/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/040319.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, March 19, 2004, Vol. 8, No. 56 Headlines ACCU-FAB INC: Case Summary & 20 Largest Unsecured Creditors ACTUANT CORP: Posts Increasing Sales & Profits in Second Quarter ADELPHIA COMMS: Jefferson Wells' Auditing Engagement Expands AIR CANADA: Pushing for Approval of AVSA MOU & Term Sheet AIR CANADA: Trinity Reviews Deal In Light of Union Intransigence AIRGAS INC: Inks Hydrogen Fuel Service Agreement with Plug Power ALLTEC CORPORATION: Case Summary & 20 Largest Unsecured Creditors AMERCO: Court Approves Bonanza Property Sale for $971,850 AMRESCO COMM'L: Fitch Takes Rating Actions on Series 1997-C1 Notes ASTORIA ENERGY: S&P Gives B+ Rating to Proposed $690MM Bank Loan AVA CAPITAL TRUST: Fitch Rates Proposed Trust Preferreds at BB BUDGET GROUP: Objections to Proposed Plan are Due Today BURLINGTON: Combines with Cone Mills to Form International Textile CAPITAL CREATION: Case Summary & 20 Largest Unsecured Creditors CENTENNIAL COMMS: Third Quarter Net Loss Reduces to $30.3 Million CITRUS VALLEY: S&P Cuts Underlying Rating to BB over Low Liquidity COMMSCOPE INC: Proposes $225 Million Convertible Debt Offering COMMSCOPE: Proposed $225-Mil. Debt Offering Gets S&P's B+ Rating CONE MILLS: Combines with Burlington to Form International Textile CONSOL ENERGY: Ranks No. 5 in Zacks' List of Stocks to Sell Now COTT CORP: Beverages Unit Acquires Cardinal Companies Assets DAVIS COACH & TOURS: Case Summary & Largest Unsecured Creditors DELTA FINANCIAL: Intends to File Registration Statement with SEC DEX MEDIA: CFO to Speak at Lehman Brothers' Conference on Mar 23 DII INDUSTRIES: Gets Until May 12, 2004 to Decide on Leases DIMON: S&P Affirms Low-B Credit Rating & Revises Outlook to Stable DOBSON COMMS: Completes Debt Repurchases of 8-7/8% Senior Notes DOUGLAS DYNAMICS: S&P Assigns B+ Corporate Credit Rating DPL: Moody's Downgrades and Puts Low-B Ratings on Review ENRON CORP: Former Employee Turns to Coburn & Schertler for Advice ENRON CORP: Court Clears Underwriters Settlement Agreement EXIDE TECHNOLOGIES: Brings-In Schnader Harrison as Special Counsel FISHER SCIENTIFIC: Inks Merger Pact with Apogent Technologies FISHER SCIENTIFIC: S&P Places Low-B Ratings on Watch Positive FOSTER WHEELER: Wins Three-Year Alliance Contract from Huntsman GEORGIA-PACIFIC: Elects to Call 9.5% Debentures Due May 2022 GSD PRODUCTIONS: Case Summary & 20 Largest Unsecured Creditors GTC TELECOM: Recurring Losses Prompts Going Concern Uncertainty INTEGRAL VISION: Restructures Note & Warrant Purchase Agreements INTERLINE: 2003 Deficit Tops $264MM Despite Improved Performance ISLE OF CAPRI: Supports Ill. Officials' Call for Auction Review JARDEN CORP: S&P Revises Outlook on Low-B Ratings to Positive KAISER ALUMINUM: Proposes to Set-Up Parcels 1 & 7 Bidding Protocol KEYSTONE: Receives Final Court Approval of $60MM DIP Financing KOPPERS: Total Debts Exceed Total Assets by $69.8MM at Dec. 2003 LORAL SPACE: Raises $1 Billion From North American Satellites Sale LNR PROPERTY: Schedules First Quarter Conference Call on Mar. 24 LUIGINO'S INC.: Moody's Gives B1 Rating to $205MM Credit Facility MASTEC INC: S&P Puts Ratings on Watch Negative Due to 10-K Delay MICROCELL: Secures C$450 Million in Senior Secured Bank Financing MIRANT CORP: Has Until September 6, 2004 to Decide on Leases M-WAVE INC: Expects New Orders to Total $2.5-$3.0 Million Annually NAT'L CENTURY: Wants Court Okay Long Island Settlement Pact NICOLE ENERGY: Case Summary & 18 Largest Unsecured Creditors NORD PACIFIC: Secures $272K in Exchange for Convertible Notes NOVA STAR: Engages Chisholm Bierwolf as New Independent Auditor NRG ENERGY: Cajun Ch. 11 Trustee Asks Court to Allow Admin. Claim ONEIDA LTD: Negotiating for Potential Preferred Equity Investment OWENS: Stipulation Clarifies 2004 Old Republic Insurance Policy PACIFIC BIOMETRICS: Ability to Continue Operations is in Doubt PARMALAT GROUP: US Debtors Turn to Lazard Freres for Advice PARMALAT GROUP: US Debtors Retain AlixPartners as Fin'l. Advisor PG&E NATIONAL: USGen Wants Until July 2 to Exclusively File Plan PORTOLA PACKAGING: Equity Deficit Totals $37.8M at February 2004 PURE FISHING INC.: S&P Assigns BB- Corporate Credit Rating SAKS INC: S&P Rates Proposed $200M Senior Convertible Notes at BB SAKS INC: $200M Convertible Sr. Debt Issue Gets Fitch's BB- Rating SIERRA PACIFIC: S&P Gives B- Rating to Pending Senior Notes SKY TECHNOLOGY: Case Summary & 5 Largest Unsecured Creditors SLK DEVELOPERS INC: Case Summary & 1 Largest Unsecured Creditor SONTRA MEDICAL: Fourth Quarter Net Loss Doubles to $2.8 Million STATION CASINOS: Receives Consents to Amend Senior Note Indenture TEXAS STATE AFFORDABLE: S&P Cuts Ratings to Low-B & Junk Levels TOM COM INC: Case Summary & 18 Largest Unsecured Creditors TRITON AVIATION: Fitch Places 6 Note Ratings on Watch Negative UNITED AIRLINES: Court Approves ESOP Committee Stipulation US AIRWAYS: Auditor KPMG Doubts Ability to Continue Operations US CONCRETE: S&P Rates Proposed $150 Million Sr. Sub. Notes at B- US DATAWORKS: Says Cash Still Sufficient to Fund Ops. for 6 Months VALCOM INC: September Deficits Prompt Going Concern Uncertainty WINN-DIXIE: Ranks No. 5 in Zacks' List of Stocks to Sell Now WMG ACQUISITION: S&P Assigns B+ Corporate Credit Rating W.R. GRACE: Asbestos Committee Says Terminate Exclusivity Now ZAPATA INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors * eAuctionMaster Opens Retail Location to Help Selling on eBay * BOOK REVIEW: Risk, Uncertainty and Profit ********* ACCU-FAB INC: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: Accu-Fab, Inc. 801 Beacon Lake Drive Raleigh, North Carolina 27610 Bankruptcy Case No.: 04-00651 Type of Business: The Debtor offers diverse services, including precision sheet metal fabrication, machining, stamping, powder coat and wet paint finishes, screen printing and electromechanical assembly. Chapter 11 Petition Date: February 23, 2004 Court: Eastern District of North Carolina (Raleigh) Judge: A. Thomas Small Debtor's Counsel: Trawick H. Stubbs, Esq. Stubbs & Perdue P.O. Drawer 1654 New Bern, NC 28563 Tel: 252-633-2700 Total Assets: $5,142,000 Total Debts: $5,679,881 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Ryersontull, Inc. Trade Debt $191,276 Airspeed, LLC Trade Debt $89,758 Nippon Express USA Trade Debt $75,176 Central Industrial Supply Trade Debt $56,531 American Caster/Material Trade Debt $34,768 Electrical Specialty Trade Debt $32,890 Tropic Fasteners, Inc. Trade Debt $31,956 Copper and Brass Sales Trade Debt $27,726 D.B. Roberts Company Trade Debt $22,818 Technicoat Corporation Trade Debt $18,203 Capital Container Inc. Trade Debt $17,609 INCO Trade Debt $17,354 Amada America, Inc. Trade Debt $13,712 Carpenter Cammack & Assoc Trade Debt $12,870 Accuride Trade Debt $12,760 Sherwin Williams Company Trade Debt $11,747 Labor Ready-Branch 294 Trade Debt $11,114 Howard Press Trade Debt $10,320 Morrisette Paper Company Trade Debt $10,005 Morgan Advanced Ceramics Trade Debt $8,678 ACTUANT CORP: Posts Increasing Sales & Profits in Second Quarter ---------------------------------------------------------------- Actuant Corporation (NYSE:ATU) announced results for its second quarter ended February 29, 2004. Second quarter sales increased approximately 24% to $176 million compared to $142.1 million in the prior year. Current year results include those from Kwikee Products Company Inc. and Dresco B.V., which were acquired on September 3, 2003 and December 30, 2003, respectively. Excluding the acquisition impacts of Kwikee and Dresco and the favorable impact of foreign currency exchange rate changes on translated results, second quarter sales increased approximately 6%. Second quarter fiscal 2004 net earnings and diluted earnings per share were $8.8 million and $0.35 per diluted share, respectively. Such results include the previously announced $2.3 million pre-tax charge ($1.5 million net of tax, or $0.06 per diluted share) attributable to the write-off of remaining debt issuance costs associated with the senior secured credit facility that was replaced during February 2004. Excluding this charge, second quarter fiscal 2004 net earnings and diluted EPS were $10.2 million and $0.41 per share, respectively. This compares favorably to prior year second quarter net earnings and diluted EPS of $7.1 million and $0.29 per diluted share, respectively, representing increases of 44% and 41%, respectively. Sales for the six months ended February 29, 2004 were $342.6 million, approximately 18% higher than the $290.0 million in the comparable prior year period. Excluding the impact of the Dresco and Kwikee acquisitions, as well as the impact of foreign currency rate changes on translated results, sales for the six-month period increased 3%. Net earnings for the six-months ended February 29, 2004 were $9.1 million, or $0.36 per diluted share, compared to $9.0 million, or $0.37 per diluted share for the comparable prior year period. The Company recorded net of tax special charges of $1.3 million, or $0.05 per diluted share, in the first quarter of fiscal 2003 related to the early extinguishment of debt and $4.7 million, or $0.19 per diluted share, related to litigation matters associated with businesses divested prior to the spin-off of APW Ltd. in July 2000. In addition, the Company recorded net of tax special charges of $9.8 million or $0.40 per diluted share, in the first quarter of fiscal 2004 and $1.5 million, or $0.06 per diluted share, in the current quarter, related to the early extinguishment of debt. Excluding all of these special charges, net earnings and diluted EPS for the first half of fiscal 2004 were $20.3 million and $0.82 per diluted share, compared to $15.0 million and $0.61 per diluted share, respectively, in the prior year. Commenting on the results, Robert C. Arzbaecher, President and CEO of Actuant, stated, "We are pleased with second quarter results, especially the 41% increase in diluted earnings per share before the refinancing charge. Earnings improved primarily as a result of higher sales, lower financing costs, improved economic conditions, and the continued weakening of the U.S. dollar. Additionally, we saw earnings contributions from both Kwikee and Dresco, which were acquired this fiscal year, as well as solid margins at Kopp, which was acquired last year. "Profit margins increased in all major operations other than automotive, which continued to be adversely impacted by inefficiencies and manufacturing variances resulting from the production start-ups of new convertible top platforms and the recent launch of production at our North America automotive plant. While these challenges continue, we are confident that we will see automotive margin improvement in the near future. "Actuant is off to a strong fiscal 2004 with first half diluted earnings per share before special charges of $0.82 per share, or 34% higher than last year. This exceeds our long-term goal of increasing earnings by 15-20% annually. Despite increases in commodity costs such as steel, plastic resin and copper, we are raising our previous sales and earnings estimates for fiscal 2004 to reflect our current outlook. We are projecting full year sales of $695-705 million, and diluted earnings per share excluding debt extinguishment charges of $1.75-1.85 per share. Based on today's exchange rates, we are expecting third quarter sales to be approximately $180-$185 million and diluted EPS of between $0.48- 0.53 per share. Given our present cost structure, the future benefit of completed acquisitions and an improved economic outlook, Actuant is positioned for continued profitable growth." Fiscal 2004 second quarter sales in the Tools & Supplies segment were $103.6 million, or approximately 14% higher than last year's $90.7 million, primarily due to foreign currency rate changes and the impact of the Dresco acquisition. Excluding these factors, Tools & Supplies segment revenues were relatively unchanged, reflecting higher North American sales offset by lower European sales. Second quarter sales in the Engineered Solutions segment increased approximately 41% over the prior year to $72.5 million, reflecting higher shipments in all major markets, the Kwikee acquisition and the favorable impact of foreign currency. Excluding foreign currency rate changes and the impact of the Kwikee acquisition, segment sales increased 18%. Actuant's second quarter operating profit increased 26% from $16 million in 2003 to $20.2 million this year, reflecting 24% sales growth and higher overall profit margins. Second quarter EBITDA (earnings before interest, income taxes, depreciation, amortization and minority interest), before special charges, was $23.8 million, or 15% higher than the $20.6 million last year, reflecting sales growth and increased operating profit margins, offset by foreign currency transaction losses. EBITDA is a key financial metric of the Company and its investors in measuring performance prior to capitalization and income tax charges. (See attached supplemental schedule for calculation.) Total debt at February 29, 2004 was $231 million, compared to approximately $254 million at the beginning of the second quarter. The decline in debt resulted from strong second quarter operating cash flow and the approximate $15 million proceeds from the sale/leaseback of a German facility in December. Cash balances declined from approximately $33 million at the beginning of the quarter to $3 million at February 29, 2004, reflecting the use of approximately $32 million of cash to fund the Dresco acquisition. Liquidity remains strong with only $12 million of the Company's $250 million revolver drawn at quarter-end. Second quarter net financing costs declined 29% year-over-year due to lower interest rates on funded debt, primarily reflecting fewer 13% Senior Subordinated Notes outstanding compared to the prior year. Actuant (S&P, BB Corporate Credit Rating, Stable Outlook), headquartered in Milwaukee, Wisconsin, is a diversified industrial company with operations in over 20 countries. The Actuant businesses are market leaders in highly engineered position and motion control systems and branded hydraulic and electrical tools. Products are offered under such established brand names as Enerpac, Gardner Bender, Kopp, Kwikee, Milwaukee Cylinder, Nielsen Sessions, Power-Packer, and Power Gear. For further information on Actuant and its business units, visit the Company's Web site at http://www.actuant.com/ ADELPHIA COMMS: Jefferson Wells' Auditing Engagement Expands ------------------------------------------------------------ Adelphia Communications and its debtor-affiliates sought and obtained the Court's authority to employ Jefferson Wells International, Inc. as their internal auditors pursuant to Sections 327(a) and 328 of the Bankruptcy Code. Pursuant to the November 15, 2002 Order authorizing the continued employment of certain accountants and consultants, by a June 13, 2003 Notice, the ACOM Debtors employed Jefferson Wells to assist them in the reconciliation of their general ledger accounts, the assembly and review of their statements of financial affairs, and certain other projects. Now, in addition to the accounting services, the ACOM Debtors obtained Court nod to expand Jefferson Wells' role to include, among other things, the provision of internal audit services. Pursuant to this expanded scope, Jefferson Wells will provide risk assessment services to the ACOM Debtors, including, but not limited to: (1) Risk assessment related to the ACOM Debtors' 2004 audit plan; (2) Cash management counseling; (3) Assistance with the ACOM Debtors' review in connection with the restatement of the ACOM Debtors' financial statements for the last four years; and (4) Bank reconciliation assistance. In consideration for Jefferson Wells' services, the firm will be compensated on an hourly basis, plus reimbursement of actual and necessary expenses incurred. Jefferson Wells' rates for consultants range between $75 and $200 per hour. All of Jefferson Wells' rates are subject to periodic, ordinary course, adjustments. The professionals involved in the ACOM Debtors' cases will likely span Jefferson Wells' rate ranges. (Adelphia Bankruptcy News, Issue No. 53; Bankruptcy Creditors' Service, Inc., 215/945-7000) AIR CANADA: Pushing for Approval of AVSA MOU & Term Sheet --------------------------------------------------------- In conjunction with their filing under the Companies' Creditors Arrangement Act, the Air Canada Applicants declared a payment moratorium on all aircraft lease payments to preserve their cash resources and allow them to complete a review of their existing fleet and assess future fleet requirements. The moratorium also provided the Applicants the opportunity to discuss revised financial arrangements for the use of the aircraft with their lessors or, alternatively, to make arrangements for the return of the aircraft. MOUs With Aircraft Financiers In September 2003, the Applicants executed a memorandum of understanding with the European Credit Agencies with respect to 38 aircraft. AVSA S.A.R.L. had provided residual value guarantees with respect to 29 of the 38 aircraft. The MOU the Applicants executed with the ECAs was subject to, among other things, AVSA agreeing to restructure the 29 RVGs. In March 2004, the Applicants executed five MOUs with certain financial institutions and other parties with respect to five A321 aircraft. AVSA had provided RVGs with respect to the aircraft. The MOU with respect to the A321 aircraft are also subject to, among other things, AVSA agreeing to restructure the 5 RVGs. The Existing Agreements The Applicants and AVSA are parties to these existing agreements: (a) The A340-500/600 Purchase Agreement dated April 7, 1998; (b) The A319 Purchase Agreement dated as of June 9, 1994; and (c) The A340 Purchase Agreement dated February 8, 1994. Pursuant to the A340-500/600 PA, the Applicants were obligated to accept delivery of five wide-body aircraft. The Applicants failed to take delivery of two A340-500 aircraft, which were scheduled to be delivered in April and May 2003. The Applicants would not be taking delivery of the three A340-600 aircraft, which were scheduled to delivered in July, August and September 2004. On January 30, 2004, the Applicants repudiated the A340- 500/600 PA, including certain promissory notes issued in lieu of cash pre-delivery payments. Pursuant to the A319 PA, and in particular, an amendment dated as of October 10, 2000, the Applicants were obligated to take delivery of 12 A321 aircraft. The Applicants failed to take delivery of the last two A321 aircraft, which were scheduled for delivery in August 2003. On January 30, 2004, the Applicants repudiated the A319 PA with respect to, and insofar as the A319 PA related to, the purchase of the two remaining A321 aircraft, including certain promissory notes issued in lieu of cash pre- delivery payments. The Applicants have no further aircraft purchase obligations under the A340 PA. Pursuant to the Existing Agreements, the Applicants paid AVSA certain cash pre-delivery payments in relation to their aircraft purchase obligations. Under the terms of the Existing Agreements, all pre-delivery payments made by the Applicants are non-refundable. Restructuring of the Existing Agreements Air Canada and AVSA agree to restructure the Existing Agreements: (A) A319 PA -- A portion of the pre-delivery payments made pursuant to the A319 PA for A321 aircraft will be applied in reduction of AVSA's damages as a result of the repudiation of the A319 PA with respect to, and insofar as the A319 PA related to, the purchase of the two remaining A321 aircraft; -- Subject to any claim AVSA may file as part of the CCAA proceedings, the Applicants will have no further obligations to AVSA with respect to the purchase of the two remaining A321 aircraft; and -- AVSA acknowledges that the promissory notes the Applicants issued with respect to each of the A321s have been repudiated and have no further force or effect. AVSA will return the promissory notes to the Applicants upon fulfillment or waiver of the conditions precedent to the parties' Memorandum of Understanding dated March 12, 2004. (B) A340-500/600 -- The Applicants or a permitted assignee will purchase the two A340-500s -- which were originally required to be purchased in April and May 2003 -- in June and July 2004. AVSA will expedite the delivery of the aircraft in time for use during the summer schedule; -- In consideration of the purchase of the aircraft, AVSA agrees that the balance of the purchase price of the A340-500s payable by the Applicants at the delivery of each of the aircraft will -- after the application of credits and other amounts that AVSA agrees to allocate to the purchase -- be reduced to $87,000,000. AVSA will finance 100% of the balance of the purchase price of the A340-500 aircraft, pursuant to a Term Sheet for the Provision of Certain Financing Support, dated March 12, 2004, with the Applicants; -- The Applicants may defer the purchase of the three remaining A340-600s to year 2010, subject to the Applicants' right to: (i) cancel the purchase of one or more of the A340-600 aircraft; and (ii) convert the A340-600 aircraft to A340-500, A340-300, A330-300 or A330-200 aircraft; -- The purchase prices for the aircraft will be the lower of the purchase price set forth in the relevant Existing Agreement and the then current market price as determined by AVSA; -- If the Applicants cancel the purchase of any of the A340-600s and do not convert the cancelled order to other wide-body types, the Applicants will pay AVSA a $3,500,000 fee, which will be satisfied by the reduction of a future wide-body credit. No additional payments with respect to the purchase of the aircraft will be required until 24 months before the delivery of the first aircraft; -- AVSA will provide the Applicants with a credit of up to $36,260,000 against the purchase of the three A340-600 aircraft, the alternative aircraft or new Airbus wide-body aircraft. The credit is subject to reduction to reflect the actual damages suffered by AVSA in the event the Applicants breach the Backstop Financing pursuant to the Term Sheet or if the $3,500,000 becomes payable; -- AVSA acknowledges that the promissory notes issued by the Applicants with respect to each of the A340-600 aircraft have been repudiated and have no further force or effect. AVSA will return the promissory notes to the Applicants upon fulfillment or waiver of the conditions precedent to the parties' MOU; and -- All the remaining pre-delivery payments held by AVSA will be applied to reduce their claim in the CCAA Proceedings. Conditions Precedent The MOU and the related transactions are hinged on these conditions being fulfilled on or before March 31, 2004: (a) Consent of Ernst & Young, Inc., the Court-appointed Monitor; (b) Bankruptcy Court approval; (c) The Applicants' receipt of all necessary corporate approvals, which take into account the pending ratification by the Air Canada Pilots Association members of the resolution relating to the rates and terms for flying the A340-500 aircraft; (d) Receipt of all necessary corporate approval or AVSA; (e) Consent of Trinity Time Investments, Ltd.; and (f) Consent of GE Capital Corporation, as CCAA Lender. Financing Support Term Sheet AVSA will finance 100% of the balance of the purchase price of the A340-500 aircraft. In consideration of the financing commitment, the Applicants will pay AVSA a Backstop Financing Fee equal to 1% of the financed amount of each A340-500 upon drawdown. The Applicants will also pay AVSA a $15,000,000 fee in consideration for AVSA's consent to restructure the RVGs. The RVG Restructuring Fee and the Backstop Financing Fee will be satisfied by AVSA's re-allocation of a portion of the non- refundable pre-delivery payments held by AVSA. The financing is subject to: (a) There being no event of default under any contractual obligations with a member of the Airbus group other than existing events of default, which are continuing; (b) There being no material adverse change in the Applicants' financial condition that would affect their ability to perform their obligations under the financing, exit from the CCAA Proceedings, or maintain their commitments with major stakeholders, at the time of the funding; (c) AVSA being granted a Court ordered first ranking charge over the two A340-500 aircraft, which will be cross- defaulted and cross-collateralized between the two aircraft and cross-defaulted with any enforcement proceedings pursuant to the CCAA Lender's Charge, as the term is defined in the Initial CCAA Order; and (d) AVSA will be entitled to enforce its remedies under the financing and not be subject to the stay of proceedings provided for in the Initial CCAA Order. The filing of an insolvency proceeding other than the current CCAA Proceeding before the Applicants' emergence from the CCAA Proceeding, which is not dismissed within 60 days, and the Applicants' default under any contractual obligation with a member of the Airbus Group, which continues past the applicable grace period, constitute Events of Default entitling AVSA to terminate the financing. Benefits of the MOU and Term Sheet John Turner, General Manager -- Air Canada Maintenance and Aircraft Programs, tells Mr. Justice Farley that the MOU and Term Sheet represent a restructuring of the Existing Agreements and a global settlement of issues outstanding between AVSA and the Applicants. More importantly, the MOU and Terns Sheet provide the Applicants with the necessary RVGs required in connection with their MOUs with the aircraft financiers. Mr. Turner explains that the settlement enables the Applicants to preserve the benefit of most of the pre-delivery payments currently held by AVSA notwithstanding that the Existing Agreements state that the payments are non-refundable. The pre- delivery payments will be allocated by AVSA to the new transactions contemplated by the MOU and the Term Sheet for the Applicants' benefit. In addition, Mr. Turner points out that the two Airbus A340-500 aircraft, which will be introduced for the busy summer season, are anticipated to provide a competitive advantage in the long haul Asian market. Air Canada's Restructuring Business Plan is focused on re-engineering the domestic market with new smaller regional jets, which will allow Air Canada to maintain competitive domestic services. The domestic network will provide the necessary feed for Air Canada to pursue and exploit the more lucrative transborder and international markets, which is imperative to the airline's long-term viability. Accordingly, the Applicants ask the CCAA Court to affirm their business judgment and: -- approve the MOU and the Term Sheet with AVSA; and -- grant AVSA a Court-ordered first ranking charge on the two A340-500 aircraft. 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. (Air Canada Bankruptcy News, Issue No. 29; Bankruptcy Creditors' Service, Inc., 215/945-7000) AIR CANADA: Trinity Reviews Deal In Light of Union Intransigence ---------------------------------------------------------------- Trinity Time, the court-approved equity plan sponsor for the Air Canada restructuring, initiated a full review of its $650 million equity investment, due to union intransigence in refusing to discuss pension structure. In conducting this review, Trinity and its financial adviser and partner, Goldman Sachs, will, for each labor group, closely examine the achieved value of the concessions made by the unions in the May-June 2003 labor negotiations in relation to the levels promised by each union (approximately $850 million in total for unionized employees). In addition, an assessment will be made as to the financial impact of the unions' refusal to consider the proposed pension changes. Leaders of the company's unions are refusing to consider changes that would transition some employees' pension plans from the current defined benefit (DB) pension plan to a defined contribution (DC) pension plan - the trend among large North American employers. Union leaders are also refusing to discuss the DC plan with their own members, despite consistent and widespread expressions of interest on the part of Air Canada employees. "Air Canada's unions have placed ideology ahead of their members' interests in refusing to discuss the DC pension structure. Trinity is simply seeking to ensure a more secure future for Air Canada and its employees while securing entitlements earned through past service," said Trinity director Harold Gordon. "Our investment - from the beginning - has been contingent on a satisfactory solution to this issue, which impacts directly Air Canada's competitiveness. By refusing even to discuss the issue, union leaders are now forcing us to reconsider the entire investment. If the numbers are not there, we will be forced to walk away from investing in Air Canada." Trinity first presented its pension proposal on February 5. Last week it agreed that current non-unionized employees would have the option of choosing between DB and DC pension plans, but it could not consider the same option for unionized employees because of the refusal of union leadership to engage in discussions. Trinity has established a web site at http://www.trinitytime.ca/ for Air Canada employees to learn more about the DC benefit option. 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. AIRGAS INC: Inks Hydrogen Fuel Service Agreement with Plug Power ---------------------------------------------------------------- Plug Power Inc. (Nasdaq: PLUG), a leader in the design, manufacture and deployment of proton exchange membrane (PEM) fuel cell systems, and Airgas, Inc. (NYSE: ARG), the largest U.S. distributor of industrial, specialty and medical gases, announced a hydrogen fuel service agreement for Airgas to be the preferred supplier of hydrogen fuel for Plug Power's GenCore(R) customers. The five-year agreement calls for Plug Power and Airgas to jointly market hydrogen fuel service products for GenCore(R) fuel cell systems in the United States. Airgas whose national network includes nearly 800 locations, will offer fuel services including cylinder dropoff and connection to Plug Power's GenCore(R) customers. Airgas will also provide a complete line of specialty gas equipment to help manage the fuel supply and a unique Chemical Energy Storage Module (CESM) to provide hydrogen fuel storage for the GenCore(R) fuel cell systems. According to Tom Thoman, vice president-gases for Airgas, "Plug Power is building a leading position in the fuel cell market, especially in the provision of backup power for telecommunications equipment and other stationary installations. These applications fit perfectly with our expertise in cylinder hydrogen fuel storage and supply." "We are excited about our agreement with Airgas, the leader in the distribution of cylinder hydrogen throughout the United States," said Mark Sperry, chief marketing officer, Plug Power. "Together, Plug Power and Airgas will offer a complete, convenient and cost effective fueling solution for our customers." About GenCore(R) Plug Power's GenCore(R) fuel cell system provides extended run back-up power for the telecommunication and uninterruptible power supply industries. GenCore(R) is fueled by bottled hydrogen and produces no emissions. About Plug Power Plug Power Inc. designs and develops on-site energy systems based on proton exchange membrane fuel cells. Plug Power's strategic partners include GE Fuel Cell Systems, DTE Energy Technologies, Vaillant GmbH, Honda R&D Co., Ltd., Engelhard Corporation and Celanese Ventures. The Company's headquarters are located in Latham, N.Y., with offices in Washington, D.C., and The Netherlands. For more information please visit www.plugpower.com. About Airgas, Inc. Airgas, Inc. (NYSE: ARG) (S&P, BB Corporate Credit Rating, Positive) is the largest U.S. distributor of industrial, medical and specialty gases, welding, safety and related products. Its integrated network of nearly 800 locations includes branches, retail stores, gas fill plants, specialty gas labs, production facilities and distribution centers. Airgas also distributes its products and services through eBusiness, catalog and telesales channels. Its national scale and strong local presence offer a competitive edge to its diversified customer base. For more information, visit http://www.airgas.com/ ALLTEC CORPORATION: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Alltec Corporation 110 Catalyst Drive Canton North Carolina 28716 Bankruptcy Case No.: 04-10329 Type of Business: The Debtor manufactures lightning protection and grounding systems as well as Transient Voltage Surge Suppression (TVSS) products. See http://www.allteccorp.com/ Chapter 11 Petition Date: March 17, 2004 Court: Western District of North Carolina (Asheville) Judge: George R. Hodges Debtor's Counsel: David G. Gray, Esq. Westall, Gray, Connolly & Davis, P.A. 81 Central Avenue Asheville, NC 28801 Tel: 828-254-6315 Total Assets: $958,843 Total Debts: $1,863,236 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Independent Protection Company $113,926 D&H Development $44,632 Thomas Publishing Company $33,303 Elan Financial Services $29,626 Preferred Lightning Protection $17,624 Avoca Engineers & Architects $16,050 Precision Axis $15,500 Principal Life Insurance Co. $13,935 Frijouf, Rust & Pyle, P.A. $12,851 ARCAT, Inc. $10,355 Advanced Protection Technology $9,136 Overnite Transportation $8,534 Stone Container Corporation $6,891 Southeastern Freight Lines $6,462 Ditek Corporation $5,744 Ontrack Systems $5,148 Andamios Y Pararrayos Sa De Cv $4,925 Nehring Electrical Works $4,894 Asheville Savings Bank $4,826 Innovative Assoc. Solutions $4,560 AMERCO: Court Approves Bonanza Property Sale for $971,850 --------------------------------------------------------- Amerco Real Estate Company sought and obtained the Court's authority to sell to the State of Nevada, Department of Transportation the real property located at 2001-21 W. Bonanza Road in Las Vegas, Nevada, which is the subject of a condemnation proceeding. AREC is responsible for: -- administering the real property matters for all properties owned by Amerco, U-Haul International and their subsidiaries; -- purchasing properties to be used by Amerco, U-Haul and their subsidiaries; and -- disposing, either through sale or lease, of unused real property. The Property that the Department is condemning under its powers of eminent domain consists of a 29,085-square foot area, including improvements and a temporary construction easement of 3,942 square feet for a period of 42 months to widen the US-95 freeway in Las Vegas, Nevada. There are 154 mini-storage units located on the Property, which are affected by the condemnation proceeding. On November 22, 2002, Amerco obtained the appraisal reports provided by Cushman & Wakefield of Illinois, Inc., which valued the Property at $880,000. The Department originally offered Amerco $883,500 to purchase the Property. Thereafter, the Department proposed to increase its initial purchase offer to $971,850 in exchange for Amerco's promise to forego recovery of any money for lost rental value of the storage units -- a 10% increase from the original offer. The Property is not part of the Collateral on the DIP Facility from Wells Fargo Foothill, Inc. Also, the Property is not subject to the Synthetic Leases with BMO Global Capital Solutions LLC and Citibank, N.A. However, since the DIP Facility provides that the Debtors must forward proceeds of the sale of the Property to the DIP Lender to repay the advances the Debtors made, the Debtors will repay the DIP Lender for the advances under the DIP Facility with the Sale Proceeds. Any remaining Sale Proceeds will be deposited into the Compass Bank account as provided in an agreement with JPMorgan. Headquartered in Reno, Nevada, AMERCO's principal operation is U- Haul International, renting its fleet of 96,000 trucks, 87,000 trailers, and 20,000 tow dollies to do-it-yourself movers through over 1,000 company-owned centers and 15,000 independent dealers located throughout the United States and Canada. The Company filed for chapter 11 protection on June 20, 2003 (Bankr. Nev. Case No. 03-52103). Craig D. Hansen, Esq., Jordan A. Kroop, Esq., Thomas J. Salerno, Esq., and Carey L. Herbert, Esq., at Squire, Sanders & Dempsey LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,042,777,000 in total assets and $884,062,000 in liabilities. (AMERCO Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000) AMRESCO COMM'L: Fitch Takes Rating Actions on Series 1997-C1 Notes ------------------------------------------------------------------ AMRESCO Commercial Mortgage Funding I Corp.'s mortgage pass- through certificates, series 1997-C1, are upgraded by Fitch Ratings as follows: --$21.6 million class D to 'AAA' from 'AA'; --$26.4 million class E to 'AAA' from 'A'; --$9.6 million class F to 'AA+' from 'A-'; --$31.2 million class G to 'BBB-' from 'BB+'. --$4.8 million class H to 'BB+' from 'BB-'. The following classes are affirmed by Fitch: --$131.6 million class A-3 'AAA'; --Interest-only class X 'AAA'; --$24 million class B 'AAA'; --$12 million class C 'AAA'; --$7.2 million class J 'B'; --$2.4 million class K 'B-'. Fitch does not rate the $12 million class L certificates. The upgrades are primarily the result of increased subordination levels due to loan payoffs and amortization. As of the March 2004 distribution date, the pool's aggregate principal balance has been reduced by 41% to $282.8 million from $480.1 million at issuance. The trust has not realized any losses to date. Three loans (9.4%) are in special servicing, including two 90 days delinquent loans (7.7%). The largest of them (6.0%) is secured by a retail center in Tulsa, OK. A new anchor tenant moved in recently, increasing occupancy to 74%. The special servicer is evaluating workout options. ASTORIA ENERGY: S&P Gives B+ Rating to Proposed $690MM Bank Loan ---------------------------------------------------------------- Standard & Poor's Rating Services assigns its 'B+' preliminary rating to Astoria Energy LLC's proposed $690 million senior secured bank loan due March 2012. The outlook is stable. Standard & Poor's has assigned a recovery rating of '4' to the Astoria Energy project to indicate the marginal recovery (25% to 50% of principal) that secured lenders may expect in the event of a default. AE, which is a Delaware limited liability company, will use the proceeds to develop, own, and operate a 552 MW combined-cycle gas and oil-fired power plant located in the Astoria section of Queens, New York. The stable outlook reflects the view that the project will complete construction of the facility on time and on budget, as well as meet guaranteed performance criteria under the engineering, procurement, and construction (EPC) contract. "Low technology risk and an investment-grade EPC guaranty support the stable outlook," said Standard & Poor's credit analyst Michael Messer. "The ratings could fall if construction lags significantly behind schedule or if cost overruns require draws on backstop letters of credit or the EPC guaranty," added Mr. Messer. Standard & Poor's also said that because of basic structural weaknesses in the project, little opportunity exists for an upgrade in the near term. The project will sell capacity and energy under a 10-year power purchase agreement with a five-year extension option to Consolidated Edison Co. of New York Inc. (ConEd; A/Stable/A-1). AE is 50% owned by Steinway Creek Electric Generating Co. LLC and 50% owned by a consortium of private investors, including Energy Investor Funds, Caisse Depot Capital Americas, and the SNC-Lavalin Group. The sponsors expect to begin construction by April 2004 and commence commercial operations by May 1, 2006. AVA CAPITAL TRUST: Fitch Rates Proposed Trust Preferreds at BB -------------------------------------------------------------- Fitch Ratings assigns a 'BB' rating to AVA Capital Trust III's proposed issuance of $60 million of trust preferred securities. Proceeds from the flexible rate trust preferred will be used to redeem $60 million of Avista Capital I 7 7/8% trust preferred. The proposed security's distributions will initially be fixed for five years and may be remarketed on either a fixed or floating rate basis to be effective following the expiration of the initial fixed rate period. Avista Capital Trust I and AVA Capital Trust III are subsidiaries of Avista Corporation (AVA). The Rating Outlook is Stable. The rating considers AVA's (senior secured 'BBB-', senior unsecured rated 'BB+' by Fitch) improving financial metrics and a generally supportive regulatory environment. Although AVA's financial ratios remain weak relative to its credit category, future debt reduction is expected to be facilitated by excess cash flows contributed primarily by the core utility business, Avista Utilities, and to a lesser degree by AVA's unregulated energy operation, Avista Energy (AE). Utility cash flows are likely to continue to benefit from recovery of deferred power costs, recent and prospective electric and natural gas rate increases and manageable capital requirements. The Stable Rating Outlook reflects AVA's relatively predictable utility cash flows and Fitch's expectations for a continuation of supportive regulatory treatment and further debt reduction. The rating also recognizes AVA's ongoing efforts to downsize its non-utility investments. Management focus on the more stable utility operation is a positive for fixed income investors. Nonetheless, prospective AE cash flows, an important component of AVA's ongoing de-leveraging process, are volatile and subject to relatively high business risk. In February 2004, Avista Utilities filed electric and natural gas base rate cases with the Idaho Public Utilities Commission. The filings seek 11% and 9% increases in AU's respective electric and natural gas rates. A final order is expected around year-end 2004. An unanticipated negative outcome in the Idaho jurisdictional rate cases would weaken anticipated cash flows slowing the company's de-leveraging process BUDGET GROUP: Objections to Proposed Plan are Due Today ------------------------------------------------------- On February 4, 2004, the U.S. Bankruptcy Court for the District of Delaware approved the Disclosure Statement prepared by the BRAC Group, Inc. (f/k/a Budget Group, Inc.) Debtors with respect to their Second Amended Joint Chapter 11 Liquidating Plan. The Court found that the Disclosure Statement contained the right kind and amount of information to enable creditors to make informed decisions whether to accept or reject the Plan. The court fixed today, at 4:00 p.m. (Eastern Time) as the deadline for filing objections to plan confirmation. Objections must: a) be in writing; b) comply with the federal Rules of Bankruptcy Procedure and the Local Bankruptcy Rules of this Court; c) set forth the names of the objector, nature and the amount of claim against the Debtor's estates or properties; d) state the legal and factual basis of objection; e) be filed with the Clerk of the Bankruptcy Court for the District of Delaware, 3rd Floor, 824 Market Street, Wilmington, Delaware 19801 Objections must be served on: (1) Sidley Austin Brown & Wood LLP, Bank One Plaza, 10 South Dearborn Street, Chicago, IL 60603, Attn: Larry J. Nyhan, Esq.; (2) Young Conaway Stargatt & Taylor, LLP, The Brandywine Building, 1000 West Street, 17th Floor, Wilmington, Delaware 19801, Attn: Robert S. Brady, Esq.; (3) Brown Rudnick Berlack Israels LLP, One Financial Center, Boston, Massachusetts 02111, Attn: Harold J. Marcus, Esq.; (4) Ashby & Geddes, 222 Delaware Avenue, 17th Floor, Wilmington, Delaware 19801, Attn: William P. Bowden; (5) Richards, Layton & finger, P.A., One Rodney Square, P.O. Box 551, Wilmington, Delaware 19899, Attn: Mark Collins, Esq.; (6) Office of the U.S. Trustee, J. Caleb Boggs Federal Building, 844 North king Street, Wilmington, Delaware 19801, Attn: Margaret Harrison, Esq. Headquartered in Daytona Beach, Florida, Budget Group, Inc., operates under the Budget Rent a Car and Ryder names -- is the world's third largest car and truck rental company. The Company filed for chapter 11 protection on July 29, 2002 (Bankr. Del. Case No. 02-12152). Lawrence J. Nyhan, Esq., and James F. Conlan, Esq., at Sidley Austin Brown & Wood and Robert S. Brady, Esq., and Edward J. Kosmowski, Esq., at Young, Conaway, Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $4,047,207,133 in assets and $4,333,611,997 in liabilities. BURLINGTON: Combines with Cone Mills to Form International Textile ------------------------------------------------------------------ Wilbur L. Ross announced that Cone Mills, which was acquired out of bankruptcy last Friday, would be combined with Burlington Industries to form International Textile Group (ITG) with combined revenues of approximately $900 million. Mr. Ross is Chairman of ITG, and its President and CEO is Joseph Gorga. Gary Smith, formerly of Cone Mills, will be the new CFO of ITG. John Bakane will remain CEO of Cone Mills Denim. Both Smith and Bakane will report to Gorga. Cone Mills will assume responsibility for Burlington Burlmex denim manufacturing in Mexico. Cone Jacquards will be consolidated with Burlington's two Jacquard operations into a single Burlington Company, and Cone's Carlisle subsidiary also has become part of Burlington. Burlington House, Cone Jacquards and Carlisle will operate under ITG's newly formed Home Furnishing Business. The company is currently searching both internally and externally for a President to run the newly formed group. ITG will be the majority owner of Nano-Tex, which operates the specialty chemical business. Burlington Apparel Fabrics, headed by Ken Kunberger, will be combined into ITG. All four companies will operate from a single headquarters which will be located in Greensboro if local authorities provide the requested incentives. Meanwhile both present headquarters are occupied under short-term leases. Mr. Bakane commented, "We are pleased to provide stability and opportunities to over 1,000 manufacturing employees at Cone's White Oak plant here in Greensboro. We look forward to working with the City in creating an environment in which White Oak manufacturing can continue to prosper." Mr. Gorga said, "I look forward to blending these two companies and strengthening the well known Cone and Burlington brands in the marketplace. There is great opportunity to grow what each has started and together take our business and product strategies to the next level." Mr. Ross added, "ITG is already a major player in the U.S. and Mexico and intends to internationalize further. I will be going to China next week to discuss a wide range of topics with government and industry leaders there. If our government creates a NAFTA- friendly Central American Free Trade Agreement and involves the quotas contained in China's WTO accession agreement, any international initiative would be additive to our business rather than replacing U.S. operations." CAPITAL CREATION: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: The Capital Creation Co., Inc. aka The CCC Financial Organization aka Joshua Holdings Agency P.O. Box 22140 Beachwood, Ohio 44122 Bankruptcy Case No.: 04-12595 Type of Business: The Debtor is a security holder. Chapter 11 Petition Date: March 4, 2004 Court: Northern District of Ohio (Cleveland) Judge: Pat E. Morgenstern-Clarren Debtor's Counsel: David M. Neumann, Esq. Benesch, Friedlander, Coplan & Aronoff LLP 2300 BP America Tower 200 Public Square Cleveland, OH 44114 Tel: 216-363-4500 Estimated Assets: $100,000 to $500,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ The Coventry Group, Inc. Contract $713,000 c/o Braden M. Douthett, Esq. Bricker & Eckler 1375 East Ninth Street Suite 1500 Cleveland, OH 44114-1718 Warren Financial Contract $84,000 Calfee Halter & Griswold Legal Fees $74,071 Rotatori, Bender & Assoc. Legal Fees $62,603 Roetzel & Andress Legal Fees $62,153 Kimball E. Rubin & Accounting Fees $36,320 Associates Ltd. Baker & Hostetler LLP Legal Fees $22,556 Jones, Day, Reavis & Pogue Legal Fees $14,573 Ballard Spahr Andrews Legal Fees $14,371 Ingersol Weston Hurd Fallon Paisley Legal Fees $10,741 & Howley Tower East Operating Assoc. Lease Dispute $9,924 LP American Express Tax Service Accounting Fees $8,790 Broad & Cassel Legal Fees $3,893 Alston & Bird Legal Fees $2,513 Saltz, Shamis & Goldfarb Accounting Fees $2,350 Hausser & Taylor LLP Accounting Fees $2,218 The Mediation Group Professional Fees $1,488 Mehler & Hagestrom Transcript Services $1,038 Mercantile IV Associates Unpaid Rent $715 Rennillo Court Reporting Transcript Services $686 CENTENNIAL COMMS: Third Quarter Net Loss Reduces to $30.3 Million ----------------------------------------------------------------- Centennial Communications Corp. (Nasdaq: CYCL) announced results for the quarter ended February 29, 2004. Consolidated revenues grew 14% from the same quarter last year to $207.4 million. Net loss was $30.3 million for the third quarter as compared to a net loss of $159.6 million for the same quarter last year. Adjusted operating income (previously referred to as "adjusted EBITDA") was $81.3 million, a 19% increase from the same quarter last year. Adjusted operating income is net income (loss) before interest, taxes, depreciation, amortization, loss (gain) on disposition of assets, minority interest in (income) loss of subsidiaries, income from equity investments, loss on impairment of assets, other income (expense) and special non-cash charge. The Company's wireless subscribers at February 29, 2004 were 1,027,500, compared to 929,700 on the same date last year, an increase of 11%. U.S. Wireless subscribers increased by 1,600 from the quarter ended November 30, 2003, aided by national rate plans. Caribbean Wireless subscribers increased 28,700 as compared to the quarter ended November 30, 2003, due primarily to strong growth of postpaid subscribers. Caribbean Broadband switched access lines reached 48,100 and dedicated access line equivalents were 205,300 at February 29, 2004, up 21% and 15%, respectively, from February 28, 2003. Cable television subscribers were 73,600 at February 29, 2004, down 4,900 from the same quarter last year. "Once again this quarter we are proud to report double-digit growth in both revenue and adjusted operating income. We are particularly proud of the performance of our retail business in the U.S., which generated service revenue growth of 17%. This growth resulted from a 3% increase in subscribers and from an improvement in service revenue per subscriber. Our Caribbean operations also posted noteworthy results; revenue grew by 20% and adjusted operating income by 31% versus the same quarter last year." said Michael J. Small, chief executive officer. For the quarter, U.S. Wireless revenues were $90.3 million and U.S. Wireless adjusted operating income was $37.2 million. U.S. Wireless adjusted operating income increased by 8% from the same quarter last year despite reduced roaming revenue of approximately $5.4 million. Service revenue per subscriber increased to $44 for the three months ended February 29, 2004 from $39 for the same period in the prior year, primarily due to the introduction of national rate plans. Service revenue is total revenue excluding roaming revenue and equipment sales. For the quarter, total Caribbean (consisting of the Caribbean Wireless and Caribbean Broadband segments) revenues were $117.1 million and total Caribbean adjusted operating income was $44.1 million. Total Caribbean adjusted operating income for the quarter was up 31% from the same quarter last year. Caribbean Wireless revenues for the quarter reached $78.0 million, an increase of 20% from the same quarter last year. Caribbean Wireless adjusted operating income for the quarter was $29.0 million, an increase of 21% from the same quarter last year. Caribbean Broadband revenues for the quarter were $41.9 million and Caribbean Broadband adjusted operating income reached $15 million, up 21% and 56% from the same quarter last year, respectively. Consolidated capital expenditures for the quarter ended February 29, 2004 were $37.6 million or 18% of revenue. Net debt at February 29, 2004 was $1,704.9 million as compared to $1,699.7 million at February 28, 2003. For the quarter, the Company's net loss of $30.3 million includes a tax provision of $6.5 million, resulting from book/tax differences and foreign taxes. Recent Financing Activity In February, Centennial Communications consummated refinancing transactions consisting of a new $750 million senior secured credit facility and a private placement of $325 million of 8 1/8% Senior Notes due 2014. The new senior secured credit facility is comprised of a $600 million, seven-year term loan maturing in 2011 and a $150 million, six-year revolving credit facility maturing in 2010. The new financings extend the weighted average maturities of the Company's long-term debt by over two years and eliminate approximately $600 million in scheduled amortization payments over the next four years. As a result of these transactions, the Company's weighted average total cost of debt has decreased from approximately 8.50% to approximately 7.75%. Term loan borrowings under the new senior secured credit facility, together with proceeds of the senior notes, were used to refinance and replace the Company's existing senior secured credit facilities; repurchase all of the Company's outstanding unsecured subordinated notes due 2009 accruing paid-in-kind interest at a rate of 13.0%; repurchase and/or redeem $70 million aggregate principal amount of the Company's outstanding $370 million 10.75% senior subordinated notes due 2008 and pay related fees and expenses. Revised Fiscal 2004 Guidance The Company is raising its prior guidance to reflect positive business trends through the third quarter. We now expect adjusted operating income to grow by a minimum of 10% in fiscal 2004 over the $295.7 million result for 2003; this revises prior guidance of 5-10% growth in adjusted operating income. This increased growth in adjusted operating income is expected despite a projected reduction of approximately $25 million in the U.S. Wireless roaming revenues in 2004 from the level experienced in 2003. This updates prior guidance of an estimated $20 million reduction in U.S. Wireless roaming revenues. The Company now expects capital expenditures of approximately $135 million in fiscal 2004 versus prior guidance of approximately $125 million. The Company has not included a reconciliation of projected adjusted operating income since projections for some components of such reconciliation are not possible to project at this time. About Centennial Centennial (S&P, B- Corporate Credit Rating, Negative) is one of the largest independent wireless telecommunications service providers in the United States and the Caribbean with approximately 17.1 million Net Pops and approximately 929,700 wireless subscribers. Centennial's U.S. operations have approximately 6.0 million Net Pops in small cities and rural areas. Centennial's Caribbean integrated communications operation owns and operates wireless licenses for approximately 11.1 million Net Pops in Puerto Rico, the Dominican Republic and the U.S. Virgin Islands, and provides voice, data, video and Internet services on broadband networks in the region. Welsh, Carson Anderson & Stowe and an affiliate of the Blackstone Group are controlling shareholders of Centennial. For more information regarding Centennial, visit its Web sites at http://www.centennialcom.com/ and http://www.centennialpr.com/ CITRUS VALLEY: S&P Cuts Underlying Rating to BB over Low Liquidity ------------------------------------------------------------------ Standard & Poor's Rating Services lowered its underlying rating (SPUR) to 'BB' on the certificates of participation (COPs) issued for Citrus Valley Health Partners, California, by the California Statewide Communities Development Authority, based on continued negative operating and excess margins and low levels of liquidity. The outlook is stable. "While Citrus Valley Health Partners' management had expected to achieve break-even performance in fiscal 2003, higher than budgeted labor expenses and a change in payor mix resulted in another year of operating losses," Standard & Poor's credit analyst James Cortez said. "Citrus Valley Health Partners' current low level of liquidity, along with upcoming capital expenditures-- which are forecast to double starting in 2005--increases the need for further financial performance improvement." Among the expenditures Citrus Valley Health Partners faces, in addition to an aging physical plant, are approximately $36 million-$40 million of seismic retrofitting that will need to take place on Citrus Valley Health Partners' three campuses by 2013. Citrus Valley Health Partners is a 563-acute staffed bed system comprised of Citrus Valley Medical Center, which, in turn, consists of Inter-Community Campus and Queen of the Valley, located on two campuses in Covina and West Covina, respectively; and Foothill Presbyterian Hospital in Glendora. COMMSCOPE INC: Proposes $225 Million Convertible Debt Offering -------------------------------------------------------------- CommScope, Inc. (NYSE: CTV) intends to offer $225 million aggregate principal amount of convertible senior subordinated debentures due 2024 to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended. The Company also plans to grant the initial purchasers of the debentures an option to purchase up to an additional $25 million aggregate principal amount of debentures. The Company plans to use the net proceeds as follows: a) to retire all of the $172.5 million aggregate principal amount of our outstanding 4% convertible subordinated notes due 2006 by redemption, at a redemption price of 101.7143% of their principal amount, plus accrued interest, and/or through privately negotiated transactions concurrent with or subsequent to this offering; b) to repay $25 million of outstanding revolving credit loans under our senior secured credit facility; and c) for other general corporate purposes. About CommScope CommScope (NYSE: CTV) -- http://www.commscope.com/-- (S&P, BB Corporate Credit & B+ Subordinated Debt Ratings, Stable) is a world leader in the design and manufacture of 'last mile' cable and connectivity solutions for communication networks. We are the global leader in structured cabling systems for business enterprise applications and the world's largest manufacturer of coaxial cable for Hybrid Fiber Coaxial applications. Backed by strong research and development, CommScope combines technical expertise and proprietary technology with global manufacturing capability to provide customers with high-performance wired or wireless cabling solutions from the central office to the home. COMMSCOPE: Proposed $225-Mil. Debt Offering Gets S&P's B+ Rating ---------------------------------------------------------------- Standard & Poor's Ratings Services affirms 'BB' corporate credit and 'B+' subordinated debt ratings on Hickory, North Carolina- based CommScope Inc. At the same time, Standard & Poor's assigned a 'B+' rating to CommScope's proposed $225 million offering of convertible senior subordinated debentures due 2024. The outlook is stable. The company plans to use proceeds of the note offering to call its existing $172.5 million of convertible subordinated notes due 2006, as well as the outstanding $25 million balance under the revolving credit line. Remaining proceeds are to be used for general corporate purposes. "Ratings on CommScope reflect weakened profitability due to a three-year downturn in cable and wire markets and reduced liquidity due to the recent acquisition of Avaya Inc.'s Avaya Connectivity Solutions (ACS)," said Standard & Poor's credit analyst Joshua G. Davis. "Those factors are partially offset by a stronger business profile, characterized by increased product breadth and strengthened market position, resulting from the acquisition," the analyst continued. The proposed refinancing of CommScope's debt modestly improves financial flexibility and debt- serving capability by extending maturities and improving interest coverage. While the data-cable market has suffered significant declines over the past three years because of depressed investment in information technology, the ACS copper cable business has remained EBITDA-profitable, or break-even, over the course of the cycle and is expected to recover gradually in conjunction with firming IT markets. Near-term profitability is likely to be negatively affected by rising materials prices, particularly copper, combined with limited ability to raise product prices. CommScope's broadband business also remains depressed but is showing signs of stabilization, with revenues flat or slightly up on a sequential basis over the past several quarters. While cable television operators are not expected to sharply increase spending on cable, ongoing maintenance spending, along with some incremental increase in demand, potentially from customers such as financially distressed Adelphia Communications Corp., should result in relative stability in revenues in the coming year. Increasing materials prices, however, could reduce gross margins in coming quarters. Increases in non-broadband cable businesses, including cables to wireless telecommunications providers, may provide some offset to ongoing profitability pressures in the core broadband cable business. The stable outlook reflects adequate debt protection for the rating. Factors limiting the rating include near-term challenges associated with the integration of the ACS business, reduced financial flexibility, and limited prospects for improvements in profitability, particularly due to rising raw material costs. CONE MILLS: Combines with Burlington to Form International Textile ------------------------------------------------------------------ Wilbur L. Ross announced that Cone Mills, which was acquired out of bankruptcy last Friday, would be combined with Burlington Industries to form International Textile Group (ITG) with combined revenues of approximately $900 million. Mr. Ross is Chairman of ITG, and its President and CEO is Joseph Gorga. Gary Smith, formerly of Cone Mills, will be the new CFO of ITG. John Bakane will remain CEO of Cone Mills Denim. Both Smith and Bakane will report to Gorga. Cone Mills will assume responsibility for Burlington Burlmex denim manufacturing in Mexico. Cone Jacquards will be consolidated with Burlington's two Jacquard operations into a single Burlington Company, and Cone's Carlisle subsidiary also has become part of Burlington. Burlington House, Cone Jacquards and Carlisle will operate under ITG's newly formed Home Furnishing Business. The company is currently searching both internally and externally for a President to run the newly formed group. ITG will be the majority owner of Nano-Tex, which operates the specialty chemical business. Burlington Apparel Fabrics, headed by Ken Kunberger, will be combined into ITG. All four companies will operate from a single headquarters which will be located in Greensboro if local authorities provide the requested incentives. Meanwhile both present headquarters are occupied under short-term leases. Mr. Bakane commented, "We are pleased to provide stability and opportunities to over 1,000 manufacturing employees at Cone's White Oak plant here in Greensboro. We look forward to working with the City in creating an environment in which White Oak manufacturing can continue to prosper." Mr. Gorga said, "I look forward to blending these two companies and strengthening the well known Cone and Burlington brands in the marketplace. There is great opportunity to grow what each has started and together take our business and product strategies to the next level." Mr. Ross added, "ITG is already a major player in the U.S. and Mexico and intends to internationalize further. I will be going to China next week to discuss a wide range of topics with government and industry leaders there. If our government creates a NAFTA- friendly Central American Free Trade Agreement and involves the quotas contained in China's WTO accession agreement, any international initiative would be additive to our business rather than replacing U.S. operations." CONSOL ENERGY: Ranks No. 5 in Zacks' List of Stocks to Sell Now --------------------------------------------------------------- Zacks.com currently rates CONSOL Energy Inc. (NYSE:CNX) stock with a 'Strong Sell' (Rank #5) recommendation. Zacks.com from time to time releases details on a group of stocks that are part of their exclusive list of Stocks to Sell Now. Since inception in 1988 the S&P 500 has outperformed the Zacks #5 Ranked Strong Sells by 170.3% annually (12.1% vs. 4.5% respectively). "While the rest of Wall Street continued to tout stocks during the market declines of the last few years, we were telling our customers which stocks to sell in order to save themselves the misery of unrelenting losses," according to Zacks.com. Here is a synopsis of why Consol Energy stock has a Zacks Rank of 5 (Strong Sell) and should most likely be sold or avoided for the next 1 to 3 months. Note that a #5/Strong Sell rating is applied to 5% of all the stocks the company ranks: CONSOL Energy Inc. (NYSE:CNX) is the largest producer of high-Btu bituminous coal in the United States, and the largest exporter of U.S. coal. CONSOL Energy has experienced several downward revisions from analysts over the past several weeks for the year ending December 2004, and its earnings estimates for that year are down by approximately -46% from two months ago. A variety of operational problems, especially in its coal segment, brought a fourth quarter loss that was steeper than the consensus and below a year-ago profit. The company went on to say that final results were lower than the revised December forecast due to additional tax liabilities, provisions for legal contingencies, and restructuring costs. However, CONSOL Energy stated that with improved execution in its operations, the company should substantially improve its financial performance in 2004. While the company looks to have opportunity to get back on the right track this, investors may want to be patient in the interim and watch for its earnings estimates to rise before taking a position. About the Zacks Rank For over 15 years the Zacks Rank has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Since inception in 1988 the #1 Ranked stocks have generated an average annual return of +33.7% compared to the (a)S&P 500 return of only +12.1%. Plus this exclusive stock list has generated total gains of +100.3% since January 2000 as the market suffered its worst downturn in 60 years. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). And since 1988 the S&P 500 has outperformed the Zacks #5 Ranked Strong Sells by 170.3% annually (12.1% vs. 4.5% respectively). Thus, the Zacks Rank system can truly be used to effectively manage the trading in your portfolio. For continuous coverage of Zacks #1 and #5 Ranked stocks, then get your free subscription to "Profit from the Pros" e-mail newsletter where we highlight stocks to buy and sell using our time tested stock evaluation model. http://at.zacks.com/?id=94 The Zacks Rank, and all of its recommendations, is created by Zacks & Co., member NASD. Zacks.com displays the Zacks Rank with permission from Zacks & Co. on its web site for individual investors. About Zacks Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 to compile, analyze, and distribute investment research to both institutional and individual investors. The guiding principle behind our work is the belief that investment experts, such as brokerage analysts and investment newsletter writers, have superior knowledge about how to invest successfully. Our goal is to unlock their profitable insights for our customers. And there is no better way to enjoy this investment success, than with a FREE subscription to "Profit from the Pros" weekly e-mail newsletter. For your free newsletter, visit http://at.zacks.com/?id=95 Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates. About Consol Energy CONSOL Energy Inc. (S&P, BB- Corporate Credit Rating, Negative)is the largest producer of high-Btu bituminous coal in the United States. CONSOL Energy has 19 bituminous coal mining complexes in seven states. In addition, the company is one of the largest U.S. producers of coalbed methane with daily gas production of approximately 146.2 million cubic feet from wells in Pennsylvania, Virginia and West Virginia. The company also has a joint-venture company to produce natural gas in Virginia and Tennessee, and the company produces electricity from coalbed methane at a joint- venture generating facility in Virginia. Additional information about the company can be found at its web site at http://www.consolenergy.com/ COTT CORP: Beverages Unit Acquires Cardinal Companies Assets ------------------------------------------------------------ Cott Corporation (NYSE: COT; TSX; BCB) announced that its subsidiary Cott Beverages Inc. is acquiring assets of The Cardinal Companies of Elizabethtown, LLC, including a bottling facility located in Elizabethtown, Kentucky. Cardinal has had a long-standing relationship with Cott as a co- packer of soft drinks in the United States. The acquisition is expected to add approximately US$12 million a year to Cott's sales. The move adds additional capacity to Cott's integrated beverage system to support the Company's growing demand for retailer branded beverages. The terms of the transaction were not disclosed. "As we work with our retail partners to grow their business, we are seeking opportunities to add production capacity where needed," said John K. Sheppard, Cott's president and chief operating officer. "This acquisition will strengthen our capabilities in the mid-western U.S. and will also allow us to offer Cott's expertise in retailer brands to new customers not currently served by us." Cott continues to expand its presence in the U.S. through both organic growth and through acquisitions and alliances. This acquisition increases the number of company owned bottling plants to nine in the US and 19 worldwide. Sheppard added, "We're looking forward to welcoming Cardinal's employees to the Cott family. Under Larry Schmidt's leadership, Cardinal has built a solid business. They now have an important contribution to make to the success of Cott." "Our association with Cott Beverages goes back many years," said Larry Schmidt, president of Cardinal Companies. "We are very pleased about our Elizabethtown plant becoming a part of the Cott manufacturing system". Headquartered in Elizabethtown, Kentucky, Cardinal supplies retailers in the Mid-West region. Cott Corporation (S&P, BB Long-Term Corporate Credit and BB+ Senior Secured Debt Ratings) is the world's largest retailer brand soft drink supplier, with the leading take home carbonated soft drink market shares in this segment in its core markets of the United States, Canada and the United Kingdom. DAVIS COACH & TOURS: Case Summary & Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Davis Coach and Tours, Inc. P.O. Box 40483 Raleigh, North Carolina 27629 Bankruptcy Case No.: 04-00909 Type of Business: The Debtor provides shuttle and limousine services. Chapter 11 Petition Date: March 11, 2004 Court: Eastern District of North Carolina (Raleigh) Judge: A. Thomas Small Debtor's Counsel: Douglas Q. Wickham, Esq. Hatch, Little & Bunn P.O. Box 527 Raleigh, NC 27602 Tel: 919-856-3940 Estimated Assets: $500,000 to $1 Million Estimated Debts: $1 Million to $10 Million Debtor's 10 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Portfolio Advisors II, LLC Secured Value: $460,000 c/o Allegiance Financial $640,000 Group 2925 Country Drive, Ste 103 Little Canada, MN 5117 Center Capital Corporation $222,127 GE Capital Secured Value: $31,000 $36,000 GE Capital Colonial Pacific $29,349 Bell South Yellow Pages $27,202 Internal Revenue Service $13,000 Vernon Law Firm $3,500 Verizon Wireless $1,209 Verizon Directories $151 ADT Alarm System $123 DELTA FINANCIAL: Intends to File Registration Statement with SEC ---------------------------------------------------------------- Delta Financial Corporation (Amex:DFC) announced it intends to file a registration statement with the Securities and Exchange Commission in the second quarter of 2004. In connection with its intent to file a registration statement, the Company has provided notice to holders of approximately 862,000 shares of its outstanding common stock, which were previously issued upon exercise of warrants, that the Company intends to file a registration statement and that these holders will be provided with the opportunity to include up to all of their Warrant Shares in the registration statement in accordance with the registration rights agreement affecting the Warrant Shares, subject to all the terms of the registration rights agreement. The registration statement contemplates the proposed underwritten public offering by Delta of newly issued shares of its common stock. The actual size of any proposed offering, and its successful completion, will depend upon a number of factors, including market conditions. Delta believes that the completion of this offering