/raid1/www/Hosts/bankrupt/TCR_Public/040415.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Thursday, April 15, 2004, Vol. 8, No. 74
Headlines
ACE ELECTRICAL: Section 341(a) Meeting Scheduled for April 19
ADELPHIA BUSINESS: Court Estimates Metromedia Claims at $30.8M
ADELPHIA COMMS: Settles Logogram Claims Held by Contrarian
ADSTAR: Closes $1.5 Million Private Placement with Laurus Funds
AIR CANADA: Asks Canadian Court to Stay the Labor Proceeding
AIR CANADA: Reports Improved March 2004 Traffic
AIRGATE PCS: Issues Second Quarter Preliminary Subscriber Results
ALLIED HOLDINGS: Files Delayed 2003 Annual Report with SEC
AMERICAN SEAFOODS: Extends Senior Note Tender Offer to May 3
AMERICA WEST: Q1 2004 Conference Call to Be Webcast on April 20
ANC RENTAL: Wants Court to Nix Claim & Recover Avoidable Transfers
APPLIANCE CONTROLS: Case Summary & 28 Largest Unsecured Creditors
ARMSTRONG: Asks to Participate in Hampton-USG Dispute Settlement
ASBURY AUTOMOTIVE: First Quarter Earnings Exceed Expectations
BOYD GAMING: S&P Lowers Senior Secured Debt Rating to BB
BUDGET: Judge Case Adjourns Plan Confirmation Hearing to April 20
CALL-NET ENTERPRISES: Releasing Q1 2004 Results on May 6, 2004
CE SOFTWARE: Proceeding with Liquidation Proposal
CHASE COMM'L: Fitch Gives Low-B Ratings to 4 Series 1998-2 Classes
CKE RESTAURANTS: Board Adopts Stock Repurchase Program
COINMACH CORP: S&P Places Low-B Level Ratings on Watch Negative
COMDISCO: Comprendium Prepays in Full Acquired German Leasing Unit
DAN RIVER: U.S. Trustee Names 7-Member Creditors' Committee
DII IND.: UK Insurers Ask Court to Postpone Confirmation Hearing
ENRON: Wants Nod to Effect Dissolution of Non-Debtor Affiliates
EVERGREEN SALES: List of 20 Largest Unsecured Creditors
EXECUTIVE AVIATION: Case Summary & 20 Largest Unsecured Creditors
FEDERAL-MOGUL: Objects to J. Scott Sherill's $98 Million Claim
FIBERMARK: U.S. Trustee Meets with Creditors on May 24, 2004
FIBERMARK INC: Shares Now Trading on the OTC Bulletin Board
FLEMING COMPANIES: Asks Court to Reclassify Various Claims
FOOTSTAR: Selling 350 Footaction Stores to Foot Locker for $160MM
FOSTER WHEELER: Expects Exchange Offer to Reduce Debt by $500MM
GLOBAL CROSSING: Verizon Demands Compliance of Court Orders
HOLMES GROUP: S&P Assigns B Rating to $315M Sr. Secured Bank Loan
INTERWAVE COMMUNICATIONS: Regains Nasdaq Listing Compliance
IPCS ESCROW: $180M Senior Unsec. Debt Issue Gets S&P's CCC Rating
IT GROUP: Unsecured Panel Retains Marotta as Litigation Consultant
KOCH CELLULOSE: S&P Assigns BB Credit & Sr. Sec. Bank Loan Ratings
LAND O'LAKES: Schedules First Quarter Earnings Call for April 26
LAS VEGAS SANDS: Proposed Unit Sale Spurs S&P's Watch Positive
LLK TRANSPORT INC: Case Summary & 20 Largest Unsecured Creditors
L & L RANCH PROPERTIES: Voluntary Chapter 11 Case Summary
MASTEC INC.: S&P Lowers Corporate Credit Rating a Notch to BB-
METRIS COS: Publishing First Quarter 2004 Results on April 19
METRIS: Issues $200MM Securities Backed By Credit Card Receivables
MIRANT: Secures Go-Ahead to Expand McDermott's Retention Scope
MJ RESEARCH: First Creditors' Meeting Slated for May 3, 2004
NATIONSRENT INC: Wooing Court to Expunge 125 No-Liability Claims
NCP MARKETING: Case Summary & 22 Largest Unsecured Creditors
NORTEL: Receives Notice of OSC Investigation Due to Restatements
OPTION ONE: Fitch Rates Series 2004-2 Class M-7 Notes at BB+
ORION TELECOMMS: US Trustee Fixes May 5 for Sec. 341(a) Meeting
OWENS CORNING: Paying $1.4 Million Kansas Prepetition Taxes
PACIFIC GAS: Closes $6.7BB First Mortgage Bond Public Offering
PARMALAT GROUP: US Debtors Sign-Up AlixPartners as Fin'l Advisor
RELIANT RESOURCES: Will Webcast Q1 Conference Call on May 5
ROBERT H MASON: Case Summary & 9 Largest Unsecured Creditors
SAFETY-KLEEN: Wants Court to Nix 114 Duplicate & Amended Claims
SASKATCHEWAN WHEAT: Three Hog Units Seek Temporary CCAA Protection
SMZ INC: Case Summary & 2 Largest Unsecured Creditors
SOLUTIA INC: Inks Deal Settling HT Troplast Patent Dispute
SPECIALTY FOODS: Releasing December Quarter Results on April 20
STELCO INC: Steelworkers' Local 8782 Set to Begin Negotiations
STOCKERYALE INC: Posts Increased Revenues for First Quarter 2004
TAUBMAN REALTY: Fitch Assigns Non-Investment Grade Issuer Rating
TELCOVE: Completes Installation of New Board of Directors
TIMKEN CO: Secures $700,000 Bearing Order from Indian Steel Mill
UNIFI INC: Discontinues Kaiping Joint Venture Discussions
UNIFI: Hosting 3rd Quarter Earnings Conference Call on April 22
UNITEDGLOBALCOM: S&P Assigns CCC+ Rating to Convertible Sr. Notes
UNITED AIRLINES: Retired Pilots Tap Meckler & LeBoeuf as Lawyers
US ENERGY: Grant Thornton's Issues Qualified Going Concern Opinion
USG CORP: Brings-In Hewitt as Employee Compensation Consultant
USI HOLDINGS: Schedules Q1 2004 Conference Call for May 3
USI HOLDINGS: Agrees to Acquire Dodge, Warren & Peters by May
WACHOVIA BANK: S&P Assigns Low-Bs to 6 Series 2004-C11 Notes
WEIRTON: Informal Committee Gets Asset Sale Auction Delayed
WEYERHAEUSER CO: Board Declares Dividend on Exchangeable Shares
WHX CORPORATION: 2003 Fourth Quarter Net Loss Tops $13.7 Million
WILLIAMS: Sells Certain Power Assets to Saracen for $23 Million
WINDERMERE SCHOOL: US Trustee Fixes Creditors Meeting for May 3
WORLDCOM: Neon Optica Seeks to Clarify Services Agreement Status
XTO ENERGY: Will Broadcast Q1 2004 Conference Call on April 20
*********
ACE ELECTRICAL: Section 341(a) Meeting Scheduled for April 19
-------------------------------------------------------------
The United States Trustee will convene a meeting of Ace Electrical
Acquisition LLC's creditors at 10:00 p.m., on April 19, 2004, in
Suite 600 at SouthTrust Building, 6th Floor, 135 West Central
Boulevard, Orlando, Florida 32801. This is the first meeting of
creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy
cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Apopka, Florida, Ace Electrical Acquisition LLC
is engaged in manufacturing and buying-out products for the
automotive parts rebuilding industry and also sells complete
alternators and starters, and sources products from the United
States as well as China, Canada and Taiwan. The Company filed for
chapter 11 protection on March 23, 2004 (Bankr. M.D. Fla. Case No.
04-03224). R. Scott Shuker, Esq., at Kay, Gronek & Latham, LLP
represents the Debtor in its restructuring efforts. When the
Company filed for protection from its creditors, it listed both
estimated debts and assets of over $10 million.
ADELPHIA BUSINESS: Court Estimates Metromedia Claims at $30.8M
--------------------------------------------------------------
On July 3, 2003, Metromedia Fiber Network Services, Inc., now
known as AboveNet Communications, Inc., timely filed Claim No.
1727 for rejection damages amounting to $62,243,658 .
The Adelphia Business Debtors desire to estimate the Claim solely
for purposes of funding a disputed claims reserve in accordance
with the terms of their confirmed Third Amended Joint Plan of
Reorganization.
Consequently, the parties agree that, solely for the purpose of
funding a disputed claims reserve under the Plan, Metromedia
Fiber's Claim will be temporarily allowed in an estimated present
value amount of $30,868,530. The ABIZ Debtors will reserve an
amount equal to the estimated ratable distribution applicable for
the holder of a general unsecured claim in Class 7B.
Notwithstanding the temporary allowance of Metromedia Fiber's
Claim, the Debtors retain their right to object to the Claim at a
later date on any grounds and for Metromedia Fiber to defend any
objection.
Judge Gerber approves the stipulation.
Headquartered in Coudersport, Pennsylvania, Adelphia Business
Solutions, Inc., now known as TelCove -- http://www.adelphia-
abs.com/ -- is a leading provider of facilities-based integrated
communications services to businesses, governmental customers,
educational end users and other communications services providers
throughout the United States. The Company filed for Chapter 11
protection on March March 27, 2002 (Bankr. S.D.N.Y. Case No. 02-
11389) and emerged from chapter 11 protection on April 7, 2004.
Harvey R. Miller, Esq., Judy G.Z. Liu, Esq., Weil, Gotshal &
Manges LLP represent the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed $ 2,126,334,000 in assets and $1,654,343,000 in debts.
(Adelphia Bankruptcy News, Issue No. 55; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ADELPHIA COMMS: Settles Logogram Claims Held by Contrarian
----------------------------------------------------------
On June 17, 2003, the Adelphia Communications Debtors commenced an
adversary proceeding to recover from Logogram, Inc. an unreleased
merchandise amounting to $2,766,476. Logogram contends that the
Unreleased Merchandise amounts to $2,171,175.
According to Brian E. O'Connor, Esq., at Willkie Farr & Gallagher
LLP, in New York, Logogram asserted various defenses to the
Complaint, including, among others, that the Unreleased
Merchandise was sold on a "sale on approval" basis, and that:
(1) under the Uniform Commercial Code, payment for a
portion of the good does not constitute acceptance;
(2) the ACOM Debtors agreed to make final payment of any
outstanding invoices and service fees prior to receipt of
the goods; and
(3) under the UCC, as a result of the ACOM Debtors'
insolvency, Logogram is entitled to retain the goods until
the ACOM Debtors pays for certain goods ordered from
Logogram but for which payment has not been made.
Logogram asserted various counterclaims in the Complaint,
including for fulfillment charges, the ACOM Debtors' purported
failure to order a requisite minimum amount of goods, and the
Debtors' purported failure to pay for all goods ordered.
On November 14, 2003, Logogram assigned a receivable amounting to
$217,102, consisting of the amount purportedly owed for the
Unpaid Merchandise to Contrarian Funds, LLC. On December 30,
2003, Contrarian filed Claim Nos. 6941, 6943 and 6942 as general
unsecured claims for $283,086 each against Adelphia
Communications, Adelphia Cablevision, LLC and ACC Operations,
Inc. asserting claims based on the Assigned Receivable.
On January 7, 2003, Logogram filed Claim No. 11955 asserting a
general unsecured claim for $186,716, arising out of alleged
unpaid fulfillment fees and charges incurred in connection with
the Unreleased Merchandise.
On January 8, 2004, Contrarian filed Claim Nos. 6714, 6712 and
6713, as general unsecured claims for $217,102 each against ACOM,
Cablevision and Operations, purportedly to replace the Contrarian
Claim Nos. 6941, 6943 and 6942. On March 2, 2004, Contrarian
withdrew the Contrarian Claims.
Certain of the ACOM Debtors scheduled $8,589 as due and owing to
Logogram on their schedules of liabilities.
To resolve all claims between the parties, the ACOM Debtors and
Logogram agree that:
(1) Logogram will make the Merchandise available to the ACOM
Debtors for inspection;
(2) The ACOM Debtors will have five business days to inspect
the Merchandise and provide Logogram with notice of their
acceptance or rejection of the Merchandise. Rejection is
permitted only in the event of damage to the Merchandise
or the Merchandise's failure to substantially conform to
the original order. If more than 10% of the Merchandise
is rejected for damage or non-conformance, the settlement
will be void and the Adversary Proceeding will proceed;
(3) Within 10 calendar days after delivery of the Notice, the
ACOM Debtors will remove the accepted Merchandise from
Logogram facilities via transportation arranged and paid
for by the ACOM Debtors;
(4) On the Date of Receipt, prior to the Merchandise being
removed from the Logogram facilities, the ACOM Debtors
will pay Logogram $125,000 via certified funds payable to
Edwards & Angell, LLP, as Attorneys, less any reduction
for rejected Merchandise. Any Rejection Reduction will be
calculated as the Preliminary Settlement Amount reduced by
an amount equal to the Preliminary Settlement Amount
multiplied by a fraction:
-- the numerator of which is the value of the rejected
Merchandise; and
-- the denominator of which is the value of the
Merchandise in the aggregate.
The Preliminary Settlement Amount less any Rejection
Reduction will constitute the "Final Settlement Amount."
Payment of the Final Settlement Amount will constitute
full satisfaction of all outstanding charges related to
the Merchandise;
(5) Logogram will prepare the accepted Merchandise for release
by taking it off of any storage rack and device, and
loading the accepted Merchandise unto the ACOM Debtors'
vehicles;
(6) Within five business days after the Date of the Receipt,
the ACOM Debtors will file a stipulation dismissing the
Adversary Proceeding with prejudice and without costs;
(7) Claim No. 11955 and the Scheduled Amounts will be
disallowed and expunged in their entirety; and
(8) The Parties will exchange mutual releases, which will not
extend to any claims or defenses to the Assigned
Receivable and the Contrarian Replacement Claims.
Mr. O'Connor points out that without the settlement, the expense
the ACOM Debtors would likely incur in litigating their case and
defending Logogram's counterclaims, as well as the risks and
uncertainties associated with litigation, is uncertain. On the
other hand, with the settlement:
(1) the ACOM Debtors will receive the Unreleased Merchandise,
having a value in excess of $2,000,000; and
(2) the Claim and the Scheduled Amounts are expunged.
For these reasons, the ACOM Debtors ask the Court to approve
their settlement with Logogram in its entirety. (Adelphia
Bankruptcy News, Issue No. 55; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
ADSTAR: Closes $1.5 Million Private Placement with Laurus Funds
---------------------------------------------------------------
AdStar, Inc. (Nasdaq: ADST, ADSTW) has closed a $1.5 million
financing with Laurus Master Fund, Ltd., a New York City based
institutional fund specializing in providing financing to small
capitalization publicly traded companies. The financing consists
of a convertible note bearing interest at the prime rate minus one
percentage point. The note is convertible into AdStar's common
stock at an initial fixed conversion price of $2.25 per share.
Once the underlying shares are covered by an effective
registration statement and subject to certain limitations based on
market volume for the common stock and the investor's aggregate
holdings, Laurus Funds is required to convert all monthly
installments of principal and interest into common stock if the
common stock exceeds 10 percent above the fixed conversion price.
AdStar may redeem the note by paying 125 percent of the then
outstanding principal balance plus accrued interest. The note is
secured by a first lien on all of the assets of AdStar and its
subsidiary.
In connection with the financing, Laurus Funds was also issued
warrants to purchase up to 200,000 of AdStar's common stock. The
warrants are exercisable as follows: 120,000 at $2.58, and 80,000
at $2.80 (120 percent and 130 percent of the twenty-two day
average closing price, respectively).
"We are pleased to have raised $1.5 million for AdStar without
dilution to our current investors," said Leslie Bernhard,
president and chief executive officer of AdStar. "Borrowing at
less than prime is unprecedented in AdStar's history and reflects
the substantial value of the conversion privilege and warrants,
even at conversion or exercise prices substantially above recent
average stock prices. We believe that with this added working
capital we can more quickly achieve the goals of our business plan
and accelerate our strategic acquisition program."
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: Asks Canadian Court to Stay the Labor Proceeding
------------------------------------------------------------
As previously reported, the Air Canada Applicants agreed to
partially lift the CCAA Stay to allow proceedings:
(i) related to events, actions or circumstances which occur
on or after June 1, 2003, which arise from the new or
modified collective agreements with respect to any of
the Applicants' bargaining units, including, without
limitation, grievances or arbitration procedures; and
(ii) pursuant to Part I or Part II of the Canada Labour Code
which arise from events, actions or circumstances which
occur on or after June 1, 2003.
The basis of the Applicants' consent was to allow ordinary
contractual administration of the Modified Collective Agreements.
However, nothing prevents the Applicants from asking the CCAA
Court to stay any specific proceeding or the enforcement of any
direction, decision or order by the Canada Industrial Relations
Board made pursuant to Section 134 or 156 of the Canada Labour
Code. Moreover, no proceeding may be taken in respect of any
statutory offense provision under Part I or Part II of the Canada
Labour Code without further order by the CCAA Court. The
Applicants did not intend to create multiple forums for
restructuring-related issues.
Among other things, the Trinity Investment Agreement is
conditioned on the resolution of certain pension funding issues.
However, the condition regarding pension plan design has
generated a great deal of controversy both between the unions and
Trinity Time Investments and among the unions themselves.
On March 24, 2004, Jean Jallet, International Association of
Machinists and Aerospace Workers National President and Directing
General Chairperson, District Lodge 140, met with Kevin Howlett,
Air Canada's Vice President for Labor Relations, to discuss a
potential resolution of the outstanding design issue which would
provide IAMAW members with a choice between a defined benefit
plan and a defined contribution plan, with no changes to the
benefits under the defined benefit plan for those who chose to
remain in that plan. Mr. Jallet represented to Mr. Howlett that
he had the authority to bind the IAMAW, consistent with past
negotiations between the parties.
On March 29, the Applicants executed a tentative agreement with
District Lodge 140 of the IAMAW on changes to pension plan design.
But in a press release on March 31, the national office of the
IAMAW disavowed the agreement.
The national office claimed that the agreement is not binding on
the union. Dave Ritchie, Canadian General Vice President of the
IAMAW, said that the authorized bargaining on pension issues would
be done by the national office.
The national office of the IAMAW filed an application with the
CIRB to declare that its local unit had no authority to enter
into the agreement with Air Canada and that the agreement was of
no force or effect.
The Applicants assert that the CIRB proceeding is really an
internal union issue. As it relates to Air Canada, the issue is
a restructuring issue.
In this regard, the Applicants contend that duplicative
proceedings in multiple forums are distracting and damaging to
their restructuring, particularly at this critical time. All
proceedings regarding restructuring issues should be in the
control of the CCAA judge until further order.
Accordingly, the Applicants ask the CCAA Court to stay the CIRB
proceeding.
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. 32; Bankruptcy Creditors' Service, Inc., 215/945-7000)
AIR CANADA: Reports Improved March 2004 Traffic
-----------------------------------------------
Air Canada mainline flew 6.6 per cent more revenue passenger miles
(RPMs) in March 2004 than in March 2003, according to preliminary
traffic figures. Overall, capacity increased by 3.8 per cent,
resulting in a load factor of 76.3 per cent, compared to 74.3 per
cent in March 2003; an increase of 2.0 percentage points.
Jazz, Air Canada's regional airline subsidiary, flew 8.3 per cent
more revenue passenger miles in March 2004 than in March 2003,
according to preliminary traffic figures. Capacity increased by
5.4 per cent, resulting in a load factor of 61.8 per cent,
compared to 60.2 per cent in March 2003; an increase of 1.6
percentage points.
"Traffic results for March maintained their upward momentum
growing 6.6 per cent on very strong demand for Southern leisure
destinations, our new service to Delhi and an expanding domestic
market. Within Canada, the transcontinental routes performed
particularly well while on the transatlantic, higher demand on the
United Kingdom and Germany routes offset the impact of our
suspension of service to Italy and Spain," said Rob Peterson,
Executive Vice President and Chief Financial Officer.
"In the coming months, year over year comparisons will become less
meaningful as concerns over SARS and the war in Iraq severely
suppressed the demand for air travel in 2003," said Mr. Peterson.
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.
AIRGATE PCS: Issues Second Quarter Preliminary Subscriber Results
-----------------------------------------------------------------
AirGate PCS, Inc. (Nasdaq:PCSA), a PCS Affiliate of Sprint,
announced guidance on preliminary subscriber results and the
ending balance of cash and cash equivalents for its second fiscal
quarter ended March 31, 2004.
The following table provides actual subscriber results of the
Company for the quarters ended March 31, 2003, and December 31,
2003, as well as guidance on preliminary subscriber results for
the quarter ended March 31, 2004.
Quarter Ended
---------------------------------
3/31/03 12/31/03 3/31/04
Actual Actual Preliminary
---------------------------------
Subscribers 358,564 359,898 367,807
Gross Additions 43,003 35,601 41,741
Churn Rate 3.69% 3.10% 2.92%
Net Adds 5,755 438 7,909
---------------------------------
During the quarter ended March 31, 2004, our subscriber base
increased over December 31, 2003 as a result of increased gross
subscriber additions and a reduced churn rate. The churn rate
decreased both year over year and quarter over quarter primarily
due to improvements in the credit quality of our subscriber base.
The balance of cash and cash equivalents at the end of the quarter
exceeded $45 million, and reflected a pre-payment on our credit
facility of $10 million, debt restructuring-related payments of
$5.1 million and a scheduled principal payment on our credit
facility of $3.3 million.
About AirGate PCS
AirGate PCS, Inc. is the PCS Affiliate of Sprint with the right to
sell wireless mobility communications network products and
services under the Sprint brand in territories within three states
located in the Southeastern United States. The territories include
over 7.4 million residents in key markets such as Charleston,
Columbia, and Greenville-Spartanburg, South Carolina; Augusta and
Savannah, Georgia; and Asheville, Wilmington and the Outer Banks
of North Carolina.
* * *
As reported in the Troubled company Reporter's March 30, 2004
edition, Standard & Poor's Ratings Services assigned its 'CCC+'
corporate credit rating to Atlanta, Georgia-based wireless carrier
and Sprint PCS affiliate AirGate PCS Inc.
The company's $141 million bank credit facility was assigned a
'CCC+' bank loan rating and a recovery rating of '5', denoting the
expectation of a negligible (0-25%) recovery of principal in the
event of a default. The $159 million 9.375% senior subordinated
secured notes due 2009, which were used to refinance debt, has
been assigned a 'CCC-' rating. The outlook is developing. Pro
forma for the refinancing, AirGate had estimated total debt of
$300 million ($347 million after adjusting for operating leases)
at Dec. 31, 2003.
"The corporate credit rating on AirGate reflects its extremely
high competitive risk, operating challenges stemming, in part,
from its affiliate relationship with Sprint PCS, and aggressive
leverage," said Standard & Poor's credit analyst Michael M. Tsao.
AirGate, which provided wireless voice and increasingly
undifferentiated data service under the Sprint PCS brand to about
360,000 subscribers at the end of 2003, is expected to face even
more intense competitive pressure in light of wireless number
portability and nationwide wireless penetration having already
exceeded 54%. With limited financial resources, AirGate's ability
to compete against major wireless carriers is constrained.
ALLIED HOLDINGS: Files Delayed 2003 Annual Report with SEC
----------------------------------------------------------
Allied Holdings, Inc. (Amex: AHI) has filed with the Securities
and Exchange Commission its Annual Report on Form 10-K for the
fiscal year ended December 31, 2003.
As previously reported, Allied had delayed filing its Form 10-K to
reclassify certain items in its consolidated financial statements
and to restate its balance sheet as of December 31, 2002 and its
consolidated statements of cash flows for the years ended December
31, 2001 and 2002.
The reclassifications and subsequent restatement had no effect on
the Company's previously reported results of operations, loss per
share, availability under its revolving credit facility, or
stockholders' equity.
The items in Allied's consolidated financial statements
reclassified or restated include (i) cash and cash equivalents and
short-term investments such that amounts will now be shown as
current restricted cash, current restricted short-term investments
and non-current restricted investments, (ii) its revolving line of
credit from long-term debt to current liabilities; (iii) certain
other items related to its pension assets and obligations to
either other non-current assets or other long-term liabilities;
(iv) a reduction in both deferred tax assets and liabilities; and
(v) additional detail within statements of cash flows from
operating activities and the reclassification of statements of
cash flows to conform to current year presentation.
About Allied Holdings
Allied Holdings, Inc. (S&P, B Corporate Credit, Stable Outlook) is
the parent company of several subsidiaries engaged in providing
distribution and transportation services of new and used vehicles
to the automotive industry. The services of Allied's subsidiaries
span the finished vehicle continuum, and include car-hauling,
intramodal transport, inspection, accessorization and dealer prep.
Allied, through its subsidiaries, is the leading company in North
America specializing in the delivery of new and used vehicles. For
additional information, visit http://www.alliedholdings.com/
AMERICAN SEAFOODS: Extends Senior Note Tender Offer to May 3
------------------------------------------------------------
American Seafoods Group LLC and American Seafoods Finance, Inc.
announced that, as part of their previously announced tender offer
and consent solicitation for their outstanding 10 1/8% Senior
Subordinated Notes due 2010, they are extending the tender offer
expiration date. The tender offer, which had been set to expire at
5:00 p.m., New York City time, on April 12, 2004, will be extended
to 5:00 p.m., New York City time, on Monday, May 3, 2004, unless
extended by American Seafoods.
The closing of the initial public offering and the other financing
transactions contemplated by the registration statement on Form S-
1 (Registration No. 333-105499) is a condition precedent to the
consummation of the tender offer. On April 1, 2004 American
Seafoods filed Amendment No. 4 to its registration statement on
Form S-1 with the Securities and Exchange Commission.
The consent expiration date was 5:00 p.m., New York City time, on
September 26, 2003. Holders who desired to receive the consent
payment and the tender offer consideration must have both validly
consented to the proposed amendments and validly tendered their
Notes pursuant to the offer on or prior to the consent expiration
date. Holders who validly tender their Notes after the consent
expiration date will receive the tender offer consideration, which
is $1,170.00 per $1,000 principal amount of Notes, but not the
consent payment. As of the close of business on September 26,
2003, which was the consent expiration date and the last day on
which validly tendered Notes could have been withdrawn, American
Seafoods had received the requisite consents to the proposed
amendments to the Indenture governing the Notes. Consequently, the
proposed amendments were incorporated in the Third Supplemental
Indenture, which was executed and delivered on September 26, 2003,
by and among American Seafoods Group LLC, American Seafoods
Finance, Inc., the guarantors listed on Schedule A thereto and
Wells Fargo Bank Minnesota, National Association, as trustee. The
proposed amendments to the Indenture, which will not become
operative unless and until the Notes are accepted for purchase by
American Seafoods, will eliminate substantially all of the
restrictive covenants, certain repurchase rights and certain
events of default and related provisions contained in such
indenture.
As of March 22, 2004, all of our existing senior subordinated
notes had been validly and irrevocably tendered.
Consummation of the offer is subject to certain conditions,
including consummation of certain financing transactions
contemplated by the registration statement on Form S-1 filed with
the Securities and Exchange Commission by American Seafoods
Corporation. Subject to applicable law, American Seafoods Group
LLC and American Seafoods Finance, Inc. may, in their sole
discretion, waive or amend any condition to the offer or
solicitation, or extend, terminate or otherwise amend the offer or
solicitation.
