/raid1/www/Hosts/bankrupt/TCR

/raid1/www/Hosts/bankrupt/TCR_Public/040405.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, April 5, 2004, Vol. 8, No. 67 Headlines AAIPHARMA INC: S&P Maintains Ratings Watch Over $40M Bank Loan ADELPHIA COMMS: Wants Nod to Assign WNSA Radio Station Contracts ADSTAR: Stock Price Triggers Series A Preferred Stock Conversion AIR CANADA: Projected Cash Budget Through June 18, 2004 AMERADA HESS: John Rielly Named Sr. VP & Chief Financial Officer AMERICAN SPORTS: Case Summary & 65 Largest Unsecured Creditors ARLINGTON HOSPITALITY: 2003 Net Loss Widens to $5.6 Million ATLANTIC EXPRESS: S&P Assigns B Corporate Credit Rating AVAYA: Will Host 2nd Quarter 2004 Earnings Webcast on April 27 BRIDGEPORT METAL: Case Summary & 20 Largest Unsecured Creditors BUCKEYE: Closing Cork, Ireland, Manufacturing Facility in August CALPINE: Completes Purchase of Brazos Power Plant for $175 Million CALPINE CORP: Inks Safeway Inc. Three-Year Power Sales Contract CONTINENTAL AIRLINES: Operating Results Improve in March 2004 CONTINENTAL AIRLINES: Elects Oscar Munoz to Board of Directors CWMBS INC: Fitch Takes Rating Actions on Series 2004-J3 Notes DEPCO INC: Case Summary & 20 Largest Unsecured Creditors DII INDUSTRIES: Turns to King & Spalding for Litigation Advice DPL INC: Fitch Lowers Ratings & Watch Negative Continues ENCORE ACQUISITION: S&P Rates $150M Senior Sub. Debt Issue at B ENERGY WEST: Modifies LaSalle Bank-Backed Credit Facility ENRON CORP: Asks Court to Clear Springs Settlement Agreement ENRON CORP: Reaches Pact Settling Powerspares Dispute EQUIFIN: Records Losses Despite Increased Revenues in Q4 & FY 2003 FALCON PRODUCTS: Names Phillip Pacey VP & Chief Financial Officer FEDERAL FORGE: Turns to Conway MacKenzie for Financial Advice FOIL SOLUTIONS: Case Summary & 20 Largest Unsecured Creditors GATEWAY INC: Shutting Down 188 Retail Stores on April 9 GENERAL CHEMICAL: Exits Chapter 11, Shedding $106 Million of Debt GERDAU AMERISTEEL: Raising $100-Mil. in Private Equity Placement GMAC COMM'L: Fitch Affirms BB Rating to 2000-FL-B Class F Notes HALE-HALSELL: Gets Nod to Hire Riggs Abney as Bankruptcy Counsel HARBOR FUNDING: Case Summary & 9 Largest Unsecured Creditors HAYES LEMMERZ: Permanently Closing Howell, Michigan, Mfg. Facility HERITAGE NETWORKS: Case Summary & 20 Largest Unsecured Creditors HIGH VOLTAGE: Taps Evercore Restructuring for Financial Advice IA GLOBAL: Auditors Lift Going Concern Doubts After Financing INDUSTRIAL PAINT: Case Summary & 40 Largest Unsecured Creditors INTERNATIONAL STEEL: Preparing $600 Million Senior Debt Offering INT'L WIRE: Continues Hiring of Ordinary Course Professionals KB HOME: Declares Quarterly Dividend Payable on May 27 KMART: Sues Local Governments to Slash 2002 Property Tax Bills MASSEY ENERGY: S&P Affirms Low-B Ratings & Removes CreditWatch MCWATTERS: Closes Sale of Kiena Royalties Portion for $700,000 MIRANT CORP: Scope of Deloitte & Touche's Retention Expands MIRANT CORP: Semco Demands Decision on Zeeland Unit Lease Contract NATIONAL CENTURY: Court Gives Go-Ahead to Conduct Rule 2004 Exams NATIONS GOVERNMENT: Makes Final Liquidating Distribution NES RENTALS: Reorganized Co Says 2003 Earnings Exceed Expectations NRG ENERGY: Moves to Disallow Tacoma City's $25+ Million Claim ON SEMICONDUCTOR: S&P Rates Planned $260M Debt Offering at CCC+ OREGON ARENA: Brings-In Winstead Sechrest as Bankruptcy Counsel O'SULLIVAN IND: Stuart Schotte Succeeds Phillip Pacey as CFO OUTBOARD MARINE: Chapter 7 Trustee Asks Court to Certify Class OWENS CORNING: Investing Up to $3 Million in Newco/India PARMALAT GROUP: Dismisses Speculations About Creditor Recoveries PARMALAT GROUP: Irish Court Places Eurofood IFSC in Liquidation PG&E NATIONAL: US Trustee Wants to Appoint Dan Scotto as Examiner PLAINS ALL AMERICAN: S&P Places B-Level Ratings on Watch Negative PLAINS ALL AMERICAN: Closes Purchase of Link's Crude Oil Business PREMIERE NETWORK: Voluntary Chapter 11 Case Summary QUINTEK: Releases Letter About Plans to Enter Outsourcing Market RCN CORPORATION: Lenders Agree to Forbear Through May 3, 2004 SAMUELS JEWELERS: Emerges From Chapter 11 as a Private Company SENTINEL INSURANCE: Judge Upholds MicroFinancial's $14 Mil. Claim SERVES 1999-1: Fitch Affirms BB- Series 1999-1 Notes Rating SHAW COMMS: Board Nominates Don Mazankowski as Lead Director SHAW COMMS: Connects with Lions Gate for Video-On-Demand Agreement SKYLINE MULTIMEDIA: Comments on Recent Trading Activity SOLUTIA INC: Quimica Gets Nod to Set Off Mutual Obligations SPEIZMAN INDUSTRIES: Paul Demmink Takes Bob Speizman's CEO Post SPEIZMAN: Lonati Declares Default Under March 2004 Agreement SPEIZMAN: Cuts Jobs in Charlotte, NC & Considers Bankruptcy Filing SPIEGEL: Committee Gets Nod to Hire Capstone as Financial Advisor SPRING AIR PARTNERS: Creditors Must File Claims by April 30 STOLT OFFSHORE: Wins $60 Million Pipelay Contract in Trinidad STOLT OFFSHORE: BG International Awards $80MM Contract in Trinidad TEMPUR-PEDIC: Clarifies Statements Regarding Covenant Compliance TRANSACTION NETWORK: S&P Assigns BB Rating to New Bank Facility TRANSMERIDIAN: Auditors Continues Going Concern Qualification USI HOLDINGS: Acquires New York-Based Bertholon-Rowland Corp. US LIQUIDS: Sells All Operating Assets & Deregisters Common Stock US WIRELESS DATA: Signs-Up Mintz Levin as Special Counsel VWR INT'L: S&P Assigns BB- Corp. Credit & Bank Loan Ratings WESTPOINT STEVENS: Court Okays Sulzer Loom Sale Bidding Procedures WILLIAMS: Releasing First-Quarter 2004 Results on May 6 W.R. GRACE: Wants Until September 30, 2004 to Decide on Leases * Credit Unions & Legislators to Boost Youth Financial Literacy * Newtek to Provide Small Business Loans to Navy Federal Members * BOND PRICING: For the week of April 5 - 9, 2004 ********* AAIPHARMA INC: S&P Maintains Ratings Watch Over $40M Bank Loan -------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings on specialty pharmaceutical company aaiPharma Inc. remained on CreditWatch with negative implications following the company's announcement that it had signed a commitment letter with Bank of America N.A. for a $40 million, 15-month priority revolving credit facility. The proposed facility, which is still subject to the consent of a majority of aaiPharma's existing senior secured lenders and subordinated note holders, would provide the company with badly needed liquidity. The Wilmington, North Carolina-based firm has minimal cash balances, and it is facing a $9.6 million interest payment on its subordinated notes and a $31 million product rights payment in the near term. The company's future cash flow generating prospects also remain clouded by an inquiry into the company's sales practices (it is currently undergoing a board- initiated inquiry into unusual sales of two of its main products, Darvon/Darvocet and Brethine, that have resulted in excess product inventory levels at the wholesaler level). "In the event aaiPharma obtains consent and secures the facility, it is likely to draw on it, in which case Standard & Poor's would revise the senior secured rating on the company to 'CCC' from 'CCC+'," said Standard & Poor's credit analyst Arthur Wong. The downgrade would reflect the increased priority debt in the company's credit profile, which would disadvantage current secured lenders. It would also reflect Standard & Poor's uncertainty about whether the value of aaiPharma's assets would provide full coverage for all senior secured lenders given the controversy surrounding the company's pharmaceutical business. ADELPHIA COMMS: Wants Nod to Assign WNSA Radio Station Contracts ---------------------------------------------------------------- In April 2000, the Adelphia Communications Debtors purchased the assets and the rights to the Federal Communications Commission license related to radio station 107.7 FM -- WNSA -- in Buffalo, New York. Upon purchasing the Station, the ACOM Debtors invested significantly in upgrades to the Station, ultimately creating one of the region's most sophisticated FM radio plants and allowing the Station to broadcast at its full license capacity for the first time. The Station's broadcasting signal reaches clearly into Rochester and Buffalo, in New York, and its broadcast range encompasses eight counties in western New York state. The ACOM Debtors seek the Court's authority to sell the Station Assets to Entercom pursuant to the terms of the Purchase Agreement, subject to higher or better offers. The ACOM Debtors will sell the Assets free and clear of all Encumbrances, with the exception of Permitted Liens. In connection with the sale of WNSA Radio Station, the Adelphia Communications Debtors seek the Court's authority to assume and assign certain contracts to Entercom Buffalo, LLC and Entercom Buffalo License, LLC or an Alternative Buyer. Entercom indicated that it requires the benefits of the WNSA Radio Station Contracts to proceed with the sale. Thus, to secure the benefit of the sale, the ACOM Debtors must assume the Contracts and assign them to, or for the benefit of, Entercom, or an Alternative Buyer. Pursuant to the Purchase Agreement, the ACOM Debtors are required to satisfy any obligations that remain outstanding under the relevant Assumed Executory Contract by curing the defaults, including any actual pecuniary losses, promptly upon assumption and assignment. The ACOM Debtors believe that they will be able satisfy the standards regarding the assumption of the Contracts. Entercom or the Alternative Buyer will provide adequate assurance of future performance before any Executory Contract may be assigned. The ACOM Debtors fully expect that any Purchaser will be able to satisfy this standard, be it Entercom or an Alternative Buyer. To facilitate a prompt resolution of cure disputes, if any, relating to the Assumed Contracts, the ACOM Debtors propose these deadlines and procedures: (1) The ACOM Debtors have proposed competitive bidding procedures to maximize their proceeds for the Station Assets. The ACOM Debtors will serve a copy of the Bidding Procedures Order together with the Notice of Proposed Assumption and Assignment of Contracts by regular mail to all non-Debtor parties to the Assumed Executory Contracts. The Notice will advise the non-Debtor parties of the requirement to file a Cure Objection by the Cure Objection Deadline; (2) Any objecting Contract Party is required to file and serve its objection, in writing, setting forth with specificity any and all Cure Obligations that it asserts must be cured or satisfied, and any and all objections to the potential assumption and assignment of the Assumed Executory Contract; (3) To be considered a timely Cure Objection, the Cure Objection must be filed with the Court and a copy delivered so that these parties receive the Cure Objection no later than 12:00 noon, prevailing Eastern Time, on April 19, 2004: (a) Shelley C. Chapman, Esquire Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, New York 10019; (b) Jim Zerefos Adelphia Communications 5619 DTC Parkway Greenwood Village, Colorado 80111; (c) W. Dean Salter, Esquire Holme Roberts & Owen LLP 1700 Lincoln Street, Suite 4100 Denver, Colorado 80203; (d) Armand Sadoughi Lazard Freres & Co. LLC 30 Rockefeller Plaza, 62nd Floor New York, New York 10020; (e) Mark Broude, Esquire Latham & Watkins LLP 885 Third Avenue, Suite 1000 New York, New York 10022; and (f) John C. Donlevie Entercom Buffalo, LLC 401 City Avenue, Suite 809 Bala Cynwyd, Pennsylvania 19004 The ACOM Debtors may, in their sole discretion, extend the Cure Objection Deadline once or successively without further notice, but they are not obligated to do so; (4) Unless a Cure Objection is timely filed and served, the Court may authorize or effect the assumption and assignment of the Executory Contract at the hearing to consider the approval of the Sale without regard to any objection the party may have; (5) Any Contract Party who fails to file and serve a Cure Objection will be deemed to have waived and released any Cure Objection and will be forever barred and estopped from asserting or claiming against the ACOM Debtors, the Purchaser or any other assignee of the relevant Assumed Executory Contract that (i) any additional amounts are due or defaults exist or (ii) conditions to assignment must be satisfied, under the Assumed Executory Contract for the period before the Petition Date; (6) Any Cure Objection must set forth: (a) the cure amount the objector asserts is due; (b) the period to which the amounts relate; and (c) the specific types and dates of any alleged defaults and pecuniary losses and conditions to assignment; (7) Hearings with respect to Cure Objections, if any, may be held at the Sale Hearing or other earlier or later date as the Court may designate, provided however, that any Assumed Executory Contract that is the subject of a Cure Objection may be assumed and assigned before the resolution of the Cure Objection based on the ACOM Debtors providing adequate assurance of their ability to cure any Cure Obligation in accordance with Section 365(b)(1) of the Bankruptcy Code; (8) The ACOM Debtors reserve the right to remove any Assumed Executory Contract from the Cure Schedule and withdraw the request to assume and assign any Assumed Executory Contract if they reasonably determine or the Court fixes a Cure Obligation that is materially greater than the Cure Obligation they anticipated; and (9) A timely filed and served Cure Objection will reserve the party's rights respecting the Cure Obligation but will not be deemed to constitute an objection to the sale of the Station Assets. The ACOM Debtors assert that these procedures will help facilitate the resolution of any issues concerning cure amounts and the assumability of the Station Contracts. (Adelphia Bankruptcy News, Issue No. 55; Bankruptcy Creditors' Service, Inc., 215/945-7000) ADSTAR: Stock Price Triggers Series A Preferred Stock Conversion ---------------------------------------------------------------- AdStar, Inc. (Nasdaq: ADST, ADSTW), a leading software and application service provider for the classified advertising industry, announced that as a result of the company's common stock closing above $2.25 per share on March 31, 2004, 1,443,457 shares of Series A preferred stock issued to Tribune Company in March 2002 have automatically converted to common stock. As a result of this conversion, the shares have lost their liquidation preference to the common stock of approximately $1.8 million, plus accrued and unpaid dividends. About AdStar, Inc. AdStar, Inc. (Nasdaq: ADST, ADSTW) is a leading provider of e- commerce transaction software and services for the advertising and publishing industries. AdStar's proprietary suite of e-commerce services includes remote ad entry software, web-based ad transaction services, and payment processing and content processing solutions, which were acquired from Edgil Associates in October 2003. Today, AdStar's ad transaction infrastructure powers classified ad sales for more than 40 of the largest newspapers in the United States, the Newspaper Association of America's bonafideclassifieds.com, CareerBuilder, and a growing number of other online and print media companies. EdgCapture, Edgil's automated payment process solution, is currently employed by call centers in more than 100 of the nation's leading newspaper and magazines. AdStar is headquartered in Marina del Rey, Calif., and its Edgil office is in North Chelmsford, Mass. * * * In its Form 10-KSB for the fiscal year ended December 31, 2003 filed with the Securities and Exchange Commission, Adstar Inc. reports: Liquidity and Capital Resources "At December 31, 2003, we had an accumulated deficit of $14,166,000. We have incurred significant recurring net losses for the years ended December 2002 and 2003 of $2,160,000 and $2,842,000. Our 2002 and 2003 net losses were principally attributable to our shift in focus from an on-line business to an ASP business. We expect to continue to incur losses until we are able to increase revenues significantly from fees based on the number of purchases transacted through our ASP product. We believe cash on hand of $2,092,000 at December 31, 2003 coupled with our recent acquisition of Edgil, which is currently generating positive cash flows, AdStar's reduction in personnel at the beginning of January 2004 and expected increase in revenues from our continued success in growing our ASP business will generate sufficient capital to meet our cash needs through the next twelve months. We are in the process of closing an additional $1,500,000 in convertible debt during the second quarter of 2004 to further enhance our ability to grow organically and position us to take advantage of additional strategic acquisitions and revenue sharing arrangements should they present themselves "We are optimistic that our growing ASP business will continue to be accepted in the marketplace. However, our ability to sell ASP business products and service offerings during the current year may be hampered by the current unstable climate in the advertising market, the geo-political climate, including the war in Iraq, and state of the economy in general. These factors, coupled with unproven ability of our newly acquired subsidiary, Edgil, to continue to generate positive cash flow, possible competition from other vendors, the extended selling cycle in our industry, and customer delays in customization and implementations, could delay our ability to increase revenue to a level sufficient to cover our expenses. "We currently have no additional borrowings available to us under any credit arrangement, and we are continuing to look for additional financing. Adequate funds may not be available or may not be available on terms favorable to us or at all. If additional funds are raised through the issuance of equity securities, dilution to existing stockholders may result. If funding is insufficient at any time in the future, we may be unable to develop or enhance our products or services, take advantage of business opportunities or respond to competitive pressures, any of which could have a material adverse effect on our financial position, results of operations and cash flows." AIR CANADA: Projected Cash Budget Through June 18, 2004 ------------------------------------------------------- Air Canada provides the CCAA Court and its creditors with updated cash flow projections for the period March 20 to June 18, 2004. For that period, the Applicants expect to have CN$125,700,000 net cash inflow after payment of aircraft lease payments to lessors who have executed restructured lease agreements to date but prior to the payment of any additional amounts to any other lessors. This would result in a CN$1,027,600,000 ending cash balance at June 18, 2004. The Applicants recorded CN$478,100,000 in net cash inflow for the period April 1, 2003 to March 19, 2004. As a result, the Applicants' combined cash balance in its Canadian and United States bank accounts as at March 19, 2004 was CN$902,000,000. Air Canada Consolidated Cash Flow Forecast For the Period March 20 to June 18, 2004 Receipts Credit card & direct passenger receipts CN$1,524,800,000 Airtime and travel agent settlement 535,100,000 Cargo/Freight 40,500,000 Accounts receivable 79,000,000 Miscellaneous 0 CIBC Facility 0 Funding from pension plan 25,800,000 ---------------- Total Receipts CN$2,205,200,000 ---------------- Disbursements Payroll & Benefits (CN$582,100,000) Retiree payments (26,700,000) Pension contributions 0 Fuel (346,200,000) Airport related charges (218,100,000) Aircraft maintenance (96,400,000) Food, Beverages & Supplies (68,700,000) IBM Advantis (Computer support) (46,100,000) Marketing (13,000,000) Travel agent incentive commission (43,800,000) Insurance (13,900,000) Funding of foreign operations (54,000,000) Other operating costs (208,000,000) U.S. immigration tax remittances (9,000,000) Airport improvement fees (39,500,000) GST remittances (45,000,000) Transportation tax (31,200,000) Security tax remittances (49,500,000) Professional fees (13,000,000) ---------------- Operating Disbursements (CN$1,903,700,000) ---------------- Capital Expenditures (CN$73,400,000) Repayment of CIBC Facility (52,900,000) Interest payments and fees re CIBC Facility (9,000,000) Other (1,500,000) ---------------- Non-Operating Disbursements (CN$136,800,000) ---------------- Net Aeroplan Cashflows 105,900,000 Net Air Canada Vacations Cashflows 48,000,000 ---------------- Cash Flows Re: Non-CCAA Applicants CN$153,900,000 ---------------- Aircraft lease payments (193,000,000) Net Cash Inflow/(Outflow) 125,700,000 Opening cash balance 902,000,000 ---------------- Ending cash balance CN$1,027,600,000 ================ Headquartered in Saint-Laurent, Quebec Canada, Air Canada -- http://www.aircanada.ca/-- represents Canada's only major domestic and international network airline, providing scheduled and charter air transportation for passengers and cargo. The Company filed for CCAA protection on April 1, 2003 (Ontario Superior Court of Justice, Case No. 03-4932) and Section 304 petition with the U.S. Bankruptcy Court for the Southern District of New York (Case No. 03-11971). Matthew A. Feldman, Esq., and Elizabeth Crispino, Esq., at Willkie Farr & Gallagher serve as the Debtors' U.S. Counsel. When the Debtors filed for protection from its creditors, they listed C$7,816,000,000 in assets and 9,704,000,000 in liabilities. (Air Canada Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000) AMERADA HESS: John Rielly Named Sr. VP & Chief Financial Officer ---------------------------------------------------------------- Amerada Hess Corporation (NYSE: AHC) announced that John P. Rielly has been named Senior Vice President and Chief Financial Officer, effective April 1, 2004. Mr. Rielly, 41, replaces John Y. Schreyer, 64, who will retire from Amerada Hess Corporation effective April 30, 2004. Mr. Rielly joined Amerada Hess in 2001 as Vice President and Controller. Prior to joining the Corporation, Mr. Rielly was employed for 17 years at Ernst & Young, where he became a Partner in 1996. The Corporation also announced that John J. Scelfo, has been named Senior Vice President, Finance and Corporate Development. Mr. Scelfo joined Amerada Hess in 2003 as Vice President and Chief Financial Officer -- Worldwide Exploration and Production. Previously he served as Chief Financial Officer of Sirius Satellite Radio and Dell Asia Pacific, and spent 19 years in various financial positions with Mobil Oil. In announcing John Schreyer's retirement, Amerada Hess Chairman and CEO John Hess stated that, "we are deeply grateful to John for his strong leadership, tireless dedication and invaluable contributions during his 14 years with the Company." About Amerada Hess Corporation Amerada Hess (S&P, BB+ Mandatory Convertible Preferred Shares Rating, Negative Outlook), headquartered in New York, is a global integrated energy company engaged in the exploration for and the production, purchase, transportation and sale of crude oil and natural gas, as well as the production and sale of refined petroleum products. AMERICAN SPORTS: Case Summary & 65 Largest Unsecured Creditors -------------------------------------------------------------- Lead Debtor: American Sports International, Ltd. dba Basketball Products International Inc. dba American Athletic, Inc. 200 American Avenue Jefferson, Iowa 50129 Bankruptcy Case No.: 04-41108 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Sport Court, Inc. 04-41107 American Sports Products Group, Inc. 04-41109 American Sports Systems, Inc. 04-41110 Type of Business: The Debtor is a premier supplier of athletic equipment primarily to institutions such as high schools, clubs, and universities in the United States. It offers a variety of products including gymnastics apparatus, athletic mats, custom padding, basketball equipment, volleyball equipment, and divider curtains. See http://www.americanathletic.com/ Chapter 11 Petition Date: March 17, 2004 Court: Northern District of Georgia (Rome) Judge: Paul W. Bonapfel Debtors' Counsels: Jason H. Watson, Esq. John C. Weitnauer, Esq. Troy J. Aramburu, Esq. Alston & Bird LLP One Atlantic Center 1201 West Peachtree Street Atlanta, GA 30309-3424 Tel: 404-881-4796 Fax: 404-881-7777 Estimated Assets Estimated Debts ---------------- --------------- American Sports $10 M to $50 M $10 M to $50 M International, Ltd. Sport Court, Inc. $10 M to $50 M $10 M to $50 M American Sports Products $50 M to $100 M $50 M to $100 M Group, Inc. American Sports Systems, $0 M to $500,000 $50 M to $100 M Inc. A. American Sports Inter.'s 22 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Blackstone Mezzanine Senior Subordinated $19,637,640 Partners, L.P. Debt 345 Park Avenue, 28th Floor New York, NY 10154 General Electric Capital Secured Credit Unsecured. Corporation Facility, consisting Amount, if of: (i) Revolving any, Loan, (ii) Term Loan, unknown. and (ii) Letter of Credit Obligations. Total outstanding for Revolving Loan $23,369,131, Term Loan $15,000,000, Letter of Credit, $975,000. Value of collateral is unknown Qycell Corporation Trade $243,413 Foamex Trade $143,653 Aeroform Trade $83,551 ABF Freight System Inc. Trade $81,937 Value Vinyls Inc. Trade $79,558 Des Moines Bolt Supply Trade $69,702 Wellmark Blue Cross Trade $67,300 Iowa Electric Light & Power Trade $51,307 Company Shaw Industries Inc. Trade $50,297 Georgia-Pacific Corp. Trade $49,933 J. R. Trucking Inc. Trade $49,268 Strongwell Chatfield Trade $45,936 Division Joseph T. Ryerson and Son Trade $45,708 Acme Printing Co. Inc. Trade $45,086 Pactiv Corp. Trade $44,816 Simonsen Iron Works Inc. Trade $44,592 Earle M. Jorgensen Co. Trade $40,724 Lyn Rus Corp. Trade $40,563 Greene County Treasurer Trade $38,676 PricewaterhouseCoopers LLP Trade $38,250 B. Sport Court, Inc.'s 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Blackstone Mezzanine Senior Subordinated $19,637,640 Partners, L.P. Debt 345 Park Avenue, 28th Floor New York, NY 10154 General Electric Capital Secured Credit Unsecured. Corporation Facility, consisting Amount, if of: (i) Revolving any, Loan, (ii) Term Loan, unknown. and (ii) Letter of Credit Obligations. Total outstanding for Revolving Loan $23,369,131, Term Loan $15,000,000, Letter of Credit, $975,000. Value of collateral is unknown Equistar Chemicals LP Trade $286,104 2718 Collections Center Dr. Chicago, IL 60693 Dutro Custom Fabrication Trade $209,542 Techmer PM Trade $158,144 ABF Freight Systems Trade $122,160 Utah Employment Services LLC Trade $74,508 Thorpe North & Western Trade $69,165 JM Process Control Trade $62,935 ITW Foils Trade $61,552 Tharco Trade $51,566 American Athletics Inc. Trade $48,832 Utah Power Trade $42,080 Schutt Manufacturing Co. Trade $41,714 Tarkett USA Inc. Trade $40,763 RB Rubber Products Inc. Trade $36,170 United Parcel Service Trade $33,530 Carron Net Company Trade $32,677 LMCC Inc. Trade $32,452 FNT Industries Trade $28,823 Ray, Quinney & Nebeker Trade $28,803 Jones Worldwide Inc. Trade $25,431 C. American Sports Products' 21 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Blackstone Mezzanine Unsecured Loan $20,156,930 Partners, L.P. Principal 345 Park Avenue, 28th Flr $18,703,695 New York, NY 10154 Accr Cash Int $1,945,521 Accr PIK Int $98,714 Warr. Disc. $591,000 General Electric Capital Unsecured Loan $3,359,488 Corporation Principal Counsel: $3,117,282 J. Douglas Bacon, Esq. Accr Cash Int Latham & Watkins LLP $324,254 Sears Tower, Suite 5800 Accr PIK Int 233 South Wacker Drive $16,452 Chicago, IL 60606 Warr. Disc. $98,500 Reed James Seaton Note Payable $1,346,426 11109 Pencewood Court $562,164 Austin, TX 78750 Employment Contract $784,262 Larry Fie Note Payable $1,234,554 1205 Southfield Drive $557,562 Jefferson, IA 50129 Put Liability $676,992 Robert G. Allison Note Payable $524,983 17700 North Rim Drive Leander, TX 78641 Kevin C. West Note Payable $524,983 1800 Fall Creek Drive Cedar Park, TX 78613 Joyce Gitch Note Payable $279,458 1927 Brown Deer Trail Coralville, IA 52241 Arnon J. Rosan Note Payable $169,770 Chuck Fleishman Employment Contract $165,000 McGraw Hill Construction Trade Account $131,156 Robert A. Hale Employment Contract $110,000 Phillip Newman Note Payable $94,317 PricewaterhouseCoopers Trade Account $62,200 Robert Schlesinger Note Payable $60,796 Larry Arbuckle Note Payable $60,796 Robert P. Cadwell Note Payable $60,796 Zamborski & Associates, LLC Trade Account $40,000 Willis of Texas, Inc. Trade Account $37,500 Marshall Jones Note Payable $35,097 David Bartley Note Payable $35,097 Michael Jones Note Payable $35,097 D. American Sports Systems' 2 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Blackstone Mezzanine Unsecured Loan $19,637,640 Partners, L.P. Principal 345 Park Avenue, 28th Floor $18,703,695 New York, NY 10154 Accr Cash Int $1,945,521 Accr PIK Int $98,714 Warr. Disc. $591,000 General Electric Capital Unsecured Loan $3,272,940 Corporation Principal Counsel: $3,117,282 J. Douglas Bacon, Esq. Accr Cash Int Latham & Watkins LLP $324,254 Sears Tower, Suite 5800 Accr PIK Int 233 South Wacker Drive $16,452 Chicago, IL 60606 Warr. Disc. $98,500 ARLINGTON HOSPITALITY: 2003 Net Loss Widens to $5.6 Million ----------------------------------------------------------- April 1, 2004 / Business Wire Arlington Hospitality, Inc. (Nasdaq/NM: HOST), a hotel development and management company, announced results for the fourth quarter and year ended December 31, 2003. The company also announced that it has sold two hotels in March and entered into a commitment to renew its operating line of credit through April 2005. Fourth Quarter and 2003 Results Revenues declined 15.6 percent in the 2003 fourth quarter to $15.1 million, compared to $17.9 million in the same period a year earlier, primarily reflecting lower revenues from the sale of hotels and fewer hotels owned and operated by the company. Net loss for the 2003 fourth quarter was $1.9 million, compared to a net loss of $1.9 million in the previous year. These results include non-cash hotel impairment charges of $262,000 pre-tax ($157,000 after tax) and $542,000 pre-tax ($320,000 after tax) in the fourth quarter of 2003 and 2002, respectively. The fourth quarter 2003 and 2002 results also include net losses from discontinued operations of $168,000 and $472,000, respectively, including additional impairment charges of $16,000 pre-tax ($10,000 after tax) and $450,000 pre-tax ($270,000 after tax), respectively, related to the non-AmeriHost hotels classified as discontinued operations. For full-year 2003, revenues rose 6.4 percent to $72.6 million from $68.2 million the prior year, due primarily to the revenue from the sale of more AmeriHost Inn hotels in 2003. The hotel sales also resulted in a decline in hotel operating revenues from consolidated AmeriHost Inn hotels during 2003. Net loss for 2003 was $5.6 million, compared to a net loss of $1.7 million for 2002. These results include non-cash hotel impairment provisions of approximately $5.1 million pre-tax ($3 million after tax) and $542,000 pre-tax ($320,000 after tax) in 2003 and 2002, respectively. In addition, the company reported a loss from discontinued operations of approximately $1.5 million and $1.1 million, both net of tax, including approximately $909,000, pre- tax ($571,000 after tax) and $450,000 pre-tax ($270,000 after tax) of additional impairment, in 2003 and 2002, respectively, related to the non-AmeriHost hotels classified as discontinued operations. The above-mentioned non-cash hotel impairment charges have been recorded primarily in connection with the company's previously announced plan for hotel disposition and increased focus on hotel development. Discontinued operations relates to the operations of the non-AmeriHost Inn hotels sold, or expected to be sold within the next 12 months, which have been reclassified from continuing operations. "2003 was a year of significant transition for Arlington, as we began implementing a new strategy that focuses on hotel development and sales rather than our previous ownership/ operations business model," said Jerry H. Herman, president and chief executive officer. "We initiated a hotel disposition program to sell off nearly half of our hotel assets and redeploy the proceeds into an expanded development program that envisions building or acquiring/converting 10 to 15 AmeriHost Inns annually by the end of 2005. We also significantly strengthened our hotel development team to match our business goals, and recently completed the implementation of new marketing efforts to enhance hotel revenues. In addition, we significantly reduced our mortgage debt, and continued our efforts to expand the AmeriHost Inn brand owned by Cendant Corporation (NYSE: CD)." Sells Two Hotels in March In March 2004, the company sold two hotels: the 84-room AmeriHost Inn in Redding, Calif., and the 60-room AmeriHost Inn in Upper Sandusky, Ohio. Gross proceeds from the two sales were $7.1 million, and the company subsequently reduced its hotel mortgage debt by $3.9 million. Line of Credit Renewal The company announced that it has entered into a commitment to renew its line of credit with LaSalle Bank NA through April 30, 2005. Under terms of the lender's commitment, Arlington's current $5.5 million line limit will be reduced through hotel sales- related paydowns and/or the passage of time to $3.5 million. In addition, the interest rate will be adjusted to 10 percent annually. The