruptcy Creditors' Service, Inc., 215/945-7000) UNITED AIRLINES: US Bank Auctions Off Aircraft Collateral Today --------------------------------------------------------------- By virtue of defaults under a Trust Indenture and Mortgage dated May 1, 1990, between Wilmington Trust Company (as Owner Trustee) and the mortgagee, U.S. Bank National Association, as successor in interest to State Street Bank and Trust Company of Connecticut, the mortgagee seeks to sell the Owner Trustee's interest in the mortgage collateral. Today at 12:00 noon, U.S. Bank will foreclose and auction all of Wilmington Trust's right, title, and interest to their aircraft collateral, a Boeing 737-322 airframe and two CFM International 56-3C-1 engines. The aircraft is in the possession of and operated by United Air Lines, Inc. It will be sold to the highest and best bidder, for cash. Wilmington Trust Company has 50 branches mainly in Delaware, Maryland and Pennsylvania. Its trust business is one of the largest in the U.S. Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. the Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at KIRKLAND & ELLIS represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. US AIRWAYS: Prepays $250 Million to ATSB & Modifies $1B Loan Terms ------------------------------------------------------------------ US Airways Group Inc., (Nasdaq: UAIR) has reached an agreement with the Air Transportation Stabilization Board (ATSB) to revise the terms of the $1 billion loan that was made to US Airways Inc., upon its emergence from Chapter 11 on March 31, 2003. Under the agreement, US Airways prepaid $250 million, causing the remaining outstanding loan balance to be reduced to $726 million. The prepayment has been made to the lenders on a prorated basis to both the ATSB guaranteed (90 percent) and non-guaranteed (10 percent) portions of the loan. The ATSB's exposure therefore was reduced by $225 million, and Bank of America and Retirement Systems of Alabama received $6.25 million and $18.75 million, respectively. In exchange for this prepayment, the financial covenants contained in the loan were modified through 2005. The revised covenants require that US Airways significantly narrow its losses in 2004 and return to profitability in 2005. The company and the ATSB also agreed to modify other terms and provisions, including lifting certain restrictions on the company's ability to pursue asset sales. The amended loan agreement was completed along with US Airways filing its Form 10-K with the U.S. Securities and Exchange Commission (SEC) for the fiscal year ended Dec. 31, 2003, which includes the independent auditors' (KPMG LLP) report to shareholders. The auditors report indicates that "the company's significant recurring losses and other matters regarding, among other things, the company's ability to maintain compliance with covenants contained in various financing agreements, as well as its ability to finance and operate regional jet aircraft and reduce its operating costs in order to successfully compete with low-cost airlines, raises substantial doubt about its ability to continue as a going concern." The auditors' report for 2002, issued while the company was in bankruptcy, also contained a similar explanatory paragraph discussing the company's ability to continue as a going concern. "It is essential for US Airways to significantly reduce its costs and return to sustained profitability by 2005 to secure continued availability of the ATSB loan," said US Airways Executive Vice President - Finance and Chief Financial Officer Neal S. Cohen. "This agreement provides US Airways the opportunity to continue its restructuring efforts, while reducing the government's exposure and providing additional loan protections to the ATSB." After this payment, the company's unrestricted cash balance is approximately $925 million. US Airways Chairman David G. Bronner said that these developments have been discussed with the board of the company and labor leadership. "This agreement gives us a narrow window for management and labor to continue to work together to make the changes necessary to get this company back to profitability." US Airways also agreed to a loan covenant that its minimum unrestricted cash balance would not fall below the lower of $700 million and the outstanding balance of the loan at each month until its "going concern paragraph" is removed, at which point the unrestricted cash covenant will be reduced to $500 million. "We fully recognize and appreciate the enormous sacrifices that our employees have already made. We share their frustration that we all have more to do to turn US Airways around," said US Airways President and Chief Executive Officer