Credit Suisse First Boston, or CSFB, is the dealer manager for the
offer and the solicitation agent for the solicitation. MacKenzie
Partners, Inc. is the information agent and Wells Fargo Bank
Minnesota, National Association is the depositary in connection
with the offer and solicitation. The offer and solicitation are
being made pursuant to the Offer to Purchase and Consent
Solicitation Statement, dated September 15, 2003, and the related
Consent and Letter of Transmittal, each as modified by American
Seafoods' press release, dated September 24, 2003, which
collectively set forth the complete terms of the offer and
solicitation. Copies of the Offer to Purchase and Consent
Solicitation Statement and related documents may be obtained from
MacKenzie Partners, Inc. at 212-929-5500. Additional information
concerning the terms of the offer and the solicitation may be
obtained by contacting CSFB at 1-800-820-1653.
American Seafoods, headquartered in Seattle, Washington, is the
largest harvester and at-sea processor of pollock and hake and the
largest processor of catfish in the United States.
AMERICA WEST: Q1 2004 Conference Call to Be Webcast on April 20
---------------------------------------------------------------
America West Holdings Corporation (NYSE: AWA) will conduct a live
audio webcast of its first quarter 2004 financial results
conference call with the financial community on Tuesday, April 20,
2004 at Noon EDT (9:00 a.m. PDT).
The webcast will be available to the public on a listen-only basis
at the company's web site, http://www.americawest.com/
An archive of the webcast will be available on the site through
April 26, 2004. Listeners to the webcast will need a current
version of Windows MediaPlayer software and at least a 28.8 kbps
connection to the Internet.
America West Holdings Corporation is an aviation and travel
services company. Wholly owned subsidiary America West Airlines
is the nation's second-largest low-fare carrier with 13,000
employees serving nearly 55,000 customers a day in 93 destinations
in the U.S., Canada, Mexico and Central America.
* * *
As previously reported, Standard & Poor's Ratings Services
assigned its preliminary 'B-' secured debt rating, and preliminary
'CCC' senior unsecured and subordinated debt ratings to securities
filed under America West Holdings Corp. and subsidiary America
West Airlines Inc.'s $500 million SEC Rule 415 shelf registration.
Existing ratings, including the 'B-' corporate credit rating on
both, are affirmed. The outlook is stable.
"The ratings on America West reflect risks relating to the adverse
airline industry environment, a weak balance sheet, and limited
financial flexibility," said Standard & Poor's credit analyst
Betsy Snyder. America West Holdings' major subsidiary is America
West Airlines Inc., the eighth-largest airline in the U.S, with
hubs located at Phoenix and Las Vegas. America West benefits from
a low cost structure, among the lowest in the industry. However,
it competes at Phoenix and Las Vegas against Southwest Airlines
Co., the other major low-cost, low-fare operator in the industry
and financially the strongest. As a result of the competition
from Southwest, as well as America West's reliance on lower-fare
leisure travelers, its revenues per available seat mile also tend
to be among the lowest in the industry. In addition, America West
Holdings owns the Leisure Co., one of the nation's largest tour
packagers.
ANC RENTAL: Wants Court to Nix Claim & Recover Avoidable Transfers
------------------------------------------------------------------
Debtors National Car Rental Systems, Inc. and ANC Rental
Corporation want to recover certain postpetition transfers made
to Ricted Associates, Ricted Associates LLC and Chapman
Consulting LLC. The Debtors also object to the Ricted Entities'
administrative claim.
On February 23, 1984, Sylan Associates entered into a lease with
219 Garage Corporation. That lease was amended on March 2, 1984
and November 1, 1987. Sylan leases certain premises, including
the premises located on 219 West 77th Street, in New York, New
York, to 219 Garage.
As of January 1, 1988, National and Ricted Associates entered
into an agreement, as amended on July 1, 1990 and April 1, 1995,
whereby, among other things, National, subleased from Ricted
Associates certain garage locations through New York City. The
Agreement expired on December 31, 2002. The Agreement provides,
in part, that National will pay to Ricted Associates on a yearly
basis:
(1) an amount based on National's gross sales for the
particular year; plus
(2) a fixed amount for the years 1988 through 1999 with
respect to the Belleclaire location; minus
(3) the Pay Rate paid by National.
On January 15, 1988, 219 Garage assigned to National all of its
right, title and interest to the Original Lease, as amended
effective as of November 1, 1987. The Assignment provides in
part that if the lease is extended by National or 219 Garage, the
payments due under National's Agreement with Ricted Associates
will continue at 5% increases yearly for the life of the new
lease. National assumed all of 219 Garage's obligations,
conditions and covenants under the Original Lease.
On November 30, 1988, National issued a letter to 219 Garage
pursuant to which it agreed to reimburse 219 Garage 1/2 of the
increased rent for the property from November 1, 1987 to
November 30, 1988. National further agreed that
If any extension or renewal of Lease is obtained by either
National or 219 Garage, National agreed that the payments
outlined in its Agreement with Ricted Associates will continue
through the term of the new Lease or extension with respect to
the Belleclaire Location.
On January 1, 1998, National entered into an Amended and Restated
Lease with Sylgar Properties Company, LLC, an affiliate of Sylan,
for the Belleclaire Location.
$295,954 Avoidable Transfers
Subsequent to the Petition Date, between January 1, 2003 and
September 30, 2003, National and ANC made certain transfers
totaling not less than $295,954 to the Ricted Entities.
Thomas G. Whalen, Jr., Esq., at Stevens & Lee, in Wilmington,
Delaware, contends that the Transfers were property of the
Debtors' estate and were not authorized under the Bankruptcy Code
or a Court order. The Transfers should be avoided and set aside
as unauthorized postpetition transactions.
Chapman Consulting was the initial transferee of the Avoidable
Transfers. Ricted Associates and Ricted LLC were the immediate
or mediate transferee of Chapman Consulting or the person for
whose benefit the Avoidable Transfers were made. Unless
otherwise determined after a trial, pursuant to Section 550(a) of
the Bankruptcy Code, the Debtors are entitled to recover from the
Ricted Entities the $295,954 plus interest.
$2.8 Million Administrative Expense Claim
On December 1, 2003, Ricted Associates filed a $2,883,179
administrative expense claim in the Debtors' cases, asserting
that the obligation was incurred on January 1, 2003 based on:
(1) the Agreement,
(2) the Assignment, and
(3) the Letter
However, Mr. Whalen asserts that, pursuant to its terms, the
Agreement expired on December 31, 2002. As of December 31, 2002,
National paid all of its obligations due to Ricted Associates
under the Agreement. As a result, no obligations were due Ricted
Associates pursuant to the Agreement. Neither the Assignment nor
the Letter created any obligations to Ricted Associates beyond
those provided in the Agreement.
Pursuant to Section 502(b), the Debtors ask the Court to disallow
and expunge the Administrative Claim.
Mr. Whalen also notes that the Assignment and the Letter were
executed before the Petition Date. In the event the Court
determines that National is obligated under the Assignment and
the Letter independent of the Agreement, those obligations
constitute prepetition obligations not entitled to priority under
Section 507. Therefore, the Administrative Claim against the
Debtors must be reclassified as a general unsecured claim.
Any claims by the Ricted Entities against the Debtors must also
be disallowed until such time as the Ricted Entities pay an
amount equal to the aggregate amount of all the Avoidable
Transfers.
Headquartered in Fort Lauderdale, Florida, ANC Rental Corporation,
is the world's third-largest publicly traded car rental company.
The Company filed for chapter 11 protection on November 13, 2001
(Bankr. Del. Case No. 01-11200). Brad Eric Scheler, Esq., and
Matthew Gluck, Esq., at Fried, Frank, Harris, Shriver & Jacobson,
represent the Debtors in their restructuring efforts. When the
Company filed for protection from their creditors, they listed
$6,497,541,000 in assets and $5,953,612,000 in liabilities. (ANC
Rental Bankruptcy News, Issue No. 51; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
APPLIANCE CONTROLS: Case Summary & 28 Largest Unsecured Creditors
-----------------------------------------------------------------
Lead Debtor: Appliance Controls Group Inc.
84 North Dugan Road
Sugar Grove, Illinois 60554
Bankruptcy Case No.: 04-14517
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Appliance Controls Group Holdings 04-14522
Type of Business: The Debtor is one of the world's leading
designers, manufacturers and distributors of
combustion-related components for the gas
cooking appliance industry.
Chapter 11 Petition Date: April 12, 2004
Court: Northern District of Illinois (Chicago)
Judge: A. Benjamin Goldgar
Debtors' Counsel: Robert M. Fishman, Esq.
Shaw Gussis Fishman Glantz Wolfson &
Towbin LLC
321 North Clark Street, Suite 800
Chicago, IL 60610
Tel: 312-541-0151
Estimated Assets: $10 Million to $50 Million
Estimated Debts: $10 Million to $50 Million
Debtors' 28 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
JP Acquisition Fund III, LP Loan $10,011,220
c/o Jacobson Partners
595 Madison Avenue, 31st Flr
New York, New York
Metal-Matic Trade Debt $410,163
629 Second Street, S.E.
Minneapolis, MN 55414
Small Parts de Mexico Trade Debt $288,890
P.O. Box 221137
El Paso, TX 79913
Optimum Staffing Inc. Trade Debt $229,102
Alger Manufacturing Co, Inc. Trade Debt $213,707
Alcoa Engineered Products Trade Debt $203,526
JMS of Holland, Inc. Trade Debt $186,598
Engman-Taylor Company, Inc. Trade Debt $182,184
Paco Industries Trade Debt $167,152
HVS Boxers LLC Loan $159,957
Nathan Gantcher Loan $159,957
George Kellner Loan $159,957
AMCITO Partners, LP Loan $159,957
Century City 1800 Loan $159,957
Partnership, LP
Rockford Toolcraft Trade Debt $157,208
Chase Brass & Copper Trade Debt $150,369
G&M Die Casting Company Trade Debt $121,482
Fed Express Trade Debt $117,861
Benjamin R. Jacobson Loan $117,158
Wolverine Metal Stamping Trade Debt $116,279
Saxonburg Ceramics, Inc. Trade Debt $100,189
Danam Corporation Trade Debt $91,192
Ken-Mac Metals, Inc. Trade Debt $89,614
R.C. Coil Spring Trade Debt $89,451
Manufacturing
Harrison R. Horan Loan $83,434
Quadruple Industries Trade Debt $82,785
Radix Inc. Trade Debt $81,410
Tube Tech Trade Debt $79,404
ARMSTRONG: Asks to Participate in Hampton-USG Dispute Settlement
----------------------------------------------------------------
In July 2001, Randall Hampton filed a proof of claim against
Armstrong World Industries, Inc., asserting a general, unsecured
personal injury claim for $2,500,000. Judith Hampton also filed a
separate proof of claim against AWI, asserting a general,
unsecured personal injury claim for $2,500,000. The Hamptons also
asserted the same claims against USG Corporation in its Chapter 11
case.
AWI objects to the allowance of these two claims.
Rather than litigate the issues, the Hamptons, AWI and USG agree
to settle the dispute pursuant to these terms:
(1) The Hamptons' claims against USG are currently being
resolved through Court-approved ADR procedures. The
Hamptons understand that the ADR Order in the USG
case does not modify or lift the stay in AWI's cases.
Nonetheless, AWI wishes to participate in the Hampton
ADR process for the purpose of determining its
liability and damage, if any, to the Hamptons. USG
and the Hamptons agree to allow AWI to participate
in the Hampton ADR process;
(2) The stay is modified to the extent necessary to
permit AWI to participate in the Hampton/USG ADR
process, but the stay remains in effect for all
other purposes; and
(3) The stipulation is without prejudice to AWI's
right to:
(i) assert all of its rights and defenses with
respect to any litigation because of the
Hampton claims; or
(ii) settle the Hampton claims at any time.
Headquartered in Lancaster, Pennsylvania, Armstrong World
Industries, Inc. -- http://www.armstrong.com/-- the major
operating subsidiary of Armstrong Holdings, Inc., designs,
manufactures and sells interior finishings, most notably floor
coverings and ceiling systems, around the world. The Company
filed for chapter 11 protection on December 6, 2000 (Bankr. Del.
Case No. 00-04469). Stephen Karotkin, Esq., Weil, Gotshal &
Manges LLP and Russell C. Silberglied, Esq., at Richards, Layton &
Finger, P.A., represent the Debtors in in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $4,032,200,000 in total assets and
$3,296,900,000 in liabilities. (Armstrong Bankruptcy News, Issue
No. 59; Bankruptcy Creditors' Service, Inc., 215/945-7000)
ASBURY AUTOMOTIVE: First Quarter Earnings Exceed Expectations
-------------------------------------------------------------
Asbury Automotive Group, Inc. (NYSE: ABG), one of the largest
automotive retail and service companies in the U.S., reported
financial results for the quarter ended March 31, 2004.
Net income from continuing operations increased 30 percent to
$10.7 million, or $0.33 per share, compared with $8.2 million, or
$0.25 per share, for the first quarter of 2003. Net income
increased 46 percent for the first quarter of 2004 to $10.4
million, or $0.32 per share, up from $7.1 million, or $0.21 per
share, in the prior year period.
Other financial highlights for the first quarter of 2004, as
compared to the prior year period, included:
* Total revenues for the quarter were approximately $1.2
billion, up 14.5 percent. Total gross profit was $191.0
million, up 12.1 percent.
* Same-store retail revenue (excluding fleet and wholesale
business) increased 3.8 percent to $1.0 billion, while same-
store retail gross profit rose 2.8 percent to $174.4
million.
* New vehicle retail revenue increased 16.2 percent (5.9
percent same-store), and unit sales increased 9.7 percent
(flat on a same-store basis). New vehicle retail gross
profit increased 14.7 percent (2.5 percent same-store).
* Used vehicle retail revenue increased 6.9 percent (down 3.3
percent same-store), and unit sales increased 7.0 percent
(down 1.4 percent same-store).
* Parts, service and collision repair revenues and gross
profit increased 15.7 percent and 13.6 percent (5.3 and 3.5
percent same-store), respectively.
* Net finance and insurance (F&I) revenue rose 15.1 percent
(7.7 percent same-store). F&I per vehicle retailed (PVR)
increased 6.1 percent to $837, and at the platform level
rose 3.4 percent to $816.
* Selling, general and administrative (SG&A) expenses for the
quarter, which include $1.2 million of expenses associated
with management changes made in the previous year, were flat
as a percentage of gross profit.
* The Company's effective tax rate for the quarter was 37.5
percent compared to 39.8 percent in the prior year period.
President and CEO Kenneth B. Gilman commented, "We are pleased to
have exceeded earnings expectations for the first quarter. While
January was somewhat difficult, our continued focus on the basics
of automotive retailing in each element of our business model
produced improving trends in February and March, leading to record
first quarter sales and gross profit results."
Mr. Gilman continued, "More specifically, we were particularly
pleased with the sales and gross profit trends in our used car
business. Despite a continued challenging environment, our
results are beginning to reflect the Company's intensified focus
on used vehicles, as our used car teams at the platform level have
become increasingly effective.
"At the platform level, a key highlight during the quarter was a
significant improvement in results at both our Arkansas and Oregon
platforms," Mr. Gilman noted. "In Arkansas, operating income for
the first quarter was more than double the prior year, with same-
store unit sales increases well into the double digits for both
new and used vehicles. As for Oregon, with the new management
team's recovery plan in place, we are beginning to see increased
revenues, particularly in used vehicles, and also reported an
operating profit for the quarter. Significant progress has been
made in adjusting the platform's cost structure, as we were able
to reduce Oregon's SG&A expenses as a percentage of gross profit
by over 200 basis points, when compared to the prior year
quarter."
Mr. Gilman added, "With the exception of Texas, where our results
were somewhat below expectations, the majority of our platforms
were essentially in-line with anticipated results for the quarter.
The results in our Texas platform were adversely impacted by a
competitive local Honda market, dealership construction, as well
as the continued adjustment to recent management changes made in
last year's second half."
The Company noted that in the first quarter of 2004 it had
completed the acquisition of three franchises, representing $170
million in annualized revenues. In addition, the Company noted
that it had executed contracts to acquire four additional
franchises with annual revenues of approximately $210 million.
These pending transactions are subject in all cases to
manufacturer consent.
About Asbury Automotive Group
Asbury Automotive Group, Inc., (S&P, BB- Corporate Credit Rating,
Stable) headquartered in New York City, is one of the largest
automobile retailers in the U.S., with 2003 revenues of $4.8
billion. Built through a combination of organic growth and a
series of strategic acquisitions, Asbury now operates through nine
geographically concentrated, individually branded "platforms."
These platforms currently operate 100 retail auto stores,
encompassing 140 franchises for the sale and servicing of 35
different brands of American, European and Asian automobiles.
Asbury believes that its product mix contains a higher proportion
of the more desirable luxury and mid-line import brands than most
public automotive retailers. The Company offers customers an
extensive range of automotive products and services, including new
and used vehicle sales and related financing and insurance,
vehicle maintenance and repair services, replacement parts and
service contracts.
BOYD GAMING: S&P Lowers Senior Secured Debt Rating to BB
--------------------------------------------------------
Standard & Poor's Ratings Services lowered its senior secured debt
rating on casino operator Boyd Gaming Corp. to 'BB' from 'BB+'.
Concurrently, the 'BB-' senior unsecured debt rating on Boyd was
affirmed. Both ratings were removed from CreditWatch where they
were placed on Feb. 10, 2004.
At the same time, a 'BB' rating was assigned to Boyd's proposed
$1.5 billion senior secured credit facility. Concurrently, a
recovery rating of '2' was assigned, indicating a high expectation
of substantial recovery (80%-100%) of principal in the event of a
default. Proceeds from the proposed facility will be used to
refinance existing debt and fund a portion of the pending
acquisition of Coast, and for fees and expenses. The 'BB'
corporate credit and 'B+' subordinated debt ratings were affirmed.
The outlook is stable. Pro forma for its pending acquisitions of
the Harrah's Shreveport property and Coast Casinos, Inc., Boyd is
expected to have approximately $2.3 billion in debt outstanding.
"The lower rating on the senior secured debt reflects Standard &
Poor's expectation that these creditors would not be in a position
to fully recover principal in the event of default, given the
significant amount of secured debt that will exist in the capital
structure," said Standard & Poor's credit analyst Michael Scerbo.
The affirmation of the senior unsecured debt, which is rated one
notch below the corporate credit rating, continues to reflect the
disadvantaged position these noteholders have given the
significant amount of priority debt that exists in the capital
structure. In fact, the ratio of priority debt to net tangible
assets is expected to exceed 30% over the next two years, a level
which would typically result in a two notch rating distinction
from the corporate credit rating. "However, Standard & Poor's
expects this to be temporary and believes that the percentage of
secured debt in the capital structure will decline over time, thus
a one notch distinction has been made."
BUDGET: Judge Case Adjourns Plan Confirmation Hearing to April 20
-----------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
Chapter 11 cases of the Budget Group Inc. Debtors asks the Court
to reschedule the confirmation hearing and schedule the hearing on
the approval of a settlement agreement it entered with major
constituencies in the cases during the week of April 19, 2004.
William Bowden, Esq., at Ashby & Geddes, in Wilmington, Delaware,
recounts that the Committee has been working with the Debtors,
the U.K. Administrators, Cendant and Cherokee towards a
negotiated resolution of numerous complex disputes between the
estates and the Cendant Parties. The parties have agreed on the
terms and conditions of a settlement agreement after extensive
negotiations.
Although the Plan could be confirmed without prior Court approval
of the Settlement Agreement, the Committee believes that it would
be more efficient to consider approval of the Settlement
Agreement simultaneously with the Confirmation Hearing since its
approval would eliminate certain confirmation issues and permit
the parties to proceed directly towards consummation of the
Liquidating Plan and distribution to creditors without further
delay.
The Committee recognizes that this would require a hearing in
Phoenix, Arizona. However, the next omnibus hearing date in
Delaware is not until May 17, 2004. The Committee wants the
confirmation hearing and approval of the Settlement Agreement to
proceed at the earliest possible time.
Judge Case is a visiting judge from Phoenix, Arizona.
Mr. Bowden relates that the sale with the Cendant Parties closed
over 15 months ago. The Committee, in conjunction with the
Debtors, patiently and persistently waded through a myriad or
complex conflicts, each of which significantly delayed
confirmation of the Liquidating Plan and distribution of the sale
proceeds. While the Committee does not want the Confirmation
Hearing postponed at all, it recognizes the benefits of having a
short postponement so that it can coincide with the Settlement
Agreement hearing. The Committee believes that scheduling the
hearings for an earlier date in Phoenix during April outweighs
the minor inconvenience and relatively minor incremental cost of
appearing in Phoenix.
Moreover, Mr. Bowden notes that there were only four confirmation
objections. Each of these objections raises fairly discrete
issues. The Committee expects that these objections will be
resolved before the Confirmation Hearing. Alternatively, the
objecting parties could appear telephonically if the Court
permits.
Debtors Agree
The Debtors agree to have the Confirmation Hearing reset to
April 19, 2004. The Debtors believe that it would be more
efficient to have the approval of the Settlement Agreement heard
at the same time as the Confirmation Hearing, because, among
other reasons, the Committee is presently unwilling to permit the
Plan to be confirmed unless the Settlement Agreement is also
approved.
* * *
Judge Case approves the Committee's request and schedules the
Confirmation Hearing and hearing for the approval of the
Settlement Agreement on April 20, 2004 at 2929 North Central
Avenue, 9th Floor, in Phoenix, Arizona.
Headquartered in Daytona Beach, Florida, Budget Group, Inc.,
operates under the Budget Rent a Car and Ryder names -- is the
world's third largest car and truck rental company. The Company
filed for chapter 11 protection on July 29, 2002 (Bankr. Del. Case
No. 02-12152). Lawrence J. Nyhan, Esq., and James F. Conlan, Esq.,
at Sidley Austin Brown & Wood and Robert S. Brady, Esq., and
Edward J. Kosmowski, Esq., at Young, Conaway, Stargatt & Taylor,
LLP, represent the Debtors in their restructuring efforts. When
the Company filed for protection from their creditors, they listed
$4,047,207,133 in assets and $4,333,611,997 in liabilities.
(Budget Group Bankruptcy News, Issue No. 37; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
CALL-NET ENTERPRISES: Releasing Q1 2004 Results on May 6, 2004
--------------------------------------------------------------
Call-Net Enterprises Inc. (TSX: FON, FON.B) will release its first
quarter 2004 results before the markets open on Thursday, May 6,
2004.
Later that day, the Company will hold its annual and special
meeting of shareholders at 2:00 p.m. (ET) in the Imperial Room of
the Fairmont Royal York Hotel in Toronto. Following the meeting,
at 3:30 p.m., the Company will host its quarterly conference call.
Bill Linton, president and chief executive officer and Roy
Graydon, executive vice president and chief financial officer
will participate in the call.
Annual and Special Meeting of Shareholders:
Date: Thursday, May 6, 2004
Time: 2:00 p.m. ET
Location: Fairmont Royal York Hotel, Imperial Room
Webcast: http://www.callnet.ca/ or
http://webevents.broadcast.com/cnw/callnet20040506
Quarterly Conference Call:
Date: Thursday, May 6, 2004
Time: 3:30 p.m. ET
Access Number: 416-695-5259 or toll free at
1-877-888-7019
Confirmation Number: T492927S
Webcast: http://www.callnet.ca/or
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=775940
Attend in person: Fairmont Royal York Hotel, Imperial Room
100 Front Street West, Toronto
The conference call will be a question and answer session only.
Participants are encouraged to join the annual and special meeting
in person or via webcast prior to the quarterly conference call.
Replay: 416-695-5275 or toll free at
1-888-509-0081 until May 13, 2004
The audio webcast will be archived at http://www.callnet.ca/
To participate in the conference call, please call the access
number ten minutes prior to the scheduled start time and request
Call-Net's first quarter results teleconference. If you require
assistance during the conference call, you can reach an operator
by pressing '0'.
Call-Net Enterprises Inc.(S&P, B/Negative, LT Corporate Rating),
primarily through its wholly owned subsidiary Sprint Canada Inc.,
is a leading Canadian integrated communications solutions provider
of local and long distance voice services as well as data and IP
services to households and businesses across Canada. Call-Net,
headquartered in Toronto, owns and operates an extensive national
fibre network, has over 134 co-locations in five major urban areas
including 25 municipalities and maintains network facilities in
the United States and the United Kingdom. For more information,
visit the Company's web sites at http://www.callnet.ca/and
http://www.sprint.ca/
CE SOFTWARE: Proceeding with Liquidation Proposal
-------------------------------------------------
CE Software, Inc. (OTC:CESF) announced financial results for its
year ended September 30, 2003.
CE Software reports a net loss of $239,715, or $16.52 per share,
with operating revenues of $1,248,970. For the previous fiscal
year, the net loss was $221,036, or $15.19 per share, on operating
revenues of $1,653,620.
"The company's revenues decreased significantly this past year,"
said John S. Kirk, President. "Not seeing a way to effectively
manage this company as a public company with limited resources, we
announced in August 2003 that we were selling our building and
investigating a corporate action that would result in the
liquidation of the corporation and a sale of the continuing
operations. The building was sold just prior to the fiscal year
end of September 30, 2003. Subsequently we sold our QuickMail
product on December 31, 2003. The product had represented about
one third of our net revenues for fiscal 2003."
John S. Kirk continued, "The remaining operations were sold on
April 1, 2004 subject to shareholder approval, details to follow
in a later press release. For the latest news, please check the
following Web site at http://www.cesoft.com/home/pressrelease-
all.html for both news and detailed explanations. We will be
setting up a Web page for shareholder questions and our responses.
For shareholders without Internet access, please write to CE
Software, Inc., Shareholder Relations, P.O. Box 65580, W. Des
Moines, IA 50265, and ask to be put on the 'shareholder news'
mailing list.
"Assuming approval by the shareholders the corporation will be
dissolved and the remaining assets liquidated. The proceeds of the
liquidation will be distributed to the shareholders. The Board of
Directors believes that this sale of the operations will enhance
shareholder value. The actual amount of any distribution will
depend on the expenses of the proxy solicitation and other
liquidation matters, as well as continuing operating expenses of
minimal personnel and any unforeseen expenses. Shareholders will
receive a formal notice of meeting and a proxy statement in the
near future."
"Without any implication as to the eventual amount of the
liquidating distribution," John S. Kirk, President, said, "I can
state that as of March 31, 2004, we had approximately $600,000 in
cash and no long or short term debt except payables and accruals
in the ordinary course of business with about 14,483 shares
outstanding."
CHASE COMM'L: Fitch Gives Low-B Ratings to 4 Series 1998-2 Classes
------------------------------------------------------------------
Fitch Ratings upgrades Chase Commercial Mortgage Securities
Corp.'s, commercial mortgage pass-through certificates, series
1998-2, as follows:
--$63.4 million class B to 'AAA' from 'AA';
--$69.7 million class C to 'A+' from 'A';
--$72.9 million class D to 'BBB+' from 'BBB'.
The following certificates are affirmed:
--$85 million class A-1 'AAA';
--$720.6 million class A-2 'AAA';
--Interest-only class X 'AAA';
--$19 million class E 'BBB-';
--$57.1 million class F 'BB';
--$12.7 million class G 'BB-';
--$22.2 million class H 'B';
--$9.5 million class I 'B-'.
The $17.1 million class J is not rated by Fitch.
The upgrades are due to an increase in credit enhancement since
issuance, and subordination levels that are in line with the
levels of deals issued today having similar characteristics.
As of the March 2004 distribution date, the transaction's
aggregate principal balance has decreased 9.4% to $1.15 billion
from $1.27 billion at issuance.
The five largest loans represent 38.5% of the deal's outstanding
loan balance. The performance of these loans has shown improvement
since issuance, with the year-end 2002 weighted-average debt
service coverage ratio of 2.20 times compared to 1.66x at
issuance. In addition, the largest loan, 75 State Street,
represents 15% of the transaction. The loan is collateralized by a
767,096 square foot (sf) office property located in Boston, MA.