loan covenants will be similar to those in the existing facility. In anticipation of this new reduced limit, the company already has used some of the proceeds from the two March hotel sales to pay down the current line of credit to the $4 million level. As a result of these hotel sales, the limit on the renewed line of credit will begin at $4.0 million, stepping down to $3.5 million on February 28, 2005. The commitment is subject to the closing of the renewed loan by April 30, 2004. "As we begin to shift more to a development mode, we intend to seek longer-term financing to better align with the duration of the development and sales cycle times, as well as new construction or acquisition/conversion financing," Herman said. "We also are considering engaging an investment advisor in the near future to assist us in achieving this goal." AmeriHost Inn Room Revenues Fourth quarter 2003 same-room revenue per available room (RevPAR) for the company's AmeriHost Inn hotels increased 1.2 percent to $29.08, compared to the same period a year earlier. Same-room RevPAR for the AmeriHost Inn hotels for all of 2003 was down slightly, 0.3 percent, to $32.40. The comparable midscale without food and beverage segment, according to Smith Travel Research, was up 3.8 percent and up 0.5 percent, respectively, for the 2003 fourth quarter and full year. 2003 Highlights -- Disposition program update--In July 2003, the company unveiled a plan to dispose of 25 to 30 hotels over a two-year period. From January 1, 2003 through July 2003, the company had sold five hotels and, for the full year, sold 11 hotels, a single-year Arlington record. In accordance with SFAS No. 144, "Accounting for Long-Lived Assets," the company's AmeriHost Inn hotel assets designated for sale within the next 12 months have been classified as "held for sale" on the accompanying balance sheet as of December 31, 2003. The operations of these hotels have not been treated as "discontinued operations" in the consolidated statement of operations due to the company's long-term royalty-sharing agreement with Cendant for all AmeriHost Inn hotels, which provides for a revenue stream to the company after the properties are sold and remain AmeriHost Inns. The operations of the non- AmeriHost Inn hotels to be sold under the disposition program have been reclassified from the company's continuing operations and presented as "discontinued operations" on the consolidated statements of operations. "With the economy and hotel industry showing signs of recovery, we are seeing increased interest from potential buyers of our hotels," he noted. "We have engaged multiple brokers to assist in the marketing of our hotels. We currently have five hotels under sales agreements and are marketing an additional 20 properties. At this time, we believe we will achieve total net proceeds of between $11.9 million and $12.3 million as a result of the plan we refer to as Operation Sell (including hotels already sold), which falls within the lower end of our previously announced range of $11.5 million to $14.7 million." It should be noted that when the company has hotels under contract for sale, even with nonrefundable cash deposits in certain cases, certain conditions to closing remain, and there can be no assurance that these sales will be consummated as anticipated. Any forecasted amounts from closed or pending sales could differ from the final amounts included in the company's applicable quarterly and annual financial statements when issued. Furthermore, such forecasted amounts do not represent guidance on, or forecasts of, the results of the company's entire consolidated operations, which are reported on a quarterly basis. Information on Arlington's hotels being brokered for sale can be obtained by calling Steve Miller, Senior Vice-President of Real Estate and Business Development, at 847-228-5400, extension 312, or e-mailing stevem@arlingtonhospitality.com . -- Development program update--The company revamped its development program, enhancing and expanding its development team with the hiring of three experienced industry veterans. The company began construction on one hotel and opened four hotels during 2003. "Steve Miller and his team came on board in the second half of 2003 and have conducted a thorough review of development opportunities in certain regions of the country. Based on their research, we will first focus our future development in markets where we have a proven track record, California and the Midwest. We also have identified certain areas in the Southeastern U.S. where we might possibly expand the AmeriHost Inn brand. We expect to break ground on at least one property in the Midwest during the second quarter, using our 80- to 90-room design, which was created for larger markets." "Most of the development, which will be the updated design in larger markets, is expected to be in joint ventures or building for third parties, and our outreach efforts to these parties is scaling up," Herman pointed out. -- Lease restructuring update--The company also announced February 26, 2004 that it, on behalf of a wholly-owned subsidiary, was attempting to restructure the terms of 21 long-term leases on AmeriHost Inn hotels with its hotel landlord, PMC Commercial Trust (AMEX: PCC). Arlington announced on March 16, 2004 that the parties entered into a temporary letter agreement that expires on April 30, 2004 and provides that base rent will continue to accrue at the rate of approximately $445,000 per month, as set forth in the lease agreements. However, the base rent payments due and payable on March 1, 2004 and April 1, 2004 were reduced to approximately $360,000 per month. Additionally, the company's subsidiary was allowed to utilize $200,000 of its security deposit held with PMC to help fund these payments. When the temporary letter agreement expires on April 30, 2004, the company's deferred portion of the base rent (approximately $170,000) will be due, and the security deposit must be restored by $200,000 to its March 12, 2004 balance. The temporary agreement also provided for the gathering and sharing of certain information regarding a possible restructuring of the lease. "Resolving this issue is a top priority for us," said Herman. "We currently are in a fact-exchanging stage and expect to move into further negotiations. Of course, there can be no assurance of the outcome of such negotiations and our efforts for a mutually beneficial restructuring of the lease." -- Strengthened the balance sheet--During the year, the company used the proceeds from the sale of 10 hotels to reduce the company's long-term mortgage debt by $16.5 million. As of December 31, 2003, the company's total mortgage debt and line of credit balance was $69.7 million, or 15.7 percent lower than the December 31, 2002 total balance of $82.6 million. The company expects to continue reducing its long-term mortgage debt through Operation Sell. -- Enhanced Cendant fees--"During the year, the AmeriHost Inn brand broke through the 100-property barrier, a significant milestone," Herman noted. The brand ended the year with 103 hotels, including opening the first property in Canada. The number of AmeriHost Inns franchised by companies other than Arlington increased to 46 properties in 2003, up from 10 hotels at the end of 2000. As a result, Arlington's incentive and royalty sharing fees rose 38 percent to $278,000 in the 2003 fourth quarter and improved 65 percent to $972,000 for the year, compared to the same 2002 periods. Common Stock Update In the 2003 fourth quarter, the company completed a 1-for-100 reverse stock split, which immediately was followed by a 100-for-1 forward split. The shares of approximately 800 stockholders who owned less than 100 shares each, or approximately 33,000 common shares in the aggregate, were redeemed by the company, resulting in an approximate 40 percent reduction in our number of shareholders. Shareholders owning 100 or more shares prior to the split were not affected by this transaction. From time to time, the company may utilize cash to purchase its own common stock. Currently, the board of directors has authorized the company to buy back, at any time and without notice, up to 1 million shares of its own common stock under certain conditions. In 2003, the company purchased 36,800 shares under this authorization in addition to the reverse-forward spilt purchases. About Arlington Hospitality Arlington Hospitality, Inc. is a hotel development and management company that builds, operates and sells mid-market hotels. Arlington is the nation's largest owner and franchisee of AmeriHost Inn hotels, a 103-property mid-market, limited-service hotel brand owned and presently franchised in 22 states and Canada by Cendant Corporation (NYSE: CD). Currently, Arlington Hospitality, Inc. owns or manages 62 properties in 16 states, including 55 AmeriHost Inn hotels, for a total of 4,511 rooms, with one additional AmeriHost Inn & Suites hotels under construction. * * * In its Form 10-K for the fiscal year ended December 31, 2003 filed with the Securities and Exchange Commission, Arlington Hospitality, Inc. reports: LIQUIDITY AND CAPITAL RESOURCES "During 2003, the cash flow from hotel operations continued to decline, due to many factors such as downturn in the hotel industry for most of 2003 and its effect on hotel room demand, increased competition in our markets, and increasing operating costs such as labor, maintenance, utilities and insurance. The net cash flow from the operations of many of our hotels has been insufficient to support their related mortgage debt payments, or lease payments, primarily to PMC, as well as necessary and ongoing capital expenditures. There can be no assurance that these costs will not increase further at rates greater than our revenues. In addition, our hotel development activity for joint ventures has also decreased over the past two years, with only one joint venture project completed in 2003. As a result, the cash flow from all of our business segments, with the largest amount funded by the sale of hotel properties, has been utilized to maintain liquidity and meet the line-of-credit availability reductions. A smaller amount has been used for investment in new hotel development. The factors impacting us in 2003, as well as the reduction in the availability of our corporate line of credit, have at times created liquidity issues. We have been able to maintain our liquidity primarily through the sale of hotels. "We believe that during the next twelve months, in order to maintain our liquidity, it is critical for us to continue to sell hotel properties. In addition, we seek to increase income from our existing hotel properties by focusing on new revenue enhancement opportunities, and aggressive cost controls. We believe that an upturn in the economy will result in increased demand for hotel rooms, including ours, and such upturn could result in significantly improved hotel operating results. However, historically we have seen that lodging demand trends will typically lag six to nine months behind any such economic trends. We have also been in discussions with PMC requesting a reduction in our subsidiary's monthly lease payment and other modifications. "Our principal liquidity needs for periods beyond twelve months are for the cost of new developments, property acquisitions, scheduled debt maturities, major renovations, expansions and other non-recurring capital improvements. "In addition to our normal operational and growth oriented liquidity needs, other contingencies may also have a significant impact on us, including the impact of seasonality on our hotel operations and hotels sales, and the inability to pay off mortgage loans when maturing. "We believe our revenues, together with proceeds from financing activities will continue to provide the necessary funds for our short-term liquidity needs. However, material changes in these factors, including factors that could inhibit our ability to sell hotels under acceptable terms and within certain time frames, may adversely affect net cash flows. Such changes, in turn, would adversely affect our ability to fund debt service, lease obligations, capital expenditures, and other liquidity needs. In addition, a material adverse change in our cash provided by operations may affect the financial performance covenants under our unsecured line of credit and certain mortgage notes." ATLANTIC EXPRESS: S&P Assigns B Corporate Credit Rating ------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'B' rating to Atlantic Express Transportation Corp.'s $115 million senior secured notes offering due 2008. Standard & Poor's also assigned its 'B' corporate credit rating to Atlantic Express. The outlook is negative. The notes, which are issued at a holding company, are guaranteed, on a senior secured basis, by substantially all the company's existing and future domestic restricted subsidiaries. Guarantor subsidiaries account for almost all of the revenues and assets of the company. The Staten Island, N.Y.-based school bus transportation company, which emerged from Chapter 11 bankruptcy protection in December 2003, has about $150 million of lease-adjusted debt. "Ratings reflect the company's substantial debt burden, limited liquidity, and competitive end markets, partly offset by a fairly predictable revenue stream," said Standard & Poor's credit analyst Lisa Jenkins. Atlantic Express is the fourth largest (albeit in a very fragmented industry) provider of school bus transportation in the U.S. and the leading provider in New York City. School bus services account for 87% of revenues. The company also provides paratransit services for physically and mentally disabled passengers and other services, including express commuter lines and tour buses (13%). As of Dec. 31, 2003, the company operated a fleet of approximately 6,400 vehicles. Atlantic Express has been in operation for over 30 years and has well-established relationships with many of its customers, primarily school districts in New York, Missouri, Vermont, Massachusetts, Illinois, California, Pennsylvania, and New Jersey. Much of Atlantic Express'revenue base is tied to the New York City Department of Education, which accounted for about 38% of revenues in fiscal 2003 (fiscal year end is June 30). Atlantic Express has had a relationship with the DOE since 1979. The current contract is up for renewal in mid-2005. Atlantic Express' revenue stream is fairly predictable, with contracts typically ranging between one to five years and a high renewal rate.However, most contracts are fixed price, which leaves the company vulnerable to unexpected increases in costs. Atlantic Express experienced a material increase in costs (especially insurance costs) during fiscal 2002, which contributed to significant liquidity pressures and led the company to file for Chapter 11 bankruptcy protection in August 2002. Despite its emergence from Chapter 11, Atlantic Express remains highly leveraged, with pro forma debt/EBITDA (adjusted for operating leases) of over 5x. Operating performance is expected to improve modestly as a result of cost-reduction initiatives and efforts to improve pricing as contracts are renewed. This should allow for some debt reduction over the next few years. However, competitive markets, exposure to unanticipated cost increases, and the potential for modest acquisitions could limit the improvement. Atlantic Express' liquidity is very constrained but should show modest improvement with the refinancing efforts currently under way. Ratings assume that the company's cost-cutting and revenue- enhancement efforts will translate into an improved financial profile. If the expected improvement does not occur, or the New York City contract is not renewed on acceptable terms, or liquidity comes under increased pressure, ratings could be reviewed for potential downgrades. AVAYA: Will Host 2nd Quarter 2004 Earnings Webcast on April 27 -------------------------------------------------------------- Avaya Inc. (NYSE: AV), a leading global provider of communications networks and services for businesses, invited investors and others to listen to its quarterly earnings conference call to be broadcast live over the Internet on Tuesday, April 27, 2004, at 5:00 p.m. EST. To access the Webcast and presentation notes accompanying the conference call, log onto Avaya's Web site at http://www.avaya.com/investorsand follow the instructions. The Webcast will be available in our archives after the call at the same Web address. You also may listen to a replay of the conference call beginning at 8:00 p.m. EST on April 27, 2004 through May 4, 2004 by dialing 800-642-1687 within the United States and 706-645-9291 outside the United States. The replay access code is 6432275. Avaya Inc. (S&P, B+ Corporate Credit Rating) designs, builds and manages communications networks for more than 1 million businesses worldwide, including 90 percent of the FORTUNE 500(R). Focused on businesses large to small, Avaya is a world leader in secure and reliable Internet Protocol (IP) telephony systems and communications software applications and services. Driving the convergence of voice and data communications with business applications -- and distinguished by comprehensive worldwide services -- Avaya helps customers leverage existing and new networks to achieve superior business results. For more information visit the Avaya Web site: http://www.avaya.com/ BRIDGEPORT METAL: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Bridgeport Metal Goods Manufacturing Co. 800 Union Avenue Bridgeport, Connecticut 06607 Bankruptcy Case No.: 04-50412 Type of Business: The Debtor is engaged in the business of manufacturing, decorating and assembling plastic cosmetic containers and packaging products. See http://www.bmgmfg.com/ Chapter 11 Petition Date: March 30, 2004 Court: District of Connecticut (Bridgeport) Judge: Alan H.W. Shiff Debtor's Counsels: Irve J. Goldman, Esq. Jessica Grossarth, Esq. Pullman & Comley 850 Main Street Bridgeport, CT 06601 Estimated Assets: $10 Million to $50 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Moldpro Company $481,262 36 Denman Thompson Avenue West Swanzey, NH 03446 Eyelet Crafters, Inc. $386,217 P.O. Box 2542 Waterbury, CT 06723-2542 Beardsley, Brown & Bassett, Inc. $178,405 Garrett Hewitt International $125,758 Tech Industries, Inc. $124,978 City of Bridgeport $86,884 Powell Products, Inc. $85,864 Sanderson MacLeod $84,212 Public Service of New Hampshire $79,721 Innerpac Northeast, Inc. $68,416 Polyone Distribution $57,573 JENFLO-BMG-Wire $53,990 WILBEA- Herman K. Beach, III, Trustee $52,615 Work Vision, Inc. $49,555 Acckos BMG $49,230 Newell Rubbermaid, Inc. $48,479 Ace Mold, Ltd. $46,080 Performance Polymers, Inc. $44,181 ITW Foils $42,151 Pieciak & Company, P.C. $41,782 BUCKEYE: Closing Cork, Ireland, Manufacturing Facility in August ---------------------------------------------------------------- Buckeye Technologies Inc. (NYSE:BKI) announced that it will discontinue producing airlaid nonwoven materials at its Cork, Ireland facility by August. The Company will continue to meet customer needs for airlaid nonwoven materials by producing these products at its facilities in Delta, British Columbia, Canada; Steinfurt, Germany; and Gaston, North Carolina. Buckeye Chairman, David B. Ferraro, stated, "Airlaid nonwoven materials are a very important part of Buckeye's product portfolio. Although we will cease production at the small single- line Cork plant, we will meet current and anticipated needs for these materials by increasing output at our three larger facilities. This consolidation will enable us to improve our overall airlaid nonwoven materials operating results by about $7 million annually and reduce working capital needs by about $4 million. We will begin to realize these benefits in the October- December quarter and anticipate achieving all the savings by the end of fiscal 2005." Mr. Ferraro further commented, "It is extremely unfortunate that market conditions necessitate closure of the Cork facility and termination of approximately 83 dedicated employees. The Company will incur restructuring costs, including employee termination expenses, of approximately $3 million during the next six months. Additionally, we will include a non-cash asset impairment charge relating to the Cork facility of about $27 million after tax in our March financial results." Buckeye (S&P, BB- Corporate Credit Rating, Stable Outlook), a leading manufacturer and marketer of specialty cellulose and absorbent products, is headquartered in Memphis, Tennessee, USA. The Company currently operates facilities in the United States, Germany, Canada, Ireland and Brazil. Its products are sold worldwide to makers of consumer and industrial goods. CALPINE: Completes Purchase of Brazos Power Plant for $175 Million ------------------------------------------------------------------ Calpine Corporation (NYSE: CPN) completed the purchase of the Brazos Valley Power Plant in Fort Bend County, Texas, for approximately $175 million. Fueled by natural gas, the combined- cycle facility is designed to generate 570 megawatts of electricity for the growing Texas power market. Calpine's wholly owned subsidiary, Calpine Construction Finance Company, L.P. (CCFC I), acquired the companies that owned the Brazos Valley project with net proceeds of approximately $150 million from the January sale of its half-interest in the Lost Pines 1 Power Project. As a result, CCFC I had the opportunity to defer tax liability by conducting a like-kind exchange. With the expected cash flow and earnings from the plant, the acquisition represented the best investment opportunity for Calpine, CCFC I and CCFC I bondholders, who consented to the acquisition. Peter Gross, vice president, Calpine marketing and sales, said the deal was financially advantageous, noting, "The addition of Brazos Valley to Calpine's portfolio will provide further opportunities to enhance the efficiencies of our operating system, lower our cost of production and better meet our customers' needs." Calpine is the largest independent power producer in ERCOT and has the cleanest, most fuel-efficient fleet of natural gas-fired facilities. With this transaction, Calpine has 11 power plants in ERCOT, capable of generating more than 6,700 megawatts of electricity for the growing ERCOT market. The company's system of plants is designed to sell power under both short- and long-term contracts to wholesale and industrial power customers. Brazos Valley is located about 25 miles southwest of Houston. It entered commercial operations in July 2003 and is powered by two General Electric 7FA turbines. CCFC1 acquired Brazos Valley from a consortium of banks that had provided construction financing for the power plant and had taken possession of the plant from the original developer in 2003. Calpine Corporation (S&P, CCC+ Senior Unsecured Convertible Note and B Second Priority Senior Secured Note Ratings, Negative Outlook), celebrating its 20th year in power in 2004, is a leading North American power company dedicated to providing electric power to wholesale and industrial customers from clean, efficient, natural gas-fired and geothermal power facilities. The company generates power at plants it owns or leases in 21 states in the United States, three provinces in Canada and in the United Kingdom and is building a plant in Mexico. Calpine is also the world's largest producer of renewable geothermal energy, and owns or controls approximately one trillion cubic feet equivalent of proved natural gas reserves in the United States and Canada. For more information about Calpine, visit http://www.calpine.com/ CALPINE CORP: Inks Safeway Inc. Three-Year Power Sales Contract --------------------------------------------------------------- Calpine Corporation (NYSE: CPN) announced that its retail energy service provider subsidiary, Calpine PowerAmerica, has entered into a three-year power sales agreement with Safeway Inc. to provide approximately 110 megawatts to Safeway facilities throughout California. The contract marks the single largest California retail transaction Calpine has entered into to date. Power deliveries are scheduled to begin June 1, 2004. "Calpine has created a large system of new, highly-efficient power plants in California, allowing the company to deliver reliable power to customers throughout the state. As a result, Calpine is uniquely positioned to provide cost effective energy solutions for a company as large and diversified as Safeway," according to Curt Hildebrand, Calpine's Vice President of Marketing and Sales. "Calpine views retail contracts such as this as an essential cornerstone of California's energy market. By allowing direct access power procurement from generators, California's employers can better manage their energy expenses and remain at the forefront of the global economy." Joe Pettus, Safeway's Vice President of Fuel and Energy Operations, said "Calpine's commitment to California, coupled with Safeway's continued ability to participate in direct access, means that we can keep our costs low, which ultimately translates into lower prices for our customers." Calpine operates 39 highly efficient, natural gas-fired and geothermal power plants in California, capable of generating nearly 3,900 megawatts. Three projects now under construction will bring Calpine's California portfolio to more than 5,800 megawatts, enough electricity to power almost 6 million homes. In addition, the company has permitted another six California projects in anticipation of continued growth in demand for reliable, cost- effective generation in the state. The contract with Safeway marks the first time Calpine has entered into a power sales agreement that calls for energy deliveries throughout the entire state as opposed to a single location. The high reliability and flexibility of Calpine's fleet of power plants enable the company to deliver a system-based energy product and at an attractive retail price and superior commercial terms. Calpine has made an unprecedented investment in California's energy infrastructure through the construction and operation of the State's newest, cleanest, and most efficient fleet of power projects. Calpine is the State's single largest producer of power from renewable resources, the first company to license and construct a major California power project in more than a decade, and is responsible for the first baseload generation built in the San Francisco Bay Area in more than 30 years. Since July 2001, Calpine has added almost 2,500 megawatts of new capacity in California -- an accomplishment unmatched by any other company in the energy industry. Calpine Corporation (S&P, CCC+ Senior Unsecured Convertible Note and B Second Priority Senior Secured Note Ratings, Negative Outlook), celebrating its 20th year in power in 2004, is a leading North American power company dedicated to providing electric power to wholesale and industrial customers from clean, efficient, natural gas-fired and geothermal power facilities. The company generates power at plants it owns or leases in 21 states in the United States, three provinces in Canada and in the United Kingdom. Calpine also owns or controls approximately one trillion cubic feet equivalent of proved natural gas reserves in the United States and Canada. The company is listed on the S&P 500, and was named FORTUNE's 2004 America's Most Admired energy company. Calpine was founded in 1984 and is publicly traded on the New York Stock Exchange under the symbol CPN. For more information about Calpine, visit http://www.calpine.com/ CONTINENTAL AIRLINES: Operating Results Improve in March 2004 ------------------------------------------------------------- Continental Airlines (NYSE: CAL) reported a March systemwide mainline load factor of 75.8 percent, 4.2 points above last year's March load factor. In addition, the airline had a March domestic mainline load factor of 74.9 percent, 0.7 points above March 2003, and an international mainline load factor of 77.2 percent, 9.6 points above March 2003. During the month, Continental recorded a U.S. Department of Transportation on-time arrival rate of 79.9 percent and a systemwide mainline completion factor of 99.7 percent. In March 2004, Continental flew 5.4 billion mainline revenue passenger miles (RPMs) and 7.2 billion mainline available seat miles (ASMs) systemwide, resulting in a traffic increase of 10.7 percent and a capacity increase of 4.5 percent as compared to March 2003. Domestic mainline traffic was 3.2 billion RPMs in March 2004, up 6.3 percent from March 2003, and domestic mainline capacity was 4.3 billion ASMs, up 5.4 percent from March 2003. Systemwide March 2004 passenger revenue per available seat mile (RASM) is estimated to have increased between 4.5 and 5.5 percent compared to March 2003. For February 2004, RASM decreased 2.5 percent as compared to February 2003. Continental's regional operations (Continental Express) set a record March load factor of 67.7 percent, 3.5 points above last year's March load factor. Regional RPMs were 584.9 million and regional ASMs were 863.4 million in March 2004, resulting in a traffic increase of 39.4 percent and a capacity increase of 32 percent versus March 2003. Continental Airlines is the world's seventh-largest airline with more than 2,400 daily departures throughout the Americas, Europe and Asia. Continental serves 128 domestic and 111 international destinations -- more than any other airline in the world -- and nearly 200 additional points are served via codeshare partner airlines. With 42,000 mainline employees, the airline has hubs serving New York, Houston, Cleveland and Guam, and carries approximately 51 million passengers per year. FORTUNE ranks Continental one of the 100 Best Companies to Work For in America, an honor it has earned for six consecutive years. FORTUNE also ranks Continental as the top airline in its Most Admired Global Companies in 2004. Visit http://continental.com/for more company information. * * * As reported in the Feb. 17, 2004, issue of the Troubled Company Reporter, Fitch Ratings affirmed the senior unsecured debt rating of Continental Airlines, Inc. at 'CCC+'. In addition, the rating for Continental's TIDES preferred equity securities has been affirmed at 'CCC-'. The Rating Outlook for Continental has been revised to Stable from Negative. Ratings for Continental reflect ongoing concerns regarding the company's ability to deliver substantial improvements in its credit profile in the face of a heavy debt and lease burden, significant cash obligations related to upcoming debt maturities, and a relatively constrained liquidity position. Senior management remains focused on a goal of delivering break-even profitability results in 2004, but persistently high jet fuel costs and a weak pricing environment will limit the airline's capacity to show significant gains in operating cash flow generation this year. With a need to maintain cash balances at or above current levels to safeguard against the risk of external shocks, Continental will likely make only limited progress toward debt reduction and balance sheet repair over the next year. CONTINENTAL AIRLINES: Elects Oscar Munoz to Board of Directors -------------------------------------------------------------- Continental Airlines (NYSE: CAL) announced the election of Oscar Munoz, executive vice president and chief financial officer of CSX Corporation, to its board of directors. In addition, Munoz will serve on the board's audit committee. "We are fortunate to have someone of Oscar's caliber join our board and audit committee," said Gordon Bethune, Continental's chairman and chief executive officer. "His independence, extensive financial experience and demonstrated leadership will benefit Continental and its shareholders." At CSX Corporation, Munoz, age 45, is responsible for all financial, strategic planning, information technology and real estate activities for one of the largest rail and logistics networks in the United States. His financial duties include management of all accounting, tax and treasury activities for CSX, which operates domestic rail services, as well as intermodal and global container terminal operations through other subsidiaries. Munoz formerly served as chief financial officer and vice president of AT&T Consumer Services, and has previously held key financial positions with Coca Cola Enterprises, the Coca Cola Company and USWest Communications, Inc. In 2001, Munoz was named one of the "100 Most Influential Hispanics" by Hispanic Business magazine. Munoz received his BS in Business Administration from the University of Southern California in 1982 and an MBA from Pepperdine University in 1986. He is married with four children and resides in Jacksonville, Florida. Continental Airlines is the world's seventh-largest airline with more than 2,400 daily departures throughout the Americas, Europe and Asia. Continental serves 128 domestic and 111 international destinations -- more than any other airline in the world -- and nearly 200 additional points are served via codeshare partner airlines. With 42,000 mainline employees, the airline has hubs serving New York, Houston, Cleveland and Guam, and carries approximately 51 million passengers per year. FORTUNE ranks Continental one of the 100 Best Companies to Work For in America, an honor it