would help substantially increase the public float of Delta stock. If the offering is completed, Delta intends to use approximately $13.9 million of the proceeds to redeem all of its outstanding Series A 10% Preferred Stock and the balance for general corporate purposes. A registration statement relating to these securities has not been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time a registration statement is declared effective by the Securities and Exchange Commission. The offering of these securities shall be made only by means of a prospectus that will be contained in such effective registration statement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state of jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. About the Company Founded in 1982, Delta Financial Corporation is a Woodbury, New York-based specialty consumer finance company that originates, securitizes and sells non-conforming mortgage loans. Delta's loans are primarily secured by first mortgages on one- to four-family residential properties. Delta originates home equity loans primarily in 26 states. Loans are originated through a network of approximately 1,700 independent brokers and the Company's retail offices. Since 1991, Delta has sold approximately $9.3 billion of its mortgages through 38 securitizations. * * * In its Form 10-Q filed with the Securities & Exchange Commission, Delta Financial corporation reports: LIQUIDITY AND CAPITAL RESOURCES "We require substantial amounts of cash to fund our loan originations, securitization activities and operations. We have organically increased our working capital over the last eight quarters. In the past, however, we operated generally on a negative cash flow basis. Embedded in our current cost structure are many fixed costs, which are not likely to be significantly affected by a relatively substantial increase in loan originations. If we can continue to originate a sufficient amount of mortgage loans and generate sufficient cash revenues from our securitizations and sales of whole loans to offset our current cost structure and cash uses, we believe we can continue to generate positive cash flow in the next several fiscal quarters. However, there can be no assurance that we will be successful in this regard. "Historically, we have financed our operations utilizing various secured credit financing facilities, issuance of corporate debt (i.e., Senior Notes), issuances of equity, and the sale of interest-only certificates and/or NIM notes and mortgage servicing rights sold in conjunction with each of our securitizations to offset our negative operating cash flow and support our originations, securitizations, and general operating expenses. "To accumulate loans for securitization or sale, we borrow money on a short-term basis through warehouse lines of credit. We have relied upon a few lenders to provide the primary credit facilities for our loan originations and at September 30, 2003, we had two warehouse facilities for this purpose. Both credit facilities have a variable rate of interest and, as of September 30, 2003, were due to expire in May 2004. In October 2003, our warehouse financing providers each increased their commitment amounts to $250.0 million, from $200 million and lowered the financing rate. In addition, we extended the maturity date for one of the facilities to October 2004. "There can be no assurance that we will be able to either renew or replace these warehouse facilities at their maturities at terms satisfactory to us or at all. If we are not able to obtain financing, we will not be able to originate new loans and our business and results of operations will be materially and adversely affected." DEX MEDIA: CFO to Speak at Lehman Brothers' Conference on Mar 23 ---------------------------------------------------------------- Dex Media, Inc.'s Chief Financial Officer, Robert M. Neumeister, will speak at the Lehman Brothers' High Yield Bond & Syndicated Loan Conference at Disney's Yacht & Beach Club Resort in Orlando, Florida on Tuesday, March 23 at 10:50 a.m. EST (8:50 a.m. MST). sPresentation materials will be available on the Dex Media web site at www.dexmedia.com . The presentation will also be broadcast live and replay audio will be available via web cast at http://customer.nvglb.com/LEHM002/032204a_by/default.asp?entity=dex About Dex Media, Inc. Dex Media, Inc. (S&P, BB- Corporate Credit Rating, Negative Outlook) is the parent company of Dex Media East LLC and Dex Media West LLC. Dex Media, Inc., through its subsidiaries, provides local and national advertisers with industry-leading directory, Internet and direct marketing solutions. The official, exclusive publisher for Qwest Communications International Inc., Dex Media published 271 directories in Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico (including El Paso, Texas), North Dakota, Oregon, South Dakota, Utah, Washington and Wyoming in 2002. As the world's largest privately-owned incumbent directory publisher, Dex Media produces and distributes 45 million print directories, and CD ROMs. Its Internet directory, qwestdex.com, receives more than 85 million annual searches. DII INDUSTRIES: Gets Until May 12, 2004 to Decide on Leases ----------------------------------------------------------- DII Industries, LLC and its Kellogg, Brown & Root debtor- affiliates sought and obtained the Court's authority to extend the time within which they may assume or reject the Leases to the later of May 12, 2004, or the date as the Plan may be confirmed, but in no case later than June 18, 2004. Headquartered in Houston, Texas, Kellogg, Brown & Root is engaged in the engineering and construction business, providing a wide range of services to energy and industrial customers and government entities in over 100 countries. DII has no business operations. The Company filed for chapter 11 protection on December 16, 2003 (Bankr. W.D. Pa. Case No. 02-12152). Jeffrey N. Rich, Esq., Michael G. Zanic, Esq., and Eric T. Moser, Esq., at Kirkpatrick & Lockhart LLP, represent the Debtors in their restructuring efforts. (DII & KBR Bankruptcy News, Issue No. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) DIMON: S&P Affirms Low-B Credit Rating & Revises Outlook to Stable ------------------------------------------------------------------ Standard & Poor's Ratings Services revisee its outlook on the second-largest independent leaf tobacco processor DIMON Inc. to stable from positive. At the same time, DIMON's 'BB' corporate credit and senior unsecured debt ratings were affirmed. Danville, Virginia-based DIMON has about $490 million of rated debt. "The outlook revision reflects the recent amendment to the unsecured bank credit facility, weak operating and financial performance, and the expectation that operating performance, margins, and financial measures will be below Standard & Poor's expectations in the near term," said credit analyst Jayne M. Ross. The ratings on DIMON reflect the challenging business environment in which the company operates, including global competition, political unrest in certain leaf-tobacco producing countries, a changing U.S. leaf-tobacco market, declining U.S. cigarette consumption, and a leveraged financial profile. In addition, there is customer concentration risk. These concerns are somewhat mitigated by the company's position as the world's second-largest independent leaf tobacco merchant, its sourcing diversification, strong customer relationships with the leading cigarette manufacturers, and better balance in worldwide leaf tobacco supply and demand. DOBSON COMMS: Completes Debt Repurchases of 8-7/8% Senior Notes --------------------------------------------------------------- Dobson Communications Corporation (Nasdaq:DCEL) completed a series of open market transactions since the beginning of 2004 to repurchase approximately $55.5 million (original principal amount) of its 8-7/8% Senior Notes for approximately $48.3 million. CUSIP for the 8-7/8% Senior Notes is 256072AD1. Dobson Communications is a leading provider of wireless phone services to rural markets in the United States. Headquartered in Oklahoma City, the Company owns wireless operations in 16 states, with markets covering a population of 10.6 million. The Company serves 1.6 million customers. For additional information on the Company and its operations, please visit its Web site at http://www.dobson.net/ * * * Standard & Poor's Ratings Services placed its ratings for Dobson Communications Corp., American Cellular Corp., and related entities (including the 'B-' corporate credit rating) on CreditWatch with negative implications. "The CreditWatch placement reflects the potential violation of bank covenants before year-end 2004 resulting from the company's revised EBITDA guidance, as well as increased pressure on roaming revenue due to the pending merger between AT&T Wireless Services Inc. (AWE) and Cingular Wireless LLC," explained Standard & Poor's credit analyst Rosemarie Kalinowski. DOUGLAS DYNAMICS: S&P Assigns B+ Corporate Credit Rating -------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Douglas Dynamics LLC, Milwaukee, Wisconsin-based manufacturer of snowplows and sand and salt spreaders. At the same time Standard & Poor's assigned its 'B+' secured bank loan rating to the company's proposed first-lien credit facilities consisting of a $50 million revolving credit facility due in 2009 and $120 million term loan due in 2010. Standard & Poor's assigned a recovery rating on the first-lien loan of '3', indicating meaningful recovery of principal in the event of a default. The second-lien term loan amounting to $50 million that matures in 2011 is assigned a rating of 'B-', or two notches below the corporate credit rating, and a recovery rating of '5', indicating negligible recovery in the event of a default. Douglas Dynamics is being sold by its parent AK Steel Corp. (B+/Negative/--) to an investor group led by Aurora Capital Group, with the transaction expected to close by the end of March 2004. Total rated debt on Douglas Dynamics is $220 million. "The speculative-grade ratings on Douglas Dynamics reflect its high business risk stemming from the volatile and seasonal nature of the business, with limited product diversity and financial flexibility," said Standard & Poor's credit analyst John Sico. Operating in a narrow niche, the company mitigates the high business and financial risks somewhat by its strong brands and leading niche-market position, with high EBITDA margins and good cash flow generation. Its high variable cost structure limits the effect that volatility has on its relatively strong operating margins. The company operates within the snow- and ice-control equipment segment of winter-related products industry. Products include snowplows and salt and sand spreaders for attachment/addition to pick-up trucks/light-duty vehicles, including wiring harnesses, mounts, and hydraulics. The company has a leading market position with its brands--Western and Fisher. The company is diversified somewhat by geography but has essentially only one end-market. It competes in the snow-belt area of the Northeast, East, and Midwest, in urban and suburban areas. It is highly dependent on one factor--snowfall. There is some relation to light-truck sales and the overall economy, but sales are isolated to one main variable, the amount of snowfall in a season, and more particularly on how much of that snow comes early in the season. The company's view is that despite the vagaries of weather, sales are highly predictable. DPL: Moody's Downgrades and Puts Low-B Ratings on Review -------------------------------------------------------- Moody's Investors Service lowers the ratings for DPL, DP&L and DPL Capital Trust II. Moody will put the three Issuers rating under review for possible further downgrade. The downgrade reflects Moody's concerns on cash flow reliability from the company's investment portfolio and untransparency; high leverage at the holding company; effects of poor market conditions and unexpected increase of natural gas prices on DPL's wholesale merchant generation portfolio, and allegations due to a $70 million settlement cost for a class action shareholder lawsuit; the company's Form 10-K filing delay as was required by March 15, 2004; concern on corporate governance in a letter to the Board of Directors by the company's controller and the effect on financing prospects to meet imminent funding needs depending upon the outcome of these developments. Downgraded Ratings under Review: DPL Ba2 - senior unsecured debt DP&L Baa2 - senior secured debt Baa3 - Issuer Rating Ba2 - preferred stock Prime-3 - commercial paper DPL Capital Trust II Ba3 - trust preferred securities. Headquartered in Dayton, Ohio, DPL Inc. operates in the Midwest through its subsidiaries The Dayton Power and Light Company, DPL Energy, and MVE, Inc. ENRON CORP: Former Employee Turns to Coburn & Schertler for Advice -------------------------------------------------------------- Phillip Lord, who up to December 1, 2003 was an employee of Enron Corporation, asks the Court, pursuant to Sections 327(e) and 330 of the Bankruptcy Code and Rules 2014(a) and 2016 of the Federal Rules of Bankruptcy Procedure, to authorize his retention of Coburn & Schertler LLP in connection with, and through the completion of, certain government and other investigations relating to the Debtors, nunc pro tunc to April 23, 2003. Lisa Freiman Fishberg, Esq., at Coburn & Schertler LLP, in Washington, D.C., explains that with respect to the various Investigations various government and administrative agencies commenced concerning the Debtors, current and former Enron employees became witnesses -- including Mr. Lord. To assist him in responding to governmental inquiries, Mr. Lord initially retained Swidler Berlin Shereff Friedman LLP. On April 15, 2003, Swidler advised Mr. Lord that he retain other counsel. Thus, on April 21, 2003, Mr. Lord retained Coburn to represent him with respect to the Enron-related governmental inquiries. Subsequently, David Schertler, on behalf of Mr. Lord, communicated with both John Kroger and Ben Campbell of the Department of Justice's Enron Task Force with respect to Mr. Lord's status in the Task Force's criminal investigation. In these communications, the prosecutors indicated their interest in obtaining Mr. Lord's cooperation as a witness in its investigation. Mr. Lord has been cooperating, and intends to continue to cooperate, with the Enron Task Force as a witness in its investigation. As counsel, Coburn will continue: (a) representing Mr. Lord as witness in connection with specific civil, criminal and administrative Investigations or other regulatory matters relating to the Debtors involving any branches or agencies of the United States Government, as well as similar matters initiated by foreign or domestic state or local governmental entity; (b) representing Mr. Lord as witness in any litigation or arbitration matters relating to the Investigations; (c) attending meetings with third parties with respect to the Investigations on Mr. Lord's behalf; (d) appearing before the Bankruptcy Court, any district or appellate courts, and the U.S. Trustee on Mr. Lord's behalf with respect to the Investigations; (e) facilitating and coordinating communications between Mr. Lord and other parties in connection with the Investigations; and (f) performing the full range of legal services normally associated with the Investigation matters. Since Swidler cannot represent Mr. Lord anymore, Ms. Fishberg contends that allowing Mr. Lord to retain Coburn is only fair and reasonable. According to Ms. Fishberg, Mr. Schertler has been and is anticipated to continue to be the attorney primarily responsible for Mr. Lord's representation. Mr. Schertler's hourly rate is $275. Danny Onorato, Esq., an associate at Coburn, has also represented Mr. Lord. Mr. Onorato's hourly rate is $175. Aside from the fees, Coburn will also seek reimbursement of out-of- pocket expenses incurred. To date, Coburn incurred approximately $40,000 in services and expenses. Mr. Schertler assures Judge Gonzalez that his firm does not hold or represent any interest adverse to the Debtors or to their estates in the matters with respect to which it is to be engaged. (Enron Bankruptcy News, Issue No. 101; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENRON CORP: Court Clears Underwriters Settlement Agreement ---------------------------------------------------------- Enron Corporation, Enron International, Inc., Enron Asia Pacific/Africa/China LLC, Enron South America LLC, Enron Caribbean Basis LLC and Atlantic Commercial Finance, Inc. sought and got Court approval for a Comprehensive Settlement Agreement among Enron for itself and on behalf of each Insured, the other Debtors and certain issuers -- the Underwriters -- of political risk insurance in respect of Enron's interests in various Foreign Enterprises worldwide. Ponderosa Assets LP and Whitewing Associates LP are also parties to the Comprehensive Settlement Agreement. The Relationship with the Underwriters Martin A. Sosland, Esq., at Weil, Gotshal & Manges LLP, in New York, related that prepetition, Enron, through direct and indirect subsidiaries, was involved in, among other things, investments to develop, finance, construct, own, operate and maintain electricity and gas generation and distribution facilities and other infrastructure investments internationally. Enron obtained political risk insurance in respect of the Investments from, inter alia, the Underwriters. The Underwriters are Steadfast Insurance Company and certain other entities. The insurance Enron obtained provided that the insured under the Policies could be Enron and subsidiary, affiliated, associated or allied companies, corporations, firms or organizations as specified on each Declaration off the Master Cover policies, provided that Enron had majority ownership and management control of those entities. According to Mr. Sosland, the Underwriters have issued eight separate Master Cover policies in respect of the Investments. On August 12, 2002, Ponderosa filed an expropriation claim with respect to one of the Investments, TGS, a gas pipeline company in Argentina. Enron, Ponderosa and the Underwriters commenced negotiations to settle disputes that had arisen related to the validity of claims under the Policies and the Underwriters' investigation of their right to avoid the Policies ab initio from their inceptions. The Tolling Agreement To facilitate ongoing discussions to resolve the Dispute, on June 11, 2003, Enron, Ponderosa and the Underwriters entered into a tolling agreement whereby they mutually agreed, among other things, that the time period would be tolled for the prosecution or adjustment of claims by the Insured under the Policies and the defense of any claims and any claim that the Underwriters had that the Policies could be avoided would not be prejudiced during the tolling period. The Comprehensive Settlement Agreement Since August 12, 2002, Mr. Sosland reports, the Enron Parties and the Underwriters were involved in ongoing discussions to resolve their Dispute. On December 1, 2003, the Enron Parties and the Underwriters entered into the Comprehensive Settlement Agreement, which provides, inter alia, that: (a) The interpretation of certain provisions of the Policies and the Assumptions and Consents is confirmed by the Enron Parties and the Underwriters; (b) The Enron Parties will take back the premiums tendered after the Petition Date, represented by the return to Enron of the JLT Amount and the Steadfast Escrow Amount; (c) Any Enron Party, which is a debtor in a Chapter 11 case and which may have an interest in the Policies, including the Debtors, will reject the Policies under Section 365(a) of the Bankruptcy Code; (d) The Underwriters will cancel the Policies as of the Petition Date for rejection under the Bankruptcy Code and for non-payment of premium; (e) The Enron Parties will accept the cancellation of the Policies as of the Petition Date; (f) The Underwriters will tender the premiums paid by the Enron Parties and received by the Underwriters prior to the Petition Date, with interest thereon; (g) The Underwriters will pay to the Enron Parties interest on the premiums tendered by the Enron Parties but not accepted by the Underwriters; (h) The Enron Parties will accept the Payment Amount; and (i) The releases given by the Parties under the Comprehensive Settlement Agreement will be effective. Enron estimates that the return to the Enron Parties, as calculated under the Comprehensive Settlement Agreement, will be approximately $88,000,000. (Enron Bankruptcy News, Issue No. 101; Bankruptcy Creditors' Service, Inc., 215/945-7000) EXIDE TECHNOLOGIES: Brings-In Schnader Harrison as Special Counsel ---------------------------------------------------------- Exide Technologies and its debtor-affiliates seek the Court's authority to employ Schnader Harrison Segal & Lewis LLP as special counsel, nunc pro tunc to February 1, 2004. Kathleen Marshall DePhillips, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub PC, in Wilmington, Delaware, relates that the Debtors previously employed Schnader as an ordinary course professional. Schnader is the Debtors' national environmental counsel, national counsel on toxic tort matters, and employment counsel. Due to the expanded scope of Schnader's engagement, the Debtors now seek to employ Schnader pursuant to Section 327 of the Bankruptcy Code. As special counsel, Schnader will be: (a) representing the Debtors with respect to environmental regulatory advice, environmental health & safety compliance, records policies, environmental matters, personal injury matters, property damage, human relations and routine commercial litigation; (b) advising the Debtors on contract negotiations or disputes regarding allocations of duties, liabilities and indemnities; (c) negotiating settlements of government demands and private claims related to occupational exposure or environmental compliance; (d) providing national oversight on the Debtors' environmental compliance policies and responses to litigation, claims or government actions; (e) providing oversight and managing common regulatory and technical issues in environmental or occupational safety and health compliance; (f) litigating environmental, health and safety, human relations and routine commercial litigation matters in the United States; (g) litigating, on behalf of the Debtors, all environmental aspects, including matters arising from contested matters under Rule 9014 of the Federal Rules of Bankruptcy Procedure, adversary proceedings commenced under Rule 7001 of the Federal Rules of Bankruptcy Procedure, or proofs of claim filed under Section 501 of the Bankruptcy Code and Rule 3001 of the Federal Rules of Bankruptcy Procedure; (h) preparing, on behalf of the Debtors, all necessary pleadings, discovery requests, and other legal papers in legal matters, adversary proceedings, contested matters, and claims litigation; (i) appearing in Court to represent the Debtors' interest; and (j) assisting in various other matters based on Schnader's more than 17-year experience in advising the Debtors on legal matters. Schnader professionals will be compensated according to their current standard hourly rates: $210 to $515 for partners $250 to $550 for counsel $125 to $300 for associates $100 to $195 for paralegals The professionals primarily responsible for the engagement and their hourly rates are: Professional Rate ------------ ---- Robert L. Collings $475 J. Robert Stoltzfus 300 Elise Fialkowski 300 Michael J. Barrie 200 Robert L. Collings, a partner of Schnader, assures the Court that the firm is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. Moreover, Schnader does not represent or hold any interest adverse to the Debtors or their estates with respect to matters on which the firm will be employed. Headquartered in Princeton, New Jersey, Exide Technologies is the world-wide leading manufacturer and distributor of lead acid batteries and other related electrical energy storage products. The Company filed for chapter 11 protection on April 14, 2002 (Bankr. Del. Case No. 02-11125). Matthew N. Kleiman, Esq., and Kirk A. Kennedy, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. On April 14, 2002, the Debtors listed $2,073,238,000 in assets and $2,524,448,000 in debts. (Exide Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., 215/945-7000) FISHER SCIENTIFIC: Inks Merger Pact with Apogent Technologies ------------------------------------------------------------- Fisher Scientific International Inc. (NYSE: FSH) and Apogent Technologies Inc. (NYSE: AOT) announced that the boards of directors of both companies have unanimously approved a definitive merger agreement to combine the two companies. This strategic combination significantly bolsters Fisher's proprietary-product portfolio and provides the company with a $1.1 billion footprint in the high-growth life-science market. As a result of the transaction, Fisher Scientific will benefit from substantially increased cash flow and financial flexibility to pursue additional growth opportunities. Through combined product-development efforts, an enhanced global presence and strengthened service capabilities, Fisher will be uniquely positioned to provide its customers with innovative products and services. Under the terms of the merger agreement, Apogent shareholders will receive tax-free 0.56 shares of Fisher Scientific's common stock for each share of Apogent common stock they own. Based on Fisher's closing price of $52.32 per share on March 16, 2004, this transaction would have a value of $29.30 per Apogent share. The combined company would have pro forma 2004 full-year revenues of approximately $5.1 billion and an enterprise value of approximately $9 billion, including $2.7 billion of net debt. Upon completion of the transaction, Fisher's shareholders would own approximately 57 percent of the combined company, and Apogent's shareholders would own approximately 43 percent. The companies anticipate that the transaction will be completed early in the third quarter of the 2004 calendar year. As a result of the combination, Fisher Scientific anticipates it will achieve synergies of approximately $55 million in 2005 and up to $100 million on an annualized basis by year-end 2006. Following the merger, Fisher expects earnings per share (EPS) will be $2.75 to $2.87 in 2004 and $3.45 to $3.65 in 2005, which is 4 percent to 5 percent accretive in 2005. The EPS estimates are based on 94.5 million and 122 million diluted shares outstanding in 2004 and 2005, respectively. "[Wednes]day's announcement represents a major strategic milestone for our company and will create a more integrated and efficient global supply network for our customers," said Paul M. Montrone, chairman and chief executive officer of Fisher Scientific. "With Apogent Technologies, Fisher Scientific has further enhanced its position in the life-science, scientific-research and clinical-lab markets and created a stronger platform for growth. Joining forces with Apogent enables Fisher to create efficiencies for our customers and value for our shareholders." Fisher Scientific Vice Chairman Paul M. Meister added, "This transaction expands our portfolio of proprietary consumable products, which creates revenue growth opportunities, enhances our margins and drives earnings growth. Notably, the combined company will also generate significant free-cash flow, which will enable us to continue pursuing high-growth opportunities that benefit our shareholders." "Fisher is an industry leader and a company that we know well," said Frank H. Jellinek, Jr., president and chief executive officer of Apogent Technologies Inc. "Apogent's customers, employees and shareholders have a very attractive opportunity to participate in the exciting potential created by the combination of these two businesses." Strategic Benefits The combination of Fisher Scientific and Apogent Technologies will result in several strategic benefits, including providing Fisher with an enhanced: -- Life-science market position. Fisher's life-science footprint will grow by more than 50 percent to $1.1 billion as a result of this combination. Apogent's Remel business complements Fisher's previously announced Oxoid acquisition, and the combination creates a $275 million microbiology unit. In addition, Apogent's wide range of consumable products for protein-based research and other drug-discovery applications enhances Fisher's life-science portfolio. -- Biopharma-production and diagnostic-reagent offering. The combination of Apogent Technologies and Fisher Scientific strengthens Fisher's position in biopharma-production and diagnostic-reagents. -- Global market presence. Apogent has manufacturing operations throughout the world that will complement and enhance Fisher's existing worldwide distribution and supply network. In addition, the combination with Apogent more than doubles Fisher's team of technically trained sales specialists. Financial Benefits The companies anticipate that the transaction will result in several key financial benefits, including: -- Enhanced margins. As a result of this transaction, Fisher expects higher-margin, proprietary products to increase from 50 percent to approximately 60 percent of its total annual sales. Fisher projects that operating margins will increase and be in the range of 10.5 percent to 10.7 percent in 2004 and 13.3 percent to 13.5 percent in 2005. -- Synergy opportunities. Fisher Scientific expects to achieve approximately $55 million of cost savings and other benefits in 2005. Fisher believes that the potential annual synergies could reach $100 million on an annualized basis by the end of 2006. These synergies will come from, among other things, manufacturing rationalization and facility consolidations. -- Revenue growth. Fisher Scientific believes that Apogent's revenue growth will be enhanced as a result of the combination with Fisher. For 2004, Fisher expects revenue growth of approximately 27.5 percent to 29.5 percent, with approximately 14 points of this growth from its combination with Apogent. For 2005, Fisher expects revenue growth of approximately 19.0 percent to 21 percent, with 11.5 points of this growth from its combination with Apogent. -- Earnings growth. Excluding estimated one-time costs in 2004 and 2005 of $175 million related to inventory step-up amounts, merger expenses, restructuring and other integration costs, Fisher expects the transaction to be neutral to 2004 EPS and 15 cents accretive in 2005. -- Strong operating cash flow. Fisher Scientific anticipates cash flow from operations will total $510 million to $540 million in 2005, as a result of the transaction announced today. Free-cash flow, defined as cash from operations less capital expenditures, in 2005 is expected to be approximately $380 million to $410 million. The increased financial flexibility will enhance Fisher's ability to pursue strategic growth opportunities. Management Upon closing of the transaction, the following Fisher Scientific officers will continue to serve in their current positions: Paul M. Montrone, as chairman and chief executive officer of Fisher, Paul M. Meister, as vice chairman, and David T. Della Penta, as president and chief operating officer. In addition, Frank H. Jellinek, Jr., president and chief executive officer of Apogent Technologies, will serve as chairman emeritus of Fisher. At the close of the transaction, four of Fisher Scientific's current directors will continue to serve on its board along with Mr. Montrone and Mr. Meister. Additionally, four members of the Apogent Technologies board of directors, including Mr. Jellinek, will join Fisher's board, increasing it to 10 directors. Fisher Scientific has a strong track record of successfully executing strategic transactions. Since 1991, the company has completed 36 acquisitions with more than $2 billion in revenues. Given the complementary nature of the businesses and the solid management teams at both companies, Fisher and Apogent expect to realize the benefits of this transaction quickly and efficiently. Upon closing of the transaction, the combined company will be called Fisher Scientific International Inc. and will be headquartered in Hampton, N.H. Approvals The merger is subject to the approval of the shareholders of both Fisher Scientific and Apogent Technologies, as well as customary regulatory approvals. Advisors Goldman, Sachs & Co. and Lazard Freres & Co. LLC acted as financial advisors to Fisher Scientific, and Skadden, Arps, Slate, Meagher & Flom LLP provided legal counsel. Lehman Brothers Inc. acted as financial advisors to Apogent, and Simpson Thacher & Bartlett LLP and Quarles & Brady LLP provided legal counsel. About Apogent Technologies Inc. Apogent is a diversified worldwide leader in the design, manufacture, and sale of laboratory and life-science products essential for healthcare diagnostics and scientific research. Apogent's companies are divided into two business segments for financial reporting purposes: Clinical Group and Research Group. About Fisher Scientific International Inc. As a world leader in serving science, Fisher Scientific International Inc. (NYSE: FSH) offers more than 600,000 products and services to more than 350,000 customers located in approximately 145 countries. Fisher's customers include pharmaceutical and biotech companies; colleges and universities; medical-research institutions; hospitals and reference labs; quality-control, process-control and R&D labs in various industries; as well as government and first responders. As a result of its broad product offering, electronic-commerce capabilities and integrated global logistics network, Fisher serves as a one-stop source of products, services and global solutions for its customers. The company primarily serves the scientific-research, clinical-laboratory and safety markets. Additional information about Fisher is available on the company's Web site at http://www.fisherscientific.com/ As reported in the Troubled Company Reporter's February 20, 2004 edition, Standard & Poor's Ratings Services assigned its 'B+' rating to Fisher Scientific International Inc.'s $300 million of senior subordinated convertible notes due March 1, 2024. The 'BB' corporate credit, 'BB+' senior secured, and 'BB-' senior unsecured debt ratings are affirmed. The outlook is negative. "The speculative-grade ratings reflect Hampton, New Hampshire- based Fisher Scientific International Inc.'s substantial debt burden, which outweighs the benefits of its position as a leading distributor and manufacturer of supplies for life science research and clinical laboratories," said Standard & Poor's credit analyst David Lugg. "Fisher's reliance on debt-financed acquisitions to add to the range of self-manufactured products it distributes is a key factor limiting the rating to speculative grade." FISHER SCIENTIFIC: S&P Places Low-B Ratings on Watch Positive ------------------------------------------------------------- Standard & Poor's Ratings Services places its 'BB' corporate credit, 'BB+' senior secured, 'BB-' senior unsecured, and 'B+' subordinated debt ratings on laboratory and life science equipment provider Fisher Scientific International Inc. on CreditWatch with positive implications in light of its agreement to purchase Apogent Technologies Inc. for about $3.7 billion in an all-stock transaction. At the same time, Standard & Poor's placed its 'BBB-' corporate credit and senior unsecured debt ratings and its 'BB+' subordinated debt ratings on Apogent on CreditWatch with negative implications. "The acquisition would significantly advance Fisher's goal to increase its proportion of self-manufactured products, while improving its overall capital structure and expanding cash flow," said Standard & Poor's credit analyst David Lugg. "Still, this is its fourth and largest acquisition announced in less than 12 months. Fisher will be challenged to manage the integration of manufacturing while continuing to provide the high level of service expected by its customers. Apogent's currently higher level of credit quality will be somewhat compromised by its combination with the lower-rated Fisher." Hampton, N.H.-based Fisher Scientific International Inc. has a substantial debt burden related to its aggressive acquisition activity, which outweighs the benefits of its position as a leading distributor and manufacturer of supplies for life science research and clinical laboratories. Portsmouth, N.H.