The loan continues to perform well with a year-end 2003 DSCR of
1.86x. Occupancy remains 100% as of Sept. 30, 2003.
One loan (0.7%) is 90 days delinquent and specially serviced. The
loan is secured by two office properties located in Fort
Washington, PA. The loan transferred to special servicing when a
tenant accounting for 25% of the gross leasable area (GLA)
vacated. Fitch expects losses on the loan; however, the loss is
anticipated to be absorbed by the non-rated class J.
CKE RESTAURANTS: Board Adopts Stock Repurchase Program
------------------------------------------------------
CKE Restaurants, Inc. (NYSE: CKR) announced that its board of
directors has authorized a program for repurchases of shares of
the Company's outstanding common stock. The stock repurchase
program will be put into effect immediately.
Repurchases may be made from time-to-time by the Company in the
open market or in block purchases in compliance with Securities
and Exchange Commission guidelines. The board of directors has
established a limit of $20,000,000 on the aggregate dollar amount
of the shares that may be purchased pursuant to the program.
"We believe that the buy-back of our shares is an attractive
opportunity for the Company, is a good investment of corporate
funds and is in the best interests of our stockholders," stated
Andrew F. Puzder, the Company'spresident and chief executive
officer.
About CKE Restaurants
As of the end of its 2004 fiscal year on January 26, 2004, CKE
Restaurants, Inc., (S&P, B Corporate Credit Rating, Negative),
through its subsidiaries, franchisees and licensees, operated
3,250 restaurants in 44 states and in 14 countries, including
1,006 Carl's Jr.(R) restaurants, 2,121 Hardee's(R) restaurants,
and 102 La Salsa Fresh Mexican Grill(R) restaurants. For more
information, go to http://www.ckr.com/
COINMACH CORP: S&P Places Low-B Level Ratings on Watch Negative
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB-' corporate
credit and senior secured bank loan ratings, as well as its 'B'
senior unsecured debt rating, on contract outsourced laundry
equipment services provider Coinmach Corp. on CreditWatch with
negative implications.
Coinmach had about $720 million of debt outstanding as of
Dec. 31, 2003.
The CreditWatch placement comes after Coinmach's parent company,
Coinmach Service Corp., filed a registration statement with the
SEC for an initial public offering of income deposit securities
representing shares of Coinmach Service's common stock and
subordinated debt. In connection with this offering, Coinmach is
expected to redeem a portion of its outstanding subordinated notes
due 2010 and some of its existing secured bank loan.
"Standard & Poor's believes that the IDS structure exhibits an
aggressive financial policy and significantly reduces a company's
financial flexibility, given the anticipated high dividend payout
rate," said Standard & Poor's credit analyst Jean C. Stout.
"Standard & Poor's is already concerned about Coinmach's weak
financial performance, which stems from a combination of high
vacancy rates in the firm's key markets and higher costs related
mainly to insurance and health care."
Standard & Poor's will meet with management to discuss the
financial and business impact of this proposed transaction and
evaluate its effect on credit quality before taking further rating
action.
Plainview, New York-based Coinmach is the leading supplier of
outsourced laundry services for multifamily housing properties in
North America, with a strong presence in the Northeast, Mid-
Atlantic, Southwest, and Southeast regions.
COMDISCO: Comprendium Prepays in Full Acquired German Leasing Unit
------------------------------------------------------------------
Comdisco Holding Company, Inc. (OTC:CDCO) announced the discounted
prepayment by Comprendium Investments S. A. of the remaining
payments due from the sale of Comdisco's German leasing
subsidiary. Comdisco received 30.5 million euros in lieu of four
payments of 9.5 million euros each, scheduled for payment in April
2004, April 2005, May 2006 and December 2006. The scheduled
payments would have been subject to reduction if certain customers
exercised contractual termination provisions. The prepaid amount
has been converted into $36.7 million and repatriated to the U.S.
Comdisco expects to take a charge of approximately $2 million in
its second fiscal quarter to reflect the difference between the
prepaid amount and the carrying value of the four scheduled
payments.
About Comdisco
Comdisco emerged from chapter 11 bankruptcy proceedings on August
12, 2002. The purpose of reorganized Comdisco is to sell, collect
or otherwise reduce to money in an orderly manner the remaining
assets of the corporation. Pursuant to Comdisco's plan of
reorganization and restrictions contained in its certificate of
incorporation, Comdisco is specifically prohibited from engaging
in any business activities inconsistent with its limited business
purpose. Accordingly, within the next few years, it is anticipated
that Comdisco will have reduced all of its assets to cash and made
distributions of all available cash to holders of its common stock
and contingent distribution rights in the manner and priorities
set forth in the Plan. At that point, the company will cease
operations and no further distributions will be made.
DAN RIVER: U.S. Trustee Names 7-Member Creditors' Committee
-------------------------------------------------------------
The United States Trustee for Region 21 appointed 7 creditors to
serve on an Official Committee of Unsecured Creditors in Dan
River, Inc.'s Chapter 11 cases:
1. L.C. Capital Master Fund, Ltd.
c/o Lampe, Conway & Company LLC
680 Fifth Avenue
Suite 1202
New York, NY 10019-5429
Phone: (212) 581-0502 Fax: (212) 581-8999
E-Mail: conway@lampeconway.com
2. Progressive Screen Engraving, Inc.
Attention: Leslie P. Coyle, Secretary
2215 Beech Street
Gaffney, South Carolina 29340
Phone: (864) 487-3871 Fax: (864) 489-6499
E-Mail: leslie_coyle@yahoo.com
3. Wellman, Inc.
Attention: Werner E. Wolckehhauer
5146 Parkway Plaza Blvd.
Charlotte, N.C. 28217
Phone: (704) 357-2040 Fax: (704) 424-2040
E-Mail: Werner.Wolckenhauer@WellmanInc.com
4. HSBC Bank, USA
Attention: Sandra E. Horwitz, Vice President
10 East 40th Street
14th Floor
New York, NY 10016
Phone: (212) 525-1358 Fax: (212) 525-1300
E-Mail: sandra.e.horwitz@us.hsbc.com
5. Singer Children's Management Trust & Affiliates
Attention: Gary Singer and/or Philip Mandelbaum
560 Sylvan Avenue
Englewood Cliggs, NJ 07632
Phone: (201) 568-4400 Fax: (201) 568-4577
E-Mail: gary@purel.com
6. Sandler Capital Management
Attention: Douglas E. Schimmel
767 Fifth Avenue
New York, NY 10153
Phone: (212) 754-8115 Fax: (212) 754-8166
E-Mail: doug@sandlercap.com
7. Teijan Akra, USA
Attention: Grover Smith, Vice President
Sales & Marketing
5950 Fairview Road, Suite 416
Charlotte, NC 28210
Phone: (704) 554-6588 Fax: (888) 828-2572
E-Mail: gsmith@akra.com
Official creditors' committees have the right to employ legal and
accounting professionals and financial advisors, at the Debtors'
expense. They may investigate the Debtors' business and financial
affairs. Importantly, official committees serve as fiduciaries to
the general population of creditors they represent. Those
committees will also attempt to negotiate the terms of a
consensual chapter 11 plan -- almost always subject to the terms
of strict confidentiality agreements with the Debtors and other
core parties-in-interest. If negotiations break down, the
Committee may ask the Bankruptcy Court to replace management with
an independent trustee. If the Committee concludes reorganization
of the Debtors is impossible, the Committee will urge the
Bankruptcy Court to convert the Chapter 11 cases to a liquidation
proceeding.
Headquartered in Danville, Virginia, Dan River Inc.
-- http://www.danriver.com/-- is a designer, manufacturer and and
marketer of textile products for the home fashions, apparel
fabrics and industrial markets. The Company filed for chapter 11
protection on March 31, 2004 (Bankr. N.D. Ga. Case No.
04-10990). James A. Pardo, Jr., Esq., at King & Spalding
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
$441,800,000 in total assets and $371,800,000 in total debts.
DII IND.: UK Insurers Ask Court to Postpone Confirmation Hearing
----------------------------------------------------------------
Pursuant to Rule 9006(b)(1) of the Federal Rules of Bankruptcy
Procedure, certain London Market Insurers ask the Court to
continue the confirmation hearing of the DII Industries, LLC
Debtors' Chapter 11 Plan by four weeks from May 2004 until June
2004. In addition, the LM Insurers also ask the Court to:
* extend the length of the Plan confirmation hearing from
three days to ten days;
* extend the L. M. Insurers' time to conduct discovery by an
additional four weeks; and
* require submission of direct examination testimony by live
witness in lieu of an affidavit.
Michael A. Shiner, Esq., at Tucker Arensberg, P.C., in
Pittsburgh, Pennsylvania, reminds the Court its set the
confirmation hearing for three days on May 10 to 12, 2004,
anticipating that the Debtors will be entitled to at least half
of the allotted time, with the balance of approximately 10 court
hours to be used by all insurers and creditors to present their
case and all cross examination of the Debtors' witnesses and
experts. The time in which percipient witness discovery must be
conducted has been limited by the Court to a maximum of five
weeks from March 1 to April 5, 2004. The LM Insurers assert that
these deadlines and time limitations are wholly insufficient to
permit them to adequately prepare or present their case to the
Court.
According to Mr. Shiner, the LM Insurers have been provided with
very limited answers to interrogatories and have received no
documents from either the Debtors or Halliburton Company. In
fact, the Debtors and Halliburton recently requested the Court to
enter a Protective Order to prevent the LM Insurers from
obtaining any relevant documents and answers to the majority of
the LM Insurers' interrogatories. The discovery propounded by
the LM Insurers is necessary to support their anticipated
objections to the Plan and to prepare for depositions, which,
under the current schedule, must be completed by April 5, 2004.
The Debtors' intentional delay in the exchange of information now
necessitates a delay in the deposition schedule, which
consequently bears on the date of the confirmation hearing.
Mr. Shiner argues that the current schedule deprives the LM
Insurers of substantial rights. The Case Management Order
affords the LM Insurers and all other objecting parties
approximately five weeks to conduct fact witness depositions.
This time is simply not enough, especially where Debtors have
objected to producing any relevant documents or answering a
number of pertinent interrogatories. The LM Insurers should not
be forced to proceed with depositions until after the Debtors and
Halliburton Company have produced the documents requested from
them and answered interrogatories. Five weeks is also
insufficient because the current schedule does not give the LM
Insurers adequate time to conduct reasonable discovery to develop
the facts needed to support their objections to the Plan.
The LM Insurers aver that discovery necessary to permit them to
develop the factual record that will support their confirmation
objections cannot be completed within the limited time
contemplated by the Case Management Order:
(a) Payment of claims
Discovery related to the operation of the plan and
intended process for the payment of claims is necessary
because through the Plan and the proposed Trust
Distribution Procedures, the Debtors are attempting to
modify their contractual obligations under the policies,
the effect of which will be to permit the payment of
false, fraudulent and excessive claims.
(b) Prepetition settlements
This discovery is necessary to protect the L. M. Insurers'
contractual rights. If the Court approves the settlements
proposed by the Debtors, the L. M. Insurers believe that
the Debtors will attempt to argue in a subsequent coverage
action that the L. M. Insurers lost their legal right to
challenge the reasonableness of the settlements or that
the plan confirmation order constitutes a judgment
establishing the Debtors' liability. In fact, the Debtors
have already stated their intention to cause the Plan to
operate so as to result in a final adjudication of their
liability to the settling parties, a defense that the L.
M. Insurers will otherwise have in all subsequent coverage
actions.
(c) Submitted ballots
This discovery is necessary to ensure that the Plan does
not gain acceptance by the votes of spurious claimants.
The L. M. Insurers believe that the Plan has not been duly
accepted in writing by the classes of creditors and
interest holders whose acceptances are required by law for
Plan confirmation pursuant to the provisions of Sections
501, 502, 524, 1126 and 1129 of the Bankruptcy Code,
because the creditors who have been permitted to vote do
not hold allowed claims. The L. M. Insurers wish to
inquire into the procedures by which the ballots for
acceptance or rejection of the Plan were solicited and
tabulated, in that they likely were not fair, properly
conducted or in accordance with Section 1126(a), the
Bankruptcy Rules and applicable non-bankruptcy law. The
L. M. Insurers must be permitted to demonstrate to the
Court that the ballot tabulation is improper as it permits
alleged claimants who have not been listed in the
schedules and who have not filed valid proofs of claim to
vote.
(d) Prepetition settlement negotiations
This discovery is necessary to show that the Debtors
conducted settlement negotiations and intentionally
excluded the L. M. Insurers from participating in these
negotiations. The likely result of the negotiations will
be the intentional payment of claims allegedly held by
untold thousands of persons who have suffered no injury
and accordingly have no claims at all as a matter of
applicable state laws.
Mr. Shiner further points out that the present expedited schedule
is unnecessary because the Debtors are not in financial distress.
The Debtors have no need to move immediately towards Plan
confirmation to manage their debts, protect a failing business
from ruin, or escape any imminent, crushing economic burden.
Thus, if the current schedule is extended to permit appropriate
discovery and to allow the L. M. Insurers a meaningful
opportunity to be heard, the Debtors will not be prejudiced.
Mr. Shiner notes that due process requires that the L. M.
Insurers have a reasonable opportunity to present their Plan
Objections. Depriving the L. M. Insurers of adequate time to
conduct discovery violates their due process rights. The L. M.
Insurers disagree with the Debtors' assertion that the Plan does
not affect the L. M. Insurers. Notwithstanding the technical
plan amendments filed by Debtors, London Market Insurers are
confidant that, following an appropriate opportunity for
discovery and a full and fair opportunity to present their
witnesses and documents at the confirmation hearing, they will be
able to demonstrate to the Court that the nature of the
settlements, the language of the Plan and its intended operation,
and the Debtors' requested findings of fact may have a
detrimental and prejudicial effect on the insurers if not
modified before confirmation. Due process, therefore, entitles
the L. M. Insurers to first obtain and then present such
evidence.
Moreover, the Debtors have asked the Court to present all their
direct evidence by affidavit rather than by live witnesses. The
Court imposed this requirement on all objecting parties who will
be heard at confirmation. The L. M. Insurers contend that use of
affidavits for the direct testimony is prejudicial to them.
Testimony by affidavit is only appropriate if the parties to an
action do not require cross-examination. It is well recognized
that when a witness is not required to respond to specific
questions on the stand, the counsel for such party is in the
advantageous position of shaping and directing the testimony
sought from the witness so that a very precise and exact version
is presented for cross examination, rather than the version the
witness might otherwise have orally presented without the guiding
influence of their attorney. The presentation of live witnesses
will prevent the Debtors' counsel from submitting the case in
chief through their own style and expression and instead, will
require that the witnesses testify in their vernacular and
subject their credibility to the examination of the objecting
parties. This is particularly important in the instant case
where the Debtors and London Market Insurers hold divergent views
on the intent and effect that the Plan could have on any
subsequent coverage action, and require an adequate opportunity
to present that evidence to the Court.
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. 10;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ENRON: Wants Nod to Effect Dissolution of Non-Debtor Affiliates
---------------------------------------------------------------
During the pendency of these cases, the Enron Corporation Debtors,
their non-debtor affiliates and other related Enron Companies
completed a number of significant sales of non-core assets. Since
the Petition Date, around 775 of the Enron Companies have been:
-- sold to third parties;
-- merged into other companies in connection with the Court-
approved asset sales; and
-- dissolved in accordance with foreign, federal, state or
other applicable law to reduce operating costs to the
estates.
The Enron Companies have effectuated the dissolutions in
furtherance of the Debtors' goal to reduce the number of Enron
Companies to the minimum necessary to operate their core ongoing
business. To date, the Enron Companies have been reduced from
about 2,400 legal entities to about 1,625 legal entities.
By this motion, the Debtors ask the Court to:
(a) authorize the Dissolutions;
(b) authorize them to take all actions necessary under
foreign, federal, state, local or other applicable law to
effectuate the Dissolutions, including:
* Obtaining shareholder, equity, manager, member, partner
or board approvals, as applicable;
* Filing applicable statements, applications,
certificates and related documentation regarding the
Dissolutions;
* Paying the remaining taxes due to or assessable by the
relevant jurisdictions;
* Paying the incidental costs related to the
Dissolutions, including the Wind-Up Costs of those Non-
Debtor Affiliates that do not have sufficient assets to
satisfy the Wind-Up Costs;
* Forgiving the Intercompany Debt;
* Filing of federal and state income tax returns;
* Developing and approving plans of liquidation;
* Appointing responsible persons to wind up the
businesses; and
* Transferring remaining assets to their respective
creditors ratably among claims of equal priority as
determined pursuant to applicable law, and if
sufficient funds remain, to equity holders;
(c) modify the automatic stay, as necessary, to effectuate
the setoff of the Reciprocal Intercompany Obligations
between the Non-Debtor Affiliates and the Debtors; and
(d) approve the forgiveness of the Intercompany Debt in
accordance with the Debt Forgiveness Procedures.
Brian S. Rosen, Esq., at Weil, Gotshal & Manges LLP, in New York,
tells the Court that so far, the Debtors have dissolved Non-
Debtor Affiliates when the dissolution:
(i) involved a Non-Debtor Affiliate with no on-going business
operations;
(ii) resulted in a reduction of administrative burdens and
expenses;
(iii) was required by foreign, federal, state, local or other
applicable law;
(iv) was a condition to consummation of a stock or asset sale
in connection with the divestiture of one of the Enron
Companies' non-core assets; or
(v) furthered the objectives of the Joint Plan by disposing of
non-core business activities and related companies.
Mr. Rosen asserts that continuing the Dissolutions will provide
the Debtors, the estate and creditors with significant benefits,
including:
(1) Reduction of the estates' liabilities for franchise taxes;
(2) Simplification and streamlining of the Debtors' business
operations;
(3) Reduction of the burdens and costs of administration like
reporting and accounting costs;
(4) Furtherance of the objectives of the Joint Plan by
disposing of non-core business activities and related
companies;
(5) The Wind-Up Costs will avoid the cost and expense of
insolvency proceedings; and
(6) The Notice Procedures and Debt Forgiveness Procedures
will reduce fees and expenses relating to Court approval
of the Dissolutions and the forgiveness of Intercompany
Debt.
The Debtors plan to continue dissolving Non-Debtor Affiliates
that are not integral to their ongoing business.
Netting of Intercompany Obligations
The Debtors intend to set off mutual claims and debts with the
Non-Debtor Affiliates that arose prior to the Petition Date. Mr.
Rosen relates that certain of the Non-Debtor Affiliates are owed
receivables by Debtor affiliates and certain of the Non-Debtor
Affiliates owe payables to one or more of the Debtors -- the
Reciprocal Intercompany Obligations. These Reciprocal
Intercompany Obligations were generated by asset sales,
intercompany loans, intercompany contract and lease obligations
and other transactions. To effectuate the statutory dissolution
process, to the extent required, the Debtors seek an authority
for the Non-Debtor Affiliates to set off the Reciprocal
Intercompany Obligations that arose prepetition, pursuant to
Sections 362(a)(7), 506 and 553 of the Bankruptcy Code.
The Transferred Intercompany Receivables
In some cases, subsequent to and as a result of the completion of
the dissolution of Non-Debtor Affiliates, certain Non-Debtor
Affiliate entities may receive intercompany receivables from the
dissolved Non-Debtor Affiliates -- the Transferred Intercompany
Receivables. Mr. Rosen clarifies that the Debtors do not propose
to effectuate any setoff of the Transferred Intercompany
Receivables.
Forgiveness of Intercompany Debt
According to Mr. Rosen, certain of the Non-Debtor Affiliates have
payables to certain of the Debtors that they are unable to
satisfy, either in whole or in part. Thus, the Debtors wish to
forgive the Intercompany Debt in accordance with these
procedures:
* The Debtors will seek Bankruptcy Court approval, upon
notice and hearing, for any proposed forgiveness of
Intercompany Debt in excess of $10,000,000;
* To effectuate the forgiveness of Intercompany Debt equal
to or less than $10,000,000, the Debtors will notify the
Creditors Committee prior to the forgiveness. The Debtors
will also notify the ENA Examiner, prior to the
forgiveness, if the Debtor forgiving Intercompany Debt is
ENA or an ENA subsidiary. The Notice Parties will receive
notice in accordance with these Debt Forgiveness Procedures
and pursuant to the proposed notice procedures; and
* If the Non-Debtor Affiliate has third party creditors,
unless it has secured the consent of the Creditors
Committee, the Debtors will limit the forgiveness of the
Intercompany Debt to the amount necessary to receive
distributions on a pro rata basis and will not subordinate
their claims to the claims of third party creditors,
subject to applicable law governing the treatment of
governmental or secured claims. Each Non-Debtor Affiliate
will obtain the Creditors Committee consent, pursuant to
the Notice Procedures, to the extent it seeks to forgive
third party debt in excess of $10,000.
Notice Procedures
In lieu of a separate motion and a hearing, the Debtors propose
to effectuate the Dissolutions pursuant to the Notice Procedures.
Mr. Rosen points out that complying with the notice provisions of
the Federal Rules of Bankruptcy Procedure and obtaining Court
approval for each such dissolution would result in unnecessary
administrative expenses for drafting, serving and filing
pleadings, as well as time incurred by attorneys for appearing at
Court hearings, which could severely reduce the cost savings
obtained by the dissolution process. Therefore, the Debtors
propose these Notice Procedures:
(a) The Debtors will give notice of each Dissolution to the
Creditors Committee. The Notices will be served on the
applicable Notice Parties in writing so as to be received
by 5:00 p.m. (New York City time) on the date of service
and will specify the Non-Debtor Affiliate to be
dissolved, the amount of Reciprocal Intercompany
Obligations to be set off, if any, and the proposed
Intercompany Debt to be forgiven, if any;
(b) The Notice will include a package of relevant
information, including a corporate data sheet, an
organizational chart, and financial statements to the
extent available. If, in connection with the
Dissolution, the Debtors also propose to forgive
Intercompany Debt equal to or less than $10,000,000, the
proposed forgiveness will be set forth in the Notice;
(c) If the Dissolution involves any Non-Debtor Affiliate of
ENA, the Debtors will also give notice to the ENA
Examiner;
(d) The Notice Parties will have five business days after the
Notice is served to object or request additional time to
evaluate the Dissolution, in writing, via facsimile or
electronic mail to:
Enron Corp.
Attn: General Counsel
Facsimile number (713) 646-5847
Email: Wade.Cline@enron.com
with a copy to:
Weil, Gotshal & Manges LLP
Attn: Brian S. Rosen, Attorneys for the Debtors
Facsimile number (212) 310-8007
Email: Brian.Rosen@weil.com
(e) If Enron's General Counsel does not receive a written
objection or request for additional time prior to 5:00
p.m. (New York City time) on the fifth business day
following service of the Notice, then the Debtors will be
authorized to consummate the Dissolution and to take any
and all actions reasonably necessary to effectuate the
Dissolution and perform any and all obligations in
connection therewith;
(f) If a Notice Party timely objects to the Dissolution, the
Debtors and the objecting Notice Party will use good
faith efforts to consensually resolve the objection;
(g) If the Debtors and the objecting Notice Party are unable
to reach a consensual resolution, the Debtors will not
proceed with the Dissolution pursuant to these procedures
and will seek Bankruptcy Court approval of the
Dissolution. The hearing will be held on the first
Thursday following service of the notice, after the
Debtors' determination that a consensual resolution
cannot be reached; and
(h) The Debtors will file periodic reports, to be attached as
an exhibit to the applicable Monthly Operating Report,
setting forth names of the Non-Debtor Affiliates
dissolved in accordance with the Notice Procedures. (Enron
Bankruptcy News, Issue No. 103; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
EVERGREEN SALES: List of 20 Largest Unsecured Creditors
-------------------------------------------------------
Evergreen Sales & Marketing Services Inc. released a list of 20
Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Bank of America, N.A. $400,000
TX1-609-06-01
211 N. Robinson
Oklahoma City, OK 73102
Ontario Systems $308,766
1150 West Kilgore Ave.
Muncie, IN 47305
SBC Long Distance $159,930
KMC Telecom II $69,144
Scully, John P. $42,947
McGuire, Robert $39,748
Lorello, Robert J. $36,780
Lason Systems, Inc. $25,355
CSG Systems Inc. $22,381
SBC $22,175
Zenith Insurance Co. $22,029
Watts, Deborah $19,414
Hardin, Timothy S. $17,954
SBC Southwestern Bell $16,915
CSS Direct $16,462
Volt Services Group $15,624
Dell Account $11,819
Westaff $6,749
Worldcom $6,549
County of Volusia $5,485
Evergreen Sales & Marketing Services Inc., provider of outbound
telemarketing services to clients in the cable television
industry filed a voluntary petition under chapter 11 on
March 30, 2004 in the U.S. Bankruptcy Court for the Middle
District of Florida (Case No. 04-03264). Richard R. Thames, Esq.
at Stutsman & Thames represent the Company. The Debtor reported
an estimated assets of $1 Million to $10 Million and estimated
liabilities of $1 Million to $10 Million when it filed for
bankruptcy protection.
EXECUTIVE AVIATION: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Executive Aviation, Inc.
209 Airport Drive
Tyler, Texas 75704
Bankruptcy Case No.: 04-60727
Type of Business: The Debtor is an Operator of fixed base
operation at Tyler Pounds Field airport.
See http://www.tylerjet.com/
Chapter 11 Petition Date: April 1, 2004
Court: Eastern District of Texas (Tyler)
Judge: Bill Parker
Debtor's Counsel: Frank J. Wright, Esq.
600 Signature Place
14755 Preston Road
Dallas, TX 75254
Tel: 972-788-1600
Total Assets: $174,966
Total Debts: $7,922,536
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
American Bank Judgment, Eastern $4,205,698
676 W. Jonson St. District of
Fond Du Lac, WI 54935 Wisconsin, Case No.
02-C-0133
Regions Bank Judgment $3,424,041
100 East Ferguson
Tyler, TX 75710
ConocoPhillips $89,717
Internal Revenue Service $76,554
Avfuel Corporation $14,610
Bassco $3,720
First National Bank of Athens $1,966
Kay M. Smith $1,652
Dow-Olds Cadillac $1,474
Ac-U-Kwik $1,435
Law Office of Ric Freeman Legal fees $1,332
Prothro, Wilhelmi & Co, PLLC $1,050
White Photography $865
Southwestern Bell Telephone $741
Purchase Power - Postage $500
Dahill Industries $484
Bill Day Tire Center $452
U.S. Dept. of Commerce $449
Center Point Energy $432
Aeronautical Radio, Inc. $304
FEDERAL-MOGUL: Objects to J. Scott Sherill's $98 Million Claim
--------------------------------------------------------------
Joseph Scott Sherrill filed Claim No. 7314 for $97,968,790, for
himself and on behalf of a purported class consisting of all
participants and their beneficiaries in the Federal Mogul
Corporation Salaried Employees Investment Program, for whose
accounts the Plan made or maintained investment in the Federal
Mogul common stock and preferred stock at any time from June 30,
1999 to October 1, 2001. The claim is based solely on alleged
"breaches of the fiduciary obligations imposed on [Federal-Mogul]
by the Employee Retirement Income Security Act, 29 U.S.C. Section
1001, et seq., as amended." According to Mr. Sherrill, the claim
amount is calculated with reference to the total "value of common
and preferred stock acquired by the Plan in the years 1999, 2000
and 2001."