has earned for six consecutive years. FORTUNE also ranks Continental as the top airline in its Most Admired Global Companies in 2004. Visit http://continental.com/for more company information. * * * As reported in the Feb. 17, 2004, issue of the Troubled Company Reporter, Fitch Ratings affirmed the senior unsecured debt rating of Continental Airlines, Inc. at 'CCC+'. In addition, the rating for Continental's TIDES preferred equity securities has been affirmed at 'CCC-'. The Rating Outlook for Continental has been revised to Stable from Negative. Ratings for Continental reflect ongoing concerns regarding the company's ability to deliver substantial improvements in its credit profile in the face of a heavy debt and lease burden, significant cash obligations related to upcoming debt maturities, and a relatively constrained liquidity position. Senior management remains focused on a goal of delivering break-even profitability results in 2004, but persistently high jet fuel costs and a weak pricing environment will limit the airline's capacity to show significant gains in operating cash flow generation this year. With a need to maintain cash balances at or above current levels to safeguard against the risk of external shocks, Continental will likely make only limited progress toward debt reduction and balance sheet repair over the next year. CWMBS INC: Fitch Takes Rating Actions on Series 2004-J3 Notes ------------------------------------------------------------- CWMBS, Inc.'s $211.8 million mortgage pass-through certificates series 2004-J3, CHL Mortgage Pass-Through Trust 2004-J3 classes A- 1 through A-7, class X, class PO and class A-R (senior certificates) are rated 'AAA' by Fitch Ratings. In addition, class M ($3,383,700) is rated 'AA', class B-1 ($1,309,900) is rated 'A', class B-2 ($655,000) is rated 'BBB', privately offered class B-3 ($436,700) is rated 'BB', and privately offered class B-4 ($327,500) is rated 'B' by Fitch. The 'AAA' rating on the senior certificates reflects the 3.00% subordination provided by the 1.55% class M, the 0.60% class B-1, the 0.30% class B-2, the 0.20% class B-3, the 0.15% class B-4, and the 0.20% class B-5 (not rated by Fitch). Fitch believes the above credit enhancement will be adequate to support mortgagor defaults as well as bankruptcy, fraud and special hazard losses in limited amounts. In addition, the ratings also reflect the quality of the underlying mortgage collateral, strength of the legal and financial structures and the master servicing capabilities of Countrywide Home Loans Servicing LP (Countrywide Servicing), a direct wholly owned subsidiary of Countrywide Home Loans, Inc. (CHL). Countrywide Servicing is rated an 'RMS2+' for master servicing and 'RPS1' for primary servicing by Fitch. The senior certificates are collateralized primarily by a pool of conventional, fully amortizing, mostly 30-year fixed-rate, mortgage loans secured by first liens on one- to four-family residential properties. As of the cut-off date (March 1, 2004), the aggregate pool balance totaled $218,301,665. The weighted- average original loan-to-value ratio (OLTV) was 73.33%. Cash-out and rate/term refinance loans represent 8.25% and 26.49% of the mortgage pool, respectively. Second homes account for 4.79% of the pool. The average loan balance is $502,999. The weighted average FICO credit score is approximately 747. The three states that represent the largest portion of mortgage loans are California (50.00%), New York (12.60%) and Florida (5.47%). Countrywide Servicing will directly service approximately 82.20% of the mortgage loans. HSBC will directly service approximately 13.05% of the mortgage loans. Bank United will directly service approximately 3.36% of the mortgage loans. CWMBS purchased the mortgage loans from CHL and deposited the loans in the trust, which issued the certificates, representing undivided beneficial ownership in the trust. For federal income tax purposes, an election will be made to treat the trust fund as multiple real estate mortgage investment conduits (REMICs). The Bank of New York will act as Trustee. DEPCO INC: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------- Debtor: Depco Inc. P.O. Box 178 Pittsburg, Kansas 66762 Bankruptcy Case No.: 04-21217 Type of Business: The Debtor is a provider of technology education programs throughout the nation and North America. See http://www.depcoinc.com/ Chapter 11 Petition Date: March 29, 2004 Court: District of Kansas (Kansas City) Judge: Robert D. Berger Debtor's Counsel: Cynthia F. Grimes, Esq. Grimes & Rebein, L.C. 15301 West 87th Street Parkway - Ste. 200 Lenexa, KS 66219 Tel: 913-888-4800 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Stratays, Inc. $74,337 Autodesk, Inc. $65,001 Intelitek $39,211 The Sierra Group, Ltd., LLC $29,800 Educational Robot Company $14,010 Techno-Isel $13,155 Ingram Micro $12,486 eCost.com $12,037 We Think Sew/B-Sew Inn $11,690 Applied Magic - ScreenPlay $11,089 SMART Technologies, Inc. $9,609 Cynmar Corp. $8,260 IASCO $8,142 Ettingers Office Supply Co. $7,861 Case Supply, Inc. $7,393 Technical Training Aids $7,381 Roadway Express $6,701 Kolar Business Machines $6,689 Crawford County Treasurer $6,642 Wal-Mart $6,129 DII INDUSTRIES: Turns to King & Spalding for Litigation Advice -------------------------------------------------------------- DII Industries, LLC and its debtor-affiliates seek the Court's authority to employ King & Spalding, LLP, as special counsel in connection with their Chapter 11 cases to represent their interests in these litigation matters: * Cause No. C-2002-25489 -- Johann F. Benkendorfer v. Oxy Vinyls, L.P. and Simmons Fabricators, Inc. in the 80th Judicial District Court of Harris County, Texas * Cause No. E-170050 -- Edna May Campbell, et al. v. AMOCO Corporation, et al. in the 172nd Judicial District Court of Jefferson County, Texas * Cause No. 2002-17911 -- Beatrice Semien, et al. v. Kellogg Brown & Root in the 234th Judicial District Court of Harris County, Texas * Cause No. 2002-00615 -- Armon Alan Goss and Teresa Ann Goss v. Kellogg Brown & Root, Inc., et al. in the 215th Judicial District Court of Harris County, Texas * Cause No. 2002-14983 -- Jorge Aguilar, et al. v. Kellogg Brown & Root., Inc., et al. in the 164th Judicial District Court of Harris County, Texas * Cause No. 2002-14984 -- Abel Arguelles, et al. v. Kellogg Brown & Root, Inc., et al. in the 334th Judicial District Court of Harris County, Texas * Cause No. 2002-14370 -- Mercer Black, Dawn Black v. Kellogg Brown & Root, Inc., et al. in the 152nd Judicial District Court of Harris County, Texas * Cause No. 2002-14369 -- Adrian Ayala, et al. v. Phillips Petroleum Company, et al. in the 80th Judicial District Court of Harris County, Texas * Cause No. 2002-14987 -- Rose Samuels, et al. v. Kellogg Brown & Root, Inc., et al. in the 270th Judicial District Court of Harris County, Texas * Cause No. 00-05021-00-0-E -- Debra Angell, et al. v. Oxychem Corporation, et al. in the 148th Judicial District Court of Nueces County, Texas * August 3, 2003 -- In re Derrick Joseph Marks * Cause No. 2003-16039 -- Dwayne Carmouche vs. Jacobs Engineering Group, Inc., et al. in the 11th Judicial District Court of Harris County, Texas * Cause No. 2003-36279 -- Gerald McAfee, et ux. vs. Zachary Construction Corporation, et al. in the 281st Judicial District Court of Harris County, Texas * Cause No. DC-02-246 -- Jo Ann G. Gonzalez, et al. v.. Brooks Well Servicing, Inc., et al. in the 229th Judicial District Court of Duval County, Texas * Cause No. 2003-30153 -- Norma Smith as Representative of the Estate of Carvin Travis Smith vs. Kellogg Brown & Root, Inc., et al. in the 152nd Judicial District Court of Harris County, Texas * Cause No. 2003-003583 -- Phelps Dodge Morenci, Inc. vs. Kellogg Brown & Root, Inc. -- In the Superior Court of the State of Arizona in and for the County of Maricopa * Cause No. 02CV1372 -- Sarah McCormick et al. v. Radiator Specialty Company, et al. in the 405th Judicial District Court of Galveston County, Texas * Cause No. 2001-64843 -- Rene Bell, et al. v. Brown & Root, Inc., et al. in the 152nd Judicial District Court of Harris County, Texas * Cause No. 63,549-A -- Charmaine Jeffords, Individually and as Next Friend of Julia M. Jeffords, a Minor, et al. vs. Genie Industries, Inc. in the Galveston County Probate Court, Galveston, Texas * Cause No. H-03-5134 -- Bredero Price Company and Bredero Shaw LLC v. Pacific Employers Insurance Company in the United States District Court for the Southern District of Texas, Houston Division King & Spalding was employed by the Debtors prior to the Petition Date and has continuously represented them since then. The Debtors hired King & Spalding because of the firm's recognized experience and expertise in certain litigation matters. It would be inefficient and costly to now require the Debtors to identify and retain substitute counsel to represent them in the litigations. In addition, doing so could be detrimental to the progress of these actions, compromise the Debtors' interests and harm their estates. Thus, the Debtors believe that employing King & Spalding to continue to represent them is both necessary and appropriate. King & Spalding has agreed to be compensated for its services based on the services rendered, the results achieved, the difficulties encountered, the complexities involved and other appropriate factors. King & Spalding will be compensated on an hourly basis: Partner $320 - 500 Associates 195 - 310 Legal Assistants 150 Document Clerks 85 In addition, King & Spalding will be reimbursed for all reasonable and necessary out-of-pocket expenses incurred in connection with its employment. R. Bruce Hurley, Esq., at King & Spalding, assures the Court that the firm does not hold or represent an interest adverse to the Debtors, their creditors, or their estates with respect to the matters for which it will be engaged. Headquartered in Houston, Texas, Kellogg, Brown & Root is engaged in the engineering and construction business, providing a wide range of services to energy and industrial customers and government entities in over 100 countries. DII has no business operations. The Company filed for chapter 11 protection on December 16, 2003 (Bankr. W.D. Pa. Case No. 02-12152). Jeffrey N. Rich, Esq., Michael G. Zanic, Esq., and Eric T. Moser, Esq., at Kirkpatrick & Lockhart LLP, represent the Debtors in their restructuring efforts. (DII & KBR Bankruptcy News, Issue No. 9; Bankruptcy Creditors' Service, Inc., 215/945-7000) DPL INC: Fitch Lowers Ratings & Watch Negative Continues -------------------------------------------------------- Fitch Ratings has lowered DPL Inc.'s (DPL) senior unsecured debt rating to 'BB' from 'BBB-'; the first mortgage bond rating of utility subsidiary The Dayton Power & Light Company (DP&L) is lowered to 'BBB' from 'A-'. All ratings remain on Rating Watch Negative. The downgrade follows DPL's announcement of a further delay in filing its Report 10-K and resulting constraints upon corporate liquidity. The inability to file certified financial statements in a timely manner represents an event of default under DPL's $150 million term loan and $150 million revolving credit facilities. There are currently no drawings under either facility. The company has obtained waivers from its lenders that extend through May 31, 2004 that enable the company to maintain the existing borrowing terms and to access the credit facilities if the 10-K is filed within the waiver period. DPL is also in non-compliance with its other debt agreements, but in each case has a grace period that generally ranges from 60 days to 90 days to remedy the event of non-compliance. Failure to file certified financial statements by the end of the grace period would most likely result in further negative rating actions. A preliminary recovery analysis that largely reflects the equity value of utility subsidiary DP&L indicates there is substantial asset coverage of DPL's and DP&L's debt obligations taking into account potential capital calls related to the equity portfolio. The utility has EBITDA of roughly $600 million and total debt of only $700 million. Even at a conservative multiple that results in substantial asset coverage of DPL's debt obligations of about $1.4 billion. Although the company appears to have sufficient cash to fund the repayment of $500 million 6.82% senior notes due April 6, 2004, liquidity which may be needed to meet unexpected events or to fund potential capital calls related to its private equity portfolio will be constrained from external sources until the 10-K is filed and access to external funding is restored. Positively, failure to fund capital calls on the equity portfolio does not trigger any cross-default provisions. The company plans to file its 10-K after resolution of an internal inquiry by the Board of Directors Audit Committee related to allegations raised by the company's controller. However, there is currently no time table to do so. Additionally, DPL changed auditors in April 2003. Both the current and previous accounting firms are currently reviewing the company's financial statements and there is potential for restatement risk. Management has stated that it does not expect 2003 financial statements to differ materially from the company's announced unaudited 2003 results. Ratings changed and remain on Rating Watch Negative are: DPL Inc. --Senior unsecured debt to 'BB' from 'BBB-'; --Trust preferred stock to 'B+' from 'BB'; --Short-term remains 'B'. Dayton Power & Light --First mortgage bonds to 'BBB' from 'A-'; --Collateralized PCRBs to 'BBB' from 'A-'; --Preferred stock to 'BB+' from 'BBB'; --Short-term to 'B' from 'F2'. DPL Inc. is a diversified regional energy company. DPL's principal subsidiaries include The Dayton Power & Light Company (DP&L) and DPL Energy (DPLE). DP&L provides electric services to 500,000 retail customers in West Central Ohio. DPLE operates about 4,600 megawatts of generation capacity and markets wholesale energy throughout the eastern half of the United States. DPL also maintains a diversified portfolio of financial assets. ENCORE ACQUISITION: S&P Rates $150M Senior Sub. Debt Issue at B --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' rating to Encore Acquisition Co.'s $150 million senior subordinated notes due 2014. At the same time, Standard & Poor's affirmed its 'BB-' corporate credit and 'B' subordinated debt ratings on the independent oil and gas exploration and production company. The outlook is stable. Proceeds from the proposed note offering will primarily be used to fund Encore's purchase of privately held Cortez Oil & Gas Inc. for $123 million, which was announced on March 3, 2004, as well as retire existing bank borrowings and other general corporate purposes. Fort Worth, Texas based Encore had about $180 million of debt outstanding as of Dec. 31, 2003. "The ratings affirmation reflects the fact that even with the increased debt Encore will take on to fund this transaction, financial measures will remain appropriate for current ratings," said Standard & Poor's credit analyst Brian Janiak. Furthermore, the acquisition is consistent with Encore's business growth strategy of acquiring relatively low-risk drilling, long- lived reserves (reserve/production ratio of 14 years), complementary to Encore's operations. Cortez's properties are in the Cedar Creek Anticline of Montana (where Encore has extensive operations), the Permian Basin, and the Mid-Continent region. The ratings on Encore reflect its small to midsize reserve base (156 million boe, pro forma for the acquisition), limited geographic diversification, and an aggressive growth strategy. Pro forma for the acquisition, Encore will be moderately leveraged with total debt to total capital at 45%. These weaknesses are tempered by the company's high percentage of company-operated properties (86%) that require modest future development expenses and its high percentage of proved developed reserves (78%), which have a long reserve life of about 17 years and provide the company with meaningful operational and financial flexibility. In addition, Encore's rising production levels (9.6% during 2003) and strong reserve replacement (255% in 2003) primarily from organic growth, combined with its relatively competitive operating and finding costs, also help mitigate the risks inherent in the company's small reserve base and limited geographic diversification. The acquisition of Cortez's estimated 15 million proven boe will effectively increase Encore's total proved reserves by 11% and production by about 9% in 2004. The stable outlook reflects Standard & Poor's expectation for management to effectively integrate the Cortez operations over the near term and expand the company's reserves and production through organic growth. The current rating incorporates the expectation that any additional significant acquisitions will be funded in a manner that does not increase leverage. Failure to adhere to moderate financial policies to expand its reserves and production growth could warrant an outlook revision or lower ratings. ENERGY WEST: Modifies LaSalle Bank-Backed Credit Facility --------------------------------------------------------- Energy West, Incorporated (Nasdaq: EWST), a natural gas, propane and energy marketing company serving the Rocky Mountain states, announced that it has successfully negotiated terms that modifies its existing credit facility with LaSalle Bank National Association. The revised credit facility converts $8 million of existing short- term debt into a $6 million, five-year term note, and a $2 million bridge loan due on September 30, 2004 and reduces the short-term revolving facility, which expires on October 31, 2004, from $23 million to $15 million. The $2 million bridge loan must be repaid with the proceeds of a placement of equity securities by the Company. The terms of the new agreement also allow the Company to pay a dividend subject to certain restrictions. Any decision with respect to the timing and amount of future dividends will be made by the Board of Directors of the Company. Under the terms of the old agreement with LaSalle, the Company was required to restructure its long-term debt by March 31, 2004. The new agreement allows the credit facilities with LaSalle to remain secured on an equal and ratable basis with the Company's existing long-term debt, eliminating the old agreement's requirement to restructure such long-term debt. According to Company officials, the elimination of this requirement has saved the Company a considerable amount of time and money. Energy West's Interim President and CEO, John C. Allen stated, "We are very excited about the successful renegotiation of the credit facilities with LaSalle. LaSalle has proven to be a great business partner, and we look forward to an ongoing, mutually beneficial relationship." ENRON CORP: Asks Court to Clear Springs Settlement Agreement ------------------------------------------------------------ Enron Energy Services, Inc. and Enron Services Operations, Inc. sought and obtained the Court's approval of a settlement agreement they entered into with Springs Industries, Inc., in satisfaction of the parties' obligations under these Agreements: (a) Energy and Facilities Management Agreement, dated March 31, 2000 by and between EESO and Springs, as amended on June 1, 2001 and August 31, 2000, and all confirmations thereunder; and (b) Confirmations (Swaps) dated November 16, 2001 Nos. 328974, 328975, 328988, 324836, and 326528 between EESI and Springs. Pursuant to the Agreements, EESI and EESO provided Springs and certain of its affiliated entities with power, natural gas, energy project design and construction and bill payment services. As credit support for the Agreements, Enron Corp. issued a Guaranty Agreement, dated March 3, 2000, for the benefit of Springs. On January 4, 2002, the Court authorized EESI and EESO to reject the Agreements pursuant to Section 365 of the Bankruptcy Code. According to Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York, EESI and EESO have invoiced Springs approximately $9,800,000 for services rendered pursuant to the Agreements. Springs has filed proofs of claim for rejection damages against EESI, EESO, and Enron for about $80,874,464. Springs indicated, among other things, that it believes that it is entitled to recoup any rejection damages it has suffered against the accounts receivable owed to EESI and EESO. To settle their disputes, the parties entered into a Settlement Agreement, which provides for: (i) a payment by Springs to EESO and EESI; (ii) Springs' withdrawal, with prejudice, of all proofs of claim; and (iii) mutual releases by EESI, EESO, and Springs of all claims, obligations and liabilities under the Agreements, including, without limitation, the Guaranty. Ms. Gray contends that the Settlement Agreement is in the best interest of the estates of EESI and EESO because, among other things, it: (i) provides for a partial recovery to EESI and EESO based on their accounts receivable from Springs; (ii) results in the final satisfaction of all claims between EESI, EESO and Springs related to the Agreements, including, without limitation the Guaranty; (iii) mitigates the risk that Springs would have a claim, payable under EESI's and EESO's plan of reorganization, greater than EESI's and EESO's accounts receivable from Springs; and (iv) mitigates the risk that Springs would be entitled to recoup or setoff all of its rejection damages against the accounts receivable owed to EESI and EESO. (Enron Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENRON CORP: Reaches Pact Settling Powerspares Dispute ----------------------------------------------------- Enron North America and Powerspares, Inc. entered into a Purchase and Sale Agreement on September 22, 2000. Under the Purchase Agreement, ENA sells to Powerspares certain parts to gas turbine generators held in various storage facilities. In exchange, Powerspares was to pay ENA $1,000,000, in four installments, the first on August 16, 2000 and the final payment on September 30, 2001. In addition, Powerspares agreed to remove the Equipment from the various storage facilities on or before certain dates, the latest of which to occur 60 days after the effective date of the Contract. Melanie Gray, Esq., at Weil, Gotshal & Manges LLP, in New York, informs the Court that Powerspares only paid ENA $725,000 of the Purchase Price. ENA attempted to collect the remaining amount due since July 2001. In February 1, 2002, ENA also sent a demand letter to Powerspares, to no avail. Powerspares asserts, and ENA disputes, that its ability to resell the Equipment is hampered because ENA has not verified the operating history and quality of the Equipment, which Powerspares assert ENA was required to do pursuant to the Contract. To amicably settle the dispute, ENA and Powerspares executed a Settlement Agreement and Mutual Release on November 10, 2003. Under the Settlement, the parties agree that: (a) Powerspares will pay to ENA $105,000, in three installments, each backed with a letter of credit; and (b) they will exchange mutual releases of all claims, obligations and liabilities under the Contract. As it avoids protracted litigation and provides for partial recovery to ENA, upon ENA's request, Judge Gonzalez approves the Settlement in all respects. (Enron Bankruptcy News, Issue No. 103; Bankruptcy Creditors' Service, Inc., 215/945-7000) EQUIFIN: Records Losses Despite Increased Revenues in Q4 & FY 2003 ------------------------------------------------------------------ EquiFin, Inc. (AMEX:II and II,WS), announced fourth quarter and full-year results for the period ended December 31, 2003. For the fourth quarter ended December 31, 2003, the Company had revenues of $681,000, a 27% increase versus $536,000 for the year earlier period. The Company had a loss from continuing operations of $399,000, or ($0.06) per share, versus a loss of $288,000 or (0.04) per share for the fourth quarter of 2002. The Company reported revenues for the full-year ended December 31, 2003 of $2,150,000, a 32.7% increase versus $1,619,000 for the year earlier period. The Company reported a loss from continuing operations of $1,588,000, or ($0.21) per share, compared to a loss from continuing operations of $1,334,000 or ($0.17) per share for the year ended December, 2002. The income from discontinued operations in 2003 was $65,000, or $0.01 per share, versus $223,000 or $0.03 per share. The net loss for 2003 was $1,523,000 or ($0.20) per share, compared to $1,111,000 or ($0.14) per share for the 2002 period. "We continue to make solid progress in our development as a finance company," said Walter Craig, EquiFin's President and Chief Executive Officer. "We did see during 2003 an increased interest in our credit services from small and mid-sized businesses. It takes time to build a loan portfolio of sufficient size to create a profitable operation on a consolidated basis. However, our operating division Equinox Business Credit Corp. had positive cash flow during the second half of 2003 and generated a profit of approximately $12,000 in the fourth quarter. As we move through 2004, we are highly focused on building a portfolio of quality assets and further streamlining operations so that we can make a significant move toward consolidated profitability." * * * In its Form 10-KSB for fiscal year ended December 31, 2003 filed with the Securities and Exchange Commission, Equifin, Inc. reports: Liquidity and Capital Resources "Cash used in operating activities amounted to $916,000 for the year ended December 31, 2003. Investing activities required cash of $6,904,000, which included $7,474,000 for development of the loan portfolio which was offset to an extent by $250,000 received from the sale of a participation. Financing activities provided $8,510,000 in cash, which included $6,066,000 in borrowings and $2,880,000 from the sale of convertible notes. The result of these activities was a net increase in cash of $690,000 which increased cash to $1,078,000 at year-end December 31, 2003. "In December 2001, Equinox Business Credit Corp., an 81% owned subsidiary of the Company, entered into a Loan and Security Agreement with Wells Fargo Foothill, which provided for the initiation of a $20,000,000 revolving credit facility. The agreement provides for interest at the prime rate plus 1.25% (equal to 5.25% at December 31, 2003). Equinox is permitted to borrow under the Credit Facility at up to 85% of the borrowing base, which consists of eligible notes receivable, as defined in the Agreement. Under the terms of the Agreement, as amended, Equinox must maintain tangible net worth (including subordinated debt) of $3,000,000 from December 31, 2003 through February 29, 2004; $3,050,000 through May 31, 2004; $3,100,000 through August 31, 2004 and $3,150,000 thereafter; a leverage ratio, as defined, of not more than 5 to 1 and an interest coverage ratio of not less than 1.1 to 1, increasing to 1.25 to 1 beginning April 2004. Equinox did not maintain the tangible net worth requirement for December 31, 2002, January 31, 2003, February 28, 2003 and June 30, 2003 and the interest coverage ratio at September 30, 2003. Through amendments to the Agreement, the lender waived the defaults for those periods. "During 2004, Equinox is also required to realize, for each fiscal quarter in 2004, 75% of its projected revenues and projected earnings before tax based on projections previously furnished to Foothill. All the assets and the capital stock of Equinox are pledged to secure the Credit Facility, which is also guaranteed by the Company. There was $9,839,000 outstanding on the Credit Facility at December 31, 2003. The Agreement matures December 19, 2004 and the has lender informed the Company that it does not currently intend to renew the agreement. "The Company will seek to replace the credit facility prior to maturity, however there can be no assurance that such efforts will be successful. If our current facility is not replaced, we might negotiate a sale of our portfolio, apply all cash flow generated by the loans securing the facility to pay down our borrowings thereby adversely effecting our liquidity position. In this situation, we may not be able to satisfy our outstanding loan commitments, originate new loans or continue to fund our operations." Also, the report of Equifin Inc.'s independent public accountants includes this paragraph: "The Company incurred net losses and negative cash flows from its operating activities during 2003 and 2002. As of March 12, 2004, the Company did not have any other source of funds to replace the funds provided by the credit facility when it expires in December 2004. Such matters raise substantial doubt about the Company's ability to continue as a going concern." FALCON PRODUCTS: Names Phillip Pacey VP & Chief Financial Officer ----------------------------------------------------------------- Falcon Products, Inc. (NYSE: FCP), a leading manufacturer of commercial furniture, today announced the appointment of Phillip J. Pacey as vice president and chief financial officer. Mr. Pacey will begin on May 1, 2004. Mr. Pacey will oversee finance, treasury, investor relations and tax functions and will report directly to Franklin A. Jacobs, Falcon's chairman and chief executive officer. Mr. Pacey most recently served as senior vice president and chief financial officer of O'Sullivan Industries Holdings, Inc., a leading manufacturer of ready-to-assemble furniture. While at O'Sullivan, he oversaw all aspects of finance, treasury and information technology. In addition, he played a key role in the financial and operational initiatives that reduced expenses and improved working capital. "We are pleased to have someone of Phillip's caliber," Mr. Jacobs said. "He is an accomplished executive who will be an excellent addition to our management team. We are confident that Phillip's experience and demonstrated ability to control costs will help drive Falcon's long-term growth and shareholder value." Mr. Jacobs continued, "We are all doing what is necessary for this company to succeed this quarter and into the future. We have taken significant steps to restructure our costs and have meaningfully reduced our breakeven point. In line with this, David Morley, our president and chief operating officer, and I have been talking about the duplication of our positions in these times of cost reductions and downsizing. We determined that it did not make sense at this time for both positions and David Morley offered to resign his position as president and chief operating officer. He will continue to consult with me on strategic alternatives as we move forward. "We are very appreciative for all David Morley has done these past three years," Mr. Jacobs concluded. "He has helped us strategically align our operations and drive efficiencies throughout the organization. We wish him success in his future endeavors." Falcon Products, Inc., is the leader in the commercial furniture markets it serves, with well-known brands, the largest manufacturing base and the largest sales force. Falcon and its subsidiaries design, manufacture and market products for the hospitality and lodging, food service, office, healthcare and education segments of the commercial furniture market. Falcon, headquartered in St. Louis, Missouri, currently operates 8 manufacturing facilities throughout the world and has approximately 2,100 employees. * * * As reported in the Troubled Company Reporter's March 22, 2004 edition, Standard & Poor's Ratings Services lowered its corporate credit rating on furniture manufacturer Falcon Products Inc. to 'CCC' from 'B-', and lowered its subordinated debt rating on the company to 'CC' from 'CCC'. The outlook is negative. "The downgrade on St. Louis, Missouri-based Falcon Products Inc. reflects the lower than expected profitability resulting from the continued softness within the furniture segments the company serves, as well as the company's breach of certain bank covenants," said Standard & Poor's credit analyst Martin S. Kounitz. FEDERAL FORGE: Turns to Conway MacKenzie for Financial Advice ------------------------------------------------------------- Federal Forge, Inc., asks permission from the U.S. Bankruptcy Court for the Eastern District of Michigan, to employ Conway, MacKenzie & Dunleavy as its financial advisors. Conway MacKenzie is to provide restructuring advisory services including: i) evaluating its business, assets and operations; ii) developing a longer range cash flow and income forecast; iii) evaluating its capital structure and financing alternatives; iv) formulating and evaluating a plan of reorganization; and v) negotiating a plan of reorganization with its creditors and other constituencies. The Debtor assures the Court that Conway MacKenzie is a "disinterested person" as that term is defined in the Bankruptcy Code. Donald S. MacKenzie, a partner in Conway MacKenzie reports that his firm will bill the Debtor in its current hourly rates of: Designation Billing Rate ----------- ------------ Practice Management Support $65 to $175 per hour Associates $215 to $275 per hour Senior Associates $225 to $305 per hour Directors $325 to $350 per hour Partners $325 to $495 per hour 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. FOIL SOLUTIONS: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Foil