/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/040326.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 26, 2004, Vol. 8, No. 61 Headlines ACADEMY TENT: Signature Special Event Acquires Tent Rental Assets ADELPHIA COMMS: Court Approves Joint Settlements with TelCove ADVANCED LIGHTING: Unable to Timely File Latest Report with SEC AIR CANADA: Continues Expansion to Latin America with New Routes AIR CANADA: Gets Financing Confirmation for Bombardier Orders ALTAMONT PARTNERS: Case Summary & Largest Unsecured Creditor AMERICUS LLC: Involuntary Case Summary ARMOR HLDGS: S&P Gives BB & B+ Preliminary Ratings to $500M Shelf ASSET SECURITIZATION: Fitch Takes Rating Actions on 1997-D4 Notes BANNER FIBREBOARD: Case Summary & 20 Largest Unsecured Creditors BLACKROCK ADVANTAGE: Board Adopts Complete Liquidation Plan BLADE RUNNER INC: Case Summary & 20 Largest Unsecured Creditors BOB'S STORES: Clear Thinking's Joseph Myers to Oversee Liquidation BOOTS & COOTS: Publishes Record Results for 2003 BRILLIANT DIGITAL: Kevin Bermeister Discloses 32.5% Equity Stake BUDGET GROUP: Will Create & Fund an Administrative Claims Reserve CARAVELLE INVESTMENT: Fitch Takes Action on Five Note Classes CHECKERED FLAG: Case Summary & 20 Largest Unsecured Creditors CHESAPEAKE ENERGY: Prices $255MM Conv. Preferred Stock Offering CKE RESTAURANTS: State Street Reports 5.06% Common Stock Ownership CLASSICA GROUP: Files Voluntary Chapter 7 Petition in New Jersey CLASSICA GROUP: Voluntary Chapter 7 Case Summary COAST DENTAL: Intends to Deregister Common Stock with SEC DIALPAD COMMS: Reaches Profitability in Fourth Quarter 2003 DII INDUSTRIES: ACE Companies Wants to Proceed with NY Action DOMAN IND.: Continuing Talks with Noteholders to Develop a Plan DURANGO GEORGIA: Court Fixes Confirmation Hearing Date for April 7 DYNEGY INC: President & CEO Bruce Williamson Takes Chairman's Post ECF INC: Case Summary & 20 Largest Unsecured Creditors EL PASO: Raises $352MM Cash from Oil & Gas Canada Sale to BG Group EL PASO CORP: BG Group Completes Acquisition of Canadian Unit EL PASO: Obtains Waivers Relating to Revolving Credit Facility EL POLLO LOCO: S&P Rates Senior Unsecured Discount Notes at CCC+ EMARCADERO AIRCRAFT: S&P Lowers Rating on Class A Notes to BB ENERGY PLUS: Files Notice of Intention Under BIA in Canada ENRON: San Juan Gas Gets Nod to Assume & Assign Software Licenses THE GAP INC: Fitch Ups Senior Unsecured Debt Rating to BB+ GLOBAL FRANCHISE: Fitch Affirms Junk Rating on Class C Notes HALSEY ENERGY: Selling Congers, NY Assets as Part of Restructuring HAVENS STEEL: Asks Court Nod to Hire McDowell Rice as Counsel IGAMES ENTERTAINMENT: Files Legal Action Against Equitex & Chex JETBLUE AIRWAYS: S&P Assigns BB+ Rating to 2004-1 Class C Notes LOEWEN GROUP: Asks for Final Decree Closing 13 More Cases LNR PROPERTY: Reports Earnings Per Share of $0.94 for 1st Quarter MAGELLAN HEALTH: Inks Stipulation Resolving Humana Military Claim METROPOLITAN MORTGAGE: Files Petition for Litigation 'Freeze' MICROCELL: Files Final Prospectus for Equity Rights Offering MIKOHN GAMING: Posts $34.2 Million Net Loss at December 31, 2003 MIRANT CORP: Brings-In Ernst & Young as Consultants MIRANT CORP: US Trustee Amends Equity Security Holders' Committee OREGON ARENA: Employs Foster Pepper as Bankruptcy Attorneys ORLANDO HYATT HOTEL: Asset Sale Auction is Today PACIFIC GAS: Court Okays Deutsche Bank as Escrow & Paying Agent PACIFIC GAS: Chairman Says Co. Ready to Exit Bankruptcy Next Month PARMALAT GROUP: US Debtors Wants to Continue Rebate Program PEABODY ENERGY: Elects William Coley & Henry Givens, Jr. to Board PENTHOUSE: Completes $4 Million Private Placement with Mercator PILLOWTEX: Signs Deal Recharacterizing 3 Key-Assigned Lease Pacts REAL ESTATE SYNTHETIC: S&P Rates Series 2004-A Notes RELIANCE: Court Issues Conditions for LaManna Settlement Approval RESIDENTIAL ACCREDIT: Fitch Takes Actions on 35 Securitizations ROHN IND.: Reorganized Company Now Trading as Frankfort Tower ROSEWOOD CENTER: Voluntary Chapter 11 Case Summary SIGNS NOW OF OREGON: Case Summary & Largest Unsecured Creditors SOLUTIA INC: Proposes to Set Up Non-Core Asset Sale Procedures SP POULSBO PLACE: Voluntary Chapter Case Summary STOLT OFFSHORE: Trading Restrictions on New Shares Lifted STRUCTURED ASSET: Fitch Affirms BB+ Rating on Class I Notes TOWER AUTOMOTIVE: Morgan Stanley Reports 7.59% Equity Stake UNITED AIRLINES: Committee Turns to Sperling & Slater for Advice UNITY WIRELESS: Appoints M. Bentob & D. Pretty to Exec. Positions US AIRWAYS: Settles Maryland Environmental Claims VANGUARDE MEDIA: Court Fixes Bid Deadline for March 30, 2004 WEIRTON: Obtains Nod to Auction Off Non-Operating Real Properties WELLINGTON LEISURE: Keen Realty to Auction 3 Industrial Facilities WELLSFORD REAL: Retains Lazard Freres as Financial Advisor WORLDCOM INC: S.D.N.Y. Court Disallows 92 Tax Claims * Cendrowski Launches New Company Focusing on Fraud * Mitchell Cohen Inducted into the American College of Bankruptcy * Powell Goldstein Names Twelve New Attorneys * Cheryl Boyer to Lead PwC's NY Hospitality & Leisure Practice * BOOK REVIEW: Competitive Strategy for Health Care Organizations: Techniques for Strategic Action ********* ACADEMY TENT: Signature Special Event Acquires Tent Rental Assets ----------------------------------------------------------------- Signature Special Event Services, North America's leading full- service event rental company, announced the acquisition of all tent rental assets of Academy Tent & Canvas. The acquisition protects availability of this large inventory for the event industry, substantially increases Signature Special Event Service's temporary structure rental inventory and strengthens their industry leadership position. The $2.1 million acquisition has been approved by a California bankruptcy judge. Academy Tent & Canvas closed its doors in February. "We worked quickly to acquire Academy's inventory to assure that it would be available to meet upcoming event industry requirements," said Tom Brown, president of Signature Special Event Services. "Our two companies had shared responsibilities with many of the same clients. Acquisition of this innovatively engineered, high-quality tent inventory allows us to offer continuing services to those clients and accelerate our own growth plans." Signature Special Event Services plans to keep the newly acquired tent rental inventory strategically positioned nationwide. "We're analyzing event forecasts now to ensure that these assets are close to where they need to be. We want previous Academy clients to be assured we are looking out for their needs," Brown added. About Signature Special Event Services Signature Special Event Services is a technology leader and North America's leading full-service event rental company serving the corporate, sporting and social event industries. The company delivers full service and support for their wide range of event rental equipment including temporary and mobile structures, flooring, lighting, climate control, power generation and distribution, kitchen facilities and cooking and catering equipment. Based in Frederick, Maryland, with offices throughout the US, Signature Special Event Services is a trusted provider for such prestigious clients as The Super Bowl, Olympics, PGA Championships and US Military. Learn more at http://www.EventServices.com/ ADELPHIA COMMS: Court Approves Joint Settlements with TelCove ------------------------------------------------------------- Adelphia Communications Corporation (OTC: ADELQ) and TelCove announced that the United States Bankruptcy Court for the Southern District of New York has approved a Master Reciprocal Settlement Agreement and a Global Settlement between the companies. These settlements, which are the result of multi-month consensual negotiations, together resolve substantially all of the issues and claims between the companies. TelCove, with its Plan of Reorganization previously confirmed by the Bankruptcy Court in December 2003, anticipates exiting bankruptcy upon closing of the Global Settlement transaction, which is expected shortly, subject to certain closing conditions. Key components of the settlements include: -- Mutual release of substantially all claims between the companies. -- Cash payment by Adelphia to TelCove of $60 million. Payment of the $60 million requires modification of Adelphia's cash management protocol and that modification must be approved by the Bankruptcy Court. The Court is scheduled to hear the motion on April 2nd. -- Five-year services commitment by Adelphia to TelCove. -- Transfer of certain CLEC assets held by Adelphia to TelCove, including local operations in Richmond, VA, Charlottesville, VA, and Buffalo, NY (subject to various regulatory approvals). -- Validation and memorialization of the ownership and future use of certain shared network assets. "This is a gratifying day," said Bob Guth, President and CEO of TelCove. "In addition to the increased clarity and certainty that we and Adelphia realize from this settlement, TelCove is particularly excited about the prospect of reestablishing a strong service provider relationship with Adelphia moving forward." Specific to the transfer of the CLEC market assets, Guth said, "This will be a seamless transition for customers in these markets. In coordination with Adelphia, we will provide clear updates throughout the regulatory approval process and subsequent branding conversion. We will ensure that there are no disruptions." "I am pleased that we have reached the Settlements with TelCove," said Joe Bagan, Adelphia SVP and Chief Administrative Officer. "The Settlements allow Adelphia to focus on our core business strategies going forward." Closing of the transfer of the CLEC markets and certain other aspects of the settlements will occur following receipt of regulatory and other consents. About Adelphia Adelphia Communications Corporation is the fifth largest cable television company in the country. It serves customers in 30 states and Puerto Rico, and offers analog and digital video services, high-speed Internet access and other advanced services over Adelphia's broadband networks. About TelCove Founded in 1991, TelCove is one of the longest standing competitive communications providers in the nation offering integrated Internet, Data, and Voice services to enterprise customers via its advanced, secure fiber optic network. For more information on TelCove, visit http://www.telcove.com/ ADVANCED LIGHTING: Unable to Timely File Latest Report with SEC --------------------------------------------------------------- Advanced Lighting Technologies, Inc. was to be late in filing its latest financial information with the SEC as the Company has only recently emerged from proceedings under Chapter 11 of title 11 of the United States Code and is in the process of completing its "fresh start" reporting in accordance with the American Institute of Certified Public Accountants' Statement of Position 90-7, "Financial Reporting by Entities in Reorganization under the Bankruptcy Code." Because of the additional work required in order to finalize the implementation of fresh start reporting, the Company was unable to complete and timely file its Quarterly Report on Form 10-Q for the period ended December 31, 2003, without unreasonable effort and expense. The Company did not believe it would be able to complete the Form 10-Q on or prior to February 23, 2004. AIR CANADA: Continues Expansion to Latin America with New Routes ---------------------------------------------------------------- Air Canada will continue to expand its services to Latin America with the introduction of non-stop flights from Toronto to Caracas, Venezuela; Bogota, Colombia, and Lima, Peru. Air Canada thus becomes the only airline offering scheduled, non-stop service between Canada and these three South American countries. The introduction of these new routes comes less than four months after Air Canada inaugurated new services to Chile, Argentina, Costa Rica and Cuba. In addition, effective July 1, 2004, Air Canada will boost its non-stop flights between Toronto and Havana, Cuba to daily service operated with Airbus A319 aircraft. In the meantime, the carrier has introduced a larger Airbus A320 aircraft on the route in response to customer demand for the popular new service launched only last December. "The addition of Venezuela, Colombia and Peru to Air Canada's growing South American network will bring added convenience and access for travelers and freight forwarders across our worldwide network," said Bill Bredt, Vice President, Network and Revenue Management. "We are seeing an increase in travel demand to and from South America as a result of a strengthening economy as well as the convenience of Air Canada's services for travellers impacted by U.S. government visa requirements when transiting via the United States. Our recently launched services to Chile, Argentina and Costa Rica, in addition to our daily flights to Brazil, are performing very well, leading us to pursue further strategic growth opportunities in Latin American markets. We also recognize and thank Transport Minister Valeri's ongoing support in bringing these new services online for the benefit of consumers." Air Canada service to Caracas will begin June 15, 2004 with flights departing Toronto on Tuesday, Thursday and Saturday, and departing Caracas on Wednesday, Friday and Sunday. Service to Bogota will begin June 16, 2004 with flights departing Toronto on Wednesday, Friday and Sunday, and departing Bogota Thursday, Saturday and Monday. The new Caracas and Bogota services will be operated using 120-seat Airbus A319 aircraft offering the carrier's recently re-designed North American Executive Class service. With southbound flight times of 5.5 and 6.5 hours, respectively, travellers will save as much as two hours and 45 minutes off alternate routings requiring stopovers. Air Canada's new service to Lima will begin November 2, 2004 with flights departing Toronto on Tuesday, Thursday and Saturday, and departing Lima on Wednesday, Friday and Sunday. Flights to Lima will be operated using 212-seat Boeing 767-300 aircraft featuring Air Canada's acclaimed international premium service, Executive First. With a flight time of eight hours, travellers will save as much as two hours and 40 minutes off alternate routings. All flights have been timed to offer customers convenient connections at Toronto's Pearson International Airport to and from destinations served by Air Canada throughout its network in Canada, the United States, Europe and Asia. Seats will be available for sale subject to government approval. In addition to Caracas, Bogota and Lima, Air Canada serves 31 other destinations in the Caribbean and Latin America including: Antigua, Aruba, Barbados, Grenada, Grand Cayman, Guadeloupe, Haiti, Kingston, Montego Bay, Nassau, Puerto Plata, San Juan, St- Lucia, Trinidad, Turks & Caicos, Havana, Cayo Coco, Cayo Largo, Holguin, La Romana, Punta Cana, Varadero, Cancun, Cozumel, Ixtapa, Mexico City, Puerto Vallarta, San Jose, Sao Paulo, Santiago and Buenos Aires. 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: Gets Financing Confirmation for Bombardier Orders ------------------------------------------------------------- Air Canada received confirmation from Bombardier that the aircraft manufacturer has secured financing on satisfactory commercial terms to Air Canada for the carrier's entire firm order of Bombardier aircraft. As announced by the company on December 19, 2003, the purchase agreement is subject to a number of conditions including financing on satisfactory commercial terms, final documentation and requisite approvals. Headquartered in Saint-Laurent, Quebec Canada, Air Canada -- http://www.aircanada.ca/-- represents Canada's only major domestic and international network airline, providing scheduled and charter air transportation for passengers and cargo. The Company filed for CCAA protection on April 1, 2003 (Ontario Superior Court of Justice, Case No. 03-4932) and Section 304 petition with the U.S. Bankruptcy Court for the Southern District of New York (Case No. 03-11971). Matthew A. Feldman, Esq., and Elizabeth Crispino, Esq., at Willkie Farr & Gallagher serve as the Debtors' U.S. Counsel. When the Debtors filed for protection from its creditors, they listed C$7,816,000,000 in assets and 9,704,000,000 in liabilities. ALTAMONT PARTNERS: Case Summary & Largest Unsecured Creditor ------------------------------------------------------------ Debtor: Altamont Partners-Coastal LLC 2101 - 4th Avenue #2200 Seattle, Washington 98121 Bankruptcy Case No.: 04-13290 Chapter 11 Petition Date: March 11, 2004 Court: Western District of Washington (Seattle) Judge: Samuel J. Steiner Debtor's Counsel: Jerry N. Stehlik, Esq. Bucknell Stehlik Sato & Stubner, LLP 2003 Western Avenue, Suite 400 Seattle, WA 98101-3000 Tel: 206-587-0144 Fax: 206-587-0277 Estimated Assets: $1 Million to $10 Million Estimated Debts: $0 to $50,000 Debtor's 1 Largest Unsecured Creditor: Entity Claim Amount ------ ------------ Monahan & Biagi PLLC $20,000 AMERICUS LLC: Involuntary Case Summary -------------------------------------- Alleged Debtor: Americus, LLC P.O. Box 668 Norge, Virginia 23127 Involuntary Petition Date: March 3, 2004 Case Number: 04-50631 Chapter: 11 Court: Eastern District of Virginia (Newport News) Judge: David H. Adams Petitioners' Counsels: Harry W. Jernigan, III, Esq. Shreen N. Mahmoud, Esq. Harry Jernigan, P.C. 258 North Witchduck Road, Suite C Virginia Beach, VA 23462 Tel: 757-490-2200 Petitioners: Vivian Foley 3102 Cider House Road Toano, VA 23168 Thomas F. McGrath, III 565 Lego Drive Charlottesville, VA 22911 Joseph A. Gebhard 27 Polly Drive Huntington, NY 11973 Zack Abuasba Zstaff Software 809 Montreat Road Black Mountain, NC 28711 Amount of Claims: $55,267 ARMOR HLDGS: S&P Gives BB & B+ Preliminary Ratings to $500M Shelf ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its preliminary 'BB' rating to unsecured debt securities and preliminary 'B+' rating to subordinated debt securities listed in Armor Holdings Inc.'s recently filed $500 million SEC Rule 415 shelf registration. At the same time, Standard & Poor's affirmed its other ratings, including the 'BB' corporate credit rating, on the security products supplier. The outlook is stable. "The ratings on Armor reflect the company's modest size and active acquisition program, offset somewhat by leading positions in niche markets and moderate leverage," said Standard & Poor's credit analyst Christopher DeNicolo. Jacksonville, Fla.-based Armor is a leading provider of law enforcement equipment, including body armor, holsters, riot gear, and batons, through its products division (around 55% of revenue in 2003) and military and commercial vehicle armoring through its Armor Mobile Security unit(43%). In early December 2003, Armor acquired Simula Inc., a provider of crew seats for military helicopters and transports, body armor, and vehicle armoring, which contributed $8.5 million in revenues (2%) in the remainder of 2003. Armor has grown rapidly since 1996 through over 20 acquisitions and modest organic growth. The company's various law enforcement products have leadership positions in their markets and strong brand identities. Products are sold through 500 distributors worldwide and Armor provides comprehensive product training support. Domestic sales have recently been flat due to the fiscal problems at many states and local municipalities, but international sales are growing. Armor, through its Simula and Protech units, has over 40% of the market for small arm protective insert (SAPI) plates, which are used in body armor by the U.S. military. Armor is also the leading provider of aftermarket vehicle armoring. The company's military business in this segment is largely from the Up-Armored HMMWV contract with the U.S. Army. Deliveries under this contract increased to 873 in 2003 from 623 in 2002, due to strong demand as a result of the security situation in Iraq. Production in 2004 is forecast to be around 2,300 units and production rates are expected to reach 220 per month by May 2004. Sales of commercial armored vehicles are likely to benefit from increased threats of terrorism throughout the world. Armor's modest leverage and demand for its military products, especially the Up-Armored HMMWV and SAPI plates, are expected to offset the risks of an active acquisition program, resulting in an overall credit profile consistent with current ratings. ASSET SECURITIZATION: Fitch Takes Rating Actions on 1997-D4 Notes ----------------------------------------------------------------- Asset Securitization Corporation's commercial mortgage pass- through certificates, series 1997-D4, are upgraded by Fitch Ratings as follows: --$49.1 million class A-3 to 'AAA' from 'AA'; --$21 million class A-4 to 'AA+' from 'A+'; --$42.1 million class A-5 to 'AA' from 'A'; --$28.1 million class A-6 to 'A+' from 'BBB+'; --$21 million class A-7 to 'A' from 'BBB'; --$21 million class A-8 to 'BBB+' from 'BBB-'; --$35.1 million class B-1 to 'BBB-' from 'BB+'. The following classes are affirmed by Fitch: --$660.3 million class A1-D 'AAA'; --$84.2 million class A1-E 'AAA'; --Interest-only class PS-1 'AAA'; --$28.1 million class A-2 'AAA'; --$35.1 million class B-2 at 'BB'; --$14 million class B-3 at 'BB-'. Fitch does not rate the $21 million class B-4, the $14 million class B-5, the $14 million B-6, the $12 million class B-7, or the $573 class B-7H certificates. The upgrades are due to an increase in credit enhancement since issuance, and levels which are in line with the subordination levels of deals issued today having similar characteristics. As of the March 2004 distribution date, the pool's certificate balance has been reduced by 21% to $1.1 billion from $1.40 billion at issuance. Eight loans (11%) have been fully or partially defeased, including the largest loan in the pool (6%). Currently, six loans (12%) are in special servicing, including four delinquent loans (5%). The largest is the Saracen loan (6%), the second-largest loan in the pool. The loan is secured by six office properties in Massachusetts, with an average occupancy of 40%. The loan is current; however, the borrower indicated that it would not continue funding shortfalls at the property. An appraisal report has been ordered and the special servicer is evaluating workout options. The second-largest specially serviced loan is the Prime Retail II portfolio (2.2%), which is secured by three retail outlet malls located in Arizona, Oregon and Idaho. Net cash flows have been affected by the occupancy decline at two of the properties. The loan became real estate owned (REO) in February 2004. The third-largest specially serviced loan (1.8%) is secured by a retail property in West Mifflin, PA. Occupancy declined after Builder's Square and Pharmor vacated. A new tenant is scheduled to move in shortly, and is expected to increase occupancy to 91%. The special servicer is evaluating options and a new appraisal has been ordered. BANNER FIBREBOARD: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Banner Fibreboard Company 22nd and Commerce Streets Wellsburg, West Virginia 26070 Bankruptcy Case No.: 04-00851 Type of Business: The Debtor is a leading manufacturer of specialty paperboard products. See http://www.bannerfibreboard.com/ Chapter 11 Petition Date: March 9, 2004 Court: Northern District of West Virginia (Wheeling) Judge: Edward Friend II Debtor's Counsel: John H. Kamlowsky, Esq. Frankovitch, Anetakis, Colantonio & Simon Fed One Bank Building, Suite 504 21 12th Street Wheeling, WV 26003 Tel: 304-233-1212 Estimated Assets: $1 Million to $10 Million Estimated Debts: $500,000 to $1 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ National Colloid $80,572 Ace Paper Recycling $50,566 Royal Paper Stock $44,019 Marathon Ashland $43,435 Orr Feit Company $32,073 Wellsburg Sanitary Board $29,898 Continental Paper Grading $28,932 DLC Transport $21,528 Allan Co. $20,496 Ohio Drilling Co. $20,410 Blackman Uhler, LLC $20,406 Wagers, Inc. $18,803 Hercules, Inc. $18,244 Michelman, Inc. $13,561 Coulmbian Chemicals $10,333 Northstar Brokerage, LLC $7,194 Johnson Boiler Works, Inc. $5,407 Bell, Charles D., Esq. $5,000 BASF Corp. $4,645 Solution Dispersions $4,350 BLACKROCK ADVANTAGE: Board Adopts Complete Liquidation Plan ----------------------------------------------------------- The Board of Directors of The BlackRock Advantage Term Trust, Inc. (NYSE:BAT) has adopted a Plan of Complete Liquidation in preparation for the Trust's termination on or about December 31, 2005. Shareholders will continue to receive regular monthly distributions, which will be reported as cash liquidating distributions pursuant to the Plan. About BlackRock BlackRock is one of the largest publicly traded investment management firms in the United States with $309.4 billion of assets under management as of December 31, 2003. BlackRock manages assets on behalf of institutional and individual investors worldwide through a variety of equity, fixed income, liquidity and alternative investment products. In addition, BlackRock provides risk management and investment system services to a growing number of institutional investors under the BlackRock Solutionsr name. Clients are served from the Company's headquarters in New York City, as well as offices in Boston, Edinburgh, Hong Kong, San Francisco, Tokyo and Wilmington. BlackRock is majority-owned by The PNC Financial Services Group, Inc. (NYSE:PNC) and by BlackRock employees. BLADE RUNNER INC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Blade Runner Inc. dba Drain Doctor P.O. Box 27455 Seattle, Washington 98165 Bankruptcy Case No.: 04-13338 Type of Business: Cleans and repairs drains and side sewers. Chapter 11 Petition Date: March 12, 2004 Court: Western District of Washington (Seattle) Judge: Thomas T. Glover Debtor's Counsel: Charles A. Johnson, Jr., Esq. 5413 Meridian Avenue N #A Seattle, WA 98103-6138 Tel: 206-632-8980 Total Assets: $58,185 Total Debts: $1,127,907 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ W. Earlene Jones Monies loaned $760,392 Estate of Norman L. Jones c/o Doug Ownes 911 6th Street Anacortes, WA 98221 Qwest Dex Advertising $138,550 Verizon Directories Advertising $56,300 Department of Revenue - Sea Sales Taxes $29,683 IRS - Ogden Misc. Receivables $29,530 Location: 20833 67th Ave. West #202, Lynnwood WA IRS - Ogden Business Checking $29,530 #354055xxxx (WA00120) Location: 20833 67th Ave. West #202, Lynnwood WA IRS - Ogden Business Checking $29,530 #020-4851xxxx Location: 20833 67th Ave. West #202, Lynnwood WA IRS - Ogden Business Checking $29,530 #354054xxxx (WA00120) Location: 20833 67th Ave. West #202, Lynnwood WA IRS - Ogden Paros Trailer $29,530 Location: 20833 67th Ave. West #202, Lynnwood WA IRS - Ogden 4 desks, 3 computers, $29,530 misc. supplies Location: 20833 67th Ave. West #202, Lynnwood WA IRS - Ogden Sewer machines, $29,530 Misc., tools Location: 20833 67th Ave. West #202, Lynnwood WA United Rentals NW Inc. Equipment rentals $12,000 for use in business IRS - Ogden Payroll taxes for 3rd $10,267 Q 2003 Department of L & I State industrial $7,392 Insurance premiums Northwest Fleet Lease, Inc. Equipment lease $6,877 Pro Source Bldg. Products Claim for materials $6,000 and equipment supplied and on Travelers Bond No. 104062037 Travelers Casualty & Surety Bond Claim $6,000 Consolidated Supply Co. Supplies $5,172 Highland Service, Inc. Goods provided: $4,900 gasoline on open account State of Washington - ES State Unemployment $3,900 taxes BOB'S STORES: Clear Thinking's Joseph Myers to Oversee Liquidation ------------------------------------------------------------------ Joseph Myers, principal and managing director of Clear Thinking Group, has been retained by BSI Holding Co. (formerly known as Bob's Stores) to serve as its Liquidation Consultant. In this capacity, he will facilitate the administration and resolution of BSI's Chapter 11 bankruptcy cases. Under terms of the appointment, which was based on an application to the U.S. Bankruptcy Court, Mr. Myers will oversee the wind-down of the debtor's bankruptcy estates and coordinate claims reconciliation. The veteran credit management executive leads the Creditors Rights Practice of Clear Thinking Group, headquartered here. Mr. Myers will fulfill his responsibilities in accordance with directives set by the debtor's board of directors, but will report regularly to the Unsecured Creditors Committee concerning the progress of the liquidation. A plan of reorganization and final documents are expected to be filed within the next few weeks. Meriden, Conn.