The Debtors dispute the Claim, and want the Claim disallowed in
its entirety. Michael P. Migliore, Esq., at Pachulski, Stang,
Ziehl, Young, Jones, & Weintraub, P.C., in Wilmington, Delaware,
asserts that:
(a) The Debtors have no liability to Mr. Sherrill nor to the
Class, on account of the facts alleged in the proof of
claim;
(b) Claim No. 7314 fails to state any claim upon which
monetary recovery may be based. The ERISA and the United
States Code mandate that even if Federal-Mogul served as a
fiduciary under the Plan and breached its
responsibilities, obligations or duties as a fiduciary,
any monetary recovery must inure only to the benefit of
the Plan as a whole, not to participants or beneficiaries
individually or to a select class. Alternatively, any
other relief available to Mr. Sherrill under the ERISA is
limited to traditional equitable relief, none of which is
applicable under the facts presented;
(c) The Claim fails to allege any facts with sufficient
particularity to satisfy the ERISA's statutory
functionality test for determining whether the Debtors
acted in a fiduciary capacity with respect to the matters
alleged in the Claim. Claim No. 7314 fails to allege any
basis upon which liability can be established against the
Debtors;
(d) To the extent that Claim No. 7314 is based on an alleged
failure by the Debtors to provide Mr. Sherrill and the
Class with material non-public information concerning the
Debtors and the common and preferred stock of Federal-
Mogul held by the SEIP, the Debtors did not breach any
purported fiduciary duty to Mr. Sherrill or the Class
because to have disclosed the non-public information for
the purpose of effectuating purchases or sales of Federal-
Mogul stock would have resulted in violations of the
federal securities laws;
(e) Any losses resulting from Mr. Sherrill's or the individual
Class members' decisions to invest their own Plan
contributions or maintain investments in Federal-Mogul
common stock, were the sole responsibility of the
individual participants in the Plan. Assuming that
Federal-Mogul met the statutory test for a plan fiduciary
under the ERISA, Section 404(c) of the ERISA nonetheless
immunizes Federal-Mogul from any liability with respect to
any losses arising in the employee contribution accounts;
(f) To the extent that the liability asserted in Claim No.
7314 includes alleged losses in Mr. Sherrill's or the
Class' SEIP accounts funded with matching contributions
in Federal-Mogul common stock, over which Mr. Sherrill and
the Class exercised complete control at all times after
December 21, 2000, and partial control prior to that date,
Section 404(c) of the ERISA precludes liability on
Federal-Mogul's part. The Debtors' matching contributions
to the SEIP in common stock were:
-- fully transferable by Mr. Sherrill and the Class at all
times after December 2000; and
-- Federal-Mogul fully compensated all then existing
employee-participants in the SEIP, and retirees, for
any losses theoretically incurred before that date as
the result of transfer restrictions applicable to
matching contributions theretofore maintained under the
Plan; and
(g) Pursuant to the ERISA, the Debtors are presumed to have
acted prudently in making Employee Stock Ownership Portion
matching contributions in Federal-Mogul preferred stock,
and Mr. Sherrill fails to allege any facts in the Proof of
Claim sufficient to overcome the presumption.
Mr. Migliore asserts that to the extent that the Claim relate to
SEIP investments in Federal-Mogul preferred stock, the Claim
should be subordinated to all claims against Debtors and
interests represented by Federal-Mogul preferred stock, but will
be senior in rank and priority to all interests represented by
Federal-Mogul common stock.
Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- http://www.federal-mogul.com/-- is one of the world's largest
automotive parts companies with worldwide revenue of some $6
billion. The Company filed for chapter 11 protection on October
1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan, Esq.,
James F. Conlan, Esq., and Kevin T. Lantry, Esq., at Sidley Austin
Brown & Wood and Laura Davis Jones, Esq., at Pachulski, Stang,
Ziehl, Young, Jones & Weintraub, represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
its creditors, they listed $ 10.15 billion in assets and $ 8.86
billion in liabilities. (Federal-Mogul Bankruptcy News, Issue No.
52; Bankruptcy Creditors' Service, Inc., 215/945-7000)
FIBERMARK: U.S. Trustee Meets with Creditors on May 24, 2004
------------------------------------------------------------
The United States Trustee will convene a meeting of FiberMark,
Inc.'s creditors at 1:00 p.m., on May 24, 2004, at U.S. Bankruptcy
Court at U.S. Post Office and Courthouse, Rutland, Vermont 05702-
6648. This is the first meeting of creditors required under 11
U.S.C. Sec. 341(a) in all bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Brattleboro, Vermont, FiberMark, Inc.
-- http://www.fibermark.com/-- produces filter media for
transportation applications and vacuum cleaning; cover stocks and
cover materials for books, graphic design, and office supplies and
base materials for specialty tapes, wallcoverings and sandpaper.
The Company filed for chapter 11 protection on March 30, 2004
(Bankr. D. Vt. Case No. 04-10463). Adam S. Ravin, Esq., D. J.
Baker, Esq., David M. Turetsky, Esq., Rosalie Walker Gray, Esq.,
at Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors
in their restructuring efforts. When the Debtors filed for
protection from its creditors, they listed $329,600,000 in total
assets and $405,700,000 in total debts.
FIBERMARK INC: Shares Now Trading on the OTC Bulletin Board
-----------------------------------------------------------
FiberMark, Inc. (OTC Bulletin Board: FMKIQ) started trading on the
Nasdaq-operated Over-the-Counter Bulletin Board (OTCBB), on April
13, 2004. The company trades under the ticker symbol "FMKIQ".
To prepare for this transition, FiberMark voluntarily delisted its
shares from the American Stock Exchange. As a result, trading was
permanently suspended on Amex effective with the close of trading
on April 12, 2004. The company formerly traded under the symbol
"FMK".
The OTCBB is a regulated quotation service that displays real-time
quotes, last-sale prices and volume information for over-the-
counter equity securities. OTC securities are traded by a
community of market makers that enter quotes and trade through a
sophisticated computer network. Over 3,600 companies trade on the
OTC. Information on the OTCBB can be found at
http://www.otcbb.com/
Brattleboro, Vermont-based FiberMark -- http://www.fibermark.com/
-- is a leading producer of specialty fiber-based materials
meeting industrial and consumer needs worldwide, operating 11
facilities in the eastern United States and Europe. The company,
along with a couple of affiliates, filed for chapter 11 protection
(Bankr. Vermont Lead Case No. 04-10463) on March 30, 2004. Adam
S. Ravin, Esq. of Skadden, Arps, Slate, Meagher & Flom LLP and
Raymond J. Obuchowski, Esq. of Obuchowski & Emens-Butler assist
the debtors in their restructuring efforts. As of petition filing
date, Fibermark listed total assets of $329,600,000 and total
debts of $405,700,000
FLEMING COMPANIES: Asks Court to Reclassify Various Claims
----------------------------------------------------------
Fleming Companies, Inc. and its debtor-affiliates object to the
classification of certain claims and ask the Court to reclassify
these claims as general unsecured claims. Each of the claims has
been filed in whole or in part as a secured, administrative
expense, or claim entitled to priority of payment, and asserts
liabilities alleged to arise from:
(1) litigation pending against the Debtors in another
forum arising from prepetition conduct;
(2) prepetition securities issued by the Debtors;
(3) indemnification obligations to former officers; or
(4) prepetition transactions between the Debtors and
certain of their trade vendors.
Christopher J. Lhulier, Esq., at Pachulski Stang Ziehl Young
Jones & Weintraub PC in Wilmington, Delaware, emphasizes that the
Debtors are not objecting to the amount of validity of the
claims. However, the Debtors reserve the right to do so in the
future consistent with applicable law. The Debtors neither admit
nor deny the facts and circumstances giving rise to these claims
other than that related to classification.
Group A: Litigation Claims
Twenty-two claims are filed based on the Debtors' alleged
wrongful or negligent prepetition conduct, which even if giving
rise to liability on the Debtors' part, does not confer the
status of a secured, administrative or priority claim. The
Litigation Claims are:
Claimant Claim Amount
-------- ------------
Mona Benoit $17,256.00
Nelson Briones 50,000.00
Juan Jose Dominguez 154,650.00
Joseph Erickson 13,945.88
Robert W. Estesss 15,900.00
James Ferguson 8,345.99
Thomas Fischer 6,324.00
Olman Galindo 65,000.00
Eleanor Gorokhovskaya 5,911.21
James A. Koonecny 93,167.00
James A. Koonecny 71,615.00
Randy Lane 29,538.46
Gary Lobley 675.00
Barb Lundstrom 35,000.00
Richard E. Mack 1,000,000.00
Market Place Foods 846,729.88
Teresa Martinez 42,602.00
Rusbiero Messa 5,000,000.00
Russell Stover Candies, Inc. 736,778.11
Patricia Janka Sandoz 39,200.00
Rosemarie Scheidt 35,000.00
Kent Wuethrich 100,000.00
Group B: Prepetition Securities Claims
Ten claims are filed based on prepetition issuances of securities
by the Debtors. Without regard to their merits, the claimants
are not entitled to assert secured, administrative or priority
status. The Prepetition Securities Claims are:
Claimant Claim Amount
-------- ------------
John C. Christensen $4,351.00
William and Ivaleah Engel 5,000.00
Leo and Charlotte Flute 1,647.90
Edward J. Klein 8,435.55
Leslie M. Krob 1,875.14
Robert and Deanna Mitchell 4,775.00
Kermit C. Paylor 2,483.76
Ira and Helen Rickard 19,729.96
David Siddons 8,000.00
Bruce Stillman 294,905.00
Group C: Indemnification Claims
Two claims seek to subrogate to and assert the priority status of
a governmental entity. However, Section 507(d) of the Bankruptcy
Code disallows that priority status to these types of claims.
The two claims are:
Claimant Claim Amount
-------- ------------
Scott Northcutt $73,828,784.00
Neal J. Rider 73,828,784.00
Group D: Trade Vendor Claims
Certain of the Debtors' trade vendors filed claims based on
prepetition transactions, which do not give rise to a secured,
administrative or priority claim. The 328 claims include:
Claimant Claim Amount
-------- ------------
7th Wave Communications $2,100.00
Acctcorp of Southern Nevada 13,600.00
Americana Marketing Inc. 5,670.00
Aquila Inc. 24,941.58
Azteca Distributors 46,161.88
Bay Area Beverage 12,057.32
Peter Beggs 11,732.00
Bezzerides Co. 24,089.14
Bingo Sales Inc. 540.00
Box USA Inc. 15,438.07
Bremmer Inc. Ry-krisp Division 7,869.80
C&C and Son Mechanical Inc. 12,155.770
Centurion Security Systems, Inc. 21,562.38
Churny Co. Inc. 56,076.46
Conair Corporation 21,089.04
Country Maid Inc. 78,521.90
Covenant Transport 11,462.22
D&D Oil Company Inc. 131,622.99
Dakota Electric Association 24,148.13
Dakota Electric Association 18,307.46
Emge Foods 6,479.68
Fast Cash Inc. 46,561.00
General Distributing Co. 14,017.05
George E. Fern Co. 269,012.88
Global Exchange Services 33,525.04
Gold Medal Products Co. 9,777.76
Gourmet Express 56,762.40
Greenwood Packing Plant Inc. 46,880.79
GS Enterprises Inc. 18,151.45
Harvest Meat Co. 7,342.59
Health Tech Inc. 69,165.33
Hill Brothers Transportation 133,001.96
IBC Holsum Bakers 6,567.02
Ians Inc. dba Holiday Inn 12,967.94
Jantech Building Services 4,415.24
Joyco USA 6,681.29
Kaufman Rossin & Co. 8,689.40
Kopco Inc. 147,627.88
Little Tan Inc. 8,064.18
Marks Paper Company 9,680.00
Massillon Knights Foundation 4,590.29
Melford Olson Honey Inc. 10,051.92
Mesa Beverage 7,137.90
Miami-Dade Water & Sewer Department 14,911.37
Montalvan's Sales Inc. 10,085.40
Newman's Own Inc. 135,705.92
Novamex 79,930.87
Donald J. Olson 10,032.76
Onise Companies 94,403.05
Pappy's Fine Foods 18,729.43
Personal Optics 54,011.20
Poi Foods LLC 20,883.48
Provo City Utilities 21,703.48
Questar Gas Co. 2,914.69
R&C Foods 26,486.68
Rabalais & Purser LLC 9,783.27
Rayman Trucking 7,053.65
Roany's A La Carte Inc. 53,143.40
Royal Crown Maintenance Inc. 25,269.68
S&J Reed Inc. 5,068.36
S E W Friel 89,590.57
Seyfarth Shaw LLP 11,640.36
Starz Imports Ltd. 5,369.41
Tamaosari Beverage Ltd. 12,006.00
Taylor Enterprises of Wisconsin 14,019.55
The Jankovich Company 10,469.70
The Range of Light Corporation 139,548.76
Toshiba America 23,955.00
Tulare County News 4,846.46
TW Maintenance Inc. 4,036.62
United Food Group LLC 9,885.60
Vaughan Foods 14,815.60
Wesclean Sales Ltd. 16,963.44
John Williams 2,000.00
Wright Hennepin Coop Elec. 19,812.87
Y Hirayama Farm Inc. 13,510.12
Zup's Food Markets 11,968.92
Headquartered in Lewisville, Texas, Fleming Companies, Inc.
-- http://www.fleming.com/-- is the largest multi-tier
distributor of consumer package goods in the United States. The
Company filed for chapter 11 protection on April 1, 2003 (Bankr.
Del. Case No. 03-10945). Richard L. Wynne, Esq., Bennett L.
Spiegel, Esq., Shirley Cho, Esq., and Marjon Ghasemi, Esq., at
Kirkland & Ellis, represent the Debtors in their restructuring
efforts. When the Debtors filed for protection from its
creditors, they listed $4,220,500,000 in assets and $3,547,900,000
in liabilities. (Fleming Bankruptcy News, Issue No. 29; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
FOOTSTAR: Selling 350 Footaction Stores to Foot Locker for $160MM
-----------------------------------------------------------------
Footstar, Inc. has entered into a definitive agreement for the
sale of approximately 350 of its remaining 353 Footaction stores
to Foot Locker, Inc. (NYSE: FL) for $160 million in cash, subject
to certain closing adjustments. The sale will enable Footstar to
focus its full attention and resources on its core Meldisco
business as it proceeds with its Chapter 11 reorganization.
The agreement with Foot Locker is subject to Bankruptcy Court and
regulatory approvals. A Court hearing at which Footstar will seek
approval is expected to commence on April 21, 2004.
Dale W. Hilpert, Chairman, President and Chief Executive Officer,
commented, "Our goal as we entered the sales process was to
maximize value for our stakeholders. This agreement meets that
objective, while also providing for continued employment of
substantially all Footaction store associates. We look forward to
completing the sale and continuing to reposition Footstar for the
future as we focus our full attention and resources on an
appropriately capitalized Meldisco business."
On March 25, 2004, Footstar announced that it would move forward
with an accelerated process to sell its remaining athletic
footwear business. In March 2004, Footstar announced that it would
close 163 underperforming stores including all of its Just For
Feet and 75 of its 428 Footaction stores.
Footstar anticipates closing the transaction after receiving
Bankruptcy Court and required regulatory approvals.
Footstar Background
Footstar, Inc., with 2003 revenues of approximately $2.0 billion
and 14,000 associates, is a leading footwear retailer. Immediately
prior to filing for Chapter 11 bankruptcy on March 2, 2004, the
Company operated 428 Footaction stores in 40 states and Puerto
Rico, 88 Just For Feet superstores located predominantly in the
Southern half of the country, and 2,496 Meldisco licensed footwear
departments and 39 Shoe Zone stores. The Company also distributes
its own Thom McAn brand of quality leather footwear through Kmart,
Wal-Mart and Shoe Zone stores.
FOSTER WHEELER: Expects Exchange Offer to Reduce Debt by $500MM
---------------------------------------------------------------
Foster Wheeler Ltd. (OTCBB: FWLRF) announced that it filed the
terms of its proposed equity for debt exchange offer with the
Securities and Exchange Commission (SEC). If the exchange offer is
executed as proposed and at minimum required participation levels,
it would reduce Foster Wheeler's existing debt by nearly $500
million, extend the maturities on $150 million of debt to 2011 and
reduce interest expense by approximately $30 million per year. The
exact amounts will depend on the terms of the final offer, as
declared effective by the SEC, and actual participation levels.
"This filing marks an important step towards completing our
balance sheet restructuring," said Raymond J. Milchovich,
chairman, president and chief executive officer. "We appreciate
the confidence in the company's future that will be expressed by
those investors who accept equity in the newly capitalized company
in exchange for debt. Upon completion of the exchange as proposed,
our debt would be reduced by nearly $500 million with a
corresponding reduction in interest payments. The debt reduction,
together with the sale of new notes to retire our funded bank
debt, would eliminate any material scheduled debt maturities over
the next five years, improving our financial position and
providing financial flexibility as we move ahead. Our goal is to
complete the exchange offer by the end of May."
The proposed exchange offer, as described in the registration
statement filed with the SEC, includes the exchange of (i) senior
secured debt due 2005 for a combination of equity and new senior
secured debt due 2011; (ii) convertible debt and Robbins bonds for
equity; and (iii) trust preferred securities for cash or equity at
the option of the holder. The completion of the exchange offer is
subject to, among other things, clearance of the registration
statement by the SEC and state securities commissions, and
attaining certain minimum participation thresholds.
As previously announced, Foster Wheeler has obtained a commitment
from a group of institutional holders of its debt securities to
purchase $120 million of new senior secured notes due 2011,
contingent on the closing of the exchange offer on terms
satisfactory to such institutional holders. The proceeds will be
used to repay the term and revolving debt outstanding under Foster
Wheeler's existing credit agreement.
"We believe we have built the foundation for successful
performance with the operational initiatives we have put in
place," continued Mr. Milchovich. "Foster Wheeler has a long
history of delivering exceptional quality, service and technology
to a sophisticated client base worldwide. The significantly
improved balance sheet from this recapitalization will provide
better support for our global operating companies to compete
favorably and to achieve their full business potential."
Foster Wheeler Ltd. -- whose December 26, 2003 balance sheet shows
a total shareholders' deficit of $872,440,000 -- is a global
company offering, through its subsidiaries, a broad range of
design, engineering, construction, manufacturing, project
development and management, research and plant operation services.
Foster Wheeler serves the refining, oil and gas, petrochemical,
chemicals, power, pharmaceuticals, biotechnology and healthcare
industries. The corporation is based in Hamilton, Bermuda, and its
operational headquarters are in Clinton, New Jersey, USA. For more
information about Foster Wheeler, visit http://www.fwc.com/
GLOBAL CROSSING: Verizon Demands Compliance of Court Orders
-----------------------------------------------------------
Philip D. Anker, Esq., at Wilmer Cutler Pickering LLP, in New
York, relates that through its domestic telephone operating
companies, Verizon Communications, Inc. is one of the largest
providers of telecommunications services to the Global Crossing
Debtors. Over the course of their Chapter 11 cases, the Debtors
have repeatedly failed to timely pay Verizon for its services.
Verizon has twice been forced to file motions with the Court to
compel payment, and twice, the Debtors have agreed, pursuant to
Court-approved stipulations, to pay all invoices in a timely
fashion. However, the Debtors are again in violation of the
Court's orders and the parties' agreements.
Mr. Anker tells the Court that as of March 5, 2004, the Debtors
owed Verizon $5,800,000 in past-due invoices that they have not
disputed or paid. Verizon's persistent and repeated efforts to
consensually resolve the matter with the Debtors have failed.
Accordingly, Verizon asks the Court to immediately:
(i) compel the Debtors to pay Verizon $5,800,000 of invoices;
and
(ii) direct the Debtors to pay all other undisputed Verizon
invoices for services as and when due -- within 21 days
of the date of the Verizon invoice.
Mr. Anker states that because of the magnitude of the Debtors and
Verizon's business relationship, the past-due invoices and the
past-due amounts are constantly changing. Thus, Verizon reserves
the right to offer additional invoices that are past due as of
April 20, 2004.
Headquartered in Florham Park, New Jersey, Global Crossing Ltd.
-- http://www.globalcrossing.com/-- provides telecommunications
solutions over the world's first integrated global IP-based
network, which reaches 27 countries and more than 200 major cities
around the globe. Global Crossing serves many of the world's
largest corporations, providing a full range of managed data and
voice products and services. The Company filed for chapter 11
protection on January 28, 2002 (Bankr. S.D.N.Y. Case No.
02-40188). When the Debtors filed for protection from their
creditors, they listed $25,511,000,000 in total assets and
$15,467,000,000 in total debts. Global Crossing emerged from
chapter 11 on Dec. 9, 2003. (Global Crossing Bankruptcy News,
Issue No. 58; Bankruptcy Creditors' Service, Inc., 215/945-7000)
HOLMES GROUP: S&P Assigns B Rating to $315M Sr. Secured Bank Loan
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B' senior secured
bank loan rating and its '4' recovery rating to small appliance
manufacturer The Holmes Group Inc.'s $315 million first-priority
senior secured credit facility due 2011. The '4' recovery rating
indicates that the asset values provide lenders with the
expectation of marginal recovery of principal (25%-50%) in a
default scenario. Standard & Poor's also assigned its 'CCC+'
senior secured bank loan rating and its '5' recovery rating to
Holmes' $105 million second-priority senior secured credit
facility due 2011. The '5' recovery rating indicates that the
asset values provide lenders with the expectation of negligible
recovery of principal (0%-25%) in a default scenario.
At the same time, Standard & Poor's revised the outlook on Holmes
Group to stable from positive, and affirmed the 'B' corporate
credit rating on the company. The outlook revision reflects
Standard & Poor's concerns about Holmes' significantly more
aggressive financial policy. As part of the current refinancing
transaction, Holmes is increasing its leverage by paying an
approximately $153 million dividend to its shareholders. However,
the company's stable operating trends provide support for the
existing ratings in the intermediate term.
"The ratings on Milford, Massachusetts-based Holmes Group Inc.
reflect its very aggressive financial policy and highly leveraged
capital structure, intense competition in the kitchen and home
environment appliance markets, the seasonal nature of sales
(influenced by both Christmas demand and vulnerability to
weather), and customer concentration," said Standard & Poor's
credit analyst Martin S. Kounitz. "Somewhat mitigating these
factors are the company's strong brand names, which have leading
market shares, particularly in the small kitchen appliance
category, and its cost structure improvements.
Holmes manufactures and markets branded kitchen and home
environment appliances. Its products include small kitchen
appliances sold under the Crock Potr and Rivalr brands, and fans,
space heaters, and humidifiers sold under the Holmesr, Bionairer,
and Pattonr brands. The company manufactures about 50% of its
products in its owned factory in China, and uses third-party
companies in the Far East to produce the remainder.
Standard & Poor's believes that the planned refinancing, including
the approximately $153.0 million dividend, will give Holmes
diminished financial flexibility. Pro forma for the transaction,
total debt will rise to approximately $354.0 million, from $204.8
million. Accordingly, pro forma total debt to EBITDA, adjusted for
operating leases, will rise to 4.3x, from 2.6x at Dec. 31, 2003.
However, with profitability improvements and free cash flow
applied to debt reduction, Standard & Poor's expects that debt
leverage could improve to the mid-3.0x range in the intermediate
term. Because the refinancing lowers the company's total interest
expense, EBITDA coverage of interest expense, adjusted for
operating leases and pro forma for the transaction, would improve
to 4.0x from 3.2x in 2003. Standard & Poor's expects EBITDA
coverage of interest expense to range from 4.0x-4.5x in the
intermediate term.
INTERWAVE COMMUNICATIONS: Regains Nasdaq Listing Compliance
-----------------------------------------------------------
interWAVE(R) Communications (Nasdaq: IWAV, IWAVE), a pioneer in
compact wireless communications systems, announced that the
Company has evidenced compliance with the filing requirement and
all other requirements for continued listing on The Nasdaq
National Market. Effective with the open of business on
Wednesday, April 14, 2004, the Company's trading symbol no
longer carried the "E" designation and reverted to IWAV.
About interWAVE
interWAVE Communications International, Ltd. (Nasdaq: IWAV, IWAVE)
is a global provider of compact network solutions and services
that offer the most innovative, cost effective and scaleable
network architectures allowing operators to "reach the unreached."
interWAVE's solutions provide economical, distributed networks
that minimize capital expenditure while accelerating customers'
revenue generation. These solutions feature a product suite for
the rapid and simple deployment of end-to-end compact cellular
systems and broadband wireless data networks. interWAVE's highly
portable mobile, cellular networks and broadband wireless
solutions provide vital and reliable wireless communications
capabilities for customers in over 50 countries. interWAVE's U.S.
subsidiary is headquartered at 2495 Leghorn Street, Mountain View,
California, and can be contacted at iwv.com or at (650) 314-2500.
* * *
In its Form 10-Q for the quarter ended December 31, 2003 filed
with the Securities and Exchange Commission, interWAVE
Communications International Ltd. also states:
Summary of Liquidity
"We cannot assure you that our existing cash and cash equivalents
plus short-term investments will be sufficient to meet our
liquidity requirements. We have had recurring net losses for the
past three fiscal years. Management is executing plans with the
intent of increasing revenues and margins, reducing spending and
raising additional amounts of cash through the issuance of debt or
equity securities, asset sales or through other means such as
customer prepayments. If additional funds are raised through the
sale of our assets, we may be limited in the type of business we
can carry on in the future. If additional funds are raised
through the issuance of preferred equity securities or debt
securities, these securities could have rights, preferences and
privileges senior to holders of common shares, and the terms of
any debt could impose restrictions on our operations. The sale of
additional equity or convertible debt securities could result in
dilution to our shareholders, and we may not be able to obtain
additional financing on acceptable terms, if at all. If we are
unable to successfully execute such plans, we may be required to
reduce the scope of our planned operations or even cease our
operations. We cannot assure you that we will be successful in
the execution of our plans."
IPCS ESCROW: $180M Senior Unsec. Debt Issue Gets S&P's CCC Rating
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC' rating to
iPCS Escrow Co.'s $180 million senior unsecured notes due 2012,
issued under Rule 144A with registration rights. iPCS Escrow is a
wholly owned indirect subsidiary of iPCS Inc.
Simultaneously, Standard & Poor's assigned its 'CCC+' corporate
credit rating to iPCS Inc. and iPCS Escrow Co. The outlook is
developing.
The unsecured notes are rated one notch lower than the corporate
credit rating because priority obligations as a percentage of net
tangible assets is expected to be more than 15%. In connection
with the confirmation and effectiveness of iPCS Inc.'s plan of
reorganization (expected by July 2004), iPCS Escrow Co. will be
merged with and into iPCS Inc. The notes will then become the
obligation of iPCS Inc. If the merger is not consummated by 120
days after the issuance of the notes, iPCS Escrow Co. will redeem
all of the notes at par plus accrued interest.
iPCS Inc. is a Sprint PCS affiliate that provides wireless
personal communications services (PCS) under the Sprint brand name
to more than 220,000 subscribers in portions of Illinois,
Michigan, Iowa, and eastern Nebraska. Pro forma for the
reorganization and the new note deal, total debt outstanding is
about $180 million.
"Ratings on iPCS reflect the company's high debt leverage near
term, its high churn rate, and the weak business position common
to all Sprint PCS affiliates," said Standard & Poor's credit
analyst Rosemarie Kalinowski. "These factors are mitigated
somewhat by the company's improved relationship with Sprint PCS
and its opportunity for growth given its 3.8% penetration rate."
iPCS's debt was reduced by more than 40% as a result of the
restructuring plan; however, total debt to EBITDA is expected to
still be aggressive, at more than 6x over the next two years.
Growth in EBITDA will be dependent on moderate revenue growth
resulting from increased number of retail stores and continued
good demand for data services. The churn rate, although declining,
is still high, in the 3% area. Implementation of new retention
initiatives in light of local number portability will be required
to improve this metric. iPCS has taken steps to reduce involuntary
churn in its subprime customer segment by increasing required
deposits.