Solutions, LLC 17 Cotters Lane East Brunswick, New Jersey 08816 Bankruptcy Case No.: 04-20798 Type of Business: The Debtor provides services to the security, hot stamping and coatings industry. See http://www.foilsolutions.com/ Chapter 11 Petition Date: March 31, 2004 Court: District of New Jersey (Newark) Judge: Novalyn L. Winfield Debtor's Counsel: Brian D. Spector, Esq. Spector & Ehrenworth, P.C. 30 Columbia Turnpike Florham Park, NJ 07932-2261 Tel: 973-593-4800 Fax: 973-593-4848 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ McMoran, Bruce P. Loan Balance $416,220 P.O. Box 395 Sea Girt, NJ 08750 Sadasivan, Sundar Trade Debt - $291,974 27 West Knight Drive Account Payable Plainsboro, NJ 08536 and Loan Balance Dick, John Loan Balance $160,151 Mantell & Prince Trade Debt - $90,297 Account Payable Stanton Hughes, Diana, Cerra Trade Debt - $61,228 Account Payable McMoran, Lynette Loan Balance $54,313 McMoran, Bruce P. Trade Debt - $48,597 Account Payable Randolph Products Co. Trade Debt - $26,469 Account Payable Highview Properties Statutory Lien $23,533 Tidey, Tim Loan Balance $21,000 SKC Films Trade Debt - $16,530 Account Payable Interfilm Holdings, Inc. Trade Debt - $15,661 Account Payable Andrew Yadamiec, CPA Services $13,990 McMoran, O'Connor & Bramley Trade Debt - $12,609 Account Payable G.C. West v Trade Debt - $11,596 Account Payable PSE&G Trade Debt - $8,555 Account Payable Akzo Nobel Coatings Inc. Trade Debt - $8,387 Account Payable Ogletree, Deakins, Nash, Trade Debt - $7,818 Smoak & Stewart Account Payable Inter-Com, Inc. Trade Debt - $7,638 Account Payable Dick, John Trade Debt - $5,754 Account Payable GATEWAY INC: Shutting Down 188 Retail Stores on April 9 ------------------------------------------------------- Gateway, Inc. (NYSE: GTW) said that after reviewing strategic options for its network of 188 company-operated retail stores, it is planning to close the stores on April 9. Gateway also said it is pursuing wider retail distribution of its products in the U.S. and abroad. The company will continue direct sales of Gateway products to consumers and businesses via http://www.gateway.com/and 1-800- Gateway. As a result of Gateway's decision, approximately 2,500 retail positions will be eliminated during the month of April as store operations wind down. Gateway will provide more detail on its brand and channel strategies, as well as any revenue and cost implications of closing the stores, when it announces its first quarter financial results April 29. About Gateway Since its founding in 1985, Gateway (NYSE: GTW) (S&P, B+ Corporate Credit Rating, Stable) has been a technology and direct-marketing pioneer, using its call centers, web site and retail network to build direct customer relationships. As a branded integrator of personalized technology solutions, Gateway offers consumers, businesses and schools a wide range of thin TVs, digital cameras, connected DVD players, enterprise systems and other products, which work together seamlessly with its award-winning line of PCs. Its products and services received nearly 130 awards and honors last year. With its acquisition of eMachines now complete, Gateway is the third largest PC company in the U.S. and among the top ten worldwide. Visit http://www.gateway.com/for more information. GENERAL CHEMICAL: Exits Chapter 11, Shedding $106 Million of Debt ----------------------------------------------------------------- General Chemical Industrial Products Inc. has completed reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of New Jersey. Its First Amended Plan of Reorganization, As Modified, which was confirmed by the Court on March 18, 2004, became effective on March 31, 2004. The company's Chapter 11 filing excluded General Chemical (Soda Ash) Partners, all U.S. subsidiaries and all non-U.S. subsidiaries, including General Chemical Canada Ltd. General Chemical's previously existing common stock (OTCBB: GNMP) and 10-5/8 percent senior subordinated notes have been deemed cancelled pursuant to the Plan. "We are pleased to have completed our 'pre-arranged' reorganization on the timetable we committed to when we filed in December 2003," said De Lyle W. Bloomquist, newly appointed President and Chief Executive Officer of General Chemical. "Thanks to the efforts of our employees and the support of our customers and suppliers, we continued normal worldwide operations during the Chapter 11 proceedings without any adverse effect on our customers. The Plan has allowed us to significantly deleverage our balance sheet and reduce our debt-service costs, thus giving us the ability to grow our business." General Chemical's aggregate balance-sheet debt upon emergence is approximately $52 million, representing a reduction of approximately $106 million from the company's pre-petition funded debt of $158 million. The Plan provides for the following: -- Harbert Distressed Investment Master Fund Ltd. and General Chemical have entered into a new $45 million term loan agreement; -- Harbert and General Chemical have entered into a new $17.5 million revolving loan agreement; -- Harbert funded a subscription for 94 percent of new preferred stock, representing approximately 63.6 percent of the aggregate outstanding common shares, assuming full conversion of the preferred shares (subject to dilution for management incentive shares and for shares issued upon exercise of pre-petition senior subordinated note holder warrants); -- Pre-petition senior subordinated note holders will receive approximately 98.5 percent of new common stock and 6 percent of new preferred stock, representing approximately 35.9 percent of the aggregate outstanding common shares, assuming full conversion of the preferred shares (subject to dilution for management incentive shares and for shares issued upon exercise of pre-petition senior subordinated note holder warrants). In addition, pre-petition senior subordinated note holders will receive warrants to acquire additional common shares; -- Holders of existing common stock will receive approximately 1.5 percent of the new common stock, representing approximately 0.5 percent of the aggregate outstanding common shares, assuming full conversion of the preferred shares (subject to dilution for management incentive shares and for shares issued upon exercise of pre-petition senior subordinated note holder warrants). Because the Plan provides that fractional shares will be rounded down to the next whole number of shares, any holder of existing common stock who would not receive more than one share of the new common stock will not receive any distribution. The company believes this will be the case with the vast majority of the company's existing common stock holders; -- Holders of pre-petition secured bank claims and debtor-in- possession facility claims have been paid in full. Distributions to pre-petition senior subordinated note holders and existing common-stock holders of new common shares and new warrants, as applicable, will be made in accordance with the Plan. The Plan is available at http://www.gogenchem.com/restructure.htm. About General Chemical Industrial Products Inc. General Chemical's subsidiaries and affiliate are leading producers of soda ash and calcium chloride. Additional information about the company is available at http://www.gogenchem.com/ GERDAU AMERISTEEL: Raising $100-Mil. in Private Equity Placement ---------------------------------------------------------------- Gerdau Ameristeel Corporation (TSX: GNA.TO) intends to sell 26,800,000 common shares to its majority shareholder, Gerdau S.A. The price of each share has been set at C$4.90 per share, the closing price of the Company's common shares on the Toronto Stock Exchange on March 31, 2004. The Company intends to use the total net proceeds of approximately US$100 million for general corporate purposes, which may include funding capital equipment or working capital and repayment of debt. The transaction is subject to approval of the Toronto Stock Exchange and closing is expected to take place no later than April 16, 2004. As of March 31, 2004 Gerdau Ameristeel has 198,196,559 shares outstanding. Gerdau S.A. indirectly holds 68.60%, or 135,954,900 of those shares. Upon completion of the transaction Gerdau Ameristeel will have 224,996,559 common shares outstanding of which 72.34%, or 162,754,900 shares, will be held indirectly by Gerdau S.A. Gerdau Ameristeel is the second largest minimill steel producer in North America with annual manufacturing capacity of over 6.8 million tons of mill finished steel products. Through its vertically integrated network of 11 minimills (including one 50%- owned minimill), 13 scrap recycling facilities and 32 downstream operations, Gerdau Ameristeel primarily serves customers in the eastern half of North America. The company's products are generally sold to steel service centers, fabricators, or directly to original equipment manufacturers for use in a variety of industries, including construction, automotive, mining and equipment manufacturing. Gerdau Ameristeel's common shares are traded on the Toronto Stock Exchange. * * * Standard & Poor's Ratings Services lowered its corporate credit rating on Gerdau Ameristeel Corp. to 'B+' from 'BB-'. In addition, Standard & Poor's lowered its senior secured bank loan rating on Gerdau Ameristeel to 'BB-' from 'BB' and lowered the company's senior unsecured debt rating to 'B' from 'B+'. The 'BB-' rating on the senior secured bank loan is one notch higher than the corporate credit rating on Gerdau Ameristeel indicating the high expectation of full recovery of principal in the event of a default. The outlook on the company is stable. Total debt for the Tampa, Florida-based company was $722 million (including operating leases) at December 2003. Gerdau AmeriSteel is North America's second-largest minimill with annual capacity of 6.8 million tons. GMAC COMM'L: Fitch Affirms BB Rating to 2000-FL-B Class F Notes --------------------------------------------------------------- GMAC Commercial Mortgage Asset Corp.'s mortgage pass-through certificates, series 2000-FL-B, are affirmed by Fitch Ratings as follows: -- $3 million class E 'AAA'; -- $9.3 million class F 'BB+'. Fitch does not rate the $9.3 million class G. Classes A, B, C, and D have paid off. The rating affirmations reflect the concerns with the five specially serviced loans and upcoming loan maturities within the deal. The pool is currently composed of six loans, collateralized by six health care properties. Of the remaining loans in the pool, one (21%) is expected to refinance at maturity. The pool has significant geographic concentrations in Michigan (53%) and Virginia (21%). Currently, there are five cross-collateralized and cross-defaulted loans in special servicing as a result of the Centennial Healthcare bankruptcy filing in January 2003. The loans remain current and are maturing in December 2004. Fitch continues to monitor the resolution of these loans and the Centennial Healthcare bankruptcy. HALE-HALSELL: Gets Nod to Hire Riggs Abney as Bankruptcy Counsel ---------------------------------------------------------------- Hale-Halsell Company sought and obtained approval from the U.S. Bankruptcy Court for the Northern District of Oklahoma to retain Riggs, Abney, Neal, Turpen, Orbison & Lewis, as its counsel. To facilitate the general administration of this estate, the Debtor reports that Riggs Abney will: a. prepare Schedules of assets and liabilities, Statements of financial affairs and other pleadings; b. render legal advice and preparation of legal documents and pleadings concerning claims of creditors, post petition financing, executing contracts, sale of assets, insurance, etc; c. representation in hearings and other contested matters; and d. formation of a disclosure statement and plan of reorganization. Scott P. Kirtley, Esq., reports that Riggs Abney received a $25,000 retainer on March 22,2004. Riggs Abney's hourly rate currently ranges at $150 to $250 per hour. Mr. Kirtley, who will lead the team in this engagement, bills at $175 per hour. Headquartered in Tulsa, Oklahoma, Hale-Halsell Company -- http://www.hale-halsell.com/-- is into Grocery Wholesale business which operates 115 Git-N-Go convenience stores and about 10 Super H Foods supermarkets, primarily in small Oklahoma towns. The Company filed for chapter 11 protection on March 22, 2004 (Bankr. N.D. Okla. Case No. 04-11677). Scott P. Kirtley, Esq., at Riggs, Abney, Neal, Turpen, Orbison represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $19,721,000 in total assets and $9,394,124 in total debts. HARBOR FUNDING: Case Summary & 9 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Harbor Funding Corp. 201 D East Main Street Huntington, New York 11743 Bankruptcy Case No.: 04-82077 Type of Business: The Debtor is a Mortgage Broker. Chapter 11 Petition Date: March 31, 2004 Court: Eastern District of New York (Central Islip) Judge: Melanie L. Cyganowski Debtor's Counsel: Kristin J. Angelino, Esq. Hofheimer Gartlir & Gross LLP 530 Fifth Avenue, 9th Floor New York, NY 10036 Tel: 212-897-7884 Fax: 212-897-4989 Total Assets: $33,300 Total Debts: $1,460,440 Debtor's 9 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Washington Mutual $730,039 Bank, F.A. c/o Mitchell L. Pashkin 25 Harriet Lane Huntington, NY 11743 IndyMac Bank FSB $700,000 155 North Lake Ave Pasadena, CA 91101 Bryan Levy Loans & payments $17,000 for Debtor American Express $3,000 Creagh & Associates $4,000 IRS $4,000 Empire Healthchoice HMO Inc. $1,100 NYS Dept. Of Taxation $1,000 and Finance First American Credco $300 HAYES LEMMERZ: Permanently Closing Howell, Michigan, Mfg. Facility ------------------------------------------------------------------ Hayes Lemmerz International, Inc. (Nasdaq: HAYZ) announced a manufacturing rationalization plan for its North American Wheel Group which will significantly lower operating costs and increase facility utilization. As a result, Hayes Lemmerz will permanently close its Howell, Michigan manufacturing facility and transfer that plant's production to other manufacturing facilities in the U.S. The plant currently employs approximately 180 people, including hourly and salaried staff, who manufacture aluminum wheels for domestic automotive customers. Company officials met April 1, 2004 with plant employees to discuss the closure plans. "This has been a difficult but necessary decision for the Company and we regret the effect it will have on our employees, their families and the Howell community," said Curtis Clawson, Chairman and CEO. "We have determined that this was the most effective course of action to better align our available capacity with the market, and make our overall cost structure more competitive." James Stegemiller, President of Hayes Lemmerz' North American Wheel Group, said, "The closure is a result of industry-wide overcapacity and is not a reflection on the workforce or management team in Howell. However, changes in business conditions have made it necessary to reduce the number of our facilities in order to reduce costs, improve efficiencies and capacity utilization, and thereby optimize our North American Wheel business." Hayes Lemmerz International, Inc. is a world leading global supplier of automotive and commercial highway wheels, brakes, powertrain, suspension, structural and other lightweight components. The Company has 44 facilities and over 11,000 employees worldwide. More information about Hayes Lemmerz International, Inc., is available at http://www.hayes-lemmerz.com/ HERITAGE NETWORKS: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------------- Lead Debtor: Heritage Networks, LLC dba AHN, LLC 50 Broadway No. 1003 New York, New York 10004 Bankruptcy Case No.: 04-33505 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Heritage 215 Entertainment, LLC 04-33504 Heritage 215 Entertainment II, LLC 04-33506 Heritage 215 Entertainment III, LLC 04-33507 Heritage-Baruch Television Distribution, LLC 04-33508 Type of Business: The Debtor is a television sales, distribution, and marketing company that concentrates on ethnically diverse programming, such as the sitcoms Moesha and The Parkers. Chapter 11 Petition Date: March 31, 2004 Court: Northern District of Texas (Dallas) Judge: Steven A. Felsenthal Debtors' Counsel: Craig C. Gant, Esq. 1409 South Lamar, No. 711 Dallas, TX 75215 Tel: 214-426-3906 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtors' 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Paramount Pictures License Fees $9,300,000 Television Group 5555 Melrose Ave. Hollywood, California 90038 Universal TV Distribution Movie Licenses $1,280,356 Holdings, LLC c/o Harter, Secrest & Emery, LLC Twelve Fountain Plaza Suite 400 Buffalo, New York 14202-2203 Carsey-Werner International $1,058,721 4024 Radford Ave. Administration Building Studio City, CA 91604 Studios USA Television Trade Debt $999,000 Distribution, LLC c/o Harter, Secrest & Emery, LLC Twelve Fountain Plaza Suite 400 Buffalo, New York 14202-2203 Warner Bros. Domestic Pay Movie Licenses $989,000 Television 4000 Warner Blvd. Building 160-9th Floor Burbank, California 91522 Twentieth Television Movie Licenses $700,000 1211 Ave. of the Americas 16th Floor New York, New York 10036 Stone Canyon Entertainment, Production Loan $700,000 LLC & Bradford Schlei c/o Randolph Mendelsohn 1800 South Robertson Blvd. Suite 1100 Los Angeles, CA 90035 New Line Cinema Movie Licenses $568,524 888 Seventh Ave. New York, New York 10106 Nielsen Media Research Nielson Ratings $473,341 150 North Martingale Road Schaumburg, IL 60173-2076 Viacom Station Group Station Compensation $442,000 513 W. 57th Street New York, New York 10019 NBC Station Group Station Compensation $432,000 30 Rockefeller Plaza New York, New York 10112 Sinclair Broadcasting Group Station Compensation $344,075 10706 Beaver Dam Rd. Cockeysville, MD 21030 Starz Encore Movie Licenses $247,500 Michael Weiden Employee Compensation $233,000 Bobbitt & Roberts Legal Services $232,399 Dick Clark Productions Executive Producer $210,578 Fees Jeanne Gore Roberts Production Loan $208,893 Production Masters, Inc. Satellite Feed $200,852 Joseph Giordano Employee Compensation $200,000 Syndicated Television Dues $175,000 Association HIGH VOLTAGE: Taps Evercore Restructuring for Financial Advice -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of Massachusetts, Eastern Division, gave its stamp of approval to High Voltage Engineering Corporation and its debtor-affiliates to retain Evercore Restructuring LP as their financial advisors. Evercore has been advising the Debtors since June 16, 2003. By reason of its prepetition engagement by the Debtors, Evercore has acquired valuable knowledge of their business and financial affairs. Evercore will: (a) assist in the evaluation of the Debtors' businesses and prospects; (b) assist in the development of the Debtors' lung-term business plan and related financial projections; (c) assist in the development of financial data and presentations to the Debtors' Board of Directors, various creditors and other third parties; (d) analyze the Debtors' financial liquidity and evaluate alternatives to improve such liquidity; (e) analyze various restructuring scenarios and the potential impact of the scenarios on the value of the Debtors and the recoveries of those stakeholders impacted by any restructuring, reorganization and/or recapitalization of the Debtors affecting existing or potential debt obligations or other claims including, without limitation, senior debt, junior debt, trade claims, general unsecured claims, etc.; (f) provide strategic advice with regard to restructuring or refinancing the Debtors' Obligations; (g) evaluate the Debtors' debt capacity and alternative capital structures; (h) participate in negotiations among the Debtors and their creditors, suppliers, lessors and other interested parties with respect to a Restructuring, an equity investment in the Debtors and a possible sale, merger, or other disposition of all or n portion of the Debtors or their assets; (i) assist the Debtors in preparing marketing materials in conjunction with a possible Transaction, Investment, Financing or debtor in possession financing; (j) assist the Debtors in identifying potential buyers or parties in interest to a Transaction and assist in the due diligence process; (k) assist and advise the Debtors concerning the terms, conditions and impact of any proposed Transaction; (l) assist in arranging DIP Financing for the Debtors as requested; (m) testify in court or at depositions in furtherance of a Restructuring, Investment, Financing, DIP Financing or Transaction; and (n) provide such other advisory services as are customarily provided in connection with the analysis and negotiation of a Restructuring, Investment, Financing, DIP Financing or Transaction, as requested and mutually agreed. The Debtors will pay Evercore: i) a $100,000 monthly advisory fee in cash; ii) upon the consummation of a Restructuring, an additional fee Restructuring Fee equal to 1.0% of the face amount of the 10-3/4% Senior Notes Due 2004 payable in cash; iii) upon consummation of an Investment, an additional fee Investment Fee equal to 3.0% of aggregate value of any Investment; iv) a DIP Financing fee of 1.0% of the total facility size of any DIP financing; v) a financing fee of 1.0% of the total facility size of any Financing; and vi) upon the consummation of a Transaction, a Transaction fee calculated as 1.25% of the Consideration. 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. IA GLOBAL: Auditors Lift Going Concern Doubts After Financing ------------------------------------------------------------- IA Global Inc. (Amex: IAO) announced that as the result of the recent financing round of $1.5 million, and the completion of the acquisition of Rex Tokyo Co. Ltd., a Japanese private company, the "going concern" clause has been removed from the financial statements of the Company. The acquisition expands our media entertainment group and provides further consolidation of Japanese business and substantial revenue growth. Rex Tokyo completed its fiscal year on September 30, 2003, with revenues of JPY 3 billion Yen, approximately $28 million at the current exchange rate. Rex Tokyo is a supplier and maintenance contractor of parts to the Pachinko and machine gaming industry in Japan. The Pachinko and machine gaming industry in Japan is a major business. They are a supplier and fitter of installations for both new Pachinko parlors and stores that are carrying out re-fittings. It supplies items such as automatic medal dispensing machines, automatic cigarette butt disposal systems, as well as numerous new Pachinko and Slot machines. In addition, it also contracts to carry out the maintenance of the machinery within these parlors. The company's CFO, Mark Scott, said, "We are very pleased with the progress of our restructuring efforts, the closing of the $1,500,000 financing and the closing of the Rex Tokyo acquisition. These transactions position the Company for immediate growth." About IA Global Inc. IA Global, Inc. is a public holding company with a concentrated focus on acquiring companies that operate in the three primary areas of entertainment, media and technology. Through our 67% equity interest in Fan Club Entertainment Co., Ltd., a privately held Japanese company, we provide advertising, merchandising, publishing, website and data management services to Cyberbred Co., Ltd., an affiliated company which has recently signed a 5-year agreement with Marvel Entertainment Inc. and Marvel Characters Inc. to manage their fan club in Japan. In addition, we are developing an Internet acceleration product and service that uses a combination of highly advanced and proven compression and caching technologies to increase delivery of Internet and e-mail data to the end-user by an average of between 4-6 times. We recently formed a joint venture company in Australia named QuikCAT Australia to market and distribute our internet acceleration software service in the Australia and New Zealand markets. We also recently acquired a 60.5% equity interest in Rex Tokyo Co., Ltd, a privately held Japanese company, that is a supplier and maintenance contractor of parts to the Pachinko and slot machine gaming industry in Japan. INDUSTRIAL PAINT: Case Summary & 40 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Industrial Paint & Supply Inc. dba Sappanos Paint & Wallpaper Co. 3545 North Kedzie Chicago, Illinois 60618 Bankruptcy Case No.: 04-12747 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Hi-Grade Paint Co Inc. 04-12750 Type of Business: The Debtor is a Paint Retailer. Chapter 11 Petition Date: March 31, 2004 Court: Northern District of Illinois (Chicago) Judge: Bruce W. Black Debtors' Counsel: Paula K. Jacobi, Esq. Sugar Friedberg & Felsenthal 30 North Lasalle Street Suite 2600 Chicago, IL 60602 Tel: 312-704-9400 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million A. Industrial Paint & Supply's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Benjamin Moore & Co. Inventory $641,213 Dept. CH 10417 Palatine, IL 60055-0417 Do It Best Corp. Inventory $74,304 Illinois Dept. of Revenue Taxes $71,831 Muralo Co., Inc. Inventory $59,822 Internal Revenue Service Taxes $54,156 CBD Group Inventory $20,312 Coronado Paint Co. Inventory $17,299 Elder & Jenks, Inc. Inventory $10,271 American Express Purchases $9,281 Seff Leaf Products, Inc. Inventory $8,056 CPC Modern Masters Inventory $7,739 ICI/Glidden Paints (Devoe) Inventory $6,516 Loparex, Inc. Inventory $6,418 Paintland, Inc. Inventory $6,066 Bestt Liebco Corp. Inventory $5,595 Wolf-Gordon, Inc. Inventory $4,570 Shell Oil Company Gasoline $4,558 Citi Cards Purchases $4,246 Fashion Tech Inventory $4,017 MDC Wallcoverings Inventory $3,750 B. Hi-Grade Paint Co. Inc.'s 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Benjamin Moore & Co. Inventory $1,391,341 Dept. CH 10417 Palatine, IL 60055-0448 Coronado Paint Co. Inventory $892,636 Internal Revenue Service Taxes $191,253 Muralo Co., Inc. Inventory $168,984 Illinois Dept. of Revenue Taxes $139,983 SBC Ameritech Advertising $38,856 CBD Group Inventory $33,448 Paintland, Inc. Inventory $24,823 Catalano, Caboor & Co., Ltd. Accounting Services $23,566 American Express Purchases $19,610 PPG Architectural Finishes Inventory $16,602 Carbit Paint Co. Inventory $15,283 Elder & Jenks Inc. Inventory $12,874 Rust-Oleum Corporation Inventory $11,134 Lumberman's Wholesale Inventory $10,267 ICI/Glidden Paints Inventory $8,335 New England Financial Insurance $7,209 Information Leasing Corp. ATM Leases $6,120 Silent Gliss Inventory $6,021 Corona Brushes Inventory $6,011 INTERNATIONAL STEEL: Preparing $600 Million Senior Debt Offering ---------------------------------------------------------------- International Steel Group Inc. (NYSE: ISG) announced that it intends to offer, subject to market and other conditions, $600 million aggregate principal amount of senior notes due 2014 in an offering exempt from the registration requirements of the Securities Act of 1933. ISG intends to apply the net proceeds of the offering to repay borrowings of approximately $266.8 million outstanding under a term loan, to repay other debt and capital lease obligations and for general corporate purposes. The notes to be offered have not been and will not be registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. About International Steel Group Inc. International Steel Group Inc. is the second largest integrated steel producer in North America, based on steelmaking capacity. The Company has the capacity to cast more than 18 million tons of steel products annually. It ships a variety of steel products from 11 major steel producing and finishing facilities in six states, including hot-rolled, cold-rolled and coated sheets, tin mill products, carbon and alloy plates, rail products and semi-finished shapes serving the automotive, construction, pipe and tube, appliance, container and machinery markets. * * * As reported in the Troubled Company Reporter's December 19, 2003 edition, Standard & Poor's Ratings Services revised its outlook on integrated steel manufacturer International Steel Group Inc., to positive from developing. Standard & Poor's at the same time affirmed its 'BB' corporate credit rating and 'BB+' senior secured bank loan rating on the company. This is one notch higher than its corporate credit rating. The facility consists of a $350 million revolving credit facility due 2006; a $250 million term loan A facility due 2005 and; a $400 million term loan B facility due 2007. INT'L WIRE: Continues Hiring of Ordinary Course Professionals ------------------------------------------------------------- International Wire Group, Inc., asks the U.S. Bankruptcy Court for the Southern District of New York for permission to continue employing the professionals they turn to in the ordinary course of business, without the submission of separate employment applications, affidavits, and the issuance of separate retention orders for each individual professional. The Debtors propose to pay each Ordinary Course Professional, without a prior application to the Court, 100% of the fees and disbursements incurred, upon the submission of an appropriate invoice setting forth in reasonable detail the nature of the services rendered and disbursements actually incurred, up to the lesser of: (a) $30,000 per month per Ordinary Course Professional or (b) $375,000 per month, in the aggregate, for all Ordinary Course Professionals. The Debtors desires the Ordinary Course Professionals to render many of the services to their estates similar to those services rendered prior to the Commencement Date. These professionals render a wide range of legal, accounting, tax, and other services for the Debtors that impact the Debtors' day-today operations. It is essential that the employment of the Ordinary Course Professionals, many of whom are already familiar with the Debtors' affairs, be continued on an ongoing basis so as to avoid disruption of the Debtors' normal business operations. The Debtors submit that the proposed employment of the Ordinary Course Professionals and the payment of monthly compensation are in the best interest of their estates and their creditors. Headquartered in Saint Louis, Missouri, International Wire Group, Inc., designs, manufactures and markets bare and tin-plated copper wire and insulated copper wire products for other wire suppliers and original equipment manufacturers. The Company filed for chapter 11 protection on March 24, 2004 (Bankr. S.D.N.Y. Case No. 04-11991). Alan B. Miller, Esq., at Weil, Gotshal & Manges, LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $393,000,000 in total assets and $488,000,000 in total debts. KB HOME: Declares Quarterly Dividend Payable on May 27 ------------------------------------------------------ The board of directors of KB Home (NYSE: KBH) has declared a quarterly cash dividend of twenty-five cents ($.25) per share on the company's Common Stock, payable on May 27, 2004 to shareholders of record on May 13, 2004. Building homes for nearly a half of century, KB Home is one of America's premier homebuilders with domestic operating divisions in the following regions and states: West Coast -- California; Southwest -- Arizona, Nevada and New Mexico; Central -- Colorado, Illinois and Texas; and Southeast -- Florida, Georgia, North Carolina and South Carolina. Kaufman & Broad S.A., the Company's majority-owned subsidiary, is one of the largest homebuilders in France. In fiscal 2003, the Company delivered 27,331 homes in the United States and France. It also operates KB Home Mortgage Company, a full-service mortgage company for the convenience of its buyers. Founded in 1957, KB Home is a Fortune 500 company listed on the New York Stock Exchange under the ticker symbol "KBH." For more information about any of KB Home's new home communities, call 1-888-KB-HOMES or visit the Company's Web site at http://www.kbhome.com/ * * * As reported in the Troubled Company Reporter's January 23, 2004 edition, Fitch Ratings has assigned a 'BB+' rating to KB Home's (NYSE: KBH) $250 million, 5.75% senior unsecured notes due February 1, 2014. The Rating Outlook is Positive. The current ratings and Outlook reflect KB Home's solid, consistent profit performance in recent years and the expectation that the company's credit profile will continue to improve as it executes its business model and embarks on a new period of growth. The ratings also take into account the company's primary focus on entry-level and first-step trade-up housing (the deepest segments of the market), its conservative building practices, and effective utilization of return on invested capital criteria as a key element of its operating model. Over recent years the company has improved its capital structure and increased its geographic diversity and has better positioned itself to withstand a meaningful housing downturn. Fitch also has taken note of KB Home's role as an active consolidator within the industry. Risk factors also include the cyclical nature of the homebuilding industry. Fitch expects leverage (excluding financial services) to remain comfortably within KB Home's stated debt to capital target of 45%-55%. KMART: Sues Local Governments to Slash 2002 Property Tax Bills -------------------------------------------------------------- Kmart is suing hundreds of