-based Apogent manufactures a range of commodity and differentiated products used by life science research and clinical diagnostic laboratories. Fisher has a well-established position as one of two major providers of a wide variety of supplies and equipment for the scientific and clinical laboratory communities. The company's broad product offering, diverse customer base, exclusive distribution arrangements with equipment manufacturers, and agreements with most major domestic group-purchasing organizations are barriers to entry for new competitors. Because Fisher has only a small presence in the big-ticket capital equipment market, its sales are not strongly influenced by the capital budget cycles of its public and private customers. Sales of consumable products contribute about 80% of the total, providing a stable base of recurring revenues. The company's acquisition activity highlights efforts to increase its proportion of self-manufactured products, which now account for almost half of revenues. Pro forma for the acquisition of Apogent, proprietary products are expected to exceed 60%. This all-stock transaction will markedly improve Fisher's capital structure, as total debt to capital is expected to fall to less than 45% from more than 73%. Less dramatic but nonetheless substantive improvements are expected in its other credit measures. Total debt to EBITDA could improve to 3.8x from an estimated 4.3x, considering the borrowings used for Fisher's recent debt-financed acquisitions. At the same time, the transaction would create a more financially leveraged entity than Apogent is on its own. Standard & Poor's will review management's plans to refinance borrowings and integrate operations before resolving the CreditWatch listings. FOSTER WHEELER: Wins Three-Year Alliance Contract from Huntsman --------------------------------------------------------------- Foster Wheeler Ltd. (OTCBB: FWLRF) announced that its subsidiary, Foster Wheeler Energy Limited, has been selected by Huntsman Petrochemicals (UK) Ltd as their Project, Design and Technical Services Alliance Partner for a period of three years for the Wilton and North Tees sites in the north east of England. These facilities comprise the assets of Huntsman's olefins, aromatics and polyurethanes businesses. Under the scope of the contract, Foster Wheeler will provide front-end engineering, project management and detailed engineering services and plant technical support, with options for procurement and construction management services. The Alliance will be managed from Foster Wheeler's Teesside Operations at Middlesbrough, close to both sites, with additional specialist technical support provided from Foster Wheeler's Reading office. Ian Bill, chairman and chief executive of Foster Wheeler Energy Limited, commented: "We are pleased to have been selected for this strategically important contract and delighted to have the opportunity to work with Huntsman for a further three years to help them meet their business objectives. "This type of 'plant gate' alliance, where we deliver services locally, either at or very close to our clients' assets, with the full and flexible support of specialists from our Reading operations, is a very important business line for us. "Our Teesside operations has similar alliance relationships with a number of other multinational companies with assets in the region. Working in such close proximity with our clients helps us develop a much deeper understanding of their objectives, and engenders an environment in which we can deliver continuous improvement, including cost reduction, schedule reduction and further step- changes in safety performance." Paul Booth, vice president, Huntsman Petrochemicals (UK) Ltd, said: "Such is the importance of these sites to Huntsman's global business, that it was vital that we selected a partner to assist us in finding ways to run our manufacturing sites more efficiently and cost effectively. We were already delighted with the standard of work undertaken by Foster Wheeler for us in the past, and we look forward to further developing our partnership in the future." The combined Huntsman companies constitute the world's largest privately held chemical company. The operating companies manufacture basic products for a variety of global industries including chemicals, plastics, automotive, aviation, footwear, paints and coatings, construction, technology, agriculture, health care, textiles, detergent, personal care, furniture, appliances and packaging. Originally known for pioneering innovations in packaging, and later, rapid and integrated growth in petrochemicals, Huntsman-held companies today have more than 15,000 employees, operations in 30 countries and annual revenues of approximately $9 billion. Foster Wheeler Ltd. -- whose December 26, 2003 balance sheet shows a total shareholders' deficit of $872,440,000 -- 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 http://www.fwc.com/ GEORGIA-PACIFIC: Elects to Call 9.5% Debentures Due May 2022 ------------------------------------------------------------ Georgia-Pacific Corp. (NYSE: GP) elected to call $250 million of its 9.5 percent debentures due May 15, 2022. The debentures were issued in May 1992. The company anticipates that the debentures will be redeemed on or about April 20, 2004. Georgia-Pacific said it will use funds available under its revolving credit facility to redeem these debentures. The company expects to record a second quarter 2004 pretax charge of approximately $12.5 million for call premiums and to write off deferred debt issuance costs. 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/ GSD PRODUCTIONS: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: GSD Productions Inc. 25 Hempstead Gardens Drive West Hempstead, New York 11552 Bankruptcy Case No.: 04-81659 Type of Business: The Debtor is a rental, sales, design and production house for lighting, sound, video, multi-media, staging, and special effects. The company provides equipment and technical support for special events, corporate affairs, festival concerts, and theatrical productions. See http://www.gsdpro.com/ Chapter 11 Petition Date: March 16, 2004 Court: Eastern District of New York (Central Islip) Debtor's Counsel: Robert S. Arbeit, Esq. Pinks Arbeit Boyle & Nemeth 140 Fell Court, Suite 303 Hauppauge, NY 11788 Tel: 631-234-4400 Fax: 631-234-4445 Total Assets: $3,121,000 Total Debts: $1,307,556 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ TMB Assoc. Services Rendered $141,272 Electronic Theatre Controls Goods Supplied $119,616 Martin Professional, Inc. Goods Supplied $101,000 Sunshine & Feinstein Services Rendered $70,000 LEX Products Corp. Goods Supplied $46,951 Local 340 Employee Benefits $35,000 Arri USA, Inc. Goods Supplied $25,970 Barbizon Electric Co., Inc. Goods Supplied $25,000 Strand Lightning Goods Supplied $23,187 High End Systems Goods Supplied $22,968 Sennheiser Services Rendered $12,500 Catalanotto & Catalanotto Services Rendered $10,000 Ed Connelly Services Rendered $10,000 Eastern Acoustics Services Rendered $8,824 Lightning & Electronics Goods Supplied $8,603 Sainson Technologies Goods Supplied $8,528 Lycian Stage Lightning Goods Supplied $7,699 White Light Goods Supplied $7,482 Ushio America, Inc. Goods Supplied $6,649 Crest Audio Goods Supplied $5,336 GTC TELECOM: Recurring Losses Prompts Going Concern Uncertainty --------------------------------------------------------------- GTC Telecom provides various services including, telecommunication services, which includes long distance telephone and calling card services, Internet related services, including Internet Service Provider access, and business process outsourcing ("BPO") services. GTC Telecom Corp. was organized as a Nevada Corporation on May 17, 1994 and is currently based in Costa Mesa, California. The Company trades on the Over-The-Counter Bulletin Board under the symbol "GTCC". The Company's condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. As of December 31, 2003, the Company had negative working capital of $7,665,222, liabilities from the underpayment of payroll taxes, an accumulated deficit of $15,989,582, and a stockholders' deficit of $7,060,203; in addition, through December 31, 2003, the Company historically had losses from operations and a lack of profitable operational history, among other matters, that raise substantial doubt about its ability to continue as a going concern. The Company hopes to continue to increase revenues from additional revenue sources and/or increase margins through continued negotiations with MCI/WorldCom and other cost cutting measures. In the absence of significant increases in revenues and margins, the Company intends to fund operations through additional debt and equity financing arrangements. The successful outcome of future activities cannot be determined at this time and there are no assurances that if achieved, the Company will have sufficient funds to execute its intended business plan or generate positive operating results. INTEGRAL VISION: Restructures Note & Warrant Purchase Agreements ---------------------------------------------------------------- Integral Vision, Inc. (OTC Bulletin Board: INVI)has restructured its Note and Warrant Purchase Agreements. The restructuring converts past due interest and a portion of the principal on existing notes into new convertible notes at a lower interest rate. A portion of the restructuring is contingent on the shareholders' approval of a proposal to increase the Company's authorized stock to 31,000,000 shares at the Company's annual shareholders' meeting to be held on May 6, 2004. As part of the restructuring, two unsecured creditors have agreed to convert a total of nearly $493,000 of demand notes into a combination of the new convertible notes and unsecured notes due July 1, 2005. Additionally, several note holders have notified the Company they are utilizing the principal on existing notes to exercise warrants to purchase the Company's common stock. "We are very pleased with this restructuring in that it permits the resolution of any potential default issues with these notes and substantially improves our balance sheet," said Charles J. Drake, Chairman and CEO of Integral Vision, Inc. "We are very optimistic at this time regarding the future sales of our SharpEye Display Inspection system. Microdisplays are now expected to reach production volumes and we are connected with most of the major manufacturers. We currently have the largest backlog of SharpEye systems in our history and we expect to experience substantial growth as the display market expands." About Integral Vision Integral Vision, Inc., an ISO 9001 registered firm, offers machine vision- based inspection systems to the industrial manufacturer. Integral Vision is a leading supplier of machine vision systems used to monitor or control the manufacturing process. Vision systems are used to supplement human inspection or provide quality assurance when production rates exceed human capability. More information can be found at http://www.iv-usa.com/ INTERLINE: 2003 Deficit Tops $264MM Despite Improved Performance ---------------------------------------------------------------- Interline Brands, Inc., a leading national distributor and direct marketer of maintenance, repair and operations products, reported a 5% increase in revenues, a 6% increase in gross profit and a 13% improvement in operating income for the fiscal quarter ending December 26, 2003 compared to the same period in 2002. The revenue increase was in part due to improving conditions in the two key markets served by Interline Brands, the professional contractor and facilities maintenance markets. For the year ended December 2003, operating income increased 10.4% and gross profit increased 3.4% on a 0.4% increase in sales. Net cash provided by operating activities increased $18.7 million in fiscal year 2003 to $29.1 million from $10.4 million in the comparable period for the prior year. Gross profit margin improved 110 basis points, from 37.1% for fiscal year 2002 to 38.2% for fiscal 2003. Interline's President and Chief Executive Officer Michael Grebe commented on the Company's performance for the period. "Our facilities maintenance and professional contractor brands showed year over year sales growth in the fourth quarter. Although the multi-family housing industry continues to experience soft market conditions, we are encouraged that the overall economy appears to be improving. Our strong earnings performance for the quarter and for the 2003 fiscal year continues to validate our integrated operating model." Net sales increased by $7.7 million, or 5.0%, to $158.9 million in the fourth quarter of fiscal 2003 from $151.2 million in the comparable period for the prior year. For the year ended December 2003, net sales increased by $2.6 million, or 0.4%, to $640.1 million from $637.5 million in the comparable period for the prior year. Beginning the third quarter of 2003, the Company changed the classification of freight revenue from selling, general and administrative expenses to net sales. The impact of this change is not considered material. In fiscal 2003 freight revenue of $2.3 million was recorded as net sales. Excluding the effect of this reclassification, net sales were relatively flat in fiscal 2003. Gross profit increased $3.6 million to $61.2 million in the fourth quarter of fiscal 2003 from $57.6 million in the comparable period in 2002 as a result of higher sales performance. For the year ended December 2003, gross profit increased $7.9 million to $244.2 million from $236.3 million in the comparable period in 2002. As a percentage of sales, gross profit for 2003 improved 110 basis points to 38.2% of sales from 37.1% for the 2002 fiscal year. This improvement is due to several factors including changes in product mix, targeted merchandising programs, more favorable partnerships with key suppliers, the expansion of our import sourcing and private label programs, and the reclassification of freight revenue. Selling, general and administrative ("SG&A") expenses increased by $4.3 million, or 10.7%, to $44.4 million in the fourth quarter of 2003 from $40.1 million in the comparable period for the prior year. SG&A expenses for the year ended December 2003 increased $6.8 million to $171.1 million from $164.3 million in the comparable period for the prior year. Higher SG&A costs are associated primarily with higher health care and compensation costs. Operating income increased by $1.7 million, or 13.2%, to $14.5 million in the fourth quarter of 2003 from $12.9 million in the comparable period for the prior year. For the 2003 fiscal year, operating income increased $5.8 million, or 10.4%, to $61.6 million from $55.8 million for the 2002 fiscal year. Net cash provided by operating activities increased by $18.7 million in fiscal 2003 to $29.1 million from $10.4 million in the comparable period for the prior year. The increase in net cash provided by operating activities was the result of continued strong operating income as well as realization of working capital efficiency initiatives during the period. Net income was $4.3 million for the fourth quarter and $7.2 million for 2003, compared to $1.9 million and $7.1 million during the respective comparable periods in 2002. At December 26, 2003, Interline Brands, Inc.'s balance sheet shows a total stockholders' equity deficit of $264,536,000 compared to $223,683,000 the prior year. Interline Brands, Inc. is a leading direct marketing and specialty distribution company with headquarters in Jacksonville, Florida. Interline provides maintenance, repair and operations (MRO) products to professional contractors, facilities maintenance professionals, hardware stores, and other customers across North America and Central America. Interline has 2,200 employees and annual sales of more than $635 million. To learn more about the company visit http://www.interlinebrands.com/ ISLE OF CAPRI: Supports Ill. Officials' Call for Auction Review --------------------------------------------------------------- Isle of Capri Casinos, Inc. (Nasdaq: ISLE) issued a statement supporting Illinois Governor Blagojevich's call this afternoon for a full, open and public review of the auction process that led to the selection of Isle of Capri as the winning bidder for that state's dormant 10th casino license. Isle of Capri was selected as the winning bidder on Monday from among seven proposals originally submitted on January 19. "We support the Governor's and Attorney General Lisa Madigan's calls for a review of the auction process, because our proposal was the best proposal for the people of Illinois. The process was fair and open," said Timothy M. Hinkley, president and COO of Isle of Capri. "The selection of Isle of Capri provides the most tax dollars initially and over the long term to the state of Illinois. In addition, the gaming board's choice guarantees that the 10th license will begin generating tax dollars as soon as possible and more revenue will be shared with the largest number of communities." "Our company has been involved in numerous competitive situations over the years," Hinkley said, "and this one stood out as one of the most thorough and open processes we've ever been involved with. We commend the Attorney General for her role in developing the rules for this process. The rules were also approved by a federal bankruptcy judge, and the entire process was administered by a top-level investment bank and the Illinois Gaming Board." The company generates more than $1 billion in annual revenues and operates 16 casinos around the world, several of which have more gaming positions than the Illinois limit of 1,200 gaming positions. Hinkley stated, "We open our projects on time and on budget, and we do our job very well. And we've been through over 50 licensing, renewal and suitability reviews in our company's history and are currently licensed in six states and two foreign jurisdictions. We are proud of our reputation." Isle of Capri Casinos, Inc., a leading developer and owner of gaming and entertainment facilities, operates 16 casinos in 14 locations. The company owns and operates riverboat and dockside casinos in Biloxi, Vicksburg, Lula and Natchez, Mississippi; Bossier City and Lake Charles (two riverboats), Louisiana; Bettendorf, Davenport and Marquette, Iowa; and Kansas City and Boonville, Missouri. The company also owns a 57 percent interest in and operates land-based casinos in Black Hawk (two casinos) and Cripple Creek, Colorado. Isle of Capri's international gaming interests include a casino that it operates in Freeport, Grand Bahama, and a two-thirds ownership interest in a casino in Dudley, England. The company also owns and operates Pompano Park Harness Racing Track in Pompano Beach, Florida. As reported in the Troubled Company Reporter's March 18, 2004 edition Standard & Poor's Ratings Services revised its outlook on Isle of Capri Casinos, Inc. to negative from stable. At the same time, Standard & Poor's affirmed its ratings on the company, including its 'BB-' corporate credit rating. The outlook revision follows Isle's announcement that the company has been selected by the Illinois Gaming Board as the successful bidder for the 10th Illinois gaming license. The company bid $518 million for the license. Subject to final approval by the Illinois Gaming Board and Bankruptcy Court approval, Isle intends to construct a $150 million casino in Rosemont, which will include 40,000 square feet of gaming space and 1,200 gaming positions, with expected completion to occur eight months after construction commences. Given initial capital spending plans, increased debt associated with the Illinois project, and pro forma for Standard & Poor's estimate of cash flow for the Rosemont property's first full year of operation, debt to EBITDA, adjusted for operating leases, will be between 5.0x and 5.5x by the company's fiscal year end in April 2005. The company has not yet disclosed its plans for financing the cost of the license and the new casino. "The ratings reflect Isle's aggressive growth strategy, the second-tier market position of many of its properties, and increased expansion capital spending," said Standard & Poor's credit analyst Peggy Hwan. "These factors are offset by the company's diverse portfolio of casino assets, relatively steady historical operating performance, and credit measures that have historically been maintained in line with the rating." JARDEN CORP: S&P Revises Outlook on Low-B Ratings to Positive ------------------------------------------------------------- Standard & Poor's Ratings Services revises its outlook on houseware manufacturer Jarden Corp. to positive from stable. At the same time, Standard & Poor's affirmed its 'B+' corporate credit and 'B-' subordinated debt ratings on the Rye, New York- based company. Standard & Poor's also assigned its 'B+' senior secured bank loan rating and '3' recovery rating to Jarden's proposed $369.5 million senior secured credit facility due 2008. Proceeds from this amended credit facility will be used, along with cash on hand, for the company's $232 million acquisition of United States Playing Card Co., a manufacturer and distributor of playing cards sold under the Bee(, Bicycle(, Hoyle( and Aviator( brand names. The '3' recovery rating on the senior secured bank loan indicates that lenders can expect meaningful recovery of principal (50%-80%) in the event of default. These ratings are based on preliminary offering statements and are subject to review upon final documentation. Pro forma for the acquisition of United States Playing Card, total debt outstanding at Jarden is expected to be about $542 million. "The ratings on Jarden Corp. reflect the highly competitive and challenging operating environment in the company's houseware segment and the limited growth potential in several of the firm's product lines," said credit analyst Martin S. Kounitz. The ratings also reflect Jarden's product portfolio, which has little brand equity, as well as the company's acquisition orientation and its high debt leverage. These concerns are somewhat mitigated by the company's significant market position in its niche portfolio of branded consumer housewares and in other businesses. Jarden markets the FoodSaver( brand of home preservation appliances as well as home canning jars and supplies under the Ball name and other brands. Through its Diamond Brands business, Jarden manufactures and markets toothpicks, matches, and disposable plastic cutlery. The company is also the sole supplier of copper-plated zinc blanks for use in making pennies to the U.S. and Canadian mints. Jarden also owns a plastics fabrication business. However, neither the plastic fabrication nor the zinc blank businesses are material to operating results. Standard & Poor's assigns a high degree of business risk to the houseware industry because retailers are concentrated, competition is intense, and companies can increase prices generally only by adding new features to existing products. Although Jarden has few competitors in the home canning business, the market is mature and seasonal. KAISER ALUMINUM: Proposes to Set-Up Parcels 1 & 7 Bidding Protocol ------------------------------------------------------------------ Kaiser Aluminum Corporation and its debtor-affiliates want to maximize the realizable value of Parcels 1 and 7 through a competitive bidding process. By this motion, the Debtors ask the Court to establish a mechanism to identify higher and better offers for the Properties. Proposed Bidding Procedures The Debtors propose that, in consultation with the Official Committee of Unsecured Creditors, they will prepare appropriate materials relating to Parcels 1 and 7, including the Automated Systems Group business, and a form of purchase agreement in substantially the form of the Purchase and Sale Agreement with CVB Northwest, LLC, to be distributed to any potential purchasers. Entities interested in potentially purchasing the Properties should contact Joseph A. Fischer, III, Esq., Assistant General Counsel of Kaiser Aluminum & Chemical Corporation at 713-333-4764 or at tre.fischer@kaiseral.com Upon the delivery of the executed confidentiality agreements to the Debtors, the Debtors will provide the potential purchasers with access to the documentation necessary to evaluate the Properties, including on-site due diligence access to the Properties as reasonably requested by the potential purchasers. Any potential purchaser that desires to become qualified to participate in the Auction of the Properties may do so by submitting bids: (i) in writing to: Joseph A. Fischer, III, Esq. Kaiser Aluminum & Chemical Corporation 5847 San Felipe, Suite 2600, Houston, TX 77057 or (ii) through facsimile at 713-332-4605; and Bid Deadline Bids must be received by 5:00 p.m. Central Time on April 5, 2004. On the Bid Deadline, the potential purchaser must tender: (i) a $4,450,000 initial bid; (ii) documentation of proof of delivery of the $250,000 deposit in immediately available funds to Spokane County Title Company, as Auction Escrow Agent, pursuant to instructions to be provided by the Debtors; and (iii) a Form Purchase Agreement for the Properties, marked with any changes the potential purchaser may request, provided, that the terms must not be contingent on: -- any due diligence investigation; -- receipt of financing; or -- any board of directors, shareholder, partner, member, manager or other similar corporate, partnership or other entity approval. The Debtors will review the bid submissions received and determine, in consultation with the Official Committee of Unsecured Creditors, the Official Committee of Asbestos Claimants, Martin J. Murphy, the legal representative of future asbestos claimants, and the Official Committee of Retired Employees, which submissions are higher and better offers than the terms set forth in the CVB Northwest Sale Agreement. The Debtors may take into consideration the effect of any changes to the terms of the purchase and sale agreements requested by the potential purchasers in making the determinations. The terms of the CVB Northwest Sale Agreement will be deemed to be a Qualified Bid for the Properties. The Debtors reserve the right to consider and accept other subsequent bids, as Qualified Bids, received after the Bid Deadline, but will be under no obligation to accept any submissions. Auction If at least two Qualified Bids -- which may include the Qualified Bid by CVB Northwest -- are received, the Debtors will conduct an auction at 9:00 a.m. Pacific Time, on Thursday, April 8, 2004 at 2111 E. Hawthorne Road in Mead, Washington. At the Auction, the entities that have submitted Qualified Bids may submit bids in excess of the Initial Bid provided that the competing bids are in increments of at least $200,000. The Debtors, in their sole business judgment but after consulting with the Creditors Committee, Asbestos Committee and Futures Representative, will select the successful bid determined to be the highest and best bid for the Properties. At the conclusion of the Auction, the successful bidder will promptly: (a) execute and deliver the Form Purchase Agreement containing the price and terms offered as the final bid; and (b) within 24 hours, deliver an additional $250,000 deposit in immediately available funds to Spokane Title Company. The Break-up Fee In the event that the Properties are sold to an entity other than CVB Northwest, the Debtors seek the Court's authority to pay CVB Northwest a $250,000 break-up fee. If CVB Northwest submits the successful bid for the Properties at the Auction, CVB Northwest will be entitled to receive a reduction in the purchase price equal to the Break-up Fee. Headquartered in Houston, Texas, Kaiser Aluminum Corporation operates in all principal aspects of the aluminum industry, including mining bauxite; refining bauxite into alumina; production of primary aluminum from alumina; and manufacturing fabricated and semi-fabricated aluminum products. The Company filed for chapter 11 protection on February 12, 2002 (Bankr. Del. Case No. 02-10429). Corinne Ball, Esq., at Jones, Day, Reavis & Pogue, represent the Debtors in their restructuring efforts. On September 30, 2001, the Company listed $3,364,300,000 in assets and $3,129,400,000 in debts. (Kaiser Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., 215/945-7000) KEYSTONE: Receives Final Court Approval of $60MM DIP Financing -------------------------------------------------------------- Keystone Consolidated Industries, Inc. (OTC Bulletin Board: KESN) announced that on March 15, 2004, the U.S. Bankruptcy Court for the Eastern District of Wisconsin in Milwaukee gave its final approval of the Company's previously announced $60 million Debtor in Possession ("DIP") financing agreements. The funds available pursuant to such DIP financing agreements, together with the cost savings resulting from the interim relief previously granted by the Court from certain provisions of the Company's Collective Bargaining Agreement with the Independent Steelworkers Alliance ("ISWA"), which represents substantially all of the Company's hourly employees at its Peoria, Illinois facilities, together with interim relief granted for certain other retiree medical benefit obligations related to certain discontinued operations, is anticipated to provide sufficient liquidity for the Company to continue to operate under the protection of Chapter 11 of the U.S. Bankruptcy Code while the Company works to develop a comprehensive plan of reorganization. A key to any comprehensive plan of reorganization for Keystone will include achieving substantial permanent relief from the current provisions of the collective bargaining agreement and the retiree medical benefit obligations. Keystone will work closely with representatives of the ISWA in an effort to negotiate the necessary modifications to the collective bargaining agreement through consensual agreement in connection with the Company's plan to obtain the necessary permanent relief under the applicable provisions of Chapter 11 of the U.S. Bankruptcy Code. The Company believes the successful achievement of the necessary permanent relief from the current provisions of the collective bargaining agreement, combined with the additional restructuring of certain indebtedness of the Company, should enable Keystone to emerge from the reorganization process as a well financed, cost- competitive producer. The Company has not set a date to emerge from Chapter 11, but intends to move through the process as quickly as possible. Keystone Consolidated Industries, Inc. is headquartered in Dallas, Texas. The company is a leading manufacturer and distributor of fencing and wire products, wire rod, industrial wire, nails and construction products for the agricultural, industrial, construction, original equipment markets and the retail consumer. Keystone's common stock is traded on the OTC Bulletin Board (Symbol: KESN). KOPPERS: Total Debts Exceed Total Assets by $69.8MM at Dec. 2003 ---------------------------------------------------------------- Sales for the year ended December 31, 2003 were $842.9 million as compared to $776.5 million for the prior year. The increase in sales is a result of increased activity in the US railroad market as well as higher sales in Australia and Europe, which foreign sales also benefited from favorable exchange conversion rates. Earnings before interest and taxes (EBIT) for the year were $19.1 million as compared to $54.1 million in 2002. The 2003 EBIT results were affected by special charges totaling $17.6 million, including $12.1 million of fourth quarter charges for restructuring costs associated with the US Carbon Materials & Chemicals business that resulted in the curtailment of production of the Woodward, Alabama tar distillation plant, asset impairments most significantly at the Portland, Oregon Terminal, restructuring of a logistics contract and severance. Also in 2003, the Company recorded $2.9 million of charges related to the closure of the Company's Logansport, Louisiana pole treating facility and $2.6 million of other charges primarily associated with the write off of receivables from a bankruptcy, and severance. The 2003 EBIT was also negatively impacted by $9.8 million due to the loss of certain tax credits realized in 2002 that did not recur in 2003 and additional accretion expense of $2.4 million associated with the adoption of FAS 143 in 2003. Net losses, before cumulative effect of accounting change, for the year ended December 31, 2003 were $19.0 million as compared to net income of $16.5 million in 2002. Net income in 2003 was adversely affected by special charges of $17.6 million, expiration of tax credits that generated $9.8 million of income in 2002, write off of deferred financing costs of $6.4 million and an early call premium of $5.8 million associated with the retirement of existing bonds in October 2003. Net losses for the year were $37.1 million as compared to net income of $16.5 million in 2002. Koppers Inc.'s December 31, 2003 balance sheet also shows a shareholders' equity deficit of $69.8 million. Specifically, company records total assets of $514 million against total liabilities of $583.8 million. Effective in the first quarter 2003, the Company adopted the provisions of FAS 143 related to asset retirement obligations. This adoption resulted in the recognition of a cumulative effect charge, after tax, of $18.1 million. Commenting on the year, President and CEO Walter W. Turner said, "The operating results for 2003 have obviously been significantly impacted by the fourth quarter restructuring of the U. S. Carbon Materials & Chemicals business that included the curtailment of production at the Woodward tar distillation plant. I am confident that the restructuring and the closure of the Logansport pole treating facility earlier in the year have allowed us to better position the U.S. businesses for greater profitability through increased productivity and the elimination of recurring costs of between $5 and $6 million from domestic operations. We continue to see strong results from our US Railroad business as well as our Australian operations and believe that the steps we have taken to restructure our U.S. Carbon Materials & Chemicals business combined with a new contract for supply of coke will lead to improved results in 2004. In keeping with our international growth strategy, I am also pleased to announce our re-entry into our Joint Venture in China effective January 1, 2004 and I am optimistic that the results will positively impact 2004 and beyond. Our focus remains on cash management and I am pleased to have achieved our year end target for borrowings, net of cash, of $331 million. We continue to be driven by our strategy of providing our customers with the highest quality products and services while continuing to focus on safety, health and environmental issues." About Koppers Koppers, with corporate headquarters and a research center in Pittsburgh, Pennsylvania, is a global integrated producer of carbon compounds and treated wood products. Including its joint ventures, Koppers operates 38 facilities in the United States, United Kingdom, Denmark, Australia, the Pacific Rim and South Africa. The company's stock is shared by a large number of employee investors and by majority equity owner Saratoga Partners of New York, NY. LORAL SPACE: Raises $1 Billion From North American Satellites Sale ------------------------------------------------------------------ Loral Space & Communications (OTC Bulletin Board: LRLSQ) has completed its previously announced transactions with Intelsat yielding $1.027 billion, consisting of $977 million for Loral's North American fleet and related assets, after adjustments, and a $50 million deposit for the construction of a new Intelsat satellite to be built by Loral's manufacturing unit, Space Systems/Loral (SS/L), of Palo Alto, Calif. The completion of the Intelsat transactions represents the achievement of a major milestone in Loral's plan for reorganization under chapter 11. Proceeds from the transaction will be used to pay in full Loral's $967 million of outstanding secured bank debt, nearly half of the company's total of $2 billion in principal debt obligations. Announced in July, the agreement with Intelsat provides for the sale of the in-orbit Telstar satellites 5, 6, 7 and 13, as well as Telstar 8, which is scheduled to be launched in the third quarter of 2004. The agreement also includes rights to the 77 degrees West longitude orbital slot, formerly occupied by Telstar 4. Loral intends to reorganize around its remaining satellite services fleet and manufacturing business. Loral Skynet's satellite services fleet currently comprises four international satellites, with an additional satellite, Telstar 18, scheduled for launch in mid-2004. SS/L received orders in late 2003 for the construction of four new satellites - one each for Intelsat and PanAmSat Corporation and two for DIRECTV, Inc. As of December 31, 2003, Loral's external backlog for its remaining businesses totaled approximately $1.2 billion excluding approximately $240 million associated with the new manufacturing orders that were booked in the first quarter of 2004. Loral Space & Communications is a satellite communications company. It owns and operates a fleet of telecommunications satellites used to broadcast video entertainment programming, and for broadband data transmission, Internet services and other value-added communications services. Loral also is a world- class leader in the design and manufacture of satellites and satellite systems for commercial and government applications including direct-to-home television, broadband communications, wireless telephony, weather monitoring and air traffic management. For more information, visit Loral's web site at http://www.loral.com/ LNR PROPERTY: Schedules First Quarter Conference Call on Mar. 24 ---------------------------------------------------------------- In conjunction with LNR Property Corporation's (NYSE: LNR) First Quarter 2004 Earnings Release, you are invited to listen to its conference call that will be broadcast live over the Internet on Wednesday, March 24 at 11:00 a.m., E.S.T. with Stuart Miller, Chairman of the Board; Jeffrey Krasnoff, President and Chief Executive Officer; and Shelly Rubin, Chief Financial Officer, all of LNR Property Corporation. What: First Quarter Earnings Release Conference Call When: Wednesday, March 24, 2004 at 11:00 a.m., E.S.T. Where: http://www.firstcallevents.com/service/ajwz402110944gf12.html How: Live over the Internet -- Simply log on to the web at the address above. Contact: Shelly Rubin of LNR Property Corporation, 305-695-5440, or fax, 305-695-5449, or e-mail, investorrelations@lnrproperty.com LNR Property Corporation (S&P, B+ Senior Subordinated Debt and BB Long-Term Counterparty Credit Ratings, Stable Outlook) is a market leader in real estate finance, management, and development, with proven expertise in adding value to commercial real estate assets, including real estate properties, loans collateralized by real estate properties and securities backed by loans on real estate properties. LUIGINO'S INC.: Moody's Gives B1 Rating to $205MM Credit Facility ----------------------------------------------------------------- Moody's Investors Service assigns Luigino's Inc.'s new $205 million credit facility a B1 rating. Luigino's B1 senior implied rating is affirmed by Moody's. The ratings outlook is stable. The new facility's proceeds will finance a $25 million long term loan to particular shareholders, fund the $10 million acquisition of a Jeno Paulucci owned affiliate company, and refinance present indebtednesss. The ratings take into consideration the resulting rise in Luigino's leverage, its limited product focus and its reasonable scale, while also taking into account the Luigino's renowned brands and consistent profitable operation in the value segment of the single-serve frozen entree category. Moody's ratings: B1 - $30 million Revolving Line of Credit Facility, maturing 2009 B1 - $175 million Senior Secured Loan, maturing 2011 B1 - Senior implied B2 - Unsecured issuer rating In recent years, the frozen meat category is encountering growth as consumers prefer convenience. Luigino's has an estimated 89 percent unit volume share in the frozen single-serve entry segment, the company's strength is in the value priced tier of this category. MASTEC INC: S&P Puts Ratings on Watch Negative Due to 10-K Delay ---------------------------------------------------------------- Standard & Poor's Rating Services places its 'BB' corporate credit rating and other ratings on MasTec Inc. on CreditWatch with negative implications because of the company's announcement that the 2003 10-K filing will be delayed and that, in contrast to $7 million of net profitability for the nine months of 2003, the company expects to report a loss for 2003, implying charges or losses in the fourth quarter of an unknown magnitude. Total debt (including present value of operating leases) was $226 million at Sept. 30, 2003, for the Miami-Fla.