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/raid1/www/Hosts/bankrupt/TCR_Public/040329.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, March 29, 2004, Vol. 8, No. 62 Headlines AGRACAT INC: Case Summary & 20 Largest Unsecured Creditors AIR CANADA: Monitor Wants CCAA Stay Extended to April 30, 2004 ALLIED COMPANIES: Case Summary & 20 Largest Unsecured Creditors AMERITYRE: Accumulated Deficits Prompt Going Concern Uncertainty AMES DEPARTMENT: Will Auction Off Elwood Property on Wednesday ANC RENTAL: Retains J.M. Harrison as Special Property Tax Counsel ASSET SECURITIZATION: Fitch Takes Actions on Series 1996-D3 Notes ATLAS WORLDWIDE: Court Sets Bar Dates for Filing Proofs of Claims BAM! ENTERTAINMENT: Agrees on VIS' Share Capital Acquisition Terms BVR SYSTEMS: Auditors Nix Going Concern Clause After Refinancing CEDARA: Successfully Completes $50 Million Equity Financing CENTERPOINT ENERGY: Subsidiary Closes $250 Million Credit Facility CHARLES LETT: Case Summary & 6 Largest Unsecured Creditors CINCINNATI BELL: Fitch Affirms Ratings & Assigns Stable Outlook CINEMARK USA: S&P Rates Proposed $370MM Sr. Sec. Bank Loan at BB- CKE RESTAURANTS: William Foley Discloses 9.66% Equity Stake CKE RESTAURANTS: Will Issue Q4 & Fiscal Year Results on April 7 CINEMARK: Obtains Requisite Consents for Debt Indenture Amendments COLONIAL TRUST: Heartland to Buy Wealth Management for $3MM Cash COMPUTERIZED THERMAL: Stock Delisted from AMEX & Moves to OTCBB COMPUTERIZED THERMAL: Obtains $500 Million Leasing Commitment CONEY ISLAND: Case Summary & 6 Largest Unsecured Creditors CONGOLEUM: Court Fixes Asbestos Property Damage Claims Bar Date CONMACO/RECTOR: Seeks Court Nod to Use Lenders' Cash Collateral CREDIT SUISSE: Fitch Assigns BB+ Rating to Class K & J Notes CURTIS ENTERPRISES: Voluntary Chapter 11 Case Summary DIRECTV LATIN AMERICA: Gets Okay for Music Choice Settlement Pact ENRON CORP: Inks Pact Settling CASH V Investors' Claims FEDERAL FORGE: U.S. Trustee Names Official Creditors' Committee FLEMING COS: Asks Court to Extend Lease Decision Time to Aug. 31 FMAC LOAN: Fitch Takes Rating Actions on Series 1998-C Notes FOOTSTAR INC: Accelerating Sales Process for Athletic Footwear FREEPORT-MCMORAN: Prices $1B Convertible Preferred Stock Offering GENTEK: Selling KRONE Communications Business to ADC for $350MM GREY WOLF: Offering $100M Floating Rate Convertible Sr. Notes HANOVER HOLDINGS: Voluntary Chapter 11 Case Summary HAWAIIAN AIRLINES: Made $133 Million Operating Turnaround in 2003 HAYES LEMMERZ: Objects to Gerotech's $1.2 Million Claim HIGH VOLTAGE: Gets Nod to Hire Ordinary Course Professionals HI-TECH ELECTRONIC: Case Summary & 20 Largest Unsecured Creditors HOMEBASE ACQUISITION: S&P Assigns B+ Corporate Credit Rating ILLINOIS POWER: Ameren Files FERC Application to Acquire Company INSPEX INC.: General Claims Bar Date Fixed for April 15, 2004 INSTEEL: Lenders Agree to Forbear to Facilitate Refinancing Plans INTERSTATE BAKERIES: Releasing Quarterly Results on April 15 ISTAR FINANCIAL: Agrees to Sell $250MM Senior Notes to Repay Debt IT GROUP: Delaware Court to Consider Chapter 11 Plan Today KMART: Moves to Nix Share Purchase Pact with C.O. Williams, et al LB COMM'L: Fitch Affirms 3 Note Ratings in Low-B & Junk Levels MAGELLAN HEALTH: Inks Deal Resolving Regence Blueshield's Claim MERRILL LYNCH: Fitch Places Class E Rating on Watch Negative MILLBROOK PRESS: Fin'l & Investment Mgt. has 14.7% Equity Stake MIRANT CORP: US Trustee Amends Creditors' Committee Membership MISSISSIPPI CHEMICAL: Shuts Down Melamine/Urea Operation in La. MOLECULAR IMAGING: Needs Additional Capital to Maintain Operations MUELLER GROUP: S&P Affirms B+ Rating & Revises Outlook to Stable NAT'L CENTURY: Court Clears Boston Medical Center Settlement Pact NEXSTAR BROADCASTING: Posts Net Losses in 4th Quarter & FY 2003 PACIFICARE HEALTH: Q1 Conference Call Scheduled for April 29, 2004 PACIFIC GAS: 11 Creditors Demand Payment of Administrative Claims PACIFIC GAS: Poised to Exit from Chapter 11 on April 12, 2004 PARMALAT GROUP: US Debtors Ask Nod to Tap Ordinary Course Profs. PENN TREATY: Inks Sales & Processing Pact With Universal American PETRO STOPPING: Reports Increased Revenues in Q4 and FY 2003 PG&E NATIONAL: NEG Wants Until June 19 to Solicit Plan Acceptances PILLOWTEX: Stipulation Recharacterizes 12 Lasalle-Assigned Leases PINNACLE CLUB: Creditors Agree to Restructure Debt Pacts PINNACLE CLUB: Reaches Banquet Space Agreement with Hyatt Hotels PRUDENTIAL SECURITIES: Fitch Rates Class G Certificates at BB+ QT 5 INC: Ability to Continue as Going Concern is in Doubt RELS MANUFACTURING: Case Summary & 19 Largest Unsecured Creditors RIODIZIO INC: Voluntary Chapter 11 Case Summary ROUGE INDUSTRIES: Administrative Claims Bar Date Set for April 5 RYLAND GROUP: First Quarter Earnings Release Set for April 21 SELECT MEDICAL: Will Webcast Q1 Conference Call on April 28 SOLUTIA: Brings-In Deloitte & Touche as Independent Accountants SPORTS ARENAS: Independent Auditors Air Going Concern Doubts STERICYCLE: S&P Revises Outlook to Stable over Improved Financials STOLT-NIELSEN: Issuing New Senior Five-Year Unsecured Bonds SUNCOS CORPORATION: Creditors' Ballots are Due on April 1, 2004 SURE FIT INC: Engages Garden City as Claims and Notice Agent SYMPHONY HEALTHCARE IV: Involuntary Case Summary SYSTEMONE TECHNOLOGIES: Dec. 31, 2003 Deficit Tops $39 Million T-K BUSINESS INVESTMENTS: Voluntary Chapter 11 Case Summary TXU CORP: TXU Capital Redeems Cumulative Trust Pref. Securities UAL: Names Arnold Lewis Marketing VP & United Loyalty President UNITED AIRLINES: Objects to 9/11 Claims Totaling $60 Billion UNITED AIRLINES: Files February Results with Bankruptcy Court UNITED ENERGY: Secures $1.75 Million Financing from Laurus Funds WEIRTON STEEL: Proposes Non-Operating Assets Bidding Protocol WESTERN GAS: Will Present at Howard Weil's March 30 Conference US WIRELESS DATA: Files Chapter 11 Petition in S.D. New York US WIRELESS DATA: Case Summary & 20 Largest Unsecured Creditors WESTPOINT: Wants to Extend Plan-Filing Exclusivity Until July 29 WOODWORKERS WAREHOUSE: All Prepetition Claims are Due on April 3 WORKFLOW: Glass Lewis Recommends Voting `Against' Merger Proposal WORLDCOM INC: Resolves Class 5 Bank Claims * BOND PRICING: For the week of March 29 - April 2, 2004 ********* AGRACAT INC: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Agracat, Inc. 2737 North Thompson Springdale, Arkansas 72764 Bankruptcy Case No.: 04-71814 Type of Business: The Debtor sells tractors for home, farm and work. See http://www.agracat.com/ Chapter 11 Petition Date: March 15, 2004 Court: Western District of Arkansas (Fayetteville) Judge: Richard D. Taylor Debtor's Counsels: David G. Nixon, Esq. Theresa L. Pockrus, Esq. Nixon Law Firm 2340 North Green Acres Road, Suite 12 Fayetteville, AR 72703-2850 Tel: 479-582-0020 Fax: 479-582-0030 Estimated Assets: $0 to $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Arkansas National Bank $800,000 3430 Wedington Drive Fayetteville, AR 72704 AFS $800,000 1400 Dividend Drive Springdale, AR 72764 Hainan Zhenjing $545,000 703-704 #100 Wen San Road Hangzhor, China 310012 ICEC $500,000 2975 Westchester Ave Purchase, NY 10577 Mr. Charles Foster $450,000 15585 Bethel Blacktop Farmington, AR 72730 Internal Revenue Service - Bankruptcy $350,000 Special Procedures Stop 5700 700 West Capitol Ave. Little Rock, AR 72201 Pelligrin Law Firm $180,000 Community Bank $145,000 Simmons First Bank $120,000 First Federal Bank $120,000 Arkansas Dept. Finance & Admin. $80,000 Auto Mall $50,000 Downing & Assoc. $50,000 First Federal Bank $50,000 Ms. Patsy Little $50,000 Financial Pacific Leasing Corp. $50,000 Unverferth $47,000 Ms. Virginia Martin $35,000 Total Resolutions $30,000 Jim Steele $17,000 AIR CANADA: Monitor Wants CCAA Stay Extended to April 30, 2004 -------------------------------------------------------------- Air Canada provides the following update on the airline's restructuring under the Companies' Creditors Arrangement Act: The Twenty-Second Report of the Monitor, a comprehensive update on the substantial progress made in the airline's restructuring under the Companies' Creditors Arrangement Act (CCAA), has been completed by Ernst and Young Inc. and is also available at http://www.aircanada.com/ In the Report, the Monitor recommends that the Court grant an extension of the stay period to April 30, 2004. The report includes an update on the following: a) The equity plan sponsor financing; b) The Deutsche Bank standby agreement; c) Pension matters; d) Renegotiated agreements with labour unions; e) Negotiations with aircraft lessors; f) Restructuring of other contractual commitments; g) The GE Capital Aviation Services (GECAS) comprehensive aircraft and financing agreement; h) The regional jet aircraft orders; i) The regional jet allocation; j) The Airbus 340-500 purchase agreement; k) The updated business plan forecast; l) Operating Results; m) Cash flow projections to June 18, 2004; n) Estimated obligations of the Company arising subsequent to April 1, 2003; o) The claims process; p) Progress in the development of the restructuring plan; q) Ancillary proceedings under Section 304 of the US Bankruptcy Code; and r) Extension of the stay of proceedings. 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. ALLIED COMPANIES: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Allied Companies, Inc. fka Quest Express Inc. fka Gulf Quest, Inc. fka Nautical Personnel, Inc. fka Nautical Quest, Inc. 5821 Rangeline Road Suite 215 Theodore, Alabama 36582 Bankruptcy Case No.: 04-11711 Chapter 11 Petition Date: March 22, 2004 Court: Southern District of Alabama (Mobile) Judge: William S. Shulman Debtor's Counsel: Barry A. Friedman, Esq. Barry A. Friedman and Associates P.C. P.O. Box 2394 Mobile, AL 36652-2394 Tel: 251-439-7400 Estimated Assets: $0 to $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Caterpillar Financial Services $1,555,000 2120 W. End Ave. Nashville, TN 37203-5258 Am South Bank $340,000 PO Box 11007 Birmingham, AL 35288-0002 Lake Charles Diesel Inc. $88,722 NREC Power Systems, Inc. $32,298 Sewart Supply Inc. $18,301 Diamond "B" Industries $18,171 Seacraft Shipyard Corp. $17,382 Allied Shipyard Inc. $16,459 Brown's Market $13,324 Damrich Coatings Inc. $7,973 General Marine Service Of Grand Chenier $7,500 Office Depot $4,807 Burton Shipyard, Inc $4,663 Saunders Engine Company $4,637 Port Supply $3,459 Baywood Foods $3,181 Chase Automotive Finance $3,165 G E Captial Finance/Wal-Mart $2,936 Young's Grocery, Inc. $1,967 Optimum Claims Services, Inc. $1,825 AMERITYRE: Accumulated Deficits Prompt Going Concern Uncertainty ---------------------------------------------------------------- Amerityre Inc.'s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has historically incurred significant losses which have resulted in a total accumulated deficit of approximately $23,485,716 at December 31, 2003, which raises substantial doubt about its ability to continue as a going concern. Amerityre had current assets of $1,723,463 and current liabilities of $66,581, for a working capital surplus of $1,656,882 at December 31, 2003. Current assets consisted of cash and cash equivalents of $947,232, net accounts receivable of $171,187, inventory of $540,327, and prepaid expenses of $64,717. Net cash used in operations was $1,210,590 and 891,566 for the six month periods ended December 31, 2003 and 2002, respectively. Operations for the six months ended December 31, 2003 were funded primarily by accounts receivables, the sale of common stock and the issuance of common stock for services and salary. Operations for the comparative period ended December 31, 2002 were funded primarily by the sale of common stock, the issuance of common stock for services and salary, and the collections of account receivables. At December 31, 2003, the Company had net property and equipment of $1,347,086 after deduction of $1,407,445 in accumulated depreciation, a net increase of $44,299 compared to June 30, 2003. The increase was a direct result of placing additional equipment into production. Because Amerityre had a retained deficit of $21,669,572, its audit report at June 30, 2003 contained a going concern paragraph as to its ability to continue as a going concern. At December 31, 2003, the deficit accumulated is $23,485,716. The Company is currently taking steps to maintain its operating and financial requirements in an effort to enable it to operate as a going concern until such time as revenues from the sale of its Products are adequate to cover its expenses. AMES DEPARTMENT: Will Auction Off Elwood Property on Wednesday -------------------------------------------------------------- Ames Department Stores, Inc. and its debtor-affiliates seek the Court's authority to sell certain commercial real property, buildings, structures and improvements constituting a former retail store located in Ellwood City, Pennsylvania to Lynrose Company, or to any other successful bidder, pursuant to the terms of a Purchase Agreement. The Ellwood Property consists of 6.8 acres of land with 54,900 square feet of building space. Neil Berger, Esq., at Togut, Segal & Segal LLP, in New York, informs the Court that as a result of the Debtors' wind-down efforts, the Ellwood Property is no longer necessary for the conduct of their business. Since ongoing maintenance requires the payment of continuing costs without any corresponding benefit, the Debtors have actively sought a purchaser for the Ellwood Property, and the offer made by Lynrose is the best offer made to date. The Purchase Agreement The substantive terms and conditions of the Purchase Agreement are: (A) Assets to be purchased: * the land and the improvements and all related easements, rights, licenses, privileges and appurtenances; and * all equipment and furnishings and all other tangible personal property owned by Ames Realty and located at the Ellwood Property on the Closing Date. (B) Purchase Price The purchase price for the Ellwood Property is $750,000, payable in cash in this manner: (i) a $40,000 deposit will be delivered by Lynrose to the Debtors, to be held in escrow by the Debtors' real estate counsel, upon the execution of the Purchase Agreement; and (ii) the balance, $710,000, will be paid in cash at the Sale Closing, subject to prorations and adjustments as may be provided under the Purchase Agreement. (C) Closing Closing on the sale of the Ellwood Property to Lynrose is to occur 15 days after the Court enters an Approval Order on the Sale. (D) No Representations or Warranties The Ellwood Property will be sold to Lynrose on an "as is, where is" basis, subject to the Purchase Agreement's representations that are customary in real estate transactions. (E) Broker The only broker involved in the transaction is Pennsylvania Commercial Real Estate, Inc., doing business as Colliers Penn, which Lynrose is solely responsible to for a broker's commission of $40,000. Pennsylvania Commercial will have no right or claim against the Debtors, and there will be no credit or adjustment to the Purchase Price on account of any broker commission or fee. Mr. Berger states that the Debtors' decision to sell the Ellwood Property in accordance with the terms and conditions of the Purchase Agreement is an exercise of sound, considered business judgment. The Purchase Agreement is the product of significant arm's-length negotiation among the parties. Ellwood Property Sale Auction Mr. Berger relates that the Sale to Lynrose or to other successful bidder that submits a higher and better offer will provide the greatest return to the Debtors' estates and creditors and eliminate further administrative costs to maintain the Ellwood Property. Accordingly, the Court schedules an auction for the Ellwood Property on March 31, 2004 at 2:00 p.m., to be conducted at the offices of Togut, Segal & Segal LLP, One Penn Plaza, Suite 3335, in New York. The Debtors maintain that the only recorded Lien against the Ellwood Property is a mortgage in favor of Kimco under the Kimco Agreement. Kimco has consented to the sale of the transactions with Lynrose or to any other entity that may submit a higher or better offer, and the release of its Lien, with such Lien to transfer to the net proceeds of the sale. Sale Aids Formulation of Plan Mr. Berger notes that the conveyance of title to the Ellwood Property by Ames Realty to Lynrose is an essential part to the consummation of any Chapter 11 plan. The Debtors propose to distribute the sale proceeds realized from the sale to their creditors in accordance with and pursuant to the terms of a plan, which they expect to propose in the future. Thus, the Debtors believe that the Ellwood Property Sale will facilitate the formulation and confirmation of a plan for them, and thus fall within the scope of the exemption provided for under Section 1146(c) of the Bankruptcy Code. Headquartered in Rocky Hill, Connecticut, Ames Department Stores, Inc., is a regional discount retailer that, through its subsidiaries, currently operates 452 stores in nineteen states and the District of Columbia. The Company filed for chapter 11 protection on August 20, 2001 (Bankr. S.D.N.Y. Case No. 01-42217). Albert Togut, Esq., Frank A. Oswald, Esq. at Togut, Segal & Segal LLP and Martin J. Bienenstock, Esq., and Warren T. Buhle, Esq., at Weil, Gotshal & Manges LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $1,901,573,000 in assets and $1,558,410,000 in liabilities. (AMES Bankruptcy News, Issue No. 52; Bankruptcy Creditors' Service, Inc., 215/945-7000) ANC RENTAL: Retains J.M. Harrison as Special Property Tax Counsel ----------------------------------------------------------------- On August 6, 2002, the Court approved the employment of CLW Enterprise, LLC, doing business as National Tax Resource Group, as Special Consultant on Property Tax Matters for the ANC Rental Debtors. On August 23, 2002, the Court approved the employment of Brusniak Harrison & McCool, PC as Special Counsel. The NTRG Order, among other things, authorized National Tax Resource to utilize Brusniak to pursue refunds of taxes the Debtors paid in previous years. In addition, the NTRG Order and the Brusniak Order provided that Brusniak would be compensated on a contingency basis based on the total tax savings and refunds obtained on the Debtors' behalf. The Brusniak and the NTRG Orders provided that all fees would be paid to National Tax Resource who in turn would allocate the appropriate percentage payment to Brusniak. The principal attorney at Brusniak working on behalf of the Debtors in conjunction with National Tax Resource was Joseph M. Harrison, IV. Bonnie Glantz Fatell, Esq., at Blank Rome LLP, in Wilmington, Delaware, informs the Court that on April 1, 2003, Mr. Harrison amicably separated from Brusniak and founded J. M. Harrison & Associates. Brusniak was renamed and is now known as Brusniak, McCool & Blackwell, PC. Subsequent to his departure from Brusniak, Mr. Harrison, through Harrison & Associates, continued to perform services on the Debtors' behalf and in conjunction with National Tax Resource. As a result of Harrison & Associates' efforts to date, the Debtors obtained favorable resolutions of various tax liabilities, which resulted in a $500,000 benefit to the Debtors' estate. Based on the NTRG Order, National Tax Resource is entitled to $122,013, of which Harrison & Associates would be entitled to $61,007. Apparently believing that the prior orders were sufficient, Harrison & Associates continued operating under the guidelines of the NTRG and Brusniak Orders. However, the United States Trustee requested the Debtors to separately employ the firm. By this application, the Debtors seek the Court's authority to employ Harrison & Associates, nunc pro tunc to April 1, 2003, as special counsel with regards to the handling of property tax protests, administrative appeals, adversary proceedings and related proceedings involving taxable property of the Debtors in various states. The Debtors note that Harrison & Associates will look solely to National Tax Resource, in accordance with the NTRG Order, for payment of its fees in connection with the representation. Ms. Fatell explains that the nunc pro tunc employment enables the payment of compensation to Mr. Harrison for those services Harrison & Associates provided since April 1, 2003, which proved to be extremely beneficial to the Debtors' estate. After the Plan confirmation, the Debtors expect that the Liquidation Trustee will likely to continue to employ Harrison & Associates. Post-confirmation, Harrison & Associates will likely to continue to work in conjunction with National Tax Resource and the Debtors or the Liquidating Trust to address and resolve existing and contemplated property tax disputes on behalf of the Debtors or the Liquidating Trust. The Debtors believe that Harrison & Associates is both well qualified and uniquely able to continue to represent them or the Liquidation Trust, as applicable, as special counsel in these Chapter 11 cases in an efficient and timely manner. The professional services that Harrison & Associates will continue to render to the Debtors or the Liquidation Trust will include, but will not be limited to: (1) providing legal advice and guidance; (2) rendering legal opinions to the Debtors and National Tax Resource; (3) preparing any necessary documents and taking any other action with respect to the Property Tax Disputes; and (4) performing other legal services for the Debtors that may be necessary or desirable. Ms. Fatell contends that Mr. Harrison is an experienced tax recovery professional that provided essential services in a cost effective manner. In view of the knowledge of the Debtors' businesses possessed by Harrison & Associates, the firm is uniquely qualified to continue to provide services to the Debtors or the Liquidation Trust. Mr. Harrison assures the Court that neither he nor any member of his firm represents a party-in-interest in the Debtors' Chapter 11 cases, their attorneys and accountants. Through diligent inquiry, Mr. Harrison ascertains that there is no connection between his firm and: (1) the U.S. Trustee or any person employed by the Office of the U.S. Trustee; and (2) the Debtors' creditors, equity security holders of any other parties-in-interest, or their attorneys. Accordingly, Harrison & Associates satisfies the disinterestedness requirements of Section 327(a) of the Bankruptcy Code. Headquartered in Fort Lauderdale, Florida, ANC Rental Corporation, is the world's third-largest publicly traded car rental company. The Company filed for chapter 11 protection on November 13, 2001 (Bankr. Del. Case No. 01-11200). Brad Eric Scheler, Esq., and Matthew Gluck, Esq., at Fried, Frank, Harris, Shriver & Jacobson, represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $6,497,541,000 in assets and $5,953,612,000 in liabilities. (ANC Rental Bankruptcy News, Issue No. 50; Bankruptcy Creditors' Service, Inc., 215/945-7000) ASSET SECURITIZATION: Fitch Takes Actions on Series 1996-D3 Notes ----------------------------------------------------------------- Fitch Ratings upgrades Asset Securitization Corp.'s commercial mortgage pas-through certificates, series 1996-D3, as follows: --$39.1 million class A-2 certificates to 'AAA' from 'AA'; --$35.2 million class A-3 certificates to 'AA-' from 'A'; --$39.1 million class A-4 certificates to 'A-' from 'BBB'. In addition, Fitch affirms the following classes: --$302.2 million class A-1C 'AAA'; --$19.6 million class A-1D 'AAA'; --$43 million class B-1 'BB'; --$27.4 million class B-2 'CCC'; --$5.7 million class B-3 'D'. Fitch does not rate class A-5. Classes A-1A and A-1B have paid off in full. 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 aggregate certificate balance has decreased by 32.7% since issuance, to $527 million from $782.6 million. Of the original 112 loans, 91 are currently outstanding in the pool. Eight loans are currently in special servicing including one 60 days delinquent, one 90 days delinquent, three in foreclosure and three real estate-owned (REO) loans. Losses are expected on five of these loans. Six of the specially serviced loans, including two REO loans, are secured by hotel properties. The largest specially serviced loan (2.9%), is secured by a 263- room, ten-story full-service hotel in downtown Atlanta. This loan is currently delinquent as a result of weak demand and declining economic conditions. The loan transferred to the special servicer recently and pre-negotiations have begun for a possible workout of the loan. The second largest loan in special servicing (0.6%), is secured by a 75-bed nursing home in Westwood CA. This loan originally transferred to the special servicer due to a covenant default and the special servicer is working to modify the loan. Fitch remains concerned with the pool's high hotel (31%) concentration. Also of concern is the loan concentration, with the top five loans representing 34% of the pool. ATLAS WORLDWIDE: Court Sets Bar Dates for Filing Proofs of Claims ----------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Florida sets April 12, 2004, at 4:00 p.m. Eastern Time as the deadline for creditors to file their proofs of claim against: Atlas Worldwide Aviation Logistics, Inc.; Atlas Air, Inc.; Atlas Worldwide Holdings, Inc.; Polar Air Cargo, Inc.; and Airline Acquisition Corp. All governmental units must file separate proofs of claim against the Debtors not later than 4:00 p.m. Eastern Time on July 28, 2004. Proofs of claim or interest must indicate the name of the Debtor and bankruptcy case number for such Debtor. If a claim or interest is asserted against more than one Debtor, a separate proof of claim must be filed. Proofs of claim or interest must be addressed to: U.S. Bankruptcy Court Claude Pepper Federal Building Attn: Altas Claims Administrator 51 S.W. 1st Avenue, Room 1517 Miami, Florida 33130 The Debtors' schedules may be viewed at their Web site at http://www.atlasreorg.com/ The Schedules may also be obtained by contacting the Debtor's notice and claims agent at: Atlas Worlwide Holdings, Inc. c/o The Trumbull Group P.O. Box 721 Windsor, Connecticut 06095-0721 Tel: 860-687-3697 Fax: 860-687-3961 Atlas Worldwide Holdings, Inc. -- http://www.atlasair.com/-- is a worldwide all-cargo carriers operate fleets of Boeing 747 freighters. The Debtors filed for Chapter 11 relief on January 30, 2004 (Bankr. S.D. Fla. Case No. 04-10792). Jordi Guso, Esq., at Berger Singerman represent the Debtors in their restructuring efforts. BAM! ENTERTAINMENT: Agrees on VIS' Share Capital Acquisition Terms ------------------------------------------------------------------ BAM! Entertainment(R) (Nasdaq: BFUN), a developer and publisher of interactive entertainment software, reached an agreement with the board of directors of VIS entertainment plc, a Scottish developer of interactive entertainment software products, on the terms of a recommended offer to be made by BAM! for the entire issued share capital of VIS. The board of directors of VIS has unanimously recommended that the shareholders of VIS accept the offer. VIS has received irrevocable undertakings from more than 90% of its shareholders to vote in favor of the offer. Previously, on February 18, 2004, BAM! announced that it had agreed to terms to acquire VIS and SOE Development Limited ("SOED"), a company set up to fund the development of State of Emergency 2, one of the key properties of BAM!. VIS re-registering as a private company and approval by the shareholders of SOED were among the conditions to the closing of the acquisition. The shareholders of VIS voted to re-register VIS as a private limited company on March 15, 2004. BAM! has entered into an agreement with the SOED shareholders to acquire the whole of the share capital of SOED, which is conditional, among other things, on the offer for VIS becoming or being declared unconditional in all respects. BAM! and VIS' board of directors believe that the combination of VIS and BAM! provides an excellent strategic, geographical and operational fit and expect that through the acquisition, substantial benefits will flow to both sets of shareholders. Following the closing of the transaction, BAM! will recommend that Chris van der Kuyl and Alexander Catto, two of the directors of VIS, be elected to the board of directors of BAM! Details of the Offer BAM! is issuing up to 4.5 million shares of its common stock in exchange for the entire issued share capital of VIS. The offer is subject to a variety of conditions including (i) approval by BAM!'s shareholders of the issuance of (x) 4.5 million shares of BAM! Common stock to VIS' shareholders and (y) 4.5 million shares of BAM! common stock to SOED's shareholders, and (ii) BAM! raising not less than $12.35 million of equity financing prior to the closing of the transaction. Based on the closing price of $0.96 per share of BAM! common stock at the close of business on March 18, 2004, the aggregate value of the 9 million shares of BAM! Common stock to be issued upon the closing of the VIS and SOED acquisitions will amount to approximately $8.64 million. Management anticipates that the closing of the two transactions will occur no later than April 30, 2004; however, the closing of the transactions will be contingent upon the satisfaction of all of the conditions set forth in the VIS and SOED transaction documents. Of the 9,000,000 shares of BAM! common stock available to be issued to the VIS and SOED shareholders who accept the offer, (i) 450,000 BAM! shares will be placed by BAM! into an escrow account to be distributed subject to the terms of a purchase price adjustment set forth in the offer; and (ii) 750,000 BAM! shares will be placed by BAM! into an escrow account to satisfy any indemnification obligations of the VIS shareholders to BAM! with respect to the breach of any representations and warranties delivered by VIS and its shareholders in connection with the offer. BAM! will also place an additional 750,000 BAM! shares into an equity account to satisfy any indemnification obligations of BAM! to the VIS and SOED shareholders with respect to the breach of any representations and warranties delivered by BAM! in connection with the offer. About BAM! Entertainment, Inc. Founded in 1999 and based in San Jose, California, BAM! Entertainment Inc. -- whose December 31, 2003 balance sheet shows a total stockholders' equity deficit of $1,467,000 -- is a developer, publisher and marketer of interactive entertainment software worldwide. The company develops, obtains, or licenses properties from a wide variety of sources, including global entertainment and media companies, and publishes software for video game systems, wireless devices, and personal computers. The company's common stock is publicly traded on NASDAQ under the symbol BFUN. More information about BAM! and its products can be found at the company's web site located at http://www.bam4fun.com/ BVR SYSTEMS: Auditors Nix Going Concern Clause After Refinancing ---------------------------------------------------------------- BVR Systems (1998) Ltd. (OTC Bulletin Board: BVRSF.OB), a diversified world leader in advanced military training and simulation systems, announced that the independent public accountants of the Company have removed the clause of "going concern" from the financial statements of the Company. The removal of the "going concern" clause is a result of the completion of a financing round in the Company of $11,000,000 (including investment of $2 million by the banks by way of conversion of loans) and the closing of agreements with the banks, the repayment of short-term loans in the amount of $6.95 million and the rescheduling of repayment of additional short-term loans in the amount of $1 million to the years 2006 and 2007. BVR Systems (1998) Ltd., (OTC Bulletin Board: BVRSF.OB) is a world leader in advanced defense training and simulation systems. The Company is controlled by Chun Holding L.P. a corporation controlled by Aviv Tzidon, Aeronautics Defense Systems Ltd. and iTS Technologies Pte Ltd. For more information visit the Company's web site at http://www.bvrsystems.com/ CEDARA: Successfully Completes $50 Million Equity Financing ----------------------------------------------------------- CEDARA SOFTWARE CORP. (TSX:CDE/OTCBB:CDSWF) successfully completed its offering of 5,000,000 common shares at a price of Cdn.