local governments in a Chicago bankruptcy court, trying to get out of paying millions of dollars the discount chain owes in taxes across the country, Knight-Ridder reports. Kmart says its 2002 tax bill should be cut dramatically and it should get a refund for 2001 because it paid too much. The suit does not involve 2003 taxes. At issue are the taxes levied on store fixtures such as shelves and display cases and equipment such as cash registers, computers, phone systems and forklifts. Kmart is objecting to the way property appraisers value the equipment, the news agency reported. (ABI World, April 1) MASSEY ENERGY: S&P Affirms Low-B Ratings & Removes CreditWatch -------------------------------------------------------------- Standard & Poor's Rating Services affirmed its ratings, including its 'BB' corporate credit rating, on Massey Energy Co. and removed the ratings from CreditWatch where they were placed on March 11, 2004. The outlook is negative. In addition, Standard & Poor's assigned its 'BB' rating to Massey's proposed $150 million senior unsecured convertible notes due 2024. Proceeds from the new notes are expected to be used to repurchase outstanding debt, buyout equipment lease obligations, and improve liquidity. "The removal of the ratings from CreditWatch follows Massey's announcement that it intends to sell $150 million of convertible senior unsecured notes, which will improve liquidity by over $40 million, somewhat alleviating Standard & Poor's concerns that Massey's liquidity at the end of the first half of 2004 might not have provided a sufficient cushion to cope with operating or other unforeseen disruptions," said Standard & Poor's credit analyst Dominick D'Ascoli. With higher contract realizations in 2004 being second-half weighted, Standard & Poor's expects Massey to be free cash flow negative during the first half of 2004. Also, the removal of the ratings from CreditWatch reflects a significant increase in Massey's expected average coal contract realizations to a level much higher than when Standard & Poor's placed its ratings on CreditWatch. Massey accomplished this by entering into metallurgical coal contracts in the export market, which has seen a tremendous increase in prices. Massey has been redirecting--and will continue to redirect--some of its existing production of steam coal with metallurgical coal properties to the metallurgical coal export market, while honoring the existing contracts by purchasing lower-priced spot steam coal. Furthermore, if the company is successful in increasing production to 45 million tons, this--coupled with higher price realizations in 2004--should result in substantially stronger credit protection measures than Standard & Poor's previously expected. The ratings on Massey Energy reflect its substantial coal deposits, contracted production, and moderate financial leverage verses its peers, offset by its high cost position and the difficulties of operating in Central Appalachia. MCWATTERS: Closes Sale of Kiena Royalties Portion for $700,000 -------------------------------------------------------------- McWatters Mining Inc. (TSX: MWA) completed the sale of a portion of its Kiena Mine Royalties to Wesdome Gold Mines Inc. for a cash consideration of $700,000. Pursuant to the transaction, the 4% net smelter return royalty ("NSR") on existing resources to be processed from the Kiena property and the 2.0% NSR on any new resources found on the Kiena property is replaced with a 2.5% NSR on all resources to be processed from the Kiena property. Wesdome had agreed to pay $1.50 per tonne of ore processed from any source for the first 5 million tonnes with $1.00 per tonne payable on ore processed from any source thereafter. Wesdome will now pay $1.00 per tonne of ore processed from any source. Wesdome will still pay $1 million if, as and when the Kiena mill effectively resumes commercial production, and still has a first right of refusal on any of McWatters's royalty interests. This transaction will allow McWatters to continue the sale process of a partial or total interest in its Sigma-Lamaque Mining Complex. McWatters will also examine all other possible alternatives that could lead to a resumption of operations at the Sigma-Lamaque Complex. * * * As previously reported, McWatters Mining Inc. obtained from the Quebec Superior Court, a time extension, until April 28, 2004, to submit a proposal to its creditors under the Bankruptcy and Insolvency Act. This extension will allow the Company to continue the sale process of a partial or total interest in its Sigma-Lamaque Mining Complex. McWatters will also examine all other possible alternatives that could lead to a resumption of the Sigma-Lamaque Complex. MIRANT CORP: Scope of Deloitte & Touche's Retention Expands ----------------------------------------------------------- Pursuant to Sections 327(a) and 328(a) of the Bankruptcy Code, the Mirant Corp. Debtors sought the Court's authority to expand their employment of Deloitte & Touche LLC as advisors and consultants. The Court already authorized the Debtors to employ Deloitte in connection with a wide range of tax consulting, tax compliance and tax advisory services effective as of July 14, 2003. The Debtors wished to expand the scope of Deloitte's engagement effective as of: -- November 17, 2003 for cost allocation services; -- December 1, 2003 for valuation services; and -- December 3, 2003 for outsourcing services. Pursuant to Engagement Letters, Deloitte will provide these services: A. Cost Allocation (a) Develop alternative cost allocation methodologies for use by Mirant Corporation in allocating costs among affiliates on a prospective basis; (b) Assist Mirant in reallocating costs among affiliates on a pro forma basis for the period July 2003 through October 2003, including a comparative analysis of the pro forma cost reallocation to the cost allocations recorded for the same time period; (c) Prepare a report to include a discussion of the new allocation methodologies, Mirant's rationale for selecting each, and other methodologies proposed by Deloitte but not selected by Mirant for cost allocation purposes; (d) Document the new allocation methodologies and the basis for their application in a policies-and-procedures format of use by Mirant; (e) Assist Mirant in the incorporation of any new allocation methodologies into Mirant's General Ledger system; and (f) Assist with other accounting and related matters as Mirant may, from time to time, request and as may be agreed to by Deloitte. B. Valuation Provide Mirant's management with valuation analyses to assist in meeting reporting obligations under SFAS 142 and SFAS 144. C. Outsourcing Provide middle-office and back-office outsourcing and functional support under the Debtors' direct supervision. Jacien Steele, a partner of Deloitte & Touche LLP, told Judge Lynn that for the additional services, the firm will charge the Debtors its customary hourly rates for services rendered, which are: Cost Position Valuation Allocation Outsourcing -------- --------- ---------- ----------- Partner/Principal/ $330 - 390 $450 - 600 $600 Director Senior Manager 275 - 325 350 - 500 500 Manager 250 - 290 300 - 450 450 Senior Staff 190 - 230 175 - 325 325 Staff 150 - 180 125 - 225 225 Deloitte will also seek reimbursement of its expenses. * * * Judge Lynn authorizes the Debtors to expand the scope of Deloitte & Touche LLP's services, effective as of November 17, 2003 for the Cost-Allocation Services, December 3, 2003 for the Outsourcing Services, and December 15, 2003 for the Valuation Services. With respect to the Expanded Services, the indemnification provisions set forth in the Engagement Letters are not approved. However, Deloitte will continue to be afforded any and all protections afforded to Protected Professionals and Persons within the Protected Persons Orders. The Order will not affect any prior final order approving the employment of Deloitte with regard to tax services. 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. 27; Bankruptcy Creditors' Service, Inc., 215/945-7000) MIRANT CORP: Semco Demands Decision on Zeeland Unit Lease Contract ------------------------------------------------------------------ Semco Energy Gas Company asks the Court to compel Mirant Zeeland LLC to assume or reject the Transportation Services Contract dated December 17, 1999 between Semco and Mirant. John S. Broude, Esq., at Broude, Smith & Jennings, PC, in Fort Worth, Texas, relates that Semco provides natural gas transmission services to Mirant for its natural gas power plant in Zeeland, Michigan. The services are provided to Mirant through a dedicated pipeline Semco operates and maintains. Mirant entered into a Tax Abatement Contract with the City of Zeeland under which Mirant receives favorable tax treatment from the City for its current and future operations at the Zeeland Plant. With the Court's approval, Mirant assumed the Tax Abatement Contract on October 22, 2003. Mr. Broude points out that with the assumption of the Tax Abatement Contract, it is clear that Mirant intends to continue to operate the Zeeland Plant for the foreseeable future, and will need continued natural gas transportation services. Under the Transportation Contract and another agreement designated as Lateral Construction and Connection Agreement, Semco was and is obligated to design, construct, and maintain a 16-inch diameter, seven and one-half mile long natural gas pipeline system to the Zeeland Plant. The Transportation Contract requires Semco to provide transportation services through the pipeline for natural gas purchased by Mirant from third party. In effect, Mirant "rents" space in the pipeline, which is maintained at Semco's expense, for delivery to the Zeeland Plant. These maintenance charges can be significant, and include: (i) maintaining quality of the natural gas from the Receipt Point to the Delivery Point; (ii) providing and operating all equipment necessary to filter from the gas stream any free liquids, which may be present in the pipeline's system as well as to filter any liquids which may be dropped from suspension in the gas stream due to pressure reduction; (iii) providing and operating a gas heater to ensure a gas temperature at the Delivery Point within a specified range; (iv) regulating pipeline pressure at the Delivery Point to maintain a specified range; and (v) providing a fail safe pressure relief valve at the Delivery Point to protect against equipment damage from excess pressure. In exchange, Mirant is required to make a once a year payment to Semco according to a schedule contained in the Transportation Contract. All payments are to be made on or before December 31 of each year. The amount due on December 31, 2003 is $995,000. To date, Mr. Broude states, Mirant had made no effort to assume or reject its contract with Semco despite the fact that it continues to make beneficial use of the pipeline to the Zeeland Plant. Furthermore, the Zeeland Plant manager has represented to Semco that Mirant expects to continue operating the Zeeland Plant. According to Mr. Broude, even though Mirant refuses to assume or reject its agreements with Semco, Semco continues to perform under those agreements and incur the cost of maintenance for the pipeline, which has historically exceeded $100,000 over the last two years. Mirant already cured and assumed a Tax Abatement Contract to preserve Zeeland Plant's favorable operating status for the foreseeable future. Semco believes that it is in Mirant's best interest to assume its Transportation Contract and lateral Agreement with Semco to preserve the generating capacity of the Zeeland Plant. However, despite Mirant's consistent representations to the Court that it is administratively solvent, Mirant failed and refused to make a decision to assume or reject. "This unfairly leaves Semco in the position of continuing to expend maintenance and operational costs without any assurance that the contracts will be assumed," Mr. Broude says. Furthermore, it is impossible for Semco to make rational decisions concerning deferred maintenance or capital improvements to the pipeline until this issue is resolved. Semco Wants $531,575 Payment Mr. Broude informs Judge Lynn that on December 13, 2003, Semco received $462,425 payment from Mirant on the Transportation Contract. There remains a $531,575 balance on the postpetition payment due on December 31, 2003. Under Section 503(b)(1)(A) of the Bankruptcy Code, the payment due on December 31, 2003 constitutes a postpetition obligation of Mirant that is entitled to administrative expense status. Therefore, the $531,575 remaining balance should be paid immediately. Accordingly, Semco asks the Court to compel Mirant to immediately pay its $531,575 administrative expense to Semco. 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. 27; Bankruptcy Creditors' Service, Inc., 215/945-7000) NATIONAL CENTURY: Court Gives Go-Ahead to Conduct Rule 2004 Exams ----------------------------------------------------------------- Pursuant to Rule 2004 of the Federal Rules of Bankruptcy Procedure, the National Century Debtors ask the Court to direct the production of documents from additional third party entities and individuals that may be in possession of information relevant to the Debtors' evaluation of the potential estate claims: A. Accounting firms and accountants that are providing or have provided their professional services to NCFE or NCFE affiliates: -- Arthur Andersen, LLP, -- Tim Michaels, and -- Greg Aronstein. B. Financial underwriters, placement agents, audit structuring agents that are or have been involved in various transactions with NCFE and its affiliates. They have knowledge that is expected to provide information relevant to the evaluation of available assets and determining what assets and what claims may belong to the Debtor estates. C. NCFE affiliated entities that have relevant knowledge regarding NCFE's various activities and transactions that are at issue in the Debtors' bankruptcy: -- Kuld Partners, LLC, -- Kuld, Corp., -- Supremacy Capital Corp., -- E&D Investments, Inc., -- Prestige Palms, LLC, -- Midwest Development Group, LLC, -- National Recovery Consulting Group, LLC, -- DAB Investments, -- Healthmed, Inc., -- ECS Holdings, Inc., -- Sterling Healthcare, -- Scott Medical Group, LLC, -- Chateau, LLC, -- Florida Health Plan Management, -- Foundation Health, -- Beacon Health Group, -- Florida Health Plan Holdings, LLC, -- Florida Health Plan Holdings II, LLC, -- DHP Holdings, LLC, -- DHP Management, LLC, and -- Health Enterprises, Inc. D. Law firms and attorneys that are providing or have provided their professional services to NCFE or its affiliates: -- Fergeson, Skipper, Shaw, Keyser, Baron & Tirabassi, and -- J. Ronald Skipper. E. Entities which performed due diligence on NCFE, its subsidiaries or affiliates and therefore have relevant knowledge relating to the acts, conduct, property, liabilities and financial condition of the Debtors' estates: -- Prudential Securities, Inc., -- Goldman Sachs & Co., and -- Bearing Point, Inc. F. Individuals associated with various NCFE healthcare providers and therefore have knowledge and information relevant the evaluation of available assets and determining what assets and what claims may belong to the Debtor estates: -- Craig W. Porter, and -- James Happ. G. Banks, brokerage firms, and investment advisors that have information relevant to the evaluation of available assets and to matters relating to potential preference or fraudulent transfer claims belonging to the Debtors' estates. H. Investigators that have knowledge and information relating to the acts, conduct, property, liabilities and financial condition of the Debtors' estates: -- Mike Powers Investigations, and -- Mike Powers. I. Mercor, Inc. J. Sprint Corporation. According to Kathy D. Patrick, Esq., at Gibbs & Bruns, in Houston, Texas, these parties have not been the subject of the Debtors' Bankruptcy Rule 2004 requests or other formal discovery to date. Based on the documents reviewed by the Debtors, these parties may have information that is relevant to the acts, conduct or property of the Debtors' estates or to the Debtors' liabilities and financial condition, which may affect the administration of the Debtors' bankruptcy estate. * * * Judge Calhoun authorizes the Debtors to issue subpoenas or other process to the Second Rule 2004 Examinees to compel the production of documents from the person or entity. The Second Rule 2004 Examinees will produce all responsive documents at the offices of Gibbs & Bruns in Houston, Texas. 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) NATIONS GOVERNMENT: Makes Final Liquidating Distribution -------------------------------------------------------- The Board of Directors of Nations Government Income Term Trust 2004, Inc. (NYSE: NGF) previously approved a Plan of Liquidation and Termination for the Company. The Plan provides for the Company's complete liquidation by March 31, 2004 or shortly thereafter and its later termination as a registered investment company and dissolution as a Maryland corporation. The final liquidating distribution for the Company will be $10.02. NES RENTALS: Reorganized Co Says 2003 Earnings Exceed Expectations ------------------------------------------------------------------ NES Rentals Holdings Inc. (OTC Bulletin Board: NLEQ), the Midwest's largest equipment rental company with 3,000 employees nationwide, has filed its Form 10-K with the U.S. Securities and Exchange Commission for the year ended Dec. 31, 2003. NES Rentals Holdings Inc. filed for reorganization on June 27, 2003, and successfully emerged from Chapter 11 protection this past February with the assistance of Carl Marks Consulting Group. During bankruptcy the company continued business as usual, renting its specialty and general equipment - with a focus on aerial work platforms, cranes and traffic safety- related services - to construction and industrial end users. Total revenues for 2003 were $567.1 million compared with $621.3 million for 2002, a difference of $54.2 million. Rental and service revenues accounted for 85.1 percent of 2003 total revenues, compared to 82.6 percent of 2002 total revenues. The company's gross profit and operating margins improved in 2003 from 2002 as a result of substantial cost-cutting measures taken throughout the year. The cost-cutting measures included closing and consolidating branch operations, centralizing shared services and administrative functions and rationalizing NES' rental equipment mix. Improved Operations and Financial Position Post-Bankruptcy Commenting on NES' 2003 earnings results, NES' Chief Financial Officer Michael Milligan said, "The company performed much better than expected through this difficult period of time. We have taken many steps to improve the operations, financial position and capital structure of NES that will help us in the future. "The financial statements for 2003 reflect the write-off of goodwill and other debt issuance costs that represent non-cash items. NES Rentals now starts off on solid financial ground with a new $500 million credit facility from a bank group led by our long-term agent, Wachovia Bank," added Milligan. "We're fortunate because our current cash position will allow us to increase our fleet's size, and improve fleet mix and quality." NES Rentals Interim Chief Operating Officer Doug Booth, a partner with Carl Marks, believes improvements in operation and marketing efficiencies now put NES Rentals in an excellent position. According to Booth, the new $500 million credit facility will enable NES Rentals to spend about $90 million in capital expenditures in 2004 and aggressively revitalize its fleet of 45,000 pieces of equipment. Fleet revitalization is central to NES' reorganization and the company plans to reinvest heavily in its fleet over the next several years to meet the needs of its many customers. "We also have successfully consolidated more than a dozen separate information systems into a single database and established a Shared Services Center, which will help us more effectively manage our fleet and enhance customer service nationwide," said Booth. "This earnings report reflects the effect of last year's bankruptcy and reorganization," said Booth. "Subsequent 10-K reports will reflect NES' new capital structure and fresh-start accounting." Duff Meyercord, NES' acting chief executive officer and the chief restructuring officer and partner with Carl Marks Consulting Group, added, "Throughout reorganization NES Rentals maintained the overwhelming support of the bank group and its bondholders and vendors. We're excited about 2004 and NES Rentals' prospects for moving forward with its financial and operational restructuring." New Board of Directors by May NES Rentals expects to announce and induct its new board of directors by the end of April. The board's first assignment is to induct a new CEO for the company by early summer. "A slew of qualified candidates demonstrated interest in the CEO position, and we've narrowed the pool," said Meyercord. "Each final candidate is both seasoned and operations focused. The new CEO will be the person the board believes can best carry out NES Rentals' various restructuring goals." About NES Rentals Holdings, Inc. NES is the fourth largest company in the $25 billion equipment rental industry. The company focuses on renting specialty and general equipment to industrial and construction end-users. It rents more than 750 types of machinery and equipment, and distributes new equipment for nationally recognized original equipment manufacturers. NES also sells used equipment as well as complementary parts, supplies and merchandise, and provides repair and maintenance services to its customers. In addition to the rental business NES is the second largest supplier of traffic and safety services to the construction industry. The company is a leading competitor in each geographic market it reaches, from its approximately 160 locations in 34 states and Canada. For more information on NES, visit http://www.nesrentals.com/ NRG ENERGY: Moves to Disallow Tacoma City's $25+ Million Claim -------------------------------------------------------------- Before the NRG Energy Debtors' Petition Date, the City of Tacoma, Washington evaluated the feasibility of a project involving: * the conversion of processable waste into refuse derived fuel; * the modification and operation of an existing steam power plant located in Tacoma to produce electricity from RDF; and * the sale of electricity from the Power Plant. In 1999, the City and Tacoma Energy Resources Company began discussing the TERC's potential involvement in the Project. TERC and the City ultimately entered into a Power Plant Services Agreement dated October 26, 2000, which required TERC to upgrade the Power Plant to make it capable of converting 150,000 tons of RDF into electricity. In turn, the City would upgrade a separate resource recovery facility for processing RDF to make it capable of meeting the Power Plant's RDF capacity. The Contract limited TERC's costs for upgrades to the Power Plant at $7,000,000, while the City's costs to upgrade the resource recovery facility were capped at $6,500,000. The Contract expires in October 2020 unless terminated sooner. The Contract is premised on the Project's feasibility and economic viability. In the event of breach or termination, the Contract limits TERC's total aggregate liability to the amount of the defined "TERC Termination Payment" as set forth in the Contract -- $6,000,000 as of 2003 and $5,450,000 as of 2004. The Contract precludes an award of damages. The Contract also prohibits any award of indirect, incidental, special, exemplary, punitive or consequential damages, except where the damages are expressly provided for. By law, the Power Plant cannot be upgraded without first obtaining certain environmental permits. Hence, the parties agreed that the City would obtain all permits necessary for upgrading and operating the resource recovery facility and the Power Plant. The City represented to TERC that the permits would be obtained by the end of 2000. However, the City failed to deliver the permits. As a result of the delays in obtaining all necessary permits, TERC concluded that the Power Plant could never viably commence operations. In the summary of 2002, TERC prepared reasonable and appropriate financial models with projections to show that neither it nor the City would make a profit from the Project. The Contract is premised on the Project and the operation of the Power Plant being economically viable. The Projection established that the Project is not economically viable. In August 2002, TERC representatives and the City met to review the Projections. The City accepted TERC's conclusion that the Project was no longer economically viable. Based on the Project's lack of economic viability due to the delay in securing the permits, TERC proposed that the parties rescind the Contract. The City's representatives indicated that they would recommend the rescission to the Tacoma City Council. The City subsequently changed its mind in light of the below- market tipping fee that it must pay under the Contract. The Contract requires the City to pay a $5.50 initial tipping fee per ton. The City asserted that without the Project, it would have had to pay $35 per ton to bring its waste to a landfill. Because of the tipping fee benefit, which accrues solely to the City and not to the Project, the City refused to bring the matter to the Tacoma City Council and refused to mutually rescind the Contract. The City seeks to have the Project lose money so it can unilaterally benefit from the decreased tipping fee. According to Albert Togut, Esq., at Togut, Segal & Segal, in New York, on October 26, 2000, NRG Energy, Inc. executed a guaranty for TERC's performance under the Contract. The Guaranty provides that NRG's liabilities as guarantor with respect to the payment of TERC's guaranteed obligations will be subject to the same limitations of liability as are applicable to TERC. On July 11, 2003, the City filed Claim No. 332, asserting that NRG is indebted to the City in the amount of the TERC Termination Payment, plus damages that the City estimates to be in excess of $25,000,000. The City asserted that its damages are equal to the present value of the landfill waste shipping charges it expects to incur as a result of TERC's alleged breaches under the Contract. NRG is liable under the Guaranty for all of the City's damages caused by TERC's non-performance under the Contract. The City further alleged that, by filing for Chapter 11 protection, NRG breached a representation in the Guaranty, which provided that no bankruptcy proceedings were pending or threatened. The City also sent a letter to TERC, asserting that TERC: (i) terminated the Contract without cause by refusing to approve the City's proposed expenditures and budget. A management committee, which is comprised of two TERC representatives and two representatives of the City, must approve Power Plant expenses and the expenditure of City Funds in excess of $25,000; (ii) materially breached the Contract with respect to the Guaranty; and (iii) committed "willful misconduct" by materially and willfully breaching the Contract by taking action that would "precipitate termination of the Power Plant lease and the Project as a whole." TERC denies the City's accusations. Pursuant to Section 502 of the Bankruptcy Code, the Debtors ask the Court to disallow Claim No. 332. Mr. Togut contends that TERC has no liability to the City for several reasons: -- The Contract has not been terminated either by the City or by TERC, and TERC has fully performed; -- TERC is excused or discharged from further performance under the Contract by a failure of condition precedent. Obtaining the necessary Project permits required by law within the time to allow the Project to remain economically viable is a condition precedent to TERC's continuing obligations under the Contract. However, all necessary permits were not obtained within the time to allow the Project to remain economically viable; -- TERC is excused or discharged from further performance under the Contract by virtue of the doctrine of impossibility of performance. The Power Plant is subject to Section 173-434 of the Washington Admin. Code, which requires that incinerators operate at an average temperature of 1,800 degrees Fahrenheit. Mr. Togut tells the Court that the Power Plant will not be able to comply with this rule because it utilizes fluidized bed combustors, which operate between 1,400 and 1,600 degrees Fahrenheit. At 1,650 degrees Fahrenheit, sand bed materials begin to collect in clumps, and above that temperature, undesirable off-gasses are created; -- TERC is excused or discharged from further performance under the Contract by virtue of the doctrines of frustration of purpose and mutual mistake since: (a) the necessary permits still have not been obtained; (b) the upgrades to the Power Plant and resource recovery facility will significantly exceed $7,000,000 and $6,500,000; and (c) the Project cannot operate in compliance with all laws and in a safe and environmentally responsible manner; and -- The City breached its contractual obligations and implied obligations of good faith and fair dealing to TERC by: (a) failing to obtain all necessary permits within the time as to allow the Project to remain economically viable; (b) failing to voluntarily rescind the Contract; and (c) attempting to force TERC to continue to incur losses and fund a Project that lacks economic viability for the sole purpose of allowing the City to profit by decreased solid waste disposal costs. "Because TERC has no liability to the City under the Contract, NRG has no liability to the City under the Guaranty," Mr. Togut emphasizes. (NRG Energy Bankruptcy News, Issue No. 25; Bankruptcy Creditors' Service, Inc., 215/945-7000) ON SEMICONDUCTOR: S&P Rates Planned $260M Debt Offering at CCC+ --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'CCC+' rating to ON Semiconductor Corp.'s planned offering of $260 million zero- coupon convertible senior subordinated notes, which will be used to redeem a like amount of 12% notes due 2009, and for other corporate purposes. At the same time, Standard & Poor's affirmed its 'B' corporate credit rating and other ratings on the Phoenix, Ariz.