IT GROUP: Unsecured Panel Retains Marotta as Litigation Consultant
------------------------------------------------------------------
The Official Committee of Unsecured Creditors appointed in the
Chapter 11 cases of The IT Group Debtors sought and obtained the
Court's authority to retain Marotta Gund Budd & Dzera, LLC as
litigation consultant on financial matters to Kasowitz Benson,
nunc pro tunc to March 1, 2004. Kasowitz Benson requires the
assistance of Marotta Gund in analyzing, among other things, the
Debtors' financial history in connection with the lawsuits. The
Committee has selected Marotta Gund based on its expertise and
experience at a national level in providing a broad range of
financial consulting and litigation support services to parties-
in-interest and their counsel in financially complex matters.
The services provided by Marotta Gund will not be duplicative of
those performed by other professionals retained by the Committee,
asserted the Committee. Marotta Gund will only perform those
services necessary for the Committee and Kasowitz Benson in the
Debtors' Chapter 11 cases.
In exchange for its services, Marotta Gund will be compensated on
an hourly basis in accordance with its ordinary and customary
rates:
Principals $500
Associates 200 - 400
Paraprofessionals 80
The fees due for services rendered will be payable on a monthly
basis, plus reimbursement of actual and necessary expenses.
Headquartered in Monroeville, Pennsylvania, The IT Group, Inc. --
http://www.theitgroup.com-- together with its 92 direct and
indirect subsidiaries, is a leading provider of diversified,
value-added services in the areas of consulting, engineering and
construction, remediation, and facilities management. The Company
filed for chapter 11 protection on January 16, 2002 (Bankr. Del.
Case No. 02-10118). David S. Kurtz, Esq., at Skadden Arps Slate
Meagher & Flom, represents the Debtors in their restructuring
efforts. On September 30, 2001, the Debtors listed $1,344,800,000
in assets and 1,086,500,000 in debts. (IT Group Bankruptcy News,
Issue No. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000)
KOCH CELLULOSE: S&P Assigns BB Credit & Sr. Sec. Bank Loan Ratings
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'BB' corporate
credit rating to Koch Cellulose LLC, which will be based in
Brunswick, Georgia. At the same time, based on preliminary terms
and conditions, Standard & Poor's assigned its 'BB' senior secured
bank loan rating and '3' recovery rating to Koch Cellulose's
$424,012,000 senior secured bank credit facilities, indicating
the likelihood of meaningful (50% to 80%) recovery of principal in
a default scenario.
Term loan proceeds of $300 million, together with $73 million of
assumed debt and $255 million of common equity, will be used to
purchase two pulp mills from Georgia-Pacific Corp. and pay related
expenses. The outlook is stable.
"The ratings reflect a good cost position, a capital structure
that should allow the company to earn an attractive return and
generate cash for debt reduction, and the capacity to increase
higher-margin fluff pulp sales," said Standard & Poor's credit
analyst Cynthia Werneth. However, offsetting these strengths are
considerable risks that include the fact that pulp markets are
cyclical, capital-intensive, and fragmented; limited product and
manufacturing site diversity; significant recent and potential
additions of softwood kraft pulp capacity with very low production
costs; customer concentration; lack of fiber integration; and a
financing structure that under certain circumstances will permit
dividends to be paid, reducing the financial cushion that might be
available in cyclical troughs. In addition, although the new owner
plans to retain existing management, this is its first investment
in the forest products industry.
The outlook is stable. Although Koch Cellulose will be subject to
the vagaries of a cyclical commodity business, Standard & Poor's
anticipates that the current rising pulp price and low interest-
rate environment, together with the company's favorable cost
structure, should facilitate substantial deleveraging within the
next one to two years and generate credit measures that are
acceptable for the ratings over the business cycle.
Koch Cellulose is an indirect wholly owned subsidiary of Koch
Industries Inc., one of the largest privately held companies in
the U.S. However, Koch Cellulose will be operated on a stand-alone
basis with a separate board of directors and independent financing
arrangements. Standard & Poor's ratings on Koch Cellulose do not
incorporate any financial support from Koch.
Koch Cellulose's operations will consist of manufacturing and
selling wood pulp produced at the two mills it is acquiring in the
southern U.S. With about 1.3 million metric tons of combined
capacity, the mills are currently producing about 70% fluff pulp
(a somewhat value-added grade of pulp used in absorbent products)
and 30% southern bleached softwood kraft pulp (used mainly in
paper). About 60% to 65% of volume is under contract at market
pricing, and about two-thirds of sales are to customers outside
the U.S. and Canada.
LAND O'LAKES: Schedules First Quarter Earnings Call for April 26
----------------------------------------------------------------
Land O'Lakes, Inc. scheduled its first quarter earnings call for
investors. The call will begin at 1:00 p.m., Eastern Time on
Monday, April 26, 2004. The call will be preceded by an earnings
release that morning. Presentation materials related to the call
will also be available on Monday morning at Land O'Lakes web site,
http://www.landolakesinc.com, under the heading "Our Company"
then "Investor Call" and will be available through May 10, 2004.
The conference call will be led by Land O'Lakes Senior Vice
President and Chief Financial Officer Dan Knutson.
The dial-in numbers are:
USA - 1-877-917-1550
International - 1-630-395-0018
Passcode: "Land O'Lakes"
A replay of the conference call will be available through
May 10, 2004, at:
USA - 1-888-568-0810
International - 1-402-998-0237
The replay access ID is #8403
Land O'Lakes, Inc. -- http://www.landolakesinc.com/-- is a
national farmer-owned food and agricultural cooperative with
annual sales of more than $6 billion. Land O'Lakes does business
in all fifty states and more than fifty countries. It is a leading
marketer of a full line of dairy-based consumer, foodservice and
food ingredient products across the United States; serves its
international customers with a variety of food and animal feed
ingredients; and provides farmers and ranchers with an extensive
line of agricultural supplies (feed, seed, crop nutrients and crop
protection products) and services.
* * *
As previously reported in Troubled Company Reporter, Land O'Lakes,
Inc., completed amendments to its existing senior credit
facilities.
Under the amendment to the revolving facility, the lenders have
committed to make advances and issue letters of credit until
January 2007 in an aggregate amount not to exceed $180 million,
subject to a borrowing base limitation. In addition, the
amendment to the revolving facility increases the amount of that
facility available for the issuance of letters of credit from $50
million to $75 million, increases the spreads used to determine
interest rates on that facility, changes the basis on which those
spreads and commitment fees for that facility are determined from
the Company's senior secured long-term debt ratings to the
Company's leverage ratio, and adjusts the leverage ratio covenant
contained in that facility. An amendment providing for the same
leverage ratio covenant modification and for a change in the
allocation of certain mandatory prepayments was also secured with
respect to the Company's term facility. Under the amendments, the
Company is required to maintain a leverage ratio of initially no
greater than 4.75 to 1, with the maximum leverage ratio decreasing
in increments to 3.75 to 1 by December 16, 2006.
* * *
As previously reported in Troubled Company Reporter, Moody's
Investors Service downgraded the ratings on Land O'Lakes, Inc.
Outlook is stable.
Rating Action To From
Land O'Lakes, Inc.
* Senior implied rating B1 Ba2
* Senior secured rating B1 Ba2
* Senior unsecured issuer rating B2 Ba3
* $250 million Senior secured bank
facility, due 2004 B1 Ba2
* $291 million Senior secured term
loan A, due 2006 B1 Ba2
* $234 million Senior secured term
loan B, due 2008 B1 Ba2
* $350 million 8.75% Senior unsecured
guaranteed Notes, due 2011 B2 Ba3
Land O'Lakes Capital Trust I
* $191 million 7.45% Trust preferred
securities B3 Ba3
The lowered ratings reflect the company's weaker-than-expected
operating performance, giving rise to a constrained financial
flexibility and the deterioration of credit protection measures.
LAS VEGAS SANDS: Proposed Unit Sale Spurs S&P's Watch Positive
--------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings for Las
Vegas Sands Inc., including its 'B' corporate credit rating, and
ratings on its wholly owned subsidiary, Venetian Casino Resort LLC
on CreditWatch with positive implications. The Las Vegas, Nevada
based casino owner and operator has approximately $1.4 billion in
consolidated debt outstanding at Dec. 31, 2003.
The CreditWatch placement stems from the Venetian's announcement
that it had agreed to sell its existing Grand Canal Shoppes to
General Growth Properties Inc. for $766 million in cash. In
addition, General Growth has agreed to purchase the multi-level
retail space in the proposed Phase II expansion, which will sit
adjacent to the Venetian. The minimum purchase price for the Phase
II retail space will be $250 million, payable upon opening. In
addition, the price is subject to upward adjustment based on net
operating income during the first 30 months of operation (a 6%
capitalization rate on the first $38 million of net operating
income and 8% thereafter). According to the company, the agreement
could be worth as much as $1.4 billion. The net proceeds from the
transactions would be available to reduce debt, finance the Phase
II and Macao expansions, and to pursue any other growth
opportunities that may arise. The sale is subject to standard
closing conditions and is expected to close on or about
May 17, 2004.
"Standard & Poor's believes the proposed transaction, in addition
to the solid financial performance of The Venetian, significantly
enhances the company's financial flexibility by providing added
liquidity to fund its ongoing and expected capital spending
initiatives, most importantly its Phase II expansion project in
Las Vegas," said Standard & Poor's credit analyst Michael Scerbo.
In resolving its CreditWatch listing, Standard & Poor's will meet
with management and review the company's current operating trends,
near- and intermediate-term growth objectives, including the
possible scope and timing of a Phase II expansion, and pro forma
capital structure. If an upgrade for the company were the ultimate
outcome of Standard & Poor's analysis, it would be limited to one
notch.
LLK TRANSPORT INC: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: LLK Transport, Incorporated
23906 Lime Valley Road
Mankato, MN 56001
Bankruptcy Case No.: 04-41899
Type of Business: Trucking.
Chapter 11 Petition Date: April 8, 2004
Court: District of Minnesota (Minneapolis)
Judge: Robert J. Kressel
Debtor's Counsel: William I. Kampf, Esq.
Henson & Efrpm, P.A.
220 South 6th Street, Suite 1800
Minneapolis, MN 55402
Tel: 612-339-2500
Total Assets: $2,468,474
Total Debts: $2,654,574
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Northern Star Bank Value of Collateral: $575,837
1650 Madison Avenue $25,000,000
Mankate, MN 56001 Net Unsecured:
$550,837
Speedway S/A $58,527
Kwik Trip $41,937
River Valley Truck $31,800
Holiday $23,336
MN Dept. Revenue $19,000
Transport Equipment $13,766
UMA Collection $12,443
Tire Associates $11,057
Husen, Kevin $11,000
Acuity-Spanjers Insurance $10,177
MN Truck & Tractor $8,510
MN Valley Landscape $7,778
Maschka, Riedy & Reis $6,732
Truckers Justice Center $6,712
Midwest Accounting Services $6,447
Global Payments $5,642
GSB Collection $4,490
Mankato Oil & Tire Co. $4,308
NRS & Associates $4,021
L & L RANCH PROPERTIES: Voluntary Chapter 11 Case Summary
---------------------------------------------------------
Debtor: L & L Ranch Properties, Ltd.
7773 Mulkey Lane
Justin, Texas 76247
Bankruptcy Case No.: 04-41636
Chapter 11 Petition Date: April 5, 2004
Court: Eastern District of Texas (Sherman)
Judge: Brenda T. Rhoades
Debtor's Counsel: Dean M. Fuller, Esq.
Law Office of Dean M. Fuller
5168 Village Creek Drive, Suite 100
Plano, TX 75093
Tel: 972-713-6600
Fax: 972-713-6603
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $500,000 to $1 Million
The Debtor did not file a list of its 20-largest creditors.
MASTEC INC.: S&P Lowers Corporate Credit Rating a Notch to BB-
--------------------------------------------------------------
Standard & Poor's Rating Services lowered its corporate credit
rating on MasTec Inc. to 'BB-' from 'BB', its senior secured bank
loan rating to 'BB' from 'BB+', and its subordinated debt rating
to 'B' from 'B+'. At the same time, all ratings for the Miami-
Florida-based provider of infrastructure services remain on
CreditWatch with negative implications, where they were
placed on March 17, 2004.
The downgrade follows MasTec's disclosure of preliminary results
of its operations for 2003, including a net loss of $40 million,
in part due to the breakdown of certain financial controls and
policies, leading to credit measures that are no longer reflective
of the rating.
In addition, the company reported appointment of a new CFO and
potential covenant violations, resulting in current discussions
for an amendment to its credit agreement with lenders.
Total debt (including present value of operating leases) was $226
million at Sept. 30, 2003.
"We will meet with management to gain additional insight into how
systemic MasTec's financial controls and procedure issues may be,
as well as the steps in place to restore the credibility of its
financial statements," Standard & Poor's credit analyst Heather
Henyon said. "In addition, we will assess MasTec's ability to
effectively execute an equity offering in the wake of these
announcements."
Standard & Poor's will also discuss with management its near-term
business strategy to improve operating results.
"Based on available information, we believe that, short of
deleveraging proceeds received from an equity offering, ratings
could be lowered further," Ms. Henyon said.
METRIS COS: Publishing First Quarter 2004 Results on April 19
-------------------------------------------------------------
Metris Companies Inc. (NYSE:MXT) will announce its first quarter
2004 earnings on Monday, April 19 before the market opens.
Management will host a live conference call on April 19 at 10:00
a.m. Eastern Time. The press and public are invited to listen to a
live webcast of the call by registering at
http://www.metriscompanies.com/
Click on the Investor Relations icon to participate. A replay of
the webcast will be available from April 19 at 1:00 p.m. Eastern
Time through April 26 at midnight.
Metris Companies Inc., based in Minnetonka, Minn., is one of the
largest bankcard issuers in the United States. The company issues
credit cards through Direct Merchants Credit Card Bank, N.A., a
wholly owned subsidiary headquartered in Phoenix, Ariz. For more
information, visit http://www.metriscompanies.com/or
http://www.directmerchantsbank.com/
* * *
As reported in the Troubled Company Reporter's November 21, 2003,
edition, Fitch Ratings placed Metris Companies Inc. 'CCC' senior
unsecured rating on Rating Watch Negative following the company's
announcement that its external auditor, KPMG LLP, has issued a
letter to the Audit Committee citing material weakness surrounding
internal controls around the valuation of the company's retained
interest in securitized assets. As a result, Metris has delayed
the filing of its quarterly 10-Q report to the Securities and
Exchange Commission. Fitch's Rating Watch reflects the uncertainty
around this recently identified issue, and the ultimate impact on
Metris' financial condition and liquidity. Fitch will settle the
Rating Watch after evaluating the financial impact, if any, once
the issue is resolved between KPMG and Metris.
METRIS: Issues $200MM Securities Backed By Credit Card Receivables
------------------------------------------------------------------
Metris Companies Inc. (NYSE:MXT) announced that Metris
Receivables, Inc., its wholly owned subsidiary, through the Metris
Master Trust, has issued $200 million of three-year credit card
asset-backed term securities to institutional investors. The
securities were rated triple A based on a surety policy issued by
MBIA. The 2004-1 series, Metris Receivables, Inc.'s first public
offering since May 2002, was priced at a spread of 28 basis points
over one-month London Interbank Offered Rate ("LIBOR"). The
proceeds from these securities are expected to be used to repay
outstanding conduit balances in 2004-A, which are due in May 2004.
Banc of America Securities LLC and Deutsche Bank Securities, Inc.
led the transaction with Barclays Capital and Goldman Sachs & Co.
acting as co-managers.
"We are pleased with our company's re-entrance into the capital
markets with this asset-backed deal and are looking forward to
future transactions as our performance continues to improve," said
Metris Chairman and CEO David Wesselink.
Metris Companies Inc., based in Minnetonka, Minn., is one of the
largest bankcard issuers in the United States. The company issues
credit cards through Direct Merchants Credit Card Bank, N.A., a
wholly owned subsidiary headquartered in Phoenix, Ariz. For more
information, visit http://www.metriscompanies.com/or
http://www.directmerchantsbank.com/
* * *
As reported in the Troubled Company Reporter's November 21, 2003,
edition, Fitch Ratings placed Metris Companies Inc. 'CCC' senior
unsecured rating on Rating Watch Negative following the company's
announcement that its external auditor, KPMG LLP, has issued a
letter to the Audit Committee citing material weakness surrounding
internal controls around the valuation of the company's retained
interest in securitized assets. As a result, Metris has delayed
the filing of its quarterly 10-Q report to the Securities and
Exchange Commission. Fitch's Rating Watch reflects the uncertainty
around this recently identified issue, and the ultimate impact on
Metris' financial condition and liquidity. Fitch will settle the
Rating Watch after evaluating the financial impact, if any, once
the issue is resolved between KPMG and Metris.
MIRANT: Secures Go-Ahead to Expand McDermott's Retention Scope
--------------------------------------------------------------
The Mirant Corp. Debtors supplemented their request to employ
McDermott Will & Emery LLP to expand the scope of its
representation as special counsel effective as of the Petition
Date.
As part of their postpetition operations and in conjunction with
the development of their new business plan, as well as carrying
out their duties as debtors-in-possession, the Debtors have been
analyzing several of their business lines regulated by the U.S.
Federal Communications Commission, the New England ISO and
NEPOOL.
After carefully reviewing the various outside professionals
available to assist the Debtors with respect to these projects,
the Debtors selected McDermott to serve as their special counsel
on these matters. The Debtors and McDermott agreed that the
additional services will relate to:
* Effecting pro forma and other license transfers with the
FCC to reflect the bankruptcy status of the Debtors;
* Filings, notifications, waivers and other submissions with
the FCC in connection with wireless license construction,
renewal and outstanding audits;
* Performing additional tasks as necessary to secure and
verify FCC licenses held by or to perfect pending
applications on the Debtors' behalf;
* Advising the Debtors on FCC regulatory issues in connection
with third party leases or antenna sites on the Debtors'
property; and
* Advising the Debtors on local commercial market issues
before the New England ISO and NEPOOL related to market or
cost-of-service issues involving the Kendall and Canal
Plants.
McDermott has been rendering some of the Expanded Services since
November 1, 2003 and has incurred about $55,000 in fees between
November 1, 2003 and February 13, 2004.
The FCC Licenses
Ian T. Peck, Esq., at Haynes and Boone LLP, in Dallas, Texas,
explained that at the end of October 2003, it was critical for the
Debtors to employ and retain qualified counsel to prepare FCC
license transfer of control applications on an expedited basis.
The FCC licenses are essential to the Debtors' plant operations
because they permit the Debtors to operate their radio
communications system upon which their employees depend to
ensure plant safety. The legal work required was also time-
sensitive due to potential liability for fines arising out of the
alleged unauthorized transfer of control upon the commencement of
the Debtors' Chapter 11 cases. There was, and still is, an
urgency to this matter due to recent notices that some of the
licenses will be cancelled by the FCC in the next 30 days unless
the Debtors respond to inquiries by the FCC on the status of
these licenses.
During the period November 1, 2003 through January 31, 2004,
McDermott:
(1) advised Mirant concerning the steps necessary to bring
its FCC licenses to compliance;
(2) prepared FCC applications;
(3) advised Mirant concerning FCC issues with respect to the
lease of wireless antenna sites on company property; and
(4) incurred $26,017 in fees and expenses.
New England ISO Matters
The Debtors needed to seek outside advice related to the New
England ISO as they develop their business plan and strategy with
respect to their New England assets. In particular, one
important issue was whether the Debtors can enter into a contract
with a form of cost-based rate recovery in New England.
McDermott has particular experience and contacts with the New
England ISO that were deemed important to evaluate the Debtors'
strategy options and McDermott was authorized to proceed to
render the necessary legal services. Latham & Watkins was
advising on the general, FERC-regulatory matters related to this
project. Once again, there was miscommunication in the "hand
over" of the matter. The Debtors' legal department devoted some
time to coordinate and assess whether the New England ISO and
FERC matters overlapped. The Debtors determined there was some
overlap, and limited McDermott's representation in this area to
local representation with the New England ISO. The Debtors
believe that McDermott's work on this matter will not be
significant, but will be targeted to representing the Debtors
before the New England ISO as they continue to develop and pursue
their strategies.
During the period December 1, 2003, through January 31, 2004,
McDermott:
(1) advised regarding local commercial issues related to the
New England ISO and NEPOOL; and
(2) advised on market cost of service issues related to the
Kendall and Canal plants.
Thus, McDermott incurred $26,812 in fees and expenses.
Accordingly, the Debtors sought and obtained Court approval to
expand the services McDermott provided to the Debtors, nunc pro
tunc to November 1, 2003.
Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- together with its direct and indirect
subsidiaries, generate, sell and deliver electricity in North
America, the Philippines and the Caribbean. The Company filed for
chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-
46590). Thomas E. Lauria, Esq., at White & Case LLP represent the
Debtors in their restructuring efforts. When the Company filed
for protection from their creditors, they listed $20,574,000,000
in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News,
Issue No. 28; Bankruptcy Creditors' Service, Inc., 215/945-7000)
MJ RESEARCH: First Creditors' Meeting Slated for May 3, 2004
------------------------------------------------------------
The United States Trustee will convene a meeting of MJ Research,
Incorporated's creditors at 2:00 p.m., on May 3, 2004, in Room
2110 at 300 Booth Street, Reno, Nevada 89509. This is the first
meeting of creditors required under 11 U.S.C. Sec. 341(a) in all
bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Reno, Nevada, MJ Research, Incorporated
-- http://www.mjr.com/-- is a leading biotechnology company
specializing in the instrument and reagent technology needed for
modern biological research. The Company filed for chapter 11
protection on March 29, 2004 (Bankr. D. Nev. Case No. 04-50861).
Jennifer A. Smith, Esq., at Lionel Sawyer & Collins represents the
Debtor in its restructuring efforts. When the Company filed for
protection from its creditors, it listed both estimated debts and
assets of over $10 million.
NATIONSRENT INC: Wooing Court to Expunge 125 No-Liability Claims
----------------------------------------------------------------
The NationsRent Debtors ask the Court to disallow and expunge 125
proofs of claim, which the Debtors have no liability. Of the No
Liability Claims, 113 represent claims that are settled and
resolved pursuant to Court-approved settlement agreements.
Some of the No Liability Settled Claims are:
Claimant Claim No. Amount
-------- --------- ------
Amsouth Leasing, Ltd 2798-2804 $4,495,825
Dime Commercial Corporation 2926 3,837,116
Dime Commercial Corporation 2916 3,811,382
Ford Motor Credit Company 3070 50,000,000
Ford Motor Credit Company 3072-3074 33,000,000
ICX Corporation 2806-2811 7,644,038
Southern Pacific Bancapital 2411 2,810,487
Southtrust Bank, NA 2773 5,736,919
Southtrust Bank, NA 2774 4,582,331
Of the No Liability Claims, 12 represent bank loan claims that
were already settled and resolved pursuant to the terms of the
confirmed Plan. The No Liability Bank Loan Claims are Claim Nos.
2414 to 2425 filed by Fleet National Bank for $767,828,364 each.
(NationsRent Bankruptcy News, Issue No. 46; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
NCP MARKETING: Case Summary & 22 Largest Unsecured Creditors
------------------------------------------------------------
Lead Debtor: N.C.P. Marketing Group, Inc.
4735 Belpar Street
North West Canton, Ohio 44718
Bankruptcy Case No.: 04-51071
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
Tae Bo Retail Marketing, Inc. 04-51073
Type of Business: The Debtor is an infomercial producer and
global marketer of the platinum award-winning
original Billy Blanks' Tae-Bo Video Library.
Chapter 11 Petition Date: April 13, 2004
Court: District of Nevada (Reno)
Debtors' Counsel: Jennifer A. Smith, Esq.
Lionel Sawyer & Collins
50 West Liberty Street, Suite #1100
Reno, NV 89501
Tel: 775-788-8666
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $10 Million to $50 Million
A. N.C.P. Marketing Group Inc.'s 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Billy Blanks/Gayle Blanks Trade Debt $2,125,303
BG Star Productions, Inc.
14708 Ventura BLVD
Sherman Oaks, CA 44718
Century Trade Debt $952,665
1800 Century Blvd.
Midwest City, OK 73110
Salene Hertzfeld Hellbronn Legal $925,299
620 5th Ave.
New York, NY 10020-2457
Cinram Trade Debt $255,699
2255 Markham Rd.
Scarborough Ontario, CA
M1B2W3
Quinn Emanuel Urquhart Legal $106,758
Oliver
Hahn Lesser Parks Legal $87,076
Younsel & Yoss LPA Legal $82,656
Consolidated Graphics Trade Debt $83,857
National Economic Research Trade Debt $61,598
Macrovision Trade Debt $30,209
Zuckerman Spaeder Goldstein Legal $13,558
Citigate Global Intelligence Trade Debt $7,699
McDonald Hopkins Co, LPA Legal $5,752
Durand Group - DVD Marketing Trade Debt $3,623
Ellen Grauer Court Reporting Legal $3,182
Scenic Expressions Inc. Trade Debt $3,091
CCT Trade Debt $845
JT Litigation Services Legal $826
D & S Creative Communication Trade Debt $692
Inc.
Venable Attorneys at Law Legal $686
B. Tae Bo Retail Marketing Inc.'s 2 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Federal Research Corporation Trade Debt $450
Delaware Secretary of State Trade Debt $262
NORTEL: Receives Notice of OSC Investigation Due to Restatements
----------------------------------------------------------------
Nortel Networks Corporation (NYSE:NT)(TSX:NT) received a letter
dated April 12, 2004, from the Staff of the Ontario Securities
Commission advising the Company that there is an OSC Enforcement
Staff investigation into matters relating to Nortel Networks
previous restatement of its financial results and its recent
announcements in March 2004 regarding the likely need to further
revise certain previously announced results and restate previously
filed financial results for one or more earlier periods.
Nortel Networks has been fully cooperating with the OSC and will
continue to do so in order to bring the investigation to a
conclusion as promptly as possible.
Nortel Networks is an industry leader and innovator focused on
transforming how the world communicates and exchanges
information. The Company is supplying its service provider and
enterprise customers with communications technology and
infrastructure to enable value-added IP data, voice and
multimedia services spanning Wireless Networks, Wireline
Networks, Enterprise Networks, and Optical Networks. As a global
company, Nortel Networks does business in more than 150
countries. More information about Nortel Networks can be found on
the Web at http://www.nortelnetworks.com/or
http://www.nortelnetworks.com/media_center
* * *
As previously reported, Standard & Poor's Rating Services placed
its 'B' long-term corporate credit, senior secured debt, and other
ratings on telecom equipment supplier, Brampton, Ontario-based
Nortel Networks Ltd. on CreditWatch with negative implications.
"The CreditWatch placement follows the announcement by parent
Nortel Networks Corp. that it, and Nortel Networks Ltd.
(collectively Nortel Networks), will need to delay the filing of
its Form 10-K for the year-ended Dec. 31, 2003, with the U.S.
Securities and Exchange Commission," said Standard & Poor's credit
analyst Joe Morin. In addition, Nortel Networks will likely have
to revise its previously reported unaudited results for the year-
ended Dec. 31, 2003, and might have to restate previously filed
financial results.
As a result, Nortel Networks will not likely be in compliance with
the requirements under its public indentures, Export Development
Canada (EDC) support facility, and its credit facilities to
deliver their SEC filings. The inability of Nortel Networks to
meet these requirements results in near-term uncertainties.
Failure to meet SEC filings within the allowable cure periods
under the indentures or credit facilities could result in a
lowering of the ratings. Inability to obtain a temporary waiver
from EDC could result in additional uncertainties, which in turn
could result in a lowering of the ratings. Finally, the ratings
could also be lowered if Nortel Networks further revises, or
restates financials results, which result in a materially weakened
financial profile.