David N. Siegel. "We are talking with all of our employees and other key stakeholders on how to respond to the new marketplace reality that only low-cost carriers are making money. We need to make changes now in order to demonstrate that US Airways will remain an important player in the airline industry," said Siegel. WARNER STREET INC: Case Summary & 1 Largest Unsecured Creditor -------------------------------------------------------------- Debtor: Warner Street, Inc. P.O. Box 34208 Bethesda, Maryland 20827 Bankruptcy Case No.: 04-15994 Chapter 11 Petition Date: March 11, 2004 Court: District of Maryland (Greenbelt) Judge: Paul Mannes Debtor's Counsel: Richard H. Gins, Esq. Gins & Greenfeld, P.C. 5028 Wisconsin Avenue North West, Suite 300 Washington, DC 20016 Tel: 202-537-7050 Fax: 202-364-5165 Estimated Assets: $1 Million to $10 Million Estimated Debts: $100,000 to $500,000 Debtor's 1 Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Morgan Smith Financial Services, Inc. $10,000 WESTAR ENERGY: S&P Rates New $300MM Revolving Facility at BB+ ------------------------------------------------------------- Standard & Poor's Ratings Services affirms its 'BB+' corporate credit ratings on electric generation and transmission company Westar Energy Inc. and subsidiary Kansas Gas & Electric Co. The outlook remains positive. At the same time, Standard & Poor's assigns its preliminary 'BBB- /BB-' rating to Westar's $900 million Rule 415 shelf registration, which includes senior secured and senior unsecured debt securities and common stock. Net proceeds will be used to repay outstanding debt and for working capital and other general corporate purposes. Standard & Poor's also assigns its 'BB+' rating to Westar's $300 million revolving credit facility that is secured by Kansas Gas & Electric's first mortgage bonds. The credit facility is rated the same as Westar Energy's and Kansas Gas & Electric's corporate credit rating and on par with Kansas Gas & Electric's first mortgage bonds because Standard & Poor's ultimate recovery analysis does not project the value of the collateral as sufficient to warrant consideration of a higher rating. The credit facility will be used to refinance existing credit facilities and other debt and for general corporate purposes, including letters of credit. The agreement expires in March 2007 and contains fall-away provisions. Collateral will be released upon achieving senior unsecured ratings of 'BBB-' or the equivalent from another rating agency, each with at least a stable outlook. "The positive outlook reflects the possibility for credit improvement following completion of Westar's restructuring plan," said Standard & Poor's credit analyst Barbara Eiseman. "We expect that additional balance sheet improving initiatives, such as sizable common stock offerings with proceeds applied toward debt reduction, will be needed to achieve investment-grade ratings," added Ms. Eiseman. WORLDCOM/MCI: Completes Restatement and 2002 Audit -------------------------------------------------- MCI (WCOEQ, MCWEQ) has filed its annual report on Form 10-K for the year ended December 31, 2002 with the Securities and Exchange Commission. The report contains the Company's consolidated financial statements for 2002. In addition, the report contains financial statements for 2001 and 2000 that are restatements of previously reported financial results. The restatement process included revalidation and correction of accounting records, review of the accounting for all major acquisitions dating back to 1993, reassessing the propriety and appropriateness of the application of accounting principles, and a re-audit of the financial statements. The restatements have no impact on the Company's current operations or liquidity. "This filing culminates the largest and most complex financial restatement ever undertaken," said Bob Blakely, MCI executive vice president and chief financial officer. "It is one of the last remaining milestones on our path to emerge from Chapter 11 protection. We appreciate the dedication and hard work of the MCI employees, as well as those at Deloitte & Touche, who participated in this process, and KPMG who audited the financials." The restatement process resulted in adjustments to revenues, expenses and earnings as well as write-downs of assets and adjustments to liabilities. These adjustments and write-downs resulted in a cumulative net reduction of $74.4 billion to previously reported pre-tax income for 2000 and 2001. "While these restatement adjustments are substantial they do not have any impact on our current substantial liquidity position," said Blakely. At the end of 2003, the Company's consolidated cash and cash equivalents was