$10.00 per share representing an aggregate amount of issue of Cdn.$50 million. Cedara has granted the underwriters an over-allotment option to purchase up to an additional 750,000 common shares, exercisable for a period of 30 days after the closing. The offering was made through a syndicate of underwriters led by Canaccord Capital Corporation and including CIBC World Markets Inc., GMP Securities Ltd., Loewen, Ondaatje, McCutcheon Limited and McFarlane Gordon Inc. Cedara intends to use these proceeds to repay bank indebtedness, for working capital purposes, and to finance future strategic acquisitions. "The completion of a $50 million financing is a major turning point for Cedara, providing both the capital and credibility to fund future growth for the benefit of our customers, employees and shareholders," said Abe Schwartz, Cedara's President and Chief Executive Officer. The securities offered have not been and will not be registered under the United States Securities Act of 1933, as amended (the U.S. Securities Act) or any other securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws, or an exemption from such registration is available. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. Cedara Software Corp. is a leading independent provider of medical technologies for many of the world's leading medical device and healthcare information technology companies. Cedara software is deployed in thousands of hospitals and clinics worldwide. Cedara's advanced medical imaging technologies are used in all aspects of clinical workflow including the operator consoles of numerous medical imaging devices; Picture Archiving and Communications Systems (PACS); sophisticated clinical applications that further analyze and manipulate images; and even the use of imaging in minimally-invasive surgery. Cedara is unique in that it has expertise and technologies that span all the major digital imaging modalities including magnetic resonance imaging (MRI), computed tomography (CT), digital X-ray, ultrasound, mammography, cardiology, nuclear medicine, angiography, positron emission tomography (PET) and fluoroscopy. The company's December 31, 2003, balance sheet discloses a working capital deficit of about CDN$5 million. CENTERPOINT ENERGY: Subsidiary Closes $250 Million Credit Facility ------------------------------------------------------------------ CenterPoint Energy, Inc. (NYSE: CNP) announced that its natural gas distribution, pipelines and gathering operations subsidiary, CenterPoint Energy Resources Corp. (CERC), recently closed on a $250 million credit facility. This new, three-year credit facility, which closed on March 23, has a fully drawn cost of LIBOR plus 150 basis points at existing credit ratings. Proceeds will be used for general corporate purposes and the facility replaces a one-year $200 million credit facility that expired on March 23, 2004. CenterPoint Energy, Inc. (Fitch, BB+ Preferred Securities and Zero-Premium Exchange Notes' Ratings, Negative), headquartered in Houston, Texas, is a domestic energy delivery company that includes electric transmission and distribution, natural gas distribution and sales, interstate pipeline and gathering operations, and more than 14,000 megawatts of power generation in Texas, of which nearly 3,000 megawatts are currently in mothball status. The company serves nearly five million customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas. Assets total $21 billion. With more than 11,000 employees, CenterPoint Energy and its predecessor companies have been in business for more than 130 years. Visit http://www.CenterPointEnergy.com/for more information. CHARLES LETT: Case Summary & 6 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Charles L. Lett dba The Lighthouse of Dallas County, Inc. 103 Calvin Circle Selma, Alabama 36701 Bankruptcy Case No.: 04-11805 Chapter 11 Petition Date: March 25, 2004 Court: Southern District of Alabama (Selma) Debtor's Counsel: Collins Pettaway, Jr., Esq. Chestnut, Sanders, Sanders, Pettaway, Campbell & Albright, L.L.C. P.O. Box 1290 Selma, AL 36702-1290 Tel: 334-875-9264 Total Assets: $3,737,301 Total Debts: $4,762,486 Debtor's 6 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ State of Alabama (ADECA) Good Samaritan $2,469,000 401 Adams Avenue Building Broad Street Montgomery, AL 36104 Voeglin Avenue and Selma, AL State of Alabama (ADECA) Balance due under $859,945 401 Adams Avenue judgment Montgomery, AL 36104 Sallie Mae Servicing College Loan $50,000 Zarzaur & Schwartz, P.C. MBNA America Bank $13,508 John Deer Credit John Deer Tractor $9,441 2950 John Deere Tractor John Deer Tractor $9,441 CINCINNATI BELL: Fitch Affirms Ratings & Assigns Stable Outlook --------------------------------------------------------------- Fitch Ratings has removed Cincinnati Bell, Inc. (CBB) and Cincinnati Bell Telephone (CBT) from Rating Watch Negative and has affirmed the following ratings for CBB and its subsidiaries: CBB --Senior secured bank facility 'BB-'; --7.25% senior secured notes due 2023 'BB-'; --7.25% senior unsecured notes due 2013 'B+'; --16% senior subordinated discount notes due 2009 'B'; --8.375% senior subordinated notes due 2014 'B'. CBT --Senior unsecured notes and medium-term notes 'BB+'. The Rating Outlook is Stable for CBB and CBT. Approximately $2.3 billion of debt is affected by Fitch's action. Fitch's action follows the company's announcement that it has obtained the necessary waivers from its lender group under its senior secured credit facility that addressed and cured all events of default under the company's senior secured credit facility in connection with CBB's restatement of its historical financial statements. Fitch's rating of CBB reflects the relative stability and lower level of business risk associated with the company's focus on its incumbent local exchange and wireless businesses. The company's local segment accounted for nearly 72% of consolidated revenue and 85% of consolidated EBITDA excluding the broadband segment. The local segment full-year EBITDA margin of 52% held relatively stable compared to 2002 EBITDA margin. Local segment year-over- year revenue decline for 2003 was approximately 1.5%, largely concentrated in revenue declines of equipment and related installation services. Local-service revenue accounting for nearly 56% of total local segment revenues was essentially flat for the year ended 2003 as compared to 2002. Fitch acknowledges that competitive pressure specifically within business markets is increasing, as reflected in the accelerated rate of access line decline the company reported for the fourth quarter. Fitch expects additional competitive pressures from cable companies launching voice services. However, the 2.6% year-over-year access line decline still compares favorably to the rates reported by the RBOCs and includes a large portion of second-line disconnects. To mitigate competitive pressure the company continues to focus on its service-bundling strategy. CBB's wireless segment reported revenue and EBITDA declines of 2.9% and 1.4%, respectively, during 2003, driven largely by a reduction of post-paid subscribers and post-paid ARPU. This reflected the company's strategy to not aggressively add wireless subscribers during the construction of the GSM/GPRS network. The company completed the GSM/GPRS network overlay during fourth- quarter 2003. CBB was able to add 13,000 subscribers resulting from the implementation of new rate plans. The rate plans coupled with the competitive wireless environment pressured post-paid ARPU down to $55.98 for 2003, a 4.9% decline relative to 2002 ARPU. Fitch expects that the company's ARPU will continue to trend down during 2004 and anticipates that growing customer acquisition costs and costs associated with operating the TDMA network and GSM network simultaneously will also pressure the wireless segment's EBITDA margin. One issue that could potentially affect the company's current rating is how its partnership with AT&T Wireless (AWE) will be resolved. AWE owns 19.9% of Cincinnati Bell Wireless, LLC (CBW) a joint venture with CBB, and pursuant to the terms of the joint venture agreement, AT&T Wireless could be in violation of the non- compete provisions contained in the agreement, provided that the proposed merger of AWE and Cingular closes and Cingular continues to offer wireless services in CBW's territory. From Fitch's perspective, any resolution of the partnership that impedes the company's ability to reduce leverage would not have a favorable impact on the company's current rating. During 2003 the company was able to reduce its debt level by approximately $271 million, or 10.5%, relative to year-end 2002 debt levels, and the debt-to-EBITDA metric at the end of 2003 was 4.4 times (x). The company generated free cash flow (measured by cash from operations less capital expenditures and dividends) of $176.3 million. Fitch expects the company to continue to generate free cash flow and improve its credit protection metrics in 2004. The company's liquidity position is supported by cash on hand of $26 million and approximately $300 million of liquidity available through its revolver. The stable rating outlook reflects the strength and relative stability of CBB's remaining local exchange and wireless business, its improved financial flexibility, and the expectation of further debt reduction and improvement of credit protection metrics over the near term. CINEMARK USA: S&P Rates Proposed $370MM Sr. Sec. Bank Loan at BB- ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BB-' rating and a recovery rating of '1' to Cinemark USA Inc.'s proposed $370 million senior secured bank facility, indicating high expectations for a full recovery of principal in a default scenario. In addition, Standard & Poor's affirmed its 'B+' corporate credit rating on Cinemark USA. At the same time, Standard & Poor's assigned a 'B+' corporate credit rating to parent holding company, Cinemark Inc. Both companies are analyzed on a consolidated basis. Standard & Poor's also assigned a 'B-' rating to the proposed Rule 144A $360 million senior discount notes due 2014 to be issued by Cinemark Inc. The outlook is negative. On a pro forma basis, the Plano, Texas-based movie theater chain is expected to have $1 billion in consolidated debt. The incremental debt from the new notes will be used to help finance the sale of the majority of Cinemark's common stock to affiliates of Madison Dearborn Partners LLC. The new bank loan includes an increase in the term loan to $270 million from $165 million, with the new funds to be used to refinance Cinemark's existing $105 million 8.5% notes due Aug. 1, 2008. "The terms of the proposed financing are consistent with Standard & Poor's expectations at the March 16, 2004, affirmation of the ratings and revision of the outlook to negative from positive," according to Standard & Poor's credit analyst Steve Wilkinson. He added, "The roughly 25% increase in consolidated debt will reverse the improvement in the company's leverage over the past two years, but Cinemark's credit profile should remain consistent with a 'B+' corporate credit rating. Lease-adjusted debt to EBITDA will rise to about 6.3x on a pro forma basis. Standard & Poor's expects Cinemark's leverage to gradually decrease over the next few years as moderate expansion activity helps drive EBITDA growth and as discretionary cash flow is used to reduce debt ahead of schedule. The prepayment of debt is a key rating assumption, and will be important to offsetting debt and leverage increases from the accretion of the proposed discount notes." CKE RESTAURANTS: William Foley Discloses 9.66% Equity Stake ----------------------------------------------------------- William P. Foley, II beneficially owns 5,794,867 shares of the common stock of CKE Restaurants, Inc., representing 9.66% of the outstanding common stock shares of the Company. The percentage is based on 59,973,057 shares of common stock outstanding, which is the sum of (a) the shares of CKE common stock outstanding as of December 31, 2003, plus (b) the options to purchase 2,359,971 shares of CKE common stock currently exercisable, or exercisable within 60 days of December 31, 2003, held by Mr. Foley. Mr. Foley holds sole voting power over 2,895,956 shares, and shares voting power over 2,898,911 shares. He also holds sole dispositive power over the 2,895,956 shares, and shares dispositive power over the 2,898,911 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/ CKE RESTAURANTS: Will Issue Q4 & Fiscal Year Results on April 7 --------------------------------------------------------------- CKE Restaurants, Inc. (NYSE: CKR) will release fourth quarter and year-end results for its 2004 fiscal year on Wednesday, April 7, 2004, after the market closes, when a summary press release will be issued and its Report on Form 10-K will be filed with the Securities and Exchange Commission. A conference call and Webcast with management will be held the following morning -- on Thursday, April 8, 2004. What: CKE Restaurants, Inc. Fourth Quarter and 2004 Year- End Conference Call and Webcast When: April 8, 2004 at 9:30 a.m. Eastern Time (6:30 a.m. Pacific Time) Where: Dial 913-981-5559 (no confirmation code required) Or listen live over the Internet at http://www.shareholder.com/cke/medialist.cfm Contact: Christie Cooney, Manager, Corporate Communications, CKE Restaurants, Inc., 805-745-7740 If you are unable to participate during the live event, a replay will be made available for one week beginning two hours after the end of the live call. To access the replay, dial 888-203-1112 in the U.S. and Canada or 719-457-0820 outside of the U.S. and Canada (access code: 229834) or go to http://www.shareholder.com/cke/medialist.cfm. As of November 3, 2003, CKE Restaurants, Inc. (S&P, B Corporate Credit Rating, Negative), through its subsidiaries, franchisees and licensees, operated 3,284 restaurants in 44 states and 14 countries, including 1,003 Carl's Jr.(R) restaurants, 2,134 Hardee's(R) restaurants, and 100 La Salsa Fresh Mexican Grill(R) restaurants. For more information, go to http://www.ckr.com/ CINEMARK: Obtains Requisite Consents for Debt Indenture Amendments ------------------------------------------------------------------ Cinemark USA, Inc. announced that, as of 5:00 p.m., New York City time, on March 25, 2004 and as part of its previously announced tender offer and consent solicitation for any and all of its outstanding $105 million 8-1/2% Series B Senior Subordinated Notes due 2008 (CUSIP No. 172441AL1), the Company had received the requisite consents to all of the proposed amendments to the indenture governing the Notes. A supplemental indenture effecting these amendments has been executed, and the supplemental indenture will become operative on the first date that validly tendered Notes are accepted for purchase and payment. The expiration of the consent solicitation was 5:00 p.m., New York City time, on March 25, 2004. The tender offer is scheduled to expire at 5:00 p.m., New York City time, on April 13, 2004, unless extended. Holders of Notes who tendered their Notes on or prior to the Consent Date will receive, promptly after acceptance by the Company, the total consideration equal to 104.5% of the principal amount of the Notes validly tendered. Holders of Notes who tender their Notes after the Consent Date but on or prior to the Expiration Date, will receive, promptly after acceptance by the Company, 101.5% of the principal amount of the Notes validly tendered. In each case, holders that validly tender their Notes shall receive accrued and unpaid interest up to, but not including, the applicable settlement date. As of 5:00 p.m., New York City time on the Consent Date, approximately $94.1 million of the $105.0 million outstanding principal amount of the Notes had been irrevocably tendered. The proposed amendments to the indenture will eliminate substantially all of the restrictive covenants, certain repurchase rights and certain events of default and related provisions contained in such indenture. The tender offer and consent solicitation will be conditioned upon the consummation of the Company's previously announced recapitalization. Neither the tender offer and solicitation of consents nor the Recapitalization is conditioned upon obtaining the consent of a majority of holders of Notes. Lehman Brothers Inc. and Goldman, Sachs & Co. are the Dealer Managers and Solicitation Agents for the tender offer and consent solicitation. Questions regarding the tender offer should be directed to Lehman Brothers Inc. at 212-528-7581 or 800-438-3242 (Attention: The Liability Management Group at Lehman). Requests for assistance or additional sets of the offer materials may be directed to D.F. King & Co., Inc., the Information Agent and Tender Agent for the tender offer and solicitation, at 888-567- 1626. * * * As reported in the Troubled Company Reporter's March 18, 2004 edition, Standard & Poor's Ratings Services affirmed its ratings on Cinemark USA Inc., including its 'B+' corporate credit rating. At the same time, Standard & Poor's revised its outlook on the company to negative from positive. The action is based on plans to increase debt to partially fund the purchase of a majority of its common stock by affiliates of Madison Dearborn Partners LLC. "The proposed sale and related financing will reverse the improvement in the company's leverage over the past two years, but Cinemark's credit profile should remain consistent with a 'B+' corporate credit rating," according to Standard & Poor's credit analyst Steve Wilkinson. He continued, "Lease-adjusted debt will rise about 25% and debt to EBITDA will increase to about 6.3x on a pro forma basis. Standard & Poor's expects Cinemark's leverage to gradually decrease over the next few years as EBITDA grows from moderate expansion activity and as discretionary cash flow is used to reduce debt ahead of schedule. The prepayment of debt will be important to offset debt and leverage increases from the accretion of the proposed discount notes and to maintain covenant compliance." COLONIAL TRUST: Heartland to Buy Wealth Management for $3MM Cash ---------------------------------------------------------------- Heartland Financial USA Inc. (Nasdaq NMS: HTLF) has signed a definitive agreement to acquire, through its Dubuque Bank & Trust Co. (DB&T) subsidiary bank, the Wealth Management Group of Colonial Trust Co., a publicly held Arizona trust company based in Phoenix. The Wealth Management Group, Colonial Trust Co.'s personal trust division, had core assets of $193 million at Dec. 31, 2003, and revenues of $1.145 million in the latest 12-month period ended Dec. 31, 2003. The Colonial board of directors is pursuing a liquidation of the entire company, which consists of the Wealth Management Group to be acquired by Heartland and a corporate trust division, which is being acquired by another buyer. The total purchase price of Colonial's Wealth Management Group will be approximately $3 million, consisting of all cash. The transaction, subject to regulatory approval and the approval of Colonial's shareholders, is expected to close during the second quarter of 2004 and be accretive to Heartland's cash earnings in 2004. Subsequent to the completion of the acquisition, Heartland expects to transfer the acquired assets and fiduciary accounts to its Arizona Bank & Trust (AB&T) subsidiary bank and enter into an inter-bank service agreement that will allocate all of the costs and revenues of the acquired trust business to DB&T. This agreement will remain in effect until both parties agree to terminate it. "This transaction represents a unique opportunity to grow our trust business within our key Southwestern marketplace," said Lynn B. Fuller, Heartland chairman, president and chief executive officer. "In particular, the addition of Colonial's seasoned management team and strong account base will immediately and dramatically elevate the profile of our newest subsidiary bank, Arizona Bank & Trust. We believe that Colonial's core competencies, coupled with Heartland's strong support services, depth of expertise, and long track record of investment performance provide a solid platform for AB&T to flourish within its Phoenix market area. In addition, Heartland will bring a number of unique services to the Phoenix area, including socially responsible investing options and the Heartland Charitable Trust, a donor-advised 501c(3) public charity." Bruce Mitchell, vice president and manager of Colonial's Wealth Management Group since 1999, will continue to head up the Wealth Management operation under AB&T's banner. "We are excited about the opportunity to help drive Arizona Bank & Trust's expansion into the local trust and investment services market," said Mitchell. "This combination of a community-oriented local banking center with a $200 million trust department will create compelling avenues for growth within every facet of AB&T's business." The company also announced that it expects to open a second office of Arizona Bank & Trust in Chandler, Ariz., in May 2004. Heartland opened AB&T's flagship office in August 2003, in Mesa, Ariz. AB&T President and CEO William F. Frank cited the expected Chandler office opening, as well as the proposed Colonial Wealth Management Group acquisition, as important milestones in the ongoing expansion into the bank's market area. "Taken together, the Colonial transaction and new office location will create compelling new avenues of growth for AB&T as we continue to expand our presence in this dynamic market," he said. About Heartland Financial USA Heartland is a $2.0 billion financial services company with seven banks in Iowa, Illinois, Wisconsin, New Mexico and Arizona: -- Dubuque Bank and Trust Co., with eight offices in Dubuque, Epworth, Farley and Holy Cross, Iowa -- Galena State Bank and Trust Company, with three offices in Galena and Stockton, Ill. -- First Community Bank, with three offices in Keokuk, Iowa, and Carthage, Illinois -- Riverside Community Bank, with three offices in Rockford, Ill. -- Wisconsin Community Bank, with seven offices in Cottage Grove, Fitchburg, Green Bay, Middleton, Monroe Sheboygan, Wis., and Minneapolis, Minn. -- New Mexico Bank & Trust, with 12 offices in Albuquerque, Clovis, Santa Fe, Melrose, and Portales, N.M. -- Arizona Bank & Trust, with one office in Mesa, Ariz., and a second office scheduled to open in May 2004 in Chandler, Ariz. Additional information about Heartland is at http://www.htlf.com/ COMPUTERIZED THERMAL: Stock Delisted from AMEX & Moves to OTCBB --------------------------------------------------------------- Computerized Thermal Imaging, Inc. (CTI) (Amex: CIO), through discussions with staff of the American Stock Exchange, agreed to remove its common stock from listing on AMEX, and will seek to have its common stock quoted on the OTC Bulletin Board. Although CTI had requested a hearing before an AMEX Listing Qualifications Panel in an effort to appeal the AMEX staff's determination to delist the CTI common stock from AMEX, CTI ultimately determined that the best interests of CTI and its shareholders would be served by ensuring an orderly transition to the OTCBB. The last trading day of the CTI common stock on AMEX was Friday, March 26, 2004. CTI currently anticipates that the OTCBB will commence quotation of the CTI common stock today, March 29, 2004. "Although we value the prestige of our AMEX listing, we believe the move to the OTCBB is more consistent with our current operations and financial condition," said Richard V. Secord, CTI's President and Chief Executive Officer. Secord continued, "Given our current financial and operating position, we believe our focus needs to be on business fundamentals. We believe the move to the OTCBB will result in significant immediate cost savings to CTI." About CTI CTI -- whose December 31, 2003 balance sheet shows a total stockholders' equity deficit of $1,069,251 -- designs, manufactures and markets thermal imaging and infrared devices and services used for clinical diagnosis, pain management and non- destructive testing of industrial products and materials. CTI has developed six significant proprietary technologies, four of which relate to its breast imaging system, BCS 2100. These include a climate-controlled examination unit to provide patient comfort and facilitate reproducible tests for the BCS 2100; an imaging protocol designed to produce consistent results for the BCS 2100; a statistical model that detects physiological irregularities for the BCS 2100, and infrared imaging and analysis hardware, including a proprietary heat-sensing camera. CTI also markets the Thermal Image Processor and Photonic Stimulator, two cleared pain management devices used for diagnostic imaging and therapeutic treatment. COMPUTERIZED THERMAL: Obtains $500 Million Leasing Commitment ------------------------------------------------------------- Computerized Thermal Imaging, Inc. (CTI) entered into a letter of commitment with Associated Leasing International Corp., pursuant to which Associated Leasing proposes to help market CTI's medical and industrial equipment and providing a credit facility of up to $500 million to facilitate sales of CTI's products. Associated Leasing provides lease financing of a broad range of capital equipment, including medical, heavy industrial, electronics, aerospace, transportation, and equipping entire hospitals. Details to implement this new program are now in development. (For more information on Associated see www.associatedleasing.net) CTI also reported that on March 19, 2004 it received a letter from the staff of the U.S. Food and Drug Administration (the "FDA") addressing CTI's application for premarket approval of CTI's BCS 2100 breast cancer screening device. In its letter, the FDA staff identified three alternative approaches, including CTI's current approach, to achieve premarket approval of the BCS2100. CTI management believes the FDA response is, in part, attributable to intervention by the Office of the FDA Commissioner. CTI management and staff are now reviewing and evaluating each of the three alternatives. All three alternatives involve different concepts in statistical methodology; however, the FDA staff has indicated that the two alternative approaches to CTI's existing approach would require new studies, but would involve considerably fewer subjects than CTI's current approach. Mr. Secord commented, "We are very appreciative of the FDA staff's willingness to help resolve the longstanding statistical issue regarding premarket approval of the CTI breast cancer system." About CTI CTI -- whose December 31, 2003 balance sheet shows a total stockholders' equity deficit of $1,069,251 -- designs, manufactures and markets thermal imaging and infrared devices and services used for clinical diagnosis, pain management and non- destructive testing of industrial products and materials. CTI has developed six significant proprietary technologies, four of which relate to its breast imaging system, BCS 2100. These include a climate-controlled examination unit to provide patient comfort and facilitate reproducible tests for the BCS 2100; an imaging protocol designed to produce consistent results for the BCS 2100; a statistical model that detects physiological irregularities for the BCS 2100, and infrared imaging and analysis hardware, including a proprietary heat-sensing camera. CTI also markets the Thermal Image Processor and Photonic Stimulator, two cleared pain management devices used for diagnostic imaging and therapeutic treatment. CONEY ISLAND: Case Summary & 6 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Coney Island Amusement, Inc. 3333 Henry Hudson Parkway Bronx, New York 10463 Bankruptcy Case No.: 04-12002 Type of Business: The Debtor owns real estate for development purposes. Chapter 11 Petition Date: March 24, 2004 Court: Southern District of New York (Manhattan) Judge: Allan L. Gropper Debtor's Counsel: Richard L. Koral, Esq. 60 East 42nd Street, Suite 1136 New York, NY 10165 Tel: 212-682-1212 Fax: 212-687-2084 Total Assets: $10,000,000 Total Debts: $8,770,000 Debtor's 6 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Coney Island Resorts, Inc. Loan $2,500,000 3333 Henry Hudson Parkway Riverdale, NY 10463 KMZ Rosenman & Colin $252,617 575 Madison Ave. New York, NY 10022 Barry Gedan, Esq. $140,240 Dynamic Group $70,000 New York Advisory Services $5,875 Kucker & Bruh, LLP $5,200 CONGOLEUM: Court Fixes Asbestos Property Damage Claims Bar Date --------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey has fixed May 3, 2004, at 5:00 pm (Eastern Time) as the deadline for filing proofs of claim for asbestos property damage claims against Congoleum Corporation and its debtor-affiliates. Proof of Claim forms may be obtained by contacting the Debtor's Claims Agent, The Altman Group, Inc. at (800) 206-0007 or by submitting a request form on the Congoleum web site at http://www.congoleum.com/ An original copy of the proof of claim form, along with copies of all attachments may be submitted by hand delivery, first class mail or overnight delivery to: The Altman Group, Inc. Re: Congoleum Corporation PD Claims Processing 60 E. 42nd Street Suite 405 New York, New York 10165 Claims not filed and served in accordance with these Court- approved procedures will be denied and forever barred. Headquartered in Mercerville, New Jersey, Congoleum Corporation -- http://www.congoluem.com/-- manufactures and sells resilient sheet and tile floor covering products with a wide variety of product features, designs and colors. The Company filed for chapter 11 protection on December 31, 2003 (Bankr. N.J. Case No. 03-51524). Domenic Pacitti, Esq., at Saul Ewing, LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $187,126,000 in total assets and $205,940,000 in total debts. CONMACO/RECTOR: Seeks Court Nod to Use Lenders' Cash Collateral --------------------------------------------------------------- Conmaco/Rector LP seeks interim and final nod from the U.S. Bankruptcy Court for the Eastern District of Louisiana, to use its lender's cash collateral to finance the continued operation of its business. Prior to the filing of its chapter 11 petition, the Debtor maintained a line of credit with the CIT Group/Equipment Financing, Inc. The CIT Group claims a valid and perfected lien and security interest in a substantial portion of the Debtor's property including all accounts, documents, instruments, inventory, equipment, investment property, and general intangibles of the Debtor. The outstanding obligations of the Debtor to CIT Group as of the Petition Date was approximately $19,702338. The Debtor has an immediate need to obtain funds to continue the operation of its business. It is imperative that the Debtor obtains authority from this Court to use cash collateral in order to maintain its business operations and protect its ability to reorganize in accordance with Chapter 11 of the Bankruptcy Code. The Debtor believes that the expenses are reasonable and necessary business expenses needed to continue the Debtor's business operations. The Debtor reports monthly cash outflows of $626,500 for the months March to May. As adequate protection to the Bank for the use of cash collateral and the risk of any diminution of such cash collateral