-based Bob's Stores filed for Chapter 11 bankruptcy protection in Delaware on October 22, 2003. At that time, the casual clothing and footwear chain operated 34 stores in six states throughout the Northeast. The majority of the merchant's assets were subsequently acquired by The TJX Companies, Framingham, Mass., for about $100 million less various adjustments. The transaction included most of Bob's store leases and operating contracts. About Clear Thinking Group Clear Thinking Group, Inc., a subsidiary of Liquidation World (TSX: LQW), Calgary, Alberta, provides a wide range of corporate turnaround, workout, and strategic consulting services to retail companies, consumer product manufacturers/distributors and industrial companies. The national advisory organization specializes in assisting small- to mid-sized companies during times of strategic change, opportunity, growth, acquisition, and crisis. Visit http://www.clearthinkinggrp.com/for more information. BOOTS & COOTS: Publishes Record Results for 2003 ------------------------------------------------ Boots & Coots International Well Control, Inc. (Amex: WEL), a global prevention, emergency response and restoration company for the oil and gas industry, reported that revenues for fiscal 2003 were up 155 percent to $35.9 million, compared to revenues of $14.1 million for 2002. For the fourth quarter, revenues increased by 237 percent to $8.9 million, compared with revenues of $2.6 million for the same period of 2002. The company's income from continuing operations was $6.6 million for 2003 compared to a loss of $2.5 million for 2002. Net income was $7.1 million compared to a net loss of $9.2 million in the prior year. Included in 2003 net income is a non-cash, non- recurring charge of $1.4 million related to the settlement of certain liabilities. Included in 2002 net income is a non-cash non-recurring credit of $1.1 million related to a favorable bankruptcy settlement related to its former subsidiary International Tool and Supply Company. Net income attributable to common shareholders for 2003 was $5.9 million, or $0.26 per diluted share, compared to a net loss in 2002 of $12.3 million, or a $1.14 loss per fully diluted share. For the fourth quarter, net income from continuing operations was $1.0 million compared to a net loss of $1.6 million for the fourth quarter of 2002. Net income attributable to common shareholders was $1.0 million, or $0.04 per fully diluted share in the fourth quarter of 2003, compared to a net loss in the prior period of $2.3 million, or a $0.21 loss per fully diluted share. Earnings before interest, taxes, depreciation and amortization (EBITDA) increased by $11.6 million to $11.2 million in 2003. For the fourth quarter, EBITDA was $1.9 million compared to a deficit of $0.5 million in the fourth quarter of 2002. "Revenues were strong in both of the company's business segments," stated Jerry Winchester, President and Chief Executive Officer. "Response revenues were, of course, principally driven by our work in Iraq. Our prevention segment was a very strong performer for the year due to the continuing success of our SafeGuard and WELLSURE(R) programs. We believe that with the successful implementation of the 2004 business plan our prevention revenues will be sufficient to sustain our current operations." Earlier this month, the company announced that, pending the transition to the new contract for the Restore Iraqi Oil (RIO) program, the company has temporarily demobilized its personnel in the region. Currently, it is unclear when the company will re-mobilize its personnel, although the company remains positioned to continue its previous work and respond immediately whenever an emergency arises in Iraq. "Last year was a year of great progress," stated Kirk Krist, Chairman of the Board. "We paid down or converted to common equity most of our senior debt and preferred stock, we restructured our remaining senior and subordinated debt into long- term debt and we strengthened the leadership of our board. We are now able to direct our energies into the growth of the business." Operational highlights include: -- Prevention revenues were $3.6 million and $16.1 million for the fourth quarter and year, respectively. In 2003, the company secured two major SafeGuard contracts worth approximately $3 million over the next two years. In 2003, the company introduced WELLSURE(R) into Canada and secured 17 new contracts. Since the beginning of 2004, Boots & Coots has secured one new SafeGuard contract located in India. -- Response revenues were $5.4 million and $19.8 million for the fourth quarter and year, respectively. -- Revenues earned from Iraq related work were $5.0 million for the fourth quarter and $22.6 million for the year, which includes a first quarter equipment sale of $6.6 million. -- At December 31, 2003 the company reported working capital of $9.5 million and long-term debt of $12.4 million. -- Shareholders' equity improved $14.4 million during the year to $0.4 million from a deficit of $14.0 million at December 31, 2002. At December 31, 2003, Boots & Coots International's balance sheet shows a recovery of stockholders' equity at $380,000. At December 31, 2002, the Company reported a total shareholders' equity deficit of $13,988,000. About Boots & Coots Boots & Coots International Well Control, Inc., Houston, Texas, provides a suite of integrated oilfield services centered on the prevention, emergency response and restoration of blowouts and well fires around the world. Boots & Coots' proprietary risk management program, WELLSURE(R), combines traditional well control insurance with post-event response as well as preventative services, giving oil and gas operators and insurance underwriters a medium for effective management of well control insurance policies. The company's SafeGuard program, developed for regional producers and operators sponsored by Boots & Coots, provides dedicated emergency response services, risk assessment and contingency planning, and continuous training and education in all aspects of critical well management. For more information, visit the company's web site at http://www.bncg.com/ BRILLIANT DIGITAL: Kevin Bermeister Discloses 32.5% Equity Stake ---------------------------------------------------------------- Kevin Bermeister beneficially owns 19,460,189 shares of the common stock of Brilliant Digital Entertainment, Inc., representing (based on 41,351,571 shares issued and outstanding as of November 3, 2003), 32.5% of the outstanding common stock shares of the Company. Mr. Burmeister holds sole voting and dispositive powers over 3,802,850 such shares, and shared voting and dispositive powers over 15,657,339 shares. Mark Dyne has the right to receive, or the power to direct, the receipt of dividends from, or the proceeds from the sale of, 7,491,169.5 of the shares beneficially owned by the Kevin Bermeister.. A third party individual has the right to receive, or the power to direct the receipt of, dividends from, or the proceeds from the sale of, 675,000 of the shares beneficially owned by Mr. Bermeister. Brilliant Digital Entertainment, Inc. (AMEX:BDE) is the parent company of Altnet Inc. and a developer of 3D rich media advertising and content creation technologies for the Internet. The b3d rich media format is used to produce entertainment, advertising and music content for consumers distributed over the Internet. Find out more about the Company at http://www.brilliantdigital.com/ * * * As reported in the Jan. 6, 2004, issue of the Troubled Company Reporter, Brilliant Digital Entertainment, Inc. (AMEX:BDE) obtained the agreement from holders of its secured convertible promissory notes to extend the maturity date of the notes from December 31, 2003 to March 1, 2004. At December 31, 2003, and after giving effect to the costs incurred in obtaining the extension, the company was indebted to the note holders in the approximate amount of $3.3 million. The notes are secured by all of the company's assets and the assets of its subsidiaries, B3D, Inc. and Brilliant Studios, Inc., and guaranteed by B3D, Inc. and Brilliant Studios, Inc. About Brilliant Digital Entertainment Inc. BUDGET GROUP: Will Create & Fund an Administrative Claims Reserve ----------------------------------------------------------------- Before the Effective Date, Reorganized Budget Group Inc. through the Plan Administrator, with the prior approval of the Plan Committee, will create and fund an Administrative Claims Reserve with an amount of the U.S. Debtor Group Estates' Cash equal to: (1) the aggregate Disputes Claim Amount of all Disputed Administrative Claims, Disputes Priority Tax Claims, disputed Priority Non-Tax Claims and Disputed Miscellaneous Secured Claims against the U.S. Debtor Group; plus (2) an amount equal to an estimate made by the Plan Administrator -- with the prior approval of the Plan Committee -- of the Administrative Claims not yet asserted against the U.S. Debtor Group's Estates. On the Effective Date, Reorganized BGI through the Plan Administrator, with the prior approval of the Plan Committee, will: -- create the U.S. Debtor Group Unsecured Claim Account in which it will deposit the Initial U.S. Debtor Group Unsecured Claim Available Amount; -- create and fund the Operating Reserve in accordance with the terms of the Plan and the Plan Administration Agreement; -- create the Unclaimed Distribution Reserve into which it will deposit from time to time the Unclaimed Distributions; and -- create the Miscellaneous Cash Account into which it will deposit from time to time the U.S. Debtor Group Miscellaneous Cash. Consistent with the terms of the Allocation Settlement Agreement, before the Effective Date, Reorganized BRACII will create and fund an Administrative Claims Reserve with an amount of BRACII Cash equal to $3,050,000. Reorganized BRACII, pursuant to Section 1930 of the Judiciary Procedures Code, will use funds in the BRACII Administrative Claims Reserve solely as set forth in the Allocation Settlement Agreement and for payment of any fees payable. Headquartered in Daytona Beach, Florida, Budget Group, Inc., operates under the Budget Rent a Car and Ryder names -- is the world's third largest car and truck rental company. The Company filed for chapter 11 protection on July 29, 2002 (Bankr. Del. Case No. 02-12152). Lawrence J. Nyhan, Esq., and James F. Conlan, Esq., at Sidley Austin Brown & Wood and Robert S. Brady, Esq., and Edward J. Kosmowski, Esq., at Young, Conaway, Stargatt & Taylor, LLP, represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $4,047,207,133 in assets and $4,333,611,997 in liabilities. (Budget Group Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service, Inc., 215/945-7000) CARAVELLE INVESTMENT: Fitch Takes Action on Five Note Classes ------------------------------------------------------------- Fitch Ratings downgrades three classes and reassigns two classes of Caravelle Investment Fund, L.L.C. These rating actions are effective immediately. -- $756,000,000 senior secured revolving credit facility reassigned to 'Paid In Full' (PIF) from 'A'; -- $89,000,000 class A first priority senior secured notes reassigned to 'PIF' from 'A' (web site already lists class A notes as 'PIF'); -- $143,000,000 class B second priority senior secured notes downgraded to 'BBB-' from 'BBB'; -- $78,000,000 class C senior subordinated secured notes downgraded to 'CCC' from 'B'; -- $52,000,000 class D subordinated secured notes downgraded to 'CCC-' from 'CCC'. Caravelle Investment Fund, L.L.C. is a market value collateral debt obligation that closed in July 1998. The fund is managed by Trimaran Advisors L.L.C. a New York based investment manager. At Oct. 10, 2002, the fund failed its class D overcollateralization test due to markdowns on publicly traded loans and bonds, as well as the investment manager's write down of special situation portfolio assets. Given the fund's failure to cure the class D OC test within a 10-day cure period, the fund formally hit an event of default. Fitch downgraded the original ratings of the class C and D notes on Nov. 19, 2002 to 'B' and 'CCC' from 'BB' and 'B', respectively. On March 21, 2003, the class B noteholders approved a limited waiver, which set the guidelines for conducting an orderly liquidation of the fund's assets and repayment of the revolving credit facility and the class A notes by Dec. 31, 2003, which was completed within that time frame. The rating action on the revolving facility and the class A notes to PIF reflects the fund's completion of the payment in full of the revolving credit facility and the class A notes, as outlined in the Limited Waiver. In order to pay down the revolving credit facility and the class A notes the investment manager used a combination of cash from the balance sheet and proceeds from the sale and disposition of mostly liquid assets. As of Feb. 29, 2004, the remaining assets in the collateral pool consisted primarily of mezzanine debt, private equities, CDO investments and one leveraged loan. Additionally, the seven largest assets represented more than 78% of the total market value of the portfolio. Two CDO investments were the second and third largest exposures, comprising approximately 31% of the total market value of the portfolio. At this time there is limited liquid collateral supporting the class B, C and D notes. While Trimaran has been successful at opportunistically liquidating positions to pay down the revolving credit facility and the class A notes, the limited liquidity of the remaining portfolio assets may create additional challenges in monetizing the portfolio. Based on the illiquid nature of the majority of the remaining portfolio investments supporting the class B, C and D notes, Fitch has downgraded the rated liabilities of Caravelle Investment Fund, L.L.C. CHECKERED FLAG: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Checkered Flag Equipment Sales and Transport, Inc. t/a Checkered Flag Transport P.O. Box 436 Thornburg, Virginia 22565 Bankruptcy Case No.: 04-32343 Type of Business: The Debtor offers local and long-distance transport. See http://www.checkeredflagequip.com/ Chapter 11 Petition Date: March 10, 2004 Court: Eastern District of Virginia (Richmond) Judge: Douglas O. Tice Jr. Debtor's Counsels: David K. Spiro, Esq. Neil E. McCullagh, Esq. Cantor Arkema, P.C. P.O. Box 561 Richmond, VA 23218-0561 Tel: 804-644-1400 Fax: 804-225-8706 Estimated Assets: $1 Million to $10 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Terex Construction Americas Lawsuit $5,582,560 12229 Collections Center Dr. Chicago, IL 60693 BB&T Lawsuit $1,400,000 P.O. Box 31273 Charlotte, NC 28231 Wachovia Trade debt $898,766 P.O. Box 740502 Atlanta, GA 30374 McCLure Equipment Sales Lawsuit $600,000 c/o Gary A. Kalaugh, Esq. kalbaugh Pfund & Messersmith 901 Moorefield Park Dr., Ste 200 Richmond, VA 23236 Scozak Construction Lawsuit $600,000 Equipment Corp. c/o William R. Baldwin, III, Esq. Cherry, Seymour & Hundley PC 707 East Main St., Ste 475 Richmond, VA 23219 De Lage Landen Trade debt $538,619 P.O. Box 41601 Philadelphia, PA 19101 First Market Bank Trade debt $412,431 P.O. Box 3637 Durham, NC 27702 John Deere Credit Trade debt $380,492 P.O. Box 4450 Carol Stream, IL 60197 Ammonn America Trade debt $380,000 13515 Branch View Lane Dallas, TX 75234 Udelson Brothers Lawsuit $355,146 24700 Chagrin Blvd, Ste 200 Beachwood, OH 44122 Thomas Equipment Trade debt $280,000 P.O. Box 336 Mars Hill, ME 04758 Southern Financial Trade debt $110,680 Trader Publications Trade debt $9,170 W. Drescher & Associates Legal fees $7,920 Lamar Companies Trade debt $6,937 Lee Publications Trade debt $6,892 Construction Equipment Guide Trade debt $6,035 Keen Transport Trade debt $4,658 Machinery Trader Trade debt $3,696 Aimes, John Legal fees $3,276 CHESAPEAKE ENERGY: Prices $255MM Conv. Preferred Stock Offering --------------------------------------------------------------- Chesapeake Energy Corporation (NYSE: CHK) has priced a private offering of $255 million of a series of 4.125% cumulative convertible preferred stock at its liquidation preference of $1,000 per share. Chesapeake expects the issuance and delivery of the shares to occur on March 30, 2004. Chesapeake has also granted the initial purchasers a 30-day option to purchase up to $38.25 million in additional shares of the preferred stock. Each share of preferred stock will be subject to an annual cumulative cash dividend of $41.25 payable quarterly when, as and if declared by the company, on the fifteenth day of each March, June, September, and December to holders of record as of the first day of the payment month, commencing on June 15, 2004. The preferred stock will not be redeemable. Each preferred share will be convertible at the option of the holder into 60.0555 shares of Chesapeake common stock based on an initial conversion price of $16.65 per common share, subject to customary adjustments. A holder may only convert the preferred stock, however, under the following circumstances: (i) during any fiscal quarter after June 30, 2004 and only during such quarter, the closing price of Chesapeake common stock for at least 20 days in a period of 30 consecutive trading days ending on the last trading day of the fiscal quarter exceeds 130% of the applicable conversion price on such trading day (or initially $21.65 per share); (ii) during the five business day period after any five consecutive trading day period in which the trading price per share of the preferred stock for each day of that period was less than 98% of the product of the closing sale price of Chesapeake common stock and the applicable conversion rate on each such day; or (iii) upon the occurrence of specified corporate transactions involving mergers, consolidations, sale of substantially all of the assets or change of control. The preferred shares will be subject to mandatory conversion into Chesapeake common stock after March 15, 2009, at the option of the Company, if the closing price of Chesapeake's common stock exceeds 130% of the conversion price for 20 trading days during any consecutive 30 trading day period. Chesapeake intends to use the net proceeds of the offering to repay debt under its bank credit facility and to fund approximately $100 million of pending acquisitions of oil and gas properties, or in the event the acquisitions are not consummated, excess proceeds will be used for general corporate purposes including possible future acquisitions. The chief executive officer and chief operating officer of Chesapeake intend to purchase at the offering price an aggregate of $20 million in additional shares of the preferred stock directly from the Company in a concurrent private offering. The preferred stock being sold by Chesapeake and the underlying common stock issuable on its conversion will not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements of the Securities Act and applicable state laws. The preferred stock will be eligible for trading under Rule 144A. Purchasers of the preferred stock are being granted rights to register resales of the preferred stock and underlying common stock under the Securities Act. This announcement shall not constitute an offer to sell or a solicitation of an offer to buy the notes or the preferred stock. Chesapeake Energy Corporation (Fitch, BB- Senior Note and B Preferred Share Ratings, Positive) is one of the five largest independent U.S. natural gas producers. Headquartered in Oklahoma City, the company's operations are focused on exploratory and developmental drilling and producing property acquisitions in the Mid-Continent, Permian Basin, South Texas and Texas Gulf Coast regions of the United States. The company's Internet address is http://www.chkenergy.com/ CKE RESTAURANTS: State Street Reports 5.06% Common Stock Ownership ------------------------------------------------------------------ State Street Research & Management Company owns 2,917,300 shares of the common stock of CKE Restaurants, Inc., representing 5.06% of the outstanding common stock of the Company. State Street Research & Management holds sole voting and dispositive powers over the entire amount of stock held. Actually none of the shares listed above are owned of record by State Street Research & Management Company. The shares listed above are owned of record by certain mutual funds and/or institutional accounts managed by State Street Research as investment advisor. State Street Research disclaims any beneficial interest in such shares. CKE Restaurants, Inc. (S&P, B Corporate Credit Rating, Negative), through its subsidiaries, franchisees and licensees, operates over 3,200 restaurants, including 1,000 Carl's Jr. restaurants, 2,181 Hardee's restaurants, and 97 La Salsa Fresh Mexican Grills in 44 states and in 14 countries. For more information, go to http://www.ckr.com/ CLASSICA GROUP: Files Voluntary Chapter 7 Petition in New Jersey ---------------------------------------------------------------- The Classica Group, Inc. (Pink Sheets:TCGI) announced that it has filed a voluntary petition for liquidation under Chapter VII of the United States Bankruptcy Code in the United States Bankruptcy Court of the District of New Jersey. The Company has taken this action because it has been unable to generate sufficient revenue or to raise sufficient working capital to sustain its operations. Immediately upon the filing of the petition all of the Officers and Directors of the Company resigned their respective positions. A Trustee will be appointed by the Court to liquidate the assets of the Company and oversee the windup of its affairs. CLASSICA GROUP: Voluntary Chapter 7 Case Summary ------------------------------------------------ Debtor: The Classica Group, Inc. 2400 South Main Street, Suite 12 Sayreville, New Jersey 08872 Bankruptcy Case No.: 04-19875 Type of Business: Manufacturing and sales of microwave heat processing systems. Chapter 7 Petition Date: March 23, 2004 Court: District of New Jersey (Newark) Judge: Donald H. Steckroth Debtor's Counsel: David L. Bruck, Esq. Greenbaum, Rowe, Smith, et al. P.O. Box 5600 Woodbridge, NJ 07095 Tel: 732-549-5600 Fax: 732-549-1881 Total Assets: $1,384,556 Total Debts: $479,929 COAST DENTAL: Intends to Deregister Common Stock with SEC --------------------------------------------------------- Coast Dental Services, Inc. (Nasdaq:CDEN), announced that the independent members of the Company's Board of Directors have approved the filing of a Form 15 with the Securities and Exchange Commission to deregister its common stock and suspend its reporting obligations under the Securities Exchange Act of 1934. The Company intends to file the Form 15 with the SEC on April 7, 2004 to provide additional time for the Company's common stock to be bought or sold on the Nasdaq National Market. Upon the filing of the Form 15 with the SEC, the Company's common stock will be delisted and will no longer trade on the Nasdaq SmallCap Market. The Company expects that the deregistration from the Exchange Act will become effective within 90 days of the filing of the Form 15. The Company filed its annual report on Form 10-K for the year ended December 31, 2003 with the SEC Wednesday. However, the Company's future reporting obligations to file periodic and current reports such as 10-K's, 10-Q's and 8-K's with the SEC will be suspended immediately upon filing of the Form 15. The Company anticipates that after the filing of the Form 15 to deregister and the delisting from the Nasdaq SmallCap Market that its common stock will be quoted on the "Pink Sheets" -- http://www.pinksheets.com/-- an electronic quotation service for over-the-counter securities, but only to the extent that market makers decide to make a market in the Company's shares. While the Company currently intends to provide market makers information necessary for the Company's shares to be quoted on the "Pink Sheets," there can be no assurance that market makers will quote the Company's shares or that an active trading market will ever develop on the "Pink Sheets." The Company's stock has been very thinly traded on the Nasdaq SmallCap Market. There is generally less liquidity and greater stock price volatility on the "Pink Sheets" as compared to the Nasdaq SmallCap Market. The independent members of the Company's Board of Directors carefully evaluated whether remaining a public company warranted the significant costs and expenses and loss of operational productivity related to the regulatory burdens of being a public company as well as the potential benefits of being a public company. The Company's out-of-pocket costs in 2003 associated with being a public company were approximately $725,000 and such costs were expected to continue to increase. These costs do not include the salaries and time the Company's employees were required to devote to public company reporting and compliance obligations. The independent members of the Board of Directors unanimously determined that the disadvantages of being a public company significantly outweighed the potential advantages of remaining a public company and concluded that it was in the best interest of the Company and its shareholders to deregister and become a private company. Upon deregistration, the Company will then be able to focus on and devote its time to improving its operations, implementing cost reduction and cost containment initiatives, attaining profitability and meeting its long term business goals. In January of this year, the Company implemented a comprehensive cost reduction and cost containment program. The Company realized savings in Dental Center labor costs in February 2004 and anticipates that several of the cost containment and cost reduction initiatives will begin to yield significant savings in the near-term. The Company believes that it can reduce its cost structure and achieve profitability in 2004. However, there can be no assurance that the cost reduction and cost containment initiatives will be successful or that the Company will achieve or sustain profitability. The Company has not been profitable since 1999. About Coast Dental Coast Dental Services, Inc. is a leading provider of comprehensive business services and support to general dentistry practices. Headquartered in Tampa, Florida, the Company currently provides comprehensive business services and support to 108 dental centers located in Florida, Georgia, Tennessee and Virginia. Coast Dental's website address is http://www.coastdental.com/ * * * In its latest Form 10-K filed with the Securities and Exchange Commission, Coast Dental Services reports: "The Company has incurred losses in each of the last four years. The Company initiated certain cost reduction efforts in the second half of 2003 and has significantly expanded this to a comprehensive cost reduction and cost containment program in early 2004. The Company's cost reduction and cost containment program include initiatives to reduce labor, occupancy, advertising, training and development and corporate general and administrative costs. As a result of these cost reduction and cost containment initiatives, the Company is optimistic it can reduce its cost structure and achieve profitability in 2004. However, there can be no assurance that these cost reduction and cost containment programs will be effective and the Company will be profitable in 2004. In the event we are unable to achieve profitability and generate the expected cash flows, or fails to have continued access to our $2 million line of credit facility due to any financial covenant non-compliance or other events of default, we could face liquidity and working capital constraints, which could adversely impact future operations and growth." DIALPAD COMMS: Reaches Profitability in Fourth Quarter 2003 ----------------------------------------------------------- Dialpad Communications(R), Inc., a leading global provider of Voice over Internet Protocol (VoIP) services, announced that it reached profitability in the fourth quarter of 2003 and was EBITDA positive for the six month period ending December 31, 2003. Dialpad anticipated attaining profitability by December 2004. These milestones were reached a full year ahead of schedule. Dialpad pioneered consumer-friendly Internet telephony and offered free calling to the United States when founded in 1999. The company's customer base quickly grew to over 14 million. The erosion of the online advertising market in early 2001 forced the company to file for Chapter 11 protection later that year. Current Chief Executive Officer Craig Walker was appointed to head the restructuring. The business was transformed from a free to a pay service, and the company set a three-year revival plan with a goal to become profitable by December 2004. Dramatically increased efficiencies and a constant focus on quality improvements have allowed for a strong growth of the company's paying customer base, leading to profitability a year earlier than planned. "These strong results validate what we've always believed: VoIP and profit are compatible," said Dialpad's CEO, Craig Walker. "At the time of the restructuring there was considerable skepticism about our plans since none of our competitors had been able to turn a profit, and to date they still haven't. In two short years we've been able to successfully transition the business to a pay model and to achieve our goal of profitability a full year earlier than planned. It is a first in the Industry." Dialpad has become a leader in the worldwide retail VoIP industry by focusing on increasing the quality of its service. The company's partnerships with multiple Tier 1 carriers and its real- time dynamic routing capabilities offer a powerful combination of reliability and cost savings to its users, while its award-winning customer support has set a new standard for the industry. In recognition of its efforts and its commitment to end users, Dialpad was chosen by CNET in June 2003 as the best PC-to-Phone service. "Dialpad benefits from a global brand based on affordability, quality, and ease of use," said Vincent Paquet, Vice President of Business Development and Marketing at Dialpad. "As we sell to consumers in over 200 countries, we consider the quality of our services to remain our best asset for attracting and retaining our customers, whether directly or through our numerous partners across the world. We doubled our call volume over the past two years and we're on course to double it again within the next twelve months. One of the main benefits of Internet Telephony is that our business model is very scalable." About Dialpad Communications Dialpad Communications, Inc. is a leading provider of high-quality Internet calling services, generating over 300 million calls in more than 200 countries worldwide. Dialpad's patent-pending technology has made it the Internet's best phone call, with a large portfolio of services designed to bring the benefits of VoIP to all consumers around the world. The company is based in Milpitas, CA and can be reached at (408) 635-1000 or at http://www.dialpad.com/ DII INDUSTRIES: ACE Companies Wants to Proceed with NY Action ------------------------------------------------------------- There are seven coverage actions pending throughout the country that involve different policies under which the DII Industries Debtors will claim coverage for their Plan. On October 24, 2003, in anticipation of the bankruptcy filing by the Debtors, ACE Companies commenced an omnibus action in the New York Supreme Court, which is designated to adjudicate, in one comprehensive proceeding, all of the coverage issues raised by the Debtors' asbestos and silica settlements and bankruptcy filing. Six of these coverage actions are: (1) Harbison Walker Refractories Co. v. Dresser Indus. Inc., et al, Case No. 02-2151 (Bankr. W.D. Pa.); (2) Dresser Indus. Inc. v. Underwriters at Lloyd's London, et al., Case No. 03-1356 (Bankr. W.D. Pa.); (3) Dresser Indus. Inc. v. Underwriters at Lloyd's London, et al., Case No. 01-07414-K (Dallas County, TX, 192 Judicial District); (4) Kellogg Brown & Root, Inc. v. AIU Ins. Co., et al., Case No. 2003-03653 (Harris County, TX, 111 Judicial District); (5) DII Indus. LLC v. Federal-Mogul Prods. Inc., et al., Case No. 01-09018 (Bankr. D. Del.); and (6) Sanchez, et al. v. Cooper Indus., et al., Case No. MDL-875 (E.D. Pa.) (D.N.M., No. 97 Civ. 1569 BB/DJS) (collectively, the "Coverage Actions"). The New York Action seeks a declaration of the rights and obligations of the Debtors and their insurers with respect to the policies under which the Debtors claim coverage for their $4,300,000,000 settlement of present and future asbestos and silica claims. An omnibus action is necessary for full adjudication of the coverage issues because of the six prior coverage actions: * None involves all the insurers that the Debtors seek to force to fund their proposed global settlement. * None involves all of the policies under which the Debtors seek coverage. * None involves all of the underlying claims for which the Debtors seek coverage. * None addresses the reasonableness and appropriateness of the $4,300,000,000 settlement amount. * None involves the question of allocation of the proposed settlement among the different lines or among the different insurance companies within each line. * None has yet made a determination as to any of the pending coverage issues. All of the actions are in their early stages. The Debtors previously obtained a Court Order lifting the automatic stay with respect to all pending litigation other than the New York Action. Thus, ACE asserts that while the Debtors are prepared to litigate the coverage issues in forums of their choosing around the country, and to continue litigating every other non-asbestos and non-silica case in which they have been sued, they seek to use the automatic stay selectively to prevent the litigation of coverage issues in New York. The selective use of the automatic stay is without support and contrary to the law. ACE points out that it is not appropriate to use the stay selectively to achieve a stay of one state court action in deference to another rather than filing an appropriate motion in the state court for such a stay. ACE and other insurers believe a single forum is most efficient because it would eliminate the risk of inconsistent judgments and provide the most prompt resolution of all coverage issues. ACE assures the Court that the Debtors will suffer no prejudice if the automatic stay is lifted as to all the pending state court insurance coverage actions. Given the nature of their Chapter 11 cases, the Debtors admitted solvency, thus, no stay of litigation is necessary. ACE believes that this should hold true for the coverage cases. The Debtors cannot seriously contend that adjudication of the coverage issues now prejudices them in any way. They are affirmatively seeking to adjudicate those issues in the other six coverage actions pending throughout the country. Therefore, the Debtors cannot, in good faith, contend that the New York Action, which seeks only a declaration of liability, somehow prejudices it while adjudication of the coverage issues in the other actions does not. Furthermore, permitting the New York Action to proceed would promote judicial economy. ACE explains that it is a comprehensive action designated to include all insurance questions, including the reasonableness of the $4,300,000,000 settlement, as well as the coverage issues raised in the other related pending actions, in a single forum. The New York Action offers the best and most comprehensive forum for adjudicating the various complicated coverage claims under the policies at issue and offers the best forum for avoiding inconsistent judgments and piecemeal litigation. At ACE's request, the Court lifts the automatic stay for ACE to continue with the New York Insurance Coverage Action. 