-based provider of infrastructure services. The uncertainty of the impact of these pending results on MasTec's liquidity, including a potential equity offering, covenant compliance, and prospective profitability and cash flow generation are concerns. The explanation for the delayed filing is that additional time is needed for auditors to conclude their work and that a significantly lower net loss than the net loss for the year ended Dec. 31, 2002 is expected. However, as the company reported a net loss of about $129 million for 2002 and earnings of about $7 million for nine months ended Sept. 30, 2003, material charges or losses could be taken in the fourth quarter to reach a loss for 2003. In addition, MasTec announced plans to issue a public offering of its common stock during the first half of 2004 and it is unclear if this plan will be affected. Standard & Poor's expects funds from operations to total debt of 20% and total debt to EBITDA of 2.5-3x at the current rating. "We will meet with management to discuss the reasons for the loss and delayed filing, business prospects and prospective liquidity. Ratings may be lowered if the reasons for the delay and loss result in lower-than-expected credit measures," said Standard & Poor's credit analyst Heather Henyon. MICROCELL: Secures C$450 Million in Senior Secured Bank Financing ----------------------------------------------------------------- Microcell Telecommunications Inc. (TSX: MT.A, MT.B) closed its previously announced C$450 million senior secured bank financing transaction for its wholly owned subsidiary, Microcell Solutions Inc. The new facilities consist of a seven-year C$200 million first lien term loan, a seven-and-a-half-year C$200 million second lien term loan, and an undrawn six-year C$50 million revolving credit facility. The new financing solidifies the Company's capital structure by extending the first significant debt maturity from 2008 to 2011 at favourable terms and conditions. In addition, due to the positive response from lenders, which resulted in commitments being oversubscribed, the Company may increase, at a later date, its first lien term loan facility or revolving credit facility by an additional C$25 million and its second lien term loan facility by an additional C$50 million. The term loans are denominated in U.S. dollars and will be amortized with quarterly payments of principal and interest and, under certain circumstances, additional mandatory prepayments are required. The first lien term loan bears an interest rate of LIBOR plus 4%, while the second lien term loan bears an interest rate of LIBOR plus 7% which includes a LIBOR floor of 2%. The revolving credit facility is denominated in Canadian dollars and bears an interest rate of LIBOR plus 4%. The credit facilities are guaranteed by Microcell Telecommunications Inc., and are secured by a pledge on substantially all the assets of the Company. The proceeds have been used mainly to repay all outstanding borrowings under the Company's previous bank credit facility in the amount of C$334 million. The new credit facilities have generated approximately C$80 million in incremental cash availability, which will provide for the continued investment in the Company's future growth initiatives through funding capital expenditures and associated working capital. The facilities were arranged jointly by J.P. Morgan Securities Inc. and Credit Suisse First Boston, with J.P. Morgan acting as sole bookrunner and administrative agent and Credit Suisse First Boston acting as syndication agent. About Microcell Microcell Telecommunications Inc. is a major provider, through its subsidiaries, of telecommunications services in Canada dedicated solely to wireless. Microcell offers a wide range of voice and high-speed data communications products and services to over 1.2 million customers. Microcell operates a GSM network across Canada and markets Personal Communications Services (PCS) and General Packet Radio Service (GPRS) under the Fido(R) brand name. Microcell has been a public company since October 15, 1997, and is listed on the Toronto Stock Exchange. * * * As previously reported, Standard & Poor's Ratings Services assigned its 'B-' senior secured debt ratings to the first priority debt of Microcell Telecommunications Inc.'s proposed bank facility. Standard & Poor's also assigned its 'B-' senior secured debt rating to the C$50 million revolver and tranche A (C$200 million equivalent) portions of Microcell Solutions Inc.'s credit facility and its 'CCC-' senior secured debt ratings to the tranche B (C$200 million equivalent) portion of the facility. Proceeds will be used to refinance Microcell's existing bank debt. At the same time, the 'CCC+' long-term corporate credit ratings on Microcell Solutions and its parent Microcell Telecommunications were affirmed. Should the transaction close as planned, the new ratings will be assigned and existing ratings on the current bank facility will be withdrawn. The outlook is developing. MIRANT CORP: Has Until September 6, 2004 to Decide on Leases ------------------------------------------------------------ Mirant Corp. and its debtor-affiliates, pursuant to Section 365(d)(4) of the Bankruptcy Code, ask the Court to extend their deadline to assume or reject all unexpired non-residential property leases through and including September 6, 2004. MIRMA Leases Michelle C. Campbell, Esq., at White & Case LLP, in Miami, Florida, related that the unexpired Leases include, without limitation, 11 Facility Lease Agreements executed by Mirant Mid- Atlantic LLC. The MIRMA Leases are the subject of a complicated leveraged lease transaction in which each MIRMA Lease has a distinct "Owner Lessor." Four of the MIRMA Leases relate to the "Undivided Interests" in an electric generating facility referred to as the Dickerson Base-Load Units 1, 2 and 3 located in Montgomery County, Maryland and were executed on December 19, 2000. Seven of the MIRMA Leases relate to the "Undivided Interests" in an electric generating facility referred to as the Morgantown Base-Load Units 1 and 2 located in Charles County, Maryland and were executed on December 18, 2000. According to Ms. Campbell, the base lease term of the Dickerson Leases is for 28.5 years -- from December 19, 2000 through June 19, 2029. The base lease term of the Morgantown Leases is for 33.75 years -- from December 19, 2000 through September 19, 2034. Under the MIRMA Leases, MIRMA is required to make semi- annual lease payments in June and December of each year. In 2003, MIRMA paid $129,193,434 for the Morgantown Leases and $21,526,362 for the Dickerson Leases. In 2004, MIRMA will pay $99,973,638 for the Morgantown Leases and $21,526,362 for the Dickerson Leases. The leased properties are being maintained and insured. * * * Stipulation with U.S. Bank On December 18 and 19, 2000, two complex leveraged lease transactions were consummated whereby, Mirant Mid-Atlantic LLC, formerly known as Southern Energy Mid-Atlantic LLC, executed 11 "Facility Lease Agreements," each with a distinct "Owner Lessor." Four of the Facility Lease Agreements related to the an electric generating facility referred to as the Dickerson Base-Load Units 1, 2 and 3 located in Montgomery County, Maryland. Seven of the Facility Lease Agreements relate to an electric generating facility referred to as the Morgantown Base-Load Units 1 and 2 located in Charles County, Maryland. The documents executed concurrently with or pursuant to the Facility Lease Agreements, include, without limitation, 11 subleases of the ground that underlies each of the Morgantown Facility and the Dickerson Facility, certain participation Agreements, certain Lease Indentures and certain Pass Through Trust Agreements. Under certain of the Lease Documents, U.S. Bank National Association, as successor by purchase to State Street Bank and Trust Company of Connecticut, National Association, acts as both the lease indenture trustee and the pass through trustee in connection with certain promissory notes that were issued by the various Owner Lessors to three pass through trusts, which then issued pass through certificates to the "Pass Through Certificate Holders." The Trustee and the Owner Lessors indicated to the Debtors that they intend to oppose the Extension Motion as it relates to the MIRMA Leases. The Trustee and the Owner Lessors also indicated that they would like to conduct discovery concerning the need of the Debtors and MIRMA for a further extension of the deadline within which to assume or reject the MIRMA Leases. To accommodate the Trustee and the Owner Lessors' request and to develop an adequate record, the parties entered into a stipulation, which the Court approved. The parties agree that: (a) The hearing on the Extension Motion as it pertains to the MIRMA Leases will be adjourned and continued until March 24, 2004; (b) The parties will act in good faith to schedule deposition noticed for March 10, 2004 or March 11, 2004 at a mutually convenient location; (c) Each party will identify the witnesses they intend to call at the March 24 hearing on or before March 12, 2004 so that the parties will have a reasonable opportunity to depose the witnesses; and (d) If the Trustee or the Owner Lessors desire to oppose the Extension Motion as it pertains to the MIRMA Leases, the objection must be filed with the Court and served to the Debtors on or before 5:00 p.m. Eastern Standard Time on March 17, 2004. The Debtors may respond to the objection on or before 5:00 .m. on March 22, 2004. Judge Lynn further rules that, pursuant to the Stipulation, MIRMA will have until March 31, 2004 to file a request to reject or assume the MIRMA Leases and that the deadline to assume or reject the MIRMA Leases will be extended until 30 days after the filing of that request, provided that if at the March 24 hearing the Court grants other relief, that relief will control. Consequently, except for the MIRMA Leases, the Court extends the Debtors' time to elect to assume or reject the Unexpired Leases through and including September 6, 2004. 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 represent 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. 26; Bankruptcy Creditors' Service, Inc., 215/945-7000) M-WAVE INC: Expects New Orders to Total $2.5-$3.0 Million Annually ------------------------------------------------------------------ M-Wave, Inc. (Nasdaq:MWAV), a value-added service provider and supply-chain manager of high performance circuit boards, announced that orders entered in the preceding 30 days with several new and existing customers are expected to total $2.5-$3.0 million annually, a 17-21 percent increase over previous annual levels. This includes manufacturing contracted with American Standard Circuits domestically, and more than 20 supply partners in Taiwan, mainland China, Singapore, Korea and Thailand. "It appears confidence is building in our business model that directs customer purchases through our 'pipeline' in the U.S. and Asia -- this is evident by our growing order book," commented Jim Mayer of Credit Support International, LLC, the firm's Chief Restructuring Advisor. New Business Is Supply Chain Oriented M-Wave's new business includes increases in supply chain agreements and purchase orders of custom printed circuit boards for a variety of applications including digital and wireless RF parts that are negotiated and sold to the customer with M-Wave managing sourcing, production, testing and logistics. The company operates in Asia through its Singapore-based office and serves as a pipeline between middle market end-users, contract manufacturers and M-Wave's supply chain manufacturing partners both Asian and U.S. based. Supply Chain Services In one contract for example, goods are stocked on a just-in-time basis so that there is a perpetual inventory of parts immediately ready for shipment to the customer. This not only increases the efficiency of the procurement process by lowering direct costs but it also allows the customer to effectively reduce its lead time in receiving printed circuit boards from Asia in days as opposed to weeks. By managing the supply chain, M-Wave can offer strategic stocking arrangements the customer might otherwise forego. "This is a good example of where the new M-Wave is going. We're creating the pipeline between our supply partners and customers to maximize their logistical leverage while obtaining the lowest price, highest quality and best delivery possible," stated Joe Turek, M-Wave's CEO. Virtual Agent Procurement program (VAP) M-Wave recently added Virtual Agent Procurement (VAP) to its service oriented offerings. As a twist to the typical sales representative arrangement, VAP allows M-Wave to become the sole agent representing the customer rather than the supplier. This increases materially the power of the customer with respect to the supply chain allowing them direct access to many suppliers while using M-Wave as their representative to effectively manage the supply base. "We become an extension of the customer's purchasing department with VAP," indicated Bob Duke, Director of Sales and Marketing. The company expects that new services like the Virtual Agent Procurement program will offer new avenues of growth in the future. About American Standard Circuits, Inc. Established in 1989 and operating from its Franklin Park, Illinois home office, American Standard Circuits (ASC) is the domestic manufacturing partner of the M-Wave organization. ASC, with the recent purchase of M-Wave's facility through an affiliate, now commands over 90,000 square feet of manufacturing capability operating on three shifts with close to 200 employees. ASC produces both Digital and RF printed circuits on a time-to-market basis with 24-hour quick-turn capability and short run production. About Credit Support International Established in 1991, originally providing services associated with cross-border financing, it has, since 2002, been devoted to serving the needs of transitional or troubled middle market companies, and due diligence associated with small public entities. Jim Mayer, its Managing Member has 18 years of experience formerly 12 years as CEO of DiversiCorp, Inc., a lender services firm, and has managed or directed more than 50 engagements with troubled companies and provided a variety of services directly to clients including: due diligence, workout, collateral control, corporate restructuring, bankruptcy support, cross-border secured finance and interim management. Mayer has served on several boards of directors including the Turnaround Management Association. About M-Wave, Inc. Established in 1988 and headquartered in the Chicago suburb of West Chicago, Ill., M-Wave is a value-added service provider of high performance circuit boards. The company's products are used in a variety of telecommunications and industrial electronics applications. M-Wave services customers like Federal Signal in digital products, Celestica and Remec with its patented bonding technology, Flexlink(TM), associated with RF and wireless products. The company trades on the Nasdaq National market under the symbol "MWAV". Visit its web site at http://www.mwav.com/ * * * LIQUIDITY AND CAPITAL RESOURCES In its latest Form 10-Q filed with the Securities and Exchange Commission, M-Wave Inc. reports: "Net cash provided by operations was $1,532,000 for the first nine months of 2003 compared to $1,876,000 for the first nine months of 2002. Accounts receivable increased $625,000. Inventories decreased $922,000. The Company received approximately $4,510,000 in income tax refunds. Accounts payable increased $871,000. Depreciation and amortization was $507,000. "Capital expenditures were $54,000 in the first nine months of 2003 compared to $2,902,000 in the first nine months of 2002. The Company has limited plans for capital expenditures in 2003. "The Company completed financing of $8,100,000 from the Illinois Development Finance Authority's 2001 maximum limit on tax-exempt private activity bonds to finance its facility in West Chicago, Illinois on July 26, 2001. The bond replaced approximately $2,865,000 of credit line debt, which had an interest rate of 6% at the time. The term of the loan is 20 years. The Company has been making quarterly sinking fund payments of $325,000, except that the December 2002 quarterly payment was not made until February 2003. The Company deposited $325,000 in the first quarter of 2003 and an additional $1,500,000 in April 2003 into the sinking fund for the Company's outstanding industrial bond debt account per the terms of its Forbearance Agreement with Bank One. "On October 1, 2003, M-Wave entered into a new $2,413,533 loan with Bank One, NA that will mature on December 31, 2003, and will require monthly payments of interest at the bank's prime rate. This loan replaces the unpaid portion of the Industrial Revenue Bonds (IRB) that were used to fund the acquisition of the land and construction of the Company's manufacturing plant located in West Chicago, Illinois, and a related forbearance agreement with the bank. Upon signing the new loan, the Company is no longer in default of its obligations to the bank arising pursuant to the IRB. However, the Company will need to repay or negotiate the loan, or seek alternative financing, prior to the loans' maturity on December 31, 2003. Concurrent with the new loan, M-Wave paid $350,000 toward then-outstanding principal obligations, and Bank One released liens covering the Company's accounts receivable and inventory. Additional terms of the loan include assigning Bank One a lien on the Company's real estate and improvements located in Bensenville, IL, site of its former operations. Bank One is to receive a payment of $650,000 upon sale of the Bensenville assets, to be applied to the loan's principal. The Company's cash balance was approximately $791,000 as of September 30, 2003. "There can be no assurances that the forgoing matters will not adversely impact the Company's relationship with its suppliers and customers. The terms of the Company's long-term bank debt represent the borrowing rates currently available to the Company; accordingly, the fair value of this debt approximates its carrying amount. "The Company had a line of credit agreement, which expired on May 15, 2002. "The Company's ability to make scheduled principal and interest payments on, or to fund working capital and anticipated capital expenditures, will depend on the Company's future performance, which is subject to general economic, financial, competitive and other factors that are beyond its control. The Company's ability to fund operating activities is also dependent upon (a) proceeds of anticipated sales of fixed assets no longer required at the Company's Bensenville facility, (b) the Company's ability to effectively manage its expenses in relation to revenues and (c) the Company's ability to access external sources of financing. The Company has been unable to date to secure additional financing. "There can be no assurances that the steps being taken by the Company, even if successfully completed, will enable the Company to comply with the terms of the Promissory Note and/or fund the Company's working capital requirements. Moreover, even if the Company is able to comply with the terms of the Promissory Note, there can be no assurance that the Company will be able to fund its working capital needs." NAT'L CENTURY: Wants Court Okay Long Island Settlement Pact ----------------------------------------------------------- Charles M. Oellermann, Esq., at Jones Day Reavis & Pogue, in Columbus, Ohio, relates that prior to the Petition Date, Long Island Health Associates Corp. entered into a Sale and Subservicing Agreement, dated as of December 22, 1999, with NPF XII and Debtor National Premier Financial Services, Inc., pursuant to which NPF XII purchased certain of Long Island's accounts receivable. On October 3, 2000, Long Island filed a Chapter 11 voluntary petition in the United States Bankruptcy Court for the Eastern District of New York. On October 26, 2000, the Eastern New York Bankruptcy Court authorized Long Island to obtain postpetition credit from NPF XII and use NPF XII's cash collateral. Long Island's prepetition obligations to NPF XII were converted into a term loan evidenced by a postpetition secured promissory note and security agreement for $2,400,000. The Debtors' books and records indicate that as of July 18, 2003, the amount due from Long Island to the Debtors was $2,182,580. On November 27, 2002, Long Island and the Official Committee of Unsecured Creditors in Long Island's case filed their joint Statement of Challenge, where Long Island and the Committee sought to preserve their objections to the validity, priority, amount and perfection of NPF XII's claims against Long Island and prepetition interests and liens in Long Island's accounts receivable. On December 2, 2003, the Eastern New York Bankruptcy Court converted Long Island's case to a case under Chapter 7 of the Bankruptcy Code. Simultaneously, Robert L. Pryor, Esq., was appointed Trustee of Long Island's Chapter 7 estate. The Chapter 7 Trustee, on behalf of Long Island's Chapter 7 estate, has approached the Debtors about resolving Long Island's obligations to NPF XII. The Chapter 7 Trustee advised the Debtors that entry into and consummation of a Stipulation will facilitate the Chapter 7 estate's effective collection of receivables and maximize recovery for creditors of both estates by funding the collection efforts being undertaken. After arm's-length negotiations, the Debtors and the Chapter 7 Trustee entered into a stipulation. The parties agree that: A. NPF XII will be deemed to have an allowed secured claim against Long Island for $2,182,580 secured by a security interest in Long Island's accounts receivable and proceeds thereof; B. In satisfaction of NPF XII's allowed secured claim, Long Island must pay to NPF XII $844,000 in cash on the Effective Date plus 80% of the proceeds of accounts receivable collected thereafter, paid quarterly until NPF XII is paid a total of $2,000,000; C. NPF XII acknowledges that its liens are limited to accounts receivable and proceeds, and immediately on payment of the Settlement Amount, Long Island will be authorized to terminate the Debtors' ownership and security interests in Long Island's accounts receivable; D. The Chapter 7 Trustee will pursue the collection of the accounts receivable and distribute the funds in accordance with the Stipulation; and E. The Parties will exchange mutual releases, including the withdrawal of Long Island's Claim No. 696 and 697. Pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedures, the Debtors ask the Court to approve the Stipulation. 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) NICOLE ENERGY: Case Summary & 18 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Nicole Energy Services Inc. P.O. Box 2158 Westerville, Ohio 43086 Bankruptcy Case No.: 04-53678 Type of Business: The Debtor provides natural gas, electric power & energy management. Chapter 11 Petition Date: March 12, 2004 Court: Southern District of Ohio (Columbus) Judge: John E. Hoffman Jr. Debtor's Counsel: Jay W. Maynard, Esq. 200 East Campus View Boulevard, Suite 214 Worthington, OH 43235 Tel: 614-985-3670 Fax: 614-985-3738 Estimated Assets: $0 to $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 18 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Columbia Gas of Pennsylvania Trade Debt $1,573,000 200 Civic Center Drive Columbus, OH 43215 Nicole Gas Production, Ltd. Trade Debt $1,130,491 6264 Sunbury Road P.O. Box 2158 Westerville, OH 43086-2158 Columbia Gas of Ohio Trade Debt $737,000 200 Civic Center Drive Columbus, OH 43215 Michcon Trade Debt $519,950 2000 2nd Avenue Detroit, MI 48226 Equitable Gas Trade Debt $465,810 One Oxford Centre, Ste 3300 Pittsburgh, PA 15219 Perry Gas, Inc. Trade Debt $439,268 952 Echo Lane #450 Houston, TX 77024 Duquense Light Corporate Trade Debt $423,000 Communications 411 Seventh Avenue (16-4) Pittsburgh, PA 15219 Columbia Gas of Kentucky Trade Debt $373,000 200 Civic Center Drive Columbus, OH 43215 AGF Direct Gas Sales & Trade Debt $363,000 Servicing, Inc. 816 Elm Street Manchester, NH 03101 Universal Bonding Insurance Trade Debt $175,000 Equitrans Trade Debt $50,000 Dickenson & Wright Trade Debt $21,000 Columbia Gas Transmission Trade Debt $17,213 Shayne & Greenwald Offices Trade Debt $14,000 Uptegraff Manufacturing Co Trade Debt $14,000 Commonwealth of Pennsylvania Trade Debt $13,000 Best Western Hotels of Ohio Trade Debt $2,300 TECO People's Gas Trade Debt Unknown NORD PACIFIC: Secures $272K in Exchange for Convertible Notes ------------------------------------------------------------- Nord Pacific Limited (Pink Sheets: NORPF) announced two developments. On March 9, 2004, Nord Pacific obtained a second loan under the credit facility agreement with Allied Gold Limited. An initial loan under this facility was obtained in January 2004. The second loan is in the amount of $272,223 in exchange for convertible notes. If Allied converts the notes for the second loan (which would be at $0.05 per share for $72,353 and $0.10 per share for $199,870 of the second loan), Allied Gold would increase its ownership to a total of 40.2% of the then outstanding common shares of Nord Pacific. In March 2004, PGM Ventures Corporation and Warrama Consulting Property Limited filed a motion with the Court of Queen's Bench of New Brunswick requesting that PGM and Warrama be added as parties in the proceeding of Nord Resources Corporation vs. Nord Pacific Limited and certain directors. This legal proceeding related to, among other things, the issuance of shares to certain directors and officers and the election of directors. Nord Pacific and Nord Resources agreed to the settlement of this litigation in December 2003 just prior to Nord Pacific entering into an arrangement agreement with Allied Gold Limited. In the motion, PGM and Warrama claim to be shareholders of Nord Pacific, owning 5,000 and 75,000 shares, respectively, and they claim that actions of the Nord Pacific Board regarding the arrangement with Allied Gold have been, among other things, oppressive and unfair and have been done without proper care. They request the Court to declare all directors meetings since June 28, 2003 as null and void, set aside transactions with Allied Gold, and invalidate 5,200,000 common shares issued previously to certain directors. Nord Pacific intends to defend vigorously the interests of Nord Pacific and its shareholders. A court hearing on the motion of PGM and Warrama is scheduled to be held on March 23, 2004. PGM may have motivations other than the interests of Nord Pacific's shareholders. As previously reported, PGM stated in a press release dated January 14, 2004 that PGM "is making" a bid for all issued and outstanding shares of Nord Pacific. Nord Pacific has not received an offer or documents for an offer by PGM. PGM is also a party with Nord Pacific to two joint ventures, the Simberi Mining Joint Venture and the Tabar Exploration Joint Venture. Warrama has been a financial adviser to Nord Pacific and to the Simberi Joint Venture. Warrama has also stated in a court filing that Warrama was retained in January 2004 by PGM to assist with the development, promotion and enhancement of PGM or its affiliated company's current economic interest in the Simberi Joint Venture. Nord Pacific is of the view that Warrama has a significant conflict of interest in this matter. Subject to confirmation of funds expended, PGM may have earned a 50% interest in the Simberi Joint Venture. If Nord Pacific cannot meet its share of expenses in the joint venture, PGM could dilute Nord Pacific's interest in the Simberi Joint Venture to 15%, with PGM's interest rising to up to 85%. Similar provisions apply in the TabarJjoint Venture. Nord Pacific has been using funds borrowed from Allied Gold to support its operations and meet its equity requirements for the Simberi Joint Venture in order to preserve its participating interest in such joint venture as an asset for all of its shareholders. If these loans by Allied Gold had to be repaid, Nord Pacific would be unable to meet the equity requirements of its Simberi Joint Venture and if PGM were to fund the additional equity requirements for the Simberi Joint Venture, then (as stated above) under the joint venture agreement PGM would be able to increase its participating interest in the Simberi Joint Venture at the expense of Nord Pacific's participating interest. NOVA STAR: Engages Chisholm Bierwolf as New Independent Auditor --------------------------------------------------------------- On February 12, 2004, Nova Star Innovations, Inc.'s independent auditors, Chisholm & Associates, Certified Public Accountants, informed the Company that on February 9, 2004, that firm had merged its operations into Chisholm, Bierwolf & Nilson, LLC. Chisholm & Associates had audited Nova Star's financials statements for the past two fiscal years ended December 31, 2002 and 2001 and its reports for each of the two fiscal years were modified as to the uncertainty of Nova Star Innovations, Inc.'s ability to continue as a going concern. The Company has indicated that except for this modification, the reports did not contain an adverse opinion, disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles. Also, there were no disagreements with Chisholm & Associates on any matter regarding accounting principles or practices, financial statement disclosure, or auditing scope or procedure during the past two fiscal years or any subsequent interim period preceding the date of resignation. The Company's Board of Directors approved the change in auditors. Nova Star is a development stage company with no assets and recurring losses from inception and we are dependent upon financing to continue operations. At September 30, 2003, the company's balance sheet discloses a total stockholders' equity deficit of $5,000. NRG ENERGY: Cajun Ch. 11 Trustee Asks Court to Allow Admin. Claim ----------------------------------------------------------------- Ralph R. Mabey is the Chapter 11 Trustee for Cajun Electric Power Cooperative, Inc., one of NRG Energy, Inc.'s debtor-affiliates. In the course of his administration of the Cajun estate, the Trustee determined to sell substantially all of Cajun's assets. Debtor Louisiana Generating, LLC was determined to be the bidder, making the highest and best offer for Cajun's assets. The Trustee and Louisiana Generating entered into a Fifth Amended and Restated Asset Purchase and Reorganization Agreement, dated as of September 21, 1999. The Agreement became the basis of the Second Amended and Restated Creditors' Plan of Reorganization dated September 21, 1999 in Cajun's case. Under the Asset Purchase Agreement and the Plan, Louisiana Generating became the successor under, and the assignee of, virtually all of Cajun's executory contracts and unexpired leases. Previously, in 1983, Cajun entered into so-called TBT Agreements with Eastman Kodak Company and The Clorox Company, pursuant to which Cajun transferred to Kodak and Clorox certain tax benefits. To support Cajun's obligations under the TBT Agreements, Cajun and CoBank, ACB entered into a Letter of Credit and Reimbursement Agreement. Pursuant to the Letter of Credit and Reimbursement Agreement: (a) In the event of default by Cajun under the TBT Agreements, Kodak and Clorox could draw down the letters of credit issued by CoBank; and (b) Cajun was required to post security in favor of CoBank in the form of cash deposits and a Pledge of certain so- called "CoBank Class E Stock" owned by Cajun and held by CoBank. In the event it was required to pay under the letters of credit, CoBank would reimburse itself from the Cajun cash and Class E stock which CoBank held. If CoBank has no further exposure under letters of credit, the remaining security it holds will be remitted to the Cajun estate, through the Rural Utilities Service. The value anticipated to be available for remittance to the Cajun estate is in excess of $10,000,000. However, since the filing of Louisiana Generating's bankruptcy case, CoBank refused to periodically remit to the Cajun estate any excess security, which it had done prior to Louisiana Generating's bankruptcy. The Trustee is unaware of any default under the TBT Agreements, which would give rise to a draw on the letters