as of the Petition Date, the Debtor proposes to: a) grant replacement liens and security interests in the same rank, privilege and amount, pursuant to and in accordance with Section 361(2), in and to all property of the Debtor's estate of the kind presently encumbered by the indebtedness owed to the CIT Group as of the time of the filing of the Petition, including a replacement lien in all of the Debtor's accounts receivable generated post- petition, and; b) grant administrative priority pursuant to Sections 361(3), 503(b), and 507(a)(1); c) provide of financial and operational reports to the CIT Group; and d) maintain the insurance on all of the Collateral; e) segregate all Cash Collateral from other non-cash collateral belonging to the Debtor; f) conduct its business operations pursuant to budgets approved by the Court after review and the right to object by CIT Group. Headquartered in Belle Chasse, Louisiana, Conmaco/Rector L.P. -- http://www.conmaco.com/-- is in the business of sale and rental of new and used construction and industrial equipment, primarily cranes and specialized lift equipment, complementary parts and merchandise to a wide variety of construction and industrial customers. The Company filed for chapter 11 protection on February 27, 2004 (Bankr. E.D. La. Case No. 04-11248). Stewart F. Peck, Esq., and Christopher T. Caplinger, Esq., at Lugenbuhl, Wheaton, Peck, Rankin & Hubbard, LC represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed both estimated debts and assets of over $10 million. CREDIT SUISSE: Fitch Assigns BB+ Rating to Class K & J Notes ------------------------------------------------------------ Fitch Ratings upgrades Credit Suisse First Boston Mortgage Securities Corp.'s commercial mortgage pass-through certificates, series 2001-FL1, as follows: -- $7.8 million class G to 'AAA' from 'AA'; -- $3.9 million class H to 'AAA' from 'BBB+'; -- $3.2 million class K to 'BB+' from 'B+'. In addition, Fitch affirms the following classes: -- $6.1 million class D 'AAA'; -- $5.2 million class E 'AAA'; -- $5.2 million class F 'AAA'; -- $9.7 million class J 'BB+'. F itch does not rate the $10.5 million class L. Classes A, B and C have paid in full. The upgrades reflect improved credit enhancement levels resulting from loan payoffs and amortization. Of the original 37 loans, three are currently outstanding in the pool and all are with the special servicer. Classes J and K are experiencing interest shortfalls due to trust expenses, special servicing fees and other non-recoverable expenses. The shortfalls, as well as the accrued interest on the shortfalls, are expected to be repaid in full shortly. The largest specially serviced loan, Alliance SH2 Portfolio (66.6%), is secured by three garden style multifamily properties located in Indiana, North Carolina and Texas. The loan matures in October 2003 and is currently performing under a forbearance agreement while the borrower pursues refinancing. The loan remains current. The second largest specially serviced loan, Citiscape Apartments, is secured by a 231-unit apartment complex in Dallas, TX. This loan has been real estate-owned (REO) since November of 2003. The property, which has historically performed well, is currently being marketed by the special servicer. The third largest specially serviced loan, Holiday Express Cambridge (15.4%), is secured by a 112-room limited service hotel located in Cambridge, MA. The loan has been modified extending its maturity until October 2004 and is pending return to the master servicer. Under the terms of the modification, the borrower has agreed to make a one time payment reducing the principal balance by $800,000 while the lender has agreed to write down the loan balance by $1.2 million. This loan is current. Fitch will continue to closely monitor the deal as surveillance is ongoing. CURTIS ENTERPRISES: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: Curtis Enterprises, Inc. P.O. Box 1170 Russellville, Arkansas 72811 Bankruptcy Case No.: 04-12947 Chapter 11 Petition Date: March 9, 2004 Court: Eastern District of Arkansas (Little Rock) Judge: Audrey R. Evans Debtor's Counsel: Stephen L. Gershner, Esq. Davidson Law Firm P.O. Box 1300 Little Rock, AR 72203-1300 Tel: 501-374-9977 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. DIRECTV LATIN AMERICA: Gets Okay for Music Choice Settlement Pact ----------------------------------------------------------------- DirecTV Latin America, LLC rejected its programming agreement with Music Choice, pursuant to which the Debtor was licensed the right to broadcast and make available to subscribers certain digital music programming. The Court authorized the Debtor to reject the Music Choice Agreement on March 28, 2003, and, consequently, Music Choice timely filed a proof of claim for $27,327,001. The Music Choice claim consists of $4,729,560 in accrued but unpaid prepetition amounts and rejection damages estimated at $22,597,441. Music Choice and the Debtor have agreed that the Music Choice Claim will be reduced by $1,327,001 and that Music Choice will have an allowed general unsecured claim against the Debtor for $26,000,000. The Debtor and Music Choice have also agreed to a mutual release of claims. Consequently, the Debtor sought and obtained Court approval for its settlement agreement with Music Choice. (DirecTV Latin America Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENRON CORP: Inks Pact Settling CASH V Investors' Claims ------------------------------------------------------- Prior to the Petition Date, Enron Power Marketing, Inc., and Virginia Electric and Power Company entered into a Power Purchase Agreement whereby EPMI provided electricity capacity and scheduled electricity to Virginal Electric in return for monthly payments -- the Capacity Payments. EPMI's right to future receivables under the Power Purchase Contract was monetized through these series of transactions: * On June 30, 1997, EPMI sold the right to the Capacity Payments to Enron Cash Company No. 5, pursuant to an assignment agreement in return for a cash payment of approximately $131,000,000. Also on June 30, 1997, CashCo 5, pursuant to a contractual asset sale agreement, transferred an asset equal to the Purchase Price to the Contractual Asset Securitization Holding Trust V in return for a cash payment of an amount equal to the Purchase Price from the Trust. In turn, the Trust paid EPMI a purchase price to enter into an interest rate swap agreement with the Trustee to eliminate cash flow volatility. * To fund the purchase of the Contractual Asset from CashCo 5 and to purchase the Swap, the Trust issued to a syndicate of lenders led by Barclays Bank PLC two tranches of notes amounting to $67,856,938 and $59,152,619, and certificates of beneficial ownership amounting to $3,928,131. EPMI is the servicer of the CashCo 5 Sale Agreement and Barclays acts as the administrative agent. The Capacity Payments service the debt incurred by issuing the Notes. * Pursuant to the Performance Guaranty, dated as of June 30, 1997, Enron guaranteed to the Cash V Investors, Barclays, as Administrative Agent and Master Swap Counterparty, and the Trustee the payment and performance of all obligations of EPMI and CashCo 5 under the Operative Documents. Virginia Electric failed to make Capacity Payments under the Power Purchase Contract and EPMI had a claim against it for the unpaid amounts. However, the commencement of the Chapter 11 cases constituted an event of default under the Guaranty and certain other Operative Documents. Barclays asserted a prepetition claim against EPMI and Enron for $68,590,538, plus all costs and allowable interest, based on EPMI's alleged default of the CashCo 5 Sale Agreement and related Service Agreement. EPMI denied the allegations. The parties settled all issues regarding the CASH V Structure through a settlement agreement. Accordingly, the parties engaged in extensive, arm's-length and good faith negotiations and discussions. Consequently, Enron, EPMI, CashCo 5, Barclays, in its capacity as a Purchaser and as agent and master swap counterparty, the CASH V Investors -- Credit Lyonnais New York Branch, Bank of Nova Scotia, Bayerische Landesbank Girozentrale, Mizohu Global Ltd., KBC Bank NV, UFJ Bank Limited, Metropolitan Life Insurance Company, Texas Life Insurance Company, Principal Life Insurance Company -- and State Street Bank and Trust Company of New York, National Association agreed on these terms and conditions: A. Settlement Payments On the Closing Date, the Trustee will cause to be paid to Barclays, in its capacity as Administrative Agent for distribution to each of the CASH V Investors its pro rata share of: (1) the amount currently on deposit in the Distribution Account established pursuant to the Sale Agreement, which amount is approximately $69,000; and (2) the amount currently held in the Collection Account established pursuant to the Sale Agreement, which amount is about $41,700. EPMI agreed that all amounts received from Virginia Power after the Closing Date in connection with the Virginia Power Claim will be deposited in an account EPMI will establish. In addition, EPMI will cause to be paid all payments received in connection with the Virginia Power Claim in this manner: (a) Enron will be reimbursed for up to $1,000,000 of reasonable out-of-pocket costs incurred in connection with its prosecution of the Virginia Power Claim; (b) The next $2,600,000 of recoveries will be split between EPMI and the CASH V Investors, with EPMI receiving 20% of the amount recovered and the CASH V Investors receiving 80% of the amount; (c) The next $10,000,000 in recoveries will be shared equally between EPMI and CASH V Investors; (d) Any recovery greater than $12,600,000 but less than $32,600,000 will be split between EPMI and the CASH V Investors with EPMI receiving 60% of the amount recovered and the CASH V Investors receiving 40% of that amount; and (e) Any recovery greater than or equal to $32,600,000 will be split between EPMI and CASH V Investors, with EPMI receiving 75% of the amount recovered and the CASH V Investors receiving 25% of the amount. B. Mutual Release Each of the parties releases, acquits and forever discharges each other from any and all claims, demands, liabilities and causes of action at any and every kind, character or nature whatsoever, in law or in equity, asserter or unasserted, which the Parties may have or claim to have against each other now, or which may later arise, solely from the CASH V Transactions. C. Proofs of Claim The Parties acknowledged and agreed that Claim Nos. 10909 and 10910 filed against Enron and EPMI by or on behalf of any of the CASH V Investors, the CASH V Trust and the other holders of Notes and Certificates in the amount as filed will not be released, discharged or otherwise waived; provided, however, that the Filed Claims are subject to reduction to the extent payments are made pursuant to the Settlement Agreement, and are further subject to Enron's and EPMI's right to dispute the claims; provided further, that any proofs of claim in excess of the amount will be deemed immediately expunged without any further Court order. The Filed Claims with respect to Enron may be amended to reflect amounts due under the Swap and any amended Filed Clam will remain subject to Enron's right to dispute it in all respects. D. Cooperation/Virginia Power Claim The Parties agreed that EPMI will use its commercially reasonable efforts to prosecute the Virginia Power Claim; provided, however, that any settlement, resolution or other agreement between EPMI and Virginia Power will require the approval of the "Majority Purchasers," which approval will not be unreasonably withheld or delayed; provided further, however, that if amounts to be received by EPMI in connection with the Virginia Power Settlement exceed $20,000,000, the approval will not be required. Each of the CASH V Investors agreed to cooperate, at no cost to the CASH V Investor, to the extent reasonably requested by EPMI and will not interfere with EPMI's prosecution of its claims against Virginia Power. Thus, pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure, the Debtors sought and obtained Court approval for the Settlement Agreement. The Court also authorize Enron and EPMI to enter into and implement the Settlement Agreement. (Enron Bankruptcy News, Issue No. 102; Bankruptcy Creditors' Service, Inc., 215/945-7000) FEDERAL FORGE: U.S. Trustee Names Official Creditors' Committee --------------------------------------------------------------- The United States Trustee for Region 9 appointed a 7-member Official Committee of Unsecured Creditors in Federal Forge, Inc.'s Chapter 11 case: 1. Mark Fiorina Republic Engineered Products 3770 Embassy Parkway Akron, Ohio 44333 Tel: 330 670 3042 Fax: 330 670 7041 2. Gary W. Barnard Barnard Manufacturing Co., Inc. 205 E. Walker Road PO Box 10 St. Johns MI 48879 Tel: 989 224 1070 Fax: 989 224 1903 3. Diane Hurst S & S Die Companye 830 River Street Lansing, Michigan 48912 Tel: 517 484 8144 Fax: 517 484 5511 4. Michael Conlin/Paul Verbrugge Non-Destructive Testing Services, Inc. 8181 Broadmoor, SE Caledonia, Michigan 49316 Tel: 616 891 3870 Fax: 616 891 3565 5. Tim Dunagan Ajax Technologies 1441 Chardon Road N Euclid, Ohio 44117 Tel: 216 531 1010 Fax: 216 481 6369 6. John M. Dolski Bell Induction Heating, Inc. 41241 Edison Lake Road Belleville, Michigan 4811 Tel: 734 679 0133 Fax: 734 697 0766 7. Carol A. McCrackin R.M. Electric, Inc. 16037 Grove Road Lansing Michigan 48906 Tel: 517 523 7580 Fax: 517 323 7810 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Lansing, Michigan, Federal Forge, Inc. -- http://www.durgam.com/-- is a supplier specializing in nonsymetrical forgings. The Company filed for chapter 11 protection on February 19, 2004 (Bankr. Mich. Case No. 04-01738). Lawrence A. Lichtman, Esq., at Carson Fischer, PLC represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of over $10 million. FLEMING COS: Asks Court to Extend Lease Decision Time to Aug. 31 ---------------------------------------------------------------- Scotta E. McFarland, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub P.C., in Wilmington, Delaware, reminds the Court that, as of the Petition Date, the Fleming Companies, Inc. Debtors' lease portfolio included 1,500 non-residential property leases. So far, the Debtors have decided to assume and assign or reject more than 1,300 leases. The Debtors worked diligently in analyzing the portfolio to determine which of the leases are valuable estate assets and which are burdensome. Under the Purchase Agreement with C&S Wholesale Grocers, Inc., and C&S Acquisition LLC, C&S bought the right to designate certain leases to be assumed and assigned to it or its designees, or, alternatively, to be rejected. The six-month option period for C&S to exercise that right expired on February 23, 2004. At present, the Debtors have fewer than 200 remaining unexpired leases, and all but 50 have been or will shortly be the subject of requests seeking assumption or rejection. Ms. McFarland relates that the Debtors are unable to make reasoned decisions on whether to assume or reject all the Leases before the current deadline. The Debtors' cases are large and complex, and any decision with respect to the assumption and rejection of the unexpired leases will be central to any plan. But the Debtors also do not want to forfeit their rights to assume any of the Leases as a result of the "deemed rejected" provision of Section 365(d)(4) of the Bankruptcy Code. Accordingly, the Debtors determined that they need more time to ensure reasoned and informed decisions on the Leases. By this motion, the Debtors ask the Court to extend their time to assume or reject unexpired non-residential real property leases until August 31, 2004. Ms. McFarland contends that if the deadline is not extended, the Debtors may be forced to assume liabilities or forfeit the benefits associated with some unexpired leases. The Debtors do not want to be compelled to make choices without sufficient information. Ms. McFarland assures the Court that the affected lessors will not be prejudiced with the extension of the Section 365(d)(4) deadline. The Debtors have been current in all of their postpetition rent payments and other contractual obligations with respect to the Leases. The Debtors will continue to timely pay all rent obligations until the Leases are either rejected or assumed. Judge Walrath will convene a hearing on April 5, 2004, to consider the Debtors' request. By application of Del.Bankr.LR 9006-2, the lease decision deadline is automatically extended through the conclusion of that hearing. Headquartered in Lewisville, Texas, Fleming Companies, Inc. -- http://www.fleming.com/-- is the largest multi-tier distributor of consumer package goods in the United States. The Company filed for chapter 11 protection on April 1, 2003 (Bankr. Del. Case No. 03-10945). Richard L. Wynne, Esq., Bennett L. Spiegel, Esq., Shirley Cho, Esq., and Marjon Ghasemi, Esq., at Kirkland & Ellis, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, they listed $4,220,500,000 in assets and $3,547,900,000 in liabilities. (Fleming Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., 215/945-7000) FMAC LOAN: Fitch Takes Rating Actions on Series 1998-C Notes ------------------------------------------------------------ Fitch Ratings downgrades FMAC Loan Receivables Trust, series 1998- C, as follows: --Class B to 'BB' from 'BBB'; --Class C to 'B' from 'BB'; --Class F to 'D' from 'C'. In addition, Fitch affirms the following classes: --Class A-X 'AA'; --Class A-1 'AA'; --Class A-2 'A'; --Class A-3 'A'; --Class D 'CCC'; --Class E 'CC'. Class F has defaulted on principal and interest payments and the notes have been written down to $0 to cover losses from defaulted loans. The downgrades to classes B and C are the result of erosion of credit enhancement from writedowns and losses passed thru to the trust. Fitch is expecting continued deterioration of the pool of loans as evident with the $14.8 million convenience acquisitions loans that have become delinquent in February 2004. In December 2000, $35 million in convenience acquisitions loans went delinquent, with a workout occurring in November 2002 to bring the loans current. Fitch analysis assumed low recovery expectations from the $8 million Westwind of Oregon loans and the $11.5 million exposure to the East Texas Holdings loans that are currently in default. At this time, Fitch believes that credit enhancement supporting the senior bonds is adequate for the current ratings. However, as loans continue to be impaired, further action may be needed. FOOTSTAR INC: Accelerating Sales Process for Athletic Footwear -------------------------------------------------------------- Footstar, Inc. announced that, as part of its Chapter 11 reorganization, it is moving forward with an accelerated process to sell its remaining athletic footwear operations. The planned divestiture will enable the Company to focus its full attention and resources on its core Meldisco business, a strong cash generator and a leader in the licensed and discount footwear segments. The Company also said that its decision to pursue a sale was in part due to the absence of a commitment from Nike USA, Inc., the largest supplier to Footstar's athletic business, to supply that business for more than 75 days in accordance with past business practices. Subject to Bankruptcy Court approval, Footstar intends to begin soliciting bids for all or part of the remaining athletic footwear business, which will be divested through a Court-supervised auction. This business now consists of a strong portfolio of 353 Footaction stores, following the Company's announcement, earlier this month, of plans to close 163 underperforming locations. Clearance sales at these locations, which include 88 Just For Feet stores and 75 Footaction stores, are now underway. Dale W. Hilpert, Chairman, President and Chief Executive Officer, commented, "Based on careful analysis of various alternatives, we believe the value in our athletic business can be best realized by pursuing a sale at this time. In recent weeks, we have taken actions to significantly strengthen this business by exiting unprofitable operations and streamlining the organization. The Footaction business that remains is attractive and profitable, serving a core base of athletic footwear consumers across major metropolitan markets. A sale will enable us to concentrate our full resources and energies to capitalize on the strengths of our Meldisco business. "We recognize this decision has serious implications for many of our associates. We will be working to complete the sales process expeditiously," said Mr. Hilpert. Under a master license agreement, Meldisco has operated the footwear departments of Kmart stores for more than 30 years. Meldisco generated revenues of approximately $1.0 billion in 2003. Footstar Background Footstar, Inc., with 2003 revenues of approximately $2.0 billion and 14,000 associates, is a leading footwear retailer. As of March 1, 2004, the Company operated 428 Footaction stores in 40 states and Puerto Rico, 88 Just For Feet superstores located predominantly in the Southern half of the country, and 2,496 Meldisco licensed footwear departments and 39 Shoe Zone stores. The Company also distributes its own Thom McAn brand of quality leather footwear through Kmart, Wal-Mart and Shoe Zone stores. FREEPORT-MCMORAN: Prices $1B Convertible Preferred Stock Offering ----------------------------------------------------------------- Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) announced the pricing of its private offering of $1 billion of Convertible Perpetual Preferred Stock. The preferred stock, which will have a liquidation preference of $1,000 per share, will pay, when declared by the Board of Directors, cash dividends at a rate of 5 1/2% per annum, payable quarterly. The preferred stock will be convertible into 18.8 million shares of FCX common stock, equivalent to a conversion price of $53.186 per share of common stock, reflecting a 40 percent conversion premium to the $37.99 per share closing price of FCX's common shares on the New York Stock Exchange on March 24, 2004. The conversion rate will be subject to adjustments in certain circumstances and the preferred stock may not be called for redemption by FCX prior to March 30, 2009, and thereafter may be called at FCX's option if FCX's common stock price exceeds 130 percent of the conversion price. The offering, which is expected to close on March 30, 2004, will generate net proceeds of approximately $969 million. Approximately $881.9 million of net proceeds will be used to acquire 23.9 million shares of FCX common stock owned by Rio Tinto and the remainder for general corporate purposes. The closing of the FCX common stock acquisition and the closing of this offering are conditioned on each other. FCX has granted the initial purchasers an option to purchase up to an additional $100 million of the preferred stock. The preferred stock is being offered only to qualified institutional buyers in accordance with Rule 144A under the Securities Act of 1933. The preferred stock and the common stock issuable upon conversion have not been registered under the Securities Act of 1933 or the securities laws of any other jurisdiction. Unless they are registered, the securities may be offered and sold only in transactions that are exempt from registration under the Securities Act of 1933 or the securities laws of any other jurisdiction. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of the company. * * * As reported in the Troubled Company Reporter's January 30, 2004 edition, Standard & Poor's Ratings Services assigned a 'B-' senior unsecured debt rating to Freeport-McMoRan Copper & Gold Inc.'s $350 million notes due 2014. "The ratings on Freeport-McMoRan reflect its ownership in one of the lowest-cost copper operations in the world and strong free cash flow generation overshadowed by the risks of operating in the Republic of Indonesia and its aggressive debt leverage, said Standard & Poor's credit analyst Dominick D'Ascoli. GENTEK: Selling KRONE Communications Business to ADC for $350MM --------------------------------------------------------------- GenTek Inc. (OTC Bulletin Board: GETI) has signed a definitive agreement to sell its KRONE communications business to ADC Telecommunications, Inc. (NASDAQ: ADCT). Under the terms of the agreement, GenTek will receive total consideration of approximately $350 million, consisting of $291 million in cash and the assumption by ADC of approximately $59 million of pension- and employee-related liabilities. The transaction is expected to close within 90 days and is subject to customary conditions including regulatory and other approvals. KRONE employs more than 2,000 people worldwide, primarily located in the United States, Mexico, Germany, the United Kingdom and Australia. "The sale of the KRONE business to ADC represents a dramatic step in the evolution of GenTek's business portfolio and provides an extremely favorable result to our shareholders," said Richard R. Russell, GenTek's President and CEO. "The net proceeds from this transaction will substantially de-lever GenTek's balance sheet, providing us with much greater financial flexibility going forward." GenTek indicated that it expects the net cash proceeds from this transaction to be approximately $250 million, after transaction fees, taxes, required distributions to holders of the Company's Tranche A warrants and other required payments. Proceeds from the transaction are expected to be used primarily to repay debt. "While we are sorry to see our affiliation with KRONE's world- class management team and employees come to an end, we believe that this transaction provides them with a unique opportunity to be part of a premier global connectivity and cable business," Russell said. "I want to personally thank Ron Lowy, KRONE's President and COO, and his team for their extraordinary efforts over the past three years." For the year ended December 31, 2003, GenTek's KRONE business generated $316 million of sales and $13 million of adjusted operating income, on an unaudited basis and before restructuring charges and other one-time items, and had depreciation and amortization expense of $14 million. A reconciliation of KRONE's 2003 adjusted operating income to its 2003 operating income of $7 million is provided below. Adjusted operating income is presented here as the Company believes it is more indicative of ongoing business activity than is operating income. "This transaction will bring added financial strength to GenTek that will allow us to concentrate our efforts on growing the core businesses within our performance products and manufacturing segments," Russell noted. Credit Suisse First Boston LLC acted as financial advisor to GenTek on this transaction, while Skadden, Arps, Slate, Meagher and Flom LLP provided legal advice. About GenTek Inc. GenTek Inc. is a manufacturer of industrial components, performance chemicals and telecommunications products. Additional information is available at http://www.gentek-global.com/ About ADC Telecommunications, Inc. ADC offers high-quality, value-added solutions of network equipment, software and systems integration services that enable communications service providers to deliver high-speed Internet, data, video and voice services to consumers and businesses worldwide. ADC has sales into more than 90 countries. Learn more about ADC Telecommunications, Inc. at http://www.adc.com/ GREY WOLF: Offering $100M Floating Rate Convertible Sr. Notes ------------------------------------------------------------- Grey Wolf, Inc. (Amex: GW) has agreed to sell $100 million aggregate principal amount of floating rate contingent convertible senior notes due 2024 in a private offering. Grey Wolf has granted to the initial purchaser an option to acquire up to an additional $25.0 million principal amount of the notes. The closing of the transaction is subject to customary terms and conditions. The notes will be convertible into shares of Grey Wolf's common stock at a conversion price of $6.51 per share of common stock, upon the occurrence of certain events. The notes will bear interest at an annual rate equal to three-month LIBOR, adjusted quarterly, minus a spread of 0.05% except that interest for any period will never be less than zero. Regardless of the level of three-month LIBOR, the coupon interest rate will never exceed 6.00% per annum. Interest will be payable quarterly in arrears. Grey Wolf will have the right to redeem the notes for cash at any time after April 2014. Holders will have the right to require Grey Wolf to repurchase the notes in 2014 and 2019. The Company will use the net proceeds from the offering to fully redeem its 8- 7/8% Senior Notes due 2007 and for general corporate purposes. If the initial purchaser exercises its option to acquire the additional $25.0 million principal amount of the notes, the net proceeds from the exercise of the option will be used for general corporate purposes. Grey Wolf, Inc., headquartered in Houston, Texas, is a leading provider of contract oil and gas land drilling services in the Ark-La-Tex, Gulf Coast, Mississippi/Alabama, South Texas, West Texas and Rocky Mountain regions with a total drilling rig fleet of 117. * * * As reported in the Troubled Company Reporter's March 12, 2004 edition, Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit and senior unsecured ratings on Grey Wolf Inc., and revised its outlook to negative following a review of Grey Wolf's proposed acquisition of New Patriot Drilling Corp. "The acquisition of New Patriot Drilling Corp. for about $51 million dollars, $30 million of which will be funded with cash, will result in reduced liquidity for Grey Wolf at a time of diminished cash flow and a still-weak deep drilling market," noted Standard & Poor's credit analyst Paul B. Harvey. "Since the June 2003 refinancing of its 8.875% $165 million notes, liquidity (cash and available borrowing capacity) has decreased by nearly 40% including the New Patriot acquisition, with cash on hand dropping by nearly $60 million," he continued. The negative outlook reflects the reduced liquidity resulting from the New Patriot acquisition at a time of continuing weak industry conditions and cash flow for Grey Wolf. If significant liquidity erosion continues while industry conditions fail to improve, negative rating actions are likely. HANOVER HOLDINGS: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Hanover Holdings, Incorporated 26 Green Street Bellows Falls, Vermont 05101 Bankruptcy Case No.: 04-10312 Chapter 11 Petition Date: March 3, 2004 Court: District of Vermont (Rutland) Judge: Colleen A. Brown Debtor's Counsel: Rebecca A. Rice, Esq. Cohen & Rice 26 West Street, Suite 1 Rutland, VT 05701-3274 Tel: 802-775-2352 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. HAWAIIAN AIRLINES: Made $133 Million Operating Turnaround in 2003 ----------------------------------------------------------------- Hawaiian Airlines, Inc. announced its final financial results for the fiscal year ended December 31, 2003, showing that the company reported an operating profit(1) of $77.5 million (including a $17.5 million security fee reimbursement from the federal government) on revenue of $706.1 million, compared to an operating loss of $55.2 million on revenue of $632 million for 2002. The results reflect an operating profit turnaround of $132.7 million and Hawaiian's most profitable annual operating result ever. Said Joshua Gotbaum, Hawaiian's trustee, "It was an amazing year. Hawaiian's management and employees have done a spectacular job. Building on a new fleet, they have reformed almost every part of Hawaiian's operations. Hawaiian, always known