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) DOMAN IND.: Continuing Talks with Noteholders to Develop a Plan --------------------------------------------------------------- Doman Industries Limited continues to work with certain unsecured noteholders in developing a restructuring plan for presentation to Doman's unsecured creditors in connection with proceedings under the Companies' Creditors Arrangement Act. As the Company had previously announced on February 27, 2004, it has been advised by counsel to the Unsecured Noteholder Group that they oppose the proposal presented by International Forest Products Limited to the Company on February 26, 2004. The Company understands that Interfor is working on revising its proposal. The Company continues to work with Interfor in connection with Interfor's due diligence efforts in that regard. The Company also reports that interest has been shown by a number of other potential lenders/investors to develop other potential proposals for consideration by the Company. The Company is continuing to review all proposals to determine which is in the best interest of all stakeholders. Doman is an integrated Canadian forest products company and the second largest coastal woodland operator in British Columbia. Principal activities include timber harvesting, reforestation, sawmilling logs into lumber and wood chips, value-added remanufacturing and producing dissolving sulphite pulp and NBSK pulp. All the Company's operations, employees and corporate facilities are located in the coastal region of British Columbia and its products are sold in 30 countries worldwide. DURANGO GEORGIA: Court Fixes Confirmation Hearing Date for April 7 ------------------------------------------------------------------ The U.S. Bankruptcy Court for the Southern District of Georgia has approved the Amended Disclosure Statement for the Joint Amended Liquidating Plan prepared by Durango Georgia Paper Company, Durango Georgia Converting Corporation, Durango Georgia Converting, LLC and the Official Committee of Unsecured Creditors in the Debtors' cases. 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 Honorable Judge Lamar W. Davis, Jr., will convene a hearing on April 5, 2004, at 10:00 a.m., to consider the merits of the Company's plan and whether the plan should be confirmed. Durango Georgia is a nationally recognized bleached board and kraft paper producer in the U.S. offering coast to coast and international service. The Debtor filed for Chapter 11 relief on November 20, 2002 (Bankr. S.D. Ga. Case No. 02-21669). W. Brooks Stillwell, Esq., Robert K. Imperial, Esq., at Hunter, McClean, Exley & Dunn, PC and Michael M. Beal, Esq., Robin C. Stanton, Esq., and Elizabeth J. Philp, Esq., at McNair Law Firm, PA represent the Debtors in their restructuring efforts. DYNEGY INC: President & CEO Bruce Williamson Takes Chairman's Post ------------------------------------------------------------------ Dynegy Inc. (NYSE:DYN) announced that its Board of Directors has decided to elect President, Chief Executive Officer and Director Bruce A. Williamson as Chairman of the Board. Mr. Williamson will replace Dynegy's non-executive Chairman of the Board, Daniel L. Dienstbier, who has announced his retirement and will not seek re- election at the Annual Meeting of Shareholders on May 20. Consistent with Dynegy's pursuit of best practices in corporate governance and its commitment to ensure that the Board operates independently of management, the Board of Directors has also decided to name Dynegy Director Patricia A. Hammick as Lead Director, concurrent with Mr. Williamson's election to the Chairman position. The Board intends to name Mr. Williamson and Ms. Hammick to these positions following the annual meeting, should the company's shareholders re-elect them to serve as Directors for another year. Mr. Williamson, 44, has served as President and Chief Executive Officer and as a Director of Dynegy since October 2002. In the broader role of Chairman, Mr. Williamson will provide leadership to the Board and its committees. "The Board's unanimous decision to elect Bruce to this important position reflects our confidence in his abilities and the strength of our corporate governance structure," Mr. Dienstbier said. "Under Bruce's leadership, Dynegy has made outstanding progress in our self-restructuring plan, established a track record of delivering results, improved its capital structure and restored confidence and credibility with investors and the public. He will bring to the Chairman role the highest level of integrity, proven leadership capabilities and a strong commitment to create value for our investors." Ms. Hammick, 57, was elected to the Board in April 2003. She has more than 25 years of energy industry experience, including management positions with Gulf Oil Exploration and Production, the National Gas Supply Association and Columbia Energy Group. In the new role of Lead Director, Ms. Hammick will preside over the regular executive sessions of Dynegy's independent Directors. She will also provide advice and counsel to the Chairman, work with the Chairman in developing Board meeting agendas and act as a liaison between the Board and the Chairman. "Pat is a strong leader, a valuable asset to the Board and an instrumental contributor in the areas of compliance and corporate governance. Her extensive industry background also makes her the right choice for this role," Mr. Dienstbier said. "The Board will benefit from Pat's continued guidance and leadership." Mr. Dienstbier, 63, has served as non-executive Chairman of the Board since October 2002 and as a Dynegy Director since 1995. He also served as interim Chief Executive Officer of Dynegy from May 2002 until Mr. Williamson's election in October 2002, directing the initial phase of Dynegy's self-restructuring plan. Mr. Dienstbier has planned his retirement since last year to provide for a less rigorous schedule and more time to devote to his family and a variety of interests. "Dan provided invaluable counsel to our Board and the management team throughout the years and helped guide our company through some challenging times," Mr. Williamson said. "Dan served the company with the highest standards of ethics and professionalism, and Dynegy is fortunate to have benefited from his experience and expertise for nearly a decade." Dynegy Inc. (S&P, B Corporate Credit Rating, Negative) provides electricity, natural gas, and natural gas liquids to customers throughout the United States. Through its energy businesses, the company owns and operates a diverse portfolio of assets, including power plants totaling more than 12,700 megawatts of net generating capacity, gas processing plants that process approximately two billion cubic feet of natural gas per day and nearly 38,000 miles of electric transmission and distribution lines. ECF INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------ Debtor: ECF, Inc. P.O. Box 11090 McLean, Virginia 22102 Bankruptcy Case No.: 04-11223 Chapter 11 Petition Date: March 19, 2004 Court: Eastern District of Virginia (Alexandria) Judge: Stephen S. Mitchell Debtor's Counsel: Richard J. Stahl, Esq. Stahl, Forest & Zelloe, P.C. 11350 Random Hills, Road, Suite 700 Fairfax, VA 22030 Tel: 703-691-4940 Fax: 703-691-4942 Estimated Assets: $0 to $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Gordon Feinblant $129,574 Semmes, Bowen & Semmes $123,408 Lytek Communications, LLC $108,709 Esguerra & Esguerra $78,951 Accu-Tech Corporation $66,067 GN Nettest Green $55,394 Wachovia Bank $51,000 Autodesk $50,000 Hill Management Services, Inc. $43,697 Miller, Mary $40,985 Residential Management, Inc. $40,333 Hiru Padma-Kumara $36,923 Nicole S. McCurnin $35,807 Catherine Culotta $31,154 Murdock Atrium, LP $30,333 Lloyd G. Manning $24,231 Vittoria M. Whiteley $20,354 Alexander E. Colic $20,192 Farhad Sharifzadeh-Moghaddam $19,038 Penske Truck Leasing Co. LLP $16,835 EL PASO: Raises $352MM Cash from Oil & Gas Canada Sale to BG Group ------------------------------------------------------------------ El Paso Corporation (NYSE: EP) has closed the previously announced sale of El Paso Oil & Gas Canada, Inc. to BG Group for approximately $352 million in cash. This sale supports El Paso's recently announced long-range plan to reduce the company's debt, net of cash, to approximately $15 billion by year-end 2005. To date, the company has announced or closed approximately $2.9 billion of the $3.3 to $3.9 billion of assets sales targeted under the plan. An asset sales tracker that shows all of the announced and completed assets sales is posted at http://www.elpaso.com/in the Investor Resources section. El Paso Corporation's purpose is to provide natural gas and related energy products in a safe, efficient, dependable manner. The company owns North America's largest natural gas pipeline system and one of North America's largest independent natural gas producers. For more information, visit http://www.elpaso.com/ * * * As previously reported, Standard & Poor's Ratings Services lowered its corporate credit rating on natural gas pipeline and production company El Paso Corp. to 'B-' from 'B' to reflect a larger-than- expected write-down of the company's oil and natural gas reserves. The outlook remains negative. EL PASO CORP: BG Group Completes Acquisition of Canadian Unit ------------------------------------------------------------- BG Group completed the purchase of El Paso Oil and Gas Canada, Inc. from El Paso Corporation for a cash consideration of US$ 345.6 million. The announcement that BG Group had agreed the purchase was made on 16 February 2004. The assets held by the acquired company, which will now be called BG Canada Exploration and Production Inc., include 630,000 acres of net undeveloped oil and gas acreage, which BG believes hold considerable exploration potential. The company also holds producing assets, concentrated in four core areas in Alberta and British Columbia. The properties are located in the Western Canadian Sedimentary Basin, with the 630,000 acres of net undeveloped land representing 91% of the total land position. The Ryder Scott evaluated proved reserves of 132 billion cubic feet equivalent are concentrated in the four core areas of Bubbles and Ojay/Sundown (British Columbia) and Waterton and Copton (Alberta). BG has four business segments - Exploration & Production, Liquefied Natural Gas, Transmission & Distribution and Power Generation. Active in some 20 countries on five continents, its core geographical areas are the UK, Kazakhstan, Egypt, Trinidad & Tobago, South America and India. * * * As previously reported, Standard & Poor's Ratings Services lowered its corporate credit rating on natural gas pipeline and production company El Paso Corp. to 'B-' from 'B' to reflect a larger-than- expected write-down of the company's oil and natural gas reserves. The outlook remains negative. EL PASO: Obtains Waivers Relating to Revolving Credit Facility -------------------------------------------------------------- El Paso Corporation (NYSE: EP) announced that it has now received all subsequent waivers relating to its Revolving Credit Facility and other financing transactions that are required to address potential issues related to its recently announced reserve revisions. El Paso had previously announced that it had received waivers on its Revolving Credit Facility and two other transactions, but that it required waivers on other transactions within thirty days. These waivers address the expected delay in the company's Form 10-K filings and the impact of a potential restatement of previously reported financial results. El Paso Corporation's purpose is to provide natural gas and related energy products in a safe, efficient, dependable manner. The company owns North America's largest natural gas pipeline system and one of North America's largest independent natural gas producers. For more information, visit http://www.elpaso.com/ * * * As previously reported, Standard & Poor's Ratings Services lowered its corporate credit rating on natural gas pipeline and production company El Paso Corp. to 'B-' from 'B' to reflect a larger-than- expected write-down of the company's oil and natural gas reserves. The outlook remains negative. EL POLLO LOCO: S&P Rates Senior Unsecured Discount Notes at CCC+ ---------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC+' rating to quick-service restaurant operator EPL Intermediate Inc.'s (a holding company for El Pollo Loco Inc.) proposed $40 million senior unsecured discount note offering due 2010. The notes will be issued under Rule 144A with registration rights, and they will be structurally subordinated to the debt at the operating company. Proceeds will be used to pay a dividend to shareholders. At the same time, Standard & Poor's lowered its ratings on El Pollo Loco Inc. The corporate credit rating was lowered to 'B' from 'B+'. The outlook is stable. The rating action is based on the company's increased debt leverage. The new notes will add $40 million of incremental debt and will continue to accrete until 2009 when they become cash pay. "The ratings reflect El Pollo Loco's participation in the highly competitive quick-service sector of the restaurant industry, its small size and regional concentration, weak cash flow protection measures, and a highly leveraged capital structure," said Standard & Poor's credit analyst Robert Lichtenstein. "These risks are partially offset by the company's established brand in California, especially among the Hispanic population." El Pollo Loco is a small player in the highly competitive quick- service chicken sector of the restaurant industry. The company only maintained a 4% national market share, compared with 51% for KFC, 15% for Chick-fil-A, and 13% for Popeye's. In Los Angeles, the company's primary market, El Pollo Loco competes more effectively, with about a 35% market share. Still, many of El Pollo Loco's competitors have substantially greater brand recognition than the company, as well as greater financial, marketing, and operating resources. A large part of El Pollo Loco's success is its established brand among the Hispanic population. Approximately 50% of its customers are Hispanic. The Hispanic population in the Los Angeles area has been the fastest-growing segment of the total population. Nevertheless, the company is regionally concentrated, with 77% of its restaurants in the Los Angeles area. Changes in the demographic trends or economic conditions in the area could have a material adverse effect on El Pollo Loco's business. EMARCADERO AIRCRAFT: S&P Lowers Rating on Class A Notes to BB ------------------------------------------------------------- Standard & Poor's Ratings Services lowered its ratings on Embarcadero Aircraft Securitization Trust's (EAST) class A-1 and A-2 floating-rate notes to 'BB' from 'BBB' and removed them from CreditWatch, where they were placed March 15, 2004. The outlook on the class A-1 and A-2 notes is negative, reflecting the current poor economic and operating environment facing the aviation industry. The 'CCC' rating on the class C floating-rate notes remains on CreditWatch with negative implications, where it was placed March 15, 2004. The rating actions reflect the sustained decline in lease revenues, increase in aircraft-related expenses, and greater reliance on the cash reserves to meet timely note payments. In addition, the value of EAST's aging aircraft fleet has fallen significantly since the transaction closed on Aug. 17, 2000, resulting in negative implications for future lease revenues and residual realizations. Over the past 2.5 years, EAST's average monthly lease revenues have deteriorated by at least 40% when compared with amounts received in the 12 months before Sept. 11, 2001. During the same period, maintenance and reconfigured costs have been higher than expected for repossessed or returned aircraft. Although the number of leases requiring maintenance payments has improved, the amount of aircraft-related expenses on a fleet basis is still in excess of the contracted maintenance collections. As a result of the depressed lease revenue and increased aircraft-related expenses, net collections available to service the rated notes have been under tremendous stress. Note amortizations have been behind the target minimum principal schedules since September 2002 for the class A notes and September 2003 for the class C notes. Currently, net collections are only sufficient to make distributions on the class A notes. Unless the growing gap between the class A minimum principal balance and class A outstanding balance is reduced to zero, the EAST subordinated notes will not receive any distributions from net collections. As of March 15, 2004 the class A gap is approximately $53.6 million. Since the beginning of 2002, the EAST cash reserves have been used to make timely payments of note interest. The class A reserve has been drawn on and replenished from time to time, whereas the class C reserve has been consistently drawn on each month. Without any near-term prospect for the transaction's net cash flows to improve, the cash reserves available to cover both the class A and class C notes will likely continue to diminish. As of March 15, 2004, the current available cash reserve amounts as a percentage of initial available to the class A and C notes are 95.5% and 29.4%, respectively. Based on current projections, the class C reserve will be fully depleted in 12-13 months. Standard & Poor's will continue to closely monitor this transaction and the CreditWatch placement on the class C notes. ENERGY PLUS: Files Notice of Intention Under BIA in Canada ---------------------------------------------------------- EP 2000 Conservation Inc. (TSX-V: EP) announced that Energy Plus 2000 Inc., its wholly-owned subsidiary, filed a Notice of Intention to file a Proposal in accordance with the Bankruptcy and Insolvency Act, effective March 11, 2004. This measure is intended to address certain financial issues facing Energy Plus 2000 Inc. EP 2000 Conservation Inc. is listed through the facilities of the TSX Venture Exchange, Tier 2. ENRON: San Juan Gas Gets Nod to Assume & Assign Software Licenses ----------------------------------------------------------------- San Juan Gas Company, Inc., a debtor-affiliate of Enron Corporation, sought and obtained the Court's authority, pursuant to Section 365 of the Bankruptcy Code and Rule 6006 of the Federal Rules of Bankruptcy Procedure, to assume and assign 92 Software Licenses to SJG Acquisition Corporation as required pursuant to the terms of their Purchase Agreement. Martin A. Sosland, Esq., at Weil, Gotshal & Manges LLP, in New York, recalls that on July 10, 2003, the Court authorized and approved the Purchase and Sale Agreement between San Juan Gas and SJG Acquisition. In connection with the Purchase Agreement, San Juan Gas has determined, in the exercise of its business judgment, to assign to SJG Acquisition the Software Licenses applicable to the computers and four servers being transferred to SJG Acquisition in connection with the transaction contemplated by the Purchase Agreement. According to Mr. Sosland, San Juan Gas is not in default under any of the Software Licenses. Under the proposed assumption and assignment of the Licenses, neither San Juan Gas nor SJG Acquisition will pay any cure amounts. (Enron Bankruptcy News, Issue No. 102; Bankruptcy Creditors' Service, Inc., 215/945-7000) THE GAP INC: Fitch Ups Senior Unsecured Debt Rating to BB+ ---------------------------------------------------------- Fitch Ratings has upgraded The Gap, Inc.'s senior unsecured debt rating to 'BB+' from 'BB-'. This action resolves the Rating Watch Positive status, which Fitch placed on Gap's ratings on March 11, 2004. Approximately $2.8 billion of debt is affected by this action. The rating upgrade reflects Gap's improved financial profile and acknowledges the company's turnaround in its comparable store sales performance. There has been a considerable improvement in Gap's credit profile with the significant slowdown in store expansion, working capital control and debt reduction. Profitability has also improved as Gap has better executed its merchandising strategy and minimized markdowns despite the challenges of an intensely competitive retail environment. For the month of February, Gap reported comparable store sales were up 12% - the company's 17th month of consecutive same store sales growth. For the last five months, since October 2003 when results began comparing to the previous year's positive results, Gap has sustained positive same store sales growth (ranging from 1%-12%, with the average about 5%). The merchandise in the stores has returned to Gap's core competencies - basics, with some trend and emerging trend - and consumers appear to be responding. While it is still relatively early in the turnaround, Fitch expects that Gap will continue to be conservative in both its product offerings and financial strategies. Gap's operating performance continues to improve, though profitability remains below levels generated in the late 1990s. In addition to a growing sales base - profitability has increased due to improved gross margin. Gross margin was up almost 400 bps over the prior year - one contributing factor to an increasing EBITDA margin of 16% versus 12.4% the prior year. Continued gross margin improvement is anticipated with further improvement in markdown strategy, brand differentiation and store optimization. Fitch believes Gap will continue to selectively close stores and expects that retail square footage should be flat in 2004, compared to down 2% in 2003. While Gap has given guidance of $500 million of capital spending in 2004 for some new stores, remodels and IT - this level of spending is significantly less than historical levels. As of Jan. 31, 2004, Gap's unrestricted cash on hand totaled $3.3 billion and restricted cash (to support letters of credit) totaled $1.35 billion. This compares to a debt burden totaling $2.8 billion at Jan. 31, 2004. In addition, Gap's $750 million secured revolving credit facility remains undrawn. Because it is early in its turnaround, Fitch expects Gap to maintain a high unrestricted cash balance in order to self fund seasonal working capital needs, capital expenditures as well as provide for debt repayment. While cash is fungible and there are few restrictions in its uses, Fitch believes the high cash balance provides Gap a sizeable cushion. In this competitive environment, significant liquidity provides for potential periods of economic weakness and merchandising missteps. Over the past year Gap's credit profile has improved considerably. Total adjusted debt (includes 8 times rent expense)/EBITDAR for the fiscal year ended Jan. 31, 2004 was 2.9 times (x) versus 4.0x the prior year and EBITDAR coverage of interest and rents was 3.0x versus 2.0x. The Gap has been selectively repurchasing debt on the open market and has stated that debt reduction is the company's first priority use of cash, although a bank covenant limits debt reduction to $1 billion through June 2006. As of Jan. 31, 2004, Gap, operating under its Gap, Old Navy and Banana Republic brands, had 3,022 store locations amounting to 36.5 million square feet of retail space. Gap US operated 1,389 stores, Gap International 358 stores, Banana Republic (including Canada) 435 and Old Navy (including Canada) 840 stores. GLOBAL FRANCHISE: Fitch Affirms Junk Rating on Class C Notes ------------------------------------------------------------ Fitch Ratings downgrades Global Franchise Trust 1998-1 class A-2 to 'BBB' from 'A', class A-3 to 'BB' from 'A-' and class B to 'B' from 'BB'. Class C is affirmed at 'CCC'. The downgrades are the result of the expected losses on the defaulted loans in the pool most notably the $25 million Horizon/Calvane exposure. Horizon Food Services filed to bankruptcy in July of 2003 and its plan of reorganization was approved in December. An appraisal on the properties has valued the collateral at $14.7 million. The loan payments were reduced proportionally and all payments will be applied to the principal balance, there was no write-down of principal and reduced payments will extend the amortization schedule of loan by approximately five years, beyond the legal final maturity of the trust. Fitch analysis assumed several scenarios some of which assumed the Horizon loan performed until the legal final maturity of the trust and others assumed that the loan defaulted a second time and was ultimately liquidated at a fraction of updated collateral value. Classes A-3, B, C and D have not received interest payments for the past three months as the servicer is recouping the advances made on the loan. The interest shortfalls are expected to continue for 4-6 months. The trust has been generating consistent cash flow and barring additional stress on the pool all shortfalls are expected to be refunded within 6 months of when the advances have been fully recouped. HALSEY ENERGY: Selling Congers, NY Assets as Part of Restructuring ------------------------------------------------------------------ Halsey Drug Co., Inc. (OTC.BB: HDGC) has sold certain non-revenue generating abbreviated new drug applications (ANDAs) and entered into an agreement to sell substantially all of its assets located at its former finished dosage manufacturing facilities in Congers, New York. The divestment of these assets is consistent with the Company's restructuring plan announced on November 6, 2003. In addition to the non-revenue generating ANDAs, the Company has entered into an agreement to divest certain intellectual property, product rights and manufacturing equipment. The total consideration to be paid to the Company for all asset divestments will total approximately $4.5 million. Shareholder approval is necessary to complete the sale of certain intellectual property and product rights and manufacturing equipment. Such approval shall be sought at the next annual meeting of shareholders. Halsey Drug Co., Inc., together with its subsidiaries, is an emerging pharmaceutical technology development company specializing in proprietary active pharmaceutical ingredient manufacturing processes and finished dosage form development. The company's Sept. 30, 2003 balance sheet discloses a net capital deficit of about $39 million. HAVENS STEEL: Asks Court Nod to Hire McDowell Rice as Counsel ------------------------------------------------------------- Havens Steel Company wants permission from the U.S. Bankruptcy Court for the Western District of Missouri, Kansas City Division, to employ McDowell Rice Smith & Buchanan as its bankruptcy counsel. The Debtor states that McDowell Rice has extensive experience in Chapter 11 cases and corporate, litigation, tax, real estate and insolvency matters, is familiar with the business and financial affairs of Debtor, and is qualified to represent its interests. The Debtor anticipates that McDowell Rice will: a. advise Debtor with respect to its powers and duties as a debtor and debtor-in-possession in the continued management and operation of its business and properties; b. attend meetings and negotiate with representatives of creditors and other parties in interest; c. take all necessary action to protect and preserve Debtor's estate including the prosecution of actions on its behalf, the defense of any actions commenced against Debtor or the estate, negotiations concerning litigation in which Debtor may be involved, and objections to claims filed against the estate; d. prepare on behalf of Debtor all motions, applications, answers, orders, reports, and papers necessary to the administration of the estate; e. negotiate and prosecute on Debtor's behalf use of cash collateral, DIP financing, sales of assets, contracts and lease agreements, and all necessary agreements and/or documents; f. formulate, negotiate and seek approval of disclosure statement(s) and plan(s) of reorganization; g. appear before this Court and any appellate courts to protect and advance the interests of Debtor and the estate before such courts; h. address all requirements of the Office of the United States Trustee in this proceeding; and i. perform all other necessary legal services and provide all other necessary legal advice to Debtor in connection with the Chapter 11 case. The hourly rates currently charged by McDowell Rice are: Position Billing Rate -------- ------------ Shareholders $160 - $325 per hour Associates $120 - $135 per hour Paralegals $45 - $90 per hour Headquartered in Kansas City, Missouri, Havens Steel Company -- http://www.havenssteel.com/-- provides design-build services from engineering to fabrication and erection to steel management systems and on-site project management. The company filed for chapter 11 protection on March 18, 2004 (Bankr. W.D. Mo. Case No. 04-41574). Jonathan A. Margolies, Esq., and R. Pete Smith, Esq., at McDowell, Rice, Smith & Buchanan represents the Debtors in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of over $10 million each. IGAMES ENTERTAINMENT: Files Legal Action Against Equitex & Chex --------------------------------------------------------------- iGames Entertainment, Inc. (OTC Bulletin Board: IGME) filed a complaint in the United States District Court for the District of Delaware against Equitex, Inc. and its wholly owned subsidiary, Chex Services, Inc. iGames, Inc., Equitex, Inc. and Chex Services, Inc. were all parties to a stock purchase agreement for the acquisition of Chex Services, Inc. by iGames, Inc. The stock purchase agreement was recently terminated, for cause, by iGames, Inc. because of numerous breaches of the agreement by Equitex, Inc. and Chex Services, Inc. In the federal complaint, iGames asserts that it is entitled to recover significant damages, including all of the transaction costs it incurred while attempting to acquire Chex Services, Inc. and a one million dollar agreed-upon termination fee. The complaint asserts claims for breach of contract, tortious interference with business relations and breach of the covenant of good faith and fair dealing arising from the stock purchase agreement and a related term loan note. Christopher Wolfington, CEO of iGames, stated: "We have filed this complaint because of the actions and inactions of Equitex, Inc. and Chex Services, Inc. As was recently announced, we have presented a new proposal to the independent directors of Equitex, Inc. that we believe offers significant value to its shareholders and will allow us to acquire Chex Services, Inc. without further delay and unnecessary expense. If, however, Equitex, Inc. and Chex Services, Inc. refuse to consider this proposal and continue on their current course of conduct, we will pursue all of our legal and equitable remedies." About iGames Entertainment iGames Entertainment, Inc. provides cash access and financial management systems for the gaming industry, focusing on specialty transactions in the cash access segment of the funds transfer industry through its Money Centers of America, Inc. and Available Money, Inc. subsidiaries. The Company's growth strategy is to develop or acquire innovative gaming products and systems and market these products worldwide. For a complete corporate profile on iGames Entertainment Inc., visit iGames' corporate website at http://www.igamesentertainment.com/ * * * Going Concern Uncertainty In its most recent Form 10-Q filed with the Securities and Exchange Commission, iGames Entertainment reported: "The [Company's] financial statements have been prepared assuming that the Company will continue as a going concern. The Company has a net loss of $940,395 for the six months ended September 30, 2003, an accumulated deficit of $3,808,343 at September 30, 2003, cash used in operations of $576,088 for the six months ended September 30, 2003, and requires additional funds to implement our business plan. These conditions raise substantial doubt about the Company's ability to continue as a going concern. "Management is in the process of implementing its business plan and has begun to generate revenues. Management believes that sales of its Protector and placement of new table games will continue to contribute to its operating cash flows. Additionally, management is actively seeking additional sources of capital, but no assurance can be made that capital will be available on reasonable terms. Management believes the actions it is taking allow the Company to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern." JETBLUE AIRWAYS: S&P Assigns BB+ Rating to 2004-1 Class C Notes --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'AAA' rating to JetBlue Airways Corp.'s (BB-/Stable/--) Class G-1 and G-2 pass- through certificates series 2004-1, and its 'BB+' rating to the Class C pass-through certificates. The Class G-1 certificates ($119.1 million) have a final legal maturity of June 15, 2015; the Class G-2 certificates ($187.9 million) Sept. 15, 2015; and the Class C certificates ($124.0 million) Sept. 15, 2009. "The 'AAA' rating on the Class G-1 and G-2 certificates is based on a guarantee insurance policy provided by MBIA Insurance Corp. (AAA/Stable/--); the 'BB+' rating on the Class C certificates is based on JetBlue's credit and the added protections of overcollateralization and structural features of the certificates," said Standard & Poor's credit analyst Betsy Snyder. The pass-through certificates are aircraft-backed securities whose credit quality benefits from substantial overcollateralization, favorable legal treatment under the U.S. Bankruptcy Code, and dedicated liquidity facilities. New York, N.Y.