-based company. The outlook is stable. ON Semiconductor had total debt of $1.4 billion at Dec. 31, 2003. "ON has taken actions to reduce leverage and increase financial flexibility, and improving industry conditions should contribute modestly to profitability. Still, the company's business and financial profile are not likely to strengthen materially beyond current levels in the next few years," said Standard & Poor's credit analyst Bruce Hyman. ON Semiconductor supplies standard logic and analog integrated circuits and discrete semiconductors, holding about a 5% combined share of those fragmented markets. The company's expectations that revenues for the quarter ended March 31, 2004, when reported, will be up about 8% sequentially, with gross margins above 30%, reflect firming industry conditions. Debt maturities are nil through August 2006. Asset sales are not seen as a likely source of liquidity in duress, even assuming bank concurrence; an orderly relocation of manufacturing operations to permit partial asset sales would be time-consuming, while the company's limited inventory of leading-edge manufacturing equipment sharply constrains the equipment's net asset value. OREGON ARENA: Brings-In Winstead Sechrest as Bankruptcy Counsel --------------------------------------------------------------- Oregon Arena Corporation asks for authority from the U.S. Bankruptcy Court for the District of Oregon to retain and employ Winstead Sechrest & Minick PC as its bankruptcy attorneys. For several months before the Petition Date, Winstead Sechrest worked extensively with the Debtor to prepare it for its bankruptcy filings. Through this process, Winstead Sechrest has become familiar with the Debtor's business operations and financial affairs and many of the legal issues that will likely arise in the context of this Chapter 11 case. The attorneys who will be primarily designated to represent the Debtor and their current standard hourly rates are: Professional's Name Designation Billing Rate ------------------- ----------- ------------ R. Michael Farquhar Shareholder $495 per hour Valinda B. Wolfert Shareholder $440 per hour Jaime Myers Associate $210 per hour Victoria A. Cathcart Associate $170 per hour Winstead Sechrest will: a. provide legal advice with respect to the Debtor's powers and duties as debtor-in-possession in the continued operation of its business and management of its properties; b. assist the Debtor in maximizing the value of its assets for the benefit of all creditors and other parties in interest; c. pursue confirmation of a plan of reorganization; d) investigate any and all necessary and appropriate actions and/or proceedings on behalf of the Debtor in this Court and other appropriate jurisdictions; e) prepare on behalf of the Debtor all necessary applications, motions, answers, orders, reports, and other legal papers; f. appear in Court to protect the interests of the Debtor and its estate; g. assist the Debtor with the requirements of the Securities & Exchange Commission; and h. perform all other legal services for the Debtor during this Chapter 11 proceeding that may be necessary and proper for the Debtor's general business operations and general financial affairs. Headquartered in Portland, Oregon, Oregon Arena Corporation, owns Portland's Rose Garden, one of the city's entertainment arenas and home of the NBA's Portland Trail Blazers. The company filed for chapter 11 protection on February 27, 2004 (Bankr. D. Oreg. Case No. 04-31605). Paul B. George, Esq., at Foster Pepper Tooze LLP and R. Michael Farquhar, Esq., at Winstead Sechrest & Minick P.C., represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed an estimated assets of more than $10 million and estimated debts of more than $100 million. O'SULLIVAN IND: Stuart Schotte Succeeds Phillip Pacey as CFO ------------------------------------------------------------ O'Sullivan Industries Holdings, Inc. (Pinksheets: OSULP), a leading manufacturer of ready-to-assemble furniture, announced that Phillip Pacey, senior vice president and chief financial officer, has resigned effective April 30, 2004, to become the chief financial officer of Falcon Products, Inc., a leading manufacturer of commercial furniture. Stuart D. Schotte has been named acting chief financial officer to succeed Mr. Pacey. Mr. Schotte is currently the Senior Vice President of Operations for O'Sullivan and has previously served as Vice President of Supply Chain Management and as Corporate Controller since joining O'Sullivan in 1998. "Phil has been a key member of our management staff and played a significant role in all of our financial activities since he joined the company in 1995," stated Richard Davidson, president and chief executive officer. "We want to thank Phil for his efforts on behalf of O'Sullivan and wish him continued success in his future endeavors." "While we will miss Phil as a member of our team," continued Davidson, "we are fortunate to have someone of Stuart's caliber and experience to step into this role. Stuart has played a significant role in our operational and financial initiatives and will be supported by an experienced and talented financial management team." Mr. Pacey stated, "I have enjoyed my eight years at O'Sullivan tremendously. While I look forward to the challenges ahead, I still believe in the future prospects of O'Sullivan and will continue to retain my equity interests in the company." * * * As reported in the Troubled Company Reporter's February 20, 2004 edition, Standard & Poor's Ratings Services lowered its corporate credit rating on furniture manufacturer O'Sullivan Industries Holdings Inc. to 'B-' from 'B', and the senior unsecured debt ratings on the company to 'CCC' from 'CCC+'. Standard & Poor's also lowered the corporate credit ratings on the company's wholly owned operating subsidiary, O'Sullivan Industries Inc., to 'B-' from 'B', and lowered the subsidiary's subordinated debt ratings to 'CCC' from 'CCC+'. In addition, the subsidiary's senior secured bank loan rating was lowered to 'B' from 'B+'. The outlook is negative. "The downgrade reflects lower than expected profitability at O'Sullivan as a result of ongoing challenging industry conditions in the ready-to-assemble furniture market," said credit analyst Martin S. Kounitz. "As a result, O'Sullivan's credit measures are below Standard & Poor's expectations. Given the weak operating environment, the timing of recovery for O'Sullivan is unclear." Lamar, Missouri-based O'Sullivan is the second-largest designer, manufacturer, and distributor of ready-to-assemble furniture products, selling primarily to the U.S. home office and home entertainment markets. OUTBOARD MARINE: Chapter 7 Trustee Asks Court to Certify Class -------------------------------------------------------------- On May 4, 2004, at 8:30 a.m., Alex D. Moglia, the Chapter 7 Trustee for Outboard Marine Corporation and its related Debtors, will appear before the Honorable Judge John H. Squires in the U.S. Bankruptcy Court for the Northern District of Illinois to present a Motion for Class Certification in an adversary proceeding involving the United States Dept. of Justice. The motion asks the Court to certify a class under Fed. Rule of Civil Procedure 23(b)(1)(b). If the class is certified, no member will be able to opt out and any decision of the bankruptcy court related to the class will be binding to all class members. If the Class is certified, the Trustee will ask the Court to bar all members of the Class from seeking any payment or other relief from Liberty Mutual Insurance Company or its related entities under any insurance policy issued by them. Objections to the Motion, if any, must be filed by tomorrow, and delivered to: 1. The Office of the Clerk The United States Bankruptcy Court Northern District of Illinois 219 S. Dearborn Street Chicago, Illinois; and 2. Attorney for the Trustee Kathleen H. Klaus, Esq. Shaw Gussis Fishman Glantz Wolfson & Towbin, LLC 321 North Clark Street, Suite 800 Chicago, IL 60610 Copies of the Motion may be obtained by contacting Mirjana Mirkovic at mmirkovic@shawgussis.com Outboard Marine filed for Chapter 7 bankruptcy on December 22, 2000 (Bankr. N.D. Ill. Case No. 00-37405). Kathleen H. Klaus, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin, LLC serves as Counsel to the Chapter 7 Trustee. OWENS CORNING: Investing Up to $3 Million in Newco/India -------------------------------------------------------- Owens Corning and its debtor-affiliates contemplate transacting directly or indirectly with: (1) IPM, Inc., Owens Corning's wholly owned non-debtor subsidiary; (2) Newco/India, a newly formed company organized under the laws of India that will be wholly owned by IPM; (3) Owens Corning India Limited, a company organized under the laws of India which is 60% owned by IPM. OC India operates a manufacturing facility in India where it manufactures, markets, distributes and sells certain glassfibre reinforcement materials, among other composite materials and building materials; and (4) Owens-Corning Fiberglas Espana, S.A., a limited liability company organized under the laws of Spain, which is an IPM non-debtor subsidiary. According to J. Kate Stickles, Esq., at Saul Ewing LLP, in Wilmington, Delaware, the Debtors identified a growing market for fiberglass reinforcement fabrics in India, which they believe has significant opportunities for expansion. The Fabrics are used primarily in the manufacture of windmill blades, as well as for marine, railway, chemical, container and other applications. To take advantage of these opportunities, the Debtors ask the Court to authorize IPM to invest up to $3,000,000 in Newco to be used: (i) to purchase machinery and equipment; (ii) to cover the cost of certain infrastructure expenditures; and (iii) for working capital necessary for the production and sale of Fabrics. Once organized, Ms. Stickles relates, Newco will utilize OC India's plant to conduct its operations. Newco and OC India will enter into a tolling agreement to govern their relationship. The essential terms of the Tolling Agreement are: (1) Newco's machinery and equipment will be installed in OC India's manufacturing plant; (2) OC India will convert and process Newco's raw materials into finished products pursuant to orders Newco transmits to OC India; (3) Newco will pay OC India tolling fees, which consists of costs of labor, utilities and other direct and indirect overhead expenses, plus 5% of the Conversion Costs; and (4) The term of the Tolling Agreement is five years. Newco will obtain most of the raw materials necessary to produce the Fabrics from OC India and the remaining raw materials from other OC affiliates. OC India will exclusively distribute the finished products manufactured under the Tolling Agreement pursuant to an Indenting Agreement. Pursuant to the Indenting Agreement, Newco will pay OC India a commission on the Newco products sold by OC India. Ms. Stickles informs the Court that Owens Corning and Espana -- the OC Companies -- each owns the rights to license the OC Technology necessary to manufacture the Fabrics. The essential terms of the License Agreement are: (1) The OC Technology licensed by the OC Companies to Newco will at all times be and remain the property of the OC Companies; (2) The OC Companies will grant Newco an arm's-length royalty- bearing, non-exclusive, non-transferable license to make and have made the Fabrics in India, and to export, use, market and sell the Fabrics anywhere in the world; (3) Newco may sub-license the OC Technology, provided that it obtains approval from the OC Companies; (4) The OC Companies will furnish Newco technical services for the transmission of the OC Technology to enable Newco to effectively use the OC Technology; (5) Newco will pay the OC Companies for the technical services at the standard rates then in effect which the OC Companies charge its subsidiaries, licensees and affiliates; (6) Newco will produce the Fabrics in accordance with the highest quality standards internationally available and in accordance with the guidelines established by Owens Corning, and use the proprietary marks included in the OC Technology only in a form that is in conformance with Owens Corning's style guide and other instructions; and (7) The term of the License Agreement is five years, but can be terminated earlier, renewed or extended. To the extent necessary to facilitate the Tolling Agreement, Newco will sub-license certain of the OC Technology to OC India pursuant to a Technology Sub-License Agreement. The essential terms of the Sub-License are: (1) The rights related to the OC Technology licensed by Newco to OC India will at all times be and remain the property of Newco; and (2) Newco will grant OC India a royalty-free, non-exclusive, non-transferable limited license solely to make the Fabrics in India for Newco. Ms. Stickles maintains that the proposed transactions will permit Owens Corning, IPM and Newco to take full advantage of the growing market in India for fabrics. Most importantly, authorizing the transactions will permit IPM and Owens Corning to ultimately obtain 100% of the benefits and profits of the opportunities now available. If OC India were to take advantage of the opportunities, only 60% would ultimately be obtained by IPM and Owens Corning. Newco already signed third party contracts for the Fabrics that will require Newco's new machine and equipment to operate at full capacity for the next five years. In addition, licensing the OC Technology to Newco will enhance Newco's ability to compete in the international markets, which could also lead to greater export potential for the Fabrics. Ms. Stickles assures the Court that the transactions are proposed in good faith. Headquartered in Toledo, Ohio, Owens Corning -- http://www.owenscorning.com/-- manufactures fiberglass insulation, roofing materials, vinyl windows and siding, patio doors, rain gutters and downspouts. The Company filed for chapter 11 protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837). Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom represents the Debtors in their restructuring efforts. On Jun 30, 2001, the Debtors listed $6,875,000,000 in assets and $8,281,000,000 in debts. (Owens Corning Bankruptcy News, Issue No. 71; Bankruptcy Creditors' Service, Inc., 215/945-7000) PARMALAT GROUP: Dismisses Speculations About Creditor Recoveries ---------------------------------------------------------------- Parmalat Finanziaria SpA, in | Parmalat Finanziaria SpA in Extraordinary Administration, | Amministrazione Straordinaria communicates that information | comunica che sono destituite carried today in a number of | di ogni fondamento le notizie publications reporting that | riportate oggi da alcuni creditors of Parmalat Group | organi di informazione secondo companies in Extraordinary | le quali ai creditori delle Administration would be | Societa del Gruppo Parmalat in guaranteed a repayment of | Amministrazione Straordinaria between 25% and 33% of their | sarebbe assicurata una investment are completely | percentuale di rimborso dal without foundation. | 25 al 33 per cento. * * * Reuters and Bloomberg News, citing Il Sole/24 Ore, reported that Parmalat Finanziaria SpA intends to swap EUR12 billion in debts into equity as part of its reorganization. The plan will allow bondholders to recover between 25% and 33% of their claims when Parmalat shares will resume trading. When the Parmalat stocks would trade again is not yet determined. Parmalat's 50 biggest creditors met with Extraordinary Commissioner Enrico Bondi in Milan, Italy on Friday, March 26, 2004. Headquartered in Wallington, New Jersey, Parmalat USA Corporation -- http://www.parmalatusa.com/-- generates more than 7 billion euros in annual revenue. The Parmalat Group's 40-some brand product line includes milk, yogurt, cheese, butter, cakes and cookies, breads, pizza, snack foods and vegetable sauces, soups and juices and employs over 36,000 workers in 139 plants located in 31 countries on six continents. The Company filed for chapter 11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04- 11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at Weil Gotshal & Manges LLP represent the Debtors in their restructuring efforts. On June 30, 2003, the Debtors listed EUR2,001,818,912 in assets and EUR1,061,786,417 in debts. (Parmalat Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000) PARMALAT GROUP: Irish Court Places Eurofood IFSC in Liquidation --------------------------------------------------------------- Pearse Farrell, FCA of FGS Chartered Accountants and Business Advisors, was confirmed by order of Mr. Justice Kelly, as Official Liquidator to Eurofood IFSC Limited, the Irish subsidiary of Parmalat, the Italian dairy company which is currently in extraordinary administration in Italy. Mr. Justice Kelly made an order that Eurofood is insolvent and made a second order winding up the Company and appointing Mr. Farrell as Official Liquidator. He stated in his judgment that the appointment of Pearse Farrell as Provisional Liquidator by the High Court brought about the opening of main insolvency proceedings for the purpose of the Insolvency Regulation. Mr. Justice Kelly further made a declaration that the center of main interest of Eurofood is and was always in Ireland. While this ruling is apparently contrary to the ruling of the court in Parma, Mr. Justice Kelly found that he did not have to consider the merits of the decision of the Parma court since, in his opinion, it lacked jurisdiction under the Insolvency Regulation to do what it purported to do. In addition he felt that the Parma court was obliged to recognize the order of the Irish High Court in appointing the Provisional Liquidator. General principles of EU law include respect for fundamental rights, including the right to a fair hearing. In this case, the creditors of Eurofood were not put on notice of the hearing before the Parma court, despite a direction from the Parma court that all interested parties be put on notice. Furthermore, the right to a fair hearing implies that one should be given sufficient notice of the hearing in order to prepare a defense. The Provisional Liquidator, who was put on bare notice of the hearing before the Parma court was not furnished with the papers grounding the application until after the hearing before the Parma court had actually concluded. Counsel on behalf of the Italian Extraordinary Administrator made a request for a stay on the order appointing Mr. Farrell as Official Liquidator, however, this was duly refused by Mr. Justice Kelly. Previously Mr. Farrell had been appointed as Provisional Liquidator to the Company by order of the High Court on 27 January last which pre-dates, by a period of up to some weeks, an application to and order of the court in Parma in Italy dated 20 February 2004, whereby the Parma Court admitted Eurofood into insolvency and furthermore found that the center of main interest of Eurofood was in Italy rather that in Ireland. [Bank of America filed winding up petition against Eurofood in January 2004. The unit owed Bank of America over $3.5 million or GBP1.9 million in loans.] Mr. Justice Kelly's judgment clarifies the European Insolvency Regulation from an Irish perspective in that: (1) It sets out the tests for establishing the center of main interest in cross-jurisdictional cases involving Ireland; (2) It establishes that the commencement of a winding-up begins with the lodging of a petition in such cross- border cases; and (3) The appointment of a Provisional Liquidator does constitute the commencement of insolvency proceedings under the Regulation. The Official Liquidator will now commence the process of realizing the assets of the Company which consist primarily located of debtor and loan balances from Parmalat entities located in Italy and South America. The Official Liquidator will also be lodging an appeal in Italy against the decision of 20 February last of the Parma court. About FGS FGS (Farrell Grant Sparks) is a leading independent firm of chartered accountants and business consultants with offices in Dublin and Belfast. The firm is a market leader in the provision of corporate recovery, restructuring and turnaround services. Pearse Farrell is recognized as one of the leading insolvency practitioners in the country having acted in over 250 appointments. His recent appointments have included acting as receiver to the Comer Group of companies, part of the worldwide Indorama Group, as liquidator to Lernout & Hauspie Ireland Limited, a speech recognition company for which the Irish company handled the European distribution for the Belgian public company. In addition, Pearse has also acted as receiver to Simmonscourt Holdings Limited and Harvard Properties Limited, the development companies for the Four Seasons Hotel in Ballsbridge, Dublin and as receiver of the Holiday Inn in Dublin. Pearse Farrell also has extensive experience in liquidating IFSC based companies. 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. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000) PG&E NATIONAL: US Trustee Wants to Appoint Dan Scotto as Examiner ---------------------------------------------------------------- W. Clarkson McDow, Jr., the United States Trustee for Region 4, asks the Court to approve the appointment of Daniel Scotto as Examiner in the NEG Debtors' (formerly the PG&E National Energy Group Inc. Debtors) Chapter 11 cases. Mr. McDow had consulted with these parties-in-interest regarding the appointment of an examiner: * Paul Nussbaum, counsel for NEG -- on behalf of the NEG Debtors and the Official Committee of Unsecured Creditors of NEG and the Official Noteholders Committee; and * Greg Yates, counsel for Mitsubishi Heavy Industries. Mr. McDow believes that Dan Scotto is highly qualified to serve as NEG Examiner. Mr. Scotto holds an MBA in Finance from Pace University and a Bachelor of Science degree from St. Francis College. Presently, Mr. Scotto is a Senior Energy Analyst at Whitehall Financial Advisors, LLC, in Greenwich, Connecticut. He is the founder and Director of Research at Whitehall Financial, a firm specializing in the utilities industry. Mr. Scotto will be compensated at $600 per hour for his services. Mr. Scotto will also receive reimbursement for all out-of-pocket expenses. Mr. Scotto assures the Court that he does not hold or represent any interest adverse to the NEG Debtors or their estates. 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) PLAINS ALL AMERICAN: S&P Places B-Level Ratings on Watch Negative ----------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Plains All American Pipeline L.P. (PAA, BBB-/Watch Neg/--; BB+ Senior Unsecured Rating) on CreditWatch with negative implications. Houston, Texas-based PAA has about $650 million of debt. "The CreditWatch listing follows PAA's announcement it is acquiring the North American crude oil and pipeline operations of Link Energy LLC for total consideration of about $330 million," noted Standard & Poor's credit analyst Steven K. Nocar. "Along with the acquisition, PAA intends to issue in total $197 million of equity, $100 million of which is expected to be issued through a private placement shortly after the close of the Link transaction," he continued. Of concern to Standard & Poor's is PAA's announcement that the SEC is conducting a review of its 10-K filing dated March 1, 2004. Although the review is being conducted as a routine review of a Fortune 500 company as per SEC policy, it indefinitely delays PAA's plan to issue the remainder of its common units to permanently fund the acquisition. As a result, PAA will borrow under a new $200 million, 364-day bank facility until it is able to issue the units. Proceeds from the unit issuance will be applied to reduce outstanding amounts under this facility. In the interim, debt to EBITDA is expected to increase to 4 times. Standard & Poor's will resolve the CreditWatch listing soon after conclusion of the SEC review. If the SEC review is cursory and concludes in 120 days, and PAA issues the remainder of its announced equity immediately thereafter, Standard & Poor's would likely affirm the rating. If the SEC review extends beyond 120 days, Standard & Poor's will meet with management to assess the status and nature of the review. PLAINS ALL AMERICAN: Closes Purchase of Link's Crude Oil Business ----------------------------------------------------------------- Plains All American Pipeline, L.P. (NYSE: PAA) completed the acquisition of the North American crude oil and pipeline operations of Link Energy LLC. The total purchase price for the transaction was approximately $330 million, which included $273 million in cash, the assumption of $49 million of liabilities and net working capital items and $8 million of third-party transaction, closing and integration costs and other items. Plains All American Pipeline, L.P. (PAA, BBB-/Watch Neg/--; BB+ Senior Unsecured Rating) is engaged in interstate and intrastate crude oil transportation, and crude oil gathering, marketing, terminalling and storage, as well as the marketing and storage of liquefied petroleum gas and other petroleum products, primarily in Texas, California, Oklahoma, Louisiana and the Canadian Provinces of Alberta and Saskatchewan. The Partnership's common units are traded on the New York Stock Exchange under the symbol "PAA". The Partnership is headquartered in Houston, Texas. PREMIERE NETWORK: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Premiere Network Services, Inc. 1510 North Hampton Road, Suite 120 De Soto, Texas 75115 Bankruptcy Case No.: 04-33402 Type of Business: The Debtor is a Telecommunication provider. Chapter 11 Petition Date: March 29, 2004 Court: Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Debtor's Counsel: Claude D. Smith, Esq. Campbell & Cobbe, P.C. 900 Jackson Street 120 Founders Square Dallas, TX 75202 Tel: 214-742-2200 Fax: 214-742-0002 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. QUINTEK: Releases Letter About Plans to Enter Outsourcing Market ---------------------------------------------------------------- Quintek Technologies, Inc. (OTCBB:QTEK) filed a Form 8-K with the Securities and Exchange Commission disclosing the text of a letter to its shareholders in which the Company discussed its plans to enter the Business Process Outsourcing (BPO) market. In the letter, the Company highlighted its previously disclosed achievements to date in 2004, including: -- The announced expansion into the service industry; -- The strategy to develop a complete information lifecycle management (ILM) solution for cradle-to-grave document storage; -- The appointment of a new President with considerable industry and sales experience to help further impact the successful growth and expansion of the Company. Quintek also disclosed that it has formed a new division, Quintek Services, Inc. (QSI). The formation of QSI is complementary with Quintek's alignment of the Company as a 'Business Process Outsourcing' (BPO) services provider. Forrester Research has estimated that the BPO space will grow to $146 billion by the year 2008. Quintek also referenced that over a 24-month period they intend to add up to an additional 35 new sales people and increase the scope of the Company's offerings. Quintek is the only manufacturer of a chemical-free desktop microfilm solution. The company currently sells hardware, software and services for printing large format drawings such as blueprints and CAD files (Computer Aided Design), directly to microfilm. Quintek does business in the content and document management services market, forecast by IDC Research to grow to $24 billion by 2006 at a combined annual growth rate of 44%. Quintek targets the aerospace, defense and AEC (Architecture, Engineering and Construction) industries. Quintek's printers are patented, modern, chemical-free, desktop- sized units with an average sale price of over $65,000. Competitive products for direct output of computer files to microfilm are more expensive, large, specialized devices that require constant replenishment and disposal of hazardous chemicals. The company's December 31, 2003, balance sheet discloses a total shareholders' equity deficit of about $1.5 million. RCN CORPORATION: Lenders Agree to Forbear Through May 3, 2004 ------------------------------------------------------------- RCN Corporation (Nasdaq: RCNC) announced that the negotiations with its senior secured lenders, members of an ad hoc committee of holders of its Senior Notes and others on a consensual financial restructuring of its balance sheet are continuing. In connection with the continuing negotiations, the Company, the Lenders and members of the Noteholders' Committee have agreed to extend expiration of their previously announced forbearance agreements until 11:59 p.m. on May 3, 2004. The Company remains hopeful that the continuing negotiations will lead to agreement on a consensual financial restructuring plan in the near term, although there is no assurance this will occur. As previously stated, under the extended forbearance agreements, the Lenders and members of the Noteholders' Committee have agreed not to declare any Events of Default, which they would be entitled but not required to do, under the Company's senior credit facilities or the Company's senior notes, respectively, as a result of the Company not making an interest payment on its 10 1/8% Senior Notes due 2010 or its 9.8% Senior Notes due 2008 and certain other defaults. The Company anticipates that a Chapter 11 filing would include RCN Corporation, the holding company, and does not intend that its material operating subsidiaries be included, although there is no assurance this will occur. Since financial restructuring negotiations are ongoing, the treatment of existing creditor and stockholder interests in the Company is uncertain at this time. However, the restructuring as currently contemplated will likely result in a conversion of a substantial portion of the Company's outstanding Senior Notes into equity and an extremely significant, if not complete, dilution of current equity. Accordingly, the value of the Company's securities is highly speculative. The Company urges that appropriate caution be exercised with respect to existing and future investments in any of the Company's debt obligations and/or its Common stock. RCN's objective is to reach agreement on a consensual financial restructuring plan during the current forbearance period. If financial restructuring negotiations were to proceed beyond that period or were to end, however, additional forbearance, waiver and/or amendment agreements would be needed to support RCN's continuing operations. In addition, in the absence of an agreement on a consensual financial restructuring upon expiration of the forbearance agreements, the Lenders and members of the Noteholders' Committee who hold 10 1/8% Senior Notes and 9.8% Senior Notes would be entitled, but not required, to declare RCN's senior credit facilities and the outstanding 10 1/8% Senior Notes and 9.8% Senior Notes, respectively, immediately due and payable. Any acceleration of amounts due under RCN's senior credit facilities or the 10 1/8% Senior Notes or the 9.8% Senior Notes would, due to cross default provisions in the Company's indentures governing its other senior notes, entitle, but not require, the holders of other senior notes to declare the Company's other senior notes immediately due and payable if they so choose. Holders of 10 1/8% Senior Notes or the 9.8% Senior Notes that are not members of the Noteholders' Committee are not subject to the terms of the forbearance agreements. If acceleration of the Company's senior credit facilities and 10 1/8% Senior Notes or the 9.8% Senior Notes were to occur, RCN would not, based on current and expected liquidity, have sufficient cash to pay the amounts that would be payable. Although RCN is actively pursuing discussions towards a final agreement on a consensual financial restructuring, there can be no assurance that such an agreement will ultimately be reached, that RCN would be able to obtain further extensions of its forbearance agreements with the Lenders and members of the Noteholders' Committee, or that holders of 10 1/8% Senior Notes or the 9.8% Senior Notes that are not members of the Noteholders' Committee will not declare an Event of Default under the 10 1/8% Senior Notes or the 9.8% Senior Notes (which would terminate the forbearance agreement with Lenders), or seek other remedies available under applicable law or the terms of the 10 1/8% Senior Notes or the 9.8% Senior Notes, prior to such time. RCN will continue to apply substantial effort and resources to reaching a formal agreement on a consensual financial restructuring while also continuing to evaluate the best alternatives for RCN under current circumstances and as discussions and events unfold. On March 31, 2004, the NASDAQ Stock Market notified the Company that the market value of its Common Stock closed below the required minimum of $35 million for the 10 consecutive business days leading up to March 26, 2004. Under applicable NASDAQ rules and the NASDAQ notification, if the market value of the Common Stock does not exceed $35 million for at least 10 consecutive days prior to April 30, 2004, the Common Stock will be delisted. There can be no assurance that the Company will regain compliance with NASDAQ rules or that the Common Stock will not be delisted. The value of the Company's securities is highly speculative. The Company urges that appropriate caution be exercised with respect to existing and future investments in any of the Company's debt obligations and/or its Common stock. About RCN Corporation RCN Corporation (Nasdaq: RCNC) is the nation's first and largest facilities-based competitive provider of bundled phone, cable and high-speed Internet services delivered over its own fiber-optic local network to consumers in the most densely populated markets in the U.S. RCN has more than one million customer connections and provides service in Boston, New York, Philadelphia/Lehigh Valley, Chicago, San Francisco, Los Angeles and Washington, D.C. metropolitan markets. SAMUELS JEWELERS: Emerges From Chapter 11 as a Private Company -------------------------------------------------------------- Samuels Jewelers, Inc. (Pink Sheets:SMJWQ), the eighth-largest retail jewelry chain in America, announced that the Company received approval from the U.S. Bankruptcy Court for its reorganization plan, which provides for Samuels to emerge from Chapter 11. At a hearing Tuesday, March 30th, the court confirmed the plan which provides for the Company's secured creditor to convert a substantial portion of its debt to equity thereby providing a platform for Samuels to emerge from Chapter 11 as a private company. In addition, the plan provides for critical continuing vendors to receive payment in full for their claims over a period of eighteen months. Samuels has been operating under Chapter 11 since August 2003. Under Chapter 11 the Company continued implementing its turnaround while working closely with its vendors and creditors. Comparable store sales have increased 2.0% and 8.9% in January and February, respectively. "This is a major milestone for Samuels," stated Randy McCullough, CEO and President of Samuels. "We appreciate our secured lender and our other creditors working closely with us to design and implement a plan that will provide a solid foundation for Samuels to build upon in the future. We also believe our confirmation and our positive recent sales trends are a result of dedication and a lot of hard work from all of our terrific company associates who believe in Samuels and have worked diligently together to move Samuels forward." "Samuels' reorganization was overwhelmingly supported by every class of creditor who voted on the plan and was completed very quickly and efficiently," said Michael Tuchin of Klee, Tuchin, Bogdanoff & Stern LLP, bankruptcy counsel for Samuels Jewelers, Inc. "The fact that the reorganization was completed so smoothly is a testament to the efforts of the management team and all of Samuels' employees." The key elements of the plan include the conversion of a significant amount of debt to equity, the payment in full to critical continuing vendors, the assumption of substantially all of the Company's leases