for excellent service, is now also the nation's most punctual airline as well as one of the most profitable. "Even so," Gotbaum said, "we're not resting on our laurels. Airline competition is fierce, and every year is a new chance to remind travelers about Hawaiian's unique combination of service and value." The operational success of 2003 meant Hawaiian finished the year as the third most profitable airline in the nation, which, as Gotbaum says, "is an incredible story all by itself." Many positive changes contributed to Hawaiian's improvement in 2003. Passenger revenue increased by $85 million, cargo revenue by $7 million. The newly acquired fleet produced savings of $41 million in aircraft maintenance, while increased use of Hawaiian's web site and direct booking saved some $10 million in distribution costs. (1)Operating profit excludes bankruptcy-related and other non- operating charges, interest, and taxes. Airlines are frequently compared on the basis of operating profit margins. The financial accounts that include all these charges are discussed on the next page and attached to this release. These offset increases of $28 million in aircraft rent and $10 million in wages and benefits, as well as a $23 million decline in charter revenue from reduced charter service compared to the year prior. Under generally accepted accounting principles, reorganization- related expenses are reported as a non-operating expense. In 2003, Hawaiian had $115.1 million in net reorganization expenses; of this amount approximately $102 million represents non-cash charges, consisting of bankruptcy-related claims and asset write- offs. When these and other non-operating charges (e.g., interest expense, taxes) are taken into account, the company reported a net loss of $49.5 million for 2003 (versus a net loss of $57.4 million in 2002). A full set of audited financial statements will be posted at Hawaiian Airlines' web site at http://www.HawaiianAir.com/when they become available. Operational Improvements The year was marked by several accomplishments that contributed to Hawaiian's financial success, including the full conversion to a new fleet of transpacific aircraft with the retiring of the last DC-10 jet in February 2003. In addition, the company revamped its web site, which generated a steady increase in web sales activities throughout the year as customers responded to the special fares and travel deals offered online. Hawaiian also introduced several technology-based initiatives that improved its operational efficiency including a full conversion to e-ticketing, the installment of Self Check-In Hele On (Hurry Up) terminals at all Hawaii airports to speed transits, and the introduction of Web Check-In Hele On at HawaiianAir.com allowing customers to check in from home or the office up to 24 hours before departure. This helped contribute to Hawaiian's operational success for the year, which was reflected in the airline finishing 2003 as the nation's number one on-time carrier for November and December - which were the first two months the company submitted traffic statistics - according to monthly reports filed by the U.S. Department of Transportation. About Hawaiian Airlines Hawaiian Airlines, the nation's number one on-time carrier, is recognized as one of the best airlines in America. Business travelers recently surveyed by Conde Nast Traveler rated Hawaiian Airlines as having the best in-flight service and meals of any U.S. carrier. Hawaiian was recently ranked fourth best in the nation overall by Travel + Leisure. Celebrating its 75th year of continuous service, Hawaiian Airlines is Hawaii's biggest and longest-serving airline, and the second largest provider of passenger air service between Hawaii and the mainland U.S. Hawaiian offers nonstop service to Hawaii from more mainland U.S. gateways than any other airline. Hawaiian also provides approximately 100 daily jet flights among the Hawaiian Islands, as well as service to American Samoa and Tahiti. Hawaiian Airlines, Inc. is a subsidiary of Hawaiian Holdings, Inc. (AMEX and PCX: HA). Since the appointment of a bankruptcy trustee in May 2003, Hawaiian Holdings has had no involvement in the management of Hawaiian Airlines and has had limited access to information concerning the airline. HAYES LEMMERZ: Objects to Gerotech's $1.2 Million Claim ------------------------------------------------------- Gerotech Incorporated filed Claim No. 2400 for $1,211,768 on account of unpaid balance allegedly owed by Debtor Hayes Lemmerz International-Montague, Inc. on the purchase of six Mori-Seiki horizontal machining centers and accessories, which were to be used by HLI-Montague in the production of parts for automobile suspension systems. The Machines were purchased by HLI-Montague pursuant to a Purchase and Security Agreement, dated October 5, 2001, which incorporated by reference Quotation No. Q3443, dated November 19, 2000, and Purchase Order No. 102254, dated February 2, 2001. The Quotation and Purchase Order provide specifications and performance requirements for the Machines. Pursuant to the PSA, Gerotech retained a purchase-money security interest in the Machines. Gerotech asserts that it properly perfected the security interest by the timely filing of financing statements. On January 28, 2002, Gerotech sought adequate protection payments from the Debtors for any decrease in the value of the Machines while in HLI-Montague's possession. In the alternative, Gerotech asked the Court to lift the automatic stay to repossess the Machines. Pursuant to a Consent Order, the Debtors agreed to pay Gerotech $11,500 as monthly adequate protection payments. The Debtors made timely payments to Gerotech under the Consent Order until the confirmation date of their Chapter 11 Plan. Under the Plan, the Gerotech Claim is treated as a "Miscellaneous Secured Claim," a secured claim against the Debtors that did not relate to certain credit facilities. As such, the Gerotech Claim was reinstated as of the Effective Date. The purchase-money security interest held by Gerotech was not extinguished by the occurrence of the Effective Date. The Plan further provided that the Reorganized Debtors retained the right to contest or defend against the Gerotech Claim in the Court or in an appropriate non- bankruptcy forum after the Effective Date. Gerotech represented to HLI-Montague that the cycle times of the Machines would be that a single machine could prepare 100,000 suspension parts in a 240-day work year. Based on these representations, HLI-Montague determined that it would require six of the Machines to meet the demand for the specific suspension parts it planned to produce. The Machines, however, consistently failed to meet the cycle times and other production requirements described in the Quotation and Purchase Order. The cycle times and production results of the Machines have deviated so far from the promised specifications that HLI-Montague was forced to purchase additional equipment and machine tools to meet the demand of its customers. As a result, the Reorganized Debtors commenced a complaint after the Effective Date against Gerotech before the Circuit Court for the County of Wayne, Michigan, seeking damages for breach of contract and breach of express and implied warranties. As of March 1, 2004, the Michigan Litigation remains pending. Consequently, the Reorganized Debtors object to Gerotech's Claim No. 2400 and ask the Court to disallow and expunge the Claim in its entirety. As the amount and validity of the Gerotech Claim is largely dependent on the outcome of the Michigan Litigation, J. Eric Ivester, Esq., at Skadden, Arps, Slate, Meagher & Flom, LLP, in Chicago, Illinois, points out that the Gerotech Claim is contingent and unliquidated. Therefore, the Court should not make a determination regarding the allowability and the amount of the Gerotech Claim until: -- the time as the Circuit Court has made a final determination as to the liability and damages, thus liquidating the Gerotech Claim; and -- the Reorganized Debtors have exhausted all available appeal rights, thus eliminating the contingencies involved in the Michigan Litigation. The Reorganized Debtors reserve all rights to file a substantive objection to the Gerotech Claim on any and all available grounds once the Michigan Litigation has concluded. Due to the contingent and unliquidated nature of the Gerotech Claim, Mr. Ivester advises the Court that other bases for objection may arise, or the Reorganized Debtors may become aware of substantive bases for objection to the Gerotech Claim, at a later date. (Hayes Lemmerz Bankruptcy News, Issue No. 46; Bankruptcy Creditors' Service, Inc., 215/945-7000) HIGH VOLTAGE: Gets Nod to Hire Ordinary Course Professionals ------------------------------------------------------------ The U.S. Bankruptcy Court for the District of Massachusetts, Eastern Division, gave High Voltage Engineering Corporation and its debtor-affiliates approval to continue employing the professionals they utilize in the ordinary course of their businesses. Prior to the Petition Date, the Debtors employed, from time to time, professionals to render services relating to, among other things: (a) general corporate, (b) litigation, (c) accounting, (d) auditing, and (e) other matters requiring the expertise and assistance of professionals. The Debtors desire to continue to employ the Ordinary Course Professionals to render services to the estates that are similar to the prepetition services. The Debtors submit that the retention of the Ordinary Course Professionals is in the best interests of their estates and creditors. While Ordinary Course Professionals with whom the Debtors previously dealt have stated that they wish to represent them on an ongoing basis, some might be unwilling to do so if they are paid through a formal and time consuming application process. Moreover, if the expertise and background knowledge of these Ordinary Course Professionals with respect to the particular areas for which they were responsible prior to the Petition Date are lost, the estates undoubtedly will incur additional and unnecessary expenses because they will be forced to retain other professionals without such background and expertise. The court permits the Debtors to pay 100% of the postpetition fees and disbursements to each Ordinary Course Professional upon the submission to the Debtors of an appropriate in voice setting forth, in reasonable and customary detail, the nature of the services rendered after the Filing Date. The Debtors estimate that the interim fees and expenses will not exceed a total of $125,000 per month for all Ordinary Course Professionals and $15,000 per month for any single Ordinary Course Professional. Headquartered in Wakefield, Massachusetts, High Voltage Engineering Corp., designs and manufactures technology-based products in three segments: power conversion technology and automation, advanced surface analysis instruments and services, and monitoring instrumentation and control systems for heavy machinery and vehicles. The Company filed for chapter 11 protection on March 1, 2004 (Bankr. Mass. Case No. 04-11586). Christian T. Haugsby, Esq., and Douglas B. Rosner, Esq., at Goulston and Storrs, PC represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of more than $100 million. HI-TECH ELECTRONIC: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Hi-Tech Electronic Assembly Inc. 5 HI-Tech Drive Oglesby, Illinois 61348 Bankruptcy Case No.: 04-11434 Type of Business: The Debtor provides Contract Packaging, Electronic Component Design, and Systems Integration Services. See http://www.hi-tech5.com/ Chapter 11 Petition Date: March 23, 2004 Court: Northern District of Illinois (Chicago) Judge: Carol A Doyle Debtor's Counsel: Richard G. Larsen, Esq. Myler, Ruddy & Mctavish 111 West Downer Place Suite 400 Aurora, IL 60506 Tel: 630-897-8475 Total Assets: $0 Total Debts: $2,731,111 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Union Bank Blanket Lien on all $2,087,866 122 W. Madison St. tangible and Ottawa, IL 61350 Intangible assets of the debtor Belford Electronics Business Debt $45,224 Circuit Etching Technology Business Debt $42,028 Multitek Business Debt $38,002 IEC/Integrated Electronics Business Debt $36,331 American Products Business Debt $33,293 Electrospec, Inc. Business Debt $30,575 Insight Electronics Business Debt $22,815 Lane Technical Sales Business Debt $22,815 Wallenstein & Wagner, Ltd. Business Debt $21,985 Circuit Engineering Business Debt $19,748 Future Active Industrial Business Debt $19,561 Electronic Brother Electronics Business Debt $17,121 Herbolshelmer, Lannon, Business Debt $16,180 Henson, Dunc Lintech Components Business Debt $14,990 Impact Components Business Debt $13,964 Neal, Gerber & Eisenberg Business Debt $13,252 Abalon Marketing Business Debt $12,500 Ford Motor Credit Business Debt $11,821 Sunny Components Business Debt $10,872 HOMEBASE ACQUISITION: S&P Assigns B+ Corporate Credit Rating ------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B+' corporate credit rating to Homebase Acquisition LLC, the parent company of Consolidated Communications Illinois Holdings Inc. and Consolidated Communications Texas Holdings Inc. The outlook is stable. Simultaneously, Standard & Poor's assigned its 'B+' bank loan rating and a recovery rating of '3' (based on preliminary documentation) to the $427 million secured bank loan facility co- borrowed by Homebase indirect subsidiaries Consolidated Communications Acquisition Texas Inc. and Consolidated Communications Inc. In addition, Standard & Poor's assigned its 'B-' rating to the $240 million senior unsecured notes due 2014 issued under Rule 144A with registration rights by co-issuers Consolidated Communications Texas Holdings Inc. and Consolidated Communications Illinois Holdings Inc. (the respective holding companies of the co-borrowers). The issuers are severally liable with respect to payment of principal and interest on the notes, but each provides a cross-guarantee of the other issuer's obligation on a senior unsecured basis. In addition, the notes are guaranteed on a nonrecourse basis by Homebase Acquisition LLC, limited in recourse to a second-priority pledge of the common stock of the issuers. Homebase Acquisition LLC and its subsidiaries are collectively known as "Consolidated Communications." The company is an established rural local exchange company that provides communications services to residential and business customers in Illinois and, prospectively, Texas. Proceeds from the secured bank loan facility, the new notes, and an $89 million contribution from Homebase Acquisition's equity investors will be used to fund the acquisition of TXU Communications Ventures Co. (approximately $524 million) and to repay existing bank debt. Pro forma for the TXU Communications Ventures acquisition, as of Dec. 31, 2003, total debt outstanding was about $640 million. "Ratings on Consolidated Communications reflect the company's high debt leverage due to the largely debt-financed TXU Communications acquisition, geographic concentration (Illinois and Texas), and integration risk related to the acquisition," said Standard & Poor's credit analyst Rosemarie Kalinowski. The acquisition, expected to close by mid-2004, will significantly increase Consolidated Communications' access lines to a total of about 262,000. "These factors are somewhat mitigated by the relatively stable revenue of the telephone operations, the supportive regulatory environment, and the depth of management experience at the company," added Ms. Kalinowski. ILLINOIS POWER: Ameren Files FERC Application to Acquire Company ---------------------------------------------------------------- Ameren Corporation (NYSE: AEE) filed its request for Federal Energy Regulatory Commission (FERC) review and approval of its acquisition from Dynegy Inc. (NYSE: DYN) of the stock of Decatur, Ill.-based Illinois Power Company (IP) and Dynegy's 20 percent interest in Electric Energy, Inc, owner of a Joppa, Ill., coal-fired power plant. Ameren announced on Feb. 3 the proposed $2.3 billion transaction. The parties also submitted to FERC several agreements, including a firm capacity power supply contract for the annual purchase by IP of 2,800 megawatts of electricity from Dynegy. That power supply contract extends through 2006 and is expected to supply about 75 percent of IP electric customer requirements. The FERC application also confirms that Ameren is moving ahead with its plans to join the Midwest Independent Transmission System Operator (MISO) -- the regional transmission system organization that acts as an agent to provide transmission service on behalf of its members, who own the transmission assets. On May 1, 2004, Ameren plans to transfer functional control of the AmerenUE and AmerenCIPS transmission systems to MISO through a contractual agreement with a for-profit independent transmission company, GridAmerica LLC., provided it has received all necessary regulatory approvals. In February 2004, the Missouri Public Service Commission approved an agreement which authorizes AmerenUE to participate in MISO through a contractual agreement with GridAmerica. AmerenCILCO is already a MISO member. The FERC application also seeks approval for IP to join the MISO. The company's future intent is to eventually have all of Ameren operating companies' transmission systems in MISO and managed through GridAmerica. "Ameren's acquisition of IP and the resulting electric delivery system upgrades we plan to make will benefit general reliability and access to markets for IP customers and for communities throughout the Midwest," says Gary L. Rainwater, chairman, president and chief executive officer, Ameren Corporation. "As we have said, this transaction will offer a high level of service and increased returns for investors. This acquisition is a natural fit with our core energy growth strategy and will provide benefits to customers, employees, communities and our investors." The acquisition is subject not only to the approval of the FERC and the Illinois Commerce Commission, where a filing was made March 24, but also to approval of the Securities and Exchange Commission, the Federal Communications Commission, and to the expiration of the waiting period under the Hart-Scott- Rodino Act. No approval is required from shareholders of the company. The company expects to make all remaining regulatory filings within the next several weeks and for regulatory approvals to be completed by year-end 2004. With assets of $14.3 billion, Ameren serves 1.7 million electric customers and 500,000 natural gas customers in a 49,000-square- mile area of Missouri and Illinois. Illinois Power, based in Decatur, Ill., serves 600,000 electric and 415,000 natural gas customers in a 15,000 square-mile territory across Illinois. The company was founded more than 75 years ago and its parent company -- Illinova -- was purchased in 2000 by Houston, Texas-based Dynegy Inc. * * * As reported in the Troubled Company Reporter's February 5, 2004 edition, Standard & Poor's Ratings Services placed its 'B' corporate credit rating on electric utility Illinois Power Co., a subsidiary of Dynegy Inc., on CreditWatch with positive implications following the announcement that Ameren Corp. has agreed to purchase Illinois Power. Standard & Poor's also affirmed its 'B' corporate credit rating on Dynegy. The outlook on Dynegy and its other subsidiaries remains negative. Also, Illinois Power Company's 'B' senior secured debt, 'CCC+' indicative senior unsecured rating and 'CC' preferred stock have been placed on Rating Watch Positive by Fitch Ratings. The rating action follows the recent announcement by Dynegy Corp. (DYN, senior unsecured rated 'CCC+', Outlook Positive) that it had entered into an agreement with Ameren Corp. (Ameren, senior unsecured rated 'A-', Stable) through which Ameren will acquire all of the outstanding common and preferred stock of IP. INSPEX INC.: General Claims Bar Date Fixed for April 15, 2004 ------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts orders that April 15, 2004, at 4:00 p.m. Eastern Time, is the General Claims Bar Date -- the deadline -- by which creditors must file their proofs of claim against Inspex Inc. with the clerk of the Bankruptcy Court. Three types of claims are exempted from the bar date: 1. Claims not listed as disputed, contingent and unliquidated in the Debtor's Schedules; 2. Claims already properly filed against the Debtor; and 3. Administrative expense claims under sections 503(b) and 507(a)(1) of the Bankruptcy Code. The bar date for governmental units is May 19, 2004, at 4:00 p.m. Eastern Time. Inspex, Inc. -- http://www.inspex.com/-- is an innovative developer of data management and wafer inspection systems for the semiconductor industry. The company filed for Chapter 11 relief on November 21, 2003 (Bankr. Mass. Case No. 03-46714). Melvin S. Hoffman, Esq., at Looney & Grossman represents the Debtor in its restructuring efforts. When the debtor filed for protection against its creditors, it disclosed total assets of $14,441,579 and total debts of $11,419,438. INSTEEL: Lenders Agree to Forbear to Facilitate Refinancing Plans ----------------------------------------------------------------- Insteel Industries, Inc. (Pink Sheets: IIIN) announced that it has reached preliminary agreements with new lenders for the refinancing of its senior secured credit facility. The anticipated transactions are expected to provide up to $100 million of financing, consisting of a $60 million revolving line of credit and up to $40 million of term loans. Proceeds from the transactions would be used to pay off the Company's existing credit facility, support its working capital and capital expenditure requirements, and for general corporate purposes. While there can be no assurances, the transactions are expected to close in May 2004, subject to reaching definitive agreements, completion of due diligence, credit approval and closing conditions required by the new lenders. In order to facilitate the anticipated refinancing, the Company's existing lenders have agreed to an extension in the maturity date of the current credit facility from March 31, 2004 to May 17, 2004. Following the completion of the anticipated refinancing, the Company plans to file its Form 10-K for the year ended September 27, 2003 and its Form 10-Qs for the quarterly periods ended December 27, 2003 and March 27, 2004 with the Securities and Exchange Commission. Shortly after the completion of these filings, the Company expects that its common stock would resume trading on the OTC bulletin board. "Over the past two years, we have considered a number of refinancing alternatives for the Company," said H.O. Woltz III, Insteel's president and chief executive officer. "The proposal that we have elected to pursue became a viable option in the wake of the upturn in the Company's financial performance that began with the fourth fiscal quarter ended September 2003. We are optimistic that the timing of the refinancing is favorable in terms of supporting our business requirements going forward and with respect to the Company's ability to continue paying down debt." Insteel Industries is one of the nation's leading manufacturers of wire products. The Company manufactures and markets concrete reinforcing products, tire bead wire and industrial wire for a broad range of construction and industrial applications. INTERSTATE BAKERIES: Releasing Quarterly Results on April 15 ------------------------------------------------------------ Interstate Bakeries Corporation (NYSE:IBC) announced that based upon preliminary results for its fiscal third quarter ended March 6, 2004, it expects to report a net loss for the quarter of approximately $.08 to $.12 per diluted share on a net sales decline of approximately 2.5 percent from the prior year. Fiscal 2004's estimated results for the quarter include anticipated restructuring charges of approximately $1.5 million, or $.02 per diluted share, as compared to the prior year's third quarter restructuring charges of $5 million, or $.07 per diluted share. These anticipated results are based upon preliminary estimates. The Company is scheduled to release its quarterly results and hold its quarterly conference call on Thursday, April 15, 2004. Interstate Bakeries Corporation (S&P, BB Corporate Credit and Senior Secured Bank Loan Ratings, Negative) is the nation's largest wholesale baker and distributor of fresh baked bread and sweet goods, under various national brand names, including Wonder, Hostess, Dolly Madison, Merita and Drake's. The Company, with 57 bread and cake bakeries located in strategic markets from coast to coast, is headquartered in Kansas City, Missouri. ISTAR FINANCIAL: Agrees to Sell $250MM Senior Notes to Repay Debt ----------------------------------------------------------------- iStar Financial Inc. (NYSE: SFI) has agreed to sell $250 million of 5.125% Senior Notes due 2011 to qualified institutional investors in a transaction complying with Securities and Exchange Commission Rule 144A and to non-US persons under SEC Regulation S. The Notes are being sold at 99.825% of their principal amount to yield 5.155% per annum. The transaction is expected to close on March 30, 2004. iStar Financial expects to use the proceeds from the sale of the Notes to repay secured indebtedness. The Notes have not been registered under the Securities Act of 1933, as amended, or the securities laws of any other jurisdiction and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. iStar Financial (Fitch, BB Preferred Share Rating, Stable Outlook) is the leading publicly traded finance company focused on the commercial real estate industry. The Company provides custom- tailored financing to high-end private and corporate owners of real estate nationwide, including senior and junior mortgage debt, senior, mezzanine and subordinated corporate capital, and corporate net lease financing. The Company, which is taxed as a real estate investment trust, seeks to deliver a strong dividend and superior risk-adjusted returns on equity to shareholders by providing innovative and value-added financing solutions to its customers. Additional information on iStar Financial is available on the Company's Web site at: http://www.istarfinancial.com/ IT GROUP: Delaware Court to Consider Chapter 11 Plan Today ---------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved the Disclosure Statement prepared by the IT Group Inc. Debtors and its Official Committee of Unsecured Creditors with respect to the Debtors' First Amended Joint Chapter 11 Plan. The Court found that the Disclosure Statement contained the right kind and amount of information to enable creditors to make informed decisions whether to accept or reject the Plan. Accordingly, the Bankruptcy Court sets today, at 2:00 p.m. Eastern Time as the hearing to consider the confirmation of the Plan, before the Honorable Judge Mary F. Walrath. Headquartered in Monroeville, Pennsylvania, The IT Group, Inc. -- http://www.theitgroup.com/-- together with its 92 direct and indirect subsidiaries, is a leading provider of diversified, value-added services in the areas of consulting, engineering and construction, remediation, and facilities management. The Company filed for chapter 11 protection on January 16, 2002 (Bankr. Del. Case No. 02-10118). David S. Kurtz, Esq., at Skadden Arps Slate Meagher & Flom, represents the Debtors in their restructuring efforts. On September 30, 2001, the Debtors listed $1,344,800,000 in assets and 1,086,500,000 in debts. KMART: Moves to Nix Share Purchase Pact with C.O. Williams, et al ----------------------------------------------------------------- On April 6, 2001, the Kmart Corporation Debtors entered into a share purchase agreement with these parties: * C.O. Williams Construction Limited * Solitaire Properties Limited * Duncan D.P. Weekes * Alan Roett * Roger D. Gooding * Michael T. Gooding * Keith Weekes * Phillip Atwell * Stephen E. Wilhams * L. Charmaine Skeete * Charles E. Williams * R.H. Maraj Under the Agreement, the Debtors agreed to purchase all outstanding shares of Solitaire Properties Limited. Solitaire Properties owned, as its primary asset, certain real property located in Barbados on which the Debtors intended to build a retail store. Pursuant to the Agreement, the Debtors gave Mr. Maraj, as counsel for C.O. Williams, a $975,000 deposit pending closing of the sale. Recognizing the difficulties in building a store and receiving all government approval in Barbados, the Agreement contains a number of conditions precedent that would permit the parties to "rescind" and return to the status quo. If the Debtors rescinded the Agreement because certain enumerated conditions precedent were not met, C.O. Williams was required to return the Deposit to the Debtors. To date, the Debtors have not yet obtained the necessary permission of a governmental agency to do business as provided for in the Agreement. Accordingly, the Debtors ask the Court to: (a) declare that the Agreement, along with other related agreements, are rescinded and that the Debtors are entitled to a return of the Deposit; (b) compel C.O. Williams to immediately turn over the Deposit to the Debtors; (c) award the Debtors $975,000 plus interests and costs in the event that C.O. Williams fail to immediately turn over the Deposit; and (d) award the Debtors reasonable and necessary attorney's fees and costs to the extent permitted by law. (Kmart Bankruptcy News, Issue No. 71; Bankruptcy Creditors' Service, Inc., 215/945-7000) LB COMM'L: Fitch Affirms 3 Note Ratings in Low-B & Junk Levels -------------------------------------------------------------- Fitch Ratings affirms LB Commercial Conduit Mortgage Trust II's commercial pass-through certificates, series 1996-C2 as follows following classes: --$70.0 million class A at 'AAA'; --$27.8 million class B at 'AAA'; --$21.8 million class F at 'BB'; --$13.9 million class G at 'CCC'; --$6.0 million class H at 'CC'. In addition Fitch upgrades the following classes: --$23.8 million class C certificates to 'AAA' from 'AA'; --$15.9 million class D certificates to 'AA+' from 'A'; --$7.9 million class E certificates to 'A' from 'BBB'. Fitch does not rate the class J certificates. The ratings upgrades and affirmations are the result of transaction pay down and loan payoffs resulting in increased subordination levels. The collateral balance has been reduced 52% from $397.2 million to $191.0 million as of the February 2004 distribution date. Currently, 8 loans in special servicing represent 15.6% of the transaction. The majority of loans in special servicing are Real Estate Owned (REO) limited service hotels. That resulted from the hotel's operator, Lodgian, filing bankruptcy in 2002. Losses are expected on all but one of the REO hotels upon disposition. The largest loan in special servicing (2.20%) is a 284 unit multifamily property in Grand Blanc, MI. The loan transferred in December 2003 as the result of a monetary default. The property has significant deferred maintenance and the borrower is working with the special servicer to develop a plan to rehabilitate the property. The second largest loan is in special servicing (1.47%) is a REO hotel in Sioux City, IA. The hotel has been re-flagged as a Plaza hotel since issuance and the special servicer is currently negotiating a sale with a perspective purchaser. MAGELLAN HEALTH: Inks Deal Resolving Regence Blueshield's Claim --------------------------------------------------------------- On June 20, 2003, Regence BlueShield timely filed Claim No. 1578 against the Magellan Health Debtors on behalf of obligations owed to The Regence Group for an unspecified amount. The Regence Group is an affiliation of BlueCross and BlueShield plans, including Regence BlueCross BlueShield of Oregon, Regence BlueShield (WA), Regence BlueCross BlueShield of Utah, and Regence BlueShield of Idaho. These insurance plans and HMOs serve enrollees in Oregon, Washington, Utah and Idaho. Regence asserts a claim under certain contracts with certain of the Debtors and their predecessors-in-interest. On December 5, 2003, the Debtors objected to Claim No. 1578 and sought to fix the Claim for $2,010,407 and to allow the Claim as a general unsecured claim in that amount. Regence's attorney contacted the Debtors in an effort to reach a resolution regarding the Objection. Certain of the Debtors are currently owed amounts from Regence with respect to the reconciliation of program costs incurred pursuant to the terms of the Oregon Contract. As of February 20, 2004, the Oregon Receivable is $279,088. Certain of the Debtors are also owed amounts from Regence with respect to an administrative fee payable under the terms of the Regence 2003 Contract. As of February 20, 2004, the Boeing Fee is $143,801. To resolve their dispute, the Reorganized Debtors and Regence, for itself and on behalf of the Regence entities, engaged in arm's-length discussions. In a Court-approved stipulation, the parties agree that: (a) The Claim will be fixed and allowed as a general unsecured claim for $1,731,319. The Allowed Claim Amount takes into account a set-off of the Oregon Receivable; (b) The Reorganized Debtors will distribute to Regence $763,938 in cash, in full satisfaction of the Allowed Claim. The Distribution amount takes into account a set- off of the Boeing Fee against amounts payable with respect to the Allowed Claim under the Plan; (c) The HealthWise Contract will be deemed amended to permit either of the parties, or their successors-in-interest, to terminate the contract without cause upon 120 days' prior written notice to the other party; and (d) Except for the Allowed Claim, Regence and its affiliates will have no other claims against the Reorganized Debtors, the Debtors, or the Debtors' estate for any liabilities relating to the Claim or arising with respect to the contracts identified in the Claim, other than any liabilities arising under the HealthWise Contract from and after March 3, 2004. 