-based JetBlue, a low-cost airline, has grown substantially while maintaining high, although recently reduced, margins, in the weak airline environment that began in 2000. The certificates are secured by equipment notes issued by JetBlue, financing 13 A320-232 passenger jet aircraft delivered or to be delivered between February 2004 and December 2004. The Airbus A320-200, the only model currently operated by JetBlue, is a popular, modern technology, medium-size narrowbody passenger jet. It is Airbus' most successful model and fully competitive with Boeing's 737 "next generation" series. The newer narrowbody jets (the A320's and next generation 737's) have tended to be more liquid in the secondary market and have kept their values better than have most other aircraft types during the recent industry downturn. This is due to their larger user base and more modest costs to reconfigure them for transfer from one user to another, compared to widebody planes. However, due to the relatively small number of aircraft sale transactions over this period, estimates of resale values are subject to more than the usual uncertainty. Because the G-1 and G-2 certificateholders benefit from a guarantee insurance policy supporting the payment of interest when due and the payment of the outstanding balance on the final legal distribution date, the aircraft collateral coverage serves mainly to enhance recovery prospects for insurer MBIA in the event of a JetBlue default, and to provide coverage for the Class C certificateholders. Standard & Poor's anticipates that the ratings assigned to the G-1 and G-2 certificates would change if, and as the rating of MBIA changes. The rating of the Class C certificates would change if and as the rating of JetBlue changes. LOEWEN GROUP: Asks for Final Decree Closing 13 More Cases --------------------------------------------------------- The Reorganized Loewen Group Debtors ask Judge Walsh to close 13 more cases. Courts have held that a Chapter 11 debtor should be removed from the ongoing supervision of the bankruptcy court once the debtor's estate has been fully administered. By local court rule, a debtor may seek entry of a final decree at any time after the confirmed plan has been substantially consummated, so long as all fees due to the Court Clerk or the United States Trustee have been paid. The Debtors report that these 13 estates have been fully administered: Closing Debtors Case No. --------------- -------- 50th State Funeral Plan, Ltd. 99-1247 Alternative Acquisition, Inc. 99-2098 Blackhawk Garden of Memories, Inc. 99-1319 Blalock-Coleman Funeral Home, Inc. 99-1320 BLH Management, Inc. 99-1323 Care Memorial Society, Inc. 99-1350 Dudley M. Hughes Funeral Home, Inc. 99-1437 Kingston Memorial Gardens, Inc. 99-1624 Ourso Funeral Home, Airline Gonzales, Inc. 99-1809 Roselawn Operations, Inc. 99-1902 Spring Hill Cemetery Company 99-1961 The Center for Pre-Arranged Funeral Planning, Inc. 99-2002 Valley of The Temples Mortuaries, Ltd. 99-2031 The Plan has been substantially consummated, and the deposits and property transfers provided by the Plan have been completed. Moreover, the Reorganized Debtors have assumed the business and management of the Closing Debtors' assets. In addition, most payments provided for under the Plan have been made. All pleadings and Contested Claims in the Closing Cases have been, or will soon be, finally resolved. All fees with respect to the Closing Cases have also been paid. The Reorganized Debtors recognize that there is a pending fee dispute with the Office of the U.S. Trustee regarding the calculation of quarterly fees. Consistent with the rulings of other courts and the Court's prior Orders closing the other Debtors' cases, the Reorganized Debtors ask the Court to continue its jurisdiction over the Quarterly Fee Dispute as it relates to both the remaining Cases and the Closing Cases. (Loewen Bankruptcy News, Issue No. 83; Bankruptcy Creditors' Service, Inc., 215/945- 7000) LNR PROPERTY: Reports Earnings Per Share of $0.94 for 1st Quarter ----------------------------------------------------------------- LNR Property Corporation (NYSE: LNR), one of the nation's leading real estate investment, finance and management companies, reported net earnings for its first quarter ended February 29, 2004 of $28.5 million, or $0.94 per share diluted, compared to net earnings of $34.8 million, or $1.06 per share diluted, for the same quarter in 2003. Before a $0.07 per share charge for early extinguishment of debt, earnings per share were $1.01 for the first quarter ended February 29, 2004, compared to $1.06 per share for the same quarter in 2003. Mr. Jeffrey P. Krasnoff, President and Chief Executive Officer of LNR, stated, "Our strong results this quarter are once again directly tied to the focus on our strategic plan. We continue to utilize our unique franchise to identify opportunities and create value and cash flows where others often cannot. Key value creation examples during the current period include the resecuritization of just one of our many CMBS bonds, which generated a $17 million profit, and the successful repositioning, leasing and sale of a shopping center, once collateral for a $47 million defaulted loan, which generated a $21 million profit." Mr. Krasnoff continued, "Our extensive portfolio and breadth of operations in markets throughout the U.S. and in Europe give us access to many unique investment and value creation opportunities. In addition, others continue to seek us out for our intensive due diligence process and hands-on management capabilities. These competitive advantages, along with our strong balance sheet and liquidity position, allow us to carefully select and take advantage of these opportunities." Mr. Krasnoff added, "Already this year, we have purchased or identified over $800 million of new investments, including the recent closing of The Newhall Land and Farming Company acquisition with our long-time partner, Lennar Corporation. Not only does Newhall provide us an excellent opportunity to grow our income producing property portfolio, it also allows us to combine our commercial real estate skills with Lennar's residential expertise and appetite for homesites in one of the country's most land supply-constrained markets. This one transaction alone should add substantial earnings and cash flows for our Company for many years to come." Mr. Krasnoff concluded, "With the CMBS resecuritization completed earlier than we originally anticipated, the new investments we have in place or in the pipeline and the sales we have planned for the rest of the year, our earnings per share goals for 2004 remain in the range of $3.55 - $3.75." FIRST QUARTER PERFORMANCE Total revenues and other operating income decreased $2.7 million, or 2% this quarter, compared with last year's first quarter. Total revenues and other operating income decreased as a result of lower interest income due to a lower average level of CMBS investments, and lower rental income from a smaller stabilized property portfolio during most of the first quarter of 2004. These decreases were partially offset by higher gains in the current period on sales of real estate securities and real estate property assets, including sales within partnerships. Real Estate Properties On January 27, 2004, a joint venture 50% owned by the Company and 50% owned by Lennar Corporation completed the acquisition of The Newhall Land and Farming Company, for approximately $1 billion. Newhall is a premier community planner in north Los Angeles County. Its primary activities are planning the communities of Valencia and Newhall Ranch, which together form one of the nation's most valuable landholdings. Valencia and Newhall Ranch are located on 34,000 acres of land, 30 miles north of downtown Los Angeles. Funding for the Newhall purchase came from capital contributions of approximately $200 million from each of the partners and $400 million of borrowings under a $600 million senior credit facility, secured by the assets of Newhall and another LNR/Lennar joint venture. The balance came from $217 million the Company paid to the venture for a portfolio of Newhall's income producing commercial assets. Although these income producing commercial assets are expected to immediately contribute to the Company's recurring income from net rents (rental income less cost of rental operations), after depreciation and carrying costs, including those within the land venture, the Newhall acquisition is not anticipated to have a material impact on the Company's net earnings until 2005, when significant homesite sales are expected to commence. Earnings before income taxes from real estate property activities were $25.8 million for the quarter ended February 29, 2004, compared to $37.1 million for the same period in 2003. This decrease was primarily due to lower equity in earnings of unconsolidated partnerships and lower net rents (including net rents categorized as earnings from discontinued operations), partially offset by higher gains on sales of real estate property assets. Equity in earnings of unconsolidated partnerships was $3.5 million for the quarter ended February 29, 2004, compared to $20.4 million for the same period in 2003. This decrease was due to earnings last year from one partnership, which is involved in the development of approximately 585 acres of commercial and residential land in Carlsbad, California. The partnership sold 75% of its interest in the land in 2003 for a gain. Net rents decreased to $10.9 million for the quarter ended February 29, 2004, from $15.7 million for the same period in 2003. This decrease in net rents was primarily due to a smaller stabilized property portfolio for most of the first quarter of 2004 due to sales of stabilized properties throughout 2003, as well as the loss of a tenant in the third quarter of 2003 that had leased 100% of one of the Company's office buildings and which made a $24 million payment last year to cancel its lease. These decreases were partially offset by net rents from the portfolio of income producing properties acquired from Newhall late in the first quarter of 2004. Over the past three years, the Company has limited its new property acquisitions in favor of adding value to its existing portfolio through development, repositioning and leasing. As properties have come on-line, and the Company has maximized their cash flows, the Company has taken advantage of strong buyer demand by selling many of these assets at premium prices. As a result, the Company's stabilized property portfolio and the corresponding net rents from these properties have been declining. With the acquisition of the income producing properties from Newhall late in the first quarter, the Company's stabilized property portfolio has increased significantly and an increase in net rents over the first quarter of 2004 should be reflected in the next reported quarter's results. At February 29, 2004, 58% of the Company's $784.7 million owned property portfolio was stabilized. At February 28, 2003, 54% of the Company's $735.7 million owned property portfolio was stabilized. Gains on sales of real estate property assets were $22.9 million for the quarter ended February 29, 2004 (including $21.9 million characterized as earnings from discontinued operations), compared to $14.7 million for the same period in 2003. Gains on sales of real estate property assets fluctuate from quarter to quarter primarily due to the timing of asset sales. Gains in the first quarter of 2004 were primarily related to the sale of one 420,000 square foot retail property located in Westbury, New York. The loan on this property was part of a large CMBS transaction in which LNR owns the junior bonds and is the special servicer. When the loan went into default, the Company used its workout skills, in its role as special servicer, and quickly took title to the shopping center in the CMBS trust. LNR purchased the center out of the trust for the par value of the loan and acquired an additional free-standing store in the middle of the property that was critical to the center's redevelopment plan, but was not part of the collateral for the loan. The Company then brought in a major national retailer to build a new store on the combined site and renegotiated to relocate other tenants to accommodate the new tenant. Once the shopping center was 100% leased and before performing any development or construction work, the Company sold the asset for a $21 million pretax profit and realized an 81% unlevered return on the investment. LNR's domestic real estate portfolio, including properties held in unconsolidated partnerships, at quarter-end included approximately 7.9 million square feet of office, retail, industrial and warehouse space, 0.6 million square feet of ground leases, 2,300 hotel rooms, and 11,000 apartments (9,500 in affordable housing communities), either completed, under development or under management. This compares with approximately 6.8 million square feet of office, retail, industrial and warehouse space, 1.6 million square feet of ground leases, 2,100 hotel rooms, and 11,200 apartments (9,700 in affordable housing communities), either completed, under development or under management twelve months earlier. At February 29, 2004, LNR's wholly-owned operating property portfolio, excluding $306.9 million of assets undergoing development or repositioning and $56.9 million relating to the affordable housing business, was yielding approximately 11% on net book cost. Real Estate Loans LNR's real estate loan business consists of lending in unique high- yielding situations. Earnings before income taxes from real estate loans were $12.0 million for the quarter ended February 29, 2004, compared to $11.5 million for the same period in 2003. This increase was primarily due to higher interest income. Interest income from real estate loans increased 10% to $12.9 million for the quarter ended February 29, 2004, from $11.7 million for the same period in 2003. This increase was primarily due to a higher average level of loan investments, partially offset by income in the first quarter of 2003 realized from the payoff of several loan investments that had been acquired at discounts. Most of the Company's floating-rate interest is earned on investments in structured junior participations in short-to- medium term real estate loans ("B-notes"). During the first quarter, the Company funded three additional B- note investments for $116.5 million, and received $33.1 million from the payment in full of two B-note investments. Subsequent to the end of the first quarter, the Company committed to fund three additional B-note investments for $43.4 million. Assuming these loans are funded, investments under the Company's B- note program will have a face value of approximately $566.8 million, a 65% increase over February 28, 2003. Real Estate Securities Earnings before income taxes from real estate securities were $45.5 million for the quarter ended February 29, 2004, compared to $36.0 million for the same period in 2003. This increase was primarily due to higher gains on sales of securities, partially offset by a decrease in interest income. During the first quarter of 2004, the Company sold $28.7 million face amount of investment grade CMBS through a resecuritization of a non-investment grade CMBS bond (the "CDO"). The non-investment grade bond, which had a face amount of $50.4 million, was originally purchased in 1996 with a CCC rating. Due to the overall strong performance of the securitization and LNR's efforts as special servicer, the rating agencies subsequently upgraded the bond to a BB+ rating. Taking into account the quality of the collateral and LNR's involvement in the CDO transaction, the rating agencies rated $28.7 million of the $50.4 million face amount of the bonds from the CDO as investment grade. The Company sold the $28.7 million face amount of investment grade bonds to unrelated third parties for total cash proceeds of $30.3 million and recognized a pretax gain of $17.3 million. The Company retained the remaining $21.7 million face amount of bonds rated BB+/BBB- to BB+/B. The yield on the retained bonds, which had an amortized book cost of $7.5 million at February 29, 2004, was 26%. Interest income from direct CMBS investments decreased to $26.6 million for the quarter ended February 29, 2004, from $32.6 million for the same period in 2003. This decrease was primarily due to a lower average level of CMBS investments during the 2004 period. The Company's annualized cash yield on its fixed-rate CMBS portfolio was approximately 16%. The cash yield on the unrated portion of this portfolio was approximately 31%. During the quarter ended February 29, 2004, the Company acquired $215.2 million face amount of non-investment grade fixed-rate CMBS for $96.9 million and $11.9 million face amount of non-investment grade floating-rate CMBS for $3 million. Subsequent to the end of the quarter, the Company purchased or committed to purchase securities in nine additional CMBS transactions. In these transactions, the Company has acquired or expects to acquire approximately $191.8 million face amount of non-investment grade CMBS for approximately $109.5 million. Assuming these transactions close as anticipated, the total face amount of the Company's direct non-investment grade CMBS investments will be approximately $2.5 billion with an amortized cost of approximately $925 million. The rated portion of this portfolio will be approximately $1.1 billion of face value with an amortized cost of approximately $671 million. The unrated portion of this portfolio will be approximately $1.4 billion of face value with an amortized cost of approximately $254 million. With these new transactions, the Company will have an investment in or be the special servicer for which it earns fees for 138 CMBS pools with an aggregate original face amount of approximately $125 billion, compared to 106 pools with an aggregate original face amount of $87 billion at February 28, 2003. FINANCING AND CAPITAL STRUCTURE During the first quarter of 2004, the Company issued $50 million principal amount of 7.25% senior subordinated notes due 2013 and completed the redemption at a premium of the remaining $45.3 million principal amount of its 10.5% senior subordinated notes due 2009. As a result of the redemption of the 10.5% notes at a premium, the Company recorded a pretax charge of $3.4 million to earnings from continuing operations during the first quarter of 2004, which is included in the "Corporate and Interest" segment. Also during the first quarter of 2004, the Company increased a revolving line of credit through which it finances B-note purchases from $220.0 million to $300.0 million, extending its maximum maturity to February 2009. At February 29, 2004, the Company had $1.8 billion of available liquidity, which consisted primarily of cash and availability under existing credit facilities. Only 9% of the Company's debt is scheduled to mature over the next twelve months, assuming extension options are exercised, most of which is expected to be refinanced or paid off as related assets are sold in the coming months. The Company's weighted average debt maturity was 6.3 years at February 29, 2004, compared to 3.8 years at February 28, 2003. In order to minimize the effects of interest rate risk, the Company has continued its efforts to maintain a highly match- funded balance sheet. At February 29, 2004, 59% of its debt was fixed-rate, 11% was floating-rate but had been swapped to fixed- rate, and 13% was match-funded against floating-rate assets. After considering the floating-rate debt that had been swapped or match- funded, only 17% of the Company's total debt remained floating- rate. A 100 basis point change in LIBOR would impact the Company's net earnings by $0.4 million, or $0.01 per share diluted. Interest expense increased by 10% for the quarter ended February 29, 2004, compared to the same period in the prior year, primarily due to higher average debt balances and slightly higher average interest rates. The weighted average interest rate on outstanding debt was 5.6% at February 29, 2004, compared to 5.8% at February 28, 2003. The Company continues to believe that the assets on its balance sheets are conservatively stated relative to fair values. At February 29, 2004, based on management's internal analysis, asset fair values exceeded their amortized book cost by approximately $442 million. This includes approximately $341 million of excess value that is not reflected on the balance sheet and relates primarily to the property segment. The remainder represents approximately $101 million of fair value in excess of amortized cost related to the available-for-sale CMBS portfolio, which is reflected on the balance sheet, but most of which has not yet been reflected in earnings. This analysis ascribes no excess value to the recently closed Newhall transaction or to the servicing rights the Company has in 130 CMBS transactions, which are carried at zero value on the Company's books. At the end of the quarter, the Company was operating at a 1.67:1 net debt to book equity ratio and at a 1.39:1(1) net debt to equity ratio, if book equity is adjusted to reflect the estimated fair value in excess of what is on the balance sheet, excluding any excess value for the Newhall transaction and CMBS servicing rights. 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. MAGELLAN HEALTH: Inks Stipulation Resolving Humana Military Claim ----------------------------------------------------------------- On June 26, 2003, Humana Military 2/5, Inc. timely filed Claim No. 2630 for $2,090,769. Claim No. 2630 is based on contractual obligations under a Subcontract Agreement dated March 31, 1998 between Humana and Magellan Debtor Green Spring Health Services, Inc. Pursuant to the Agreement, Green Spring provided certain behavioral healthcare services on Humana's behalf for the TriCare Regions 2/5 Program. The Subcontract terminated pursuant to its terms on April 30, 2003. Under the terms of the Subcontract, Humana withheld amounts from payments otherwise payable to Green Spring and maintained the amounts in a fund for the payment or reimbursement of certain financial obligations of Green Spring under the Subcontract. As of January 22, 2004, the Withhold Fund has a $3,503,397 balance. After the Subcontract was terminated, disputes arose between the parties relating to obligations. The obligations in dispute included those relating to: (a) payment by Green Spring of claims for health care services incurred prior to termination of the Subcontract; (b) reimbursement of Green Spring for health care service claims allegedly paid incorrectly; (c) reimbursement of Green Spring for claims satisfied out of amounts held in the Withhold Fund that were not the financial responsibility of Green Spring under the Subcontract; (d) reconciliation of certain price adjustments and risk-share liabilities under the Program; (e) collection and distribution of receivables from certain heath care service providers; (f) payment for change orders; and (g) payment of transition costs. To resolve the claim amicably and without the expense and risk of litigation, the Reorganized Debtors and Humana stipulate that Humana will distribute $1,228,069 from the Withhold Fund to Green Spring, subject to adjustments to the amount between the date of execution of the Stipulation by the Parties and the time of distribution for interest accruing for the account of Green Spring and the Withhold Fund monthly account service fees reducing the amount. The $2,275,328 in the Withhold Fund will be distributed to Humana in full satisfaction of Green Spring's liabilities under the Subcontract. The Stipulation constitutes a full and final settlement and compromise of Claim No. 2360, which is deemed to be expunged in its entirety. Judge Beatty promptly approves the Stipulation. Magellan Health Services is headquartered in Columbia, Maryland, and is the leading behavioral managed healthcare organization in the United States. Its customers include health plans, corporations and government agencies. The Company filed for chapter 11 protection on March 11, 2003, and confirmed its Third Amended Plan on October 8, 2003. Under the Third Amended Plan, nearly $600 million of debt will drop from the Company's balance sheet and Onex Corporation will invest more than $100 million in new equity. (Magellan Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000) METROPOLITAN MORTGAGE: Files Petition for Litigation 'Freeze' ------------------------------------------------------------- On Monday, March 22, 2004, attorneys representing Metropolitan Mortgage & Securities Co., Inc., Summit Securities, Inc. and Metropolitan Investment Securities, Inc. (collectively, the "Debtors") filed a complaint in the U.S. Bankruptcy Court for the Eastern District of Washington, seeking a stay of pending and future litigation against the Debtors and their subsidiaries and their respective directors and officers (collectively, the "Insureds"). "This action was taken first in order to preserve the proceeds of the Insureds' directors' and officers' liability insurance policies and professional liability insurance policies," said Ford Elsaesser, outside counsel to Summit Securities, adding, "the insurance coverage represents a valuable asset of the Debtors' bankruptcy estates that will potentially be reduced to the extent that funds are expended to defend these matters." Elsaesser further pointed out that "Debtors' officials feel the insurance proceeds should be preserved as part of the assets available to all claimants whose claims are valid and insured by the Policies. During the bankruptcy process, the Debtors are hopeful that outstanding civil litigation implicating the Policies can be consolidated to further reduce costs and ensure an equitable distribution to prevailing claimants." According to Douglas Siddoway, a Randall & Danskin attorney working with the Creditors Committee for Metropolitan Mortgage, the Committee supports the filing "in order to preserve this bankruptcy asset." Based in Spokane, Washington, Metropolitan Mortgage & Securities Co., Inc. is into the business of Insurance and Annuity Operations. It, along with Summit Securities Inc., filed for Chapter 11 protection (Bankr. E.D. Wash. Case No.: 04-00757) on February 4, 2004. Bruce W. Leaverton, Esq. of Lane Powell Spears Lubersky LLP and Doug B. Marks, Esq. of Elsaesser, Jarzabek, Anderson, Marks, Elliot & McHugh represent the Debtors in their restructuring efforts. As of petition filing date, Metropolitan Mortgage listed assets of $420,815,186 and debts of $415,252,120. MICROCELL: Files Final Prospectus for Equity Rights Offering ------------------------------------------------------------ CCNMatthews - Mar 24 Microcell Telecommunications Inc. (TSX: MT.A, MT.B) has filed a final prospectus with the securities authorities in each province of Canada in connection with its previously-announced rights offering to holders of its Class A Restricted Voting Shares, Class B Non-Voting Shares, First Preferred Voting and Non-Voting Shares, and Second Preferred Voting and Non-Voting Shares. Shareholders of record at the close of business on April 2, 2004 will receive one right for every share held. Every five rights will entitle the holder to purchase one Class B Non-Voting Share at a price of C$22.00 per share (equivalent to approximately US$16.52 per share based on the current exchange rate) prior to the expiry time of 5:00 p.m. (Montreal time) on April 28, 2004. Rights not exercised before the expiry time will be void and of no value. The rights will be listed on the Toronto Stock Exchange from March 31, 2004 until 12:00 p.m. (Montreal time) on April 28, 2004. Concurrently with the issuance of rights to Canadian shareholders by way of a Canadian prospectus, rights may also be issued to shareholders in the United States who are qualified institutional buyers ("QIBs") and/or institutional accredited investors in transactions exempt from the registration requirements of the United States Securities Act of 1933. For Canadian Federal income tax purposes, holders of the Company's First Preferred Voting Shares, First Preferred Non-Voting shares, Second Preferred Voting Shares and Second Preferred Non-Voting Shares will be deemed to have received on April 2, 2004 a dividend equal to the value of the rights on that date. In the case of preferred shareholders that are not residents of Canada, the Company will be required to withhold 25% of the value of the rights distributed to them. As a result, the Company's subscription agent, Computershare Trust Company of Canada ("Computershare") is authorized to dispose of any rights issued to non-Canadian holders and to use a portion of the proceeds to satisfy any such withholding obligation. Certain U.S. institutional investors entitled to receive the rights pursuant to applicable exemptions will have the option to pay to Computershare the amount of any withholding in order to avoid having their rights sold in the market. Non-Canadian holders that convert their Preferred Shares into Class A Restricted Voting Shares or Class B Non-Voting Shares prior to April 2, 2004 will not be subject to any such withholding. The estimated net proceeds from the rights offering will be approximately C$97 million. In addition, the Company may receive up to an additional C$50 million from the concurrent minimum purchase of Class B Shares by COM Canada, LLC, a private holding company of Craig O. McCaw, which is acting as standby purchaser for the rights offering. The combined proceeds will be used by the Company to redeem its Preferred Shares, and any balance will be used to fund capital expenditures and for general corporate purposes. The Company intends to give a notice of redemption pursuant to which it shall redeem, as of May 1, 2004, Preferred Shares then outstanding having a minimum redemption price of approximately C$97 million and a maximum redemption price of approximately C$147 million in the aggregate of its Preferred Shares subject to applicable law and subject to and in accordance with the provisions of the restated articles of incorporation of the Company, including those relating to the application of equity proceeds. Such redemption will be subject to the right of the holders of Preferred Shares to convert such shares into Class A Restricted Voting Shares or Class B Non-Voting Shares prior to their redemption. The notice of redemption will stipulate that no redemption will occur in the event that the rights offering is not completed. The redemption price of each Preferred Share so redeemed as of May 1, 2004 shall be C$16.39 per share, representing the redemption price of the Preferred Shares as computed pursuant to the Company's restated articles of incorporation. In addition, Microcell appointed Merrill Lynch Canada Inc. as exclusive soliciting dealer in connection with the rights offering. Merrill Lynch will also provide advice and technical support with respect to the solicitation by the Company of Canadian shareholders and certain institutional shareholders in the United States. This news 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 or jurisdiction, including the United States, 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. Any public offering of securities to be made in the United States can only be made by means of a prospectus pursuant to an effective registration statement. Microcell has no intention of filing such a registration statement in connection with this rights offering. 