and the continued employment of the senior management team. Samuels Jewelers, Inc. operates a national chain of specialty retail jewelry stores located in regional shopping malls, power centers, strip centers and stand-alone stores. The Company sells fine jewelry items in a wide range of styles and prices, with a principal emphasis on diamond and gemstone jewelry. As of April 1, 2004, the Company operates 102 retail jewelry stores in 18 states. The Company also sells jewelry online at SamuelsJewelers.com. The Company currently operates stores under the following four trade names: "Samuels," "C&H Rauch," "Schubach" and "Samuels Diamonds." Measured by the number of retail locations, Samuels is the eighth- largest specialty retailer of fine jewelry in the country. SENTINEL INSURANCE: Judge Upholds MicroFinancial's $14 Mil. Claim ----------------------------------------------------------------- MicroFinancial Incorporated (NYSE-MFI), announced that the company was awarded a $23 million judgment. In the first quarter of 2000, the Company had filed an action in the United States District Court for the District of Massachusetts against Sentinel Insurance Company, Ltd., Premier Holidays International, Inc., and Daniel DelPiano arising from Premier's October 1999 default on its repayment obligations to the Company under a $12 million loan. Judgment has been entered in this case against Sentinel, which had issued a business performance insurance policy guaranteeing repayment of the loan in the amount of $14 million. This judgment has not been satisfied. Sentinel is currently undergoing liquidation proceedings and a claim in this amount has been filed with the bankruptcy court. The Company's case against Premier and DelPiano was tried in November 2003, and was decided by the Court in March 2004. The Court entered a judgment for the Company against Premier and DelPiano, jointly and severally, on all of the Company's counts, including fraud and violation of Massachusetts General Laws, Chapter 9A, and dismissing with prejudice all of Premier and DelPiano's claims and counterclaims. The Court awarded the Company $23 million in damages. Collection of this award is not assumed and therefore it is not reflected in the Company's financial statements. "This legal matter is now behind us. The Company is pleased with the court's findings in favor of our position on all counts, specifically on the finding of fraud committed by Premier and DelPiano, and on the full dismissal with prejudice of the counterclaims filed against us." stated Mr. Richard Latour, President and CEO. The Company also announced that it continues to reduce its outstanding debt obligations during 2004 beyond original expectations. "As of April 1, 2004, the senior credit facility debt balance outstanding was $35.7 million, compared to an expected $41.0 million for the same period, as stated in the bank agreement. Total interest bearing debt stands at $39.9 million as of April 1, 2004, compared to $62.1 million on December 31, 2003" concluded Mr. Latour. About Microfinancial MicroFinancial Inc. (NYSE: MFI), headquartered in Woburn, MA, is a financial intermediary specializing in leasing and financing for products in the $500 to $10,000 range. The company has been in operation since 1986. SERVES 1999-1: Fitch Affirms BB- Series 1999-1 Notes Rating ----------------------------------------------------------- Fitch Ratings affirms the $47,500,000 Structured Enhanced Return Vehicle Trust notes, series 1999-1 at 'BB-'. SERVES 1999-1 is a synthetic collateralized loan obligation (CLO) that affords investors leveraged exposure to a diversified portfolio of high- yield loans. The transaction utilizes a total rate of return swap between the SERVES trust and Bank of America, N.A. to obtain the leveraged exposure. Fitch has reviewed the credit quality of the individual assets comprising the portfolio. SERVES 1999-1 has experienced marginal positive credit migration and minimal change to the weighted- average rating factor (WARF). While there was not a significant increase to the Collateral and Cumulative Payment Accounts, the composition of the portfolio has improved as overall market conditions strengthened along with a reduction in impaired assets within the reference portfolio. Subsequently, a review of the transaction has led Fitch to conclude that the 'BB-' rating of the notes is representative of the current credit risk to investors. SHAW COMMS: Board Nominates Don Mazankowski as Lead Director ------------------------------------------------------------ Shaw Communications Inc.'s Board of Directors has nominated the Right Honorable Don Mazankowski to the role of Lead Director. "We are extremely pleased that Don has accepted the responsibility of serving as Lead Director on our Board," said JR Shaw, Executive Chair of Shaw Communications. "Don is an outstanding Canadian with a long and distinguished career in public service and corporate Canada," he added. The Lead Director is an outside and unrelated director appointed by the Board of Directors to ensure that the Board can perform its duties in an effective and efficient manner independent of management. The appointment of a Lead Director is part of Shaw's ongoing commitment to good corporate governance. Mr. Mazankowski was a Member of the Parliament of Canada from 1968 to 1993 and held a number of Cabinet positions, including Deputy Prime Minister, Minister of Finance and President of the Privy Council. Mr. Mazankowski is a director of a number of national and international Corporations. He has been a director of Shaw since 1993 and is currently chairman of the Corporate Governance Committee of the Board and a member of the Executive Committee. Shaw Communications Inc. (S&P, BB+ Corporate Credit Rating, Stable) is a diversified Canadian communications company whose core business is providing broadband cable television, Internet and satellite direct-to-home services to approximately 2.9 million customers. Shaw is traded on the Toronto and New York stock exchanges (Symbol: TSX - SJR.B, NYSE - SJR). SHAW COMMS: Connects with Lions Gate for Video-On-Demand Agreement ------------------------------------------------------------------ Shaw Communications Inc. announced a licensing agreement with Lions Gate Entertainment to provide movies and programming content for Shaw On Demand - Shaw's video-on-demand service. This deal puts some of today's most popular and ground-breaking releases right at the fingertips of Shaw Digital customers across Western Canada. Shaw On Demand provides customers with unprecedented choice and control when watching movies and other programming at home. Customers can choose from hundreds of titles every month, including major motion pictures, classic movies, TV series, children's programming, adult entertainment and music videos. "Adding Lions Gate's leading-edge lineup of current feature films and extensive collection of motion pictures and other content complements the ever-evolving Shaw On Demand library", said Peter Bissonnette, President of Shaw Communications Inc. "Lions Gate Entertainment is pleased to be associated with Shaw Communications on this innovative home entertainment service. Shaw's position in the Canadian market gives us an excellent opportunity to provide our content via VOD for our current feature films and extensive library," said Brad Pelman, Senior Vice-President, Sales & Distribution, Lions Gate Films Corp. Lions Gate will supply Shaw with current feature films and TV series that have garnered international accolades, including the Academy Award(R)-nominated film The Cooler, the chiller hit Cabin Fever, and true crime drama Wonderland. Since the launch of Shaw On Demand, customers have been able to experience a growing library of feature films and entertainment from such companies as Alliance Atlantis, Universal Studios, Hallmark Entertainment, and Twentieth Century Fox. In addition, the shawondemand.ca customer interface was recently relaunched, featuring a richer home page, daily updates on new films and entertainment, and more on-demand movie trailers and content previews. Bissonnette said that while Shaw is continually adding new entertainment to the On Demand library, the company is also introducing new viewing experiences such as High Definition TV content and other customer-focused product innovations. Full details are available at shaw.ca and shawondemand.ca, or by calling 1-888-472-2222. Lions Gate Entertainment is the premier diversified independent producer and distributor of motion pictures, television programming, home entertainment, family entertainment and video-on-demand content. Its prestigious and prolific library of more than 8000 titles is one of the largest in the industry and the biggest in indie history. The Lions Gate brand name is synonymous with original, daring, quality entertainment in markets around the world. Shaw Communications Inc. (S&P, BB+ Corporate Credit Rating, Stable) is a diversified Canadian communications company whose core business is providing broadband cable television, Internet and satellite direct-to-home ("DTH") services to approximately 2.9 million customers. Shaw is traded on the Toronto and New York stock exchanges. SKYLINE MULTIMEDIA: Comments on Recent Trading Activity ------------------------------------------------------- Skyline Multimedia Entertainment, Inc. (OTC Bulletin Board: SKYL), announced that it has come to its attention that there has been increased activity in the level of volume of trading of its common stock as well as an increase in the market price. Michael Leeb, the President of Skyline, commented, "we are not aware of any reason as to the cause of this recent activity. As stated in our previous filings with the U.S. Securities and Exchange Commission, we have experienced significant losses in recent years and have substantial negative working capital and a substantial capital deficiency. In addition, since a substantial portion of the working capital deficiency is comprised of notes payable that are due currently, we are dependent upon the continued forbearance of our principal creditors in not demanding payment of the outstanding indebtedness." As a result, Skyline's financial statements have been prepared assuming that Skyline will continue as a going concern. Management of Skyline cautions investors that there have been no recent developments in connection with Skyline's operations nor does Skyline have any plans or arrangements to enter into any type of acquisition or transaction that may warrant such trading activity. Skyline, through its wholly-owned subsidiary, New York Skyline, Inc., operates the New York Skyride, a state-of-the-art simulator attraction located in the Empire State Building in New York, New York. * * * In its Form 10-QSB for the quarter ended December 31, 2003, Skyline Multimedia Entertainment reports: "The Company is in default on the amounts payable to its creditor under the Senior Credit Agreement, dated as of December 20, 1996, which became due on December 20, 2001. As a result, the interest rate on the principal and unpaid interest was increased to 21% effective December 20, 2001. The Company is in continuing discussions with the Investor regarding the Debt, including the Senior Credit Agreement, and the satisfaction of the conditions set forth in the letter received from the Investor dated October 24, 2003. It should be noted, however, that notwithstanding the satisfaction by the Company of all of the conditions set forth in the letter from the Investor, the Investor specifically reserved the right to demand payment in full on all obligations. The Company is dependent on the continued forbearance of its note holder because the Company currently does not have available funds to fully repay these loans and the accrued interest on them. The above factors give rise to substantial doubt as to the ability of the Company to continue as a going concern." SOLUTIA INC: Quimica Gets Nod to Set Off Mutual Obligations ----------------------------------------------------------- Quimica M., S.A. de C.V. is a joint venture of Solutia, Inc. and Vitro Plan, S.A. de C.V., a Mexican Corporation. Robin E. Keller, Esq., at Stroock & Stroock & Lavan LLP, in New York, recalls that before the Petition Date, Quimica entered into a long-term contract with Monsanto Company, a predecessor to the Debtors. The Contract required Quimica to purchase a polyvinyl butyral resin and plasticizer from Monsanto. The Debtors are now a party to the contract. Quimica also contracted to deliver PVB film to Solutia, which film is used in the automotive and construction laminated glass industries. As of December 17, 2003, the Debtors owed Quimica $1,884,689. At the same time, Quimica had outstanding prepetition invoices with the Debtors totaling $4,824,854 -- $510,770 of which was payable. Following the Petition Date, Quimica entered into discussions with the Debtors regarding the outstanding amount owed to it. The parties agreed that given both their desire to continue performing under the agreements and given the Debtors' equity at stake and interest in the continued viability of Quimica, it was appropriate to allow Quimica to set off the prepetition amounts owed to the Debtors against the prepetition amounts owed to Quimica. Since the Petition Date, Quimica has remitted to the Debtors $518,039 for amounts owed as of the Petition Date, and has agreed to remit other amounts that may become due and owing to the Debtors in excess of the amount owed by the Debtors to Quimica, which Quimica is holding to effectuate set-off. Accordingly, Quimica sought and obtained Court approval to lift the automatic stay for it to exercise its set-off rights. 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) SPEIZMAN INDUSTRIES: Paul Demmink Takes Bob Speizman's CEO Post --------------------------------------------------------------- Speizman Industries, Inc. (OTC Bulletin Board: SPZN) announced the resignation of the Company's CEO, Bob Speizman, and its Senior Vice President, Mark Speizman. Also resigning from the Company were Bryan Speizman, Barry Speizman and Don Mullen. Paul Demmink, the Company's chief financial officer, will also serve as its chief executive. "On behalf of the Company and its Board of Directors, we want to thank all of the Speizmans for their years of service and many contributions to the Company and wish them well in their future endeavors," Mr. Demmink said. For additional information on Speizman Industries, visit the Company's web site at http://www.speizman.com/ SPEIZMAN: Lonati Declares Default Under March 2004 Agreement ------------------------------------------------------------ Speizman Industries, Inc. (OTC Bulletin Board: SPZN) has been notified by Lonati, SpA that the Company is in default under the Distributorship and Forbearance Agreement entered into by the parties in March 2004 for failure to pay certain amounts owed to Lonati. Lonati's affiliated companies, Santoni SpA, Tecnopea Srl and SRA Srl, have also notified the Company that it is in default under the parties' March 2004 Distributorship Agreements for failure to pay certain amounts owed. As a result, Lonati can take steps to collect any monies owed by the Company. Lonati and its affiliates can terminate their distributor agreements with the Company, all of which extend to May 7, 2004. This default under the Lonati agreement terminates the forbearance period relating to the Company's credit facility with SouthTrust Bank, thereby giving SouthTrust the right to exercise its remedies under the loan documents. For additional information on Speizman Industries, visit the Company's web site at http://www.speizman.com/ SPEIZMAN: Cuts Jobs in Charlotte, NC & Considers Bankruptcy Filing ------------------------------------------------------------------ Speizman Industries, Inc. (OTC Bulletin Board: SPZN) announced the layoff of 17 employees, principally in its textile division located in Charlotte, North Carolina. The Company anticipates making an undetermined number of additional layoffs over the next several weeks. Other reductions in the Company's operations will be made during this timeframe. These layoffs and other reductions are due to the Company's continuing losses and limited liquidity resulting from the significant decline in demand for the Company's laundry and textile equipment. The Company's Board of Directors, with the assistance of its financial advisors, continues to review its alternatives, which include the potential sale of the Company's sock and/or laundry divisions or a bankruptcy filing. The Company anticipates continuing business operations while it reviews its alternatives. For additional information on Speizman Industries, visit the Company's web site at http://www.speizman.com/ SPIEGEL: Committee Gets Nod to Hire Capstone as Financial Advisor ----------------------------------------------------------------- The Official Committee of Unsecured Creditors appointed in the Chapter 11 cases involving The Spiegel Group and its debtor- affiliates sought and obtained the Court's authority to retain Capstone Corporate Recovery, LLC as its financial advisors to replace FTI Consulting, Inc., nunc pro tunc to February 6, 2004. The Committee explained that the purpose of the proposed substitution is principally to permit the Committee to continue using former FTI employees who have been principally involved in the Committee's financial matters. Specifically, Jay Borow, Andrew Cowie, Norman Haslun, Christopher Kearns, and Andrea Will have recently moved to Capstone from FTI. The Committee needs Capstone to: (a) advise and assist the Committee in its analysis and monitoring of the Debtors' historical, current and projected financial affairs, including without limitation, its business plan, schedules of assets and liabilities, statement of financial affairs, periodic operating reports, analyses of cash receipts and disbursements, analyses of cash flow forecasts, analyses of trust accounting, analyses of various asset and liability accounts, analyses of cost-reduction programs, analyses of any unusual or significant transactions between the Debtors and any other entities, and analyses of proposed restructuring transactions; (b) review the Debtors' expense structure and identify opportunities for further reductions, including store closings and arrangements for liquidation sales; (c) develop a monitoring report to enable the Committee to effectively evaluate the Debtors' performance on an ongoing basis; (d) analyze and critique actual and proposed debtor-in- possession financing arrangement; (e) analyze arrangements with trade creditors regarding postpetition credit extension, including inventory return programs and other related issues; (f) advise and assist the Committee in: -- reviewing executory contracts, including leasing arrangements and provide recommendations to assume or reject; -- identifying and reviewing preference payments, fraudulent conveyances and other causes of action; and -- reviewing the Debtors' books and records for related party and potential avoidance actions; (g) perform liquidation analyses of the Debtors and advise the Committee and its counsel; (h) assist and advise the Committee in evaluating and analyzing restructuring plans proposed by the Debtors, review and provide analysis of any plan of reorganization and disclosure statement, assist and advise the Committee in implementing a plan of reorganization, and ascertain the reasonableness of the Debtors' long-term viability and plan of reorganization; (i) analyze alternative reorganization scenarios in an effort to maximize the recovery to the Committee and develop negotiation strategies to support the Committee's position, assist the Committee and its counsel in the negotiation of any aspects of a restructuring, and advise and assist the Committee in reviewing any proposed sales or acquisitions of strategic or non-strategic assets or business units; (j) advise and assist the Committee in its: -- assessments of the Debtors' management team, including a review of any existing or proposed bonus, incentive and retention plans, including key employee retention plans; and -- review of the Debtors' existing management processes, including but not limited to organizational structure, cash management and management information and reporting systems; (k) render expert testimony and litigation support services, as requested from time to time by the Committee and its counsel, regarding the feasibility of a plan of reorganization and other matters; (l) attend Committee meetings and court hearings as may be required in the role as financial advisor to the Committee; (m) assist and advise the Committee and counsel in reviewing and evaluating court motions filed or to be filed by the Debtors or any other parties-in-interest; and (n) provide such other bankruptcy and related financial advisory services as are consistent with the Committee's role and duties. Capstone will be compensated on an hourly basis and reimbursed for actual, necessary expenses incurred. Member $475 - 495 Professional Staff 200 - 450 Support Staff 125 - 175 Headquartered in Downers Grove, Illinois, Spiegel, Inc. -- http://www.spiegel.com/-- is a leading international general merchandise and specialty retailer that offers apparel, home furnishings and other merchandise through catalogs, e-commerce sites and approximately 560 retail stores. The Company filed for Chapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No. 03-11540). James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq., at Shearman & Sterling represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $1,737,474,862 in assets and 1,706,761,176 in debts. (Spiegel Bankruptcy News, Issue No. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000) SPRING AIR PARTNERS: Creditors Must File Claims by April 30 ----------------------------------------------------------- The United States Bankruptcy Court for the Southern District of New York, sets 5:00 p.m. on April 30, 2004, as the deadline for all creditors owed money on account of claims arising prior to March 22, 2004, against: * Spring Air Partners - North America, Inc. * Spring Air Partners - California, Inc. * Spring Air Partners - New Jersey, Inc. * Spring Air Partners - Pennsylvania, Inc. * Spring Air Partners - Texas, Inc. * Spring Air Partners - Ohio, L.L.C. * Spring Air Partners - Canada, Inc. * Chattam & Wells, Inc. * Spring Air California - Deluxe Bedding Co., Inc. * Chattam & Wells Mattress Company, LLC * Southland Bedding Company * Springco Bedding Co. to file written proofs of claim. Claim forms must be delivered on or before the April 30 Bar Date to: United States Bankruptcy Court Southern District of New York One Bowling Green, Room 534 New York, NY 10004-1408 Seven categories of claims are exempted from the Bar Date: (a) claims already properly filed; (b) claims scheduled in the right amount and not disputed, contingent or unliquidated; (c) claims previously allowed by the Bankruptcy Court; (d) claims already paid in full; (e) claims subject to another bankruptcy court-imposed deadline (f) intercompany claims; and (g) administrative expense claims. Headquartered in New York, New York, Spring Air Partners - North America, Inc., -- http://www.springair.com/-- is a bedding manufacturer in the United States, manufacturing mattresses and box springs under multiple brand names: Back Supporter(R), ComfortFlex(R), Four Seasons(R), Chattam and Wells(R), Posture Comfort(R) and Nature's Rest(R), for sale to local, regional and national retailers in the United States and Canada. The Company filed for chapter 11 protection on March 22, 2004 (Bankr. S.D.N.Y. Case No. 04-11915). Mark A. Broude, Esq., at Latham & Watkins represents the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed estimated assets of more than $10 million and estimated debts of over $50 million. STOLT OFFSHORE: Wins $60 Million Pipelay Contract in Trinidad ------------------------------------------------------------- Stolt Offshore S.A. (Nasdaq: SOSA; Oslo Stock Exchange: STO), announced the receipt of a letter of intent from the National Gas Company of Trinidad and Tobago to install 62.9 km of 36-inch diameter gas transportation pipeline from the BP Cassia B platform to Rustville on the South East coast of Trinidad. The contract is valued between $50 - $60 million. Offshore installation will take place in the second half of this year. Bruno Chabas, Chief Operating Officer, said, "We welcome this contract award for pipelay work in Trinidad, an increasingly important market for us and one in which we are committed to maximise the local content of our projects wherever possible. Through the use of our pipelay barge DLB 801, we are steadily building our share of this market. This important project award follows our current work in the Angostura field and the recently awarded Dolphin project." Stolt Offshore is a leading offshore contractor to the oil and gas industry, specialising in technologically sophisticated deepwater engineering, flowline and pipeline lay, construction, inspection and maintenance services. The Company operates in Europe, the Middle East, West Africa, Asia Pacific, and the Americas. * * * As reported in Troubled Company Reporter's January 2, 2004 edition, Stolt Offshore S.A. obtained an extension from December 15, 2003 until April 30, 2004 of the waiver of banking covenants. Stolt Offshore continues discussions with its lenders towards a long-term agreement. STOLT OFFSHORE: BG International Awards $80MM Contract in Trinidad ------------------------------------------------------------------ Stolt Offshore S.A. (Nasdaq: SOSA; Oslo Stock Exchange: STO), announced the award of a contract, valued at approximately $80 million, from BG International Limited for the installation of about 90km of 24-inch diameter gas transportation pipeline and an associated 12-inch diameter infield flowline and well control umbilical. The gas transportation pipeline will take gas from the Dolphin Platform off the East coast of Trinidad to the Beachfield onshore facility. Offshore installation will be in the second half of this year. Quinn Hebert, President, Stolt Offshore North Americas Region, said, "We welcome this contract award for pipelay work in Trinidad, an increasingly important market for us and one in which we are committed to maximise the local content of our projects wherever possible. Through the use of our pipelay barge DLB 801, we are steadily building our share of this market. This important project follows our current work in the Angostura field." Stolt Offshore is a leading offshore contractor to the oil and gas industry, specialising in technologically sophisticated deepwater engineering, flowline and pipeline lay, construction, inspection and maintenance services. The Company operates in Europe, the Middle East, West Africa, Asia Pacific, and the Americas. * * * As reported in Troubled Company Reporter's January 2, 2004 edition, Stolt Offshore S.A. obtained an extension from December 15, 2003 until April 30, 2004 of the waiver of banking covenants. Stolt Offshore continues discussions with its lenders towards a long-term agreement. TEMPUR-PEDIC: Clarifies Statements Regarding Covenant Compliance ---------------------------------------------------------------- Tempur-Pedic International Inc. (NYSE: TPX) clarified certain statements regarding the Company's credit facility and its expansion plans. In an article released March 31, 2004 issued by Dow Jones Newswire the article noted that, as reported in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission, the Company had received waivers as of December 31, 2003 from its senior lenders regarding the capital expenditure covenant and certain administrative covenants regarding the delivery of certain financial information. The Company confirms that it is in compliance with all of the covenants included in its senior credit facilities. The Company also confirms that the capital expenditure covenant included in its senior credit facilities was structured to reflect the Company's continued expansion plans, and the Company believes that this covenant will not restrict the Company's planned capacity expansions in the future. The Company did note that the timing of planned capacity additions is driven by the continued growth in the demand for its products, and in the event of faster than anticipated growth in its business, it may choose to accelerate its planned capital spending, in which case the Company may be required to obtain an amendment or waiver of the capital expenditure covenant in its senior credit facility. The Company confirms that its relationships with its senior lenders are very good, and the Company remains confident that it would obtain this relief regarding the timing of planned capital expenditures, if required, as it has in the past. About the Company Tempur-Pedic International Inc. (NYSE: TPX) manufactures and distributes Swedish Mattresses and Neck Pillows(TM) made from the revolutionary Tempur(R) pressure-relieving material, a visco- elastic material that conforms to the body to provide support and help alleviate pressure points. Products are currently sold in 54 countries under the Tempur(R) and Tempur-Pedic(R) brand names. World headquarters for Tempur-Pedic International are in Lexington, KY. For more information about the Company, visit http://www.tempurpedic.com/ TRANSACTION NETWORK: S&P Assigns BB Rating to New Bank Facility --------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' senior secured bank loan rating, with a recovery rating of '4', to the new senior secured bank facility of Reston, Virginia-based Transaction Network Services Inc. (TNS) (BB-/Stable/--). Proceeds from this facility and from the company's recent initial public offering, were used to refinance TNS' previous bank facility. The '4' recovery rating reflects the expectation of marginal (25%-50%) recovery of principal in a default or bankruptcy scenario for the senior secured lenders TNS provides private data communications networks for transaction-oriented applications. Pro forma for the refinancing of TNS' senior secured bank debt and its initial public offering, the company had approximately $111 million in operating lease- adjusted debt as of December 2003. The new facility consists of a $30 million revolving credit facility and a $65 million term loan, both maturing 2009. The bank facility is secured by a first-priority perfected security interest in substantially all of the borrower's existing and future assets, as well as the existing and future assets of subsidiary guarantors. In addition, all outstanding equity interests of the company and its subsidiaries are pledged as security. "Rating upside potential is limited by TNS' business profile," said Standard & Poor's credit analyst Ben Bubeck. "However, downside risk is limited by solid credit metrics for the rating and stable cash flow generation, barring the loss of a key contract." TRANSMERIDIAN: Auditors Continues Going Concern Qualification ------------------------------------------------------------- Transmeridian Exploration, Inc. (OTCBB:TMXN) announced financial and operational results for the year ended December 31, 2003 and reported its year-end proved reserves prepared by Ryder Scott Company. Operations Review During 2003, Transmeridian drilled and completed its first well, the South Alibek No. 1 (SA-1) which is currently producing at the rate of approximately 1,000 barrels of oil per day (Bopd) and began drilling operations on two new wells, the SA-2 and the SA-4, which were the second and third wells in an initial seven well drilling program. As of December 31, 2003, the SA-4 had reached total depth and been logged, while the SA-2 was within 1,300 feet of its planned total depth. In January 2004, the SA-2 reached total depth. Production casing has been set in both wells in preparation for an extended testing program. During the first quarter of 2004, the Company began drilling its fourth and fifth wells, SA-5 and SA 17. Transmeridian also made substantial progress on its permanent production facilities, which are designed for a total capacity of 30,000 Bopd and are expected to be operational in the second quarter of 2004. Proved Oil Reserves Transmeridian's oil and gas reserve report was prepared by Ryder Scott Company, one of the world's leading independent reservoir engineering firms. The gross proved reserves, including the SA-2 (which was logged subsequent to year-end) were estimated by Ryder Scott to be 64.7 million barrels of oil (MMbbls), more than three times the gross proved reserves of 20.9 MMbbls from the previous year. The Company has also engaged Ryder Scott to update its complete evaluation of South Alibek Field, including estimates of probable and possible oil resources which may be ultimately recovered from the field. The results of this evaluation will be released when it has been completed. At December 31, 2003 (excluding the SA-2), net proved reserves were 45.7 MMbbls, up from 17.1 MMbbls at year-end 2002. All of the reserves are located in the South Alibek Field in Kazakhstan. This report is based on two wells which were drilled and completed in 2003, the SA-1 and SA-4, and a previously producing well, the Alibekmola 29. The field is in the early stages of development, with significant future drilling planned. Management Comments Commenting on 2003 results and the updated Ryder Scott reserve report, Lorrie T. Olivier, Chairman and CEO of Transmeridian said, "We are very excited about the growing potential of the South Alibek Field and the value that it represents for Transmeridian. The completion of three wells and the tripling of gross reserves in the field are tremendous milestones in the growth of the Company. We learn more about the field and its ultimate potential with every well we drill. We are very optimistic about the 2004 capital program and expect it to yield further significant increases in the asset base and value of the Company." 