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. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000) MERRILL LYNCH: Fitch Places Class E Rating on Watch Negative ------------------------------------------------------------ Fitch Ratings upgrades Merrill Lynch Mortgage Investors, Inc.'s mortgage pass-through certificates, series 1996-C1 as follows: --$32.3 million class D to 'AAA' from 'AA'. In addition, the $48.5 million class E rated 'BB' is placed on Rating Watch Negative. The following classes are affirmed: --$69.9 million class A-3 at 'AAA'; --Interest-only class IO at 'AAA'; --$38.8 million class B at 'AAA'; --$38.8 million class C at 'AAA'; --$32.3 million class F at 'C'. Classes A-PO, A-1 and A-2 have paid in full. Fitch does not rate the $9.4 million class G. The rating upgrade is due to increased subordination levels resulting from 58% paydown of the pool's certificate balance to $270.3 million from $647.3 million. The Rating Watch Negative placement is the result of interest shortfalls incurred by class E as of the March 2004 distribution date. The master servicer, GMAC Commercial Mortgage Corp., is recouping approximately $1.35 million in advances on the West Kentucky Outlet Center, a real estate owned (REO) property. The property was recently re-valued at $750,000. Interest to class E is expected to be fully repaid, at which time Fitch will revisit the rating. There are six loans in special servicing, representing 8% of the pool. The largest specially serviced loan is the West Kentucky Outlet Center (3%), a retail property located in Eddyville, KY. The REO loan transferred to the special servicer in April 1999 and the special servicer is marketing the property for sale. Of the remaining five specially serviced loans, one is 90 days delinquent (1.4%), one is 60 days delinquent (0.5%) and the other three are current (3%). While Fitch expects losses, classes A-3, B, C, D and E are well protected given their high credit support. MILLBROOK PRESS: Fin'l & Investment Mgt. has 14.7% Equity Stake --------------------------------------------------------------- Financial & Investment Management Group, Ltd. beneficially owns 422,401 share of the common stock of Millbrook Press, Inc. The Management Group shares voting and dispositive powers over the shares. 422,401 shares represents 14.70% of the outstanding common stock shares of Millbrook Press. Financial & Investment Management Group, Ltd. is a registered investment advisor, managing individual client accounts. All shares reported on here are held in accounts owned by the clients of Financial & Investment Management Group, Ltd. Because of this, Financial & Investment Management Group, Ltd. disclaims beneficial ownership. Headquartered in Brookfield, Connecticut, Millbrook Press, Inc. -- http://www.millbrookpress.com/-- is a publishing children's non- fiction books in hardcover and paperback for schools, libraries and consumer markets. The Company filed for chapter 11 protection on February 6, 2004 (Bankr. Conn. Case No. 04-50145). Jed Horwitt, Esq., at Zeisler and Zeisler represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $8,000,000 in total assets and $9,000,000 in total debts. MIRANT CORP: US Trustee Amends Creditors' Committee Membership -------------------------------------------------------------- Creedon Keller & Partners, Inc. resigned from the Official Committee of Mirant Unsecured Creditors. As of March 11, 2004, the members of the Mirant Unsecured Creditors Committee are: Lori Ann Curnyn, Co-Chair Hypovereins Bank 150 East 42nd Street New York, NY 10017-4679 Telephone (212) 672-5935 Fax (212) 672-5908 loriann_curnyn@hvbcrediTadvisors.com Mark B. Cohen, Co-Chair Deutsche Bank AG 60 Wall Street New York, NY 10019 Telephone (212) 250-6038 Fax (212) 797-5695 mark.b.cohen@db.com John Dorans Citibank, N.A. 250 West Street, 8th Floor New York, NY 10013 Telephone (212) 723-3104 Fax (212) 723-3899 john.dorans@citigroup.com Mike McKenney Bank of America 101 South Tryon Street Charlotte, NC 28255 Telephone (704) 388-5920 Fax (704) 386-1759 michael.j.mckenney@bankofamerica.com Jill Akre Wachovia Securities 1339 Chestnut Street The Widener Bldg., 4th Floor, PA4810 Philadelphia, PA 19107 Telephone (267) 321-6663 Fax (267) 321-6903 jill.akre@wacovia.com Ronald Goldstein Appaloosa Management LP 26 Main Street, 1st Floor Chatham, NJ 07928 Telephone (973) 701-7000 Fax (973) 701-7055 R.Goldstein@amlp.com Russ Paladino HSBC Bank USA 452 Fifth Avenue New York, NY 10018 Telephone (212) 525-1324 Fax (212) 525-1366 russ.paladino@us.hsbc.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) MISSISSIPPI CHEMICAL: Shuts Down Melamine/Urea Operation in La. --------------------------------------------------------------- Mississippi Chemical Corporation (OTC Bulletin Board: MSPIQ.OB) announced the permanent closure of its melamine and urea operation and its No. 1 ammonia facility, all located at Triad Nitrogen, L.L.C. in Donaldsonville, La. The company will continue to operate its No. 2 ammonia plant in Donaldsonville as swing production, operating as needed based on customer demand and market conditions. The company will utilize its ammonia storage infrastructure at the complex as an ammonia terminal operation to be sourced with purchased ammonia in addition to its production capacity. Securing a stable customer base with profitable pricing has been difficult in the current market place, and ammonia market conditions continue to be adversely affected by extreme natural gas price fluctuations relative to ammonia prices. The company has initiated efforts to locate a buyer for its melamine business and related assets. Company employees were notified that these operations would be permanently idled by the end of May. When these operations are shut down, there will be a reduction in the workforce of approximately 72 full-time positions. Outplacement counseling and a severance package based on length of service will be provided to the employees. The Louisiana Works-Department of Labor will also be assisting affected employees in job opportunities. Eighteen employees will remain at the facility to manage the port terminal and, as market conditions dictate, operate the No. 2 ammonia plant. The company's Donaldsonville complex consists of two melamine production plants, two ammonia production plants, one urea production plant and a deep- water port terminal on the Mississippi River. These facilities have an annual capacity to produce approximately 1 million tons of ammonia, with 534,000 tons of such capacity attributable to the No. 2 ammonia plant, and 578,000 tons of urea synthesis. A majority of the urea synthesis production used to produce approximately 396,000 tons of prilled urea was shut down in January 2003. The remaining urea production has been used primarily for urea melt for the melamine production with the balance of the production dedicated to urea sold for industrial use. Annual capacity for melamine production is approximately 115 million pounds but the company has utilized only about 80 million pounds in its recent operations. Mississippi Chemical Corporation is a leading North American producer of nitrogen and phosphorus products used as crop nutrients and in industrial applications. Production facilities are located in Mississippi, Louisiana, and through Point Lisas Nitrogen Limited, in The Republic of Trinidad and Tobago. On May 15, 2003, Mississippi Chemical Corporation, together with its domestic subsidiaries, filed voluntary petitions seeking reorganization under Chapter 11 of the U.S. Bankruptcy Code. MOLECULAR IMAGING: Needs Additional Capital to Maintain Operations ------------------------------------------------------------------ Molecular Imaging Corporation (formerly Mobile PET Systems, Inc.) and subsidiaries were organized to provide molecular imaging services to hospitals and other health care providers on a fixed or mobile-shared user basis. The Company's MI services include providing high technology imaging systems, technologists to operate the imaging systems, the management of day-to-day operations, and educational and marketing support. However, the Company's continued existence is dependent upon its ability to resolve its liquidity problems, principally by obtaining additional equity capital and by refinancing existing obligations under capital lease. While pursuing additional equity and refinancing existing obligations, the Company must continue to operate on limited cash flows generated internally. The Company experienced a net loss for the six months ended December 31, 2003 of $1,839,189 (unaudited) compared to a net loss from continuing operations for the six months ended December 31, 2002 of $1,204,258 (unaudited) and has an accumulated deficit of $27,606,163 (unaudited) that raise substantial doubt about its ability to continue as a going concern. The Company has an immediate need to raise additional capital to sustain operations. In addition, it will be required to raise additional capital to add or acquire additional mobile units or stationary sites. Molecular Imaging is actively exploring various financing alternatives. Management has recently met with and had discussions with numerous financing sources and investment banking companies that have expressed an interest in investing in, or raising money for, the Company. The Company has received several non-binding term sheets as a result of these discussions, and has executed a non-binding term sheet with a third party investment bank for the sale of $3 million of preferred stock of the Company. Pursuant to the terms of the financing documents entered into between the Company and Dragon Nominees Limited in July of 2002, Dragon has notified the Company that it intends to purchase all of the securities described in the term sheet. The Company has provided the required financing documents to Dragon. Dragon has notified the Company that it does not consider itself to be contractually bound to purchase the securities. The Company believes Dragon is contractually bound to purchase the securities and the Company is evaluating its alternatives under the July 2002 financing documents with Dragon. While the Company will continue to work towards completing a financing with Dragon, and pursue other financing alternatives, there can be no assurance as to whether, when, or upon what terms Dragon will close this financing, or as to whether, when, or upon what terms any additional debt or equity financing will be available to the Company. Molecular Imaging's current assets at December 31, 2003 totaled $5,779,358, and its current liabilities were $12,957,182, compared to current assets of $3,805,598 and current liabilities of $8,434,193 at June 30, 2003. Its current liabilities exceed current assets because, under Generally Accepted Accounting Principles, the Company is required to record as a current liability its capital lease obligations due within the next twelve months. Several of its units are also financed under non- cancelable operating leases that are not recorded as liabilities until the monthly payment is due. Its current assets, on the other hand, include only those accounts receivable that are outstanding from service revenues recognized and typically represent 30 to 60 days of service revenues. Shareholders' equity decreased to $2,009,304 at December 31, 2003, from $3,749,744 at June 30, 2003, due primarily to the net loss of $1,839,189. Molecular Imaging has an immediate need to raise additional capital to sustain its operations. MUELLER GROUP: S&P Affirms B+ Rating & Revises Outlook to Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services affirmed its 'B+' corporate credit rating on Mueller Group Inc. and revised the outlook to stable from positive. At the same time, Standard & Poor's assigned its 'B+' bank loan and its recovery rating of '3' to Decatur, Illinois-based Mueller Group Inc.'s $635 million first-priority senior secured credit facilities. The '3' recovery rating indicates an expected meaningful recovery (50%-80%) of principal in the event of a default. Standard & Poor's also assigned its 'B-' rating and a recovery rating of '5' to Mueller's $225 million second priority senior secured notes due 2011. The '5' recovery rating indicates the expectation of a negligible recovery (25% or less) of principal. The company's $190 million senior subordinated notes due 2012 were also assigned a 'B-' rating. "The outlook revision reflects the company's aggressive debt leverage and weak credit protection measures pro forma for the transaction, its aggressive financial policies, cyclical end- markets, and the competitive and capital-intensive nature of the industry," said Standard & Poor's credit analyst Linli Chee. "These risk factors are partially offset by the company's solid business positions within niche segments of the North American flow-control industry, a meaningful percentage of replacement business, and large installed base." The bank facilities consist of a $100 million revolving credit facility due 2009 and a $535 million term loan due 2011 and are secured by a first-priority perfected security interest in all the tangible and intangible assets owned by Mueller and the capital stock of its guarantor subsidiaries (limited to 65% of the voting stock of its foreign subsidiaries). Standard & Poor's rating on the company's $225 million senior second-secured term loan incorporates the fact that the lenders will have a second lien on the company's assets. Proceeds from the new term loan and notes offering will be used to refinance the company's existing $523 credit facility due May 31, 2008, provide a $396 million distribution to unrated Mueller Group Holdings (N.A.) Inc., its parent company, which will use the proceeds to pay a dividend to its common stockholders and for general corporate purposes. Mueller's pro forma total debt (including operating leases) outstanding at Dec. 31, 2003, is about $975 million. Mueller is a leading North American manufacturer of cast, fabricated, forged, and machined products. NAT'L CENTURY: Court Clears Boston Medical Center Settlement Pact ----------------------------------------------------------------- Charles M. Oellermann, Esq., at Jones Day Reavis & Pogue, in Columbus, Ohio, relates that Boston Regional Medical Center, Inc. began selling its accounts receivable to National Century Debtor- affiliate NPF WL, Inc. in 1995 pursuant to a sales and subservicing agreement. The SSA was subsequently assigned to NPF VIII, Inc. and then to NPF XII. The Debtors also advanced more than $2,300,000 to BRMC through equipment financings and promissory note issuances. In February 1999, BRMC filed a bankruptcy petition in the Massachusetts Bankruptcy Court. BRMC filed an adversary proceeding against the Debtors. BRMC asserted that it is entitled to: -- more than $12,000,000 funds held in reserve accounts by the Debtors; -- damages for breach of the SSA and for fraud in connection with an alleged failed buyout by the Debtors and Greater Southeast Community Hospital Corporation I and its affiliates; and -- an order equitably discharging any of the Debtors' liens on BRMC's assets and equitably subordinating any of the Debtors' claims against the BRMC estate. The Debtors filed counterclaims in the BRMC Adversary Proceeding, alleging that BRMC: -- breached the SSA; -- converted the Debtors' property by diverting proceeds of the purchased receivables; and -- held that property in constructive trust for the Debtors' benefit. In addition, the BRMC Creditors' Committee commenced an adversary proceeding in the Massachusetts Court against Charles Ricks, et al. for breach of fiduciary duty against BRMC's former directors and officers, who in turn filed claims for contribution and indemnity against the Debtors and other entities as third party defendants. NPF XII, Inc. and NCFE, Inc. filed proofs of claim in BRMC's bankruptcy case, asserting $9,000,000 in unsecured claims. NPF X, Inc. also filed proofs of claim, asserting $2,300,000 in secured claims arising out of the equipment financings and promissory notes. In October 2001, after more than a year of litigation and discovery, BRMC, the BRMC Creditors' Committee and the Debtors entered into a settlement agreement to settle all claims among the parties. The Debtors agreed to pay $5,300,000 to BRMC: -- $1,500,348 from the Reserve Accounts held by BRMC; and -- $3,799,652 that was to be held by Hanify & King, P.C., BRMC's counsel, and to be returned to the Debtors if the First Settlement Agreement was not approved by the Massachusetts Bankruptcy Court. After the Petition Date, the Massachusetts Court ordered that further proceedings regarding the First Settlement Agreement were stayed as a result of the Debtors' Chapter 11 filings. On February 7, 2003, the Debtors commenced an adversary proceeding against BRMC, seeking turnover of the $3,799,652 Cash amount on the basis that the Cash constituted property of the Debtors' estates. BRMC opposed the Debtors' request and sought to lift the automatic stay to seek approval of the First Settlement Agreement by the Massachusetts Court. BRMC also filed Claim No. 338 in the Debtors' Chapter 11 cases, asserting an unliquidated claim against the Debtors for the Cash under the First Settlement Agreement. The Debtors objected to Claim No. 338. In December 2003, the Debtors filed an adversary proceeding against Doctors Community Healthcare Corporation, et al., seeking a declaratory judgment with respect to the ownership of certain reserve funds held by the Debtors. On January 12, 2004, the Debtors filed an amended complaint adding BRMC as a defendant to the Reserve Ownership Proceeding. The parties have agreed to resolve all of their claims and disputes. Accordingly, the Debtors sought and obtained the Court's authority to enter into a settlement agreement with BRMC and the Official Committee of Unsecured Creditors of Boston Regional Medical Center, Inc. The principal terms of the Settlement Agreement are: A. Distribution of Reserves and Cash Hanify & King, P.C. will transfer $650,000 of the Cash, plus interest and income accruing with respect to the Cash after February 23, 2004, to the Debtors. The remainder of the Cash will be transferred to BRMC. BRMC will retain the Reserves. B. Waiver and Release of Claims BRMC and the BRMC Committee, on the one hand, and the Debtors, on the other hand, each will withdraw any proofs of claim filed in the other's bankruptcy cases and will waive and release any claims, interests and rights to participate in any plan distribution in the other's bankruptcy case. C. Provisions Relating to Pending Adversary Proceedings The Debtors will dismiss, with prejudice: (1) BRMC and the BRMC Committee from the Turnover Proceeding; and (2) BRMC from the Reserve Ownership Proceeding. BRMC will dismiss the BRMC Adversary Proceeding with prejudice. The Third Party Claims against the Debtors must be dismissed with prejudice in the BRMC Committee Adversary Proceeding. D. No Objections to the Plan Neither BRMC nor the BRMC Committee will file, prosecute or file any pleading in support of any objection to the confirmation of the Plan. Any objections filed by either BRMC or the BRMC Committee will be withdrawn with prejudice in their entirety. Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- is the market leader in healthcare finance focused on providing medical accounts receivable financing to middle market healthcare providers. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. D. Ohio Case No. 02-65235). Paul E. Harner, Esq., Jones, Day, Reavis & Pogue represents the Debtors in their restructuring efforts. (National Century Bankruptcy News, Issue No. 36; Bankruptcy Creditors' Service, Inc., 215/945-7000) NEXSTAR BROADCASTING: Posts Net Losses in 4th Quarter & FY 2003 --------------------------------------------------------------- Nexstar Broadcasting Group, Inc. (NASDAQ: NXST) reported financial results for the quarter and fiscal year ended December 31, 2003. Results for the 2003 and 2002 periods reflect contributions from the Company's December 2003 acquisition of Quorum Broadcast Holdings, L.L.C., comprised of 11 owned and operated television stations and five additional stations to which it provided management, sales and other services. The acquisition, which was structured as a merger of Quorum's direct subsidiaries with, and into, Nexstar Broadcasting Group, Inc., has subsequently been accounted for as a merger under common control in a manner similar to a pooling of interests. Accordingly, Nexstar's financial results include the financial results of all Quorum subsidiaries for all periods presented in this announcement. 2003 Fourth Quarter Nexstar's net loss in the 2003 fourth quarter was $24.4 million, or $1.29 per share, compared to a net loss of $15.1 million in the fourth quarter of 2002. Net broadcast revenue for the quarter declined 9.2% to $52.4 million from $57.7 million in the fourth quarter of 2002. Political advertising revenue was $2.0 million in the fourth quarter of 2003, compared to $17.6 million in the fourth quarter of 2002 due to the biennial election cycle. The cyclical decrease was partially offset by a 17.8% increase in local and national revenues to $54.8 million, from $46.5 million in the fourth quarter of 2002. The Company reported a loss from operations of $13.1 million in the fourth quarter of 2003, compared to income from operations of $12.6 million in the fourth quarter of 2002. Direct station operating expenses and selling, general and administrative expenses, net of trade, increased 10.4% to $29.6 million for the fourth quarter 2003 from $26.8 million reported in the 2002 fourth quarter. Stations acquired by the Company in 2003 unrelated to the Quorum acquisition accounted for an increase in expenses of $4.0 million, which was partially offset by a decrease in expenses of $1.2 million at the remaining stations. The loss from operations reflects $11.8 million of non-recurring merger costs incurred during the period related to the Quorum merger and $4.1 million of costs related to completion of the Company's initial public offering of common stock in November 2003. Fourth-quarter broadcast cash flow (operating income plus corporate expenses plus depreciation and amortization of intangible assets and program rights plus other non-recurring items minus cash program payments) was $20.2 million for the fourth quarter of 2003, compared to $27.8 million in the fourth quarter of 2002. The decline in broadcast cash flow was primarily due to the decrease in political advertising revenue during the quarter. Broadcast cash flow is a non-GAAP financial measure. Nexstar believes that the presentation of this non-GAAP measure is helpful to investors because it is used by lenders to measure the Company's ability to service debt and by industry analysts to determine the market value of stations and their operating performance. A reconciliation of this measure to GAAP information is presented in the tables below. Interest expense for the fourth quarter of 2003 was $25.2 million, compared to $20.6 million in 2002. Included in the 2003 amount are non-recurring items of $6.7 million related to call premiums and accelerated amortization on Quorum's senior discount notes and $3.9 million related to the adoption of Statement of Financial Accounting Standards No. 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity" ("SFAS No. 150") on July 1, 2003. SFAS No. 150 requires the Company to account for the change in fair value of certain of its mandatorily redeemable units from implementation date as an adjustment to interest expense. Full-Year Results The Company's net loss attributable to common shareholders for fiscal year 2003 was $87.1 million, or a net loss of $5.59 per share, compared to a net loss of $116.6 million in 2002. Net loss for 2003 included $8.9 million recorded as a cumulative effect of change in accounting principle as a result of adopting SFAS No. 150. Net loss in 2002 included a first quarter write-down of $43.5 million, net of taxes, related to the adoption of Statement of Financial Accounting Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS No. 142") on January 1, 2002, which required the Company to test goodwill and FCC licenses for impairment, as of January 1, 2002. Net broadcast revenue for 2003 was $193.5 million compared to $188.1 million in 2002. Loss from operations was $4.0 million for 2003, compared to income from operations of $21.3 million in 2002. Broadcast cash flow in 2003 was $70.8 million, a 7.7% decrease from $76.7 million in 2002. The decline in broadcast cash flow was primarily due to a decrease in political advertising revenue during 2003 compared to 2002. Interest expense in 2003 was $68.3 million, compared to $67.4 million in 2002. Interest expense for 2003 includes $6.7 million related to call premiums and accelerated amortization on Quorum's senior discount notes and $3.9 million related to the adoption of FAS No. 150. CEO Comment Commenting on the results, Perry A. Sook, Nexstar Broadcasting Group President and Chief Executive Officer, said, "The year of 2003 was one of tremendous accomplishment and achievement for Nexstar Broadcasting Group, Inc. We more than doubled the size of our company through strategic and opportunistic acquisitions. We also strengthened our capital structure by completing two bond offerings, two senior debt financings and our Initial Public Offering. The Company's fourth quarter 2003 revenue results, excluding political revenue comparisons, demonstrate growth in our "core" revenue categories, which we think underscores our focus on revenue generation, as well as the generally improving confidence of our advertisers. "Our strong mid-market presence and experienced management team positions the Company to deliver strong returns to its shareholders in the periods ahead," continued Mr. Sook. "Many of our stations are situated in markets to benefit from 2004 political advertising as well as the 2004 Summer Olympics, which will air on our 14 NBC affiliates. We have substantially completed the integration of our newly acquired stations and are realizing the benefit of our expense reductions. We are also working quickly to implement new revenue initiatives at the stations. These developments, combined with a continued focus on reducing leverage and improving our balance sheet, should contribute to improved financial results in 2004 and beyond." Balance Sheet Total debt outstanding on December 31, 2003 was $598.9 million and cash balances were $10.8 million at year-end. A subsidiary of the company is the borrower under a senior secured credit facility. The subsidiary's consolidated total debt, less cash on hand, of $474.6 million at December 31, 2003 resulted in a leverage ratio as defined per the credit agreement at the end of the quarter of 6.4x, compared to a permitted leverage covenant of 7.0x. Nexstar had 28.4 million common shares outstanding on December 31, 2003. Weighted average shares outstanding were 19.0 million for the quarter and 15.6 million for the full year 2003. Capital expenditures were $1.9 million in the fourth quarter of 2003, compared to $3.8 million for the fourth quarter of 2002, while totaling $10.3 million for full year 2003, compared to $11.5 million for 2002. About Nexstar Broadcasting Nexstar Broadcasting Group (S&P, B+ Long-Term Corporate Credit Rating, Stable Outlook) owns, operates, programs or provides sales and other services to 44 television stations in 27 markets in the states of Illinois, Indiana, Maryland, Missouri, Montana, Texas, Pennsylvania, Louisiana, Arkansas, Alabama and New York. Nexstar's television station group includes affiliates of NBC, CBS, ABC, FOX and UPN, and reaches approximately 7.4% of all U.S. television households. The following is a list of the Company's owned properties, as well as those with which it has local service agreements: PACIFICARE HEALTH: Q1 Conference Call Scheduled for April 29, 2004 ------------------------------------------------------------------ PacifiCare Health Systems, Inc. (NYSE: PHS) will host a conference call and webcast on Thursday, April 29, 2004 at 5:00 PM Eastern time to discuss the company's earnings for the first quarter of 2004, which will be released after the close of the market on the same day. Investors, analysts and other interested parties will be able to access the live conference by calling (800) 857-9879, password "PacifiCare". A replay of the call will be available through May 20, 2004 at (800) 568-9697. Additionally, a live webcast of the conference call will be available on PacifiCare's website at http://www.pacificare.com/ Click on About PacifiCare, Investor Relations, and then Conference Calls, to access the link. PacifiCare Health Systems (S&P, BB+ Counterparty Credit Rating, Stable Outlook) serves more than 3 million health plan members and approximately 9 million specialty plan members nationwide, and has annual revenues of about $11 billion. PacifiCare is celebrating its 25th anniversary as one of the nation's largest consumer health organizations, offering individuals, employers and Medicare beneficiaries a variety of consumer-driven health care and life insurance products. Specialty operations include behavioral health, dental and vision, and complete pharmacy and medical management through its wholly owned subsidiary, Prescription Solutions. PACIFIC GAS: 11 Creditors Demand Payment of Administrative Claims ----------------------------------------------------------------- Pursuant to Section 503 of the Bankruptcy Code, 11 claimants assert administrative claims against Pacific Gas and Electric Company arising from: (a) actual, necessary costs and expenses of preserving PG&E's estate; (b) compensation and reimbursement; (c) actual, necessary costs and expenses other than compensation and reimbursement; (d) reasonable compensation, including compensation for professionals retained by PG&E; (e) reasonable compensation for services rendered by an indenture trustee; or (f) fees and mileage. The claimants are: Claimant Amount -------- ------ Bank of America, N.A. $939,724,065 California Department of Water Resources 3,000,000 California Power Exchange Corporation 667,841 Commonwealth Energy Corporation 1,319,258 David A. Tribble, d.b.a. D&L Enterprises 16,778 Dynegy Power Marketing, Inc. 413,630 West Coast Power, LLC 12,630,643 San Diego Gas & Electric Company Unliquidated SunGard Recovery Services, LP 139,354 Union Pacific Railroad not less than $1,000,000 Victoria Sandoval Khan 10,000,000 The 11 claimants demand payment of their administrative claims. 