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. MIKOHN GAMING: Posts $34.2 Million Net Loss at December 31, 2003 ---------------------------------------------------------------- Mikohn Gaming Corporation (Nasdaq:MIKN), a leading provider of diversified products and services used in the gaming industry worldwide, reported a net loss before interest, depreciation, amortization, slot rent, other expense/asset write-downs and the early retirement of debt of $0.7 million, or $0.03 per share, for the three months ended December 31, 2003 as compared to net income of $8.2 million, or $0.63 per share, in the same period a year ago. Including interest, depreciation, amortization, slot rent, other expense/asset write-downs and the early retirement of debt, the net loss for the fourth quarter of fiscal 2003 was $22.5 million, or $1.14 per share, as compared to net income of $0.1 million, or $0.01 per share, during the same period a year ago. For the year ended December 31, 2003, the Company recorded net income before interest, depreciation, amortization, slot rent and other expense/asset write-downs and the early retirement of debt of $15.4 million, or $1.04 per share, as compared to net income of $12.4 million, or $0.97 per share, during the same period a year ago. Including interest, depreciation, amortization, slot rent, other expense/asset write-downs and the early retirement of debt, the net loss for the year ended December 31, 2003 was $34.2 million, or $2.33 per share, as compared to a net loss of $37.9 million, or $2.95 per share, during the same period a year ago. Other expense/asset write-downs and the early retirement of debt of $13.8 million and $15.3 million were recorded in the three and twelve months ended December 31, 2003, respectively, in connection with the debt refinancing completed during the fourth quarter, the write-down of various obsolete assets, the closure of all overseas manufacturing operations and severance and other charges related to the departure of former members of management. During the year ended December 31, 2002, other expense/asset write-downs of $16.7 million were recorded in connection with the write-down of various obsolete assets, severance and other costs related to staff reductions and plant closures, and other charges related to the departure of former members of management and the Board of Directors. Revenues for the fourth quarter of fiscal 2003 declined to $20.0 million from $28.7 million in the same period a year ago due primarily to lower license fees from slot and table games, and product sales. During the year ended December 31, 2003, revenues declined to $91.8 million from $109.4 million in 2002 also due to lower license fees from slot and table games, and product sales. The decline in slot and table game revenues during the three and twelve months ended December 31, 2003 as compared to the same periods in 2002 was primarily the result of a decrease in the installed base of slot and table game contracts. There was no material shift in the fee per day for slot and table contracts in 2003 as compared to 2002. The decrease in product sales for both periods during 2003 as compared to 2002 was primarily due to the elimination of selling these products in Australia and a decrease in demand in North America. Revenues from systems sales increased to $4.4 million in the fourth quarter of fiscal 2003 from $4.1 million in the 2002 quarter due primarily to increased demand by new and existing customers. Systems sales revenues also increased during the 2003 fiscal year to $14.0 million from $9.4 million for the same reason. President and Chief Executive Officer Russel McMeekin stated: "Our focus in 2003 was on mission critical issues related to liquidity, balance sheet leverage, improving our gross margins and completing our management reorganization in an effort to eliminate the negative cash flow from the business model. These actions taken in 2003 will result in an incremental increase in free cash flow in 2004 between $8-$10 million, an improved balance sheet and liquidity position and a business model founded on generating revenues from licensing our technology and content at margins higher than the former model which focused on both capital intensive manufacturing and licensing game content." At December 31, 2003, Mikohn Gaming Corporation's balance sheet shows a recovery of shareholder equity at $7,389,000. At December 31, 2002, the company reported a total stockholders' equity deficit of $6,912,000 Financial Outlook Chief Financial Officer Michael A. Sicuro stated: "With the positive changes in our business model becoming more visible and the first stage of the balance sheet restructuring complete, Mikohn is poised to have significantly improved financial results in 2004. We believe the trend in our revenues will stabilize during the next two fiscal quarters, and will begin to increase during the second half of 2004. We estimate revenues, EBITDA and free cash flow to be $90-$100 million, $14-$20 million and $2-$4 million in 2004, respectively. In addition, we expect GAAP reported net earnings to be between a loss of $8 million to positive net earnings of $1 million, and to be at least break even in the fourth quarter if we achieve the midpoint of our revenue estimates. For the first quarter of fiscal 2004, we expect to generate revenues from $19-$21 million which will result in a GAAP reported net loss of $5-$6 million and negative free cash flow of $1-$3 million." Free cash flow is defined as the net change in cash and cash equivalents at the beginning of a period as compared to the cash and cash equivalents at the end of that same reporting period; EBITDA is defined as earnings before interest, taxes, depreciation and amortization. GAAP is defined as generally accepted accounting principles as applied in the United States. About Mikohn Mikohn (S&P, B- Corporate Credit Rating, Negative Outlook) is a leading supplier of innovative and diversified products and services used in the gaming industry worldwide. The Company develops, manufactures and distributes an expanding array of slot games, table games and advanced player tracking and accounting systems for slot machines and table games. The Company is also a market leader in exciting visual displays and progressive jackpot technology for casinos worldwide. There is a Mikohn product in virtually every casino in the world. For further information, visit the Company's website at http://www.mikohn.com/ MIRANT CORP: Brings-In Ernst & Young as Consultants --------------------------------------------------- Pursuant to Section 327(a) of the Bankruptcy Code, the Mirant Corp. Debtors sought the Court's authority to employ Ernst & Young LLP as consultants, nunc pro tunc to July 15, 2003. While the Debtors already employed KPMG LLP, the Debtors asserted that E&Y's employment is still necessary because under the relevant provisions of the Sarbanes-Oxley Act, firms providing accounting and auditing services are prohibited from providing certain services relating to Sarbanes-Oxley compliance issues due to the independence requirements of external auditors under the Securities and Exchange Commission regulations. In addition, while the Debtors already employed Deloitte & Touche LLP as their tax advisors and consultants, the Debtors' employment of E&Y is still necessary because of the synergies already obtained by E&Y in connection with the Sarbanes-Oxley Compliance Matters, not to mention the extra cost and expense the Debtors would incur to have a new professional provide the same services. Nevertheless, the Debtors believe that the consulting services E&Y renders will not be duplicative of the services rendered by any other of the Debtors' Chapter 11 professionals. E&Y promised to carefully coordinate its efforts with the other professionals to make sure that its actions are not duplicative of the actions the other professionals are taking. As compensation, E&Y will charge the Debtors these hourly rates of its professionals: Partners and Principals $660 - 700 Senior Managers 540 - 635 Managers 385 - 470 Seniors 280 - 370 Staff 190 - 270 During the 90 days prior to the Petition Date, the Debtors paid E&Y $648,320 for fees and $754,876 to E&Y affiliate, Ernst & Young Corporate Finance LLC. Due to past representations, as of the Petition Date, the Debtors still owe E&Y $8,400. E&Y agree to waive its prepetition claim if its engagement is approved. Prior to the Petition Date, EYCF received a $200,000 retainer from Mirant Corporation. As of the Petition Date, $121,404 of the retainer remained and will be refunded to Mirant. * * * The Court authorizes the Debtors to employ Ernst & Young LLP as their consultants, nunc pro tunc to July 15, 2003. 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) MIRANT CORP: US Trustee Amends Equity Security Holders' Committee ----------------------------------------------------------------- Pursuant to Section 1102(a) of the Bankruptcy Code, the U.S. Trustee for Region 17, William T. Neary, informs the Court that as of March 11, 2004, the Equity Committee appointed in the Chapter 11 cases of the Mirant Corp. Debtors is composed of: (1) Joann McNiff, Co-Chair Phaeton International/Phoenix Partners 33 S. Franklin Avenue Bergenfield, NJ 07621 (201) 385-2933 Fax: (201) 385-2933 jmcniff@optonline.net (2) Morris Weiss, Co-Chair Tejas Securities Group, Inc. 112 E. Pecan, Suite 1510 San Antonio, Texas 78205 (210) 226-1555 Fax: (210) 226-7571 mdweiss@tejassec.com (3) Roger B. Smith 301 Kemp Road Suwanee, GA 30024-1607 (700) 418-1818 Fax: (404) 842-4523 rbsmith@bear.com (4) Andres Forero 705 E. 43rd Street Austin, TX 78751 (512) 380-7057 Fax: (512) 380-7057 aforero@mail.utexas.edu (5) Michael Willingham 9202 Meaux Drive Houston, TX 77031 (713) 270-8740 Fax: (866) 876-5362 mwillingham1@yahoo.com 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) OREGON ARENA: Employs Foster Pepper as Bankruptcy Attorneys ----------------------------------------------------------- Oregon Arena Corporation seeks authority from the U.S. Bankruptcy Court for the District of Oregon to employ Foster Pepper Tooze LLP as its bankruptcy attorneys. Several months prior to the Petition Date, Foster Pepper already worked with the Debtor to prepare for its bankruptcy filings. Through this process, Foster Pepper has become familiar with the Debtor's business operations and financial affairs and many of the legal issues that will likely arise in the context of this Chapter 11 case. Thus, Foster Pepper is a logical choice for counsel by the Debtor. If the Debtor is forced to retain local counsel other than Foster Pepper, the Debtor would incur substantial additional expenses and delays associated with familiarizing new counsel with the Debtor's financial affairs and business operations. The attorneys who will be primarily designated to represent the Debtor and their current standard hourly rates are: Name of Professional Position Billing Rate -------------------- -------- ------------ Michael R. Silvey Attorney $350 per hour Paul B. George Attorney $350 per hour Nancie K. Potter Attorney $275 per hour Carter M. Mann Attorney $240 per hour The Debtor expects Foster Pepper to: a) provide legal advice with respect to the Debtor's powers and duties as debtor-in-possession in the continued operation of its business and management of its properties; b) assist the Debtor in maximizing the value of its assets for the benefit of all creditors and other parties in interest; c) pursue confirmation of a plan of reorganization; d) investigate any and all necessary and appropriate actions and/or proceedings on behalf of the Debtor in this Court and other appropriate jurisdictions; e) prepare on behalf of the Debtor all necessary applications, motions, answers, orders, reports, and other legal papers; f) appear in Court to protect the interests of the Debtor and its estate; g) assist the Debtor with the requirements of the Securities and Exchange Commission; and e) perform all other legal services for the Debtor during this Chapter 11 proceeding that may be necessary and proper for the Debtor's general business operations and general financial affairs. Headquartered in Portland, Oregon, Oregon Arena Corporation, owns Portland's Rose Garden, one of the city's entertainment arenas and home of the NBA's Portland Trail Blazers. The company filed for chapter 11 protection on February 27, 2004 (Bankr. D. Oreg. Case No. 04-31605). Paul B. George, Esq., at Foster Pepper Tooze LLP and R. Michael Farquhar, Esq., at Winstead Sechrest & Minick P.C., represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed an estimated assets of more than $10 million and estimated debts of more than $100 million. ORLANDO HYATT HOTEL: Asset Sale Auction is Today ------------------------------------------------ On March 4, 2004, the U.S. Bankruptcy Court for the Middle District of Florida approved the proposed sale of substantially all of the assets of Orlando Hyatt Hotel Associates Limited Partnership to the highest and best bidder. A Bankruptcy Court-ordered auction will be held today, at 1:00 p.m., at 6375 West Irio Bronson Memorial Highway in Kissimmee, Florida. The Bankruptcy Court will be asked at a Sale Hearing on April 14, 2004, to approve the sale of the business to the high bidder. Orlando Hyatt Hotel filed for Chapter 11 relief on April 26, 2002 (Bankr. M.D. Fla. Case No. 02-04365-KSJ). R. Scott Shuker, Esq., at Gronek & Latham, LLP represents the Debtor in its liquidating efforts. PACIFIC GAS: Court Okays Deutsche Bank as Escrow & Paying Agent --------------------------------------------------------------- Pacific Gas and Electric Company sought and obtained Court approval to appoint Deutsche Bank Trust as Escrow Agent. PG&E has chosen Deutsche Bank Trust Company Americas to serve as escrow and paying agent with respect to the escrows for Disputed Claims in Classes 5, 6 and 7 and Tax Claims. Deutsche Bank Trust is a subsidiary of Deutsche Bank. Deutsche Bank has assets exceeding $800,000,000,000, and has the extensive experience in providing trust and agency services. Deutsche Bank Trust has $41,500,000,000 in assets. Deutsche Bank's trust services group represents over 3800 corporations and government agencies, servicing over $2 trillion in securities. Headquartered in San Francisco, California, Pacific Gas and Electric Company -- http://www.pge.com/-- a wholly-owned subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest combination natural gas and electric utilities in the United States. The Company filed for Chapter 11 protection on April 6, 2001 (Bankr. N.D. Calif. Case No. 01-30923). James L. Lopes, Esq., William J. Lafferty, Esq., and Jeffrey L. Schaffer, Esq., at Howard, Rice, Nemerovski, Canady, Falk & Rabkin represent the Debtors in their restructuring efforts. On June 30, 2001, the Company listed $23,216,000,000 in assets and $22,152,000,000 in debts. (Pacific Gas Bankruptcy News, Issue No. 73; Bankruptcy Creditors' Service, Inc., 215/945-7000) PACIFIC GAS: Chairman Says Co. Ready to Exit Bankruptcy Next Month ------------------------------------------------------------------ At the Morgan Stanley Global Electricity & Energy Conference, Robert D. Glynn, Jr., Chairman, CEO and President of PG&E Corporation (NYSE: PCG) said the company is on course to enter a period that is more stable and more certain than at any time since the onset of the California energy crisis in 2000, as its core business, Pacific Gas and Electric Company, prepares to exit Chapter 11 next month. "In a few weeks, PG&E Corporation and Pacific Gas and Electric Company will conclude PG&E's Chapter 11 process and turn the corner to a period of significant stability," he said. Glynn said that he believes the terms and assurances contained in the nine-year settlement agreement with the California Public Utilities Commission (CPUC) to resolve Pacific Gas and Electric Company's Chapter 11 case, establish a strong foundation of financial and regulatory stability as the company moves forward. Further, he said if the CPUC approves the settlement agreement the utility reached with consumer groups in its 2003 general rate case (GRC) to set the utility's base gas and electric rates through 2006, the foundation will be even stronger. Pacific Gas and Electric Company is now in the process of completing the final steps required for its plan of reorganization to become effective. A significant requirement was the completion of a $6.7 billion bond offering, the proceeds of which will be used to pay creditors on the effective date. Both Standard & Poor's and Moody's Investors Service announced investment grade credit ratings for the bonds. In addition, Moody's upgraded the utility's issuer rating to investment grade and S&P announced a prospective investment grade corporate credit rating for the utility to be effective upon its exit from Chapter 11. Other components of the financing include $2.1 billion in new fully committed credit facilities of which approximately $335 million will be initially drawn, and $799 million in a bridge loan to facilitate the re-issue of pollution control bonds. Proceeds of the bond sale, bank borrowings, and approximately $2.6 billion of cash on hand and $1.2 billion of reinstated debt and preferred equity, will be used to satisfy roughly $11.7 billion in claims. Glynn said that, under the terms of the plan of reorganization, the plan will become effective 11 business days after all conditions have been met. The company expects to officially exit Chapter 11 during the week of April 12. Upon exit from Chapter 11, the company will have met the goals it said must be accomplished by any reorganization plan for the utility: emerging as an investment grade company, satisfying all valid creditor claims, and doing so without raising customers' rates. In fact, the utility was recently able to lower customers' electric rates by approximately $800 million in 2004 alone, with the average bundled rate decreasing by 8 percent. Glynn also outlined the utility's previously announced settlement agreement to resolve its 2003 GRC reached with the CPUC's Office of Ratepayer Advocates and other parties in September 2003. The settlement agreement, which still must be approved by the CPUC to become effective, contemplates a revenue increase of $326 million for the utility's electric and gas distribution and electric generation operations. This amount is already accounted for in 2004 rates, which reflect the 8 percent rate reduction approved by the CPUC last month. The settlement agreement also provides for timely revenue increases to cover the utility's rate base growth and inflation starting this year through 2006. "The GRC settlement agreement provides a level of predictability on allowed costs that we've not had in the past, and as a result, it provides significant advantages for us in our ability to plan and manage the utility over the next few years," said Glynn. Although the CPUC has not yet issued a final decision in the utility's 2003 GRC, Glynn said the company anticipates the settlement agreement will provide the basis for a final decision. Glynn said the foundation created by the imminent resolution of the utility's Chapter 11 case and the anticipated resolution of the utility's 2003 GRC will allow the company to focus its efforts on delivering increased value to customers and shareholders. "Our company is exiting a period that has been uniquely uncertain and challenging, and we're entering an era that we expect will be uniquely stable," he said. "We intend to realize fully the opportunities this creates for us to deliver increased value to customers and shareholders." Specifically, he said the company and the utility have agreed to pursue securitization of the regulatory asset created under the settlement agreement with the CPUC to resolve the utility's Chapter 11 case to provide further rate reductions to customers, and he restated the company's aspiration to declare common stock dividends for shareholders by the second half of 2005. A webcast replay of Glynn's presentation is available on the PG&E Corporation web site at http://www.pgecorp.com/ PARMALAT GROUP: US Debtors Wants to Continue Rebate Program ----------------------------------------------------------- The U.S. Parmalat Debtors sought and obtained the Court's authority to continue all prepetition practices relating to their rebate program. According to Gary T. Holtzer, Esq., at Weil, Gotshal & Manges LLP, in New York, the continuation of the Rebate Program is essential to preserve customer loyalty and confidence in the U.S. Debtors' commitment to their customers. In the ordinary course of businesses, the U.S. Debtors employ a rebate incentive program aimed at encouraging retail stores to purchase their products. Each time they enter into a new purchase contract with a Retailer, or renew an old one, the U.S. Debtors agree, under certain conditions, to refund a portion of the Retailers' costs of purchasing their products. The Retailers receive rebates for volume purchased, as well as promotional allowances provided by the Debtors. The Retailers receive their Rebates by check automatically on either a monthly, quarterly, or annual basis, depending on the Retailer's specifically negotiated contract. Certain Retailers set off the amount of their Rebate against future purchases from the Debtors. The Rebates are paid by check for 60% of the customers under the Rebate Program and offset against accounts receivable for the remaining 40%. The Court authorizes the U.S. Debtors to make Prepetition Rebate Payments on account of the eligible Rebates. The Debtors estimate that, as of the Petition Date, the aggregate amount of outstanding Rebates that relate to amounts purchased by the Retailers before the Petition Date is $2,286,729. 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. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000) PEABODY ENERGY: Elects William Coley & Henry Givens, Jr. to Board ----------------------------------------------------------------- Peabody Energy (NYSE: BTU) announced that William A. Coley and Dr. Henry Givens, Jr. have been elected directors, expanding Peabody's board to 12 members. Mr. Coley was president of Duke Power and Dr. Givens is president of Harris-Stowe State College. "Bill Coley and Henry Givens possess experience and vision that will enable us to provide continued strength and leadership in corporate governance," said Chairman and Chief Executive Officer Irl F. Engelhardt. "We welcome them to a very talented board of directors." Mr. Coley retired as president of Duke Power in February 2003 after a 37- year career with the organization. He joined Duke Power as an engineer in 1966 and held a series of engineering, operations and senior management roles there. He was named senior vice president of customer operations and elected to the Duke Power board of directors in 1990. He was named president of the Associated Enterprises Group in 1994 and elected president of Duke Power in 1997. Duke Power is a unit of Duke Energy, one of the nation's largest utilities, serving approximately 2.2 million customers in North Carolina and South Carolina. A native of Belmont, N.C., Mr. Coley graduated from the Georgia Institute of Technology with a bachelor's degree in electrical engineering. He is a registered professional engineer in North Carolina and South Carolina. Mr. Coley is a member of the North Carolina Economic Development Board and co-chair of the Governor's Business Council for Fiscal Reform. He has served as trustee of Queens University of Charlotte and Union Theological Seminary in Richmond, Va. He also served as chairman of the Charlotte Chamber of Commerce, the Arts and Science Council fund drive and the Junior Achievement fund drive. Dr. Givens is a native of St. Louis and president of Harris-Stowe State College, a position he has held since Harris-Stowe became a state institution in 1979. He began his career in education as a teacher in the Webster Groves School District, was named principal of the nation's first prototype magnet school, and was named assistant to the superintendent of schools. He was the first African American to serve as Assistant Commissioner of Education in Missouri, holding the post for five years. Dr. Givens earned his bachelor's degree at Lincoln University, his master's degree at the University of Illinois and his doctorate at Saint Louis University. He has participated in post-doctoral studies in higher education administration at Harvard University and has been recognized with dozens of national, state and local awards, including two honorary doctorates of Humane Letters from Lincoln University and St. Louis University. He is affiliated with numerous educational organizations and honor societies, including the American Association of State Colleges and Universities board of directors, the Association of Governing Boards, the Missouri Coordinating Board for Higher Education and the National Alliance of Black School Educators. PEABODY ENERGY BOARD OF DIRECTORS B. R. (Bobby) Brown served as Chairman, President and Chief Executive Officer of Consol Energy Inc. and its predecessor companies from 1977 - 1999. He also was Senior Vice President of DuPont, Consol's controlling shareholder, from 1982 - 1992. Mr. Brown's experience includes Senior Vice President at Conoco and President and Chief Executive Officer of Remington Arms Co., Inc. He is currently a director of Remington Arms and Delta Trust Bank and is a former director of PNC Bank and Carnegie Mellon University. Mr. Brown is an inductee in the West Virginia Mining Hall of Fame and a recipient of the Distinguished Service Award from the National Mining Association. William A. Coley served as President of Duke Power and retired in February 2003 after a 37-year career with the organization. Mr. Coley is a registered professional engineer in North Carolina and South Carolina. He was named Senior Vice President of Customer Operations and elected to the Duke Power board of directors in 1990, named President of the Associated Enterprises Group in 1994 and elected President in 1997. Mr. Coley graduated from the Georgia Institute of Technology with a bachelor's degree in electrical engineering. He is a member of the North Carolina Economic Development Board and co-chair of the Governor's Business Council for Fiscal Reform. He has served as trustee of Queens University of Charlotte and Union Theological Seminary in Richmond, Va. He is also a director of CT Communications, Inc., SouthTrust Corporation and British Energy plc. Irl F. Engelhardt is Chairman and Chief Executive Officer of Peabody Energy. He joined the company in 1979 after a decade of management consulting experience and held various officer-level positions prior to being named Chief Executive Officer in December 1990. His business experience includes: Group Executive and Director of Hanson Industries; Co-Chief Executive Officer of The Energy Group; Chairman of Cornerstone Construction and Materials; Chairman of Suburban Propane; Chairman of Citizens Power; and Chairman of Peabody Resources Limited (Australia). He received a bachelor of science degree in accounting from the University of Illinois in 1968 and a master's in business administration from Southern Illinois University in 1971. Among a number of industry leadership positions, he is Chairman of the Center for Energy and Economic Development, Co-Chairman of the Coal-Based Generation Stakeholders Group and the National Mining Association's Sustainable Development Committee and Health Reform Committee and a member of The Business Roundtable and the Conservation Fund's Corporate Council. Mr. Engelhardt is also a Director of U.S. Bank N.A. in St. Louis and serves on the board of a number of civic organizations. Dr. Henry Givens is President of Harris-Stowe State College. He began his career in education as a teacher in the Webster Groves School District, was named principal of the nation's first prototype magnet school and assistant to the superintendent of schools. He was the first African American to serve as Assistant Commissioner of Education in Missouri, holding the post for five years. Dr. Givens earned his bachelor's degree at Lincoln University, his master's degree at the University of Illinois and his doctorate at Saint Louis University. He has participated in post-doctoral studies in higher education administration at Harvard University and has been recognized with dozens of national, state