2004 Capital Budget The capital budget for the South Alibek Field in 2004 is $25.9 million. This budget is based on the continuous operation of two drilling rigs in the field and includes expenditures to complete construction of the central production facility and the other support facilities for the field. The drilling budget calls for the completion of the SA-2 and SA-4 wells which started drilling in 2003 and are currently undergoing completion testing. The company plans to drill and complete four additional wells in 2004. Two of these wells will be on locations currently booked as proved undeveloped reserves and two will be on locations which are outside of the boundaries of our proved reserves. The Company also expects to commence the drilling of two additional wells before the end of 2004. Accordingly, including the SA-1 well which is currently producing, the 2004 capital budget envisions a cumulative total of seven wells drilled and completed in the field by the end of 2004, assuming all such wells are successful, and two additional wells in progress. Capital Financing On January 9, 2004, Transmeridian sold 7.3 million shares of common stock in a private placement for net cash proceeds totaling $4.4 million. The proceeds from the offering were used to repay approximately $3 million of debt owed by Transmeridian under the Caspi Neft credit facility. This payment, combined with the proceeds from the Bramex option exercise as discussed above, result in a remaining balance of $6 million under the original $20 million credit facility. This amount will be amortized over the next 12 months beginning in March 2004. As of December 31, 2003, there was approximately $7 million available for future borrowings under the $30 million credit facility. Caspi Neft will require additional funding beyond its existing credit facilities in order to fund the 2004 capital budget. Transmeridian currently estimates the minimum funding requirements for its 50% interest in Caspi Neft to be between $5 and $10 million. Bramex, the other 50% owner, has indicated that it has available funds to finance its share of the 2004 budget. The minimum amount of funding required is highly dependent on the amount and timing of cash flows from the existing and future wells drilled on the property. The Company is in the early stages of developing the field, with limited cash flow from production and has primarily used debt financing to fund development. Our auditors continue to express concern about the Company's ability to continue in existence. This "going concern" qualification has been in our auditors' opinions since our inception in 2000, so this position was not unexpected. Management recognizes its financial challenges, and believes strongly that the potential value of the South Alibek Field far outweighs the current and near-term investment requirements. Management is also confident that it can successfully attract future capital for this project in order to continue the development of the field. Production, Pricing and Transportation Caspi Neft is currently producing its first well, the SA-1, on an extended production testing basis. During the second half of 2003, we produced 117,376 barrels of oil and sold 77,293 barrels. This test production has been transported by truck and was sold at an average price of $10.52 per barrel, resulting in revenues of $797,411 for the year. These prices represent a fairly low percentage of prevailing world oil prices. Prices received for our oil sales increased during the year and we realized $12.44 per barrel for sales during the month of December 2003. When our facilities at the Emba rail terminal are completed, we anticipate a reduction in our transportation and storage costs. With the completion of the central production facility, currently scheduled to be operational in the second quarter 2004, and the pipeline and pump station, planned to be operational in early 2005, we expect to be able to ship our oil by pipeline, which should result in a reduction in our transportation and storage costs and significantly improved net pricing for our crude oil. South Alibek Field The South Alibek field is located in northwestern Kazakhstan within the prolific oil region of Aktobe. It lies in a fairway of oil fields that produce from carbonate reservoirs of Carboniferous age. The fields in this trend are projected to ultimately contain over 40.0 billion barrels of recoverable reserves, including the giant Tengiz field which is estimated to hold 9.0 billion barrels of recoverable reserves and the Kashagan Field which is estimated to have 13.0 billion barrels of recoverable reserves. The South Alibek field is immediately adjacent to the currently producing Alibekmola Field, from which it is separated by a large fault. The primary oil reservoirs in the South Alibek Field are the Upper Carboniferous (KT1) and the Middle Carboniferous (KT2) limestone. The tops of these formations are found at an initial depth of 6,500 feet and can have a combined gross thickness of 5,000 feet or more. About Transmeridian Exploration, Inc. Transmeridian Exploration, Inc. (TMXN) is an independent energy company established to acquire and develop oil reserves in the Caspian Sea region of the former Soviet Union. TMXN primarily targets medium-sized fields with proved or probable reserves and significant upside reserve potential. Its first major project is the South Alibek Field in Kazakhstan. USI HOLDINGS: Acquires New York-Based Bertholon-Rowland Corp. ------------------------------------------------------------- U.S.I. Holdings Corporation, (Nasdaq: USIH) announced that it has acquired New York, NY-headquartered Bertholon-Rowland Corp. (BR). BR is anticipated to contribute approximately $25 million of revenues to USI on an annual basis. Terms of the transaction were not disclosed. Founded in 1944, BR was one of the first brokers to develop insurance programs for professional associations on behalf of their members. BR is one of the largest association-sponsored professional liability and life/health insurance marketers, administrators and program managers providing a range of personal and business plans to professionals and alumni associations in the U.S. BR also provides travel insurance services to these associations. The acquisition of BR together with USI's existing Affinity Group creates the one of the largest offerings of program lawyers professional liability in the U.S. Alan E. Zink, Chairman, President and CEO of BR, will assume the role of Chairman of USI Affinity. David L. Eslick, USI's Chairman, President and CEO, said, "USI is committed to growth through acquisitions of strong agencies with quality professionals. With over 60 years in the association insurance industry, BR has long-standing relationships with professional and alumni associations and in leading insurance markets that we anticipate will significantly enhance USI's current offering. We are very pleased to enter into a partnership with Alan and his well-respected team of professionals." Douglas W. Kreitzberg, CEO of USI Affinity, added, "The acquisition of BR enhances USI's existing offering to associations by providing diverse insurance products, professional liability, life, health and travel insurance. This addition creates one of the largest offerings of this kind and we anticipate that it will enable us to leverage existing business opportunities for the USI Affinity Group." Also commenting on the acquisition, Alan E. Zink, added, "By joining USI, our ability to serve our association clients is dramatically increased. We are pleased to be able to enhance our offerings to them with quality products and services from a professional team keenly aware of association needs. Our experience with professional, alumni and other affinity associations gives USI access to an exciting new marketplace." About U.S.I. Holdings Corporation Founded in 1994, USI (S&P, BB- Counterparty Credit and Bank Loan Ratings, Stable) is a leading distributor of insurance and financial products and services to businesses throughout the United States. USI is headquartered in Briarcliff Manor, NY, and operates out of 59 offices in 19 states. Additional information about USI may be found at http://www.usi.biz/ US LIQUIDS: Sells All Operating Assets & Deregisters Common Stock ----------------------------------------------------------------- U S Liquids Inc. (OTC Pink Sheets: USLQ) announced the completion of the sales of substantially all of the assets of USL Environmental Services, Inc. d/b/a A&A Environmental of Baltimore, Md., and U S Liquids of Pennsylvania, Inc. d/b/a EMAX of Pittsburgh, Pa., to Perma-Fix Environmental Services, Inc. In addition, the Company has completed the sale of the stock of its Canadian subsidiary. As a result, the Company has sold all operating assets and deregistered its common stock. US WIRELESS DATA: Signs-Up Mintz Levin as Special Counsel --------------------------------------------------------- U.S. Wireless Data, Inc., seeks permission from the U.S. Bankruptcy Court for the Southern District of New York to employ Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., as its special counsel. The Debtor reports that Since 2000, Mintz Levin has performed extensive legal work for it in connection with various corporate, securities, intellectual property and employment matters. As a result of this representation, Mintz Levin has become familiar with and knowledgeable about the Debtor's corporate operations. Mintz Levin, which has particular expertise in corporate, securities, intellectual property and employment law as well as extensive experience and skill in all facets of legal issues faced by sophisticated corporate clients, The Debtor has also employed Halperin & Associates as counsel in this proceeding. The Debtor believes that the rational economic approach to this case is for Halperin & Associates to act as general bankruptcy counsel and for Mintz Levin to handle corporate matters, including intellectual property, employment, and federal securities matters. Mintz Levin and Halperin & Associates will work closely together to develop a work plan and division of labor to substantially eliminate any duplication of work. Mintz Levin is expected to provide services including those non- bankruptcy matters related to: (i) employment issues affecting the Debtor's personnel; (ii) the Debtor's intellectual property, including a certain pending litigation matter and the continuing prosecution of the Debtor's patent applications; (iii) federal securities laws, including applicable filings; and (iv) general corporate and contract matters. Mintz Levin will charge the Debtor at its regular hourly rates, which range from: Designation Billing Rate ----------- ------------ Attorneys $245 to $550 per hour Paraprofessionals $70 to $220 per hour Headquartered in New York, New York, U.S. Wireless Data, Inc. -- http://www.uswirelessdata.com/-- is a Delaware corporation that provides proprietary enabling solutions and wireless transaction delivery and gateway services to the payments processing industry. The company filed for chapter 11 protection on March 26, 2004 (Bankr. S.D.N.Y. Case No. 04-12075). Alan David Halperin, Esq., at Halperin & Associates represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $2,719,000 in total assets and $5,709,000 in total debts. VWR INT'L: S&P Assigns BB- Corp. Credit & Bank Loan Ratings ----------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to VWR International Inc., a distributor of research laboratory products that is being spun off by Germany-based Merck KGaA to private holders. The outlook is stable. At the same time, Standard & Poor's assigned a 'BB-' senior secured bank loan rating and a recovery rating of '3' to VWR's proposed $740 million senior secured credit facilities. The 'BB-' rating is the same as the corporate credit rating; this and the recovery rating of '3' indicate that lenders can expect a meaningful recovery of principal (50%-80%) in the event of a default or bankruptcy. Standard & Poor's also assigned a 'B' rating to both VWR's $175 million senior notes due 2012 and its $345 million senior subordinated notes due 2014. The senior notes are rated the same as the subordinated notes, reflecting Standard & Poor's view that the unsecured senior notes would be materially disadvantaged in a bankruptcy given the large proportion of assets secured by the bank loans. Proceeds from these borrowings will finance the purchase of VWR from Merck KGaA by private equity firm Clayton, Dubilier & Rice Inc. in a largely debt-financed transaction. "The mid-speculative-grade ratings reflect the heavy debt burden and the evolving competitive risks in VWR's markets," said Standard & Poor's credit analyst David Lugg. "These risks largely offset the benefits of VWR's well-established position in the stable and attractive laboratory supply market." West Chester, Pa.-based VWR is the second-largest distributor of products to the global research laboratory market. Since 1999, it has operated as a subsidiary of 'BBB' rated Merck KGaA, building its position in the European market through a series of acquisitions. Merck is now divesting VWR to focus resources on its higher growth specialty chemicals and pharmaceuticals businesses. The proposed transaction will saddle VWR with an estimated $1.2 billion of financial obligations, including capitalized operating leases. The laboratory distribution market is undergoing a competitive restructuring as one of its leading players, Fisher Scientific International Inc. (BB/Watch Pos/--), aggressively acquires suppliers in a vertical integration strategy. This approach is a departure from the view that distributors should avoid any potential competition with suppliers. If this strategy were to prove successful, it could put VWR at a competitive disadvantage in the long run. VWR plays a critical role in the efficient operation of the laboratory supply market. It enables some 5,000 suppliers to reach 250,000 customers with more than 700,000 products. The company has expanded into several services that it provides on site, ranging from purchasing to internal product distribution to individual laboratories. The combination of the company's scale and its long- term customer relationships poses very high barriers to competitor entry into the market. WESTPOINT STEVENS: Court Okays Sulzer Loom Sale Bidding Procedures ------------------------------------------------------------------ WestPoint Stevens Inc. and its debtor-affiliates operate a manufacturing plant in Valley, Alabama. At the Lanier Plant, the Debtors utilized certain machinery specific to the manufacture of sheeting products, including over 395 Sulzer projectile looms. As part of their reorganization efforts, the Debtors are in the process of converting the Lanier Plant from sheeting manufacturing to towel manufacturing. The conversion entails replacing the Looms with new weaving machinery scaled for the production of towels rather than sheeting. The Debtors have determined that the Looms are not needed in any of their other existing manufacturing plants and, thus, continued ownership of the Looms is not essential to their reorganization. Thus, the Debtors engaged in extensive marketing efforts to sell the Looms, including the distribution of sales information to various used machinery dealers that had previously done business or were familiar to the Debtors. As a result, nine entities submitted bids. Atkins Machinery Inc.'s offer was the highest bid received. After good faith and arm's-length negotiations, the Debtors and Atkins entered into a Purchase Agreement for the sale of the Looms. The Purchase Agreement between the Debtors and Atkins Machinery Inc. for the sale of the Debtors' Sulzer looms provides that the sale will be subject to higher and better offers. At the Debtors' request, the Court approves these auction and bidding procedures: (A) The Debtors will provide: (1) notice of the Sale Hearing and Bidding Procedures, together with a copy of the Purchase Agreement to all parties known to the Debtors as having expressed a bona fide interest in acquiring the Looms; (2) publication of notice in the Southern Textile News, a textile trade weekly printed in Charlotte, North Carolina; and (3) a copy of the Purchase Agreement to all other prospective offerors and parties-in-interest on request to the Debtors through their attorneys, Weil, Gotshal & Manges LLP, by telephone at (212) 833-3584 or jessica.serrano@weil.com by e-mail; (B) To be considered a qualified bidder, a party should submit a competing offer for an alternative transaction that is: (1) irrevocable through the date of the closing of the sale of the Looms; and (2) in writing and delivered to: * WestPoint Stevens Inc 507 West Tenth Street West Point, Georgia 31833 Attn: M. Clayton Humphries, Jr., Esq. * Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York 10153 Attn: Kathryn L. Turner, Esq. Troy L. Cady, Esq. * Stroock & Stroock & Lavan LLP 180 Maiden Lane New York, New York 10038 Attn: Lawrence M. Handelsman, Esq. Michael J. Sage, Esq. so as to be received not later than 11:00 a.m. on April 2, 2004; and The competing offer must include: * A statement of the competing offeror's intent to bid at the Auction; * A written agreement executed by the competing offeror, together with a copy of the agreement marked to show the specific modifications, if any, to the Purchase Agreement that the competing offeror requires; * A purchase price for the Looms that exceeds Atkins' purchase price by at least $100,000; * A good faith deposit of $406,800 in cash or in other form of immediately available U.S. funds; and * Evidence, acceptable to the Debtors, of the competing offeror's ability to consummate the transaction within three business days after the entry of an order approving the sale; (C) Competing offers will be unconditional and not contingent on any event, including any due diligence investigation, the receipt of financing or the receipt of any further approval, including from any board of directors, shareholders or otherwise. Any person submitting a competing offer will be deemed to have submitted to the Court's jurisdiction; (D) If the Debtors do not receive any competing offers satisfying the previous requirements, then the Debtors, in their sole discretion, may elect to forego the Auction, deem Atkins as having submitted the highest and best offer and deem Atkins' offer for the sale of the Looms on the terms set forth in the Purchase Agreement as the final auction offer; (E) The Auction will be conducted by the Debtors or their representatives on invitation to Atkins and all Qualified Bidders that have submitted competing offers in accordance with the procedures, and will commence on April 5, 2004 at 11:00 a.m. at the Debtors' corporate offices, 507 West Tenth Street, West Point, Georgia 31833; (F) At the Auction, the Debtors will announce the initial auction offer that represents the highest and best offer received prior to the Auction. All successive bids at the Auction will be increased in increments of not less than $25,000. Atkins may submit competing offer without waiving its right to a Break-Up Fee in the event an alternative transaction is consummated with a successful offeror other than Atkins. Atkins may not apply or credit any portion of the Break-Up Fee as a component of its subsequent offers; (G) Following the conclusion of the Auction, the Debtors will select the highest and best offer for the Looms and will inform the party having submitted the Final Auction Offer. At the Sale Hearing, the Court will consider the Final Auction Offer for approval; (H) Each Good Faith Deposit will be maintained in an interest- bearing account and be subject to the jurisdiction of the Court. The Good Faith Deposit, together with any interest paid, will be applied by the Debtors against the purchase price to be paid by the Successful Offeror at the closing of the transaction approved by the Court. Promptly after the closing, each Good Faith Deposit submitted by a party other than a Successful Offeror, together with any interest paid, will be returned; (I) In the event the Successful Offeror fails to consummate the transaction due to its breach of the terms of its agreement with the Debtors, the Successful Offeror's Good Faith Deposit, together with any interest paid, will be forfeited and the Debtors may request authority to consummate a transaction with the Qualified Bidder having submitted the next highest and best offer at the final price and terms bid by this Qualified Bidder at the Auction; and (J) No offer will be deemed accepted unless and until it is approved by the Court. The Debtors maintain that the Bidding Procedures provide a fair and reasonable means of ensuring the Looms are sold for the highest and best offer attainable. (WestPoint Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) WILLIAMS: Releasing First-Quarter 2004 Results on May 6 ------------------------------------------------------- Williams (NYSE: WMB) announced plans to report its first-quarter 2004 financial results before the market opens on May 6. Williams' management will discuss the results during an analyst presentation to be webcast live beginning at 8:30 a.m. Eastern the same day. Participants are encouraged to access the presentation and corresponding slides via http://www.williams.comon May 6. A limited number of phone lines also will be available at (800) 818- 5264. International callers should dial (913) 981-4910. Callers should dial in at least 10 minutes prior to the start of the discussion. The webcast replay -- audio and slides -- will be available on http://www.williams.com. Audio-only replays of the presentation will be available at approximately 5:30 p.m. Eastern on May 6 through midnight on May 13. To access the replay, dial (888) 203- 1112. International callers should dial (719) 457-0820. The replay confirmation code is 646547. About Williams Williams, through its subsidiaries, primarily finds, produces, gathers, processes and transports natural gas. Williams' gas wells, pipelines and midstream facilities are concentrated in the Northwest, Rocky Mountains, Gulf Coast and Eastern Seaboard. More information is available at http://www.williams.com/ * * * As reported in Troubled Company Reporter's October 16, 2003 edition, Fitch Ratings affirmed The Williams Companies, Inc.'s outstanding senior unsecured notes and debentures at 'B+'. Also affirmed are outstanding credit ratings for WMB's wholly-owned subsidiaries Northwest Pipeline Corp., Transcontinental Gas Pipe Line Corp., and Williams Production RMT Co. The Rating Outlook for each entity has been revised to Positive from Stable. Details of the securities affected are listed below. The following is a summary of outstanding ratings affected by the action: The Williams Companies, Inc. -- Senior unsecured notes and debentures 'B+'; -- Feline PACs 'B+'; -- Senior secured debt 'BB'; -- Junior subordinated convertible debentures. 'B-'. Williams Production RMT Co. -- Senior secured term loan B 'BB+'. Northwest Pipeline Corp. -- Senior unsecured notes and debentures 'BB'. Transcontinental Gas Pipe Line Corp. -- Senior unsecured notes and debentures 'BB'. W.R. GRACE: Wants Until September 30, 2004 to Decide on Leases -------------------------------------------------------------- W.R. Grace & Co. and its debtor-affiliates ask Judge Fitzgerald to extend their deadline to decide whether to assume, assume and assign, or reject unexpired non-residential real property leases through and including September 30, 2004. The request is without prejudice to the Debtors' right to seek further extensions, and without prejudice to any lessor's right to request to shorten the lease decision period on a particular lease. The Debtors explain that their management and professionals have been consumed with the operation of their businesses and the resolution of a number of complex business decisions. The Debtors have also focused on defining their mounting asbestos- related litigation liabilities. Resolution of the asbestos issues will involve significant litigation that will take time. The Debtors have not yet intelligently appraised each lease's value, and until the asbestos issues are resolved, little progress can be made toward developing a viable reorganization plan. The Debtors remain parties to several hundred unexpired leases that fall into two major categories: (a) Real property leases for offices and plants throughout the United States and Puerto Rico; and (b) Leases where the Debtors are lessees of commercial real estate, often retail stores, restaurants, and other similar facilities most of which have been subleased to other tenants. These leases are important assets of the estate. Thus, the decision to assume or reject these leases is central to any plan of reorganization. The Debtors assure Judge Fitzgerald that they are current in all of their postpetition rent payments and other contractual obligations with respect to the unexpired leases. The Debtors intend to continue to timely pay all rent obligations on leases until they are either rejected or assumed, and will continue to timely perform their contractual obligations with respect to the assumed leases. The Court will convene a hearing on April 26, 2004, to consider the Debtors' request. By application of Del.Bankr.LR 9006-2, the lease decision period is automatically extended through the conclusion of that hearing. (W.R. Grace Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service, Inc., 215/945-7000) * Credit Unions & Legislators to Boost Youth Financial Literacy --------------------------------------------------------------- High school seniors will graduate with few of the personal financial skills they need to support themselves. This according to a survey released by the National Jump$tart Coalition for Personal Financial Literacy. This lack of knowledge is directly related to financial problems these young adults may face later in life, such as bankruptcy and difficulty in obtaining affordable credit, says the Michigan Credit Union League (MCUL). Credit unions are teaming up with the Michigan Legislature this month -- Michigan Youth Financial Literacy Month -- to help graduate more fiscally smart, savvy youth. Dubbed the "Financial Literacy Legislative Challenge" by authors state Senators Mike Bishop, R-Rochester, Wayne Kuipers, R-Holland, and Representatives Brian Palmer, R-Romeo, and Marc Shulman, R- West Bloomfield, the initiative finds lawmakers co-presenting financial curricula with credit union volunteers in schools and student credit union branches around the state. "There's a crisis in financial education in our country and a need for leadership in combating it," said Lori Z. Bahnmueller, vice president of Association Services for the MCUL. "Credit unions are ideally positioned to respond because we have always believed that education and information are key to achieving financial well being." Michigan credit unions lead their industry in youth financial literacy outreach, teaching more than 55,000 students annually. They are also leaders in school credit union branches, with some 150 student-run branches in school districts across the state. Many other credit unions have special youth and teen savings clubs, complete with their own newsletters, events and membership benefits. Credit unions will also be participating in the Federal Reserve Bank's "Money $mart Week" during Youth Financial Literacy Month. Slated for April 22-30, Money $mart Week features more than 150 free financial education events for consumers in metro Detroit -- 26 of which are being hosted by credit unions. The MCUL, the trade association for Michigan credit unions, is also hosting a free teacher training for educators April 22. In partnership with Michigan State Cooperative Extension, the training will evolve around the National Endowment for Financial Education's High School Financial Planning Program. This is the curriculum most employed by credit union volunteers. For further details, go to www.chicagofed.org and click on "Detroit Money $mart Week." The comprehensive Jump$tart survey of more than 4,000 high school students in 33 states measured 12th graders' level of knowledge of personal finance basics, and compared the results with those from similar surveys conducted in 2002, 2000 and 1997. On average, students who participated in the 2004 survey answered 52.3 percent of the questions correctly -- a failing grade based upon the typical grade scale used by schools. This year's score is up from 50.2 percent in 2002 and 51.9 percent in 2000. To view the survey in its entirety, go to www.jumpstart.org . The national results are similar to those garnered by the Michigan Jump$tart Coalition in 2001. Conducted by the National Institute for Consumer Education (NICE), the 2001 survey looked at 12th graders' level of knowledge within four areas: income, money management, saving and investment, and spending. Students were asked questions on a wide range of topics and concepts such as taxes, retirement, insurance, credit use, inflation and budgeting. On average, survey participants answered 49 percent of the questions correctly. Organized in 1934, the Michigan Credit Union League is a statewide trade association representing Michigan credit unions. Based in Northville Township with a satellite office in Lansing, the MCUL offers credit unions assistance in the areas of regulatory compliance, legislative advocacy, media advocacy and operational information. For more information, visit the MCUL's Web site at http://www.mcul.org/ * Newtek to Provide Small Business Loans to Navy Federal Members ---------------------------------------------------------------- Newtek Business Services, Inc. (Nasdaq: NKBS) -- http://www.newtekbusinessservices.com/-- a provider of business services and financial products to the small business market, announced that its small business lender, Newtek Small Business Finance, entered into a agreement with the Navy Federal Credit Union to make SBA loans available to the Navy Federal members. Navy Federal is the largest credit union in the country, with 2.3 million members and over $20 billion in assets. Newtek Small Business Finance will provide a full service solution to the business lending needs of the Navy Federal members and will provide loan processing, servicing and liquidation services for the credit union. Barry Sloane, chairman and CEO of Newtek Business Services, stated, "We are thrilled at the prospect of assisting Navy Federal with providing small business loans to its members. Our services will span the scope of underwriting, servicing and potentially providing financing for members of this distinguished financial institution." Newtek Business Services, Inc. is a premier provider of business services and financial products to the small to medium-sized business market. Newtek's core brands include: * Newtek Small Business Finance: small business and U.S. government-guaranteed lending services; * Newtek Merchant Solutions: electronic merchant payment processing solutions; * Newtek Financial Information Systems: outsourced bookkeeping & controller services; * Newtek Tax Services: tax filing, preparation and advisory services; and * Newtek Insurance Agency: customized business insurance. * BOND PRICING: For the week of April 5 - 9, 2004 ------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- American & Foreign Power 5.000% 03/01/30 70 Atlas Air Inc. 9.250% 04/15/08 39 Best Buy 0.684% 06/27/21 74 Burlington Northern 3.200% 01/01/45 58 Calpine Corp. 7.750% 04/15/09 71 Calpine Corp. 7.875% 04/01/08 74 Calpine Corp. 8.500% 02/15/11 73 Calpine Corp. 8.625% 08/15/10 73 Comcast Corp. 2.000% 10/15/29 41 Cummins Engine 5.650% 03/01/98 75 Cox Communications Inc. 2.000% 11/15/29 36 Delta Air Lines 7.900% 12/15/09 66 Delta Air Lines 8.000% 06/03/23 74 Delta Air Lines 8.300% 12/15/29 58 Delta Air Lines 9.000% 05/15/16 61 Delta Air Lines 9.250% 03/15/22 61 Delta Air Lines 9.750% 05/15/21 62 Delta Air Lines 10.125% 05/15/10 68 Delta Air Lines 10.375% 02/01/11 69 Delta Air Lines 10.375% 12/15/22 64 Elwood Energy 8.159% 07/05/26 70 Federal-Mogul 7.500% 01/15/09 25 Foamex L.P. 9.875% 06/15/07 66 Finova Group 7.500% 11/15/09 62 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 Level 3 Communications 6.000% 03/15/10 60 Liberty Media 3.750% 02/15/30 71 Levi Strauss 7.000% 11/01/06 74 Mirant Corp. 2.500% 06/15/21 58 Mirant Corp. 5.750% 07/15/07 59 Mirant Americas 7.625% 05/01/06 74 Mirant Americas 8.300% 05/01/11 74 Northern Pacific Railway 3.000% 01/01/47 56 Owens Corning 7.700% 05/01/08 44 RCN Corporation 10.000% 10/15/07 46 Reliance Group Holdings 9.000% 11/15/00 15 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 ***