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: Poised to Exit from Chapter 11 on April 12, 2004 ------------------------------------------------------------- In a filing with the U.S. Bankruptcy Court, Pacific Gas and Electric Company stated that all conditions to effectiveness of its plan of reorganization have been satisfied as of March 26, 2004. The company stated that the effective date of the plan will occur on April 12, 2004, and that the distribution record date for purposes of determining the holders of record of allowed claims who are entitled to receive payment under the plan on the effective date will be March 29, 2004. Holders of allowed claims or equity interests as of the close of business on the distribution record date are entitled to the distributions that will be made under the plan on the effective date or as soon as practicable thereafter. The company will have no obligation to recognize any transfer of any allowed claim or equity interest occurring after the distribution record date. PG&E voluntarily filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code on April 6, 2001. Under the company's confirmed plan of reorganization, PG&E will pay in full or otherwise satisfy undisputed claims of creditors on the effective date or as soon as practicable thereafter. FINANCIAL DEBT Undisputed claims to be paid or otherwise satisfied include those relating to PG&E's medium-term notes, floating rate notes, senior notes, first and refunding mortgage bonds, Southern San Joaquin Power Authority Bonds, and commercial paper. On the effective date or as soon as practicable thereafter holders of these claims will be paid 100 percent of the principal amount of these obligations (plus any applicable premium), plus accrued and unpaid interest to April 12, 2004. Separate first quarter interest payments for medium-term notes, floating rate notes, senior notes, Southern San Joaquin Power Authority Bonds, and commercial paper will be made on April 1, 2004. The various trustees' records as to holders of these obligations generally will be closed as of March 29, 2004, the distribution record date. Following payment on the effective date, these securities will be retired. QUIDS PG&E will pay the principal and all accrued and unpaid interest on all its 7.90 percent Deferrable Interest Subordinated Debentures, or QUIDS. On the effective date or as soon as practicable thereafter, QUIDS holders of record as of the distribution record date will be paid principal of $25.00 per debenture, or 100 percent of the principal amount totaling $300 million, plus accrued and unpaid interest from April 1, 2004 to April 12, 2004, for a total of $25.060347 per debenture. A separate interest payment for the quarter ending March 31, 2004 will be made on March 31, 2004. Following payment on the effective date, the QUIDS will be retired. The transfer agent's books will be closed as of the March 29, 2004 distribution record date, and trading will be suspended. National City Bank of Indiana is the trustee for the QUIDS. PREFERRED DIVIDENDS On the effective date or as soon as practicable thereafter, holders of preferred stock will be paid previously unpaid dividends for the period from November 1, 2000 through January 31, 2004. PG&E has 11 series of preferred stock. The amount of accumulated, unpaid dividends is $82.3 million. The amount to be paid per series per share is as follows: First Preferred Stock, Dividend to be Paid $25 Par Value per Share Redeemable 7.04% $5.720000 6.57% $5.338125 6.30% $5.118750 5.00% $4.062500 5.00% Series A $4.062500 4.80% $3.900000 4.50% $3.656250 4.36% $3.542500 Non-Redeemable 6.00% $4.875000 5.50% $4.468750 5.00% $4.062500 The American Stock Exchange has advised the company that the ex- dividend date for these payments will be April 13, 2004. SINKING FUNDS Also on the effective date or as soon as practicable thereafter, the company will bring current its preferred stock sinking fund obligations. Two of PG&E's preferred stock series, 6.57 percent and 6.30 percent, have past due sinking fund payments totaling $10.6 million. The sinking fund payments will be used to redeem, on a pro rata basis, 10 percent of the 6.57 percent series and 5 percent of the 6.30 percent series. A redemption price of $25.00 will be paid per redeemed share, plus unpaid dividends from February 1, 2004 through April 12, 2004. Holders of redeemed shares of the 6.57 percent series will receive a total of $25.3285 per redeemed share and holders of redeemed shares of the 6.30 percent series will receive a total of $25.315 per redeemed share. UNDISPUTED CREDITOR CLAIMS All allowed creditor claims held by lenders, energy suppliers, vendors and other creditors with undisputed claims will be paid consistent with the terms of the company's plan of reorganization. DISPUTED CREDITOR CLAIMS Funds for disputed claims that are not resolved before the effective date will be held in escrow, pending successful resolution of those claims. PASS-THROUGH CLAIMS Certain claims, including those related to environmental, pending litigation and tort claims, will pass through the company's bankruptcy and be satisfied in the ordinary course of business at such time and in such manner as the company is obligated to satisfy such claims under applicable law. 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. PARMALAT GROUP: US Debtors Ask Nod to Tap Ordinary Course Profs. ---------------------------------------------------------------- Judge Drain authorizes the U.S. Parmalat Debtors to continue the employment of various attorneys, accountants and other professionals in matters arising in the ordinary course of their businesses and unrelated to these Chapter 11 cases, while they operate as debtors-in-possession under the Bankruptcy Code. The Debtors will employ the Ordinary Course Professionals on terms substantially similar to those in effect before the Petition Date. The U.S. Debtors employ Ordinary Course Professionals to render legal services with regard to specialized areas of the law, accounting and tax services, in connection with the operation of their business. The Debtors also employ real estate appraisers, brokers and leasing agents. The Court also authorizes the Debtors to employ additional Ordinary Course Professionals, as the need arises. Judge Drain requires the Debtors to file supplemental lists of the additional Professionals with the Court and serve the lists on the United States Trustee for the Southern District of New York, the attorneys for the Debtors' prepetition senior lenders and the statutory committee of unsecured creditors, once appointed. If no objections to any supplemental lists are filed within 15 days after service, the employment of the additional Professionals will be deemed approved by the Court pursuant to Sections 327 and 328 of the Bankruptcy Code without the need for a hearing. The U.S. Debtors are authorized to pay compensation and reimburse expenses to each Ordinary Course Professional on a "rolling basis." An Ordinary Course Professional, whose fees and disbursements are less than $30,000 in any month, may be paid in subsequent months a total of $30,000 plus the difference between $30,000 and the amount billed in prior months. However, the maximum payment to any Ordinary Course Professional in any month will be $60,000. Any payments made in excess of the fee cap to any Ordinary Course Professional will be subject to prior Court approval. The Court requires the U.S. Debtors to provide a monthly summary of the payments made to the Ordinary Course Professionals to the U.S. Trustee and the attorneys for the Unsecured Creditors Committee. Judge Drain directs each law firm retained as an Ordinary Course Professional to file with the Court, within the later of (i) March 27, 2004, and (ii) the date of the law firm's engagement by the Debtors, an affidavit pursuant to Section 327(e) of the Bankruptcy Code setting forth that the law firm does not represent or hold any interest adverse to the Debtors or to their estates. 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) PENN TREATY: Inks Sales & Processing Pact With Universal American ----------------------------------------------------------------- Penn Treaty American Corporation (NYSE: PTA) has entered a sales initiative and processing agreement with subsidiaries of Universal American Financial Corp. (Nasdaq: UHCO) of Rye Brook, New York. Under the terms of the Agreement, the career agents of Universal American Financial Corp.'s insurance subsidiaries, Pennsylvania Life and Pyramid Life, will offer Penn Treaty's long-term care and home health care insurance products. The Penn Treaty portfolio of products offered will include benefit periods in excess of three years (which are not offered by the Universal American Financial companies), and Penn Treaty's Secured Risk Plan, a long-term care policy that is designed for individuals with substandard health conditions. In addition, Penn Treaty expects to develop a new sales initiative by offering Medicare Supplement insurance products in at least 30 states through its national distribution team of independent agents. The sale of Medicare Supplement insurance products will provide additional diversity to Penn Treaty's long-term care insurance products, further broadening its senior market portfolio. Introduction of Penn Treaty's new Medicare Supplement insurance product line is expected to be in the early third quarter of 2004. Under the Agreement, Penn Treaty will utilize Universal American's third party administrative services company, CHCS Services Inc, to provide policy administration, commissions and claims services for the new Medicare Supplement policies. CHCS Services, Inc. is a seasoned administrator with in excess of $500 million of Medicare Supplement premium under management. William W. Hunt, Penn Treaty President and CEO, said, "This is a great business opportunity that allows each company to capitalize on its own set of core competencies. For Penn Treaty, another valuable distributor of our long-term care insurance products is established. This will help us achieve our long-term care insurance growth goals, while giving Universal American's career agents access to the broadest underwriting window in the industry." Mr. Hunt continued, "Entering the Medicare Supplement business helps achieve our goal of revenue and profit diversification with a product family that is complementary to long-term care insurance. I am very confident that the Medicare Supplement insurance product line will create significant value not only by clearing our financial hurdles, but also by facilitating the recruitment of new field marketing organizations." Patrick D. Patterson, Executive VP and Chief Marketing Officer added, "Our agreement with Universal American's subsidiaries will establish a stronger sales platform for both organizations, resulting in improved agent recruiting, retention and increased sales. We look forward to working together to accomplish these common objectives." William Wehner, President of Pennsylvania Life said, "We are looking forward to making available the Penn Treaty extended benefit and substandard long-term care products to our career agents. These added plans would give our agents a complete portfolio of long term care products to offer to our valued clients". Gary Jacobs, "President of CHCS said, "We are pleased that Penn Treaty chose us as their administrator of choice for their new Medicare Supplement Plans. We are committed to providing all Penn Treaty agents with the best Medicare Supplement service in the market today." Universal American Financial Corp. offers a portfolio of supplemental life and health insurance products, primarily to the senior market, as well as third party administrator services for insurance and non-insurance programs in the senior market. The Company is included in the Russell 2000 and 3000 Indexes. For more information, visit http://www.uafc.com/ Penn Treaty, through its wholly owned direct and indirect subsidiaries, Penn Treaty Network America Insurance Company, American Network Insurance Company, American Independent Network Insurance Company of New York, United Insurance Group Agency, Inc., Network Insurance Senior Health Division and Senior Financial Consultants Company, is primarily engaged in the underwriting, marketing and sales of individual and group accident and health insurance products, principally covering long-term nursing home and home health care. The Company's website is http://www.penntreaty.com/ * * * As reported in the Troubled Company Reporter's February 9, 2004 edition, Standard & Poor's Ratings Services assigned its 'CC' subordinated debt rating to Penn Treaty America Corp.'s (NYSE:PTA) $14 million, 6.25% subordinated convertible notes, which are due on Oct. 15, 2008. The notes were issued in a private placement to accredited investors. The terms of the notes are identical to those of the company's existing 6.25% subordinated convertible notes due 2008, except that the newly issued notes may not be converted until after May 31, 2004, and until shareholder ratification and approval of the issuance of the notes and the related shares of common stock is obtained. Ratings List Penn Treaty American Corp. Counterparty credit rating CCC-/Positive/-- Subordinated debt rating CC PETRO STOPPING: Reports Increased Revenues in Q4 and FY 2003 ------------------------------------------------------------ Petro Stopping Centers, L.P., one of the leading operators of full-service travel plazas in the U.S., announced its operating results for the fourth quarter and twelve months ended December 31, 2003. Revenue for the fourth quarter 2003 of $268.8 million was $28.8 million higher than the same period in 2002. The increase in revenue was primarily driven by a 6.4% increase in same store fuel gallons, a 3.8% increase in the average retail selling price per fuel gallon, and the addition of two new company operated sites. Net income for the quarter was $1.6 million, including a charge of $908,000 related to the write-down of land held for sale. No provision for income taxes is reflected in the Company's consolidated financial statements because of its organization as a partnership. Net income for the year ended December 31, 2003 was $8.7 million compared to $7.0 million in 2002. Revenue for the year was $1.1 billion compared to $922.9 million in 2002. EBITDA for the year increased 1.6% to $44.3 million. "The successful completion of our debt restructuring in early 2004 has positioned Petro to prosper as economic conditions continue to improve. We believe that the level to which our new 9% notes were over-subscribed reflects the market's confidence in our strategies and the talent of our management team," said Jack Cardwell, Petro's Chairman, President, and Chief Executive Officer. Petro Stopping Centers, L.P. is one of the leading travel plaza operators in the U.S. The Company has a nationwide network of 37 company-operated and 23 franchised locations. The Company provides high quality multi-service facilities, with most sites featuring separate diesel and gasoline fueling facilities, Iron Skillet restaurants, travel & convenience stores, and Petro:Lube truck maintenance and repair centers. * * * As reported in the Troubled Company Reporter's February 17, 2004 edition, Standard & Poor's Ratings Services assigned its 'B-' rating and '3' recovery rating to Petro Stopping Centers L.P.'s $225 million senior secured notes due 2012. These notes were issued pursuant to Rule 144A with registration rights. The notes are rated one notch below the corporate credit rating; this and the '3' recovery rating indicate the expectation of meaningful recovery of principal (50%-80%) in the event of a default. In addition, Standard & Poor's raised the rating on the company's senior secured bank loan to 'BB-' from 'B+' and assigned a '1' recovery rating to the loan. The bank loan is rated two notches higher than the corporate credit rating; this and the '1' recovery rating indicate a high expectation of full recovery of principal in the event of a default. The 'B' corporate credit rating for Petro was affirmed and removed from CreditWatch, where it was placed Aug. 28, 2003. The outlook is negative. The affirmation is based on Petro's stable operating performance over the past two years, as well as its enhanced liquidity as a result of extended maturities and lower cash interest payments under the refinancing. Proceeds from these issues, along with cash, were used to repay the company's existing $135 million senior unsecured notes and Petro Stopping Centers Holdings L.P.'s existing $113.7 million face value of senior discount notes due 2008. The new term loan is $25 million, $20 million less than the previous term loan. The negative outlook reflects the company's continued high leverage and thin cash flow coverage ratios. A further deterioration in these credit measures or reduced liquidity could result in a ratings downgrade in the near term. PG&E NATIONAL: NEG Wants Until June 19 to Solicit Plan Acceptances ---------------------------------------------------------------- National Energy & Gas Transmission, Inc. (formerly PG&E National Energy Group Inc.) asks the Court to further extend its exclusive period to solicit acceptances for its reorganization plan through and including June 19, 2004, pursuant to Section 1121(d) of the Bankruptcy Code. Martin T. Fletcher, Esq., at Whiteford, Taylor & Preston, LLP, in Baltimore, Maryland, explains that the extension will allow NEG to pursue confirmation of its pending Plan. Mr. Fletcher informs the Court that NEG has diligently undertaken to achieve approval of the disclosure statement for its Plan. At this time, the voting on the Plan is already underway with the support of the Official Committee of Unsecured Creditors and the Official Noteholders Committee appointed in NEG's Chapter 11 case. The deadline for filing confirmation objections is April 19, 2004. The Confirmation Hearing will be held on April 28, 2004. The solicitation of votes for the Plan began on March 12, 2004 and the ballots to accept or reject the Plan must be submitted by April 19, 2004. Judge Mannes will convene a hearing on May 19, 2004 to consider NEG's request. Pursuant to the Order for Complex Chapter 11 Bankruptcy Case dated July 9, 2003, NEG's Exclusive Solicitation Period is automatically preserved, without the necessity of a bridge order, until the conclusion of that hearing. Headquartered in Bethesda, Maryland, PG&E National Energy Group, Inc. -- http://www.pge.com/-- develops, builds, owns and operates electric generating and natural gas pipeline facilities and provides energy trading, marketing and risk-management services. The Company filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md. Case No. 03-30459). Matthew A. Feldman, Esq., Shelley C. Chapman, Esq., and Carollynn H.G. Callari, Esq., at Willkie Farr & Gallagher represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $7,613,000,000 in assets and $9,062,000,000 in debts. (PG&E National Bankruptcy News, Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000) PILLOWTEX: Stipulation Recharacterizes 12 Lasalle-Assigned Leases ----------------------------------------------------------------- Between October 1, 1999 and January 1, 2000, Debtor Pillowtex Corporation entered into 12 lease agreements with General Electric Capital Corporation: (a) Production Equipment Lease Agreement No. Series 17-A, having a capitalized cost of $487,218; (b) Production Equipment Lease Agreement No. Series 17-B, having a capitalized cost of $1,270,307; (c) Production Equipment Lease Agreement No. Series 17-C, having a capitalized cost of $487,219; (d) Production Equipment Lease Agreement No. Series 17-D, having a capitalized cost of $783,088; (e) Production Equipment Lease Agreement No. Series 17-E, having a capitalized cost of $1,040,003; (f) Production Equipment Lease Agreement No. Series 17-F, having a capitalized cost of $91,276; (g) Production Equipment Lease Agreement No. Series 17-G, having a capitalized cost of $374,121; (h) Production Equipment Lease Agreement No. Series 17-H, having a capitalized cost of $91,276; (i) Production Equipment Lease Agreement No. Series 17-I, having a capitalized cost of $91,276; (j) Production Equipment Lease Agreement No. Series 20-A, having a capitalized cost of $487,219; (k) Production Equipment Lease Agreement No. Series 20-C, having a capitalized cost of $487,219; and (l) Production Equipment Lease Agreement No. Series 25-A, having a capitalized cost of $1,190,625; Under the 12 Lease Agreements, GECC leased to the Debtors certain production equipment for use by the Debtors in their manufacturing operations. Subsequently, GECC assigned all its right, title, interest and obligations in the 12 Lease Agreements to LaSalle National Leasing Corporation. The 12 Lease Agreements were amended to provide that at the end of the lease terms, the Debtors will acquire title to the Equipment upon the payment of specified amounts aggregating approximately $650,000. On May 9, 2002, the Debtors assumed the 12 Lease Agreements. On October 1, 2003, LaSalle assigned to Crescent Financial LLC, an affiliate of GGST, the 12 Lease Agreements and substantially all of LaSalle's rights, title, interest, claims and remedies under the Lease Agreements and in the Equipment for the purchase price of $1,750,000. Pursuant to the Court-approved sale of substantially all of the Debtors' assets to GGST, the parties must jointly determine whether each Subject Capital Lease would be treated as a true lease or recharacterized as a financing lease or secured loan under the Bankruptcy Code. Upon their review of the Lease Agreements, the Debtors, Crescent and GGST agreed that they be treated as financing leases. Thus, with the Court's consent, the parties stipulate and agree that: (a) The 12 Lease Agreements are recharacterized as financing leases or secured loans; (b) The Equipment is property of the Debtors' estates; (c) Crescent, as assignee of LaSalle, has a valid, binding, enforceable and perfected, first priority security interest in the Equipment and accordingly, a secured claim against the Debtors equal to $1,750,000, the liquidation value of the Equipment; (d) As of the Petition Date, the aggregate balance due or to become due under the 12 Lease Agreements was $2,325,307; (e) 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; (f) GGST will have an allowed unsecured prepetition non- priority deficiency claim against the Debtors for $575,307 and will not be required to file a proof of claim; and (g) Each of 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 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) PINNACLE CLUB: Creditors Agree to Restructure Debt Pacts -------------------------------------------------------- The Pinnacle Club announced it has reached agreements with several of its creditors and its landlord that will facilitate the Club's successful reorganization under Chapter 11 of the Bankruptcy Code. On March 10, 2004, the Colorado Bankruptcy Court approved the Rent Moratorium Agreement by and between the Pinnacle Club and its landlord, Antelope Real Estate Co. LLC. Under the Rent Moratorium Agreement, Antelope agreed to defer the rent for the months of January, February and March 2004. Separately, the Club reached agreements with its primary secured lender, Wells Fargo Bank and the Colorado Department of Revenue, which will govern the Club's use of Wells Fargo's and the State's "cash collateral" existing at the time of the Pinnacle Club's Chapter 11 bankruptcy filing. Further, the Pinnacle Club reached an agreement in principle with the Colorado Department of Revenue for repayment of the pre-petition taxes owed to the State under terms favorable to the Club. These agreements are subject to the approval of the bankruptcy court. Michael V. Schranz, Pinnacle Club President said: "We are encouraged by the progress made by the Club under the direction of General Manager, Wayne N. Sweger and his staff, as we continue with our bankruptcy reorganization. From a cash flow position and a house profit standpoint, the Club is ahead of the budget filed with the court. More importantly, our membership is energized by the Club's efforts to meet their dining, business meeting and catering needs. We are confident the Pinnacle Club will emerge from Chapter 11 as a more robust and successful business club, and return to its historic role as one of the premier city clubs in the country." Wayne N. Sweger, General Manager of the Pinnacle Club, said: "Bookings for weddings are strong and we continue to accept many reservations for meeting rooms and other special functions. We are receiving excellent feedback from our members and guests about their special functions and weddings. I'm certain these comments are helping to generate future sales. We recently opened the Club for Thursday and Friday evening socializing for the membership in the Crystal Room, absolutely the best room in the entire Rocky Mountain region for watching the sunset. I believe the Club is moving in a very positive direction with a motivated staff and look forward to continued improvement." About the Pinnacle Club The Pinnacle Club is Denver's most recognized private club. Offering paramount service and member benefits from our 37th and 38th floors, the views of the city and Front Range are unmatched. Our expert Special Events Planners can assist with your next wedding or private meeting. Each of our nine event rooms have the magnificent panoramic views of the Front Range and Downtown Denver, accommodating two to 1,200, gala to business functions, and everything in-between! Discover for yourself why "It's Better at the Top." PINNACLE CLUB: Reaches Banquet Space Agreement with Hyatt Hotels ---------------------------------------------------------------- The Pinnacle Club reached an agreement with Hyatt Hotels under which Hyatt will utilize the Club's banquet space under terms that are more financially attractive to Pinnacle than under previous agreements. Pinnacle Club membership continues to have first and full access to all of the functionality offered at the Club. Where available, Hyatt Hotel's downtown Denver location will have the opportunity to book functions, special events and business meetings. Commenting on the arrangement with Hyatt, Sweger said: "This agreement, I believe, provides a first-rate source of new business for the Pinnacle Club and offers us an excellent chance to showcase the Club's banquet facilities and services to more of Denver and the Rocky Mountain area. I'm pleased to have reached agreement with the Hyatt and look forward to working with them." About the Pinnacle Club The Pinnacle Club is Denver's most recognized private club. Offering paramount service and member benefits from our 37th and 38th floors, the views of the city and Front Range are unmatched. Our expert Special Events Planners can assist with your next wedding or private meeting. Each of our nine event rooms have the magnificent panoramic views of the Front Range and Downtown Denver, accommodating two to 1,200, gala to business functions, and everything in-between! Discover for yourself why "It's Better at the Top." PRUDENTIAL SECURITIES: Fitch Rates Class G Certificates at BB+ -------------------------------------------------------------- Prudential Securities Secured Financing Corp.'s commercial mortgage pass-through certificates, series 1995-MCF2, are upgraded as follows: --$5.6 million Class F to 'AAA' from 'A+'; --$12.2 million Class G to 'BB+' from 'CCC'. The following classes are affirmed: --$51.9 million Class C at 'AAA'; --$8.9 million Class D at 'AAA'; --$15.6 million Class E at 'AAA'. The $7.4 million Class H remains at 'D' due to a cumulative principal loss of $3.8 million since issuance. Classes J-1 and J-2 have been reduced to $0 due to realized losses, and classes A-1, A-2, A-EC and B have paid in full. The upgrades are due to increased credit enhancement as a result of continued amortization and loan payoffs. As of the March 2004 distribution date, the deal has paid down 76.6%, to $51.9 million from $222.3 million from issuance, and to 25 loans from 85. Three healthcare properties, also Fitch loans of concern, have paid off in full. The Bristol House loan ($4.3 million), which incorporated a second lien formerly collaterized by the Walden Oaks property, paid off in full as of the March 2004 distribution date. Seaport Manor ($2.2 million) prepaid as of the February 2004 distribution date with a loss of $183,617. Fitch had expected greater losses on both of these loans. Fitch is concerned that the remaining pool has become more concentrated since issuance, with retail properties collateralizing 75% of the deal and the top five loans comprising 40%. In addition, there is one specially serviced loan (2.7%) currently 90 days delinquent and collateralized by an office property in Avon, IN. The special servicer is working with the borrower to bring the loan current. However the substantial paydown offsets these concerns and the upgrades are warranted. QT 5 INC: Ability to Continue as Going Concern is in Doubt ---------------------------------------------------------- QT 5, Inc.'s unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of the Company as a going concern. The Company incurred a net loss of $3,396,688 and $5,391,291 during the three and six months ended December 31, 2003, respectively, only had $44,937 and $190,404 of revenue during the three months and six months ended December 31, 2003 respectively, and had a cash balance of $58,478 at December 31, 2003. In addition, the Company had an accumulated deficit of $15,577,067 and negative working capital of $1,474,244 and on January 8, 2004 has lost its NICO patent rights for its only revenue-generating product at December 31, 2003. The Company is now commencing the marketing and sales of its new disease and drug quick-test products and management recognizes that the Company must generate additional resources to fund overhead and for the eventual achievement of revenue and sustained profitable operations. The Company's success is dependent upon numerous items, including the successful development of effective marketing strategies to customers in a competitive market for its new products. The Company anticipates that certain of its new product line may enter the market in the second calendar quarter of 2004 and management believes that revenues generated by this product could lead to future profitability. Also, in November 2003, the Company completed an accounts receivable financing facility with AeroFund Financial which enables it to finance approved customer invoices to a maximum of $1,500,000 at any given time. Although the Company is currently in default of this financing agreement, caused by the loss of its NICO patent and non-payment by certain