and local awards, including two honorary doctorates of Humane Letters from Lincoln University and St. Louis University. He is affiliated with numerous educational organizations and honor societies William E. (Wilber) James is a Founding Partner of RockPort Capital Partners LLC, a venture fund specializing in energy and environmental technology and advanced materials. He is also Chairman of RockPort Group, an international oil trading and investment banking company. Prior to joining RockPort, Mr. James co-founded and served as Chairman and Chief Executive Officer of Citizens Power LLC, a leading power marketer. Previously, Mr. James was a co-founder of the non-profit Citizens Energy Corporation and served as Chairman and Chief Executive Officer of Citizens Corporation, its for-profit subsidiary, from 1987 to 1996. Mr. James holds a bachelor of arts degree from Colorado College. He serves on the board of directors of the African Wildlife Foundation, the National Peace Corps Association's Advisory Council and the Cape Ann Historical Association. Robert B. Karn III is a financial consultant and former managing partner in financial and economic consulting with Arthur Andersen in St. Louis. Before retiring from Andersen five years ago, Mr. Karn served in a variety of accounting, audit and financial roles over a 33-year career, including Managing Partner in charge of the global coal mining practice from 1981 through 1998. He is a Certified Public Accountant and has led a number of civic organizations. Mr. Karn serves on the board of directors of Natural Resource Partners, a coal-oriented master limited partnership that trades on the New York Stock Exchange. Henry (Jack) E. Lentz is an Advisory Director for Lehman Brothers Inc. He joined Lehman Brothers in 1971 and became a Managing Director in 1976. In 1988, Mr. Lentz left Lehman Brothers to serve as Vice Chairman of Wasserstein Perella Group, Inc. In 1993, he returned to Lehman as a Managing Director and served as head of the firm's worldwide energy practice. In 1996, he joined the Merchant Banking Group as a Principal and in 2003 became a consultant to the Merchant Banking Group. Mr. Lentz is currently a director of Rowan Companies, Inc. and Curbo Ceramics, Inc. Mr. Lentz holds an MBA from the Wharton School of Business at the University of Pennsylvania. William C. Rusnack is the former President and Chief Executive Officer of Premcor Inc. Prior to joining Premcor in April 1998, Mr. Rusnack was President of ARCO Products Company, the refining and marketing division of Atlantic Richfield Company. During his 31-year career at ARCO, he was also President of ARCO Transportation Company and Vice President of Corporate Planning. Mr. Rusnack is a member of the American Petroleum Institute as well as a member of the Dean's Advisory Council of the Graduate School of Business at the University of Chicago and the National Council of the Olin School of Business at Washington University in St. Louis. He serves on a number of civic and corporate boards, including Sempra Energy, The Urban League of Metropolitan St. Louis, the St. Louis Science Center and the St. Louis Opera Theatre. He holds a bachelor of science in general chemistry from Indiana University of Pennsylvania and an MBA from the University of Chicago. Dr. James R. Schlesinger served as U.S. Secretary of Energy, U.S. Secretary of Defense and Central Intelligence Agency (CIA) Director. He is currently Chairman of the Board of Trustees of the MITRE Corporation and serves as Counselor to the Center for Strategic and International Studies. Dr. Schlesinger was U.S. Secretary of Energy from 1977 to 1979. He held senior executive positions for three U.S. Presidents, serving as Chairman of the U.S. Atomic Energy Commission from 1971 to 1973, Director of the Central Intelligence Agency in 1973 and Secretary of Defense from 1973 to 1975. Prior positions include Assistant Director of the Office of Management and Budget, Director of Strategic Studies at the Rand Corporation, Associate Professor of Economics at the University of Virginia and Board of Governors of the Federal Reserve System. Dr. Schlesinger holds bachelor of arts, master's and doctoral degrees from Harvard University. He is a trustee at the Atlantic Council, Center for Global Energy Studies; a fellow of the National Academy of Public Administration; and a member of the American Academy of Diplomacy. Dr. Blanche M. Touhill is Chancellor Emeritus and Professor Emeritus at the University of Missouri - St. Louis. Dr. Touhill began her career in education at Queens College, City University of New York, before joining UMSL as an assistant professor. Dr. Touhill was named Vice Chancellor for Academic Affairs in 1987 and assumed the responsibilities of Interim Chancellor in 1990. She was named Chancellor in 1991. Dr. Touhill holds bachelor's and doctoral degrees in history and a master's degree in geography from St. Louis University. Dr. Touhill has served on a number of civic and corporate boards, including Trans World Airlines, Delta Dental, the Urban League of St. Louis, Civic Progress and the Missouri Botanical Gardens. In 1997, she was named the St. Louis Citizen of the Year. Sandra A. Van Trease is President and Chief Executive Officer of UNICARE, one of the fastest-growing segments of Wellpoint Health Networks, Inc. Wellpoint is a large health insurance company, based in California, which last year purchased RightCHOICE Managed Care, Inc. Ms. Van Trease held the positions of President and Chief Operating Officer and previously Executive Vice President and Chief Financial Officer of RightCHOICE. Prior to joining RightCHOICE in 1994, she was a Senior Audit Manager with Price Waterhouse. She is a Certified Public Accountant and Certified Management Accountant. Ms. Van Trease serves on the boards of a number of civic organizations in the St. Louis area and on U.S. Bancorp's St. Louis board of directors. Alan H. Washkowitz is a Managing Director of Lehman Brothers Inc. and part of the firm's Merchant Banking Group, with responsibility for the oversight of Lehman Brothers Merchant Banking Partners II L.P. Mr. Washkowitz joined Kuhn Loeb & Co. in 1968 and became a general partner of Lehman Brothers in 1978 when Kuhn Loeb & Co. was acquired. Prior to joining the Merchant Banking Group, Mr. Washkowitz headed Lehman Brothers' Financial Restructuring Group. He is currently a director of CP Kelco Inc., L-3 Communications Corporation and K&F Industries, Inc. Mr. Washkowitz holds an MBA from Harvard University and a Juris Doctorate from Columbia University. ABOUT PEABODY Peabody Energy (NYSE: BTU) is the world's largest private-sector coal company, with 2003 sales of 203 million tons and $2.8 billion in revenues. Its coal products fuel approximately 9.8 percent of all U.S. electricity generation and nearly 2.5 percent of worldwide electricity generation. As reported in the Troubled Company Reporter's March 22, 2004 edition, Fitch Ratings has assigned a 'BB' rating to Peabody Energy's (BTU) new $250 million senior unsecured notes due 2016. At the same time Fitch affirms Peabody's 'BB+' rating on the revolving credit facility and bank term loan and the 'BB' rating on its $450 million senior unsecured notes due 2013. The Rating Outlook remains Positive. Also, as previously reported, Standard & Poor's Ratings Services affirmed all its ratings on Peabody Energy Corp. and assigned its 'BB-' rating to the company's $200 million senior unsecured notes due 2016. In addition, Standard & Poor's assigned its '1' recovery rating to Peabody's $1.3 billion senior secured credit facility. This and the existing 'BB+' rating on the credit facility (which is one notch higher than the corporate credit rating) indicate a high expectation of full recovery of principal in the event of a default. "The ratings on St. Louis, Mo.-based Peabody Energy Corp. reflect its aggressive financial leverage, including its significant debt- like liabilities," said Standard & Poor's credit analyst Thomas Watters. "The ratings also reflect the company's leading market position; its substantial, diversified reserve base; and contractual coal sales." PENTHOUSE: Completes $4 Million Private Placement with Mercator --------------------------------------------------------------- Penthouse International (OTCBB:PHSL), a diversified holding company with operating subsidiaries in adult entertainment and real estate, has closed a $4 million private placement of convertible preferred stock to Mercator Advisory Group, LLC, through its designated funds, the Mercator Momentum Fund and the Mercator Momentum Fund III, both accredited institutional investors. Penthouse used the proceeds to complete its acquisition of Internet Billing Company LLC (iBill). iBill is now a wholly owned subsidiary of Penthouse International, Inc. and will operate as a completely independent division from other Penthouse subsidiaries, including General Media, Inc., which is in reorganization. Penthouse International also owns real property in Manhattan, New York and Zijuatanejo-Ixtapa, Mexico. "Mercator is a valuable strategic investor for Penthouse," said Claude Bertin. "Mercator is responsive in its analytical approach and its execution which compliments other institutional investments committed to Penthouse in the prior several weeks." Penthouse has disclosed in recent weeks debt and equity financing commitments totaling over $116 million that is to be provided to General Media and Penthouse by its main shareholder, Dr. Luis Enrique Fernando Molina, and several institutional investors. Harry Aharonian, Portfolio Manager for the Mercator Advisory Group stated, "After performing our due diligence, in our opinion we believe that Penthouse's acquisition of iBill compliments its current business model and we believe Penthouse will achieve organic growth from its subsidiaries which will ultimately bring shareholder value. We welcome the investment into our portfolio." About Mercator Advisory Group, LLC. The Mercator Advisory Group, through its designated managed equity funds, specializes in direct equity investments in public companies. Our strategy is to make investments into small to mid cap companies that show strong potential for near and long-term appreciation. MAG incorporates strict selection criteria for our portfolio companies including a company's liquidity, fundamental analysis within its own space and the ability of the company's management to show a path toward growth. We often place our investments by formalizing long-term strategies with management with milestones to track progress. Our commitments are usually subject to the company executing on predetermined milestones that ultimately achieve greater shareholder equity. About Penthouse International, Inc. Penthouse International, Inc., through its subsidiaries General Media, Inc., Del Sol Investments LLC and PH Realty Associates LLC and iBill, is a brand-driven global entertainment business founded in 1965 by Robert C. Guccione. General Media's flagship PENTHOUSE brand is one of the most recognized consumer brands in the world and is widely identified with premium entertainment for adult audiences. General Media caters to men's interests through various trademarked publications, movies, the Internet, location-based live entertainment clubs and consumer product licenses. General Media licenses the PENTHOUSE trademarks to third parties worldwide in exchange for recurring royalty payments. Penthouse's iBill subsidiary is the premier provider of turnkey e-commerce solutions for online businesses around the world. Penthouse International, Inc.'s September 30, 2003 balance sheet shows a total shareholders' equity deficit of about $70 million. PILLOWTEX: Signs Deal Recharacterizing 3 Key-Assigned Lease Pacts ----------------------------------------------------------------- Between June 16, 1999 and July 30, 1999, Debtor Pillowtex Corporation entered into three lease agreements with General Electric Capital Corporation under which Pillowtex used GECC's production equipment for the Debtors' manufacturing operations: (a) Production Equipment Lease Agreement No. Series 8-A, having a capitalized lessor's cost of $3,007,393; (b) Production Equipment Lease Agreement No. Series 8-A1, having a capitalized lessor's cost of $1,546,200; and (c) Production Equipment Lease Agreement No. Series 18-A, having a capitalized lessor's cost of $602,600. GECC later assigned all its right, title, interest and obligations under the three Lease Agreements to Key Equipment Finance, a division of Key Corporate Capital, Inc. On May 9, 2002, the Debtors assumed the Three Lease Agreements. In an Assignment and Bill of Sale with Crescent Financial LLC, dated September 30, 2003, Key assigned to Crescent, an affiliate of GGST, the three Lease Agreements and substantially all of Key's rights, title, interest, claims and remedies under the Lease Agreements and in the Equipment for $600,000. On October 7, 2003, the Court approved the sale of substantially all of the Debtors' assets to GGST. Pursuant to the Sale Agreement, the parties must jointly determine prior to the closing of the sale of the Assets, whether each Subject Capital Lease must be treated as a true lease or recharacterized as a financing lease or secured loan under the Bankruptcy Code. Accordingly, with the Court's approval, the Debtors, Crescent and GGST stipulate and agree that: (a) The three Lease Agreements are not true leases under the Bankruptcy Code and, thus, recharacterized as financing leases or secured loans; (b) The Equipment is property of the Debtors' estates; (c) Crescent, as assignee of Key, has a valid, binding, enforceable and perfected, first priority security interest in the Equipment and, accordingly, a secured claim against Pillowtex equal to the liquidation value of the Equipment; (d) As of the Petition Date, the aggregate balance due or to become due under the Lease Agreements was $1,166,266; (e) The liquidation value of the Equipment is $600,000; (f) In consideration of the Secured Claim, the Debtors will transfer to GGST good legal and beneficial title to the Equipment, free and clear of all liens, claims, encumbrances and interests of any kind or nature; (g) GGST will have an allowed unsecured prepetition non- priority deficiency claim against the Debtors for $566,266 and will not be required to file a proof of claim; and (h) Crescent and GGST fully and forever releases and discharges the Debtors of and from any and all claims against the Debtors that Crescent or GGST has or may have under or relating to the three Lease Agreements. Headquartered in Dallas, Texas, Pillowtex Corporation -- http://www.pillowtex.com/-- sells top-of-the-bed products to virtually every major retailer in the U.S. and Canada. The Company filed for Chapter 11 protection on November 14, 2000 (Bankr. Del. Case No. 00-4211). David G. Heiman, Esq., at Jones, Day, Reavis & Poque represents the Debtors in their restructuring efforts. On July 30, 2003, the Company listed $548,003,000 in assets and $475,859,000 in debts. (Pillowtex Bankruptcy News, Issue No. 61; Bankruptcy Creditors' Service, Inc., 215/945-7000) REAL ESTATE SYNTHETIC: S&P Rates Series 2004-A Notes ---------------------------------------------------- Standard & Poor's Ratings Services assigned its ratings to Real Estate Synthetic Investment Securities Series 2004-A's $162.718 million notes. The ratings are based on a level of credit enhancement that meets Standard & Poor's requirements given the quality of the loans, distribution of the mortgaged properties, and a legal structure designed to minimize potential losses to certificateholders caused by the insolvency of the issuer. RATINGS ASSIGNED Real Estate Synthetic Investment Securities Series 2004-A Class Rating Amount (mil $) B3 A 58.578 B4 A- 19.526 B5 BBB 26.035 B6 BBB- 13.017 B7 BB 16.923 B8 BB- 5.207 B9 B+ 10.414 B10 B 6.509 B11 B- 6.509 RELIANCE: Court Issues Conditions for LaManna Settlement Approval ----------------------------------------------------------------- Certain individuals asserted claims for alleged breach of fiduciary duty under Section 502(a)(2) of the Employee Retirement Income Security Act of 1974, relating to their investments in Reliance Group Holdings, Inc.'s publicly traded common stock. They filed a class action on July 17, 2001 captioned LaManna, et al. v. Steinberg, et al., Civil Act. No. 01 CV 3571 (Judge Anita B. Brody), in the United States District Court for the Eastern District of Pennsylvania. The Reliance Group Debtors are not parties to the LaManna Action, but they are involved as owners of insurance policies that are property of the estates. The Parties are: -- Plaintiffs: Camille LaManna and Eileen Stutzbach, individually, on behalf of the Reliance Savings Incentive Plan and as representatives of the Class; -- Defendants: Saul P. Steinberg, Robert M. Steinberg, Lowell C. Freiberg, George E. Bello, James E. Yacobucci, Joel H. Rothwax, Bruce L. Sokoloff, Leslie Fishkin and Ann E. Colleran; -- the Reliance Savings Incentive Plan; -- certain Underwriters at Lloyd's, London and Companies subscribing to policy numbers 823/FD9701593, 542/FO120D96, 823/FO1307D97, 823/FD9798178 and 823/FD9900896; and -- the Insurance Commissioner of Pennsylvania as Liquidator of RIC, which is the Plan Administrator of the Reliance Savings Incentive Plan. On August 30, 2002, the Defendants filed three requests to dismiss that, although fully briefed, remain sub judice. Discovery was stayed while the Parties to the LaManna Action were referred to United States Magistrate Judge Diane M. Welsh, U.S. District Court for the Eastern District of Pennsylvania, to conduct settlement discussions. The LaManna Action Parties held numerous good faith, arm's-length negotiating sessions over the next 14 months attempting to settle the ERISA Claims, with the assistance of Judge Welsh. As a result, the LaManna Action Parties, assessing the risks and costs of litigation, determined to settle the LaManna Claim under these terms: (1) Releases: (a) the Plaintiffs will forever release the Defendants from all Settled Claims; (b) RIC, as the Plan Administrator, releases the parties to the Settlement; (c) the Insurers release the Plaintiffs; and (d) the Defendants release claims to insurance coverage and the Insurers for their part in the litigation. (2) Coverage: (a) the Defendants retain the right to seek insurance coverage for indemnity, costs, expenses and fees for any claims not settled; and (b) the Insurers, on behalf of the Defendants, will pay $5,000,000 to settle the LaManna Claim; (i) the Insurers will pay $60,000 from the $5,000,000 to Fidelity Employer Services Company to pay administrative fees and costs associated with mailing the Class Notice and calculating and applying the Plan of Allocation. This amount is not recoverable if the Settlement is not approved by the District Court; (ii) the Insurers, on behalf of Defendants, will pay Class Counsel, from the $4,940,000 remaining from the Settlement Amount, the amount awarded by the District Court, plus the amount awarded to the Plaintiffs; and (iii) the Insurers will pay the balance of the Settlement Amount to Fidelity Management Trust Company for allocation to Class Members. The LaManna Action Parties ask Judge Gonzalez to approve the Settlement Agreement. The LaManna Action Parties also ask the Court to preclude creditors of the Debtors' estates from taking actions inconsistent with the Settlement. The Parties are seeking approval for the Settlement in the Commonwealth Court and the Pennsylvania Court. * * * Judge Gonzalez rules that the request will be granted when: (a) the United States District Court for the Eastern District of Pennsylvania grants the Preliminary and Final Order in the LaManna Action; and (b) the Liquidation Court approves the Settlement and the payment of the Retainer Amount. When both conditions are satisfied, the Bankruptcy Order will become final and binding and the request will be granted in all respects. Headquartered in New York, New York, Reliance Group Holdings, Inc. -- http://www.rgh.com/-- is a holding company that owns 100% of Reliance Financial Services Corporation. Reliance Financial, in turn, owns 100% of Reliance Reliance Insurance Company. The Company filed for chapter 11 protection on June 12, 2001 (Bankr. S.D.N.Y. Case No. 01-13403). When the Company filed for protection from their creditors, they listed $12,598,054,000 in assets and $12,877,472,000 in debts. (Reliance Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., 215/945-7000) RESIDENTIAL ACCREDIT: Fitch Takes Actions on 35 Securitizations --------------------------------------------------------------- Fitch Ratings has taken various actions on the following Residential Accredit Loans, Inc. mortgage asset-backed pass- through certificates as follows: Series 1997-QS4 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 affirmed at 'AAA'; --Class M-3 affirmed at 'AAA'; --Class B-1 affirmed at 'A+'; --Class B-2 affirmed at 'BB+'. Series 1997-QS5 --Classes A, R affirmed at 'AAA'; --Class M-1 upgraded to 'AAA' from 'AA'; --Class M-2 upgraded to 'AAA' from 'A'; --Class M-3 upgraded to 'BBB+' from 'BBB'; --Class B-1 affirmed at 'BB' ; --Class B-2 remains at 'CCC'. Series 1997-QS7 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 affirmed at 'AAA' ; --Class M-3 affirmed at 'A+'; --Class B-1 affirmed at 'BB'; --Class B-2, rated 'B', placed on Rating Watch Negative. Series 1998-QS4 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 affirmed at 'AAA'; --Class M-3 affirmed at 'A+'; --Class B-1 affirmed at 'BB+'; --Class B-2 affirmed at 'B'. Series 1999-QS2 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 affirmed at 'AAA'; --Class M-3 affirmed at 'A-'; --Class B-1 affirmed at 'BB'; --Class B-2 affirmed at 'B'. Series 1999-QS9 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 upgraded to 'AAA' from 'AA'; --Class M-3 upgraded to 'BBB+' from 'BBB'; --Class B-1 affirmed at 'BB'; --Class B-2 affirmed at 'B'. Series 1999-QS10 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 upgraded to 'AA+' from 'AA'; --Class M-3 affirmed at 'BBB'; --Class B-1 affirmed at 'BB'; --Class B-2 remains at 'C'. Series 1999-QS11 --Classes CB, NB, A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 upgraded to 'AAA' from 'AA'; --Class M-3 affirmed at 'A-'; --Class B-1 affirmed at 'BB'; --Class B-2, rated 'B', placed on Rating Watch Negative. Series 1999-QS13 --Classes CB, NB, A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 upgraded to 'AA+' from 'AA'; --Class M-3 affirmed at 'BBB'; --Class B-1 affirmed at 'BB'; --Class B-2 downgraded to 'C' from 'CCC'. Series 1999-QS14 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 affirmed to 'AAA'; --Class M-3 affirmed at 'A+'; --Class B-1 affirmed at 'BB'; --Class B-2 downgraded to 'C' from 'CCC'. Series 1999-QS15 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 upgraded to 'AAA' from 'AA'; --Class M-3 upgraded to 'BBB+' from 'BBB'; --Class B-1 affirmed at 'BB'; --Class B-2 downgraded to 'CC' from 'CCC'. Series 2000-QS1 --Classes CB, NB, A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 affirmed at 'AAA'; --Class M-3 affirmed at 'BBB'; --Class B-1 downgraded to 'B-' from 'BB-'; --Class B-2 downgraded to 'D' from 'C'. Series 2000-QS3 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 upgraded to 'AAA' from 'AA+'; --Class M-3 affirmed at 'A-'; --Class B-1 affirmed at 'BB'; --Class B-2 downgraded to 'C' from 'B-'. Series 2000-QS5 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 affirmed at 'AAA'; --Class M-3 affirmed at 'A'; --Class B-1 affirmed at 'BB-' Series 2000-QS6 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 affirmed at 'AAA'; --Class M-3 affirmed at 'A-'; --Class B-1 affirmed at 'BB'; --Class B-2 downgraded to 'C' from 'B-'. Series 2000-QS10 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 affirmed at 'AAA'; --Class M-3 upgraded to 'AA-' from 'A+'; --Class B-1 affirmed at 'BB'; --Class B-2 affirmed at 'B'. Series 2000-QS11 --Classes CB, NB, A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 affirmed at 'AA+'; --Class M-3 affirmed at 'A+'; --Class B-1 downgraded to 'B-' from 'BB'; --Class B-2 downgraded to 'C' from 'B-'. Series 2000-QS12 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 affirmed at 'AAA'; --Class M-3 upgraded to 'AA-' from 'A+'; --Class B-1 affirmed at 'BB'; --Class B-2 affirmed at 'B'. Series 2000-QS14 --Classes CB, NB, A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 upgraded to 'AAA' from 'AA+'; --Class M-3 affirmed at 'A'; --Class B-1 affirmed at 'BB'; --Class B-2 downgraded to 'B-' from 'B'. Series 2001-QS1 --Classes CB, NB, A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 affirmed at 'AAA'; --Class M-3 affirmed at 'AA-'; --Class B-1 affirmed at 'BBB-'; --Class B-2 affirmed at 'B'. Series 2001-QS3 --Classes CB, NB, A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 affirmed at 'AAA'; --Class M-3 affirmed at 'A-'; --Class B-1 affirmed at 'BB'; --Class B-2 downgraded to 'B-' from 'B'. Series 2001-QS4 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 affirmed at 'AA-'; --Class M-3 affirmed at 'BBB'; --Class B-1 affirmed at 'BB'; --Class B-2 downgraded to 'B-' from 'B'. Series 2001-QS6 --Classes CB, NB, A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 affirmed at 'AA'; --Class M-3 affirmed at 'A'; --Class B-1 affirmed at 'BB'; --Class B-2, at 'B', placed on Rating Watch Negative. Series 2001-QS7 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 affirmed at 'A+'; --Class M-3 affirmed at 'BBB'; --Class B-1 affirmed at 'BB'; --Class B-2 affirmed at 'B'. Series 2001-QS10 --Classes CB, NB, A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 affirmed at 'AA-'; --Class M-3 affirmed at 'BBB'; --Class B-1 affirmed at 'BB'; --Class B-2 affirmed at 'B'. Series 2001-QS11 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 affirmed at 'A+'; --Class M-3 affirmed at 'BBB+'; --Class B-1 affirmed at 'BB'; --Class B-2 affirmed at 'B'. Series 2001-QS12 --Classes A, R affirmed at 'AAA'; --Class M-1 upgraded to 'AAA' from 'AA'; --Class M-2 upgraded to 'A+' from 'A'; --Class M-3 affirmed at 'BBB'; --Class B-1 affirmed at 'BB'; --Class B-2 affirmed at 'B'. Series 2001-QS13 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AAA'; --Class M-2 affirmed at 'AA'; --Class M-3 affirmed at 'A'; --Class B-1 affirmed at 'BB'; --Class B-2 affirmed at 'B'. Series 2001-QS17 --Classes A, R affirmed at 'AAA'; --Class M-1 upgraded to 'AA+' from 'AA'; --Class M-2 affirmed at 'A'; --Class M-3 affirmed at 'BBB'; --Class B-1 affirmed at 'BB'; --Class B-2 affirmed at 'B'. Series 2002-QS1 --Classes A, R affirmed at 'AAA'; --Class M-1 upgraded to 'AA+' from 'AA'; --Class M-2 affirmed at 'A'; --Class M-3 affirmed at 'BBB'; --Class B-1 affirmed at 'BB'; --Class B-2 affirmed at 'B'. Series 2002-QS2 --Classes A, R affirmed at 'AAA'; --Class M-1 upgraded to 'AA+' from 'AA'; --Class M-2 affirmed at 'A'; --Class M-3 affirmed at 'BBB'; --Class B-1 affirmed at 'BB'; --Class B-2 affirmed at 'B'. Series 2002-QS4 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AA'; --Class M-2 affirmed at 'A'; --Class M-3 affirmed at 'BBB' --Class B-1 affirmed at 'BB'; --Class B-2 affirmed at 'B'. Series 2002-QS5 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AA'; --Class M-2 affirmed at 'A'; --Class M-3 affirmed at 'BBB'; --Class B-1 affirmed at 'BB'; --Class B-2 affirmed at 'B'. Series 2002-QS6 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AA'; --Class M-2 affirmed at 'A'; --Class M-3 affirmed at 'BBB'; --Class B-1 affirmed at 'BB'; --Class B-2 affirmed at 'B'. Series 2002-QS8 --Classes A, R affirmed at 'AAA'; --Class M-1 affirmed at 'AA'; --Class M-2 affirmed at 'A'; --Class M-3 affirmed at 'BBB'; --Class B-1 affirmed at 'BB'; --Class B-2 affirmed at 'B'. The upgrades are being taken as a result of low delinquencies and losses, as well as increased credit support levels. The affirmations are due to credit enhancement levels consistent with future loss expectations. The negative rating actions reflect poor performance of the underlying collateral in the transaction. ROHN IND.: Reorganized Company Now Trading as Frankfort Tower ------------------------------------------------------------- Effective February 17, 2004, the common stock of Frankfort Tower Industries, Inc., will trade under the ticker symbol "FFTIQ". As previously reported, the Company (formerly known as ROHN Industries, Inc.), sold substantially all of its operating assets to Radian Communication Services Corporation, as part of its ongoing Chapter 11 bankruptcy. The assets the Company sold included the trade names "ROHN Industries, Inc." and "ROHN". Because of the resulting name change, the Company will no longer trade under the ticker symbol "ROHNQ". The Company and related debtors currently continue their operations for the sole purpose of the liquidation of any remaining assets for the benefit of their creditors. Once the remaining assets have been liquidated in an orderly fashion, the proceeds will be administered to the bankruptcy estate and applied to the claims and obligations pursuant to Chapter 11 of the United States Bankruptcy Code. At this time, it is not anticipated that the Company's shareholders will receive any recovery in the bankruptcy proceedings. ROSEWOOD CENTER: Voluntary Chapter 11 Case Summary -------------------------------------------------- Debtor: Rosewood Center, LLC 6073 Sharonwood Drive Stevens Point, Wisconsin 54481 Bankruptcy Case No.: 04-11704 Chapter 11 Petition Date: March 12, 2004 Court: Western District of Wisconsin (Eau Claire) Judge: Thomas S. Utschig Debtor's Counsel: Daniel R. Freund, Esq. Freund Law Office 920 South Farwell Street, Suite 1800 P.O. Box 222 Eau Claire, WI 54702-0222 Tel: 715-832-5151 Fax: 715-832-5491 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20-largest creditors. SIGNS NOW OF OREGON: Case Summary & Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Signs Now of Oregon Inc. dba Signs Now of Oregon 5541 North East 122nd Avenue #310 Portland, Oregon 97230 Bankruptcy Case No.: 04-42494 Type of Business: The Debtor is a full service sign shop from simple text signs to full color digital graphics. See http://www.signsnownw.com/ Chapter 11 Petition Date: March 12, 2004 Court: Western District of Washington (Tacoma) Judge: Paul B. Snyder Debtor's Counsel: Richard G. Birinyi, Esq. Bullivant Houser Bailey PC 1601 5th Avenue #2400 Seattle, WA 98101-1618 Tel: 206-292-8930 Total Assets: $414,989 Total Debts: $1,731,120 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Weststar Loan Servicing Corp $320,000 P.O. Box 2078 Portland, OR 97208 Bank of the West Value of Collateral: $292,783 SBA Division $233,000 P.O. Box 61000 Truckee, CA 96160 Signs Now Corporation $240,000 Qwest Dex/Fidelity $115,000 Collection Service Northwest Sign Supply $62,000 Northwest Sign Supply (OR) $56,042 State of Washington $53,469 Northgate Station $29,838 Verizon Directories Corp. $29,617 Deringer's Properties, Inc. $26,703 Wells Fargo Businessline $24,772 Dawn Hardley $20,488 First Industrial, L.P. $20,420 American Express Data $16,116 Christenson Barclay & Shaw $14,420 Inc. Ford Motor Credit Company $11,703 Dept Consumer & Business $11,446 Service A&F Properties $11,036 Andresen Plaza $10,466 Brekke Postal Station $9,900 SOLUTIA INC: Proposes to Set Up Non-Core Asset Sale Procedures -------------------------------------------------------------- In connection with the day-to-day operation of their businesses, the Solutia, Inc. Debtors maintain a diverse array of assets, including real, personal and intangible property. The Debtors have determined