OPTION ONE: Fitch Rates Series 2004-2 Class M-7 Notes at BB+
------------------------------------------------------------
Fitch Ratings-New York-April 13, 2004: Fitch has rated the $987.5
million Option One Mortgage Loan Trust 2004-2 asset-backed
certificates as follows:
--$825 million classes A-1A, A-1B, A-2, A-3 and A-4 'AAA';
--$58 million class M-1 'AA';
--$47.5 million class M-2 'A+';
--$14 million class M-3 'A';
--$10 million class M-4 'A-';
--$12.5 million class M-5 'BBB+';
--$10 million class M-6 'BBB';
--$10.5 million class M-7 'BB+'.
The 'AAA' rating on the senior certificates reflects the 17.50%
total credit enhancement provided by the 5.80% class M-1, 4.75%
class M-2, 1.40% class M-3, 1% class M-4, 1.25% class M-5, 1%
class M-6, 1.05% class M-7 and initial (1.25%) and future (floor
of 0.50% of original loan balance) overcollateralization (OC). All
certificates have the benefit of monthly excess cash flow to
absorb losses. In addition, the ratings reflect the quality of the
loans, the integrity of the transaction's legal structure, as well
as the capabilities of Option One Mortgage Corp. as servicer and
Wells Fargo Bank, N. A., as trustee.
The certificates are supported by two collateral groups, one
conforming and the other nonconforming. The Group I mortgage pool
consists of first-lien adjustable-rate and fixed-rate mortgage
loans that conform to Fannie Mae and Freddie Mac loan balances and
have a cut-off date pool balance of $489,261,121. Approximately
25.31% of the mortgage loans are fixed-rate mortgage loans and
74.69% are adjustable-rate mortgage loans. Nearly 4% of the loans
are interest-only mortgages for the first 60 months. The weighted-
average current loan rate is approximately 6.797%. The weighted-
average remaining term to maturity (WAM) is 355 months. The
average principal balance of the loans equals $163,389. The
weighted-average original loan-to-value (OLTV) ratio is 78.04%.
The properties are primarily located in California (21.09%), New
York (18.84%) and Massachusetts (10.70%).
The Group II mortgage pool consists of first-lien adjustable-rate
and first- and second-lien fixed-rate, conforming and
nonconforming mortgage loans with a cut-off date pool balance of
$262,596,269. Approximately 24.73% of the mortgage loans are
fixed-rate mortgage loans and 75.27% are adjustable-rate mortgage
loans. Approximately 9.5% of the loans are interest-only mortgages
for the first 60 months. The weighted-average current loan rate is
approximately 6.797%. The WAM is 355 months. The average principal
balance of the loans equals $212,357. The weighted-average OLTV is
77.87%. The properties are primarily located in California
(25.60%), New York (19.16%) and Massachusetts (12.31%).
The trust will have the benefit of a mortgage insurance policy
provided by PMI Mortgage Insurance Co. to cover certain first-lien
mortgages with OLTVs in excess of 80%. Approximately 29.24% and
21.30%, respectively, of the Group I and Group II mortgage loans
with OLTVs greater than 80% will be covered by the PMI policy.
For federal income tax purposes, multiple real estate mortgage
investment conduit (REMIC) elections will be made with respect to
the trust estate.
Option One was incorporated in 1992, and began originating and
servicing subprime loans in February 1993. Option One is a
subsidiary of Block Financial, which is in turn a subsidiary of
H&R Block, Inc.
ORION TELECOMMS: US Trustee Fixes May 5 for Sec. 341(a) Meeting
---------------------------------------------------------------
The United States Trustee will convene a meeting of Orion
Telecommunications Corp.'s creditors at 2:30 p.m., on May 5, 2004,
in the Office of the United States Trustee, 80 Broad Street,
Second Floor, New York, New York 10004-1408. This is the first
meeting of creditors required under 11 U.S.C. Sec. 341(a) in all
bankruptcy cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in New York, New York, Orion Telecommunications
Corp. -- http://www.oriontelecommunications.com/-- is a market-
leading manufacturer and distributor of telecommunication
services. The company filed for chapter 11 protection on April 1,
2004 (Bankr. S.D.N.Y. Case No. 04-12203).
Frank A. Oswald, Esq., at Togut, Segal & Segal LLP represents the
Debtor in its restructuring efforts. When the Company filed for
protection from its creditors, it listed $16,347,957 in total
assets and $97,588,754 in total debts.
OWENS CORNING: Paying $1.4 Million Kansas Prepetition Taxes
-----------------------------------------------------------
These Kansas Governmental Entities established a commercial and
industrial real and personal property tax abatement program to
encourage development in Wyandotte County and to maintain and
enhance the commercial, industrial, economic, and employment base
of the County:
* Kansas City, Kansas, and
* the Unified Government of Wyandotte County, Kansas, a
unified city and county governmental entity that governs
matters in Kansas City, Bonner Springs and Edwardsville,
Kansas.
Owens Corning owns a manufacturing facility in Kansas City, which
facility contains three operating production lines and one
manufacturing machine and production line that has been idle
since 1999. Due to the timing of its bankruptcy filing, Owens
Corning is delinquent on certain prepetition real estate and
personal property taxes owed to the Government Entities.
Owens Corning considered resuming production at its idled
manufacturing and production line at its Kansas City facility. In
this regard, Owens Corning engaged in discussions with the
Government Entities regarding its potential participation in the
Tax Abatement Program.
The Government Entities informed Owens Corning that they are
ready to assist Owens Corning in obtaining the benefits of the
Tax Abatement Program, which will abate up to 100% of Owens
Corning's personal property taxes for 10 years. The parties
believe that the tax abatements will amount to a $577,942 savings
over the life of the program.
However, the Government Entities informed Owens Corning that
they will not permit Owens Corning to participate in the Tax
Abatement Program unless it pays the delinquent taxes owed to the
Government Entities. The taxes are "priority taxes" pursuant to
Section 507(a)(8) of the Bankruptcy Code.
The Debtors determined that it is in their best interest and of
their creditors that Owens Corning becomes current on its real
estate and personal property tax obligations to the Government
Entities so that it can be eligible to participate in the Tax
Abatement Program.
Accordingly, the Debtors sought and obtained Court authority to
pay the prepetition real estate and personal property taxes to the
Government Entities for the year 2000. The amount of the taxes
to be paid is $271,926 on account of real estate taxes and
$1,194,339 on account of personal property taxes, for a total of
$1,466,265.
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)
PACIFIC GAS: Closes $6.7BB First Mortgage Bond Public Offering
--------------------------------------------------------------
On March 23, 2004, Pacific Gas and Electric Company closed its
public offering of $6.7 billion in first mortgage bonds. The
$6.7 billion in first mortgage bonds consisted of:
* $600 million of 3.60% First Mortgage Bonds due 2009,
* $500 million of 4.20% First Mortgage Bonds due 2011,
* $1 billion of 4.80% First Mortgage Bonds due 2014,
* $3 billion of 6.05% First Mortgage Bonds due 2034, and
* $1.6 billion of Floating Rate First Mortgage Bonds due 2006.
According to Linda Y.H. Cheng, Corporate Secretary of PG&E,
proceeds of the offering, subject to the satisfaction of certain
conditions to implementing PG&E's confirmed plan of
reorganization, will be used to pay allowed creditor claims
pursuant to the plan.
On March 23, 2004, PG&E filed with the Securities and Exchange
Commission:
(a) the Underwriting Agreement, dated March 18, 2004, between
Pacific Gas and Electric Company and Lehman Brothers Inc.
and UBS Securities LLC;
(b) the Indenture of Mortgage, dated as of March 11, 2004,
between Pacific Gas and Electric Company and BNY Western
Trust Company;
(c) the First Supplemental Indenture, dated as of March 23,
2004, between Pacific Gas and Electric Company and BNY
Western Trust Company;
(d) the Escrow Deposit and Disbursement Agreement, dated as of
March 23, 2004, among Pacific Gas and Electric Company and
BNY Western Trust Company as escrow agent and trustee;
(e) the Calculation Agency Agreement, dated as of March 23,
2004, between Pacific Gas and Electric Company and BNY
Western Trust Company; and
(f) two opinions of Orrick, Herrington & Sutcliffe LLP, dated
March 23, 2004.
A full-text copy of the Underwriting Agreement is available for
free at:
http://www.sec.gov/Archives/edgar/data/75488/000095014904000670/f97400exv1w1
.txt
Headquartered in San Francisco, California, Pacific Gas and
Electric Company -- http://www.pge.com/-- a wholly-owned
subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest
combination natural gas and electric utilities in the United
States. The Company filed for Chapter 11 protection on April 6,
2001 (Bankr. N.D. Calif. Case No. 01-30923). James L. Lopes,
Esq., William J. Lafferty, Esq., and Jeffrey L. Schaffer, Esq., at
Howard, Rice, Nemerovski, Canady, Falk & Rabkin represent the
Debtors in their restructuring efforts. On June 30, 2001, the
Company listed $23,216,000,000 in assets and $22,152,000,000 in
debts. (Pacific Gas Bankruptcy News, Issue No. 74; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
PARMALAT GROUP: US Debtors Sign-Up AlixPartners as Fin'l Advisor
----------------------------------------------------------------
The U.S. Parmalat Debtors sought Court approval to employ
AlixPartners, LLC as financial advisors.
Since January 19, 2004, AlixPartners and one of its affiliates
have assisted the U.S. Debtors in their restructuring process.
AlixPartners provided those services from the date of its
engagement up to immediately before the Petition Date. Among
other things, the Debtors employed AlixPartners to:
(i) identify and implement liquidity generating
initiatives;
(ii) develop cash management strategies; and
(iii) assist Parmalat USA Corporation in obtaining new
financing.
Going forward, AlixPartners will:
-- assist in negotiations with the Debtors' stakeholders and
their representatives;
-- assist in negotiations with potential acquirers of the
Debtors' assets;
-- assist the Debtors' management in the reorganization
process and implementation of overall restructuring goals;
-- assist in managing the "working group" professionals who
are and will be assisting the Debtors' in the
reorganization process or who are working for the Debtors'
various stakeholders to improve coordination of their
effort and individual work product to be consistent with
the Debtors' overall restructuring goals;
-- work with the Debtors and their representatives to further
identify and implement both short-term as well as long-term
liquidity generating initiatives;
-- assist in developing and implementing cash management
strategies, tactics and processes and work with the
Debtors' treasury department and other professionals and
coordinate the activities of the representatives of other
constituencies in the cash management process;
-- assist the Debtors' management with the development of the
Debtors' revised business plan, and other related forecasts
as may be required by the bank lenders in connection with
negotiations or by the Debtors for other corporate
purposes;
-- assist in communication or negotiation with outside
constituents including the banks and its advisors;
-- assist with the preparation of the statement of affairs,
schedules and other regular reports required by the
Bankruptcy Court as well as provide assistance in such
areas as testimony before the Bankruptcy Court on matters
that are within its areas of expertise;
-- assist with financing issues either prior to or during the
bankruptcy proceeding and in conjunction with the plan of
reorganization;
-- assist in preparing for and filing a bankruptcy petition,
coordinate and provide administrative support for the
proceeding and develop the Debtors' reorganization plan or
other appropriate case resolution, if necessary; and
-- manage the claim and claim reconciliation processes.
The U.S. Debtors will compensate AlixPartners for its services in
accordance with the firm's customary hourly rates plus
reimbursement of actual, necessary expenses. AlixPartners'
hourly rates are:
Principals $540 - 690
Senior Associates 430 - 520
Associates 300 - 400
Accountants & Consultants 225 - 280
Analysts 150 - 190
The professionals that will primarily be responsible for the
engagement and their hourly rates are:
Name Description Rate Commitment
---- ----------- ---- ----------
James A. Mesterharm Lead Financial $590 Full Time
Restructuring
Advisor
Peter Fitzsimmons Senior 630 As Needed
Restructuring
Advisor
John Dischner Cash & 450 Full Time
Restructuring
Advisor
Chris Blacker Due Diligence & 390 Full Time
Restructuring
Support Advisor
The U.S. Debtors have paid to AlixPartners a $300,000 retainer,
which will be applied to AlixPartners' final bill.
The U.S. Debtors will also compensate AlixPartners for its
efforts through a contingent success fee. The Success Fee will
be calculated and paid based on the development and
implementation of a plan to maximize the "Parmalat Dairy Value
Recovery" received by the various stakeholders of the Company.
The "Parmalat Dairy Value Recovery" is deemed to include any
distribution of value by the Company, its subsidiaries or
affiliates, including but not limited to cash, securities, stock
appreciation rights, plant & equipment assets, working capital
assets, and deferred earn-outs, and the value of reorganized
stock or reorganized debt securities issued to the stakeholders
of the Company, net of the costs of recovery.
Success Fee Element Success Fee Earned
------------------- ------------------
Implementation and the closing
of a value recovery plan including
the sale of a majority of the
assets of Parmalat USA and $1,000,000
affiliates, in which AlixPartners
assists in the negotiations with
all relevant stakeholders.
Distribution to stakeholders of 1% of the
more than $135,000,000 from excess
Parmalat Dairy Value Recovery
The Success Fee is an integral part of AlixPartners' compensation
for the engagement. The payment of the Success Fee will occur
when the value has been exchanged and proceeds from a buyer or
buyers of the Debtors' business are distributed to creditors or
deposited in a segregated bank account.
Mr. Mesterharm, a principal at AlixPartners, discloses that in
connection with an agreement dated January 20, 2004, Parmalat SpA
retained AlixPartners Srl, an affiliate of AlixPartners, to
assist with a variety of restructuring activities including work
on the U.S. Debtors. In addition, Comerica Bank, a lender to the
U.S. Debtors, is a limited partner in Questor Partners Fund, LP
and Questor Partners Fund II, LP. Jay Alix, a principal at
AlixPartners, is the President and CEO of Questor Management
Company, LLC, the entity that manages QPF and QPF II.
Nevertheless, Mr. Mesterharm attests that AlixPartners does not
hold any adverse interest in the Debtors and their estates.
* * *
Judge Drain approves the application, except with respect to
AlixPartners' Contingent Success Fee, on a final basis. The Court
adjourns the hearing on the Contingent Success Fee sine die --
until the conditions for earning the Contingent Success Fee are
satisfied.
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)
RELIANT RESOURCES: Will Webcast Q1 Conference Call on May 5
-----------------------------------------------------------
In conjunction with Reliant Resources, Inc. (NYSE: RRI) First
Quarter 2004 Earnings Release, you are invited to listen to its
conference call that will be broadcast live over the Internet on
Wednesday, May 5, 2004 at 11:00 a.m. Eastern.
What: Reliant Resources First Quarter 2004 Earnings
Conference Call
When: Wednesday, May 5, 2004 at 11:00 a.m. Eastern.
Where: http://www.firstcallevents.com/service/ajwz404275916gf12.html
How: Live over the Internet -- Simply log on to the web
at the address above.
Contact: Stephanie Slavin 713-497-6983
If you are unable to participate during the live webcast, the call
will be archived at http://www.reliantresources.com/
To access the replay, click on Investor Relations.
Reliant Resources, Inc., based in Houston, Texas, provides
electricity and energy services to retail and wholesale customers
in the U.S., marketing those services under the Reliant Energy
brand name. The company provides a complete suite of energy
products and services to more than 1.8 million electricity
customers in Texas, ranging from residences and small businesses
to large commercial, industrial and institutional customers.
Reliant also serves large commercial and industrial clients in the
PJM (Pennsylvania, New Jersey, Maryland) Interconnection. The
company has approximately 20,000 megawatts of power generation
capacity in operation, under construction or under contract in the
U.S. For more information, go to http://www.reliantresources.com/
* * *
As reported in Troubled Company Reporter's January 5, 2004,
edition, Fitch Ratings anticipated no immediate change in Reliant
Resources, Inc.'s credit ratings or Rating Outlook based on the
announcement that RRI has prepaid a portion of its outstanding
debt, terminated a $300 million senior priority credit facility,
and reached an agreement with its bank group to allow the
potential acquisition of select generating assets in Texas.
RRI's ratings are as follows:
-- Senior secured debt 'B+';
-- Senior unsecured debt 'B';
-- Convertible senior subordinated notes 'B-';
-- Rating Outlook Stable.
ROBERT H MASON: Case Summary & 9 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Robert H. Mason, Inc.
14201 Excelsior Boulevard
Minnetonka, MN 55345
Bankruptcy Case No.: 04-32177
Type of Business: The Debtor is a Home Builder.
Chapter 11 Petition Date: April 8, 2004
Court: District of Minnesota (St. Paul)
Judge: Gregory F. Kishel
Debtor's Counsel: William I. Kampf, Esq.
Henson & Efron, P.A.
220 South 6th Street, Suite 1800
Minneapolis, MN 55402
Tel: 612-339-2500
Total Assets: $2,126,800
Total Debts: $1,773,220
Debtor's 9 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Johnson, Tony & Carolyn Subject to avoidance $1,200,000
c/o David B. Sand Value of Collateral:
2200 IDS Center $1,225,000
Minneapolis, MN 55402 Net Unsecured:
$66,343
Prior Liens Exist
Lenarz, Richard $200,000
Bachman, Alan $150,000
Hennepin County Value of Collateral: $5,291
$1,225,000
Net Unsecured: $5,291
Prior Liens Exist
RJF Agencies, Inc. $3,332
Xcel Energy $445
Centerpoint Energy $182
City of Minnetonka $165
Fleet Management $144
SAFETY-KLEEN: Wants Court to Nix 114 Duplicate & Amended Claims
---------------------------------------------------------------
The Safety-Kleen Debtors ask the Court to disallow and expunge 34
Duplicate Claims and 80 Amended and Superseded Claims.
The Debtors and the Trustee expressly reserve their rights to
object to the surviving claim on any and all grounds whatsoever.
The Duplicate Claims include:
Claimant Claim Amount
-------- ------------
Arapahoe County Treasurer, Colorado $1,645.06
Ark. Dept. of Finance and Administration 2,401.49
Commonwealth of Kentucky 172,335.20
Hale County, Texas .05
Harris County/City of Houston, Texas 16,383.77
Internal Revenue Service 169,678.84
Internal Revenue Service 21,466,157.21
City of Kansas City, Missouri 14,152.28
City of Kansas City, Missouri 27,102.85
Leon County, Florida 5,512.97
Luzerne County Tax Claim Bureau, Wilkes Barre, PA 16,461.33
Macon-Bibb County Tax Commissioner, Georgia 6,606.40
Mississippi State Tax Commission 4,033.55
New Mexico Department of Labor 433.54
Pennsylvania Department of Revenue 24,038.00
Register of Deeds, Lacrosse County, Wisconsin 19,454.70
State of Minnesota Dept. of Revenue 67,683.55
Ward County, Monahans, Texas 20.58
Whitfield County Tax Commissioner 555.00
Among the Amended and Superseded Claims are:
Claimant Claim Amount
-------- ------------
State of Arizona $1,277.61
Bradford County Tax Claim Bureau 5,122.85
Clay County, Florida 6,803.00
Internal Revenue Service 6,829.76
Internal Revenue Service 25,879,114.93
Internal Revenue Service 93,474.46
Internal Revenue Service 112,268.42
Internal Revenue Service 25,154,586.88
Internal Revenue Service 25,879,114.93
Internal Revenue Service 25,127,487.89
Internal Revenue Service 21,466,157.21
Internal Revenue Service 199,317.10
Internal Revenue Service 189,678.84
Internal Revenue Service 21,084.26
City of Harrisburg, Pennsylvania 1,445.10
City of Kansas City, Missouri 14,436.54
Los Angeles County Treasurer 34,368.96
Louisiana Department of Revenue 151,674.38
Louisiana Department of Revenue 132,019.00
Miami County Auditor, Ohio 6,868.93
State of Minnesota 67,683.55
Missouri Department of Revenue 105,579.98
New York State Department of Taxation & Finance 18,843.80
New York State Department of Taxation & Finance 22,733.33
New York State Department of Taxation & Finance 79,033.71
City of Newark, Ohio 2,596.86
Sacramento County Tax Collector, California 31,996.99
Sonoma County Tax Collector, California 10,424.26
State of Louisiana 10,284.29
State of Minnesota 67,683.55
Wake County Revenue Department, North Carolina 6,767.83
Wisconsin Department of Revenue 12,800.00
(Safety-Kleen Bankruptcy News, Issue No. 76; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
SASKATCHEWAN WHEAT: Three Hog Units Seek Temporary CCAA Protection
------------------------------------------------------------------
Heartland Pork Management Services, together with three wholly
owned hog operations, advised the Saskatchewan Wheat Pool that
they are applying for temporary protection under the Companies'
Creditors Arrangement Act (CCAA).
The Pool announced several weeks ago that it was planning to exit
the hog industry and was pursuing divestiture options. Pool CFO
Wayne Cheeseman said that while divestiture efforts were ongoing,
suppliers to the hog operations began shortening their payment
terms, and recently, a major creditor for two of the
community-owned hog operations called its loans.
As a result of these changing circumstances and in order to
protect its own interest, the Pool, which also provides funds to
the operations, took similar steps, issuing demand letters
on April 12 to the eight hog operations in which it has an
interest.
Heartland Pork Management Services, an independent operating
company with its own management team, along with the Boards of
Directors of Elm Springs Multipliers, East Diefenbaker Pork
Producers and Carlton Trail Pork took the court action to protect
the companies' assets and remain in control of the operations
while a suitable solution is developed to address the financial
challenges facing the operations. The Boards of the four
community-owned operations (Bear Hills Pork Producers, Carrot
River Pork Producers, Horizon Pork Producers and Manitou Hog
Enterprises) have also advised the Pool that they will be seeking
to join the CCAA application.
"We believe our efforts will support the opportunity for a
positive resolution for the hog barns in these communities,"
Cheeseman said. "From the Pool's perspective, the company was
simply unwilling to continue to accept the continued losses or to
jeopardize its security interests in the face of possible
proceedings that may have been initiated by others."
Cheeseman said the Pool will co-operate fully with the monitor,
KPMG, Inc., including supplying them with information gathered
during the divestiture process. He noted the Pool is also
applying to the court to support the hog operations with interim
funding (Debtor-In-Possession, or DIP, financing) to allow them
to continue to operate through the CCAA process.
While protected by a CCAA Order, the companies continue to
operate their businesses as usual and develop a plan for
financial recovery. Creditors are prevented from taking assets or
substantially changing the terms of contracts. An Order is
expected to be granted later this morning and will initially stay
in place for 30 days. There is an opportunity to extend this
term, if necessary, at the Court's discretion.
"[Tues]day's decision is no reflection on the Pool's financial
health," Cheeseman said. "The hog operations have not contributed
to the company's earnings over the past several years, and in
fact have been a draw on our resources because of continued
losses. This is an ancillary, non-core business to the Pool."
The Pool recorded a non-cash impairment charge in its second
quarter related to its investment in the hog industry. Management
does not believe that an additional charge is required as a
result of this action.
SMZ INC: Case Summary & 2 Largest Unsecured Creditors
-----------------------------------------------------
Debtor: SMZ, Inc.
dba Highland Food Store
2400 East University Drive
Denton, Texas 76209-7828
Bankruptcy Case No.: 04-41651
Type of Business: The Debtor operates a Grocery Store.
Chapter 11 Petition Date: April 5, 2004
Court: Eastern District of Texas (Sherman)
Judge: Brenda T. Rhoades
Debtor's Counsel: William L. Perlman, Esq.
Perlman & Robison
3626 North Hall Street, Suite 610
Dallas, TX 75219
Tel: 214-520-2200
Total Assets: $308,300
Total Debts: $1,028,122
Debtor's 2 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Northwest National Bank Note/Deed of Trust $1,019,599
610 W. Randol Mill Rd. Value of Collateral:
Arlington, TX 76011 $275,000
Pacific Fuel Miscellaneous $14,000
401-2 Bedford Euless Road Business Debt
Hurst, TX 76053
SOLUTIA INC: Inks Deal Settling HT Troplast Patent Dispute
----------------------------------------------------------
On October 15, 1999, Solutia Europe SA, a non-debtor affiliate of
Solutia, Inc., commenced patent infringement proceedings against
HT Troplast AG in the Dusseldorf District Court of the Federal
Republic of Germany. The action is based on HT's infringement of
Solutia's European patent -- EP 0 544 717 B1 -- for which Solutia
Europe is the licensee. HT subsequently revoked the action,
which operated as a stay of the Infringement Action. On
April 5, 2001, the German Federal Patent Court declared the
revocation of the Patent effective in Germany. Solutia Europe's
appeal on the judgment is presently pending.
To resolve the Patent Litigation, Solutia and HT entered into a
Settlement and Patent License Agreement dated January 29, 2004.
Pursuant to the Settlement Agreement, HT agreed to withdraw the
Revocation Action and Solutia Europe agreed to withdraw the
Infringement Action. The Settlement Agreement also provides that
the Debtors, Solutia Europe and HT all exchange mutual claims
releases against each other related to the Patent Litigation.
Accordingly, the Debtors ask the Court to approve the Settlement
Agreement.
To address the HT-related infringement issues, the Debtors agreed
to grant HT a non-exclusive, royalty-bearing license to use the
Patent. Pursuant to the license, HT agreed to pay the Debtors
royalties of 3% of the net sales of products it sold under the
Patent and counterpart patents within other territories, and 10%
of sales for exports outside of the territories. HT also agreed
to pay the Debtors royalties on past sales it had recorded
between January 1, 1999 and December 31, 2001. Past Royalty
Payments would be 1.5% of HT's past net sales of products related
to the Patent, if the sales were made in accordance with patent
terms, and 5% of net sales if products were not sold according to
terms.
M. Natasha Labovitz, Esq., at Gibson, Dunn & Crutcher LLP, in New
York, contends that the Settlement Agreement would fully resolve
the Patent Litigation, without the uncertainty, time and
additional expense that would be involved if the Debtors
litigated their claims against HT. Ms. Labovitz adds that the
Settlement Agreement would also enable the Debtors to generate
revenue on account of HT's past and future use of the Patent.
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. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SPECIALTY FOODS: Releasing December Quarter Results on April 20
---------------------------------------------------------------
Specialty Foods Group Income Fund (TSX: HAM.UN) will release
financial results for the quarter ended December 27, 2003, and the
288 day period from March 14, 2003 to December 27, 2003 on
Tuesday, April 20, 2004 after the close of the market.
In addition, Management will hold a conference call on Wednesday,
April 21, 2004, at 9:00 AM EDT to review the results of the
quarter and other issues of interest to unitholders. The call-in
numbers are 416-405-9328 or 800-387-6216. A replay of the call
will be available from approximately one hour after the end of the
conference call through May 5, 2004 by dialing 416-695-5800 or
800-408-3053 and using the access code 3034961 followed by the
number sign.
Also, the fund announced that the Annual Meeting of Unitholders
will be held on June 17, 2004, at 10:00 AM at the Toronto Metro
Convention Centre, Room 205B, 255 Front Street, Toronto, Ontario.
Further, the 2003 annual report is scheduled to be released on or
about May 6, 2004, and will be mailed along with the accompanying
financial and proxy information on or about May 25, 2004.
Specialty Foods Group Income Fund is an open-ended, limited
purpose trust established under the laws of the Province of
Ontario, which indirectly holds an interest of approximately 56%
in Specialty Foods Group, Inc. SFG is a leading independent U.S.
producer and marketer of premium branded and private-label
processed meat products. SFG produces a wide variety of products
such as franks, hams, bacon, luncheon meats, dry sausage and
delicatessen meats. These products are sold to a diverse customer
base in the retail (e.g., supermarkets) and foodservice (e.g.,
restaurants) sectors. SFG sells products under a number of leading
national and regional brands, such as Nathan's, Swift Premium,
Field, Fischer's, Mosey's, Liguria, Alpine Lace and Scott Petersen
as well as on a private-label basis.