approximately $6 billion. The largest category of restatement adjustments is impairment charges resulting from write-offs of goodwill and write-downs in the carrying value of other intangible assets and property, plant and equipment in 2000 and 2001. The impairment charges for 2000 and 2001 total $59.8 billion. Other significant restatement adjustments are related to the Company's review of significant acquisitions as far back as 1993. As part of this review, fair value allocations and purchase price calculations were re- performed. Restatement adjustments to correct errors in the application of purchase accounting for the acquisitions totaled $5.8 billion during 2000 and 2001. The remaining restatement adjustments to 2000 and 2001 pre-tax income total $8.8 billion. Included in this amount are $4.8 billion of charges to pre-tax income to correct access costs that had been reduced either by the improper capitalization of the expenditures as additions to property, plant and equipment or by inappropriate reductions to accrual balances. As restated, consolidated revenues were $32.2 billion in 2002, $37.7 billion in 2001, and $39.3 billion in 2000. These results include the revenues of Embratel, the Company's Brazilian affiliate. The Company had a net loss of $9.2 billion in 2002, $15.6 billion in 2001, and $48.9 billion in 2000, including the restatement adjustments. The Company is continuing work on its 2003 financial statements and expects to emerge from Chapter 11 protection in April 2004. The restatement process and the resulting accounting adjustments are described in the Company's 10-K report, available at http://www.mci.com/investor. About WorldCom, Inc. WorldCom, Inc. (WCOEQ, MCWEQ), which, together with its subsidiaries, currently conducts business under the MCI brand name, is a leading global communications provider, delivering innovative, cost-effective, advanced communications connectivity to businesses, governments and consumers. With the industry's most expansive global IP backbone, based on the number of company-owned points-of-presence (POPs), and wholly-owned data networks, WorldCom develops the converged communications products and services that are the foundation for commerce and communications in today's market. For more information, go to http://www.mci.com/ YUM! BRANDS: Fitch Raises Senior Debt Ratings to BBB- from BB+ -------------------------------------------------------------- Fitch Ratings has upgraded YUM! Brands, Inc.'s senior unsecured notes and unsecured $1 billion bank credit facility to 'BBB-' from 'BB+'. The Rating Outlook is revised to Stable. Approximately $2 billion of unsecured debt is affected by this rating change. The upgrade reflects significant debt reduction, strong growth in international markets and an effective multibranding strategy for the competitive US quick service restaurant (QSR) market. YUM has significantly reduced its debt levels over the past five years to just over $2 billion at fiscal-year end (FYE) 2003 from $3.5 billion at FYE 1998. Debt levels are expected to remain relatively flat for 2004, but YUM plans to continue debt reduction as its debt matures in 2005 and 2006. YUM's adjusted leverage (as defined by total debt plus eight times rent divided by EBITDA plus rent) improved to 2.7 times in 2003 from 3.0x in 2002. Cash flow has steadily increased and EBITDA margins have gradually improved over the past several years. Further gradual improvement is foreseen over the near-to-intermediate term. YUM is experiencing significant growth in its foreign markets, especially in China, the UK, Australia/New Zealand and South Korea. The majority of YUM's new restaurants in 2003 were built in foreign markets. YUM's international segment represents about one- third of company revenue and operating profit and international revenue increased approximately 13% in both 2002 and 2003. Fitch anticipates that international sales and profit will continue to increase from unit expansion and organic sales growth. Multibranding, the combination of one or more brands under one roof, has enabled YUM to maintain generally positive comparable sales growth in the US. It also diversifies the food offering for the multibranded locations, increases average unit volume and results in a remodeled unit. A multibrand roughly generates 25% in incremental sales growth and typically costs $350,000 - $500,000 per unit. The one-time incremental sales increase from multibranding is included in the same-store sales calculation. Since its acquisition of A&W and Long John Silver's in May 2002, the majority of YUM's multibranding has shifted to combinations involving one of these brands. Although YUM's increasing reliance on A&W