that certain of these assets are no longer necessary for the successful operation and reorganization of their businesses. The Debtors believe that the prudent course, after identifying that an asset is either unproductive or non-essential, is to market the asset for sale or in some cases, donate or abandon it. By doing so, the Debtors expect to: (a) streamline their operations by eliminating the need to track and maintain equipment and other property not central to their businesses; (b) in certain circumstances, make room for the purchase of replacement equipment or other assets; and (c) improve liquidity or reduce debt service by realizing sale proceeds. The Debtors anticipate that during the pendency of their Chapter 11 cases, they will attempt to sell a number of non-core assets that are of relatively de minimis value compared to their total asset base, which is on a consolidated basis over $2,900,000,000. Many of the asset sales may constitute transactions outside the ordinary course of the Debtors' business that typically would require individual Court approval. Mr. Cieri contends that requiring Court approval for each miscellaneous asset sale would be administratively burdensome to the Court and costly for the Debtors' estates. In certain cases, the costs and delays associated with seeking individual Court approval of a sale would potentially eliminate, or substantially undermine, the economic benefits of the transaction. Accordingly, to reduce these burdens and costs, the Debtors ask the Court to approve the proposed Non-Core Asset Sale Procedures. Under the proposed process, the Debtors will use the Non-Core Asset Sale Procedures to obtain more expeditious and cost- effective review by interested parties, in lieu of individual Court approval, of certain sales involving less valuable, non- core assets. All other sale transactions outside the ordinary course of the Debtors' businesses would remain subject to Court approval on an individual basis. The Non-Core Asset Sale Procedures (1) Transactions The Non-Core Asset Sale Procedures would apply only to asset sale transactions outside the ordinary course of business involving, in each case, the transfer of $5,000,000 or less, as measured by the amount of cash and other consideration to be received by the Debtors on account of the assets to be sold, including any assumption of liabilities or payment by the buyer of aggregate cure costs in connection with the assumption and assignment of any related executory contracts and unexpired leases. The Debtors would be permitted to use the Non-Core Asset Sale Procedures to sell assets that are encumbered by liens, encumbrances or other interests only if the holders consent to the sale. Similarly, the Debtors would be permitted to sell assets co-owned by a Debtor and a third party only upon express or implied consent of the co- owner. (2) Notice For Non-Core Asset Sales for which the total consideration is between $250,000 and $5,000,000 or for which a donation or abandonment is contemplated, the Debtors propose these procedures: (a) After the Debtors enter into a contract or contracts contemplating a Non-Core Asset Sale, they will serve a notice of the proposed sale on: -- the United States Trustee for the Southern District of New York; -- counsel to the Creditors Committee; -- counsel to the Official Committee of Retirees; -- counsel to the agents for the Debtors' postpetition secured lenders; -- counsel to the Indenture Trustee for the secured public debt service issued by the Debtors; -- counsel to the Ad Hoc Committee for the secured public debt securities issued by the Debtors; -- all other known parties holding or asserting liens on or other interests in the assets that are the subject of the proposed sale; and -- if applicable, the non-debtor parties to all executory contracts and unexpired leases that the Debtors propose to assume and assign. (b) Each Sale Notice must include these information with respect to the proposed sale: -- a description of the assets and their locations; -- the identity of the non-debtor party to the proposed sale and any relationships between the party and the Debtors; -- the identities of any parties holding lien on or other interests in the assets proposed to be sold, and a statement indicating that all liens and interests are capable of monetary satisfaction; -- the material economic terms and conditions of the proposed sale; -- identification of the executory contracts and unexpired leases that the Debtors propose to assume and assign in connection with the proposed sale and the related cure amounts; -- instructions regarding the procedures to assert objections to the proposed sale; and -- the Debtors' basis for believing that the consideration for the sale is fair and equitable or that donation or abandonment is appropriate. With respect to each Sale Notice, the Interested Parties have through 5:00 p.m. on the 10thcalendar day after the service date to object to the proposed sale. If no objections were properly asserted before the expiration of the Notice Period, the Debtors would be authorized to consummate the Proposed Sale. Upon either the expiration of the Notice Period without the receipt of any objections or the written consent of all interested parties, the proposed sale would be deemed final and fully authorized by the Court. If any significant economic terms of the proposed sale were amended after transmittal of the Sale Notice but before the expiration of the Notice Period, the Debtors would be required to send a revised Sale Notice to all Interested Parties describing the sale as amended. If a revised Sale Notice is required, the Notice Period would be extended for an additional five calendar days. (3) Objection Procedures Objections to any proposed Non-Core Asset Sale must: (a) be in writing; (b) be served on the Interested Parties and the Debtors' counsel before the expiration of the Notice Period; and (c) state with specificity the grounds for objection. (4) De Minimis Non-Core Asset Sales A De Minimis Sale will be deemed final and fully authorized by the Court, without following the Notice Procedures and without further Court approval. De Minimis Sales are any Non-Core Assets Sales involving: (a) the transfer of $250,000 or less in total consideration or value; (b) no proposed assumption and assignment of any executory contracts; and (c) no known parties other than the DIP Lenders and the Indenture Trustee of the 11.25% Debentures hold or assert liens or other interests in the De Minimis Sale. Within 45 days after the end of each quarter, the Debtors will provide interested parties with a report itemizing the assets sold and consideration received for each De Minimis Sale completed during the quarter. (5) Effect of Sale The Debtors propose that, for each Non-Core Asset Sale, buyers will take title to the assets free and clear of liens, claims, encumbrances and other interests, pursuant to Section 363(f) of the Bankruptcy Code. Headquartered in St. Louis, Missouri, Solutia, Inc. -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Company filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. (Solutia Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000) SP POULSBO PLACE: Voluntary Chapter Case Summary ------------------------------------------------ Debtor: SP Poulsbo Place II Limited Partnership 1201 Third Avenue Suite 5400 Seattle, Washington 98101 Bankruptcy Case No.: 04-13299 Chapter 11 Petition Date: March 11, 2004 Court: Western District of Washington (Seattle) Judge: Thomas T. Glover Debtor's Counsel: Diana K. Carey, Esq. Karr Tuttle Campbell 1201 3rd Ave Ste 2900 Seattle, WA 98101-3028 Tel: 206-224-8066 Fax: 206-682-7100 Total Assets: $2,807,724 Total Debts: $4,256,471 The Debtor did not file a list of its 20-largest creditors. STOLT OFFSHORE: Trading Restrictions on New Shares Lifted --------------------------------------------------------- Stolt Offshore S.A. (Nasdaq: SOSA; Oslo Stock Exchange: STO), announced that the transfer restrictions have been lifted on the 45.5 million Common Shares, which were issued in the private placement and on which trading commenced on March 12, 2004. The ISIN number under which the new shares have been trading and the STON ticker code will be cancelled on March 25, 2004. All Stolt Offshore shares registered on the Oslo Bors will trade under the original ISIN number and STO ticker code from that date. Stolt Offshore is a leading offshore contractor to the oil and gas industry, specialising in technologically sophisticated deepwater engineering, flowline and pipeline lay, construction, inspection and maintenance services. The Company operates in Europe, the Middle East, West Africa, Asia Pacific, and the Americas. * * * As reported in Troubled Company Reporter's January 2, 2004 edition, Stolt Offshore S.A. obtained an extension from December 15, 2003 until April 30, 2004 of the waiver of banking covenants. Stolt Offshore continues discussions with its lenders towards a long-term agreement. STRUCTURED ASSET: Fitch Affirms BB+ Rating on Class I Notes ----------------------------------------------------------- Structured Asset Securities Corp.'s multi-class pass-through certificates, series 1996-CFL, are upgraded by Fitch Ratings as follows: --$48 million class H to 'AAA' from 'AA'. The following classes are affirmed by Fitch: --Interest-only classes X-1 and X-2 'AAA'; --$12.4 million class F 'AAA'; --$96 million class G 'AAA'; --$67.2 million class I 'BB+'. The $34.5 million class J and the $265,165 class P certificates are not rated by Fitch. The upgrades reflect improved credit enhancement levels resulting from loan payoffs and amortization. As of the February 2004 distribution date, the pool's certificate balance has been reduced by 87% to $258.4 million from $1.93 billion at issuance. Realized losses to date total $25.5 million, or 1.3% of the original principal balance. Seven loans (28%) are currently being specially serviced by Lennar Partners, Inc., including one 90 days delinquent (1.3%), one in foreclosure (1.3%), and a real estate- owned (REO) loan (1.6%). The largest specially serviced loan (11.5%) is secured by an office property in St. Paul, MN. Occupancy at the property declined to 53%. The loan is current and the special servicer is negotiating a loan workout. The second-largest specially serviced loan (8.7%) is secured by a 1.5 million-square-foot Kmart distribution facility in Ocala, FL. The loan is current and the special servicer is negotiating a loan workout. The REO loan (1.7%) is secured by an office property in Sarasota, FL. Losses are expected. Over 20% of the pool did not submit financials; not all the loans are required to report them. TOWER AUTOMOTIVE: Morgan Stanley Reports 7.59% Equity Stake ----------------------------------------------------------- Morgan Stanley beneficially owns 4,272,128 shares of the common stock of Tower Automotive, Inc., which represents 7.59% of the outstanding common stock of the Company. Morgan Stanley holds shared dispositive powers over the stock. Morgan Stanley is filed ownership record with the SEC solely in its capacity as the parent company of, and indirect beneficial owner of securities held by, one of its business units. Accounts managed on a discretionary basis by Morgan Stanley are known to have the right to receive, or the power to direct, the receipt of dividends from, or the proceeds from, the sale of such securities. No such account holds more than 5 percent of the class. * * * As previously reported, Standard & Poor's Ratings Services lowered its ratings on Grand Rapids, Michigan-based Tower Automotive Inc. and related entities, including lowering the corporate credit rating to 'B+' from 'BB-', and removed all ratings from CreditWatch where they were placed on Oct. 16, 2003. "The downgrade reflects continued weak operating performance due to intense industry pressures and operating inefficiencies that have led to the deterioration of the firm's financial profile," said Standard & Poor's credit analyst Daniel DiSenso. "The company is generating sizable negative free cash flow, and credit measures are very weak, with adjusted debt to EBITDA of more than 5x and funds from operations to debt of about 10%, below Standard & Poor's expectations. Tower's new senior management team is taking numerous steps to improve performance, but it will take some time to turn around the business." UNITED AIRLINES: Committee Turns to Sperling & Slater for Advice ---------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the Chapter 11 cases of the United Airlines Inc. Debtors seeks the Court's authority to retain Sperling & Slater as special litigation counsel to assist with discovery and pursue, if warranted, claims against aircraft financiers represented by Chapman and Cutler LLP for potential violations of 15 U.S.C. Section 1, the Sherman Act, federal securities law and other related claims. The Committee takes on Sperling due to potential conflict of its sole counsel, Sonnenschein, Nath & Rosenthal. Fruman Jacobson, Esq., at Sonnenschein, alleges that the Chapman Group members acted in concert to set aircraft financing terms. The Chapman Group has demonstrated their unwavering solidarity by rebuffing all efforts by the Debtors to deal individually with its members. As a result, the Committee believes that the Chapman Group exercised leverage to force the Debtors to retain more aircraft than needed at above market rates. Given the Chapman Group's "stranglehold" on the Debtors' aircraft supply, the Committee wants to retain Sperling to determine if the actions run afoul of federal or state law. The Committee selects Sperling because of its experience and expertise with complex litigation in an antitrust context. Sperling will be paid its hourly rates, which range from $150 to $725 for attorneys and $100 to $150 for paralegals. Sperling will also charge for reasonable and necessary expenses. Founder Bruce S. Sperling, Esq., assures the Court that the firm does not represent or hold any interest adverse to the Debtors' estates or the Committee and its constituents. Trustees Object U.S. Bank, The Bank of New York, Wells Fargo and J.P. Morgan Trust Company, in their capacity as Trustees to aircraft leases, complain that the Committee's request is premature. James E. Spiotto, Esq., at Chapman & Cutler, in Chicago, explains that there has been no final settlement agreement with the Chapman Group that is before the Court for approval. Discussions are ongoing, but the substance of the request can be revisited if and when a Term Sheet is filed for approval. The Committee should not be allowed to trump up interference while the settlement discussions are taking place. It would be a waste of the estate's assets to retain another law firm to investigate and litigate "outlandish claims" for a settlement that may never be finalized. Any Term Sheet will be presented to the Court for parties to comment. "It goes without saying that a debtors' negotiation with creditors over the amount of loss they will suffer is not the type of activity the antitrust laws were designed to reach," Mr. Spiotto says. The Trustees hold large unsecured deficiency claims, making them among the largest unsecured creditors. As a result, the Committee, in the exercise of their fiduciary duty, owes the Trustees a duty of loyalty. Reading between the lines, the Committee is trying to force the Chapman Group and the Trustees to shoulder a disproportionate percentage of savings the Debtors will reap from renegotiating the aircraft financings. In the process, the Committee is interfering with the Debtors' attempts to reach an agreement with the Trustees. This should not be allowed, especially since any agreement should be beneficial to the Debtors. The Committee's allegations fail to establish a legally viable antitrust claim. Any Sherman Act violation must establish that the challenged behavior has diminished competition in a defined market and that the plaintiff was injured as a result. The Committee cannot support this demonstration. Also, the Sherman Act does not prohibit parties with common legal rights, like creditors, from engaging in coordinated efforts to enforce those rights. It could be argued that such coordinated efforts further the purposes of antitrust laws by reducing the costs of bankruptcy to consumers. 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. 42; Bankruptcy Creditors' Service, Inc., 215/945-7000) UNITY WIRELESS: Appoints M. Bentob & D. Pretty to Exec. Positions ----------------------------------------------------------------- Unity Wireless Corporation (OTCBB: UTYW; Germany: WKN#924385), a developer of integrated wireless subsystems and power amplifiers, announced the appointment of Myer Bentob to the position of Executive Chairman and that he will assume the responsibilities of Chairman Mark Godsy who is stepping down from the board of directors. In addition, Dallas Pretty has been appointed the Company's Chief Financial Officer. "I am pleased to serve as Executive Chairman of Unity Wireless and am enthusiastic about what the future can hold for our Company," said Myer Bentob. "We continue to strengthen our foundation as an organization and are well positioned to attract new opportunities and customers." Myer Bentob joined Unity Wireless in August 2003 as Executive Vice Chairman and brings tremendous experience earned throughout his 35+year career in the wireless telecommunications industry to his expanded role within the Company. Founder, former CEO and Chairman of Unity Wireless Mark Godsy is stepping down from the Company's board of directors. "I am delighted that Myer is joining the Company as its Executive Chairman," stated Mark Godsy. "I think Myer's appointment represents a great testament to the quality and commitment of the team at Unity Wireless. I wish to personally thank the many individuals who over the years have helped create the Company's very promising future." Director Ken Maddison commented, "On behalf of the board and executive management team at Unity Wireless, we would like to sincerely thank Mark for his many years of service to our Company. He has always been a strong proponent of shareholder interests and in seeing our Company grow into something to be proud of. We wish him the very best." At the same time, the board also announced the appointment of Dallas Pretty to the position of Chief Financial Officer. Mr. Pretty is a Chartered Accountant with over 10 years of experience in both public and private companies and brings a strong understanding of strategic business development, public and private financing, internal and external financial reporting, human resources, and facilities management. Since earning his CA designation at international accounting firm KPMG, he has worked in senior management roles with local technology companies. "Working as an advisor and consultant to Unity Wireless for the last year has given me a good understanding of its business process, prospects and challenges," said Mr. Pretty. "I am looking forward to working closely with Ilan Kenig and the rest of the team to capitalize on what looks to be a bright future." About Unity Wireless Unity Wireless -- http://www.unitywireless.com/-- is a leading developer of integrated wireless subsystems and power amplifier technology. The Company's single-carrier and multi-carrier power amplifier products deliver world-class efficiency and performance with field-proven quality and reliability in thousands of base stations and repeaters around the world. Unity Wireless' June 30, 2003, balance sheet shows a working capital deficit of about $338,000. US AIRWAYS: Settles Maryland Environmental Claims ------------------------------------------------- The Maryland Department of the Environment filed Claim No. 5293 against U.S. Airways, Inc., for $10,450,000 for estimated remediation costs for the release of petroleum at the Baltimore/Washington International Airport fuel farm. The Maryland Aviation Administration filed Claim No. 5273 against U.S. Airways for $372,137, plus $1,430,000 for estimated remediation costs for the release of petroleum at BWIA. The MAA also filed Claim No. 5274 against Piedmont Airlines, Inc., for $16,421, plus $1,430,000 for estimated remediation costs for the release of petroleum at BWIA. The parties entered into a settlement in which the MDE agreed to withdraw Claim No. 5293 and the MAA agreed to withdraw those portions of Claim Nos. 5273 and 5274 related to petroleum contamination at BWIA. In return, U.S. Airways and Piedmont Airlines agreed to retain liability for the Claims related to BWIA. The Court approved the Settlement on June 5, 2003. However, prior to the Order, the MDE and the MAA filed three Administrative Expense Claims that were duplicative of Claim Nos. 5273, 5274 and 5293. The Reorganized Debtors objected to the Administrative Expense Claims. To settle the issue, the parties agree that Administrative Expense Claims Nos. 5611, 5650, and 5652 are invalid and should be withdrawn. The parties agree that the Court-approved Settlement will remain in effect and binding. Claim No. 5293 and Administrative Expense Claim No. 5611 are withdrawn. Claim Nos. 5273 and 5274, and Administrative Expense Claim Nos. 5650 and 5652 are each reduced by $1,430,000. The MAA's remaining claims and US Airways' defenses, other than for remediation of petroleum contamination, remain unaffected. (US Airways Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service, Inc., 215/945-7000) VANGUARDE MEDIA: Court Fixes Bid Deadline for March 30, 2004 ------------------------------------------------------------ Vanguarde Media, Inc. and Vanguarde Holdings, Inc. will sell substantially all of their assets to the highest and best bidder. Bids must be submitted not later than 1:00 p.m. on March 30, 2004, to: a. The Financial Advisors of the Debtors Triax Capital Advisors 620 Fifth Avenue, 2nd Floor New York, NY 10020 Attn: Joseph Sarachek, Esq. b. Counsel for the Debtors Baker & McKenzie 805 Third Avenue New York, NY 10022 Attn: Joseph Samet, Esq. c. Counsel for the Official Committee of Unsecured Creditors. Lowenstein Sandler PC 65 Livingston Avenue Roseland, NJ 07068 Attn: Kenneth A. Rosen, Esq. Paul Kizel, Esq. For additional information or bidding procedures, contact: Joseph Sarachek Triax Capital Advisors, LLC 620 fifth Avenue 7th Floor, New York, NY 1020 Tel Num: 212-332-4011 Fax: 212-332-4019 e-mail: jsarachek@triaxadvisors.com The Honorable Judge Allan L. Gropper has set March 31, 2004, at 11:00 a.m. as the auction and sale hearing date. The Debtor publishes magazines for the urban woman, the affluent African-American, and people in the urban music business. The company filed for Chapter 11 Protection on November 26, 2003 (Bankr. S.D.N.Y. Case No. 03-17509). Ira A. Reid, Esq., at Baker & McKenzie represents the Debtors in its liquidating efforts. WEIRTON: Obtains Nod to Auction Off Non-Operating Real Properties ----------------------------------------------------------------- Mark E. Freedlander, Esq., at McGuireWoods, in Pittsburgh, Pennsylvania, tells Judge Friend that under the Asset Purchase Agreement among the Weirton Steel Debtors, ISG Weirton, Inc. and International Steel Group, Inc., certain of Weirton's assets are, or may be under certain conditions, excluded from the sale. The Non-operating Real Property Assets are: Reserve Description Amount ----------- ------- Weirton Lodge, including certain $390,000 fixtures and furniture 305 Acres adjacent to Three Springs 265,000 Industrial Park 12 Acres surrounding G.O. Building (2 parcels) * Parcel One: 1.78 acres 175,000 * Parcel Two: 9.885 acres 200,000 Freedom Way, Weirton, West Virginia (4 parcels, approximately 41 acres) * 6 acres on Freedom Way (Shelly and Sands Site) 200,000 * 6 acres on Freedom Way, east of Roll Coater 150,000 * 4.5 acres on Freedom Way, west of Roll Coater 100,000 * 24.4 acres on the north side of Freedom Way, 350,000 Holnam Site 7 plus Acres, Steubenville Plant, 260,000 Steubenville, Ohio 5 Acres of Half Moon (old bone yard site) 210,000 6 Acres plus the Half Moon Training Center 250,000 and Equipment Accordingly, the Debtors sought and obtained the Court's authority to conduct a public auction sale with reserve of the Non-operating Real Property Assets, free and clear of all liens, claims, encumbrances and other interests, subject however, to environmental maintenance and remediation liabilities, if any, relating to each of the Non-operating Real Property Assets. Each Successful Bidder for a Non-operating Real Property Asset will be required, inter alia, to execute an Agreement of Sale with respect to that Non-operating Real Property Asset at the time its Successful Bid is accepted by the Debtors. The material terms of the Sale Agreement are: A. Non-operating Real Property Assets No personal property, whether owned by the Debtors or any third party, located on any Non-Operating Real Property Asset, will be sold in connection with any Real Property Auction Sale, except for: (1) furniture and fixtures located at the Weirton Lodge, which will be sold in conjunction with the Weirton Lodge; and (2) certain training equipment located at the Half Moon Training Center, which will be sold in conjunction with the Half Moon Training Center. B. Reserve All Non-operating Real Property Assets will be sold with reserve. C. Purchase Price The Purchase Price is the Successful Bid. Upon the acceptance of a bid, each Successful Bidder of a Non-operating Real Property will be required to: (1) execute an Agreement of Sale; and (2) deliver a cashier's check or immediately available funds payable to the Debtors' counsel, as escrow agent, in an amount equal to 20% of the reserve amount for that Non-operating Real Property Asset. The Debtors' counsel will retain the earnest money in escrow pending the closing. The balance of the Purchase Price must be paid in full by cashier's check, wire transfer or other immediately available funds at the time of each Closing on a sale of a Non-operating Real Property Asset. D. Deed of the Debtors All Non-Operating Real Property Assets will be offered at the Real Property Auction Sale, free and clear of all liens, claims, encumbrances and other interests, however, subject to environmental maintenance or remediation obligations, if any, including, but not limited to, the obligations, if any, related to the Non-Operating Real Property Asset that arise after Closing: (1) under the 1996 Consent Decree between Weirton Steel, the United States Environmental Protection Agency and the West Virginia Department of Environmental Protection; or (2) under any administrative order issued by the United States Environmental Protection Agency. No representations or warranties will be offered or made with respect to the condition, description and environmental status of the Non-Operating Real Property Assets. All Non-Operating Real Property Assets will be sold "as is, where is" and "with all faults." E. Closing All transactions contemplated by the Agreement of Sale for each Non-Operating Real Property Asset will close on the date that is the earlier of: (1) 30 days after the closing date of the proposed sale to ISG; or (2) 100 days after the Effective Date of the Agreement of Sale for each Non-operating Real Property Asset, or at other date and time as may be mutually agreed in writing between each Successful Bidder for a Non- operating Real Property Asset and the Debtors. The Debtors will have the right to extend the Closing Date for a period of 30 days upon written notice to the Successful Bidder. F. Taxes and Costs The Successful Bidders will pay for all the transfer taxes on the sales of the Non-operating Real Property Assets. The Debtors will pay all costs associated with the: -- deed preparation, -- title clearance, and -- a pro-rated portion of the current year's real estate taxes, assessments and utility costs. The Successful Bidder will pay: -- title examination and search, title commitment, title insurance policy and any endorsements thereto and any survey of the Non-Operating Real Property Assets; -- recording fees for the Deed; -- any and all realty transfer, recording and excise taxes or fees associated with the sale of each Non-operating Real Property Asset; -- a pro-rated portion of the current year's real estate taxes and assessments, and utility costs; and -- a buyer's premium in an amount equal to 6% of the Purchase Price. The Buyer's Premium will be payable at the Closing in cash, cashier's check, wire transfer or other immediately available funds to the order of Harry Davis & Company, the auctioneer, who will conduct the Real Property Auction Sale. (Weirton Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000) WELLINGTON LEISURE: Keen Realty to Auction 3 Industrial Facilities ------------------------------------------------------------------ Wellington Leisure Products, Inc. has retained Keen Realty, LLC to market and sell three of the company's manufacturing facilities located in SC, NC, and OH. Wellington Leisure Products is a diversified manufacturer of consumer and commercial products for the cordage, narrow woven fabrics, home seasonal, and sporting goods markets. Wellington filed for Chapter 11 protection in February 3, 2003 in the United States Bankruptcy Court Middle District of Georgia. "In light of the Bankruptcy, our client is a very motivated seller. This sale presents an excellent opportunity for users and investors to buy quality industrial facilities," said Mike Matlat, Keen Realty's Vice President. "We are encouraging interested parties to move fast, as the properties are expected to receive offers quickly," Matlat added. The properties consist of a 102,000 square foot facility in Batesburg-Leesville, SC; a 91,000 square foot facility in Granite Quarry, NC; and a 224,000 square foot facility in Xenia, OH. Founded in 1982, Keen Realty has had extensive experience solving complex problems and evaluating and selling real estate, leases and businesses in bankruptcies, workouts and restructurings. Keen Realty, a leader in identifying strategic investors and partners for businesses, has consulted with over 130 clients nationwide and evaluated and disposed of over 200 million square feet of properties. For more information regarding the auction of the facilities for Wellington Leisure Products, please contact Keen Realty, LLC, 60 Cutter Mill Road, Suite 407, Great Neck, NY 11021, Telephone: 516- 482-2700, Fax: 516-482-5764, e-mail: krc2@keenconsultants.com Attn: Mike Matlat. WELLSFORD REAL: Retains Lazard Freres as Financial Advisor ---------------------------------------------------------- Wellsford Real Properties, Inc. (AMEX: "WRP") announced that its Board of Directors has authorized the retention of the investment banking firm of Lazard Freres & Co. LLC to advise WRP on various strategic financial and business alternatives available to it to maximize shareholder value. These may include a recapitalization, acquisitions, dispositions of assets, a liquidation, the sale or merger of WRP and alternatives that would keep WRP independent. There is no assurance as to which of the aforementioned alternatives will occur. WRP is a real estate merchant banking firm organized in 1997 and headquartered in New York City which acquires, develops, finances and operates real estate properties and organizes and invests in private and public real estate companies. WORLDCOM INC: S.D.N.Y. Court Disallows 92 Tax Claims ---------------------------------------------------- Worldcom Inc. and its debtor-affiliates have reviewed 258 Tax Claims and have concluded that one or more of these objections apply to each