* * *
In its latest third-quarter report to unitholders, the company
disclosed that:
"As of September 27, 2003, the Company had available borrowing
capacity of $3.6 million under its revolving credit facility. The
Company would have been in default with certain loan covenants had
its lenders not granted waivers. Discussions with lenders are
currently underway to modify certain of the covenant levels and
calculations in order to correct certain measurement criteria and
to provide the Company with additional room under the covenants to
reflect its current actual and projected level of financial
performance. While there can be no definitive assurance that such
modifications will be made, management believes that its lenders
are currently comfortable with the proposed changes and expects
the modifications to be made before the end of the fourth
quarter."
STELCO INC: Steelworkers' Local 8782 Set to Begin Negotiations
--------------------------------------------------------------
The negotiating committee of the United Steelworkers' Local 8782,
representing about 1,000 workers at Stelco Inc.'s Lake Erie Works,
announced its intent to bargain under the Ontario Labour Relations
Act.
The Steelworkers' contract with Stelco Lake Erie expires on
July 31 and, according to Section 19 of the Basic Agreement, the
local is delivering its letter of intent to bargain 110 days
before the expiry date.
The local union understands the special circumstances that Stelco
is in and, although there is a fundamental disagreement with the
company's approach, the union believes it is in everyone's best
interest to deal with it in bargaining. The contract has been
flexible so that issues such as restructuring can be and should be
addressed at the bargaining table.
The mandate given by the membership and all Stelco employees and
pensioners is to protect the hard-earned gains that have been made
over the years. The letter of intent was delivered to senior
Stelco management at a meeting on Tuesday afternoon, April 13.
STOCKERYALE INC: Posts Increased Revenues for First Quarter 2004
----------------------------------------------------------------
StockerYale, Inc., (NASDAQ: STKR), a leading independent provider
of photonics-based products announced its financial results for
the first quarter ended March 31, 2004.
Revenues for the first quarter 2004 totaled $4.2 million, a 31%
increase over the $3.2 million reported in the fourth quarter of
2003 and up 16% compared to the $3.6 million reported in the first
quarter 2003. Revenue growth was driven by higher laser and LED
shipments, as well as an increase in machine vision system sales
from Southeast Asia. The operating loss for the quarter was $1.5
million, compared with an operating loss of $2.7 million,
excluding asset impairment charges, in the fourth quarter 2003 and
a $2.0 million loss in the first quarter a year ago.
First quarter order bookings increased 40% to $4.9 million from
$3.5 million the previous quarter reflecting improving market
conditions across all product lines, as well as positive customer
reception to new products launched in the second half of 2003. Due
to higher sales, improved product mix and lower manufacturing
overhead, the Company reported a gross profit of $1.2 million, or
30% of revenues, during the first quarter of 2004, up from a gross
profit of $0.3 million, or 8% of revenues, in the previous quarter
and $0.9 million, or 26% of revenues in the first quarter of 2003.
Operating expenses declined 10% sequentially and comparatively as
the Company continued to aggressively manage costs. R&D spending
represented 20% of revenues in the first quarter 2004 compared to
31% last quarter and 25% for the first quarter 2003.
"The first quarter represented a record in terms of revenues and
order bookings for StockerYale, as the Company generated new
product momentum from substantial technology investments over the
last two years, as well as the improving global market
conditions," said Mark W. Blodgett, chief executive officer. "The
dramatic restructuring of operations to reduce costs, a refocused
product development effort, and a more diversified sales strategy
that created new sales channels for our products has positioned
the Company for continued financial improvement in 2004," Blodgett
added.
During the quarter the Company took additional steps to further
reduce operating costs and improve balance sheet quality and
liquidity. In February the Company completed a $6.6 million
equity/convertible note offering. Proceeds were used to pay off a
high amortization mortgage on its Salem, New Hampshire facility
and for working capital purposes. As a result of prepaying the
mortgage, the Company incurred a non-cash charge of $266,000. The
Company expects to further reduce indebtedness and interest costs
over the next several quarters. The Company's new COO, Ricardo
Diaz, continues to streamline manufacturing and increase product
development efficiency.
The Company also reports that it is consolidating its laser,
fluorescent and fiber optic illumination production into its
Montreal R&D and manufacturing facility. In addition to increasing
overall productivity, the Company expects to generate an
additional $1 million in annualized savings and improve working
capital efficiency when completed this quarter. Lastly, the
Company has hired Vitale, Caturano & Co. as its new auditors.
Vitale, Caturano is New England's largest regional accounting firm
and will provide the Company with improved customer service at a
lower overall cost.
Outlook
"The first quarter represents a turning point for StockerYale as
we exceeded our internal financial and operational objectives for
the quarter," said Blodgett. "While we are pleased with the
rebound in our traditional machine vision and assembly inspection
markets, we are aggressively implementing a new product
development strategy to increase long-term sales growth in new
markets. Currently we are introducing lasers for both defense and
bio-medical applications, and expect to announce an important new
customer win in this market shortly. Finally, there are signs that
demand for telecom components is stabilizing and our line of
specialty fibers and diffractive optics are well positioned to
benefit from any market improvement. Given stronger order bookings
over the last two quarters, new product momentum, improving gross
margins and further cost savings we are confident that the Company
will continue to exhibit a marked improvement in its overall
performance."
About StockerYale
StockerYale, Inc., headquartered in Salem, NH, is an independent
designer and manufacturer of structured light lasers, light
emitting diodes, (LEDs), fiber optic, and fluorescent illumination
technologies as well as specialty optical fiber and phase masks
for use in a wide range of markets and industries including the
machine vision, telecommunications, aerospace, defense and
security, utilities, industrial inspection, and medical markets.
StockerYale serves a widely varied, international customer base
and reinvests a significant percentage of its revenues in R&D to
meet the future requirements of its customers. StockerYale has
offices and subsidiaries in the U.S., Canada, Europe, and the
Pacific Rim.
* * *
As reported in the Troubled Company Reporter's April 8, 2004
edition, the Company filed its fiscal 2003 Form 10K with
the SEC on March 30, 2004. The Form 10K contained a going concern
qualification from its auditors relating to the Company's fiscal
2003 consolidated financial statements. This qualification is
similar to the statement issued in fiscal 2002 and the Company
will continue to rely on external financing to fund ongoing cash
flow requirements. As previously reported, the Company raised $6.6
million in February 2004. The proceeds were used to pay off the
mortgage on its Salem headquarters and for working capital
purposes. The Company will continue to take the necessary steps to
strengthen its balance sheet and raise growth capital, including
the possible sale of under-utilized assets.
TAUBMAN REALTY: Fitch Assigns Non-Investment Grade Issuer Rating
----------------------------------------------------------------
Fitch Ratings assigns a 'BB' issuer rating to Taubman Realty
Group, the operating partnership of Taubman Centers, Inc. and
downgrades Taubman Centers, Inc.'s $200 million of outstanding
preferred stock to 'BB-' from 'BB'. Additionally, Fitch has
removed Taubman's ratings from Rating Watch Negative. The Rating
Outlook is stable.
The downgrade reflects continued pressure on cash flow coverage
measures which declined as a result of borrowings related to
Taubman's development pipeline. Despite the stabilization of
several of these development assets, the earnings contribution
from the recently completed projects is insufficient to return the
risk profile of the preferred stock to previous ratings levels.
Proforma for recent financing transactions and the contributions
from recently completed assets, the ratio of recurring earnings
before interest taxes depreciation and amortization (EBITDA) less
capital expenditures to interest, capitalized interest, preferred
dividends, and principal amortization is 1.6 times, more
consistent with the 'BB' issuer rating and the 'BB-' preferred
stock rating.
Further when leverage is adjusted to reflect the pro rata
consolidation of off-balance sheet investment activity, leverage
on a debt plus preferred stock to undepreciated book basis is
79.7%, also consistent with the risk profile of a BB rated issuer.
Fitch acknowledges the high quality and defensible nature of many
of Taubman's assets that support the preferred stock rating. The
productivity of the Taubman malls is among the highest in the
industry. Additionally, Taubman has made important recent strides
in reducing its exposure to floating-rate debt by terming out
construction borrowings in the long-term, fixed rate mortgage
market.
The Rating Outlook is Stable reflecting the limited funding needs
of Taubman's substantially reduced development pipeline and the
relatively stable retail sales environment. Taubman's debt
maturity schedule is manageable reflecting substantial recent
refinancing.
Taubman Centers, Inc. (NYSE:TCO) is a $2.2 billion real estate
investment trust (REIT) engaged in the development, acquisition,
ownership and management of regional malls located in nine states.
As of Dec. 31, 2003, TCO owned or, controlled 21 malls through its
61% ownership interest in Taubman Realty Group, its operating
partnership. Nine of the company's regional mall assets are wholly
owned and twelve of the properties are owned in joint ventures.
TELCOVE: Completes Installation of New Board of Directors
---------------------------------------------------------
TelCove, a leading provider of business critical
telecommunications services to enterprise companies and carriers,
announced that it has completed its transition to a new Board of
Directors in the wake of its recent emergence from Chapter 11.
With extensive expertise in executive management, finance,
corporate governance, and telecommunications, TelCove's Board of
Directors is comprised of the following individuals:
* Mr. Kurt Cellar - Chartered Financial Analyst, Portfolio
Manager - Bay Harbour Management, L.C.
* Mr. Douglas Teitelbaum - Managing Principal - Bay Harbour
Management, L.C.
* Mr. Steven Van Dyke - Chartered Financial Analyst, Managing
Principal and Founder, Bay Harbour Management, L.C.
* Mr. John Stout - Managing Director and Principal, Bay
Harbour Management, L.C.
* Mr. Gene Davis - Chairman and Chief Executive Officer -
PIRINATE Consulting Group, L.L.C.
* Mr. Dale Booth - Chief Executive Officer and Director -
Daisytek International
* Mr. Robert Guth - Chairman, President, and Chief Executive
Officer - TelCove
TelCove also announced that the members of its newly formed Board
have elected Robert Guth, who also serves as the Company's
President and Chief Executive Officer, as Chairman of the Board.
About TelCove
Founded in 1991, TelCove is a leading provider of business
critical telecommunications services that offers enterprise
companies and carriers superior Internet, Data, and Voice
solutions via its reliable, secure and independently-owned
metropolitan and intercity fiber-optic network. TelCove operates
throughout 50 markets in the eastern half of the United States.
For more information about TelCove, visit http://www.telcove.com/
TIMKEN CO: Secures $700,000 Bearing Order from Indian Steel Mill
----------------------------------------------------------------
The Timken Company has received a significant bearing order from
India-based Jindal Steel & Power Limited, the world's largest
coal-based sponge iron plant. The order, worth more than $700,000
(USD), calls for Timken to provide Jindal Steel's Raigarh plant
with two types of cylindrical roller bearings. Sponge iron
facilities utilize a mixture of iron ore and coal to feed into an
electric furnace for melting and steel making. This process is an
alternative to the more commonly used raw material of scrap steel.
Jindal Steel placed the order to meet the growing demand for iron
and steel in India. The new bearings will be used on six new
sponge iron kilns planned for the facility. The plant currently
is in the process of setting up four of the new kilns and recently
has launched a universal beam rolling mill designed to produce
120-meter rails; the longest manufactured in India.
"Timken earned the business because of its response to our needs
at the mill," said Manoj Kumar, senior purchasing manager for
Jindal Steel. "It offered a wide range of friction management
solutions that will help us to keep the mill running at highly
productive levels."
"We have been working with Jindal Steel since 2002 and have a
strong, ongoing partnership," said J. P. Sinha, Timken director of
sales and marketing for India. "We're excited about the
opportunity to bring our relationship to the next level as Timken
becomes a more integral part of Jindal Steel's expansion."
In addition to supplying new bearings, Timken works with Jindal
Steel to provide bearing repair and hands-on training for its
personnel while drawing upon the expertise of its global
engineering and research facility in Bangalore, India for
continuous improvement and innovation.
The Timken Company (NYSE: TKR)(Moody's, Ba1 Senior Unsecured Debt,
Senior Implied and Senior Unsecured Issuer Ratings)
-- http://www.timken.com/-- is a leading global manufacturer of
highly engineered bearings and alloy steels and a provider of
related products and services with operations in 29 countries. The
company recorded 2003 sales of $3.8 billion and employed
approximately 26,000 at year-end.
UNIFI INC: Discontinues Kaiping Joint Venture Discussions
---------------------------------------------------------
Unifi, Inc. (NYSE: UFI) announced that it has ceased joint venture
discussions with the Guangdong Kaiping Polyester Enterprises Group
and Guangdong Kaiping Chunhui Co. Ltd. in Kaiping, Guangdong, P.R.
China. The Company announced in December 2003 that it had
extended discussions related to the proposed joint venture, in
which it had expected to own a seventy-five percent (75%)
interest, as well as an indirect interest in Chunhui through the
fifty-six percent (56%) ownership held by Kaiping.
The Company's determination that Kaiping will not be in a position
to execute a definitive agreement in the near-term was a primary
factor in its decision to end the discussions. Required
regulatory approvals, which would not officially begin until after
a definitive agreement between the parties was signed, could
extend the closing well into the next calendar year.
Against this background, the Company additionally stated that it
will pursue a "greenfield" option, creating a wholly-owned
subsidiary to produce its value-added yarns in China. Site
selection is underway, and a location will be announced shortly.
The Company plans to utilize idle equipment from the United
States, Ireland, and the United Kingdom to set up textured
polyester and nylon production, twisting, nylon covering, and
dyeing operations in China.
"Although we were unable to reach an agreement with Kaiping, we
remain focused on our China strategy. Over the last two years,
Unifi has introduced its value-added products and brands to the
Asian market through Unifi Asia and our agreement with Tuntex in
Thailand. In addition, we have had teams in China visiting
various locations during the past eighteen months gathering
information about the market and incentives for wholly-owned
enterprises. We have determined that the quickest and most
efficient way for Unifi to enter the Chinese market is to begin a
"greenfield" operation that will be entirely owned and controlled
by the Company," said Brian Parke, Unifi's President and Chief
Executive Officer.
"With what we have learned over recent months, we believe that the
decision to pursue a start-up activity with a wholly-owed
subsidiary is the best strategy for getting on the ground in China
during the calendar year 2004," continued Parke. "Various cities
in China are competing for the location of the Unifi business,
which should minimize our costs over normal start-ups we have
experienced in the past. In addition, we expect that the approval
process for our business license will be much shorter using a
wholly-owned subsidiary. This strategy allows us to produce
product sooner while using less of our cash reserves. We plan to
apply the same business model that grew Unifi into one of the
world's leading producers and processors of textured yarns to our
subsidiary in China."
The Company will review its detailed plan for its China expansion
with investors during its earnings conference call.
Unifi Inc. (NYSE: UFI) (S&P, B+ Corporate Credit and Senior
Unsecured Debt Ratings, Negative Outlook) is one of the world's
largest producers and processors of textured yarns. The company's
primary business is the texturing, dyeing, twisting, covering, and
beaming of multi-filament polyester and nylon yarns. Unifi's
textured yarns are found in home furnishings, apparel, and
industrial fabrics, automotive, upholstery, hosiery, and sewing
thread. For more information about Unifi, visit
http://www.unifi-inc.com/
UNIFI: Hosting 3rd Quarter Earnings Conference Call on April 22
---------------------------------------------------------------
Unifi, Inc., (NYSE: UFI) will host a conference call at 3:00 p.m.
(EDT) on Thursday, April 22, 2004 to discuss its financial results
of the third fiscal quarter ended March 28, 2004.
To participate in this conference call, please dial (973) 409-9261
approximately 10 minutes prior to the beginning of the
presentation, which is expected to begin promptly at 3:00 p.m.
(EDT). Participants can view a corresponding presentation from
the Unifi website at http://www.unifi-inc.com/
The presentation can be found by clicking the "Third Quarter
Conference Call" link on the homepage. It will be available
immediately prior to the beginning of the call. Following
management's comments, there will be an opportunity for questions
from the financial community.
For those interested but unable to participate, a replay of the
conference call in its entirety will be available at (973) 341-
3080 pin #4697166 approximately one hour after its conclusion.
This replay line will be kept open for one week.
Unifi Inc. (NYSE: UFI) (S&P, B+ Corporate Credit and Senior
Unsecured Debt Ratings, Negative Outlook) is one of the world's
largest producers and processors of textured yarns. The company's
primary business is the texturing, dyeing, twisting, covering, and
beaming of multi-filament polyester and nylon yarns. Unifi's
textured yarns are found in home furnishings, apparel, and
industrial fabrics, automotive, upholstery, hosiery, and sewing
thread. For more information about Unifi, visit
http://www.unifi-inc.com/
UNITEDGLOBALCOM: S&P Assigns CCC+ Rating to Convertible Sr. Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'CCC+' rating to
Denver, Colorado-based cable operator UnitedGlobalCom Inc.'s ?500
million 1.75% convertible senior notes due 2024, issued under Rule
144A with registration rights. The note purchasers also have the
right to acquire an additional ?125 million of notes. The company
indicated that the net proceeds of the issue will be used for
working capital and other corporate purposes, including potential
repayment of certain indebtedness of its subsidiaries.
At the same time, Standard & Poor's affirmed its 'B' corporate
credit rating on UGC. The outlook is stable.
The convertible notes are rated two notches below the corporate
credit rating due to the substantial concentration of priority
obligations relative to total assets. Most of these priority
obligations consist of borrowings outstanding under the company's
?3.5 billion in combined credit facilities at UPC Distribution
Holding B.V., which totaled ?3 billion as of Dec. 31, 2003.
"The rating reflects UGC's significant business risk in its 11
European cable markets, which comprise the vast majority of its
revenues and EBITDA," said Standard & Poor's credit analyst
Catherine Cosentino. UGC Europe Inc. emerged from bankruptcy in
September 2003. The company relied heavily on debt to fund the
ambitious upgrade of its network to support aggressive growth in
its video, Internet, and telephony subscribers. However, such
growth failed to materialize.
While UGC's debt has been reduced to about $4 billion as a result
of several debt restructurings, including at UPC Polska LLC, the
company still remains relatively highly leveraged at about 5.8x
debt to fourth-quarter 2003 annualized EBITDA on an operating
lease-adjusted basis, excluding restructuring and asset impairment
charges. Improvement prospects for UGC's credit metrics could be
hampered in 2004, as the company faces increasing competition in
its voice, video, and data businesses. The Western European data
market, in particular, has become much more competitive in 2003,
as the local telephone carriers have accelerated their expansion
of digital subscriber line (DSL) services. Telephone services,
which have always been subject to a high degree of competition,
have now begun to be further challenged by increased wireless
substitution of landline services. Moreover, satellite providers
have continued to limit subscriber growth in certain of the
company's markets. Such rising competition could limit EBITDA
improvement due to higher pricing pressures, as well as potential
increased customer churn and retention costs.
UNITED AIRLINES: Retired Pilots Tap Meckler & LeBoeuf as Lawyers
----------------------------------------------------------------
The Section 1114(d) Retired Pilots Committee appointed in the
Chapter 11 cases of the United Airlines Debtors wants to retain
lawyers to prosecute the retired pilots and their beneficiaries'
interest in the Debtors' cases. In this regard, the Retired
Pilots Committee seek the Court's permission to retain the law
firms Meckler, Bulger & Tilson and LeBoeuf, Lamb, Greene & McRae
LLP as their counsel, nunc pro tunc to March 11, 2004.
Jack Carriglio, Esq., at Meckler, will act as lead negotiating
and trial counsel for the Retired Pilots Committee with the
assistance of his associate, Eric Newman, Esq. Mr. Carriglio is
an experienced trial attorney and member of the American College
of Trial Lawyers. Frank Cummings, Esq., at LeBoeuf, has over 40
years experience litigating, advising clients and teaching about
employee benefits, bankruptcy and labor law.
Meckler and LeBoeuf will:
(a) assist and advise the Retired Pilots Committee on
modifications to the retired pilots' insurance-related
benefits;
(b) negotiate with the Debtors on proposed modifications to
pilots' insurance-related benefits;
(c) represent the Retired Pilots Committee in proceedings or
hearings on pilots' insurance-related benefits;
(d) prepare for the Retired Pilots Committee necessary
adversary complaints, motions, applications, orders or
other legal papers related to Section 1114 matters;
(e) advise the Retired Pilots Committee of its powers and
duties;
(f) advise the Retired Pilots Committee on bankruptcy, general
corporate, labor, employee benefits, litigation and other
relevant law;
(g) litigate at any level any issues related to Section 1114
pilots' insurance-related benefits;
(h) assist the Retired Pilots Committee in locating, retaining
and working with any consulting or testifying experts; and
(j) perform all other legal services the Retired Pilots
Committee needs.
Neither Meckler nor LeBoeuf represent or hold any interest
adverse to the Retired Pilots Committee. Both firms have
conducted extensive conflicts checks to comply with Section
1103(b) of the Bankruptcy Code and Rules 2014 and 5002 of the
Federal Rules of Bankruptcy Procedure to ensure that there are no
conflicts of interest. Neither firm has been involved in any
dispute related to the Debtors in any capacity that would affect
these proceedings.
However, Mr. Carriglio discloses that he, Frank Cummings and Eric
Newman previously represented the United Retired Pilots Benefit
Protection Association. This representation is consistent with,
and is not adverse to, the Retired Pilots Committee's
representation. After all, the URPBPA requested a separate
committee of retired pilots. The members of the Retired Pilots
Committee are registered members of the URPBPA. The URPBPA has
adopted a resolution stating that it will support, and not
contest, the decisions of the Retired Pilots Committee.
Both firms will charge $250 to $450 per hour rates for attorneys
and $95 to $125 per hour rates for paralegals.
Headquartered in Chicago, Illinois, UAL Corporation
-- http://www.united.com/-- through United Air Lines, Inc., is
the holding company for United Airlines -- the world's second
largest air carrier. the Company filed for chapter 11 protection
on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James
H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman,
Esq., and Steven R. Kotarba, Esq., at KIRKLAND & ELLIS represent
the Debtors in their restructuring efforts. When the Company
filed for protection from their creditors, they listed
$24,190,000,000 in assets and $22,787,000,000 in debts. (United
Airlines Bankruptcy News, Issue No. 43; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
US ENERGY: Grant Thornton's Issues Qualified Going Concern Opinion
------------------------------------------------------------------
U.S. Energy Corp. (Nasdaq: USEG) and Crested Corp. (OTC Bulletin
Board: CBAG), d/b/a USECC reported that that their independent
auditor, Grant Thornton L.L.P. has issued a going concern opinion
qualifying the financial statements of both companies for the year
ended December 31, 2003, consistent with the qualified opinions
Grant Thornton issued for the seven months ended December 31, 2002
and the (former) fiscal year ended May 31, 2002.
Keith Larsen, President of U.S. Energy Corp. stated, "The going
concern qualification on our audited financial statements is not a
surprise to us. For the past two years, U.S. Energy Corp. and its
affiliated companies have been selling unnecessary assets, and
streamlining overhead, to concentrate on the coalbed methane gas
sector. With the Pinnacle Gas Resources transaction in July 2003;
the January 30, 2004 purchase of the Hi-Pro assets, and setting up
a $25 million mezzanine credit facility to buy more proven gas
properties, we are positioning the companies for significant
increases in acreage, reserves and cash flow in the coalbed
methane business. In the meantime, we still have substantial
positions in other minerals, and see tremendous potential in three
of the other commodities in which we are involved. The prices of
each have appreciated significantly over the past several months,
and are expected to be sustained at these levels: Uranium is at a
15-year high at $17.60 per pound; gold is above $400.00 per ounce,
and molybdenum oxide is at a recent historical high price of
$16.25 per pound.
Our strategy calls for increasing cash flow through the production
of natural gas, which continues to sustain prices above $4.00 per
Mcf. In addition, we are seeking to monetize our uranium, gold and
molybdenum assets either by spin-off, joint venture, or outright
sale.
We also look forward in late 2004 to a final resolution of the
Nukem litigation now on appeal. This could provide the companies
with a minimum of $20 million in cash, which is the amount awarded
to the companies by the U.S. District Court of Colorado in 2003."
About U.S. Energy Corp. & Crested Corp.
U.S. Energy Corp. and its majority owned subsidiary, Crested
Corp., are engaged in joint business operations as USECC. Through
their subsidiary Rocky Mountain Gas, Inc., they own interests in
over 364,816 gross acres prospective for coalbed methane (CBM) in
the Powder River Basin of Wyoming and Montana and acreage adjacent
to the Greater Green River Basin in southwest Wyoming. This
acreage data includes approximately 100,000 gross acres held by
Pinnacle Gas Resources, Inc., in which RMG owns a minority equity
interest. Certain properties are subject to a definitive agreement
dated July 10, 2001 with CCBM, Inc., a division of Carrizo Oil &
Gas, Inc. of Houston, TX to develop and expand RMG's CBM
properties. USECC owns control of Sutter Gold Mining Company,
which owns properties in California prospective for gold. USECC
also owns various interests in uranium properties in Wyoming and
Utah.
USG CORP: Brings-In Hewitt as Employee Compensation Consultant
--------------------------------------------------------------
Since the Petition Date, the USG Corporation Debtors have employed
Hewitt Associates LLC as a non-legal ordinary course professional
providing non-bankruptcy human resources and employee benefits
consulting services. These non-bankruptcy services are primarily
related to consultation with the Debtors regarding their pension
and medical insurance plans. Specifically, as an ordinary course
professional, Hewitt has performed:
* actuarial consulting services primarily for USG pension and
retiree medical plans;
* record keeping services for the USG Investment Plan; and
* consulting services for miscellaneous employee benefits
services, including health care programs.
By this application, the Debtors seek the Court's authority to
employ Hewitt as their employee compensation consultant in
relation to their Chapter 11 cases, nunc pro tunc to February 27,
2004.
The consulting services that Hewitt will provide may include the
design, establishment and process for approval of a new long-term
incentive program for the Debtors. The steps to complete the
design may include:
(a) reviewing all current compensation programs, including the
previous long-term incentive plan;
(b) identifying employees who are eligible for participation
in the plan;
(c) identifying target pay levels for individuals that will
provide competitive pay levels and a reasonable sharing of
profits with employees;
(d) identifying and testing key performance metrics that are
important to and influence the value of USG;
(e) establishing an appropriate pay for performance scale;
(f) developing design alternatives to be considered by
management, the board of directors and creditor
constituencies;
(g) financial modeling and testing of various alternatives;
(h) reviewing of alternative plan designs with management, the
board of directors and creditor constituencies;
(i) developing detailed specifications for the final plan
design, including provisions for vesting and payment of
awards and employment termination provisions; and
(j) providing testimony in depositions and court hearings, as
needed.
Hewitt has been responsible for providing the Debtors with
benefits consulting services over the past 30 years and has,
therefore, become intimately familiar with the Debtors'
personnel, property and business operations by providing these
services. This makes Hewitt uniquely qualified to provide the
Debtors with continued, uninterrupted benefits consulting
services.
Hewitt is a global outsourcing and consulting firm delivering a
complete range of human capital management services to companies.
Hewitt provides services from 86 offices in 37 countries. Hewitt
has extensive expertise and over 60 years of experience in
assisting companies in connection with corporate restructuring
and a variety of corporate planning needs. Hewitt is also an
independent company, with no ties to any public accounting
firms, investment banking firms, credit rating agencies,
management consulting firms or financial services organizations.
Moreover, Hewitt's executive compensation practice team is
comprised of senior consultants, junior consultants and support
staff who have extensive experience providing consulting
services. The Debtors will benefit from Hewitt's vast experience
in performing consulting services for companies undergoing
financial reorganizations, both in and out of Chapter 11.
The Debtors also believe that employing Hewitt will ensure the
most economic and effective means for them to be represented
during the Chapter 11 cases.