and Long John Silver's is of some concern since they are both mature brands, they have enabled YUM to greatly expand its multibranding opportunities. When YUM only owned KFC, Taco Bell and Pizza Hut, multibranding opportunities were limited due to the number of stand-alone units in existence amongst its core brands. Fitch believes that YUM can continue to multibrand in the US for many years going forward. Any concerns about multibranding with A&W and Long John Silver brands are mitigated by the fact that the added brand does not have to perform to the same level as a stand- alone restaurant. It only has to generate an incremental $200,000 - $300,000 in sales. On this basis, and with limited experience, multibranding is producing the requisite one-time sales increase. YUM franchises, operates or licenses more than 33,000 restaurants in more than 100 countries and territories. Core brands include KFC, Taco Bell and Pizza Hut each of which is a leader in its respective segment. * CenterOne Financial Services Adds Executive Directors ------------------------------------------------------- CenterOne Financial Services LLC, an industry leader in providing third-party servicing for motor vehicle sales finance and lease contracts, has announced the addition of two executives. D. Brian Johnson and Michael S. Heller have joined the company as Executive Directors of Business Development. The announcement was made by CenterOne Vice President Ed Brown. In their new roles, Johnson and Heller are primarily responsible for business development activities including product development and relationship management. Before joining CenterOne, Johnson was vice president, marketing and sales for JPMorgan's SST subsidiary. He received his bachelor of science degree in business administration from Missouri Western University. Johnson and his wife, Heather and two boys, reside in St. Joseph, Missouri. Before joining CenterOne, Heller was the southeast director of Business Development for the Technology and Venture Capital Group at Deloitte & Touche. He earned a juris doctor degree from American University, a master of laws degree in taxation from New York University School of Law and a bachelor of science degree in management from Tulane University. Heller and his wife, Susan, and their son will relocate to South Florida. About CenterOne Financial Services LLC CenterOne -- http://www.centeronefinancial.com/-- is a division of World Omni Financial Corp. It was established in March 2000 to provide third-party servicing for motor vehicle sales finance and lease contracts, and concentrates on five key areas: Originations, including application entry, decisioning, discounting and funding; Retail/Lease Servicing, including customer service, insurance follow-up, payment processing, accounting, and investment reporting; Collections, including automated predictive dialer, champion/challenger strategies, skip tracing, bankruptcy, and recovery; Pro-active Remarketing, including portfolio analysis and strategy, telemarketing, direct mail, and termination processing; and Vehicle Remarketing, including inventory tracking, field representation, and channel management. About World Omni Financial Corp. World Omni -- http://www.worldomni.com/-- is a diversified automotive finance company providing a broad range of financial services to consumers, dealers, and lenders. It is recognized as one of the finance industry's premier providers in indirect consumer retail and lease financing, commercial dealership financing, consumer and commercial leasing, wholesale inventory financing and dealership working capital, mortgage loans, third- party portfolio management and servicing and remarketing services. The company was the first to provide captive financing for import vehicles in the United States. World Omni is a subsidiary of JM Family Enterprises, Inc. (http://www.jmfamily.com),a $7.7 billion diversified automotive company headquartered in Deerfield Beach, Fla. * eXrP Launches Comprehensive Services for Indicted Corp Officials ------------------------------------------------------------------ Executive Recovery Partners, LLC (eXrP), launched its comprehensive services for corporate officers facing criminal indictment, bankruptcy and related white collar and fraud charges, with an ad in USA TODAY last Friday, focusing on the Houston, Los Angeles, and New York markets. eXrP was founded by Denver businessman Will Hoover. The firm contracts with professional specialists who can provide the wide range of assistance required by indicted corporate officers, including legal, strategic coaching, expert witnesses, public relations, forensic accounting and psychological counseling; in addition to others