of credit by Kodak and Clorox and, subsequently, would give CoBank cause to resort to the cash and stock security it holds. However, if by virtue of Louisiana Generating's bankruptcy filing, acts taken by it in Chapter 11, provisions or implementation of Louisiana Generating's plan of reorganization or otherwise, a default has occurred under the TBT Agreements, the Cajun estate may stand to lose several millions of dollars in cash and stock currently held as security by CoBank. In that instance, the Trustee and the Rural Utilities Service would have a substantial administrative claim against Louisiana Generating. Based on the best information currently available, it appears that the claim would be $8,679,750, depending on the date of the default and the TBT Agreement liability at that date. The precise amount of the Trustee's claim is subject to further refinement and revision. By this motion, Mr. Mabey asks the Court to allow its administrative expense claim for $8,679,750. (NRG Energy Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000) ONEIDA LTD: Negotiating for Potential Preferred Equity Investment ----------------------------------------------------------------- Oneida Ltd. (NYSE:OCQ) announced financial results for the fourth quarter and fiscal year ended January 31, 2004. Sales for the fourth quarter were $121.7 million, compared to sales of $133.1 million in the fourth quarter of the previous fiscal year that ended January 2003. Oneida reported a fourth quarter net loss of $17.4 million, equal to a loss of $1.04 per share, which included a loss of $0.55 per share stemming from one-time expenses totaling $9.1 million (as detailed below). This compared to year-ago net income of $3.0 million equal to $0.18 per share, which included $0.11 per share resulting from a reduction in the effective tax rate that occurred primarily from the resolution of matters for which amounts had previously been accrued. For the fiscal year ended January 2004, Oneida's sales totaled $453 million, compared to sales of $491.8 million for the same period a year ago. The company reported a fiscal year-end net loss of $99.2 million, equal to a loss of $5.98 per share, which included a loss of $4.97 per share relating to a deferred tax asset valuation allowance, professional services expenses, and charges for plant closings and for the sale of certain assets of the Buffalo China dinnerware factory. This compared to net income of $9.2 million equal to $0.55 per share for the fiscal year ended January 2003. Oneida's fourth quarter results were affected by the following one-time expenses that totaled $9.1 million: -- The company incurred charges of approximately $4 million relating primarily to the sale of certain assets of the Buffalo China factory. -- The cost of sales adjustment rose by approximately $2 million from a year ago because of cost inefficiencies relating to the closing of five manufacturing sites. Those sites, whose closings were announced on October 31, 2003 and have all taken effect, have been sold or are in the process of being sold. Oneida anticipates all further planned sales of assets will be completed by the end of the third fiscal quarter, and expects to receive approximately $10 million in cash before expenses from those further sales. -- Oneida spent $3.1 million for professional services relating to the restructuring of its credit facilities. Fourth quarter results also included an income tax benefit of $428,000 that resulted from accounting for an approximately $4.7 million reversal of tax reserves due to the resolution of prior years' income tax audits, coupled with establishing an additional $4.3 million reserve for deferred tax valuation. "We are pleased to be nearing the conclusion of restructuring our manufacturing and product sourcing operations," said Peter J. Kallet, Oneida Chairman and Chief Executive Officer. "We anticipate $12 million in annual savings from the five factory closings that are completed, and we expect to achieve a potential $18 million in additional annual savings by successfully converting our Sherrill, N.Y. flatware factory to a lean manufacturing system. We will determine in the next few months whether the lean conversion will achieve the necessary savings; a successful conversion is essential for the long-term viability of the Sherrill factory." DISCUSSIONS WITH POTENTIAL PRIVATE EQUITY INVESTOR Oneida has been in discussions with a private equity investor with respect to a potential preferred equity investment in the company. The company is in related discussions with its lenders and potential new financing sources to restructure its existing indebtedness and provide ongoing liquidity. The company will provide updated information regarding the progress of this initiative when appropriate. Any investment will be contingent on, among other things, the negotiation and execution of definitive documents with the investor, the restructuring of the company's existing indebtedness, and the completion of new financing. Because the private equity investment and restructuring of its indebtedness are not concluded at this time, Oneida may receive a going-concern opinion from its independent auditors, PricewaterhouseCoopers LLP, when the audit is completed for the fiscal year ended in January 2004. Oneida Ltd. is a leading source of flatware, dinnerware, crystal, glassware and metal serveware for both the consumer and foodservice industries worldwide. * * * As previously reported, 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. 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. 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. OWENS: Stipulation Clarifies 2004 Old Republic Insurance Policy --------------------------------------------------------------- Under the laws of most states where the Owens Corning Debtors operate, they are required to provide workers' compensation insurance for their employees. Accordingly, the Debtors are the beneficiaries of these workers' compensation insurance policies issued by Old Republic Insurance Company: (1) a policy with a term running from September 1, 2000 to September 1, 2001; (2) a policy with a term running from September 1, 2001 to September 1, 2002; and (3) a policy with a term running from September 1, 2002 to September 1, 2003, which was extended to November 1, 2003. Pursuant to the 2000-2001 Policy and related agreements, the Debtors provided Old Republic with a prepetition letter of credit in the current amount of $8,361,000. In the course of discussions regarding Old Republic's issuance of the 2001-2002 Policy, Old Republic informed the Debtors that it was unwilling to issue the 2001-2002 Policy without clarification of certain issues raised by the 2000-2001 Policy and the 2001- 2002 Policy. Generally, the clarifications addressed issues that arise from the fact that Old Republic's reimbursement rights and associated claims against the Debtors would remain unliquidated for a long period of time because covered workers' compensation claim may be payable for years after the policies expired. Placing a value on claims for deductible loss reimbursement relating to large deductible policies shortly after a policy year ends may be difficult and could result in estimated claims that are either significantly higher or lower than the reimbursement claims which would actually transpire. With respect to the 2000-2001 Policy and the 2001-2002 Policy, the parties addressed the issues for the benefit of all parties concerned by entering into a Court-approved Stipulation on August 7, 2001. In connection with the issuance of the 2001-2002 Policy, the Debtors provided Old Republic with a letter of credit in the original amount of $8,500,000. The issuance of the 2002-2003 Policy raised the same issues, as did the previous policies. The parties addressed these issues by entering into a Second Stipulation. Old Republic thereafter issued the 2002-2003 to the Debtors. In connection with the issuance of the 2002-2003 Policy and in accordance with the terms of the Second Stipulation, the Debtors increased the postpetition Letter of Credit from $8,500,000 to $18,500,000. The New Policy Upon expiration of the 2002-2003 Policy, Old Republic issued a new workers' compensation policy to the Debtors for the one-year period commencing as of November 1, 2003. In the course of the parties' renewal discussions, Old Republic informed the Debtors that it required them to increase the amount of the postpetition Letter of Credit by $2,000,000 and obtain clarification of the same issues with respect to the New Policy that the Second Stipulation resolved in connection with the 2002-2003 Policy and that the First Stipulation resolved in connection with the 2000- 2001 and 2001-2002 Policies. The Third Stipulation provides that: (a) Old Republic is to be entitled to an unliquidated administrative claim against the Debtors, on account of the possibility that: (1) the Debtors fail to make premium payments, or pay any other amounts due with respect to the New Policy; or (2) the Debtors fail to make payments within the deductible layer of the New Policy for deductibles relating to or on account of occurrences giving rise to workers' compensation claims covered by the New Policy; (b) The administrative claims are: (1) to survive confirmation of the Debtors' reorganization plan; (2) not be liquidated or adjudicated by the Court; and (3) not be payable upon the effective date of the Plan, unless the confirmed plan for the Debtors' liquidation, in which event Old Republic's administrative claim against the Debtors is to be estimated or adjudicated by the Court, as appropriate, and paid when allowed by the Court. In addition, in the event these cases are converted to Chapter 7 cases, Old Republic's administrative claim against the Debtors is to be estimated by the Court and paid when allowed by the Court; (c) Court approval of the Stipulation is to be deemed to be authorization for the Debtors to enter in to the New Policy and to increase the postpetition Letter of Credit by $2,000,000. The Debtors are not to seek to recover, until November 1, 2007, any excess proceeds of the prepetition Letter of Credit or the postpetition Letter of Credit, if drawn upon by Old Republic, unless otherwise agreed by the parties; (d) The proceeds of the prepetition Letter of Credit are to be applied first to Old Republic's prepetition claim on account of the 2000-2001 Policy. Old Republic may apply the remaining proceeds of the prepetition Letter of Credit to its administrative claims relating to the 2000-2001 Policy, the 2002-2003 Policy and the New Policy as it sees fit, in its sole reasonable discretion; and (e) In the event that the Debtors do not make all the required premium payments owed in account of the New Policy or does not make all required deductible payments on account of the claims covered in the New Policy, Old Republic is to be entitled, without lifting the automatic stay, but only after providing the Debtors and its Creditors Committee and Future Representative with no less than seven business days' prior written notice, to exercise its state law rights, if any, to cancel the New Policy. The Court promptly approves the parties' Third Stipulation. 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 BIOMETRICS: Ability to Continue Operations is in Doubt --------------------------------------------------------------- Pacific Biometrics, Inc., a Delaware corporation, provides specialty reference laboratory services to the pharmaceutical and diagnostics industries. The Company was incorporated in Delaware in May 1996. The Company conducts its business through its wholly owned subsidiary, Pacific Biometrics, Inc., a Washington corporation. The Company had a net loss for the quarter ended December 31, 2003, experienced recurring losses from operations in prior years, expects further significant losses for the quarter ending March 31, 2004, and has regularly had cash flow shortages. Additionally, the Company has deficiencies in working capital and stockholders' equity and has significant amounts of past due debt. These matters raise substantial doubt about the Company's ability to continue as a going concern. Management has taken steps to revise its operating and financial requirements, which it believes are sufficient to provide the Company with the ability to continue in existence for the near term. These steps include expansion of business development efforts and initiation of a best efforts private placement of unregistered common stock through registered broker-dealers. In addition, the Company is continuing to review its operational and financial requirements. To that end, in November and December, the Company implemented certain cost reductions and deferrals that included generally all of its employees. In addition to headcount reductions, the Company's senior management and certain other employees accepted salary deferrals ranging from 15% to 20%, and the majority of the Company's other employees were subjected to the State of Washington's "Shared Work Program". Under the Shared Work Program, employees' hours worked may be reduced by up to 50%, and the employees are eligible to apply for unemployment benefits for the reduction in hours worked. Additionally, the Company began to implement further cost reductions beginning in February 2004, including additional headcount reductions, and reduction of the monthly management fee paid to Saigene from $70,000 per month to $40,000 per month. Also, effective February 1, 2004, the salary deferrals to senior management and certain other employees became salary reductions, and the Company's Board of Directors approved the grant of stock options to these employees in connection with the salary reductions for the month of February 2004. There can be no assurance, however, that the Company's efforts to reduce expenses and generate revenue will be successful. The Company is continuing to review its operational and financial requirements, and may implement additional cost reductions and deferrals. In addition to the best efforts private placement of unregistered common stock through registered broker-dealers, the Company is also currently seeking to raise other financing to fund operations, however, in the current market condition, raising capital has been, and will continue to be difficult. Even after the steps the Company has taken to revise its operating and financial requirements, the Company still has significant debts and claims that need to be settled. The Company will continue to review its operating and financial requirements with the objective of controlling expenses while minimizing any adverse impact on its future business opportunities, and attempt to settle outstanding debts with cash generated from its operations, with stock, and/or with technology assets. However, there can be no assurance that the Company will raise sufficient financing from any equity or debt financing to help fund operations during the near term. Accordingly, management is contemplating other alternatives to enable the Company to fund continuing operations, including, but not limited to, exploring strategic alternatives, which may include a merger, asset sale, joint venture or another comparable transaction, loans from management or employees, salary deferrals or other cost cutting mechanisms, or raising additional capital by private placements of equity or debt securities or through the establishment of other funding facilities. None of these potential alternatives may be available to the Company, or may only be available on unfavorable terms. If the Company is unable to obtain sufficient cash to continue to fund operations, it may be forced to seek protection from creditors under the bankruptcy laws and/or cease operations. Any inability to obtain additional cash as needed could have a material adverse effect on the Company's financial position, results of operations and ability to continue in existence. PARMALAT GROUP: US Debtors Turn to Lazard Freres for Advice ----------------------------------------------------------- Due to their deteriorating financial condition and lack of liquidity, the U.S. Parmalat Debtors determined that a sale of their businesses was required to preserve the value of their assets for the benefit of their creditors and other parties-in- interest. Before the Petition Date, the Debtors employed Lazard Freres & Co., LLC to assist them in the sale process. Lazard Freres: -- advised and met with the Debtors' management, with respect to various financial matters; -- assisted the Debtors and their counsel in evaluating their businesses, assets and operations; -- acted on the Debtors' behalf in arranging out-of-court and debtor-in-possession financing; -- assisted the Debtors in preparing financial information in support of the DIP financing; -- assisted the Debtors in negotiating and communicating with the holders of the Debtors' various debt issues with respect to various matters; -- assisted the Debtors in analyzing their business and financial condition, formulating appropriate strategy and structural alternatives, advising the Debtors in connection with negotiations and aid in the consummation of a Sale Transaction; and -- advised and attended meetings of the Debtors' Boards of Directors and their committees on matters related to the Sale Transaction. In light of the prepetition engagement, Anthony Mayzun, Parmalat USA Vice President - Finance and Assistant Treasurer, tells Judge Drain that Lazard Freres has developed its knowledge of the U.S. Debtors' financial and business operations. The Debtors, therefore, believe that Lazard Freres is highly qualified to provide financial advisory and investment banking services in their Chapter 11 cases going forward. On an interim basis, the Court permits the U.S. Debtors to employ Lazard Freres as financial advisor and investment banker. Lazard Freres will continue, without interruption, to perform the same services for the Debtors. Lazard Freres will also provide testimony and other evidence, as necessary, in any proceeding before the bankruptcy court on matters related to the Sale Transaction. The firm will also provide the Debtors with other general restructuring advice on matters related to the Sale Transaction. As consideration for the services to be provided, the U.S. Debtors will pay Lazard Freres these fees: (a) A fee payable on the consummation of any Sale Transaction equal to 1.3% of the Aggregate Consideration involved in the Sale Transaction, subject to a $1,000,000 Minimum Fee; and (b) In addition to any fees that may be payable to Lazard Freres and, regardless of whether any transaction occurs, the Debtors will promptly reimburse Lazard Freres for all reasonable fees and out-of pocket expenses. The U.S. Debtors will also indemnify Lazard Freres. Frank A. Savage, a managing director at Lazard Freres, discloses the firm's potential conflict with interested parties in these cases: (1) Parmalat Finanziaria SpA and Parmalat SpA engaged Lazard Freres to provide advice in connection with strategic alternatives, financial restructuring and insolvency matters, worldwide asset recovery, and actions commenced against Parmalat in the United States and abroad. Parmalat engaged Lazard & Co., Limited, Lazard Freres' English affiliate, and Lazard & Co. Srl, its Italian affiliate; (2) In 2003, Banca Intesa SpA, a creditor of Parmalat USA Corporation and certain Italian affiliates of the Debtors, purchased a subordinated convertible note in the principal amount of $150,000,000 issued by Lazard Funding Limited LLC, a separate subsidiary of Lazard Freres' parent corporation, Lazard LLC. Lazard Freres LLC guarantees the note. Banca Intesa also invested $150,000,000 in Lazard & Co. Srl. Banca Intesa holds 40% of the quota (equity) of Lazard & Co. Srl, as well as a subordinated note in the principal amount of $50,000,000 issued by Lazard & Co. Srl. Lazard LLC and its subsidiaries hold the remaining 60% of the equity of Lazard & Co. Srl and have effective control over its day-to-day management and operations; (3) Lazard Freres has represented GE Capital Corporation and its affiliates on a variety of matters in the past. The firm is currently retained by GE Capital affiliates on unrelated matters. Lazard Freres acted as investment banker for GE Capital on its purchase of CompuNet in 1996, Ameridata Technology in 1996, TIP Europe in 1999, a real estate business in the United Kingdom in 2000, and the asset-based lending and real estate finance businesses of DaimlerChrysler Capital in 2002. Lazard Freres also represented GE Capital in its sale of GE Capital Consulting in 1999; (4) Lazard Freres acted as co-manager of International Paper Co.'s $1,000,000,000 note offering in 2003. Lazard Freres advised IP Timberland in its sale in 1996. Lazard Freres advised International Paper Co. in its acquisition of Hammermill Paper Co. in 1986. The firm also acted as co-manger of IP Timberland's $150,000,000 note offering in 1985; (5) Lazard Freres is advising Keyspan Energy Services, Inc. on a variety of matters unrelated to the Debtors; (6) Lazard Freres was retained in 2002 to provide services to Firmenich, Inc. That engagement is no longer active; (7) Lazard Freres retains Deloitte & Touche as its auditors. Deloitte & Touche has previously served as auditors to the Debtors; (8) As part of its business as a broker-dealer, Lazard Freres acts as a broker in a variety of securities, including high yield debt, investment grade debt, convertible debt, preferred equity and common equity. From time to time, Lazard Freres may trade securities or act as a broker trading securities unrelated to these cases with some of the Debtors' stakeholders and other parties-in-interest; and (9) Lazard has in the past worked with, continues to work with, and has mutual clients with certain law firms who are parties-in-interest in these cases or who represent those parties, including without limitation, Weil Gotshal & Manges. Lazard Freres does not believe that these relationships create a conflict of interest in their representation of the Debtors in these Chapter 11 cases. Mr. Savage assures the Court that Lazard Freres remains a "disinterested person" as the term is defined in Section 101(14) of the Bankruptcy Code. The Court will convene a hearing to consider final approval of Lazard Freres' engagement on April 22, 2004 at 10:00 a.m. Objections are due April 9, 2004. 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. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) PARMALAT GROUP: US Debtors Retain AlixPartners as Fin'l. Advisor ---------------------------------------------------------------- On an interim basis, Judge Drain authorizes the U.S. Parmalat Debtors to employ AlixPartners, LLC as financial advisors. "The services of AlixPartners are necessary in order to enable the Debtors to execute their duties as debtors-in-possession. AlixPartners' familiarity with the Debtors' financial affairs and the business and financial circumstances surrounding the commencement of these Chapter 11 cases will minimize the charges to the Debtors' estates," Anthony Mayzun, Parmalat USA Vice President - Finance and Assistant Treasurer, says. Since January 19, 2004, AlixPartners and one of its affiliates have assisted the U.S. Debtors in their restructuring process. AlixPartners provided those services from the date of its engagement up to immediately before the Petition Date. Among other things, the Debtors employed AlixPartners to: (i) identify and implement liquidity generating initiatives; (ii) develop cash management strategies; and (iii) assist Parmalat USA Corporation in obtaining new financing. Going forward, AlixPartners will: -- assist in negotiations with the Debtors' stakeholders and their representatives; -- assist in negotiations with potential acquirers of the Debtors' assets; -- assist the Debtors' management in the reorganization process and implementation of overall restructuring goals; -- assist in managing the "working group" professionals who are and will be assisting the Debtors' in the reorganization process or who are working for the Debtors' various stakeholders to improve coordination of their effort and individual work product to be consistent with the Debtors' overall restructuring goals; -- work with the Debtors and their representatives to further identify and implement both short-term as well as long-term liquidity generating initiatives; -- assist in developing and implementing cash management strategies, tactics and processes and work with the Debtors' treasury department and other professionals and coordinate the activities of the representatives of other constituencies in the cash management process; -- assist the Debtors' management with the development of the Debtors' revised business plan, and other related forecasts as may be required by the bank lenders in connection with negotiations or by the Debtors for other corporate purposes; -- assist in communication or negotiation with outside constituents including the banks and its advisors; -- assist with the preparation of the statement of affairs, schedules and other regular reports required by the Bankruptcy Court as well as provide assistance in such areas as testimony before the Bankruptcy Court on matters that are within its areas of expertise; -- assist with financing issues either prior to or during the bankruptcy proceeding and in conjunction with the plan of reorganization; -- assist in preparing for and filing a bankruptcy petition, coordinate and provide administrative support for the proceeding and develop the Debtors' reorganization plan or other appropriate case resolution, if necessary; and -- manage the claim and claim reconciliation processes. The U.S. Debtors will compensate AlixPartners for its services in accordance with the firm's customary hourly rates plus reimbursement of actual, necessary expenses. AlixPartners' hourly rates are: Principals $540 - 690 Senior Associates 430 - 520 Associates 300 - 400 Accountants & Consultants 225 - 280 Analysts 150 - 190 The professionals that will primarily be responsible for the engagement and their hourly rates are: Name Description Rate Commitment ---- ----------- ---- ---------- James A. Mesterharm Lead Financial $590 Full Time Restructuring Advisor Peter Fitzsimmons Senior 630 As Needed Restructuring Advisor John Dischner Cash & 450 Full Time Restructuring Advisor Chris Blacker Due Diligence & 390 Full Time Restructuring Support Advisor The U.S. Debtors have paid to AlixPartners a $300,000 retainer, which will be applied to AlixPartners' final bill. The U.S. Debtors will also compensate AlixPartners for its efforts through a contingent success fee. The Success Fee will be calculated and paid based on the development and implementation of a plan to maximize the "Parmalat Dairy Value Recovery" received by the various stakeholders of the Company. The "Parmalat Dairy Value Recovery" is deemed to include any distribution of value by the Company, its subsidiaries or affiliates, including but not limited to cash, securities, stock appreciation rights, plant & equipment assets, working capital assets, and deferred earn-outs, and the value of reorganized stock or reorganized debt securities issued to the stakeholders of the Company, net of the costs of recovery. Success Fee Element Success Fee Earned ------------------- ------------------ Implementation and the closing of a value recovery plan including the sale of a majority of the assets of Parmalat USA and $1,000,000 affiliates, in which AlixPartners assists in the negotiations with all relevant stakeholders. Distribution to stakeholders of 1% of the more than $135,000,000 from excess Parmalat Dairy Value Recovery The Success Fee is an integral part of AlixPartners' compensation for the engagement. The payment of the Success Fee will occur when the value has been exchanged and proceeds from a buyer or buyers of the Debtors' business are distributed to creditors or deposited in a segregated bank account. Mr. Mesterharm, a principal at AlixPartners, discloses that in connection with an agreement dated January 20, 2004, Parmalat SpA retained AlixPartners Srl, an affiliate of AlixPartners, to assist with a variety of restructuring activities including work on the U.S. Debtors. In addition, Comerica Bank, a lender to the U.S. Debtors, is a limited partner in Questor Partners Fund, LP and Questor Partners Fund II, LP. Jay Alix, a principal at AlixPartners, is the President and CEO of Questor Management Company, LLC, the entity that manages QPF and QPF II. Nevertheless, Mr. Mesterharm attests that AlixPartners does not hold any adverse interest in the Debtors and their estates. Judge Drain will convene a hearing to consider final approval of AlixPartners' engagement on April 22, 2004 at 10:00 a.m. Objections to the engagement are due April 9, 2004. 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. 8; Bankruptcy Creditors' Service, Inc., 215/945-7000) PG&E NATIONAL: USGen Wants Until July 2 to Exclusively File Plan ---------------------------------------------------------------- John Lucian, Esq., at Blank Rome, LLP, in Baltimore, Maryland, explains that USGen New England, Inc., a debtor-affiliate of PG&E National Energy Group Inc., still needs more time to address a plethora of issues. USGen's preliminary efforts have included: (a) stabilizing its large and complex business under challenging circumstances; (b) addressing various "First Day" issues; (c) complete voluminous Schedules and Statement of Financial Affairs; (d) preparing for the Section 341 meeting of creditors; (e) preparing detailed monthly operating reports; (f) responding to creditor inquiries; (g) preparing various administrative and procedural motions for streamlining case operation; and (h) meeting with, briefing, and engaging in negotiations on various issues with the Official Committee of Unsecured Creditors and its professionals on a regular basis. Additionally, USGen has filed many motions concerning its postpetition operations and discharge of its fiduciary duties, which consumed substantial amounts of USGen's time and resources. Thus, USGen asks the Court to extend its exclusive period to file a Chapter 11 plan through and including July 2, 2004 and its exclusive period solicit acceptances of that plan through and including August 31, 2004. The Bear Swamp Litigation According to Mr. Lucian, the Bear Swamp litigation is, arguably, the most intensive matter to confront USGen during the early months of the case. The dispute began when USGen sought to reject its uneconomic leases and related agreements with the Bear Swamp counterparties. USGen's obligations under those leases included $44,000,000 in lease payments in 2004 alone. Through extensive settlement discussions spanning many weeks, USGen negotiated an interim settlement agreement through which the Bear Swamp counterparties consented to a rejection of the leases and related agreements to the extent the Court determines they constitute a lease rather than a secured financing. In furtherance of the parties' agreement, USGen initiated an adversary proceeding against the Bear Swamp counterparties on January 2, 2004 through which the Court will make that determination. As a result of an interim standstill agreement negotiated in early 2004, the defendants have not filed an answer yet, but are expected to do so later this month because the standstill agreement expired on March 1, 2004. Expedited discovery has recommenced in anticipation of a trial on June 23 to 24, 2004. A resolution of the cardinal issues raised in the Bear Swamp adversary proceeding weighs heavily on USGen's reorganization efforts. Despite the protracted nature of the proceedings, the matter remains on schedule for a June trial. Therefore, granting an additional exclusivity extension will allow USGen to concentrate on concluding the litigation without being distracted by a competing plan, as well as incorporate the litigation results into its plan formulations. The Algonquin Litigation USGen has also been embroiled in litigation with Algonquin Gas Transmission Company since August 2003 when USGen sought to reject its contracts with Algonquin. Algonquin challenged USGen's right to reject its contracts, initiated a rate case before the Federal Energy Regulatory Commission, filed a $481,000,000 proof of claim, and commenced a lift stay proceeding involving a $10,000,000 letter of credit. Algonquin's actions continue to involve USGen in numerous proceedings before the Court and the FERC, and have consumed significant amounts of USGen's resources during the first eight months of USGen's case. USGen continues to engage in active settlement negotiations with Algonquin and is cautiously optimistic that a global resolution of all issues may be reached during an extended exclusivity period. However, if the Exclusive Periods are not extended, USGen likely will not be able to continue to devote significant resources to its settlement efforts with Algonquin. Rockingham Condemnation Proceedings Moreover, Mr. Lucian states that the Town of Rockingham, Vermont pursued eminent domain proceedings against USGen in late 2003 to condemn one of USGen's hydroelectric facilities. To preserve this important asset, USGen responded by initiating an adversary proceeding and seeking emergency injunctive relief from the Court. USGen has conducted extensive negotiations with Rockingham, which USGen hopes will result in a consensual resolution to be presented to the Court upon completion of the underlying documentation. The matter continues to considerably consume USGen's resources. Implementation of Reorganization Strategy Notwithstanding the enormous amount of time and resources absorbed by the pertinent matters, USGen has made substantial progress in formulating and implementing a reorganization strategy by evaluating the possibility of a sale of substantially all of its assets or, alternatively, emerging from Chapter 11 as a stand-alone entity. USGen is making substantial progress in certain negotiations and intends to circulate in the near future a proposed asset purchase agreement and set of bid procedures to entities for their consideration. Mr. Lucian informs the Court that USGen needs additional time to conduct the negotiations and should not be distracted by the threat of a competing plan while the negotiations proceed. Sophisticated Business Operations and Interaction with the Creditors Committee USGen has continued to focus on the fundamental task of operating its large and complex business. An enterprise of this magnitude presents complicated and novel issues requiring thorough analyses and timely responses from USGen's management. Mr. Lucian points out that, in recent months USGen has: (a) negotiated and implemented a multi-year, multimillion dollar contract for environmental upgrades at its Brayton Point Facility; (b) resolved complicated tax disputes with certain municipalities; (c) negotiated the assignment of a beneficial coal contract to the estate; and (d) achieved other operational success. In addition, USGen has been working closely with the Creditors Committee and its financial and legal advisors on its reorganization efforts. USGen meets with the Creditors Committee and its advisors on a regular basis and communicates with them several times per week to discuss all aspects of the Chapter 11 case. USGen's efforts include many detailed presentations of its operational, financial and tactical activities, as well as other issues critical to the Creditors Committee's understanding of USGen and its reorganization efforts. The Creditors Committee's advisors are intimately involved in the Debtor's confidential negotiations with potential purchasers and are consulted on all major issues. USGen intends to maintain this approach and work with the Creditors Committee in good faith throughout any extended Exclusive Periods. Furthermore, Mr. Lucian states that USGen's Chapter 11 case is less than eight months old and USGen has remained current fully on all postpetition obligations. Mr. Lucian assures Judge Mannes that creditors and parties-in-interest will not be prejudiced by a further exclusivity extension. To the contrary, a denial of a further exclusivity extension could detrimentally affect USGen's asset values and possible sale price because a competing plan would likely force USGen to abruptly conclude its negotiations with the current potential bidders. In that sense, USGen will not be able to maximize the value of its assets in the best interests of its estate and creditors. Judge Mannes will convene a hearing on March 31, 2004 at 2:00 p.m. to consider USGen's request. Pursuant to the Order for Complex Chapter 11 Bankruptcy Case dated July 16, 2003, USGen's Exclusive Filing Period is automatically extended, without the necessity of a bridge order, until the conclusion of that hearing. 