proof of claim: (a) the claim is in an amount for which the Debtor disputes it owes; (b) the Debtor has paid some, or all, of the taxes that form the basis of the claim; (c) does not indicate the type of tax on which it is based; (d) there is no documentation attached to the claim; (e) was filed in duplicate in several of the Debtors' bankruptcy cases; (f) includes interest, but there is no itemized statement of all principal and interest due; (g) was amended or replaced by a later filed claim or withdrawn; (h) was filed as a secured claim but does not indicate the collateral securing the claim or evidence that a valid lien has attached to the collateral; (i) the claim is, or includes, a fee or charge and is not a "tax" pursuant to In re: Chateaugay Corp., 53 F.3d 478 (2d Cir. 1995); (j) the claim was filed as a tax claim, but is not for a tax or does not indicate that it is for a tax; (k) was filed as a secured claim, or set-off claim, but does not indicate the value of the collateral securing the claim; (l) was not filed on behalf of a governmental unit, or does not indicate that it was filed on behalf of the governmental unit; and (m) was not timely filed. Accordingly, the Debtors object to 258 Tax Claims and ask the Court to disallow and expunge the claims. The Debtors identified these objectionable Tax Claims -- 79 Income Tax Claims, 59 Excise Tax Claims, 57 Property Tax Claims, 18 Franchise Tax Claims, 3 Tax Liens, 8 Occupation Taxes, 45 Trust Fund Taxes, 3 Employment Taxes, and 73 Penalty Claims. * * * Judge Gonzalez expunged 92 Tax Claims. The Debtors' objection to 31 Tax Claims was also withdrawn. Eight Tax Claims are placed on scheduling orders. In addition, the Court rules that: (1) Pursuant to a letter agreement dated September 26, 2003 between Centro de Recaudacion de Ingressos Municipales and the Debtors, Claim No. 9830 filed by CRIM will be an Allowed Secured Claim for $81,658. (2) Pursuant to a letter agreement dated November 5, 2003, between Fulton County, Georgia and the Debtors, Claim Nos. 10675, 35542 and 36331 are expunged. Claim No. 36350 is allowed as a secured claim for $2,715,280 and will be paid in a lump sum payment on the Plan Effective Date or within 30 days thereafter. (3) Pursuant to a letter agreement dated November 12, 2003, between San Bernardino County and the Debtors, Claim No. 12549 is allowed as a secured claim for $1,320,685 and will be paid in a lump sum payment on the Plan Effective Date and the date Claim No. 12549 becomes an allowed secured claim. Claim No. 12549 is subject to the statutory rate of interest. San Bernardino will retain its lien until Claim No. 12549 is paid in full. (4) Pursuant to a letter agreement dated December 11, 2003, between the City and County of Denver and the Debtors, Claim Nos. 35783 and 195 are expunged. Claim No. 1216 is allowed as a priority claim for $906,208 and will be paid pursuant to the Reorganizational Plan. The Denver Agreement resolves all prepetition claims filed by Denver that now exist or may arise including, but not limited to, Claim Nos. 35783, 195 and 1216. (5) Pursuant to a letter agreement dated December 22, 2003, between the City of New Orleans and the Debtors, Claim No. 7283 is allowed as a Section 507(a)(8) priority tax claim for $267,929 and as a general unsecured claim for $153,523. New Orleans and the Debtors agree that tax account number 104103181 is a duplicate account of tax account number 003000119, and New Orleans is directed to expunge and remove all tax receivables from 1999 and 2000 from these accounts and take all other necessary and appropriate steps consistent with the Court's directive. New Orleans and the Debtor agree that tax account number 103104625 is a duplicate of tax account number 004000104, and New Orleans is directed to expunge and remove all tax receivables from year 2000 from these accounts and take all other necessary and appropriate steps consistent with the Court's directive. Claim No. 7283 will be paid in one lump sum payment on, or immediately after, the Plan Effective Date. (6) Pursuant to a letter agreement dated November 10, 2003, between Marion County, Indiana and the Debtors, claims numbered 15667, 15669, 15671, 15673, 15674, 15675 and 35723 are expunged. Furthermore, these claims will be allowed as secured claims: Claim Number Amount ------------ ------ 15668 $98 15670 359 15672 785,410 15676 152,324 15677 1,056,244 The Allowed Marion Claims will be paid in a lump sum payment on the Plan Effective Date or within 30 days thereafter. Claim No. 15678 is allowed as a general unsecured claim for $210,220 and will be paid according to the terms of the Debtors' confirmed Plan of Reorganization. (7) Pursuant to a letter agreement dated September 4, 2003 between the County of Santa Clara, California and the Debtors, Claim Nos. 898, 12935 and 32698 will be expunged. Claim No. 33949 will be allowed as a Secured Claim for $1,301,171, which amount does not include the "Section 506" penalty amounting to $134,764. Claim No. 896 is for postpetition taxes not yet due and will paid in the ordinary course. The Debtors reserve their right to object to Claim No. 896 after the official tax bill for Claim No. 896 is received by the Debtors. The Debtors agree to allow Claims Nos. 34002 and 1187 as filed as Secured Claims and Claim Nos. 34002 and 1187 will be paid pursuant to the terms of the Plan of Reorganization. (8) Pursuant to a letter agreement dated July 29, 2003 between Beaver County, Utah and the Debtors, Claim No. 32678 will be an Allowed Secured Claim for $20,575. (9) Pursuant to a letter agreement dated September 4, 2003 between Aldine County Independent School District and the Debtors, Claim No. 11124 will be an Allowed Secured Claim for $299,827. (10) Pursuant to a Closing Agreement between 13 Oregon Counties -- Baker County, Clackmas County, Columbia County, Coos County, Douglas County, Josephine County, Lane County, Linn County, Marion County, Multnomah County, Tillamook County, Umatilla County, and Washington County -- and the Oregon Taxpayers -- MCI WorldCom Network Services, Inc. and MCIMetro Access Transmission -- the Oregon Taxpayers agree to allow these claims in these amounts: Claim No. Filed Amount Allowed Amount --------- ------------ -------------- 6889 $56,859 $34,115 16878 7,427 4,456 16879 8,085 4,851 16891 14,601 8,760 16889 45,421 27,276 7059 142,987 85,792 16902 33,656 20,016 15424 134,446 82,187 16324 41,500 24,681 16333 38,918 23,145 16296 561,495 332,242 16299 521,495 308,780 16895 6,113 3,668 7444 66,603 39,610 16476 58,209 34,771 34702 588,969 393,908 Total Filed Amount: $2,326,409 Total Allowed Amount: $1,428,258 The Oregon Counties agree to accept $1,428,258 in full satisfaction of any and all property tax obligations owed by the Oregon Taxpayers to the Oregon Counties for the 2002 tax year, including claim numbers 1094, 1111 and 3510. The Oregon Allowed Amount will be paid in one payment to the Oregon Counties. Upon payment of the Oregon Allowed Amounts, the Oregon Counties will not object to an order that withdraws the Oregon County Claims. The Oregon Counties will not assert any additional Ad Valorem property taxes against the Oregon Taxpayers for the year 2002. (11) Pursuant to a letter agreement dated July 24, 2003, between the City of Alpharetta and the Debtors, the Debtors agree to allow number Claim No. 35086 for $55,422. Alpharetta agrees to the expungement of Claim No. 23128, which was amended by Claim No. 35086. (12) Pursuant to a Closing Agreement dated July 31, 2003, between the Delaware Department of Revenue and the Debtors, the Parties agree that the amount due on Claim No. 7900 is $10,000. The Delaware Amount is payment solely for Delaware public utility tax liability for the taxable periods through July 21, 2002. Claim No. 7900 is withdrawn. (13) Pursuant to an Agreement Resolving Certain Tax Audit Liabilities and Bankruptcy Claims dated September 15, 2003, Shared Technologies Fairchild Telecom, Inc., MCI WorldCom Communications, Inc. and BLT Technologies, Inc. agree to allow these claims in these amounts: Claim Number Agreed Allowed Amount ------------ --------------------- 22391 $0 22392 0 18978 0 35180 0 18977 57,462 TOTAL $57,462 The Taxpayers agree to pay the Texas Comptroller of Public Accounts without further delay. Upon receipt of the Texas Comptroller Payment, the parties agree that all claims for the tax types and tax periods involved in the audits that determined the Texas Comptroller Payment will be forever relinquished and released, specifically including any claims related to refunds, set-offs or any other rights of reimbursements by the Taxpayers. The Texas Comptroller agrees that it will not object to the withdrawal of the claims upon receipt of the Texas Comptroller Payment. The Texas Comptroller Payment has been received by the Texas Comptroller and, therefore, Claim Nos. 22391, 22392, 18978, 35180 and 18977 and the objections thereto are withdrawn. By agreement dated October 7, 2003, the Texas Comptroller agrees to the withdrawal of Claim Nos. 18975 and 22397 and the objections thereto, as those claims have been subsequently amended by Claim Nos. 35166 and 35196. The amended claims remain valid. The Debtors reserve their rights to object to Claim Nos. 35116 and 35196. (14) Pursuant to a Compromise Settlement Agreement dated July 31, 2003, the Debtors agree to pay the City of Los Angeles, California $5,200,000 in settlement and full satisfaction of Claim Nos. 31207, 31206 and 31208. Upon receipt of the Los Angeles Payment, Los Angeles agrees to allow the withdrawal of the Los Angeles Claims. The Los Angeles Payment has been received and, therefore, Claim Nos. 31207, 31206 and 31208 are withdrawn. (15) Pursuant to a letter agreement dated October 3, 2003, the Debtors agree to allow Claim No. 34199 filed by the Madison County Tax Collector as a priority claim for $56,814. Madison agrees to allow Claim No. 1282 to be expunged. (16) Pursuant to a letter agreement dated October 6, 2003, between the Debtors and the Jackson County Treasurer, the Debtors agree to allow Claim no. 35681 as a priority claim for $81,938. Jackson agrees to the expungement of Claim No. 8567. (17) In the Property Tax Register dated September 30, 2003 and letter dated October 3, 2003, the Debtors agree to allow Claim No. 7060 filed by the Davis County Treasurer as a Secured Claim for $7,928. The Davis Amount will be paid in one lump sum payment on the Plan Effective Date. Davis agrees to waive penalties and interest with regard to Claim Number 7060. (18) Pursuant to a letter agreement dated July 14, 2003, between the City of Pasadena and the Debtors, Claim No. 9780 will be an allowed non-priority, general unsecured claim for $10,506. (19) Pursuant to a letter agreement dated July 14, 2003, between Pima County, Arizona and the Debtors, Claim No. 16900 will be an allowed priority claim for $1,771,640. (20) Pursuant to a Closing Agreement dated July 16, 2003, entered into by the Debtors and the City of Chicago, Chicago filed Claim Nos. 22476, 22477, 22478 and 22479. The parties have agreed that the Debtors are liable to Chicago for $144,258. Upon receipt and successful negotiation of the Chicago Payment, Chicago will not assess any additional taxes or make any additional bankruptcy claims against the Debtors for any period ending on or before July 21, 2002. After Chicago successfully negotiates the Chicago Payment, Chicago will not object to an order withdrawing the Disputed Tax Claims. (21) Pursuant to a letter agreement dated July 15, 2003, between the Massachusetts Department of Revenue and the Debtors, these claims will be allowed in these amounts: Claim Number Status Amount ------------ ------ ------ 1600 priority claim $622 1547 priority claim 467 general unsecured 34 33659 priority claim 39,212 general unsecured 2,869 (22) As set forth in a Stipulation Resolving Claims filed by the New York City Department of Finance dated June 16, 2003 between NYCDF and the Debtors, NYCDF filed Claim Nos. 1011, 1360, 1518, 1676, 2980, 3565, 3566, 3567, 3568, 3569, 3570, 3571, 3572, 5176, 5302, 5303, 5662, 5663, 5665, 5666, 6309, 6310, 6311, 6312, 6313, 6545, 6546, 7293, 7295, 10001, 10002, 10707, 10708, 11022, 11023, 11025, 34470, and 34474 in the Debtors' bankruptcy cases. The Debtors objected to certain of the NYCDF Claims. The parties have settled the NYCDF Claims pursuant to the terms of the NYCDF Stipulation. The NYCDF Claims are expunged in their entirety, except Claim Nos. 5662, 5663, 5665, 5666, 10001 and 11023, which will be amended and allowed as secured claims for $277,801 in the aggregate, including all statutory interest though June 30, 2003. Statutory interest will accrue from July 1, 2003, to the day of payment. NYCDF will not file any additional tax claims for the taxes and tax periods reflected in the NYCDF Stipulation against WorldCom, Inc. or its direct and indirect subsidiaries, as debtors and debtors-in- possession in these proceedings, or amend any tax claims for the taxes and tax periods reflected in the NYCDF Claims except as provided. (23) As set forth in a Closing Agreement on Assessments and Other Matters dated June 23, 2003, between the Wisconsin Department of Revenue and the Debtors, WDR filed Claim Nos. 12775, 12776, 12781, 12782, 12783, 12784, 35483, 35484, 35486, 35612 and 35680. The Debtors objected to certain of the WDR Claims. The parties have settled the WDR Claims pursuant to the terms of the WDR Agreement. The WDR Claims are expunged in their entirety, except Claim No. 12782, which will be allowed as a priority claim for $614,916; Claim No. 35612, which will be allowed as a priority claim for $40; and Claim No. 35485, which is not expunged. (24) As set forth in a Letter Agreement between the County of Box Elder and the Debtors, Elder filed Claim No. 7492. The Debtors objected to Claim No. 7492. The parties have settled Claim No. 7492, and the Debtors agree that the Claim will be allowed as a priority claim for $19,708. Headquarterd in Clinton, Mississippi, WorldCom, Inc., -- http://www.worldcom.com/-- is a pre-eminent global communications provider, operating in more than 65 countries and maintaining one of the most expansive IP networks in the world. The Company filed for chapter 11 protection on July 21, 2002 (Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the Debtors listed $103,803,000,000 in assets and $45,897,000,000 in debts. (Worldcom Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., 215/945-7000) * Cendrowski Launches New Company Focusing on Fraud --------------------------------------------------- Expanding on its 20 years of innovative tax and business consulting, Cendrowski Selecky PC announces the launch of Cendrowski Corporate Advisors (CCA), a company specifically focused on fraud, including deterrence, training, investigation and remediation. CCA offers tailored fraud deterrence training and internal control assessments to address concerns facing organizations such as financial reporting integrity, asset misappropriation and embezzlement. The concepts delivered are applicable to private, public, and non-profit organizations. CCA founder Harry Cendrowski, along with senior manager Jim Martin, developed and licensed the training program for the Certified Fraud Deterrence (CFD) professional designation offered by the National Association of Certified Valuation Analysts (NACVA). The CFD program is the first new fraud designation by any national professional organization in the past 20 years. The objectives of the training program mirror those of the Sarbanes-Oxley Act as well as statements by Securities and Exchange Commission leadership related to the proactive deterrence of fraud for both private and public companies. The CFD training program includes 40 hours of classroom instruction, an eight-hour exam and a comprehensive written case analysis, incorporating CCA's unique proactive measures to deter organizational fraud. The fraud-deterrence training course is now delivered across the country, and has been attended by professionals from corporate, private, government and non-profit organizations. "While others were discussing the issue of fraud, our firm took the lead in creating and underwriting these significant fraud- deterrence initiatives for business leadership and our profession," Cendrowski said. In that spirit of professional leadership, CCA publishes two newsletters each month, one focused on asset fraud, the other on corporate governance and regulatory compliance. The newsletters are distributed as a public service to interested individuals and groups, including the Michigan Association of Certified Public Accountants, NACVA, and the Detroit Regional Chamber. CCA, along with its affiliates Cendrowski Selecky P.C. and Prosperitas Group, LLC, operate under a newly-formed parent company, Cendrowski Strategic Partners. Cendrowski Corporate Advisors provides consulting services to private, public, and non-profit organizations including forensic accounting, internal control assessment and fraud deterrence, fraud investigation and remediation, expert witness, fraud deterrence training & education, business valuation, risk assessment, operational review, litigation support, internal audit, business continuity planning, and bankruptcy and fiduciary. * Mitchell Cohen Inducted into the American College of Bankruptcy ----------------------------------------------------------------- Mitchell H. Cohen, a Principal of Gordon Brothers Group, LLC, was inducted into the Fifteenth Class (2004) of Fellows of the American College of Bankruptcy during a ceremony at the United States Supreme Court in Washington, D.C., on Friday, March 19, 2004. In joining this select group, Mr. Cohen has been honored and recognized for his professional excellence and exceptional contribution to the fields of bankruptcy and insolvency. "We are extremely proud of Mitch," stated Michael G. Frieze, CEO of Gordon Brothers. "In awarding him this honor, the American College of Bankruptcy has acknowledged something his colleagues have known for years - that Mitch is not only one of the country's most qualified attorneys in the areas of bankruptcy and insolvency law, but also a professional of the highest integrity and leadership qualities." Nominees for Fellows are extended an invitation to join based on a record of achievement reflecting the highest standards of professionalism. The College now has 607 Fellows, each selected by a Board of Regents from among recommendations of the Circuit Admissions Council in each federal judicial circuit and specially appointed Committees for Judicial and International Fellows. Mr. Cohen manages compliance issues and counsels consumer products companies in the structuring, development and implementation of all transactions at Gordon Brothers Group. Prior to joining Gordon Brothers, Mr. Cohen was a partner at a major Boston law firm. He is a graduate of Brandeis University, earned his law degree from the University of California at Berkeley, Boalt Hall School of Law, and has an MBA from the University of California at Berkeley, Haas Business School. Mr. Cohen has also been a member of the Board of the American Bankruptcy Institute from 1998 to 2003, and currently is a Vice President of Membership. The American College of Bankruptcy is an honorary professional and educational association of bankruptcy and insolvency professionals. The College plays an important role in sustaining professional excellence in this rapidly expanding field. College Fellows include commercial and consumer bankruptcy attorneys, insolvency accountants, corporate turnaround and renewal specialists, law professors, judges, government officials and others involved in the bankruptcy and insolvency community. Founded in 1903, Gordon Brothers Group, LLC -- http://www.gordonbrothers.com/-- provides global financial, operating and advisory services for companies at times of growth or restructuring. Gordon Brothers delivers customized business solutions for companies that seek to maximize liquidity of under- performing inventory, real estate and fixed assets; facilitates mergers and acquisitions; appraises inventories, real estate and fixed assets and provides equity and debt capital to the retail and consumer product community. During the past three years, Gordon Brothers disposed of over $12 billion worth of inventory, mitigated $3 billion of leasehold obligations and conducted appraisals on over $100 billion of assets. * Powell Goldstein Names Twelve New Attorneys --------------------------------------------- Powell, Goldstein, Frazer & Murphy LLP has named twelve attorneys as partners, counsel and of counsel. Named to the partnership were former associates Michael J. Delaney, Charles A. Luband, and Eric P. Schroeder and former Counsel, Brad Alexander Baldwin, Wendy L. Hagenau, and Donna Marie Rodney. Associates Ronni Solomon Abramson, Joshua Berman, Matthew P. Holley, Kathryn B. Vargo and former Of Counsel, Daniel C. Deckbar were named as Counsel, and former associate Leah J. Knowlton has been named Of Counsel. Ronni Solomon Abramson concentrates on litigation matters. She is a graduate of the Benjamin Cardozo School of Law (J.D., 1994) and The State University of New York at Binghamton. Brad Alexander Baldwin, who focuses his practice on corporate reorganizations and Chapter 11 bankruptcy and out-of-court workouts, graduated from Oglethorpe University and University of Georgia Law School. Joshua Berman practices in the area of estate planning, trusts and wills. He is a 1993 graduate of Emory University and received his J.D. from the University of Miami School of Law. Daniel C. Deckbar joined the Firm in 2003 from Rollins/Orkin and concentrates in the area of product liability litigation. He is a graduate of Vanderbilt University and received his J.D. from the University of Memphis. Michael J. Delaney's principal areas of practice are in mergers and acquisitions and corporate finance. He is a graduate of Franklin and Marshall College and earned a M.B.A. from Georgia State University. His law degree is from Ohio State University College of Law, where he graduated with Honors. Wendy L. Hagenau concentrates in workout and insolvency litigation. She is a graduate of the Duke University School of Law, where she earned her J.D., and the University of Tennessee. Matthew P. Holley practices in corporate finance, including private and public offerings of securities. He earned his law degree from Indiana University School of Law, a masters degree from the University of Southern Mississippi and his undergraduate degree from Indiana University. Leah J. Knowlton is an experienced litigation attorney focusing on toxic tort and products liability disputes. She is an honors graduate of the University of Chicago and earned her J.D. from Yale Law School. Charles A. Luband focuses his practice in the area of health care law and policy. He has an undergraduate degree from Brown University, an M.P.P. from the Kennedy School of Government and earned his law degree from Harvard Law School. Donna Marie Rodney concentrates her practice on structuring both low- income housing tax credit and historic rehabilitation tax credit transactions. She has an undergraduate degree from Howard University and earned her law degree from Boalt Hall School of Law at the University of California at Berkeley. Eric P. Schroeder has a J.D. from Vanderbilt University and earned his undergraduate degree from Duke University. Eric concentrates on First Amendment, media and intellectual property litigation. Kathryn B. Vargo represents management in all aspects of labor- management relations, equal employment and other employment issues. She is a graduate of Northwestern University and earned her law degree from Emory University School of Law. Powell, Goldstein, Frazer & Murphy LLP is one of the nation's larger law firms. Established in 1909, the Firm's more than 300 attorneys provide legal counsel to clients in a wide variety of practices from offices in Atlanta, GA and Washington, DC. For more information, visit http://www.pgfm.com/or call 404-572-6600. * Cheryl Boyer to Lead PwC's NY Hospitality & Leisure Practice -------------------------------------------------------------- Cheryl Boyer will lead PricewaterhouseCoopers' New York Hospitality & Leisure Practice. Effective immediately, Ms. Boyer will be in charge of all national engagements run out of the New York office, as well as all New York-specific engagements. Ms. Boyer's appointment comes at a time of rapid improvement in the U.S. lodging industry and the New York lodging market. Under Ms. Boyer's direction, the New York practice will continue to grow by providing advisory services to lodging, food service, real estate and sports and leisure companies. Ms. Boyer will report directly to Bjorn Hanson, Ph.D., global leader of PricewaterhouseCoopers' Hospitality & Leisure Practice. Ms. Boyer has spent the last five years with PricewaterhouseCoopers, working very closely with Sean Hennessey, the former director of the New York practice. Mr. Hennessey withdrew from his position earlier this month to start his own private consulting practice, Lodging Advisors. Mr. Hennessey will also remain involved in engagements with PricewaterhouseCoopers as a subcontractor. "I am confident that Cheryl Boyer will be a superb leader for the New York Hospitality & Leisure Practice," said Mr. Hennessey. "Working with her and my colleagues at PricewaterhouseCoopers has been a very special time in my career, and I feel lucky that I have had the opportunity to be a part of this practice." Prior to joining PricewaterhouseCoopers, Ms. Boyer was a managing director in Insignia Hotel Partners' Capital Markets group where she worked with clients on a variety of assignments including debt and equity financing, asset management and capital and asset advisory projects. Previously, as vice president of sales and marketing at Hotel Partners, Ms. Boyer was responsible for restructuring and managing the analysis, research and marketing departments. Prior to joining Hotel Partners, she was a vice president with Landauer Associates, where she completed numerous consulting and appraisal assignments on behalf of the firm's leading clients. She has previous experience with Laventhol & Horwath and InterContinental Hotels. "Cheryl is one of the stars in our Hospitality & Leisure Practice, and it has been exciting to watch her grow in her career and now to assume a leadership role," said Bjorn Hanson, Ph.D., global practice leader PricewaterhouseCoopers Hospitality & Leisure Practice. "We feel fortunate that we will continue to work with Sean and appreciate all he has done and will continue to do to benefit our practice and clients." PricewaterhouseCoopers -- http://www.pwc.com/-- is the world's largest professional services organization. Drawing on the knowledge and skills of more than 125,000 people in 142 countries, we build relationships by providing services based on quality and integrity. * BOOK REVIEW: Competitive Strategy for Health Care Organizations: Techniques for Strategic Action ------------------------------------------------------------- Authors: Alan Sheldon and Susan Windham Publisher: Beard Books Softcover: 190 pages List Price: $34.95 Review by Francoise C. Arsenault Order your personal copy today at http://www.amazon.com/exec/obidos/ASIN/1587981351/internetbankrupt Competitive Strategy for Health Care Organizations: Techniques for Strategic Action is an informative book that provides practical guidance for senior health care managers and other health care professionals on the organizational and competitive strategic action needed to survive and to be successful in today's increasingly competitive health care marketplace. An important premise of the book is that the development and implementation of good competitive strategy involves a profound understanding of change. As the authors state at the outset: "What may need to be done in today's environment may involve great departure from the past, including major changes in the skills and attitudes of staff, and great tact and patience in bringing about the necessary strategic training." Although understanding change is certainly important in most fields, the authors demonstrate the particular importance of change to the health care field in the first and second chapters. In Chapter 1, the authors review the three eras of medical care (individual medicine, organizational medicine, and network medicine) and lay the groundwork for their model for competitive strategy development. Chapter 2 describes the factors that must be taken into account for successful strategic decision-making. These factors include the analysis of the environmental trends and competitive forces affecting the health care field, past, current, and future; the analysis of the competitive position of the organization; the setting of goals, objectives, and a strategy; the analysis of competitive performance; and the readaptation of the business, if necessary, through positioning activities, redirection of strategy, and organizational change. Chapters 3 through 7 discuss in detail the five positioning activities that are part of the model and therefore critical to the development and implementation of a successful strategy: scanning; product market analysis; collaboration; restructuring; and managing the physician. The chapter on managing the physician (Chapter 7) is the only section in the book that appears dated (the book was first published in 1984). In this day of physician- owned hospitals and physician-backed joint ventures, it is difficult to envision the physician in the passive role of "being managed." However, even the changing role of physicians since the book's first publication correlates with the authors' premise that their model for competitive strategic planning is based exactly on understanding and anticipating change, which is no better illustrated than in health care where change is measured not in years but in months. These middle chapters and the other chapters use a mixture of didactic presentation, graphs and charts, quotations from famous individuals, and anecdotes to render what can frequently be dry information in an entertaining and readable format. The final chapter of the book presents a case example (using the "South Clinic") as a summary of many of the issues and strategic alternatives discussed in the previous chapters. The final chapter also discusses the competitive issues specific to various types of health care delivery organizations, including teaching hospitals, community hospitals, group practices, independent practice associations, hospital groups, super groups and alliances, nursing homes, home health agencies, and for-profits. An interesting quote on for-profits indicates how time and change are indeed important factors in strategic planning in the health care field: "Behind many of the competitive concerns.lies the specter of the for- profits. Their competitive edge has lain until now in the excellence of their management. But developments in the past half- decade have shown that the voluntary sector can match the for- profits in management excellence. Despite reservations that may not always be untrue, the for-profit sector has demonstrated that good management can pay off in health care. But will the voluntary institutions end up making the same mistakes and having the same accusations leveled at them as the for-profits have? It is disturbing to talk to the head of a voluntary hospital group and hear him describe physicians as his potential competitors." ********* 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 ***