Since the Petition Date, Hewitt has received $922,648 as
compensation and reimbursement of expenses. The Debtors propose
to pay Hewitt a fixed fee of $180,000, including expenses, as
compensation for the consulting services. In addition, the
Debtors seek the Court's authority to pay Hewitt its fixed fee in
four equal monthly installments beginning the month that Hewitt's
employment is approved by the Court, without further need for fee
application. The fixed fee was calculated by multiplying the
Debtors' and Hewitt's estimate that 400 hours of consulting
services will need to be performed at a $450 average hourly
billing rate. The current hourly billing rates for the Hewitt
personnel expected to render the consulting services are:
Staff Level USG Hourly Billing Rate
----------- -----------------------
Lead Compensation Consultants $400 - 600
Junior Compensation Consultants 250 - 400
Compensation Analysts 150 - 250
Administrative Assistant(s) 100 - 175
Given the nature of the consulting services to be performed by
Hewitt and the manner in which it has historically billed the
Debtors, both parties ask the Court to excuse Hewitt from the
interim compensation procedures applicable in the Debtors'
Chapter 11 cases. Hewitt historically has presented the Debtors
with limited billing support for the Ordinary Course Services.
The Debtors understand that it is not the general practice of
human resource consulting firms to keep detailed time records
similar to those customarily kept by attorneys. As a result, it
would be prohibitively difficult for Hewitt to maintain its time
records in accordance with the interim compensation procedures
established for professionals.
On Hewitt's behalf, C. Lawrence Connolly, III, assures the Court
that the firm has no connection with the Debtors or any party-in-
interest to their Chapter 11 cases. Furthermore, Mr. Connolly
attests that Hewitt does not hold or represent any interest
adverse to the Debtors or their estates. Hewitt is a
"disinterested person," as defined in Section 101(14) of the
Bankruptcy Code and as required by Section 327(a).
Headquartered in Chicago, Illinois, USG Corporation
-- http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes. The Company filed
for chapter 11 protection on June 25, 2001 (Bankr. Del. Case Nos.
01-02094). David G. Heiman, Esq., at Jones, Day, Reavis & Pogue
and Paul E. Harner, Esq., at Jones, Day, Reavis & Pogue represent
the Debtors in their restructuring efforts. When the Debtors filed
for protection from their creditors, they listed $3,252,000,000 in
assets and $2,739,000,000 in debts. (USG Bankruptcy News, Issue
No. 63; Bankruptcy Creditors' Service, Inc., 215/945-7000)
USI HOLDINGS: Schedules Q1 2004 Conference Call for May 3
---------------------------------------------------------
U.S.I. Holdings Corporation (Nasdaq: USIH) announced that it will
release 2004 First Quarter Financial Results on Monday, May 3,
2004 after the close of the market.
The company will hold a conference call and audio webcast to
review the results at 9:00 AM (EDT) on the following day, Tuesday,
May 4, 2004. To access the audio webcast, please visit USI's
website at http://www.usi.bizon May 4, 2004 and follow the link.
To access the conference call, dial toll free (888) 273-9887 or
(612) 332-0802 for international callers, five minutes before the
teleconference. A replay of the conference call will be available
on the Investor Relations section of the USI website at
http://www.usi.biz/
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/
USI HOLDINGS: Agrees to Acquire Dodge, Warren & Peters by May
-------------------------------------------------------------
U.S.I. Holdings Corporation (Nasdaq: USIH) announced that it has
completed due diligence and entered into a definitive agreement to
acquire Los Angeles, Calif.-headquartered Dodge, Warren & Peters
Insurance Services, Inc. (DWP). DWP is expected to contribute
approximately $25 million of revenues to USI on an annual basis.
The closing of the DWP acquisition, which is subject to narrow
closing conditions, is expected to occur by the beginning of May
2004. Terms of the transaction were not disclosed.
Since 1977, DWP has been offering a full spectrum of insurance
products and services designed to meet the individual needs of its
business client base providing retail property & casualty and
employee benefits brokerage through its four offices in Southern
California. The combination of DWP with USI's existing Southern
California operation will create one of the largest middle market
brokers in the region.
David L. Eslick, USI's Chairman, President and CEO, said, "With
the completion of the due diligence and the signing of the merger
agreement, I am pleased to be one step closer to officially
welcoming DWP's team of well-respected professionals to USI.
Through the successful execution of our strategic acquisition
plan, we strive to exceed the expectations of clients, associates,
carrier partners, communities and ultimately our shareholders."
Kevin P. Mencarelli, President & CEO, USI West Coast, added, "By
increasing our strength in our existing geographic footprint with
this acquisition, we expect to better serve our clients nationally
and create the largest middle market offering in Southern
California."
Gregory D. Davidian, Chairman, President, Chief Executive Officer
of DWP, said, "By joining USI, our ability to form enhanced
strategic relationships will be dramatically increased. We are
pleased to have this opportunity to offer our clients high quality
products and services through a national corporation with the
local attention to which they are accustomed."
Also commenting on the news, Donald J. Gwizdalski, Executive Vice
President of DWP and Branch Manager of the largest office
(Torrance, California) said, "We look forward to joining with the
USI team. The combined offering will increase our ability to
provide the highest quality products and services to our clients,
which we have been committed to since 1977."
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/
WACHOVIA BANK: S&P Assigns Low-Bs to 6 Series 2004-C11 Notes
------------------------------------------------------------
Wachovia Bank Commercial Mortgage Trust 2004-C11 Certificates
Assigned Preliminary Ratings
Standard & Poor's Ratings Services assigned its preliminary
ratings to Wachovia Bank Commercial Mortgage Trust's $1.04 billion
commercial mortgage pass-through certificates series 2004-C11.
The preliminary ratings are based on information as of April 13,
2004. Subsequent information may result in the assignment of final
ratings that differ from the preliminary ratings.
The preliminary ratings reflect the credit support provided by the
subordinate classes of certificates, the liquidity provided by the
trustee, the economics of the underlying loans, and the geographic
and property type diversity of the loans. Classes A-1, A-2, A-3,
A-4, A5, B, C, D, and E are currently being offered publicly.
Standard & Poor's analysis determined that, on a weighted average
basis, the pool has a debt service coverage ratio (DSC) of 1.54x,
a beginning LTV of 83.9%, and an ending LTV of 70.9%.
PRELIMINARY RATINGS ASSIGNED
Wachovia Bank Commercial Mortgage Trust 2004-C11
Class Rating Amount ($)
A-1 AAA 67,000,000
A-2 AAA 59,200,000
A-3 AAA 87,715,000
A-4 AAA 52,829,000
A-5 AAA 454,900,000
B AA 28,641,000
C AA- 13,018,000
D A 23,434,000
E A- 11,717,000
A1-A AAA 161,017,000
F BBB+ 14,320,000
G BBB 13,019,000
H BBB- 10,415,000
J BB+ 16,924,000
K BB 5,207,000
L BB- 2,604,000
M B+ 2,604,000
N B 2,603,000
O B- 2,604,000
P N.R. 11,717,309
X-P* AAA 1,010,357,000**
X-C* AAA 1,041,488,309**
* Interest-only class.
** Notional amount.
WEIRTON: Informal Committee Gets Asset Sale Auction Delayed
-----------------------------------------------------------
The Informal Committee of Senior Secured Noteholders in the
Chapter 11 cases of Weirton Steel Corporation succeeded in its
attempt to:
(a) adjourn the Bid Deadline, the Sale Objection Deadline, the
Auction and the Sale Hearing to allow them to submit a
competing bid and file the Informal Committee Plan; or
(b) modify the Bidding Procedures Order to extend the Bid
Deadline, the Sale Objection Deadline, the Auction and the
Sale Hearing by at least to two or three weeks each and
modifying the Bidding Procedures Order to allow the
submission of a plan of reorganization as an alternative
bid.
Brian A. Kilmer, Esq., at Akin Gump, Strauss, Hauer & Feld, in
New York, relates the Court approved bidding procedures and
scheduled the bidding deadline, auction date and sale hearing
date, with respect to the Debtors' Asset Purchase Agreement with
International Steel Group, Inc. and ISG Weirton, Inc Asset. The
Bidding Procedures Order established April 6, 2004 as the
deadline for submitting a qualified, competing bid and April 9,
2004 as the deadline to object to the sale of the Sale Assets.
An auction for bidder submitting qualified bids will be held on
April 12, 2004 followed by a hearing to finalize the sale on
April 14, 2004.
The Debtors' primary argument for the highly abridged timeframe
of less than five weeks for the sale of substantially all of
their assets was their dwindling liquidity based, in large part,
on the shortage of coke from United States Steel Corporation.
Mr. Kilmer argues that US Steel has now recovered from the fire
in its mine and is now shipping almost its full contractual
requirements for the Debtors' coke. In addition, the price of
hot band steel has risen dramatically in the Debtors' markets.
As a result of these two factors plus other positive
developments, the Debtors' operations are currently generating
positive cash flow that has significantly increased excess
availability under the revolving credit facility that was
approved by the Final DIP Order.
The Court's approval of the termination of the Debtors' retiree
benefits on March 15, 2004, is also helping to increase excess
availability under the DIP Loan by relieving the Debtors of
$3,000,000 of monthly expenses. The combined effect of these
changes has been an increase in excess availability under the DIP
Loan by $20,000,000 to $25,000,000. Moreover, since March 1,
2004, the Debtors have paid down their DIP Loan by $20,000,000.
Therefore, there are currently no liquidity issues to justify the
highly abridged timeframe before the Bid Deadline, the Sale
Objection Deadline, the Auction and the Sale Hearing.
Since the Debtors now possess ample liquidity, Mr. Kilmer asserts
that the Bid Deadline, the Sale Objection Deadline, the Auction
and the Sale Hearing should be adjourned for these reasons:
(a) The Sale Agreement places a valuation on the Debtors'
estates that will provide no recovery to the holders of
the Obligations. However, the improved cash flow and
liquidity of the Debtors' operations, are wholly
inconsistent with the low valuation level proposed by the
Sale Agreement. To permit the Debtors to sell
substantially all of their assets in a fire sale when they
have ample liquidity would be a drastic result that
clearly would not constitute a fair and equitable
distribution to creditors, but rather would deprive
creditors of the opportunity to realize a recovery based
upon the true value of the Debtors.
(b) Less than five weeks between the Bidding Procedures Order
and the Auction is simply too short for other bidders to
complete their due diligence and prepare competitive bids,
which are due approximately one week prior to the Auction.
It is likely that this compressed process has caused
potential bidders to lose interest or look elsewhere.
(c) The Informal Committee and the Trustee are in the process
of formulating a competing bid for the Sale Assets as well
as formulating the Informal Committee Plan as an
alternative to the sale of substantially all of the assets
to a third party. The Informal Committee Plan capitalizes
on the Debtors' coke supply contract with US Steel, which
has very favorable, below-market pricing terms for the
Debtors that will be lost in a sale because assigning the
contract triggers a conversion to the prevailing market
price under the terms of the contract. Retaining the
current coke supply contract, as contemplated by the
Informal Committee Plan, provides favorable pricing that
will yield an estimated $50,000,000 to $100,000,000 to
reorganized Weirton in 2004 alone.
In addition, International Steel Associates and its
principal, John Correnti have been retained by the
Informal Committee to lead a management team in connection
with a competing bid or the Informal Committee Plan.
However, the Informal Committee requires more time to
finalize financing, to continue negotiations with the ISU
on the terms and conditions of a collective bargaining
agreement, and to finish negotiating with the Debtors and
other creditor constituencies on the terms of both the
competing bid and the Informal Committee Plan.
(d) There is almost no prejudice in granting the relief
requested. Due to the Debtors' healthy liquidity
position, their condition will likely improve in the
interim.
(e) The Debtors and ISG have been delaying the production of
documents and expert reports and have continued several
depositions of key witnesses. As a result, the Informal
Committee's discovery remains incomplete. In fact,
because of these issues, the Informal Committee will be
filing two motions to request that the Court compel the
Debtors and ISG to produce the requested documents and
witnesses. (Weirton Bankruptcy News, Issue No. 23;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
WEYERHAEUSER CO: Board Declares Dividend on Exchangeable Shares
---------------------------------------------------------------
The board of directors of Weyerhaeuser Company Limited (TSX: WYL)
on April 13, 2004, declared a dividend of $0.40 per share on the
exchangeable shares of the corporation payable June 1, 2004, to
shareholders of record at the close of business April 30, 2004.
The dividend shall be paid in the Canadian dollar equivalent at
the noon spot exchange rate on April 13, 2004, of 1.3359. The
Canadian dollar equivalent amount is CDN$0.53.
Weyerhaeuser Company (NYSE: WY)(Fitch, BB+ Senior Unsecured Long-
Term Ratings, Stable Outlook), one of the world's largest
Integrated forest products companies, was incorporated in 1900.
In 2003, sales were $27.8 billion (US$19.9 billion). It has
offices or operations in 18 countries, with customers worldwide.
Weyerhaeuser is principally engaged in the growing and harvesting
of timber; the manufacture, distribution and sale of forest
products; and real estate construction, development and related
activities. Weyerhaeuser Company Limited, a wholly owned
subsidiary, has Exchangeable Shares listed on the Toronto Stock
Exchange under the symbol WYL. Additional information about
Weyerhaeuser's businesses, products and practices is available at
http://www.weyerhaeuser.com/
WHX CORPORATION: 2003 Fourth Quarter Net Loss Tops $13.7 Million
----------------------------------------------------------------
WHX Corporation (NYSE: WHX) reported a net loss of $13.7 million,
on sales of $78.5 million, for the fourth quarter of 2003 compared
to a net loss of $20.7 million, on sales of $79.3 million, in the
same period in 2002. The 2002 results included a $20 million
charge relating to the Company's agreement to provide additional
funding to Wheeling Pittsburgh Corporation (WPC) as part of their
Chapter 11 Plan of Reorganization (POR). After deducting the
preferred dividend requirement for 2003 and 2002 fourth quarter,
basic and diluted loss per common share was $3.43 and $4.79,
respectively.
Full year results for 2003 were a loss from continuing operations
of $169.2 million, compared to a loss from continuing operations
of $12.0 million in 2002. The 2003 results include a $48.1 million
non-cash pension curtailment and special termination benefit
charge related to the consummation of the POR for WPC and its
debtor affiliates, and a non-cash goodwill impairment charge of
$89.0 million. After deducting the preferred dividend requirement
for 2003 and 2002, basic and diluted loss per common share from
continuing operations was $35.08 and $5.86, respectively. Income
from discontinued operations, including a gain on the sale of
Unimast of $11.9 million, was $22.5 million, or $4.22 per share,
for the year 2002. Sales for 2003 were $326.3 million compared to
$386.4 million for 2002.
In the first quarter of 2002 the Company adopted Statement of
Financial Accounting Statement No. 142 as of January 1, 2002.
These new rules require, among other things, that goodwill and
other intangible assets with indefinite useful lives no longer be
amortized, and that they be tested for impairment at least
annually. WHX recorded a $44 million non-cash charge ($8.26 per
basic and diluted common share) for goodwill impairment related to
the Handy & Harman Wire Group in the first quarter of 2002. This
charge is shown as the cumulative effect of an accounting change.
As previously announced, the WPC Group's POR was consummated on
August 1, 2003. The United States Bankruptcy Court for the
Northern District of Ohio confirmed the POR on June 18, 2003.
Among other things, as a result of the consummation of the POR,
each member of the WPC Group is no longer a subsidiary of WHX
Corporation.
Fourth Quarter Operating Results
and Other Income / Expense
Sales in the fourth quarter of 2003 were $78.5 million compared
with $79.3 million in 2002. Sales decreased by $1.6 million at the
Precious Metal Segment and $0.9 million at the Wire & Tubing
Segment. These sales declines are primarily related to the closure
of several facilities in 2002. Sales increased $1.8 million at the
Engineered Materials Segment due to new products and market share
gains in this segment's fastener business, partially offset by a
sales decline in this segment's electro-galvanizing business.
For the fourth quarter of 2003, operating loss was $7.1 million,
compared to an operating loss of $11.2 million in the fourth
quarter of 2002. Operating income from the Precious Metal segment
declined by $2.1 million to a loss of $1.6 million in the 2003
quarter from income of $0.5 million in the fourth quarter of 2002.
Operating performance at the Wire & Tubing segment improved by
$3.5 million to a $2.3 million loss in the 2003 quarter from a
$5.8 million loss in the fourth quarter of 2002. The Engineered
Materials segment reported operating income of $1.3 million in the
fourth quarter of 2003 compared to a $0.3 million operating loss
in the fourth quarter of 2002. Unallocated corporate expenses
decreased to $0.8 million in the fourth quarter of 2003 from $4.2
million in the fourth quarter of 2002. This improvement was
primarily related to a decrease in unallocated pension expense of
$3.2 million.
In the fourth quarter of 2002, the Company recognized gains of $2
million from the early retirement of debt.
Other expense was $1.3 million for the fourth quarter 2003,
primarily related to foreign exchange losses. Other income of $2.2
million in the fourth quarter of 2002 was primarily from
investment earnings.
Full Year Operating Results
and Other Income / Expense
Sales in 2003 were $326.3 million compared with $386.4 million in
2002. Sales decreased by $57.7 million at the Precious Metal
Segment and $10.3 million at the Wire & Tubing Segment. These
sales declines are primarily related to the closure of several
facilities in 2002. Sales increased by $7.8 million at the
Engineered Materials Segment due to new products and market share
gains in this segment's fastener business, partially offset by a
sales decline in this segment's electro-galvanizing business.
In 2003, operating loss was $152.2 million, compared to an
operating loss of $27.9 million in 2002. Operating loss at the
segment level was $81.4 million in 2003 compared to an operating
loss of $8.0 million in 2002. The 2003 results include a charge of
$3.5 million for employee separation and related expenses
resulting from a reduction in executive, administrative, and
information technology personnel at Handy & Harman. These costs
were allocated to the business segments. Operating loss for the
Precious Metal Segment increased by $44.0 million. The 2003
operating results for this segment include a $50.5 million
goodwill impairment charge, $1.1 million in allocated employee
separation expense, a $3.2 million gain from the liquidation of
certain precious metal inventory, and a $2.2 million gain from
insurance proceeds. The 2002 results included a restructuring
charge of $12.0 million. Operating loss for the Wire & Tubing
Segment increased by $28.5 million. The 2003 operating results for
this segment include a $38.5 million goodwill impairment charge
and $1.5 million in allocated employee separation expense. The
2002 results include an $8.0 million restructuring charge, write-
downs of $7.4 million for excess and slow moving inventory, and
accelerated depreciation of $3.4 million. The balance of the
decline in 2003 in operating income is due to increased raw
material costs and lower selling prices associated with this
segment's refrigeration business and lower margins in the
stainless steel tubing markets. Operating income for the
Engineered Materials Segment declined by $0.9 million in 2003. The
2003 results include $0.9 million in allocated employee separation
expense. Unallocated corporate expenses decreased to $16.4 million
in 2003 from $17.4 million in 2002. This resulted from a decrease
in unallocated pension expense of $2.3 million partially offset by
increased legal and insurance expense.
In 2003 and 2002, the Company recognized gains of $3.0 million and
$42.5 million, respectively, from the early retirement of debt.
Other expense was $0.2 million in 2003 compared to $3.4 million of
expense in 2002. The 2003 period loss included a $0.6 million loss
on an interest rate swap and foreign exchange losses of $2.3
million, partially offset by net investment earnings. The 2002
period loss included a $4.8 million loss on an interest rate swap.
Liquidity
As previously announced, on March 31, 2004 the Company's wholly-
owned subsidiary, Handy & Harman, successfully entered into new
financing arrangements with each of Congress Financial
Corporation, as agent, and Ableco Finance LLC, as agent, with
aggregate commitments of $163.15 million. Congress's facility
consists of a revolving credit facility of up to $70 million and a
term loan of $22.15 million. Ableco's facility consists of a
Tranche B term loan of $71 million. In connection with the
transaction, WHX also made a subordinated loan to Handy & Harman
in the amount of $43.5 million. The proceeds of the loans from
Congress, Ableco and WHX were primarily used to refinance Handy &
Harman's previous credit facility with Citibank, N.A., and for
working capital purposes.
The WHX 10-1/2% Senior Notes in the amount of $92.8 million are
due on April 15, 2005. It is the Company's intention to refinance
this obligation prior to its scheduled maturity; however there can
be no assurance that such refinancing will be obtained. The
Company's access to capital markets in the future to refinance
such indebtedness may be limited. If the Company were unable to
refinance this obligation, it would have a material adverse impact
on the liquidity, financial position and capital resources of WHX
and would impact the Company's ability to continue as a going
concern.
WILLIAMS: Sells Certain Power Assets to Saracen for $23 Million
---------------------------------------------------------------
Williams (NYSE: WMB) has signed a definitive agreement to sell
certain assets from its power segment for approximately $23
million to Houston-based Saracen Energy Partners, LP.
Including transportation contracts, associated forward purchase
and sales contracts and inventory, the agreement also assigns to
Saracen and relieves Williams of future capacity payments totaling
approximately $16 million.
Subject to typical closing conditions and adjustments, the sale is
expected to close on July 1.
Williams has generated in excess of $600 million from the sale,
termination or liquidation of contracts and assets from its power
segment since June 2002.
About Saracen
Houston-based Saracen Energy Partners was founded by former Vitol
Group Vice-Chairman Neil Kelley and former Vitol Gas & Electric
President Michael Kutsch to make targeted investments in the
energy sector. Saracen's initial focus is the establishment of a
petroleum marketing business in the Midwest with the broader goal
of establishing a multi-commodity energy trading and marketing
company. The company will participate in the physical and
financial energy markets in North America, with a customer focused
strategy to capture and protect value around energy
transportation, storage and conversion assets.
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'.
WINDERMERE SCHOOL: US Trustee Fixes Creditors Meeting for May 3
---------------------------------------------------------------
The United States Trustee will convene a meeting of Windermere
School Partners L.L.L.P.'s creditors at 9:00 a.m., on May 3, 2004,
in Suite 600 at SouthTrust Building, 6th Floor, 135 West Central
Boulevard, Orlando, Florida 32801. This is the first meeting of
creditors required under 11 U.S.C. Sec. 341(a) in all bankruptcy
cases.
All creditors are invited, but not required, to attend. This
Meeting of Creditors offers the one opportunity in a bankruptcy
proceeding for creditors to question a responsible office of the
Debtor under oath about the company's financial affairs and
operations that would be of interest to the general body of
creditors.
Headquartered in Windermere, Florida, Windermere School Partners
L.L.L.P., filed for chapter 11 protection on March 31, 2004
(Bankr. M.D. Fla. Case No. 04-03610). Frank M. Wolff, Esq., at
Wolff Hill McFarlin & Herron PA represent the Debtors in their
restructuring efforts. When the Company filed for protection from
their creditors, they listed both estimated debts and assets of
over $10 million.
WORLDCOM: Neon Optica Seeks to Clarify Services Agreement Status
----------------------------------------------------------------
NEON Optica, Inc. complains that the Worldcom Inc. Debtors have
made inconsistent representations as to the status of a
prepetition services agreement and related schedule. Hence, NEON
asks the Court to clarify whether the agreements have been assumed
or rejected in the Debtors' Chapter 11 case.
Paul N. Silverstein, Esq., at Andrews Kurth LLP, in New York,
relates that UUNet Technologies, Inc. and NEON are parties to a
Master Services Agreement dated July 2000 that set the general
terms of fiber optic services between the parties. The Services
Agreement contemplates that the parties would enter into a
separate schedule for the services they agreed to provide, which
would specify the terms on pricing, ordering procedures, billing
procedures, and others.
In August 2000, UUNet and NEON entered into a Private Optical
Network Service Schedule subject to the terms of the Services
Agreement. Pursuant to the Schedule and the Services Agreement,
NEON was obligated to provide UUNet with three dedicated fiber
optic networks for UUNet's exclusive use and benefit. In return
UUNet was to pay a $305,544 monthly fee for the circuits.
To provide the services under the Services Agreement and the
Schedule, NEON constructed fiber routes and facilities, entered
into long-term fiber optic leases, and installed fiber optic
equipment at certain locations owned or leased by the Debtors and
third parties. NEON's equipment is currently valued at
$3,000,000. NEON is continuing to incur costs for these fiber
optic leases and to maintain the facilities. From the Petition
Date until the end of January 2004, the Debtors continued to
actively use the Optical Networks provided by NEON under the
Schedule.
According to Mr. Silverstein, the Optical Networks that were
being provided under the Schedule were critical to the Debtors'
ongoing operations and could not be terminated until such time
the Debtors found alternative fiber optic routes. After the
confirmation of the Debtors' Plan, the Debtors apparently had not
secured any alternative routes and it was necessary for them to
continue to receive services from NEON under the Schedule.
Before the Plan confirmation, NEON's representatives contacted
UUNet to determine if the Debtors were intending to reject the
Services Agreement and the Schedule. The Debtors advised NEON
that those agreements were not going to be rejected because the
Optical Networks were critical for their ongoing operations.
After these conversations, the Debtors and NEON continued
performing under the Services Agreement and the Schedule. NEON
was unaware at that time that the Services Agreement and the
Schedule were listed in a Plan Supplement as executory contracts
to be rejected.
Relying on the Debtors' representations, NEON entered into an
agreement, which sets forth the amount of its prepetition claim,
and continued to provide services under the Services Agreement
and the Schedule, while the Debtors continued to accept those
services and use the Optical Networks.
In February 2004, NEON sent its monthly invoice to the Debtors
for the February services. It was then that NEON discovered that
the Services Agreement and the Schedule were rejected. The
Debtors informed NEON that they would not make any further
payments to NEON for the provision of circuits.
Upon investigation, NEON discovered that the Debtors were
utilizing the Optical Networks being provided under the Schedule
in January 2004. And sometime in January 2004, the Debtors had
found an alternative to NEON's Optical Networks and no longer
needed those Optical Networks for their ongoing operations.
Mr. Silverstein tells the Court that the Debtors' contracts
represent a significant amount of NEON's total revenue. NEON
needs to determine exactly where its stands with respect to these
agreements.
If the agreements were rejected, NEON asks the Court to:
(a) allow its rejection damages claim;
(b) allow its administrative priority claim; and
(c) require the Debtors to return the Equipment.
NEON asserts a general unsecured claim for $9,174,387 against the
Debtors:
-- $679,002 for the prepetition amounts the Debtors owed; and
-- $8,495,385 for rejection damages in the event the Services
Agreement and the Schedules were, indeed, rejected under
the Plan.
NEON also asserts an administrative priority claim for the
monthly charges due for the period from February 2004 through
April 2004.
Headquarterd in Clinton, Mississippi, WorldCom, Inc.,
-- http://www.worldcom.com/-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts. (Worldcom Bankruptcy News, Issue No. 50; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
XTO ENERGY: Will Broadcast Q1 2004 Conference Call on April 20
--------------------------------------------------------------
In conjunction with its first quarter 2004 earnings release, XTO
Energy Inc. (NYSE: XTO) will broadcast its operational review
conference call on Tuesday, April 20 at 3:00 p.m. Central (4:00
p.m. Eastern) via live internet webcast. The broadcast can be
accessed through the Company's website, http://www.xtoenergy.com/
A replay of the broadcast will be available beginning at 6:00 p.m.
Central (7:00 p.m. Eastern) on April 20th.
XTO Energy Inc. (S&P, BB+ Corporate Credit Rating, Positive
Outlook) is a premier domestic natural gas producer engaged in the
acquisition, exploitation and development of quality, long-lived
gas and oil properties. The Company, whose predecessor companies
were established in 1986, completed its initial public offering in
May 1993. Its properties are concentrated in Texas, New Mexico,
Arkansas, Oklahoma, Kansas, Wyoming, Colorado, Alaska and
Louisiana.
*********
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 ***