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) PORTOLA PACKAGING: Equity Deficit Totals $37.8M at February 2004 ---------------------------------------------------------------- Portola Packaging, Inc. reported results for its second quarter of fiscal year 2004, ended February 29, 2004. Sales were $54.2 million compared to $51.1 million for the same quarter of the prior year, an increase of 6.1%. For the first six months of fiscal 2004, sales were $114 million compared to $103.1 million for the first six months of fiscal 2003, an increase of 10.6%. Portola had an operating loss of $4.5 million for the second quarter of fiscal year 2004, compared to operating income of $1.1 million for the second quarter of fiscal year 2003. For the first six months of fiscal 2004 the Company had an operating loss of $2.5 million compared to operating income of $2.8 million for the first six months of fiscal 2003. Portola reported a net loss of $10.7 million for the second quarter of fiscal year 2004 compared to a net loss of $1.1 million for the same period of fiscal year 2003, and a net loss of $11.7 million for the first six months of fiscal 2004 compared to a net loss of $2.4 million for the same period in fiscal 2003. During the second quarter of fiscal 2004, the Company incurred pretax restructuring charges of $1.5 million compared to charges of $0.4 million for the same period in fiscal 2003 and incurred $1.9 million pretax restructuring charges during the first six months of fiscal 2004 compared to $0.4 million for the same period in fiscal 2003. Gross profit decreased $3.7 million to $6.8 million for the second quarter of fiscal year 2004 compared to $10.5 million for the second quarter of fiscal year 2003. Gross profit decreased $2.6 million to $18.6 million for the first six months of fiscal 2004 compared to $21.2 million for the first six months of fiscal 2003. As a percentage of sales, gross profit decreased 16.3% for the first six months of fiscal year 2004 as compared to 20.6% for the first six months in fiscal year 2003. The decrease in gross profit was mainly attributable to resin price increases, competitive pricing pressures in the US and the UK markets and also cold weather and severe winter storms experienced in the eastern US as compared to the same period last year. In addition, the Company incurred one time relocation and plant consolidation expenses of $1.0 million and $1.1 million during the second quarter and first six months of fiscal 2004, respectively, that were charged to cost of sales. During the second quarter of fiscal 2004, the Company incurred $0.7 million write-off of loan fees related to its $110 million of bonds redeemed in the quarter and incurred 30 days of duplicative interest of approximately $1.0 million due to the timing of the bond redemption. In addition, the Company also recorded a $1.9 million loss related to the redemption of warrants. Foreign exchange gain for the second quarter of fiscal 2004 totaled $0.9 million as compared to a gain of $0.1 million for the same period in fiscal 2003. Foreign exchange gain for the first six months of fiscal 2004 totaled $2.3 million compared to a loss of $0.3 million for the same period in fiscal 2003. Subsequent to February 29, 2004, the Company entered into a contract for sale of its manufacturing building located in Chino, Calif. The Company expects to realize a gain on this sale during the third quarter of fiscal 2004. In addition, the Company purchased certain machinery and equipment for production of dairy closures from a competitor in the United Kingdom. This machinery and equipment is expected to be utilized in the UK and other Portola facilities. EBITDA(a) decreased $6.8 million to $1.1 million in the second quarter of fiscal year 2004 compared to $5.7 million in the second quarter of fiscal year 2003, and decreased $4.6 million to $6.8 million for the first six months of fiscal 2004 compared to $11.4 million for the first six months of fiscal 2003. At February 29, 2004, Portola Packaging, Inc.'s balance sheet shows a total equity deficit of about $37.8 million. ABOUT PORTOLA PACKAGING, INC Portola Packaging is a leading designer, manufacturer and marketer of tamper-evident plastic closures used in dairy, fruit juice, bottled water, sports drinks, institutional food products and other non-carbonated beverage products. The Company also produces a wide variety of plastic bottles for use in the dairy, water and juice industries, including various high-density bottles, as well as five-gallon polycarbonate water bottles. In addition, the Company designs, manufactures and markets capping equipment for use in high-speed bottling, filling and packaging production lines as well as manufactures and markets customized five-gallon water capping and filling systems. The Company is also engaged in the manufacture and sale of tooling and molds used in the blow molding industry. For more information about Portola Packaging, visit the Company's web site at http://www.portpack.com/ PURE FISHING INC.: S&P Assigns BB- Corporate Credit Rating ---------------------------------------------------------- Standard & Poor's Ratings Services assigns its 'BB-' corporate credit rating to fishing tackle manufacturer and distributor Pure Fishing Inc. At the same time, Standard & Poor's assigned its 'BB- ' senior secured bank loan rating and its '4' recovery rating to the company's proposed $205 million first-priority senior secured bank loan due 2010. In addition, Standard & Poor's assigned its 'B' senior secured bank loan rating and its '5' recovery rating to Pure Fishing's proposed $37 million second-priority senior secured bank loan due 2011. Proceeds from the first-priority bank loan will be used to refinance existing indebtedness and to finance the company's February 2004 acquisition of Stren fishing line from Remington Arms Company Inc. Approximately $12 million of the $37 million second-priority bank loan will be drawn at closing to refinance $12 million of the company's $37 million mezzanine debt. The remaining $25 million will be available for a delayed draw to refinance the remaining mezzanine debt. The first-priority bank loan is rated the same as the corporate credit rating; this and the '4' recovery rating indicate that lenders can expect marginal recovery of principal (25%-50%) in the event of a default or bankruptcy. The second-priority bank loan is rated two notches below the corporate credit rating; this and the '5' recovery rating indicate that lenders can expect negligible recovery of principal (0%-25%) in the event of a default or bankruptcy. The ratings are based on preliminary offering statements and are subject to review upon final documentation. The outlook is negative. Standard & Poor's estimates that Pure Fishing will have about $197 million of total debt outstanding at closing of the proposed refinancing, assuming that the second- priority bank loan is fully drawn. "The ratings on Spirit Lake, Iowa-based Pure Fishing reflect its narrow business focus, participation in the highly competitive fishing tackle industry, its customer concentration, and its leveraged financial profile," said Standard & Poor's credit analyst David Kang. "Somewhat mitigating these factors are the company's solid market position, its portfolio of well-recognized brands in all of the major fishing tackle categories, its geographic diversity, and its relatively high percentage of sales from consumable products." Though its business focus is narrow, the company is the third- largest participant, as a manufacturer and distributor, in the highly competitive $3.1 billion global fishing tackle industry, and has a market share of about 7%. Although the industry is highly fragmented, there are two larger industry participants-- Daiwa Corp. (unrated), with an 11% share, and Shimano Inc. (A/Stable/--), with a 10% share. Shimano has greater financial resources than Pure Fishing and a broader product portfolio that extends beyond fishing tackle. Within the estimated $1.1 billion North American fishing tackle industry, Pure Fishing is the market leader with a share of about 12.3%. The company's portfolio of well-recognized brands in all of the major fishing tackle categories provides Pure Fishing with a competitive advantage in the consolidating retail sector. However, customer concentration remains a rating concern as the company's top customer represented close to 25% of fiscal 2003 sales. SAKS INC: S&P Rates Proposed $200M Senior Convertible Notes at BB ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB' rating to Saks Inc.'s proposed $200 million offering of senior convertible notes due 2024. An additional $30 million may be offered for sale. At the same time, Standard & Poor's affirmed its existing ratings on Saks Inc., including the 'BB' corporate credit rating. Proceeds from the notes, which will be issued pursuant to Rule 144A, will be used to repurchase or repay some of the company's higher interest-rate debt. The outlook is negative. "The ratings on Saks reflect the company's generally lackluster earnings performance and relatively weak, though recently stabilized, cash flow protection," said credit analyst Gerald Hirschberg. Further, Standard & Poor's expects that management will continue to be challenged to generate, and then sustain, improving trends in business fundamentals at its two distinctly different department store segments. These factors are only partially mitigated by the company's position as one of the major multiregional players in the large, but highly competitive, department store industry and its good niche in upscale retailing. Birmingham, Ala.-based Saks operates 242 traditional department stores under various nameplates, 62 upscale Saks Fifth Avenue department stores, and 53 Off 5th clearance stores. The company is well positioned in the industry in terms of store numbers and geographic diversity, but it has struggled since it acquired the Saks Fifth Avenue business in 1998. In addition to past integration problems, which included the melding of two different corporate cultures, Saks has been troubled by the poor economy and general consumer malaise over the past few years, and by ongoing intense competition. Although management has made strides in improving the company's balance sheet and recent trends in same-store sales have been very positive, the negative outlook incorporates Standard & Poor's concern that Saks may still falter in its recovery. Moreover, the decisions to pay a $284 million special dividend and to add debt via a $200 million convertible note offering are indications that management is still relatively aggressive in terms of its financial policy, choosing to use flexibility to enhance shareholder value at the expense of credit protection. To obtain a stable outlook, Saks needs to demonstrate further improvement in its operating performance, a trend in better credit ratios, and a more conservative financial policy. SAKS INC: $200M Convertible Sr. Debt Issue Gets Fitch's BB- Rating ------------------------------------------------------------------ Fitch Ratings assigns a rating of 'BB-' to Saks Incorporated's (Saks) $200 million issue of convertible senior notes due 2024. This issue follows Saks' announcement on Monday that it will be paying a $284 million special dividend on 5/17/04 (refer to Fitch press release dated 3/15/04.) This debt issue, together with the special dividend, will push leverage modestly higher over the near term, and limit the company's ability to delever going forward. The Rating Outlook is Negative, reflecting the more aggressive financial posture by Saks' management, as well as some uncertainty as to the strength of the current economic recovery. It is assumed that Saks' sales trends will remain positive and that its operating margins will gradually improve over the medium-term. However, the Negative Outlook will remain in place until there is evidence that current sales trends are sustainable, and they translate into improved bondholder protection measures. SIERRA PACIFIC: S&P Gives B- Rating to Pending Senior Notes ----------------------------------------------------------- Standard & Poor's Rating Services assigns its 'B-' rating to the pending $300 million 10-year, senior unsecured note issue by Sierra Pacific Resources (B+/Negative/--; Sierra Pacific). The notes will refinance the company's March 2005 maturity of senior unsecured notes. The outlook is negative. Although Sierra Pacific's rating and outlook are being affirmed in view of this upcoming issue, Standard & Poor's notes that near- term events could have a material impact on Sierra Pacific's credit profile, specifically, the general rate case and deferred cost proceedings for the two utility subsidiaries Nevada Power Co. (B+/Negative/--) and Sierra Pacific Power Co. (B+/Negative/--), and ongoing legal proceedings regarding Enron's claims for over $336 million in termination payments for contracts that it terminated in May 2002. These claims are currently collateralized by general & refunding (G&R) bonds pending resolution of the legal dispute. "The negative outlook reflects the risks of unfavorable rulings on the general rate and deferred cost cases that could be a major setback to the gradually improving regulatory environment in Nevada," said Standard & Poor's credit analyst Swami Venkataraman. "The outlook also incorporates the risk of a negative outcome in the Enron litigation that would require Sierra Pacific to make $336 million in termination payments, or provide additional cash collateral, prior to a final ruling, and the prospect of a partial or complete disallowance of these costs during a subsequent prudence review by the Public Utilities Commission of Nevada." In its general rate case filing, Nevada Power Company filed for a 12.4% ROE and a phased-in $133 million (9%) increase, with $50 million to become effective April 1, 2004, and the remainder on Jan. 1, 2005, upon expiration of an existing deferred energy balance. Nevada Power's current ROE is 10.1%. In its intervenor testimony, the staff of the Public Utilities Commission of Nevada (PUCN) has proposed a significantly smaller $17.1 million electric rate increase, based on a 10.7% ROE, $13.8 million of which is related to recovery of merger-related costs and expires after two years. About $26 million of the difference between the filings flows from a lower rate of return, $43 million from differences in the rate base, with the remaining $47 million from other costs. A final PUCN decision is expected April 1, 2004. Nevada Power has also requested recovery of $91.3 million in deferred fuel and purchased power costs over a three-year period ($14 million in the first year) that the company incurred from Oct. 1, 2002 through Sept. 30, 2003. Sierra Pacific Power Co. filed for a phased-in $88 million (12.1%) electric base rate increase based on a 12.4% ROE, with $70 million to become effective June 1, 2004, and the remainder on June 1, 2005, upon full recovery of an existing deferred energy balance. Sierra Pacific Power's current ROE is 10.17%. The staff has proposed a 10.52% ROE and has not yet made a revenue requirement filing. A PUCN decision is required by June 1, 2004. Sierra Pacific Power has a request for recovery of $42.4 million in deferred fuel and purchased power costs. Should the PUCN's decision track the staff's recommendation more closely than the companies' requests, Sierra Pacific's financial condition could be harmed and recovery delayed. SKY TECHNOLOGY: Case Summary & 5 Largest Unsecured Creditors ------------------------------------------------------------ Lead Debtor: Sky Technology Partners LLC 3200 Riverside Drive Columbus, Ohio Bankruptcy Case No.: 04-53693 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Intellapac LLC 04-53696 Type of Business: The Debtor is a custom software development and solutions provider. See http://www.skyseer.com/ Chapter 11 Petition Date: March 12, 2004 Court: Southern District of Ohio (Columbus) Judge: Donald E. Calhoun Jr. Debtors' Counsel: Michael D. Bornstein, Esq. Bornstein Law Offices 580 South High Street, 3rd Floor Columbus, OH 43215 Tel: 614-358-8052 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million Debtors' 5 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Good Realty $48,000 Plante Moran $35,000 Focus Business Solutions $7,500 Sprint Data $7,500 Data House $6,000 SLK DEVELOPERS INC: Case Summary & 1 Largest Unsecured Creditor --------------------------------------------------------------- Debtor: SLK Developers, Inc. 19824 B West Catawba Avenue Cornelius, North Carolina 28031 Bankruptcy Case No.: 04-30631 Chapter 11 Petition Date: March 23, 2004 Court: Western District of North Carolina (Charlotte) Judge: George R. Hodges Debtor's Counsel: Travis W. Moon, Esq. Hamilton, Gaskins, Fay & Moon, PLLC 2020 Charlotte Plaza 201 South College Street Charlotte, NC 28244-2020 Tel: 704-344-1117 Total Assets: $1,252,453 Total Debts: $1,249,804 Debtor's 1 Largest Unsecured Creditor: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Pramco II, LLC Bank loan $969,101 f/k/a Lincoln Bank of NC Value of Collateral: & First Charter Bank $885,658 1387 Fairport Road, Ste. 750 Fairport, NY 14450 SONTRA MEDICAL: Fourth Quarter Net Loss Doubles to $2.8 Million --------------------------------------------------------------- Sontra Medical Corporation (Nasdaq: SONT) announced financial results for the fourth quarter and fiscal year ended December 31, 2003. For the three months ended December 31, 2003, the net loss applicable to common stockholders was $2,794,000, or $.29 per share, as compared to $1,408,000, or $.15 per share, for the same period in 2002. For the year ended December 31, 2003, the net loss applicable to common stockholders was $6,156,000, or $.65 per share, as compared to $4,304,000, or $.70 per share in 2002. The Company ended the year with $4,869,000 in cash with no debt. On January 15, 2004, the Company received a $1.5 million payment from Bayer Health Care LLC's Diagnostic Division pursuant to a license agreement executed in July 2003 for Sontra's non-invasive glucose monitoring technology. Also subsequent to year end, Sontra received a total of $825,000 from the exercise of warrants to purchase common stock issued in 2003. The Company expects that its cash on hand will be sufficient to fund operations through at least June 2005. "We are pleased to have strengthened our balance sheet in 2003 with the $1.5 million license fee from Bayer Diagnostics and the completion of a preferred stock financing that raised $6.2 million in net proceeds," stated Thomas W. Davison, PhD, Sontra's President and Chief Executive Officer. "We expect 2004 to be a pivotal year for Sontra as we expect to commercialize our first transdermal drug delivery product and expand the value of our product pipeline by combining our SonoPrep(R) ultrasonic skin permeation technology platform with other synergistic transdermal drug delivery and biosensor technologies to provide complete product solutions." "In February 2004, the FDA granted Sontra the first 510(k) marketing clearance for SonoPrep for use in electrophysiology applications. Then earlier this month, we submitted a 510(k) application for a second indication, seeking marketing clearance to use SonoPrep and our topical lidocaine procedure tray to achieve rapid skin anesthesia. This FDA submission was supported by clinical data from three clinical studies involving approximately 500 patients that demonstrates that rapid skin anesthesia with 4% lidocaine was achieved within five minutes following a skin pretreatment with SonoPrep. SonoPrep skin permeation technology clearly improves the clinical utility of topical lidocaine because existing products addressing this $100 million market require up to a sixty minute waiting period before effective skin anesthesia is achieved. We expect to launch our product by the end of the second quarter of 2004, assuming FDA 510(k) marketing clearance." "Also during 2004, pursuant to our collaboration with Bayer Diagnostics to develop a non-invasive glucose monitor, we plan to assess the performance of the SonoPrep system for glucose sensing applications in a series of pilot human studies. Additionally we expect to conduct clinical studies demonstrating that SonoPrep enables transdermal delivery of vaccines and other pain drugs." About Sontra Medical Corporation Sontra Medical Corporation -- http://www.sontra.com/-- is the pioneer of SonoPrep, a non-invasive ultrasound-mediated skin permeation technology that enables transdermal diagnosis and drug delivery. Sontra's products under development include: a continuous non-invasive glucose monitoring that is being co- developed with Bayer Diagnostics; a rapid onset (less than 5 minutes) topical anesthetic delivery system and the use of SonoPrep for the transdermal delivery of large molecule drugs and biopharmaceuticals. * * * In its latest Form 10-KSB filed with the Securities and Exchange Commission, Sontra Medical Corporation reports: "We have a history of operating losses, and we expect our operating losses to continue for the foreseeable future. "We have generated limited revenues and have had operating losses since our inception. Our historical accumulated deficit was approximately $18,022,000 as of December 31, 2003. It is possible that the Company will never generate any additional revenue or generate enough additional revenue to achieve and sustain profitability. Even if the Company reaches profitability, it may not be able to sustain or increase profitability. We expect our operating losses to continue for the foreseeable future as we continue to expend substantial resources to conduct research and development, feasibility and clinical studies, obtain regulatory approvals for specific use applications of our SonoPrep technology, identify and secure collaborative partnerships, and manage and execute our obligations in strategic collaborations. "If we fail to raise additional capital, we will be unable to continue our development efforts and operations." STATION CASINOS: Receives Consents to Amend Senior Note Indenture ----------------------------------------------------------------- Station Casinos, Inc.(NYSE:STN - News) announced, pursuant to its previously announced tender offer and consent solicitation for any all of its $400,000,000 aggregate principal amount of 8-3/8% Senior Notes due 2008 (CUSIP # 857689AM5 and # 857689AN3), that it has received the requisite consents required to affect the adoption of the proposed amendments to the indenture governing the Notes. As of 5:00 P.M. (EST) on March 16, 2004, holders of $383,101,000 of the outstanding aggregate principal amount of the Notes (approximately 95.8%) have delivered valid tenders and consents pursuant to the Offer. Adoption of the proposed amendments require the consent of holders of a least a majority of the outstanding aggregate principal amount of the Notes. The proposed amendments will eliminate substantially all of the covenants and certain events of default in the indentures governing the Notes. Terms and conditions of the Offer, including the Company's obligation to accept the Notes tendered and pay the purchase price and consent payments, are set forth in the Offer to Purchase and Consent Solicitation Statement dated March 3, 2004. The Company has engaged Deutsche Bank Securities Inc., Banc of America Securities LLC and Lehman Brothers Inc. to act as dealer managers and solicitation agents in connection with the Offer. Questions regarding the Offer may be directed to Deutsche Bank Securities Inc., High Yield Capital Markets, at (212) 250-4270, Banc of America Securities LLC High Yield Special Products at (888) 292-0070 (US toll-free) or (704) 388-4813 (collect) or Lehman Bothers Inc. Liability Management Group at (212) 528-7581 or (800) 438-3242 (US toll-free). Requests for documentation may be directed to D.F. King & Co., Inc., at (800) 628-8532 (US toll- free) or (212) 269-5550 (collect). Station Casinos, Inc. is the leading provider of gaming and entertainment to the residents of Las Vegas, Nevada. Station's properties are regional entertainment destinations and include various amenities, including numerous restaurants, entertainment venues, movie theaters, bowling and convention/banquet space, as well as traditional casino gaming offerings such as video poker, slot machines, table games, bingo and race and sports wagering. Station owns and operates Palace Station Hotel & Casino, Boulder Station Hotel & Casino, Santa Fe Station Hotel & Casino, Wildfire Casino and Wild Wild West Gambling Hall & Hotel in Las Vegas, Nevada, Texas Station Gambling Hall & Hotel and Fiesta Rancho Casino Hotel in North Las Vegas, Nevada, and Sunset Station Hotel & Casino and Fiesta Henderson Casino Hotel in Henderson, Nevada. Station also owns a 50% interest in both Barley's Casino & Brewing Company and Green Valley Ranch Station Casino in Henderson, Nevada and a 6.7% interest in the Palms Casino Resort in Las Vegas, Nevada. In addition, Station manages the Thunder Valley Casino in Sacramento, California on behalf of the United Auburn Indian Community. TEXAS STATE AFFORDABLE: S&P Cuts Ratings to Low-B & Junk Levels --------------------------------------------------------------- Standard & Poor's Ratings Services lowers its underlying rating (SPUR) on Texas State Affordable Housing Corp.'s $68.3 million multifamily mortgage revenue bonds (NHT/GTEX Apartment Portfolio) series 2001A to 'B' from 'BB'. At the same time, Standard & Poor's lowered its ratings on the corporation's (NHT/GTEX Apartment Portfolio) $3.2 million series 2001C and $5.4 million 2001B multifamily mortgage revenue bonds to 'CC' and 'C' from 'CCC' and 'CC', respectively. The outlook is negative. The downgrades reflect debt service coverage of .92x maximum annual debt service coverage on the senior bonds, 0.84x on the subordinate bonds, and 0.73x on the junior subordinate bonds, based on unaudited annualized financial statements ending Dec. 31, 2003; and scheduled transfers on April 1, 2004, from the debt service reserve fund, to pay scheduled debt service on the series 2001B and 2001C bonds. The series 2001A senior bonds are credit enhanced by MBIA bond insurance, and continue to be rated 'AAA' based on the insurance. The downgrade for series 2001A affects the underlying rating only. Series 2001B and 2001C are not credit enhanced. According to the owner, funds from the debt service reserve fund will be used to make up deficiencies in revenues to pay the April 1, 2004, debt service payments on the series 2001B and 2001C bonds. The owner is currently projecting draws of approximately $277,831 on the series 2001B debt service reserve fund, and $166,248 on the series 2001C debt service reserve fund, at the time of the April bond payment. The owner does not anticipate drawing from the debt service reserve fund to pay series 2001A debt service. The issue was originally underwritten at 1.44x maximum annual debt service coverage on senior debt, 1.26x coverage on junior rated debt, and 1.19x coverage on junior subordinate rated debt. The issue has yet to meet these coverage levels. Annual expenses are approximately $3,741 per unit, which is significantly higher than the original forecast of approximately $3,000 per unit per year. Economic vacancy is more than 20%, based on annualized unaudited financial statements as of Dec. 31, 2003, well above the original forecast of 12%. This factor is greatly influenced by high concessions, which are now commonplace in Houston and Dallas. Monthly net rent collections are approximately $499 per unit, versus $560 per unit as originally underwritten. Overall rated debt per unit is approximately $47,100. Lower occupancy rates at the GTEX properties have been a contributing factor to its poor performance. The physical occupancy rate for the portfolio is currently 92% for December 2003, while the economic occupancy rate year-to-date is 80%. The projects are in soft multifamily markets. TOM COM INC: Case Summary & 18 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Tom Com, Inc. aka T Auto aka T Auto Salvage and Recycling aka Commons Enterprises aka Commons Sand and Gravel 38499 Richardson Gap Road Scio, Oregon 97374 Bankruptcy Case No.: 04-61669 Chapter 11 Petition Date: March 8, 2004 Court: District of Oregon (Eugene) Judge: Albert E. Radcliffe Debtor's Counsel: Stephen C.P. Carroll, Esq. 88 East Broadway Eugene, OR 97401-2933 Tel: 541-868-8005 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million Debtor's 18 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Young and Meyers Accountant Fees $2,940 Sell, Russ or Benda Car Lot Lease $2,300 Scio Auto Parts Business debt $1,623 Northern Investors Company Insurance Expense $1,400 American Bankers Insurance Insurance Expense $593 Capital One Credit Card $517 Argonaut Insurance Company Insurance Expense $432 Qwest Utility $423 Albany Rental, Inc. Business debt $362 Pacific Power Utility $322 AT&T Utility $246 Scio Mutual Telephone Assoc. Utility $181 Scio Mutual Telephone Utility $180 Pacific Power Utility $161 Verizon Wireless Cellular Phone $113 Pacific Power Utility $110 Scio Mutual Telephone Assoc. Utility $87 Cash Flow Management Business debt $22 TRITON AVIATION: Fitch Places 6 Note Ratings on Watch Negative -------------------------------------------------------------- Fitch Ratings places Triton Aviation Finance on Rating Watch Negative. The Rating Watch Negative reflects a drop in Triton's lease payments and nonpayment of class B and C interest during March 2004. --Class A-1 notes 'BBB-'; --Class A-2 notes 'BBB-'; --Class B-1 notes 'BB-'; --Class B-2 notes 'BB-'; --Class C-1 notes 'C'; --Class C-2 notes 'C'. An analysis of Triton's March 2004 servicer report revealed that monthly collections net of expenses dropped to negative $3.5 million from an average of $4 million the last three months. This drop in collection cash flow required the use of the entire $5 million secondary liquidity reserve to pay swaps and class A interest. Class B and C interest was unpaid. The difference in March collections from the average of the last three months reflects non payment of amounts due from two lessees and increased expenses. Polar Air Cargo is a U.S. based freight carrier whose parent is Atlas Air Worldwide Holdings Inc. Both Polar and Atlas filed for bankruptcy on January 30, 2004. At the time of its bankruptcy, Polar leased (2) 747-200F freighter aircraft from Triton. Polar rejected the leases early on in the bankruptcy proceedings and both aircraft have been returned to Triton. The Polar lease payments are guaranteed for six months following a default (including a bankruptcy filing) by a subsidiary of a highly-rated entity who is not honoring the guarantee. Austral, an Argentinean airline, leases (9) B737-200A passenger aircraft from Triton. Austral has delayed payments in the past. On March 15, 2004, (after issuance of the March servicer report) Austral paid the January 2004 past due rent and its penultimate note payment amounts totaling $840,000. It is unclear when the Polar guaranteed payments will be made. In addition, re-leasing the B747-200F freighters will be challenging. Even if the Polar guaranteed cash flow does resume, and/or the B747-200F freighters are re-leased, it may be some time before the Class B and Class C again pay interest due to Triton's payment priorities. Accrued class A principal (actual and current) are ahead of class B interest in the waterfall. In addition, although the secondary liquidity repayment is behind the class B interest (accrued and current) in the waterfall, it is ahead of class C interest Triton is a Delaware business trust formed to conduct limited activities, including the issuance of debt, and the buying, owning, leasing and selling of commercial jet aircraft. Triton originally issued $720 million of rated notes in June 2000, while as of March 2004 it had $509.6 million of notes outstanding. Primary servicing on 23 aircraft and back-up servicing is being performed by International Lease Finance Corporation (rated 'AA- /F1+' by Fitch), while Triton Aviation Services Limited services the remaining 28 aircraft. UNITED AIRLINES: Court Approves ESOP Committee Stipulation ---------------------------------------------------------- United Airlines Inc., and its debtor-affiliates sought and obtained Judge Wedoff's approval for a stipulation with the members of the UAL Corporation Employee Stock Ownership Plan -- Craig Musa, Donald Clements, Barry Wilson, Doug Walsh, Marty Torres, Ira Levy, Lynn Hughitt, and William Hobgood -- and the ESOP Plan Committee. On February 28, 2003, a complaint entitled Summers v. UAL Corporation Employee Stock Ownership Plan was filed before the United States District Court for the Northern District of Illinois, Case No. 03 C 1537. The suit seeks $2 billion in damages against the ESOP Committee and the ESOP Members. The ESOP Committee and the ESOP Members filed proofs of claim against UAL seeking indemnification for $2 billion each, alleging contingent and unliquidated damages arising out of performance of their duties on the ESOP Committee. James H.M. Sprayregen, Esq., at Kirkland & Ellis, in Chicago, Illinois, said that based on the redundancy of the Member Claims and the Committee Claims, the Parties agree to enter into a stipulation that consolidates the Claims into a single Claim. The salient terms of the Stipulation are: (a) Member Claim Nos. 38745, 34193, 35431, 36638, 3641, 36499, 43315 and 37725 will be withdrawn with prejudice and deemed disallowed; and (b) Committee Claim No. 35437 will constitute a claim on behalf of the ESOP Committee and all current, former and future members. Any ESOP Member is entitled to seek allowance of any Committee Claim in the event the ESOP Member incurs expenses that are not reimbursed or relates to this litigation or performance of duties on the ESOP Committee. 