customers, the Company intends to cure the default and anticipates utilizing this financing, when and if required, in connection with future sales of new product. Also, in February 2004 management successfully obtained additional capital through a $1 million sale and issuance of 6% convertible debentures with an original issuance discount of 25%, from which the Company received initial gross proceeds of $350,000 on February 12, 2004 with an additional $150,000 anticipated on, or about, February 20, 2004 and the $250,000 balance which is scheduled to be paid following the effective date of a registration statement (which the Company anticipated filing with the Securities and Exchange Commission in February 2004) covering the common stock underlying the debentures and related warrants. However, no assurance can be given that the accounts receivable financing facility will remain available and the balance of the convertible debenture funding will be consummated as contemplated or will generate sufficient cash to satisfy the Company's need for additional capital or that other debt or equity financing will be available to the Company on satisfactory terms. These factors, among others, raise substantial doubt about the Company's ability to continue as a going concern. RELS MANUFACTURING: Case Summary & 19 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: RELS Manufacturing Corporation 6700 Bleck Drive Rockford, MN 55373 Bankruptcy Case No.: 04-31775 Type of Business: The Debtor Manufactures automobile service products. Chapter 11 Petition Date: March 24, 2004 Court: District of Minnesota Judge: Dennis D. O'Brien Debtor's Counsel: T. Chris Stewart, Esq. Dunkley and Bennett, P.A. 701 Fourth Avenue South Suite 700 Minneapolis, MN 55415 Tel: 612-339-1290 Fax: 612-339-9545 Total Assets: $1,888,326 Total Debts: $1,222,567 Debtor's 19 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Pier Foundry Trade debt $37,000 Source Transport Trade debt $29,000 Sicam Canada Trade debt $26,000 Metal Coatings Trade debt $21,100 Earl M. Jorgensen Co. Trade debt $18,000 Innovative Metals Inc. Trade debt $11,200 Yellow Freight Trade debt $10,000 Electric Motor Service Trade debt $7,700 Shark Industries Ltd. Trade debt $7,300 Tomahawk Foundry Trade debt $5,700 Falk Paper Trade debt $4,300 Gear & Broach Inc. Trade debt $3,500 All Industries Supplies Trade debt $3,000 Dawes Transport, Inc. Trade debt $3,000 LCL Services Inc. Trade debt $3,000 Comet Tool Trade debt $2,600 Denton Casting Co., Inc. Trade debt $2,400 Wimpex, Inc. Trade debt $2,400 Pitney Bowes Trade debt $2,000 RIODIZIO INC: Voluntary Chapter 11 Case Summary ----------------------------------------------- Debtor: Riodizio, Inc. 417 Lafayette Street New York, New York 10003 Bankruptcy Case No.: 04-40821 Type of Business: The Debtor operates a restaurant and cocktail lounge. Chapter 11 Petition Date: March 26, 2004 Court: Southern District of New York (Manhattan) Judge: Cornelius Blackshear Debtor's Counsel: Mitchell Cantor, Esq. Law Offices of Mitchell Cantor 470 Park Avenue South New York, NY 10016 Tel: 212-679-7820 Total Assets: $150,000 Total Debts: $25,168,000 The Debtor did not file a list of its 20-largest creditors. ROUGE INDUSTRIES: Administrative Claims Bar Date Set for April 5 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware fixes April 5, 2004, at 4:0 p.m. as the deadline for filing administrative claims that arose before October 23, 2003, against Rouge Industries, Inc., and its debtor-affiliates. If filed via U.S. mail, claims must be sent to: Rust Consulting, Inc. P.O. Box 1689 Faribault Minnesota 55021-1689 Attn: Rouge Industries, Inc., et al, Claims Processing if via hand delivery, courier or overnight service, to: Rouge Industries, Inc., et al, Claims Processing c/o Rust Consulting, Inc. 201 South Lyndale Avenue Faribault, Minnesota 55021 Headquartered in Dearborn, Michigan, Rouge Industries, Inc., an integrated producer of flat-rolled steel, filed for chapter 11 protection on October 23, 2003 (Bankr. Del. Case No. 03-13272). Donna L. Harris, Esq., Robert J. Dehney, Esq., at Morris, Nichols, Arsht & Tunnell represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed total assets of $558,131,000 and total debts of $558,131,000. RYLAND GROUP: First Quarter Earnings Release Set for April 21 ------------------------------------------------------------- The Ryland Group, Inc. (NYSE: RYL) will release first quarter earnings on Wednesday, April 21, 2004, after the market closes. The conference call will be held on Thursday, April 22, 2004, at 9:00 a.m. PDT (12 p.m. EDT). The dial-in number is 888-857-6929. Participants may call in beginning at 8:45 a.m. PDT. The call will be recorded and replayed beginning at 12 p.m. PDT on April 22 through midnight on May 6, 2004. The dial-in number for the replay is 888-203-1112 (reference conference code 748120). In addition, the call will be broadcast from Ryland's Web site at http://www.ryland.com/in the "Investor Relations" section of the site. With headquarters in Southern California, Ryland is one of the nation's largest homebuilders and a leading mortgage-finance company. The Company currently operates in 27 markets across the country and has built more than 215,000 homes and financed more than 185,000 mortgages since its founding in 1967. Ryland is a Fortune 500 company listed on the New York Stock Exchange under the symbol "RYL." Company's Web site is at http://www.ryland.com/ As reported in Troubled Company Reporter's November 4, 2003 edition, Standard & Poor's Ratings Services raised its corporate credit rating on The Ryland Group Inc. to 'BBB-' from 'BB+'. In addition, ratings on $547 million of the company's senior unsecured and senior subordinated notes were raised. The outlook is now stable. SELECT MEDICAL: Will Webcast Q1 Conference Call on April 28 ----------------------------------------------------------- Select Medical Corporation (NYSE: SEM) will release the financial results for its first quarter ended March 31, 2004 on Tuesday, April 27, 2004, after the close of the market. The Company will host a conference call regarding the first quarter results and its business outlook on Wednesday, April 28, 2004, at 11:00 am EDT. The domestic dial in number for the call is 1-888-896-0863. The international dial in number is 1-973-935- 8507. The conference call will be webcast simultaneously at http://www.videonewswire.com/sem/042804 For those unable to participate in the conference call, a replay will be available until 1:00 pm EDT, May 5, 2004. The replay number is 1-877-519-4471 (domestic) or 1-973-341-3080 (international). The passcode for the replay will be 4632098. The replay can also be accessed at Select Medical Corporation's website, http://www.selectmedicalcorp.com/ Select Medical Corporation (S&P, BB- Corporate Credit Rating, Stable) is a leading operator of specialty hospitals in the United States. Select operates 79 long-term acute care hospitals in 24 states. Select operates four acute medical rehabilitation hospitals in New Jersey. Select is also a leading operator of outpatient rehabilitation clinics in the United States and Canada, with approximately 790 locations. Select also provides medical rehabilitation services on a contract basis at nursing homes, hospitals, assisted living and senior care centers, schools and worksites. Information about Select is available at http://www.selectmedicalcorp.com/ SOLUTIA: Brings-In Deloitte & Touche as Independent Accountants --------------------------------------------------------------- Solutia, Inc. and its debtor-affiliates seek the Court's authority to employ Deloitte & Touche LLP as their independent accountants, auditors and tax service providers. The Debtors have selected Deloitte because of its diverse experience and extensive knowledge in providing services to large and complex entities, both in and out of bankruptcy proceedings. Jeffry N. Quinn, Solutia Inc.'s Senior Vice President, General Counsel and Chief Restructuring Officer, relates that Deloitte is one of the "Big Four" accounting firms and has the necessary depth and range of skills to assist the Debtors in their Chapter 11 cases. Deloitte is already particularly familiar with the Debtors' business, management, financial and operational staff and other professionals because it has been employed by the Debtors since their inception in 1997. The scope of service to be provided by Deloitte to the Debtors include: (a) auditing and reporting on the Debtors' annual consolidated financial statements for the year ended December 31, 2003; (b) federal and state income tax preparation services, tax equalization calculation services, and miscellaneous tax compliance services pertaining to the Debtors' personnel on international assignments; and (c) property tax consulting services. In addition, Deloitte will render further independent accounting, auditing and tax services as the Debtors may request from time to time, including: (a) addressing issues relating to the completion of the 2003 Audit Services arising in connection with the Debtors' filing of the Chapter 11 cases and not contemplated at the time the 2003 Audit Services were commenced, and assisting them with other accounting and reporting matters; (b) assisting the Debtors in preparing debt compliance letters, and with other accounting, reporting, and out-of- court debt restructuring matters, arising in connection with the Chapter 11 cases; (c) assisting the Debtors in preparing quarterly and other filings that may be required by the Securities and Exchange Commission; and (d) assisting the Debtors in connection with their general tax advisory and tax compliance needs. Deloitte intends to charge the Debtors for its professional services pursuant to these fixed and contingent fee rate compensation arrangements: (a) The Debtors and Deloitte have estimated a fee of $725,000 for Deloitte's provision of 2003 Audit Services. Deloitte intends to charge fees in excess of this amount on an hourly rate basis; (b) Deloitte intends to charge the Debtors a fixed fee for each of their employees for whom expatriate tax services are provided; and (c) Deloitte intends to charge a contingent fee of 24% of the tax savings realized with respect to the properties, which are subject of the property tax services provided. Before the Petition Date, the Debtors paid Deloitte $540,000 in progress billings applied towards the $725,000 estimated fee for the 2003 Audit Services. The Debtors propose to compensate Deloitte the $185,000 remaining in estimated fees for Deloitte's postpetition performance of the 2003 Audit Services. In addition, Deloitte will provide additional services at these discounted standard hourly rates: Partner, Principal, Director $450 - 600 Senior Manager 350 - 450 Manager 250 - 350 Senior 175 - 250 Staff 150 - 175 Paraprofessionals, Assistants 85 Karen Potts, tax partner at Deloitte, assures the Court that the firm does not hold or represent any interest adverse to the Debtors with respect to the matters on which it is to be employed. Moreover, Deloitte is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. * * * The Court allows the Debtors to employ Deloitte as their independent accountants, auditors and tax service providers. However, the Debtors' employment of Deloitte with respect to providing expatriate tax services will be subject to a further hearing by the Court. 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. 10; Bankruptcy Creditors' Service, Inc., 215/945-7000) SPORTS ARENAS: Independent Auditors Air Going Concern Doubts ------------------------------------------------------------ The independent auditors' report of Sports Arenas, Inc., dated September 5, 2003, included in the Company's June 30, 2003 Annual Report on Form 10-K contained the following explanatory paragraph: "The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 13 to the consolidated financial statements, the Company has suffered recurring losses, and is forecasting negative cash flows from operating activities for the next twelve months. These items raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 13. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty." Management estimates positive cash flow of $100,000 to $200,000 in total for the remaining two quarters of the year ending June 30, 2004 from operating activities after deducting capital expenditures and principal payments on notes payable and adding estimated distributions from UCV and VRLP. However, Management estimates that it will have a tax liability of approximately $1,026,000 due in September 2004 as a result of reporting the taxable portion of the sale of the apartment project owned by UCV, LP. Management is currently uncertain of where the Company will obtain the funds to pay these tax liabilities. The Company has working capital deficit of $565,556 at December 31, 2003, which is a $1,627,109 decrease from the working capital of $1,061,553 at June 30, 2003. The decrease in working capital is primarily attributable to the reclassification of $1,026,000 from a non-current deferred tax liability to a current deferred tax liability and cash used by operating activities for the six months ended December 31, 2003. Management expects continuing cash flow deficits until Penley Sports develops sufficient sales volume to become profitable. Although, there can be no assurances that Penley Sports will ever achieve profitable operations, management estimates that a combination of continued increases in the sales of Penley Sports and reduction of its operating costs will result in Penley Sports and the Company achieving a breakeven level of operations at the end of the next two quarters. STERICYCLE: S&P Revises Outlook to Stable over Improved Financials ------------------------------------------------------------------ Standard & Poor's Ratings Services raised its corporate credit rating and senior secured bank loan rating on Stericycle Inc. to 'BB+' from 'BB'. The subordinated debt rating was raised to 'BB-' from 'B+'. The outlook is stable. Total debt as of Dec. 31, 2003, was approximately $168 million. The upgrade reflects Lake Forest, Illinois-based Stericycle's improved financial performance, continued debt reduction, and increased cash flow generation. "Despite the economic downturn, Stericycle has consistently grown its revenues and improved its operating efficiency and profitability over the last couple of years," said Standard & Poor's credit analyst Paul Blake. Industrywide cost reduction pressures have increased the amount of outsourcing by hospitals; acquisitions; and market penetration of Stericycle's new programs and services, most notably, its Steri- Safe OSHA Compliance Program for small customers. Additionally, broader regulatory awareness and compliance issues in the medical waste industry have aided in market acceptance, as potential customers require more comprehensive services. Stericycle's competitive strengths and good efficiencies enable it to achieve impressive operating profit margins above 30%. Increasing cash flow generation allowed the company to reduce debt by approximately $60 million in both 2002 and 2003. The company is the largest provider of regulated medical waste management services in the U.S. with annual revenues of $450 million, and the only national entity with a fully integrated collection and treatment network. Stericycle's customer base is well diversified, with 301,000 accounts (substantially all of them under contracts of one to five years) and about 95% customer retention rate, factors that enhance stability. Favorable demographics, customer outsourcing, expansion of ancillary services, and regulatory forces drive moderate growth prospects. STOLT-NIELSEN: Issuing New Senior Five-Year Unsecured Bonds ----------------------------------------------------------- Stolt-Nielsen S.A. (Nasdaq: SNSA; Oslo Stock Exchange: SNI) announced plans to issue new senior five-year unsecured bonds with a term from April 15, 2004 to April 15, 2009. The senior five-year bonds will have a fixed yearly coupon of 8.75%. The first tranche of the senior five-year bonds will be NOK 500-700 million, with a total borrowing limit of NOK 1 billion. The nominal value of the senior five-year bonds will be NOK 500,000. The purpose of the bond issue is to refinance part of the Company's current debt. The offering period for the bond issue is from March 26, 2004 to April 2, 2004. The securities offered or to be offered in the private placement of the senior five-year bond issue have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States without registration or an applicable exemption from the registration requirements. About Stolt-Nielsen S.A. Stolt-Nielsen S.A. is one of the world's leading providers of transportation services for bulk liquid chemicals, edible oils, acids, and other specialty liquids. The Company, through its parcel tanker, tank container, terminal, rail and barge services, provides integrated transportation for its customers. The Company also owns 41 percent of Stolt Offshore S.A. (Nasdaq: SOSA; Oslo Stock Exchange: STO), which is a leading offshore contractor to the oil and gas industry. Stolt Offshore specializes in providing technologically sophisticated offshore and subsea engineering, flowline and pipeline lay, construction, inspection, and maintenance services. Stolt Sea Farm, wholly-owned by the Company, produces and markets high quality Atlantic salmon, salmon trout, turbot, halibut, sturgeon, caviar, bluefin tuna, and tilapia. * * * As reported in the December 30, 2003 edition of the Troubled Company Reporter, Stolt-Nielsen S.A. (Nasdaq: SNSA; Oslo Stock Exchange: SNI) announced that its primary lenders agreed to extend the waivers of covenant defaults granted by the lenders until May 21, 2004. SNSA also reported that it will pay down its $160 million revolving credit facility by $20 million on February 29, 2004, and that the Company has received an extension on repayment of the remaining $140 million until May 21, 2004. The waiver extensions provide SNSA with increased flexibility on the debt-to-tangible-net-worth covenant during the waiver period, setting the ratio at 2.75-to-1 at November 30, 2003, and 2.65-to-1 at February 29, 2004. SNSA must also maintain a specified minimum tangible net worth level. Pursuant to the waiver terms, SNSA will develop a financial restructuring plan with its lenders by March 31, 2004. Additionally, the waivers call for improvements in SNSA's liquidity during the waiver period through dispositions or capital-raising initiatives, and oblige SNSA to work with its lenders to provide available collateral to unsecured or under-secured lenders during the waiver period. SUNCOS CORPORATION: Creditors' Ballots are Due on April 1, 2004 --------------------------------------------------------------- On February 18, 2004, the U.S. Bankruptcy Court for the District of Delaware approved the Disclosure Statement prepared by Suncos Corporation and its debtor-affiliates for containing adequate information pursuant to Section 1125 of the Bankruptcy Code. The Plan is now in creditors' hands and they are making those decisions. The Court sets April 1, 2004, at 4:00 p.m. Eastern Time as the deadline for creditors to submit votes to accept or reject the Plan. Objections to the Debtors' Plan must be filed and submitted to the Counsel for the Debtors and the Office of the U.S. Trustee not later than April 6, 2004. A hearing to consider the confirmation of the Plan will be held before the Honorable Judge Mary F. Walrath at 4:00 p.m. on April 13, 2004. Suncos Corporation is a Biotechnology company focused on the development of medications for the treatment of chronic inflammatory diseases. The company filed for Chapter 11 Protection on December 23, 2003 (Bankr. Del. Case No.: 03-13888). Mark D. Collins, Esq., at Richards Layton & Finger represents the Debtors. SURE FIT INC: Engages Garden City as Claims and Notice Agent ------------------------------------------------------------ Sure Fit, Inc., and its debtor-affiliates seek permission to appoint The Garden City Group as their claims and notice agent. The Debtors expect Garden City to: a) notify all potential creditors of the filing of the Debtors' bankruptcy petitions and of the setting of the first meeting of creditors, pursuant to Bankruptcy Code Section 341, under the proper provisions of the Bankruptcy Code and the Bankruptcy Rules; b) maintain an official copy of the Debtors' schedules of assets and liabilities and statement of financial affairs, listing the Debtors' known creditors and the amount owed thereto; c) notify all potential creditors of the existence and amount of their respective claims as evidenced by the Debtors' books and records and set forth in the Schedules; d) furnish a notice of the last day for the filing of proofs of claims and a form for the filing of a proof of claim, after such notice and form are approved by this Court; e) file with the Clerk a copy of the notice, a list of persons to whom it was mailed, and the date the notice was mailed, within 10 days of service; f) docket all claims received, maintain the official claims registers for each Debtor on behalf of the Clerk, and provide the Clerk with certified duplicate unofficial Claims Registers on a monthly basis, unless otherwise directed; g) specify, in the applicable Claims Register, the following information for each claim docketed: (i) the claim number assigned, (ii) the date received, (iii) the name and address of the claimant and agent, if applicable, who filed the claim, and (iv) the classification(s) of the claim (e.g. secured, unsecured, priority, etc.); h) record all transfers of claims and provide any notices of such transfers required by Bankruptcy Rule 3001; i) make changes in the Claims Register pursuant to Court Order; j) upon completion of the docketing process for all claims received to date by the Clerk's office, turn over to the Clerk copies of the Claims Registers for the Clerk's review; k) maintain the official mailing list for each Debtor of all entities that have filed a proof of claim, which list shall be available upon request by a party-in-interest or the Clerk; l) assist with, among other things, solicitation, calculation, and tabulation of votes and distribution as required in furtherance of confirmation of plan(s) of reorganization; and m) at the close of the case, box and transport all original documents in proper format, as provided by the Clerk's office, to the Federal Records Center. The Debtors reports that they have in excess of 500 creditors and potential creditors in these cases. The Debtors believe that Garden City is well-qualified to serve in the capacity as claims and notice agent and that its retention is in the best interests of the estates and the creditors. Garden City expects to receive $5,000 retainer from the Debtors and would apply this amount first against prepetition fees and expenses and would apply the balance against postpetition fees and expenses next. Headquartered in New York, New York, Sure Fit, Inc. -- http://www.surefit.net/-- sells home furniture coverings, manufactures and markets one-piece slipcovers and furniture throw covers. The Company filed for chapter 11 protection on March 7, 2004 (Bankr. S.D.N.Y. Case No. 04-11495). David C. McGrail, Esq., at Dechert LLP represents the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed estimated debts and assets of over $50 million each. SYMPHONY HEALTHCARE IV: Involuntary Case Summary ------------------------------------------------ Alleged Debtor: Symphony Healthcare IV, LLC c/o Kenneth Perry 210 12th Ave So #209 Nashville, Tennessee 37203 Involuntary Petition Date: March 23, 2004 Case Number: 04-32592 Chapter: 7 Court: District of Oregon (Portland) Judge: Trish M. Brown Petitioners' Counsel: Gene Mechanic, Esq. Mechanic, Stuart & Gibson LLP 1020 South West Taylor Street #530 Portland, OR 97205 Tel: 503-228-3862 Petitioners: Maureen Howe 31112 North East 59th LaCenter, WA 98629 Keith L. Solberg 5619 North Moore Portland, OR 97217 Judith A. Cox 144 South East 52 Avenue Portland, OR 97215 Rene Miranda 4624 South East Jackson Milwaukee, OR 97222 Cathleen Cornett 2830 South East Pardee Street Portland, Oregon 97202 Joyce Long 2813 South East Risley Avenue Milwaukie, OR 97267 Sharman Aillon 13895 South West Barrows Road #104 Beaverton, OR 97007 Wilda Noelle 9735 South West Tualatin Road Tualatin, OR 97062 Doug Ng 6620 South West 169th Avenue Beaverton, OR 97007 Total Amount of Claims: $20,220 SYSTEMONE TECHNOLOGIES: Dec. 31, 2003 Deficit Tops $39 Million -------------------------------------------------------------- SystemOne Technologies Inc. (OTC Bulletin Board: STEK) reported operating results for the twelve months ended December 31, 2003. Revenues for the twelve months ended December 31, 2003 were $16,847,000 compared to revenues of $17,720,000 for the corresponding period of 2002. The Company generated an operating profit for the twelve months ended December 31, 2003 of $2,342,000 compared with an operating profit of $3,778,000 for the corresponding period of 2002. The Company's net income for the twelve months ended December 31, 2003, which included other income of $5,779,000, was $5,272,000, compared with net income of $972,000, for the corresponding period of 2002. The company's net income attributable to common stock for the twelve months ended December 31, 2003 was $3,036,000 or a net income of $.61 cents per share, compared with a net loss of $1,323,000 or a loss of $.28 cents per share, in 2002. The Company reported that revenues declined due to the termination of its Exclusive Marketing and Distribution Agreement with Safety- Kleen. The agreement was terminated on September 30, 2003 and SystemOne received a $14 million settlement, which will be used to rebuild the Company's Marketing and Distribution channels and repay debt. Chief Executive Officer Paul I. Mansur stated, "The Company's results include a one-time gain in the amount of $5,779,000 resulting from the termination of the Exclusive Marketing and Distribution Agreement with Safety- Kleen." Mansur added, "Because Safety-Kleen was the Company's only customer, we must establish new distribution channels for our products. We are currently undertaking that effort and to date we have communicated with more than 90 potential distributors nationwide. We believe that approximately 40 to 50 distributors in this group will be qualified distributors for our products." Mansur added, "Approximately eight distributors have been appointed to date and the Company began shipping initial orders to its new distributors in the first quarter of 2004. We expect to ship approximately 150 units during the first quarter of 2004 with increases throughout the year. Mansur further added, "There can be no assurances that we will be successful in retaining these distributors and increasing shipments." At December 31, 2003, SystemOne Technologies Inc.'s balance sheet shows a total stockholders' deficit of $39,009,666 compared to $42,045,483 the prior year. Founded in 1990, SystemOne Technologies designs, manufactures, sells and supports a full range of self-contained recycling industrial parts-washing products for use in the automotive, aviation, marine and general industrial markets. The Company has been awarded eleven patents for its products, which incorporate environmentally friendly, proprietary resource-recovery and waste- minimization technologies. The Company is headquartered in Miami, Florida. T-K BUSINESS INVESTMENTS: Voluntary Chapter 11 Case Summary ----------------------------------------------------------- Debtor: T-K Business Investments, L.L.C. 6116 East ASTER Drive Scottsdale, Arizona 85254 Bankruptcy Case No.: 04-04424 Chapter 11 Petition Date: March 17, 2004 Court: District of Arizona (Phoenix) Judge: Charles G. Case II Debtor's Counsel: Warren J. Stapleton, Esq. Osborn Maledon, PC 2929 North Central Avenue, #2100 Phoenix, AZ 85012 Tel: 602-640-9000 Fax: 602-664-2065 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. TXU CORP: TXU Capital Redeems Cumulative Trust Pref. Securities --------------------------------------------------------------- TXU (NYSE: TXU) announced the redemption by TXU Capital I of all $230 million aggregate liquidation amount of the 7 1/4% Cumulative Trust Preferred Capital Securities of TXU Capital I at a redemption price equal to $25 per Trust Preferred Security plus accumulated and unpaid distributions from March 31, 2004 to the redemption date of April 24, 2004. The payment will be made on April 26, 2004 to holders of record as of April 24, 2004. The Trust Preferred Securities are listed on the New York Stock Exchange under the symbol "TXU PrA." The Trust Preferred Securities were issued in December 1998 and represent preferred ownership interests in the assets of TXU Capital I. The sole assets of TXU Capital I are 7 1/4% Junior Subordinated Debentures, Series A (Debentures) issued by TXU Corp. TXU Corp. has elected to redeem the Debentures and such redemption will result in the redemption of the Trust Preferred Securities on the date specified above. The redemption of the Trust Securities will be made only to the extent that TXU Capital I receives proceeds from the contemporaneous redemption by TXU Corp. on the redemption date of all of its outstanding Debentures, Series A. A notice of redemption is being sent to all registered holders of the Trust Preferred Securities. Copies of the notice of redemption may be obtained from The Bank of New York, the property trustee for the Trust Preferred Securities, by calling The Bank of New York at (800) 254-2826. TXU is a major energy company with operations in North America and Australia. TXU manages a diverse energy portfolio with a strategic mix of over $31 billion of assets. TXU's distinctive business model for competitive markets integrates generation, portfolio management, and retail into one single business. The regulated electric and natural gas distribution and transmission businesses complement the competitive operations, using asset management skills developed over more than one hundred years, to provide reliable energy delivery to consumers and earnings and cash flow for stakeholders. In its primary market of Texas, TXU's portfolio includes 19,000 megawatts of generation and additional contracted capacity with a fuel mix of coal/lignite, natural gas/oil, nuclear power and wind. TXU serves more than five million customers in North America and Australia, including 2.6 million competitive electric customers in Texas where it is the leading energy retailer. Visit http://www.txucorp.com/for more information about TXU. * * * As reported in the Troubled Company Reporter's March 18, 2004 edition, the Supreme Court of the State of New York, County of New York, granted TXU's motion to dismiss a lawsuit filed against TXU by purported beneficial owners of approximately 39 percent of certain TXU equity-linked securities issued in October 2001. In the opinion, the Court held that TXU's European subsidiary is not TXU's "property". As a result, the termination event and event of default alleged by the plaintiffs have not occurred. The plaintiffs have the right to file an appeal of this decision. However, TXU believes the claims are completely without merit. UAL: Names Arnold Lewis Marketing VP & United Loyalty President --------------------------------------------------------------- UAL Corporation (OTC Bulletin Board: UALAQ), parent of United Airlines, named Arnold Lewis vice president-Marketing Programs and president-United Loyalty Services. In this role, Lewis will have worldwide responsibility for the award-winning Mileage Plus program; all of the program's partner associations, including the affinity credit card program with BankOne and Visa; and its frequent flyer relationships with Star Alliance