as needed. "These people have never experienced anything like what they are now going through," said Hoover. "There are no business school courses or steps along the corporate ladder to provide them with the tools they need to survive their ordeal," he said. Hoover said that his own experience with the criminal legal environment inspired him to start eXrP. Following the filing of Ch. 11 reorganization bankruptcies, he has been indicted on charges of securities fraud, theft and violation of the Colorado Organized Crime Act, by the Denver District Attorney. His trial is scheduled in Denver Municipal Court in May. "One minute you are doing business, taking care of your clients and your family, providing for your employees, and the next minute your world totally comes apart," he said. "These people have had their assets frozen, their contacts cut off and their support systems totally evaporate," he said. "One result of these investigations and the legal process is that the once-powerful individuals are removed from their environment, become isolated, and feel overwhelmed to the point that they often plead guilty just to remove the pain and expense of dealing with the charges," he said. Hoover is constrained from the securities business entirely and not permitted to operate or participate in the capital partnering, investment, insurance or planning businesses, which he previously ran. He said that eXrP is a business which he can bring expertise gained through his own experience to provide substantial value to prospective clients while generating income and entity value to repay his creditors. A complete description of services can be found at: http://www.executiverecoverypartners.com/ Contact Will Hoover of eXrP at +1-720-528-7301. * Large Companies with Insolvent Balance Sheets ----------------------------------------------- Total Shareholders Total Working Equity Assets Capital Company Ticker ($MM) ($MM) ($MM) ------- ------ ------------ ------- -------- Alliance Imaging AIQ (39) 683 43 Akamai Technologies AKAM (175) 280 140 AK Steel Holdings AKS (53) 5,025 579 Amazon.com AMZN (1,036) 2,162 568 Aphton Corp APHT (11) 16 (5) Arbitron Inc. ARB (18) 184 (25) Alliance Resource ARLP (46) 288 (16) Atari Inc. ATAR (97) 232 (92) Actuant Corp ATU (7) 361 31 Blount International BLT (369) 428 91 Cincinnati Bell CBB (2,104) 1,467 (327) Columbia Laboratories CBRX (8) 13 5 Cubist Pharmaceuticals CBST (7) 221 131 Cedara Software CDE (2) 20 (12) Choice Hotels CHH (118) 265 (43) Cherokee International CHRK (120) 64 15 Compass Minerals CMP (90) 644 101 Caraco Pharm Labs CPD (20) 20 (2) Volume Services CVP (5) 280 (11) Centennial Comm CYCL (579) 1,447 (98) Diagnostic Imag DIAM 0 20 (3) Echostar Comm DISH (1,206) 6,210 1,674 Deluxe Corp DLX (298) 563 (309) Education Lending Group EDLG (26) 1,481 N.A. Eyetech Pharma EYET (78) 76 62 Graftech International GTI (95) 980 105 Integrated Alarm IASG (11) 46 (8) Imax Corporation IMAX (104) 243 31 Imclone Systems IMCL (186) 484 139 Journal Register JRC (4) 702 (20) Kinetic Concepts KCI (80) 618 244 KCS Energy KCS (30) 268 (16) Lodgenet Entertainment LNET (101) 298 (5) Lucent Technologies LU (3,371) 15,765 2,818 Memberworks Inc. MBRS (20) 248 (89) Millennium Chem. MCH (46) 2,398 637 Moody's Corp. MCO (327) 631 (190) McDermott International MDR (417) 1,278 154 McMoRan Exploration MMR (31) 72 5 Maxxam Inc. MXM (582) 1,107 133 Niku Corp. NIKU (4) 30 1 Nuvelo Inc. NUVO (4) 27 21 Northwest Airlines NWAC (1,775) 14,154 (297) ON Semiconductor ONNN (498) 1,144 201 Airgate PCS Inc. PCSAD (293) 574 (364) Petco Animal PETC (11) 555 113 Pinnacle Airline PNCL (48) 128 13 Primus Telecomm PRTL (168) 724 65 Per-Se Tech Inc. PSTI (21) 171 (1) Qwest Communications Q (1,106) 26,216 (1,132) Quality Distribution QLTY (126) 387 19 Rite Aid Corp RAD (93) 6,133 1,676 Revlon Inc. REV (1,726) 892 (32) Sepracor Inc SEPR (619) 1,020 728 St. John Knits Int'l SJKI (65) 234 69 I-Stat Corporation STAT 0 64 33 Syntroleum Corp. SYNM (1) 47 14 Town and Country Trust TCT (2) 504 N.A. Tenneco Automotive TEN (75) 2,504 (50) Thermadyne Holdings THMD (665) 297 139 TiVo Inc. TIVO (25) 82 1 Triton PCS Holdings TPC (180) 1,519 52 Tessera Technologies TSRA (74) 24 20 UnitedGlobalCom UCOMA (3,040) 5,931 (6,287) Ultimate Software ULTI (7) 31 (10) Universal Technical UTI (36) 84 29 Valence Tech VLNC (17) 36 4 Warnaco Group WRNC (1,856) 948 471 Western Wireless WWCA (464) 2,399 (120) Expressjet Holdings XJT (10) 510 15 Xoma Ltd. XOMA (11) 72 30 ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. 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, Rizande B. Delos Santos, Paulo Jose A. Solana, Aileen M. Quijano 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 ***