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) US AIRWAYS: Auditor KPMG Doubts Ability to Continue Operations -------------------------------------------------------------- U.S. Airways Group auditor, KPMG, LLP, relates that the airline's significant recurring losses and other matters regarding, among other things, the airline'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, raise substantial doubt about its ability to continue as a going concern. In a Form 10-K filing with the Securities and Exchange Commission dated March 12, 2004, KPMG notes that the concentration of significant operations in the eastern U.S. results in USAir being susceptible to changes in certain regional conditions that may have an adverse effect on the airline's financial condition and results of operations. USAir continues to face intense competition from the growing presence of low-fare low-cost airlines and competitors' regional jets in its markets. The rapid growth of low-fare low-cost airlines has had a profound impact on industry revenues that poses a threat to traditional network carriers. Using the advantage of low unit costs, these carriers offer lower passenger fares, particularly those targeted at business passengers, in order to shift demand from traditional network carriers. As a result of growth, the low-fare low-cost carriers now transport 25% of all domestic U.S. passengers compared to less than 10% a decade ago. They now compete for, and thus influence industry pricing on, 75% of all U.S. domestic passenger ticket sales compared to less than 20% a decade ago. The low- fare low-cost airlines are increasingly offering passenger amenities, such as in-flight entertainment and leather seating, which were once traditionally offered only by network carriers. The low-fare low-cost airlines are receiving an increasing number of operating rights in slot-restricted airports. Several low- fare low-cost airlines, including Southwest Airlines and Frontier Airlines, have launched service or announced plans to launch service at Philadelphia, a hub airport for USAir. The surge in aircraft orders and better recent financial performance relative to traditional network carriers suggest that the low-fare low- cost airline threat will significantly intensify over the next few years. The growing presence of competitors' regional jets also poses a threat to USAir. Regional jets are faster, quieter and more comfortable than turboprops and generally preferred by customers over turboprops. In recent years, USAir has lost significant market share in markets where it operates with turboprop aircraft and competitors have introduced regional jet service. Despite the recent emergence from bankruptcy and the resulting cost reductions, USAir may not be able to effectively counteract decreasing revenues and increasing costs through its cost reduction initiatives, revised business plan, customer service initiatives and revised pricing structures. Moreover, the airline's liquidity and borrowing options are limited and it may be severely impacted should there be a prolonged economic downturn, further decreases in demand for air travel or substantial increases in fuel costs. The inability to achieve sustained profitability may negatively impact USAir's ability to satisfy its obligations as they become due, obtain future equity or debt financing or to do so on economical terms and sustain or expand the business. USAir is pursuing a plan to further reduce cost per available seat mile by at least 25% built around a complete business remodeling that will allow it to be profitable in a variety of competitive environments. Key elements of the plan include marketing and distribution techniques, employee compensation, benefits and work rules, and airline scheduling and operations. USAir targets mid-year 2004 for the implementation of many of the actions needed to achieve the cost reductions. However, since the plan will require changes to the airline's collective bargaining agreements, there can be no assurance that this date can be met. USAir's failure to achieve the competitive cost structure will force it to re-examine its strategic options. (US Airways Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service, Inc., 215/945-7000) US CONCRETE: S&P Rates Proposed $150 Million Sr. Sub. Notes at B- ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B+/Positive/--' corporate credit rating to Houston, Texas-based U.S. Concrete Inc., and a 'B-' to a planned offering of $150 million senior subordinated notes due 2014. "Proceeds will be used to redeem $95 million of existing notes and repay borrowings of $60 million under a credit facility which is being replaced," said Standard & Poor's credit analyst Wesley E. Chinn. U.S. Concrete's credit quality reflects a highly competitive industry, cyclicality of the company's end markets, a moderate- sized revenue base, periodic acquisition activity, and its aggressive debt leverage, partially offset by a meaningful position in the domestic ready-mix market. Demand for ready-mixed concrete (a stone-like compound that results from combining aggregates-e.g., gravel, crushed stone, and sand--with water, various admixtures, and cement) depends on the level of construction activity in general, and in local markets. Because the market for a ready-mix plant generally is the area within a 25-mile radius, results are susceptible to swings in the level of construction activity occurring in local residential, commercial, street and highway, and other public infrastructure markets. A company's competitive position largely depends on its location, operating costs, and prevailing prices in a particular market. Ready-mix is a fragmented, consolidating industry with over 2,500 independent producers. This fragmentation and relatively low--albeit increasing--barriers to entry to new ready- mix concrete manufacturing operations contribute to highly competitive market conditions. Competitors range from small, owner-operated private companies to operating units of large, vertically integrated cement manufacturing and concrete products companies. Ready-mix concrete pricing closely tracks cement pricing, which is expected in the near term to remain roughly at the plateau of the past several years. Since the mid- 1990s, ready-mix pricing has been in the $65 to $70 range per cubic yard, compared with the $50 to $55 range for many previous years. US DATAWORKS: Says Cash Still Sufficient to Fund Ops. for 6 Months ------------------------------------------------------------------ US Dataworks, Inc., a Nevada corporation, develops, markets, and supports payment processing software for the financial services industry. Its customer base includes many of the largest financial institutions as well as credit card companies, government institutions, and high-volume merchants in the United States. It also has a strategic alliance with BancTec, Inc. and through October 2002, with CheckFree Corporation to license the Company's software for its banking customers and Thomson Financial Publishing, a unit of Thomson Corporation, to incorporate its EPICWare database into the Company's products. Prior to acquiring US Dataworks, Inc., a Delaware corporation, effective March 31, 2001, the Company was a financial services company specializing in the integration of proprietary software applications with Applications Service Provider services and an internet service provider. During July and December 2001, the Company started shutting down its ISP and ASP operations, respectively, and at March 31, 2002 all ISP and ASP activities had ceased. The Company has received a report from its independent auditors on the financial statements as of, and for the year, ended March 31, 2003 that includes an explanatory paragraph describing the uncertainty as to the Company's ability to continue as a going concern. The Company's net loss increased by $831,776, or 202%, to a net loss of $1,243,214 for the three months ended December 31, 2003 from $411,438 for the three months ended December 31, 2002. Net loss increased by $4,898,603, or 265%, to a net loss of $6,744,688 for the nine months ended December 31, 2003 from $1,846,085 for the nine months ended December 31, 2002. US Dataworks has incurred significant losses and negative cash flows from operations for the last two fiscal years. It has obtained its required cash resources through the sale of debt and equity securities but may not operate profitably in the future and may be required to continue the sale of debt and equity securities to finance operations. Management of the Company believes the Company currently has adequate cash to fund anticipated cash needs for at least the next six months. An adverse business or legal development may also require the Company to raise additional financing sooner than anticipated. Management recognizes that the Company may be required to raise such additional capital, at times and in amounts, which are uncertain, especially under the current capital market conditions. If unable to acquire additional capital or required to raise it on terms that are less satisfactory than desired, such may have a material adverse effect on the Company's financial condition. If necessary, US Dataworks indicates that it may be required to consider curtailing operations significantly or to seek arrangements with strategic partners or other parties that may require the Company to relinquish significant rights to products, technologies or markets. In the event the Company raises additional equity financings, these financings may result in dilution to existing stockholders. As of December 31, 2003, US Dataworks' accumulated deficit was $39,489,219. The Company's auditors have included an explanatory paragraph in their Independent Auditor's Report (included in the Company's audited financial statements for the years ended March 31, 2003 and 2002 filed with the annual report on Form 10-KSB/A for fiscal year ended March 31, 2003), to the effect that the loss from operations for the year ended March 31, 2003, and the accumulated deficit at March 31, 2003 raise substantial doubt about the Company's ability to continue as a going concern. VALCOM INC: September Deficits Prompt Going Concern Uncertainty --------------------------------------------------------------- As of September 30, 2003, ValCom, Inc. had three subsidiaries: Valencia Entertainment International, LLC, a California limited liability company; Half Day Video, Inc., a California corporation; and 45% equity interest in ValCom Broadcasting, LLC, a New York limited liability company, which operates KVPS (Channel 8), an independent broadcaster. The Company is a diversified entertainment company with the following operating activities: a) Studio rental - the Company leases eight sound and production stages to production companies. Six of the eight sound and production stages are owned by the Company, while the remaining two stages are leased from a third party under an operating lease agreement. b) Studio equipment and rental - operating under the name Half Day Video, Inc., the Company supplies and rents personnel, cameras and other production equipment to various production companies on a short-term or long-term basis. c) Film and TV production -The Company, in addition to producing its own television and motion picture programming, has an exclusive facilities agreement in place for productions in Los Angeles County for a three-year term with Woody Fraser/Woody Fraser Productions. d) Broadcast Television - The Company owns a 45% equity interest in ValCom Broadcasting, LLC, a New York limited liability company, which operates KVPS (Channel 8), an independent television broadcaster in the Palm Springs, California market, which is strategically located in the middle of four major markets including Los Angeles, Phoenix, Las Vegas and San Diego. ValCom's business includes television production for network and syndication programming, motion pictures, and real estate holdings. However, revenue is primarily generated through the lease of the sound stages. ValCom, which owns six acres of real property and a 120,000 square foot production facility in Valencia, California, is currently the studio set for JAG, produced by Paramount Pictures and NCIS produced by Don Belisarious Productions. The Company's sound stages have been operating at full capacity since 1996. ValCom also leases an additional three acres and a 52,000 square foot production facility that includes two full-service sound stages, for a total of eight sound stages. ValCom's past and present clients in addition to Paramount Pictures and Don Belisarious Producitons, include Warner Brothers, Universal Studios, MGM, HBO, NBC, 20th Century Fox, Disney, CBS, Sony, Showtime, and the USA Network. In addition to leasing its sound stages, ValCom also owns a small library of television content, which is ready for worldwide distribution, and several major television series in advanced stages of development. The Company's consolidated financial statements have been prepared assuming that the Company will continue as a going concern. The Company has a net loss of $2,430,159 and a negative cash flow from operations of $300,582 for the year ended September 30, 2003; a working capital deficiency of $8,962,906 and an accumulated deficit of $10,556,350 at September 30, 2003. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The net working capital (current assets less current liabilities), as stated, was a negative $8,962,906 as of September 30, 2003. During the twelve months ended September 30, 2003, the Company raised $42,000 from private placements of common stock. The Company will need to continue to raise funds through various financings to maintain its operations until such time as cash generated by operations is sufficient to meet its operating and capital requirements. The Company has stated that there can be no assurance that it will be able to raise such capital on terms acceptable to it, if at all. Total shareholders' equity decreased to $2,701,561 in fiscal year 2003. Additional paid in capital increased to $13,242,200 in fiscal year ended September 30, 2003. During the last fiscal year, the Company financed its operations with cash from its operating activities and through sales of equipment and private offerings of its securities to a director of the Company. The Company anticipates that its stock issuances and projected positive cash flow from operations collectively will generate sufficient funds for the Company's operations for the next 12 months. If the Company's existing cash combined with cash from operating activities is not adequate to finance the Company's operations during the next 12 months, the Company will consider one or more of the following options: (1) issuing equity securities in exchange for services, (2) selling additional equity or debt securities or (3) reducing the number of its employees (presently standing at 14). WINN-DIXIE: Ranks No. 5 in Zacks' List of Stocks to Sell Now ------------------------------------------------------------ Zacks.com currently rates Winn-Dixie Stores, Inc. (NYSE:WIN) stock with a 'Strong Sell' (Rank #5) recommendation. Zacks.com from time to time releases details on a group of stocks that are part of their exclusive list of Stocks to Sell Now. Since inception in 1988 the S&P 500 has outperformed the Zacks #5 Ranked Strong Sells by 170.3% annually (12.1% vs. 4.5% respectively). "While the rest of Wall Street continued to tout stocks during the market declines of the last few years, we were telling our customers which stocks to sell in order to save themselves the misery of unrelenting losses," according to Zacks.com. Here is a synopsis of why Winn-Dixie stock has a Zacks Rank of 5 (Strong Sell) and should most likely be sold or avoided for the next 1 to 3 months. Note that a #5/Strong Sell rating is applied to 5% of all the stocks the company ranks: Winn-Dixie Stores, Inc. (NYSE:WIN) operates supermarket and Marketplace superstore locations. Over the past two months, earnings estimates for the year ending June 2004 moved from a profit to a loss. Over the past month, that loss expectation has widened by 4 cents. Late January saw the company report a fiscal second quarter loss that reversed a year-ago profit while also missing the consensus. The loss was attributed to factors such as the impact of its aggressive pricing programs on gross profit margins and the competitive environment in the grocery industry. But Winn Dixie is determined to fix its situation, and announced a series of major actions in that quarterly report that will change the way it does business and help it to shape the future of the company. The plan includes brand positioning, expense reduction, and an image makeover program, among others. This is good news for the company's future, but until such actions spark higher earnings estimates, the best move may be to hold off on increasing exposure. About the Zacks Rank For over 15 years the Zacks Rank has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Since inception in 1988 the #1 Ranked stocks have generated an average annual return of +33.7% compared to the (a)S&P 500 return of only +12.1%. Plus this exclusive stock list has generated total gains of +100.3% since January 2000 as the market suffered its worst downturn in 60 years. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). And since 1988 the S&P 500 has outperformed the Zacks #5 Ranked Strong Sells by 170.3% annually (12.1% vs. 4.5% respectively). Thus, the Zacks Rank system can truly be used to effectively manage the trading in your portfolio. For continuous coverage of Zacks #1 and #5 Ranked stocks, then get your free subscription to "Profit from the Pros" e-mail newsletter where we highlight stocks to buy and sell using our time tested stock evaluation model. http://at.zacks.com/?id=94 The Zacks Rank, and all of its recommendations, is created by Zacks & Co., member NASD. Zacks.com displays the Zacks Rank with permission from Zacks & Co. on its web site for individual investors. About Zacks Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 to compile, analyze, and distribute investment research to both institutional and individual investors. The guiding principle behind our work is the belief that investment experts, such as brokerage analysts and investment newsletter writers, have superior knowledge about how to invest successfully. Our goal is to unlock their profitable insights for our customers. And there is no better way to enjoy this investment success, than with a FREE subscription to "Profit from the Pros" weekly e-mail newsletter. For your free newsletter, visit http://at.zacks.com/?id=95 Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates. About Winn-Dixie Winn-Dixie Stores, Inc. (NYSE: WIN) is one of the largest food retailers in the nation and ranks 149 on the FORTUNE 500(R) list. Founded in 1925, the company is headquartered in Jacksonville, FL, and operates more than 1,070 stores in 12 states and the Bahamas. Frank Lazaran serves as President and Chief Executive Officer. For more information, visit http://www.winn-dixie.com/ As previously reported, Standard & Poor's lowered Winn-Dixie's corporate debt rating from BB to B and placed the ratings on Credit Watch with negative implications. Moody's also lowered the Company's senior implied rating to Ba3 from Ba1 and placed the ratings on negative outlook. WMG ACQUISITION: S&P Assigns B+ Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services assigns 'B+' corporate credit rating to WMG Acquisition Corp. At the same time, Standard & Poor's assigned its 'B-' rating to WMG's proposed $800 million senior subordinated notes due 2014. Standard & Poor's also assigned its 'B+' bank loan ratings and a recovery rating of '3' to WMG's $1 billion term loan and its $250 million revolving credit, indicating a meaningful recovery of principal (50%-80%) in the event of a default. The New York City-based major music company will have about $1.8 billion of debt, pro forma for this transaction. WMG was acquired on Feb. 29, 2004, by an investor group comprised of Thomas H. Lee Partners, Edgar Bronfman Jr., Bain Capital Partners, and Providence Equity Partners. The rating reflects WMG's heavy debt burden as a result of the leveraged buyout, risks associated with the industry's migration to a digital downloading business model and leakage to piracy, and concerns regarding the extent of cost restructuring that will be required as the migration continues. These risks are only partially offset by the higher margins and greater stability of WMG's music publishing business, which accounted for about one- third of EBITDA in 2003 (pro forma for the sale of music manufacturing and distribution), a management team that already has demonstrated expertise in cost restructuring, and important progress made by the industry in 2003 in combating piracy and adopting a legitimate digital platform. WMG is tied for third place in terms of worldwide recorded music market share and it is the second-ranked music publisher. Recurring revenues accrue from its industry-leading music publishing and recorded music catalogs. WMG and the industry have been bedeviled by electronic and physical piracy. Piracy was a significant contributor to the company's nearly 15% decline in EBITDA from 1998 to 2002 when it was operating under Time Warner as an integrated content and manufacturing company. (Inclusion of manufacturing operations in historical data limits the comparability with WMG as currently constituted.) WMG underwent a major cost restructuring in 2001 following the AOL-Time Warner merger, and WMG is consolidating further its U.S. music labels and reducing other costs in a plan that will involve meaningful cash outlays to realize significant annual savings. The company has already executed a portion of this plan. W.R. GRACE: Asbestos Committee Says Terminate Exclusivity Now ------------------------------------------------------------- W.R. Grace & Co. and its debtor-affiliates sought Judge Fitzgerald's approval to extend their exclusive periods to file a plan of reorganization through August 1, 2004 and to solicit acceptances of that plan through October 1, 2004. PI Committee: No More Extension! The Official Committee of Asbestos Personal Injury Claimants reminds the Court that the Debtors' proceedings have been pending nearly three years, and during that time, the Debtors have continued to possess the exclusive right to propose and solicit acceptances of a plan to exit bankruptcy. The Debtors' request must be denied as the Debtors failed to demonstrate that any cause exists for the extension of the exclusive periods. The Debtors also failed to make any progress towards a successful reorganization. Section 1121(d) of the Bankruptcy Code provides that the Court may reduce or increase the 120-day or 180-day exclusive periods for a debtor to file and solicit acceptances of its reorganization plan if "cause" exists. The Debtors allege that sufficient "cause" exists to extend the Exclusive Periods for an additional six months, bringing the total extension to approximately two and a half years. In seeking the extension, Debtors seek to retain total control over the plan process, unencumbered by any input from, and without any regard to, the interest of its creditors. Such a result is improper under Section 1121(d). Requests to extend or reduce the Exclusive Periods should "be granted neither routinely nor cavalierly." In enacting Section 1121(d), Congress explicitly sought to achieve two goals: (1) Grant the debtor a reasonable time to confirm a plan without the threat of a competing plan; and (2) Ensure that a debtor would not use Chapter 11 as a mechanism through which to operate indefinitely without attempting to reorganize. Legislative history shows that Section 1121(d) is an attempt to create a balance between the rights of debtors and creditors by allowing the debtors sufficient time to negotiate a settlement, while at the same time avoiding undue delay for creditors. Long and numerous extensions of the Exclusive Periods upset the balance and should not be encouraged. The Debtors Aren't Even Trying The Debtors asserted that a "meaningful opportunity" was needed to negotiate a consensual plan. The Court has granted this opportunity five times, yet the Debtors are not any farther along despite this benefit. After the Court extended the Debtors' Exclusive Periods for the fifth time, the Court directed the major constituencies in the cases to confer. On September 5, 2003, the Debtors and the PI Committee conferred. However, Marla Rosoff Eskin, Esq., at Campbell & Levine in Wilmington, Delaware, tells the Court that the Debtors' proposal to the PI Committee could not be regarded as a serious attempt to reach a consensual plan. Although the Debtors assert that they are working "diligently" with other constituencies, clearly they are not working with the PI Committee. Good Cause Does Not Exist for Another Extension The burden is on the party seeking an extension of the Exclusive Periods to file a plan and solicit acceptances to demonstrate the existence of good cause warranting the extensions. The Debtors have failed to meet this burden. Ms. Eskin asserts that some promise of probable success in formulating a reorganization plan is an element of cause for an extension of the Exclusive Periods. The size and complexity of the Debtors' cases alone do not provide cause for extension of the Exclusive Periods. If size and complexity alone were sufficient to find cause then debtors in complex cases would have an unlimited right to exclusivity. Section 1121(d) would be rendered meaningless in complex cases. The Grace Debtors assert that their cases are complex and, as such, exclusivity must be granted. However, the Debtors ignore that all asbestos bankruptcy cases have a level of complexity. Section 1121(d)'s "for cause" language requires the presence of factors in addition to timing, size, and complexity that are specific to the particular debtor and its reorganization to justify an extension of the Exclusive Periods. The additional factors include: (1) The likelihood of an imminent consensual plan if the debtor retains control; (2) No alternate substantial plan being held off by exclusivity; and (3) The general balancing analysis to avoid allowing the debtor to hold the creditors and other parties-in- interest "hostage" so that the debtor can force its view of an appropriate plan on the other parties. The Debtors clearly do no meet these factors, as there is little likelihood of a consensual plan and there are other parties who are willing and able to file a plan. No Showing of Progress in Formulating a Plan Ms. Eskin points out that the Debtors have not offered any evidence of progress towards filing a plan. At the hearing on Debtors' fifth request to extend the Exclusive Periods, they stated that they are making progress with the various constituents and that the parties continue to talk. That assertion was not accurate as to the PI Committee, as there was no progress in their discussions. The Debtors' contention that the parties have continued to talk, again, cannot possibly refer to the PI Committee, as the Debtors have not made any further attempts toward a settlement since the Court-ordered conference in September 2003. Pending Litigation Is Not A Reason The pending litigation of claims does not automatically justify an extension of the Exclusive Periods, contrary to the Debtors' assertion. Denial of an extension is appropriate even where a debtor contends that waiting for the outcome of pending litigation is necessary or that the litigation is distracting. Where the need to conclude the litigation does not appear to be critical to the debtor's efforts to propose a plan, the debtor should be able to "propose its plan taking into consideration the possible results of that action." While it may be more convenient to know the results of the litigation, it is not necessary for the Chapter 11 proceeding to be placed in limbo until that time. The Debtors must not be permitted to wait until all matters are fully litigated to file a plan. If the pending litigation were the test for extending the Exclusive Periods, then extensions would be granted routinely in every case for great lengths of time. Nor can the Debtors in good faith assert that any delay in their progress is attributable to the stay entered by Judge Wolin on matters before him. Even if the matters before Judge Wolin had progressed in the last six months, there is certainly no guarantee that the matters would not have been appealed, and thus pending for months, or perhaps even years. Moreover, despite Judge Wolin's stay, the Debtors could have made a good faith effort to resolve their issues with the PI Committee, and continue to talk and work through issues and come up with ideas, as the Debtors vowed to do at the August 25, 2003 hearing. Let Someone Else Try Terminating the Debtors' Exclusive Periods will not end the company's chances for reorganization. "Denying such a motion only affords creditors their right to file the plan; there is no negative effect upon the debtor's co-existing right to file its plan," Ms. Eskin says. The risk is, of course, that while a debtor is developing its plan, another party-in-interest may file a plan. However, that is what Congress has intended. In keeping with the purpose of Section 1121(d), the creditors should have the opportunity to present a plan, as the Debtors have failed to do so in a timely manner. Ms. Eskin notes that the Court has acknowledged the Debtors' lack of progress at the omnibus hearing on February 23, 2004. The Court reiterated that it had instructed the Debtors to talk with the parties and expected that the Debtors were continuing to do so. The Debtors have accomplished nothing during the most recent six- month extension granted by the Court to justify another extension. The Debtors' conduct does not give reason to believe that any progress would be made in the next six months. In fact, the Debtors admitted to the Court at the February 23, 2004 hearing that they did not know when a plan would be filed. The Debtors have failed to demonstrate that they have achieved any movement since the Court gave them an opportunity to do so six months ago, nor any showing that they are capable of successfully reorganizing. In light of these facts, the Court must allow other creditors the opportunity to present a plan so that the Debtors' cases may be resolved in a timely manner. (W.R. Grace Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service, Inc., 215/945-7000) ZAPATA INDUSTRIES: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Zapata Industries, Inc. 4400 Don Cayo Drive Muskogee, Oklahoma 74403 Bankruptcy Case No.: 04-70694 Type of Business: The Debtor develops and sells plastic closure systems. See http://www.zaphaz.com/ Chapter 11 Petition Date: March 2, 2004 Court: Eastern District of Oklahoma (Okmulgee) Judge: Tom R. Cornish Debtor's Counsel: Sam G. Bratton, II, Esq. 320 South Boston Avenue, Suite 500 Tulsa, OK 74103 Tel: 918-582-1211 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 ------ --------------- ------------ United States Steel Steel Coils $1,522,550 174994996, P.O. Box 910441, Dallas, TX 753 Principal Life Insurance $1,000,862 Company 8801 South Yale Ave, Ste 400 Tulsa, Oklahoma Watson Standard Company Varnish $228,790 Love Box Company Boxes $127,006 Muskogee County Treasurer Taxes $104,894 Oxy Vinyls, LP Chemicals $104,245 Sunoco, Inc. (R&M) Chemicals $98,835 KPMG Auditors $66,946 Ashland Chemical, Inc. Chemicals $59,593 Internal Revenue Service Excise taxes $59,187 Buske Lines, Inc. $56,768 F&M Bank, Depository $53,571 ABF Freight Systems, Inc. $49,870 Seminole Energy Services, Natural Gas $48,199 LLC Greystone Plastics, Inc. Plastics $47,608 Burgess Mfg. of Okla Inc. Pallets $46,515 Pennie & Edmonds Professional Fees $43,497 Thompson, Hine & Flory Professional Fees $40,633 CMS Management Natural Gas $36,948 M.C. Benderavich Taxes $36,045 * eAuctionMaster Opens Retail Location to Help Selling on eBay -------------------------------------------------------------- eAuctionMaster, a premier source for selling on Ebay, opened its first retail click and mortar location in the heart of Los Angeles' Inland Empire. Expanding on the trading assistant concept, eAuctionMaster provides consumers and businesses with a fast, convenient, and effective means of selling items online. With a 99.6% positive feedback rating from its current buyer base, eAuctionMaster is rapidly building a reputation of "trust" in the online marketplace. De-cluttering Lives and Businesses Until recently, swap meets and yard sales were the best way for consumers to sell their quality unwanted items. You do all the work and make a small amount of money ... if you don't sell it, you still have to cart it all home and store it. Instead, bring it to eAuctionMaster who can put your items in front of millions of potential buyers, so you can devote your valuable time and energy to doing things that are more important to you. In the unlikely event the item does not sell, eAuctionMaster can ship it off to charity. Their expertise is not limited to items in your home. eAuctionMaster provides liquidation and close-out services for retail businesses and manufacturers. They can sell the items you can not. Their service allows you to free up valuable stock space by storing your items in their secure warehouse. Plus, you do not use up any additional resources on marketing and advertising. They post the items for you -- and reach millions, including potential buyers who haven't visited your store. eAuctionMaster has the most competitive rates and is dedicated to world class customer service to their customers and buyers. How it Works eAuctionMaster uses the tremendous selling power of Ebay auctions to sell quality items for private parties as well as for retail businesses and manufacturers. eAuctionMaster serves the local community and can assist national vendors in liquidating antiques, collectibles, electronics, overstocked items, discontinued items and more. Purchasing opportunities are available in the United States as well as for the international community. eAuctionMaster professionally manages the selling, bidding and shipping process to maximize a profit for its vendors. eAuctionMaster experts will conduct a comprehensive evaluation of your item(s), take professional digital photograph(s) in their in- house studio and write a detailed and enticing description. Once the item is listed for sale on Ebay eAuctionMaster then stores the item in an on-site secure warehouse and manages the EBay shipping and payment process. Once the item is sold they send you a check. eAuctionMaster's guarantee -- if they don't sell it, they don't take a commission. What do you have to lose? A Free evaluation and Free listing! There is no charge to list your item or get an evaluation; only a % is taken when the item is sold! About eAuctionMaster eAuctionMaster -- http://www.eAuctionMaster.com/--has over 5 years of experience in selling on Ebay, and 12 plus years of experience in the antiques and collectables industry. They have sold thousands of items to satisfied buyers world-wide. They have even sold businesses and homes. * BOOK REVIEW: Risk, Uncertainty and Profit ------------------------------------------- Author: Frank H. Knight Publisher: Beard Books Softcover: 381 pages List Price: $34.95 Review by Gail Owens Hoelscher Order your personal copy today at http://www.amazon.com/exec/obidos/ASIN/1587981262/internetbankrupt The tenets Frank H. Knight sets out in this, his first book, have become an integral part of modern economic theory. Still readable today, it was included as a classic in the 1998 Forbes reading list. The book grew out of Knight's 1917 Cornell University doctoral thesis, which took second prize in an essay contest that year sponsored by Hart, Schaffner and Marx. In it, he examined the relationship between knowledge on the part of entrepreneurs and changes in the economy. He, quite famously, distinguished between two types of change, risk and uncertainty, defining risk as randomness with knowable probabilities and uncertainty as randomness with unknowable probabilities. Risk, he said, arises from repeated changes for which probabilities can be calculated and insured against, such as the risk of fire. Uncertainty arises from unpredictable changes in an economy, such as resources, preferences, and knowledge, changes that cannot be insured against. Uncertainty, he said "is one of the fundamental facts of life." One of the larger issues of Knight's time was how the entrepreneur, the central figure in a free enterprise system, earns profits in the face of competition. It was thought that competition would reduce profits to zero across a sector because any profits would attract more entrepreneurs into the sector and increase supply, which would drive prices down, resulting in competitive equilibrium and zero profit. Knight argued that uncertainty itself may allow some entrepreneurs to earn profits despite this equilibrium. Entrepreneurs, he said, are forced to guess at their expected total receipts. They cannot foresee the number of products they will sell because of the unpredictability of consumer preferences. Still, they must purchase product inputs, so they base these purchases on the number of products they guess they will sell. Finally, they have to guess the price at which their products will sell. These factors are all uncertain and impossible to know. Profits are earned when uncertainty yields higher total receipts than forecasted total receipts. Thus, Knight postulated, profits are merely due to luck. Such entrepreneurs who "get lucky" will try to reproduce their success, but will be unable to because their luck will eventually turn. At the time, some theorists were saying that when this luck runs out, entrepreneurs will then rely on and substitute improved decision making and management for their original entrepreneurship, and the profits will return. Knight saw entrepreneurs as poor managers, however, who will in time fail against new and lucky entrepreneurs. He concluded that economic change is a result of this constant interplay between new entrepreneurial action and existing businesses hedging against uncertainty by improving their internal organization. Frank H. Knight has been called "among the most broad-ranging and influential economists of the twentieth century" and "one of the most eclectic economists and perhaps the deepest thinker and scholar American economics has produced." He stands among the giants of American economists that include Schumpeter and Viner. His students included Nobel Laureates Milton Friedman, George Stigler and James Buchanan, as well as Paul Samuelson. At the University of Chicago, Knight specialized in the history of economic thought. He revolutionized the economics department there, becoming one the leaders of what has become known as the Chicago School of Economics. Under his tutelage and guidance, the University of Chicago became the bulwark against the more interventionist and anti-market approaches followed elsewhere in American economic thought. He died in 1972. ********* 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 ***