partners. In addition, he will manage the company's direct marketing communications and customer database strategy. He will also oversee the United Loyalty Services membership programs, which include the Silver Wings Plus seniors' program, the newly launched Ameniti program for luxury travel, and MyPoints.com -- the leading provider of Internet direct marketing services. Lewis will report to Martin White, senior vice president- Marketing. "Arnold brings years of experience managing marketing partnerships and alliances with major airlines and other consumer retail companies," said White. "His familiarity with loyalty programs and the financial community will make him a valuable part of our team. We are pleased to be welcoming such a seasoned and talented marketing professional." Most recently, Lewis was Vice President for Strategic Alliances at AARP Services, Inc. In that position, he was responsible for developing strategies for external partnerships and alliances. Prior to joining AARP in October 2003, Lewis held various roles with American Express TRS Co., Inc., from 1988-2003, including Vice President, Acquisition, in the company's Consumer Card Services Group. During his career with American Express, Lewis managed card marketing and business relationships with several airlines and hotels in the U.S., including major partnerships with Delta Air Lines and Starwood Hotels. He also played a key role in the development and execution of marketing programs with United, Hertz and Hilton Hotels and managed negotiated partner relationships with several low-fare airlines. He was also part of the original team that created and managed the Membership Rewards program and oversaw partners in other industries such as lodging, rental car, retail and theme parks. About United United, United Express and Ted operate more than 3,400 flights a day on a route network that spans the globe. News releases and other information about United can be found at the company's website at http://www.united.com/ 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: Objects to 9/11 Claims Totaling $60 Billion ------------------------------------------------------------ James H.M. Sprayregen, Esq., at Kirkland & Ellis, tells Judge Wedoff that United Airlines objects to $60,260,000,000 in claims filed by 9/11 Insurers that provided coverage to property owners that allegedly suffered damages in the events of September 11, 2001. In particular, the Debtors dispute 28 claims filed by certain insurers totaling $1,900,000,000 based on first party policies underwritten in the London Market. The Debtors also dispute seven claims filed by Underwriters at Lloyd's of London. The Lloyd's Underwriters have commenced an action before the United States District Court for the Southern District of New York against various air carriers, including United Air Lines, Inc., based on the events of September 11, 2001. The Lloyd's Underwriters seek damages as subrogees of various insureds that sustained property damage and business interruption in the September 11, 2001 events. The Lloyd's Syndicate Nos. have filed Claims each for $1,000,000,000 -- 33, 0376, 1243, 1206, 2003 and 1008. Great Lakes Reinsurance filed Claim No. 40214 for $1,000,000,000. The Debtors ask the Court to disallow the 9/11 Insurers' Claims pursuant to the Air Transportation and Safety and System Stabilization Act of 2001. Section 408 limits an air carrier's liability for the events of September 11 to the carrier's insurance policy limits. Thus, the 9/11 Insurers cannot maintain a claim against the Debtors in their bankruptcy cases. The Debtors also ask the Court to disallow 9/11 Individuals Claims based on the same provision of the Act, which limits the 9/11 Insurers' Claims to the Debtors' insurance coverage. The 9/11 Individuals allegedly suffered damages due to September 11 attacks. September 11 Victims may participate in a special Victims Compensation Fund established by the Act or may seek compensation from the Debtors' insurance coverage. These are exclusive remedies available to 9/11 Individuals and, as a result, they cannot assert a Claim directly against the Debtors. There are 348 9/11 Individuals Claims aggregating $53,121,000,000. The Claims include: Claimant Claim No. Claim Amount -------- --------- ------------ Michelle Gelinas 37733 $40,000,000,000 Jennifer Brennan 36233 200,000,000 Rosa Calcedo 36221 200,000,000 Teresa Cunningham 36232 200,000,000 Mary Danahy 36218 200,000,000 Beverly Eckert 36219 200,000,000 Bandra Felt 36224 200,000,000 Nancy Foster 36225 200,000,000 Michael Giordano 36226 200,000,000 Patricia Lewis 36230 200,000,000 Chem York 36223 200,000,000 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) UNITED AIRLINES: Files February Results with Bankruptcy Court ------------------------------------------------------------- UAL Corporation (OTC Bulletin Board: UALAQ), the holding company whose primary subsidiary is United Airlines, filed its February Monthly Operating Report (MOR) with the United States Bankruptcy Court. The company reported a loss from operations of $112 million, which represents an improvement of approximately $195 million over February 2003. Mainline passenger unit revenue improved 12% year-over-year, well ahead of the industry average. The company reported a net loss of $259 million, including $119 million in reorganization expenses. The majority of reorganization expenses were non-cash items resulting from the rejection of aircraft as the company aligns its fleet with the market. UAL met the requirements of its debtor-in-possession (DIP) financing, including its trailing 12-month EBITDAR (earnings before interest, taxes, depreciation amortization and aircraft rent) covenants, for the thirteenth straight month. "United continues to make steady progress in our restructuring," said Jake Brace, United's executive vice president and chief financial officer. "Our unit revenue was up 12%, our mainline unit costs for February improved 14% year-over-year, and we improved our cash position in February by more than $200 million, resulting in positive cash flow of $7 million a day." UAL ended February with a cash balance of about $2.5 billion, which included $654 million in restricted cash (filing entities only). The cash balance increased $205 million during the month of February. United, United Express and Ted operate more than 3,400 flights a day on a route network that spans the globe. News releases and other information about United may be found at the company's website at http://www.united.com/ 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 ENERGY: Secures $1.75 Million Financing from Laurus Funds ---------------------------------------------------------------- United Energy Corp. (OTC Bulletin Board: UNRG.OB) has entered into a $1.75 million financing arrangement with Laurus Master Fund, Ltd., a financial institution specializing in funding small and micro-capitalization companies. Under the arrangement, United Energy issued a $1.75 million secured convertible term note with a variable rate coupon based on the WSJ Prime Rate. The term note is convertible into equity at an initial conversion price of $1.00 per share. Laurus Funds was also issued warrants to purchase up to 300,000 shares of United Energy's common stock. United Energy's Chairman and CEO, Ron Wilen stated, "The arrangement with Laurus Funds provides United Energy additional capital to grow through a more aggressive international sales campaign for its current line of specialty chemicals and possibly the acquisition of value-added operating companies producing other environmentally-friendly chemicals. We view this transaction as extremely positive for United Energy and our shareholders." About United Energy Headquartered in Secaucus, New Jersey, United Energy is actively engaged in the development, manufacture and sale of environmentally friendly specialty chemical products. United Energy's leading product is its KH-30(R) multifunctional dispersant and its line of related products, KX-91(R) and KH- 30S(R), which have proven to be effective cleaners in oil and gas wells, pipelines and storage tanks. * * * In the Troubled Company Reporter's January 5, 2004 edition, it was reported that during the past two fiscal years ended March 31, 2003 and 2002, United Energy Corporation has recorded aggregate losses from operations of $4,194,000 and has incurred total negative cash flow from operations of $3,034,000 for the same two- year period. During the six months ended September 30, 2003 the Company experienced a net loss from operations of $1,290,265 and negative cash flow from operating activities of $1,097,823. The Company does not currently have an operating line of credit. These matters raise substantial doubt about the Company's ability to continue as a going concern. The Company's continued existence is dependent upon several factors, including increased sales volume, collection of existing receivables and the ability to achieve profitability from the sale of the Company's product lines. In order to increase its cash flow, the Company is continuing its efforts to stimulate sales and cut back expenses not directly supporting its sales and marketing efforts. The Company is currently investigating with certain major shareholders to provide for additional sources of capital. WEIRTON STEEL: Proposes Non-Operating Assets Bidding Protocol ------------------------------------------------------------- Mark E. Freedlander, Esq., at McGuireWoods, in Pittsburgh, Pennsylvania, told 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. With the Court's consent, Harry Davis & Company will conduct the Real Property Auction Sale of the Debtors' Non-operating Real Property Assets according to these terms and conditions: A. The Real Property Auction Sale will be held at Weirton Steel Corporation, General Office Building, 400 Three Springs Drive, Weirton, West Virginia, 26062 on April 13, 2004 at 1:00 p.m., prevailing Eastern Time. B. All Non-operating Real Property Assets will be sold by Harry Davis with reserve. C. All bidding on each of the Non-operating Real Property Assets will be continuous and competitive and will not end until all bidders have submitted their last and best offers. At the conclusion of the bidding on a Non-operating Real Property Asset, Harry Davis will announce the highest or best bid and bidder. When its bid is accepted, each Successful Bidder of a Non-operating Real Property Asset will be required to: (1) execute an Agreement of Sale; and (2) deliver the Earnest Money in the form of a cashier's check or immediately available funds payable to the Escrow Agent. The Earnest Money will be retained by the Escrow Agent in escrow pending 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. All net proceeds of the sale of each Non-operating Real Property Asset will be held in a separate interest-bearing escrow account by the Debtors' counsel. Bids must not be subject to financing or any other contingencies not otherwise expressly contained in the Agreement of Sale. D. No hearing to confirm the results of the Real Property Auction Sale will occur. Instead, within five business days after the conclusion of the Real Property Sale, the Debtors' counsel will file with the Court a "Report of Real Property Auction Sale" listing each Non-Operating Real Property Asset, the Successful Bidder and Successful Bid for each Non-operating Real Property Asset. Within five business days after the completion of all of the Non-Operating Real Property Assets' Closings, the Debtors' counsel will file a "Report of Real Property Auction Sales Closings" with the Bankruptcy Court in accordance with the requirements of Rule 6004 of the Federal Rules of Bankruptcy Procedure. (Weirton Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000) WESTERN GAS: Will Present at Howard Weil's March 30 Conference -------------------------------------------------------------- Western Gas Resources, Inc. (NYSE: WGR) announced that Peter Dea, the Company's President and Chief Executive Officer will present at the Howard Weil Energy Conference on March 30, 2004 at 2:45 P.M. Eastern Standard Time. The presentation materials will be available on Western's web site beginning March 30, 2004 at approximately 2:45 P.M. Eastern Standard Time. The web site address is http://www.westerngas.com/ Go to Financial/Investor Information, then Current News. Western is an independent natural gas explorer, producer, gatherer, processor, transporter and energy marketer providing a broad range of services to its customers from the wellhead to the sales delivery point. The Company's producing properties are located primarily in Wyoming, including the developing Powder River Basin coal bed methane play, where Western is a leading acreage holder and producer, and the rapidly growing Pinedale Anticline. The Company also designs, constructs, owns and operates natural gas gathering, processing and treating facilities in major gas-producing basins in the Rocky Mountain, Mid-Continent and West Texas regions of the United States. For additional Company information, visit Western's web site at http://www.westerngas.com/ As reported in the Troubled Company Reporter's February 26, 2004 edition, Western Gas Resources, Inc.'s outstanding credit ratings have been affirmed by Fitch Ratings as follows: -- Senior unsecured debt rating 'BBB-'; -- Senior subordinated notes 'BB+'; -- Preferred stock 'BB'. In addition, Fitch has assigned a 'BBB-' rating to WGR's $300 million revolving credit facility due April 2007. The Rating Outlook is Stable. WGR's ratings reflect the core competencies of its natural gas midstream operations and growing Rocky Mountain natural gas exploration and production (E&P) unit. In addition, the Stable Rating Outlook incorporates WGR's improved balance sheet profile and the expectation that consolidated credit measures will remain consistent with WGR's ratings even under a stressed commodity price environment. US WIRELESS DATA: Files Chapter 11 Petition in S.D. New York ------------------------------------------------------------ U.S. Wireless Data, Inc. ("USWD") (OTC.BB:USWE), a leader in wireless transaction processing, filed a voluntary petition for relief under Chapter 11 of the United States Bankruptcy Code, in the U.S. Bankruptcy Court for the Southern District of New York. The company filed its petition to effect the sales of its two primary business activities which, together, represent substantially all the company's assets. The company's bankruptcy counsel is Halperin & Associates, and corporate counsel is Mintz Levin Cohn Ferris Glovsky & Popeo, P.C. The company also announced that it had reached agreement with NBS Synapse Corporation ("NBS") to sell its Synapse point-of-sale gateway business to NBS for $2.85 million in cash plus up to $2.15 million credit for free payment processing services to be rendered to USWD for its vending operations. NBS will also assume certain liabilities. NBS is indirectly majority owned by Brascan Financial Corporation, a Toronto-based financial services company that provides asset management and merchant banking services. The company simultaneously announced that it had reached agreement with SANI Operating Co., LLC to sell its vending operations to Sani, including the $2.15 million credit for free payment processing services from NBS, for $1,600,000 in cash plus the assumption of certain liabilities. Under the Bankruptcy Code, other parties will have an opportunity to submit bids for these two business activities through a court- supervised competitive bidding process. The sales of these businesses to the winning bidder(s), which are subject to the approval of the U.S. Bankruptcy Court, are expected to be consummated by May 21, 2004. In the interim, USWD's businesses will continue uninterrupted and USWD will continue to provide its customers with the same quality of service they have come to expect. In order to maintain its continuity of service, the company also announced that it has arranged debtor-in-possession financing with Sani in order to fund the company's ongoing operations during the bankruptcy process until the sales close. Subject to the approval of the Bankruptcy Court, the DIP financing will provide adequate funds to support the company's ongoing business requirements. The company does not expect that the proceeds from the sales described above or from the sales of any other assets will likely be sufficient to fund any payment to shareholders once creditor claims have been administered by the U.S. Bankruptcy Court. "While we made substantial progress over the past several years, which has included increasing our revenues significantly through the addition of over 34,000 active wireless sites, restructuring our operations to dramatically reduce our operating expenses and negative cash flow and securing trademark authorization for our wireless/cashless vending solution, thereby reinforcing the commercial viability of our technology for the vending community, we were simply unable to increase our revenues sufficiently to bring the company to profitability or to secure additional financing to maintain our viability," said Chairman and Chief Executive Officer Dean M. Leavitt. The company believes that the chapter 11 filing and financing will enable customers to continue to receive the necessary services, products and support while the company effectuates the sales of its business units as going concerns to financially sound purchasers. About U.S. Wireless Data U.S. Wireless Data provides proprietary enabling solutions and wireless transaction delivery and gateway services to the payments processing industry. The company's customers include credit card processors, merchant acquirers, banks, automated teller machine ("ATM") distributors and their respective sales organizations, as well as certain businesses seeking new solutions to make it easier for their customers to buy their products or services. The company offers these entities turnkey wireless and other transaction management services. The company also provides its customers with proprietary wireless enabling products designed to allow for card acceptance. These services and products may be utilized by conventional card accepting retailers as well as emerging card accepting market segments such as vending machines, quickservice (fast-food) and quick casual restaurants, taxis and limousines, in-home service providers, door-to-door sales, contractors, delivery services, sporting events, and outdoor markets. The company's services and products may also be used for gathering telemetric information from remote equipment such as vending machines. Further information is available at http://www.uswirelessdata.com/ US WIRELESS DATA: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: U.S. Wireless Data, Inc. 750 Lexington Avenue New York, New York 10022 Bankruptcy Case No.: 04-12075 Type of Business: The Debtor is a Delaware corporation that provides proprietary enabling solutions and wireless transaction delivery and gateway services to the payments processing industry. See http://www.uswirelessdata.com/ Chapter 11 Petition Date: March 26, 2004 Court: Southern District of New York (Manhattan) Judge: Robert D. Drain Debtor's Counsel: Alan David Halperin, Esq. Halperin & Associates 1775 Broadway Suite 515 New York, NY 10019 Tel: 212-765-9100 Fax: 212-765-0964 Total Assets: $2,719,000 Total Debts: $5,709,000 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Cingular Interactive L.P. Trade debt $346,412 2612 North Roan Street Johnson City, TN 37601 Motient Trade debt $175,417 First Data Merchant Services Trade debt $150,000 Peter J. Solomon Company Outstanding fees for $150,000 investment banking services AT&T Wireless Trade debt $60,175 Verizon Wireless Trade debt $54,636 International Plaza Trade debt $27,246 Associates Pensar Electronic Solutions Trade debt $22,981 AT&T Trade debt $22,457 Concord Trade debt $21,930 Deloitte & Touche LLP Outstanding fees for $20,560 auditing services Pepsi North America Trade debt $17,383 MCI Trade debt $16,473 Arcavista Corporation Trade debt $12,500 Weiser LLP Trade debt $7,592 Lippert/Heilshorn & Trade debt $6,969 Associates Leasecomm Corporation Trade debt $4,827 AT&T Trade debt $4,574 Colorado Mountain View Trade debt $4,039 McNeill Group, Inc. $3,790 WESTPOINT: Wants to Extend Plan-Filing Exclusivity Until July 29 ---------------------------------------------------------------- WestPoint Stevens Inc. (OTC Bulletin Board: WSPT) -- http://www.westpointstevens.com/-- filed a motion with its Bankruptcy Court to extend the Company's exclusive right to file a chapter 11 plan until July 29, 2004. The extension will provide the Company with the necessary time to complete its 5-year business plan. M.L. (Chip) Fontenot, the Company's President and Chief Executive Officer, said, "Completion of the business plan is fundamental to our emergence from chapter 11. In light of the rapid globalization of our industry, it is important that we take the time to thoughtfully consider the optimal business strategies for the Company as we prepare to discuss a chapter 11 plan with our creditors." WestPoint Stevens Inc. is the nation's premier home fashions consumer products marketing company, with a wide range of bed linens, towels, blankets, comforters and accessories marketed under the well-known brand names GRAND PATRICIAN, PATRICIAN, MARTEX, ATELIER MARTEX, BABY MARTEX, UTICA, STEVENS, LADY PEPPERELL, SEDUCTION, VELLUX and CHATHAM -- all registered trademarks owned by WestPoint Stevens Inc. and its subsidiaries -- and under licensed brands including RALPH LAUREN HOME, DISNEY HOME, and GLYNDA TURLEY. WestPoint Stevens can be found on the World Wide Web at http://www.westpointstevens.com/ WOODWORKERS WAREHOUSE: All Prepetition Claims are Due on April 3 ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware establishes April 3, 2004, at 4:00 p.m. Eastern Time as the last date for creditors to file proof of any claim arising before December 23, 2003, against Woodworkers Warehouse, Inc. Claims previously allowed by the Court and claims previously paid by the Debtor are exempt from the Bar Date. Creditors must file written requests for payment and file them by mail, hand-delivery or courier with the Court-approved Claims Agent: Delaware Claims Agency LLC Woodworkers Warehouse Inc. Claims Agent 103 W. 7th Street, 3rd Floor Wilmington, DE 19801 Headquartered in Lynn, Massachusetts, Woodworkers Warehouse, Inc., is a retailer of woodworking equipment and accessories. The Company filed for chapter 11 protection on December 2, 2003 (Bankr. Del. Case No. 03-13655). Christopher A. Ward, Esq., at The Bayard Firm represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $28,366,000 in total assets and $34,669,000 in total debts. WORKFLOW: Glass Lewis Recommends Voting `Against' Merger Proposal ----------------------------------------------------------------- Pacific Coast Investment Partners LLC, a private investment partnership, announced that Glass Lewis, a leading provider of proxy advisory services to institutional investors, mutual funds and other fiduciaries has recommended to clients that they vote AGAINST the agreement and plan of merger between Workflow Management, Inc. (NasdaqNM: WORK) and WF Holdings, Inc., an entity formed and controlled by Perseus, L.L.C. and The Renaissance Group, LLC. The report by Glass Lewis also indicates that its clients should vote AGAINST a second proposal to adjourn the merger meeting if there are not sufficient votes for a quorum in order to provide additional time to solicit proxies. In a 12-page report to its clients dated as of March 22, 2004, Glass Lewis states that it "believes that the proposal to approve the merger agreement is not in the best interests of shareholders. Accordingly, we recommend that shareholders vote AGAINST this proposal." The Glass Lewis report goes on to state the following about the Workflow Management proposal: "The Board of Directors appears to have pushed a sale agenda for the Company without properly evaluating all of its alternatives. Workflow's dismissal of alternative financing strategies as initially adverse to its stock price strikes us as short-sighted. We also view with some concern the repeated drops in WF Holdings' bid; this is especially troubling in light of the conclusion of the Company's financial advisor that a LBO transaction would likely yield greater value for shareholders. "Ultimately, however, we are most concerned about the Board's admission that many of the discussions regarding the potential acquisition and the covenant waivers occurred outside the presence of members of senior management. While we believe the bank debt amendment was beneficial, we disagree with the board's conclusion that it is customary to negotiate covenant amendments without management participation, and we have trouble understanding how shareholders are best served by having the management excluded from these negotiations with management is charged with meeting the covenants. Similarly, we are hard pressed to agree with the Board that management is routinely excluded from merger-related discussions. With this in mind, it is hard for us to agree that the Board pursued the path most likely to maximize shareholder value. Accordingly, we recommend shareholders to vote AGAINST the proposed transaction." About Workflow Management, Inc. Workflow Management, a leading provider of end-to-end print solutions with consolidated revenues of $622.7 million for its fiscal year ended April 30, 2003, employs approximately 2,700 persons and operates throughout the United States, Canada and Puerto Rico with 52 sales offices, 12 manufacturing facilities, and 14 warehouses and distribution centers. Company management believes that the Company's services, from production of logo- imprinted promotional items to multi-color annual reports, have a reputation for reliability and innovation. Workflow's complete set of solutions includes document design and production consulting; full-service print manufacturing; warehousing and fulfillment; and one of the industry's most comprehensive e-procurement, management and logistics systems. Through custom combinations of these services, the Company can deliver substantial savings to customers - eliminating much of the hidden cost in the print supply chain. By outsourcing print-related business processes to Workflow Management, customers may streamline their operations and focus on their core business objectives. For more information, go to the Company's Web site at http://www.workflowmanagement.com/ WORLDCOM INC: Resolves Class 5 Bank Claims ------------------------------------------ Pursuant to the Plan and Confirmation Order for the Worldcom Inc. Debtors, the amount of the Allowed Bank Claims arising under the 364-Day Facility will be determined by agreement of the parties or, absent agreement, by the Court. The amount of the Allowed Bank Claims arising under the Revolving Credit Facility will include the amount of letters of credit issued and outstanding as of the Commencement Date under the Revolving Credit Facility that are actually drawn before the replacement or expiration of the letters of credit. The Plan and Confirmation Order also provide that Bank of America, N.A., the Bank Agent, will have an allowed Class 5 Claim in the amount of its reasonable fees and expenses incurred before the Effective Date that are rendered or incurred in connection with the 364-Day Facility or the Revolving Credit Facility. To resolve these issues and other related matters, the Debtors, the Class 5 Banks, and Bank of America agree that: A. The Holders of Class 5 Bank Claims in the 364-Day Facility will have an allowed Class 5 Claim for $2,658,103,479. On the Effective Date, the Debtors will make a distribution of New Notes and New Common Stock in respect of this claim amount; B. The Holders of Class 5 Bank Claims in the Revolving Credit Facility will have an allowed Class 5 Claim for $6,424,385, plus the amount of any letters of credit that are drawn before the Effective Date. On the Effective Date, the Debtors will make a distribution of New Notes and New Common Stock in respect of this claim amount, including the amount of any letters of credit that are drawn before the Effective Date; C. The Holders of Class 5 Bank Claims in the Revolving Credit Facility will also have a contingent claim for $38,730,920 for undrawn letters of credit. The Holders of Class 5 Bank Claims in the Revolving Credit Facility will receive a distribution of New Common Stock for letters of credit that are drawn after the Effective Date but before their replacement or expiration. Distributions on account of letters of credit drawn after the Effective Date but before the expiration or replacement will be made on the Subsequent Distribution Date, as defined in the confirmed Plan; D. Bank of America will have an allowed Class 5 Claim for $1,021,033 for its reasonable fees and expenses incurred before the Effective Date that are rendered or incurred in connection with the 364-Day Facility and the Revolving Credit Facility. On the Effective Date, the Debtors will make a distribution of New Notes and New Common Stock in respect of this claim amount; E. On the Effective Date, the Debtors will distribute $290,000 in cash to Bank of America, representing partial satisfaction of the reasonable fees and expenses of Bank of America and its counsel, as well as postpetition letter of credit fees; and F. The allowance of Lender Expenditures of the Holders of Class 5 Bank Claims in the 364-Day Facility, other than those of Bank of America, totaling $761,740, will be resolved by separate agreement of the parties or, absent agreement, by the Court. The parties agree that the resolution of the allowance of Lender Expenditures of the Holders of Class 5 Bank Claims in the 364-Day Facility, other than those of Bank of America, will not delay the distributions. 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) * BOND PRICING: For the week of March 29 - April 2, 2004 -------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- Adelphia Communications 3.250% 05/01/21 40 Adelphia Communications 6.000% 02/15/06 41 American & Foreign Power 5.000% 03/01/30 70 Best Buy 0.684% 06/27/21 72 Burlington Northern 3.200% 01/01/45 59 Calpine Corp. 7.750% 04/15/09 71 Calpine Corp. 7.875% 04/01/08 73 Calpine Corp. 8.500% 02/15/11 73 Calpine Corp. 8.625% 08/15/10 73 Comcast Corp. 2.000% 10/15/29 40 Cummins Engine 5.650% 03/01/98 75 Cox Communications Inc. 2.000% 11/15/29 37 Delta Air Lines 7.900% 12/15/09 66 Delta Air Lines 8.000% 06/03/23 73 Delta Air Lines 8.300% 12/15/29 57 Delta Air Lines 9.000% 05/15/16 60 Delta Air Lines 9.250% 03/15/22 59 Delta Air Lines 9.750% 05/15/21 60 Delta Air Lines 10.000% 08/15/08 73 Delta Air Lines 10.125% 05/15/10 69 Delta Air Lines 10.375% 02/01/11 74 Delta Air Lines 10.375% 12/15/22 62 Elwood Energy 8.159% 07/05/26 70 Exide Corp. 2.900% 12/15/05 3 Federal-Mogul 7.500% 01/15/09 26 Fibermark Inc. 10.750% 04/15/11 55 Finova Group 7.500% 11/15/09 62 Foamex L.P. 9.875% 06/15/07 69 General Physics 6.000% 06/30/04 52 Goodyear Tire 7.000% 03/15/28 75 Inland Fiber 9.625% 11/15/07 57 Level 3 Communications 6.000% 09/15/09 61 Levi Strauss 7.000% 11/01/06 75 Levi Strauss 12.250% 12/15/12 75 Liberty Media 3.750% 02/15/30 71 Lucent Technologies 6.450% 03/15/29 74 Mirant Americas 7.200% 10/01/08 72 Mirant Americas 7.625% 05/01/06 72 Mirant Americas 8.300% 05/01/11 71 Mirant Americas 9.125% 05/01/31 72 Northern Pacific Railway 3.000% 01/01/47 57 Oakwood Homes 7.875% 03/01/04 40 Oakwood Homes 8.125% 03/01/09 49 Osprey Trust 7.797% 01/15/03 37 Select Notes 5.700% 06/15/33 75 Universal Health Services 0.426% 06/23/20 60 Werner Holdings 10.000% 11/15/07 75 ********* 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 ***