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/raid1/www/Hosts/bankrupt/TCR_Public/040422.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 22, 2004, Vol. 8, No. 79 Headlines AK STEEL: May Surcharge Electrical Steel Products ANALYTICAL SURVEYS: Names Hamid Akhavan Senior VP -- Operations ANC RENTAL: Court Confirms 3rd Amended Chap. 11 Liquidating Plan BOISE CASCADE: First Quarter 2004 Results Enters Positive Zone BRIDGEPORT METAL: US Trustee Names 3-Member Creditors' Committee BUDGET GROUP: P. Hirsch Urges Court to Reinstate $2.2MM Claim CASCADES: First Quarter 2004 Results Conference Call is on May 4 CENTURION CDO: S&P Assigns BB Preliminary Ratings to Class D Notes COEUR D'ALENE: Files Securities Registration Statements with SEC COMMUNITY REINVESTMENT: S&P Rates $65.1M Series 2004C Bonds at BB COMPUTERMAX: Case Summary & 20 Largest Unsecured Creditors CONSECO SENIOR: Receives Order From Florida Insurance Regulator COTT CORP: Declares Record First Quarter 2004 Financial Results DANA CORPORATION: Names CEO Michael J. Burns as Board Chairman DANA CORPORATION: Declares Dividend Payable on June 15, 2004 DAN RIVER: Gets Nod to Hire King & Spalding as Attorneys DELTA WOODSIDE: Net Loss Doubles to $2.3 Million at March 27, 2004 DESI INSURANCE: Voluntary Chapter 11 Case Summary DEXTERITY SURGICAL: Case Summary & 20 Largest Unsecured Creditors DRIVETIME: S&P Withdraws Low-B & Junk Counterparty & Debt Ratings DIGITAL LIGHTWAVE: May File for Bankruptcy if Refinancing Fails DSL.NET: 2003 Audit Report Includes Going Concern Qualification ECHOSTAR: Extends Form 10-K Filing as Co. Completes Restatement ENRON: Wants Time to Serve Preference Lawsuits Extended to June 9 ESHEL MANAGEMENT: Case Summary & 20 Largest Unsecured Creditors EXIDE TECHNOLOGIES: Delaware Court Confirms Reorganization Plan FERRELLGAS: Completes Blue Rhino Stock Acquisition for $343 Mil. FERRELLGAS PARTNERS: Closes $250 Million Senior Note Offering FIBERMARK: Wants to Continue Hiring Ordinary Course Professionals FLEMING: Wants Court to Fix June 19 Plan Confirmation Hearing Date FULTON STREET: Fitch Cuts Class C Fixed-Rate Notes' Rating to B GRACE DIGITAL: Case Summary & 20 Largest Unsecured Creditors HOST MARRIOTT: Directors Vote to Declassify Board ID KRIFF INC: Case Summary & 20 Largest Unsecured Creditors INTERPLAY ENTERTAINMENT: Looks for More Funds as Bankruptcy Looms INTERPLAY: Engages SG Capital to Explore Strategic Options JP MORGAN: Fitch Affirms Low-B Ratings for 6 Ser. 2001-CIBC3 Notes LITFUNDING CORP: Inks Settlement Agreement with Creditors KMART: Leona Celestine Wants Court to Okay Validity of $6.6M Claim LAIDLAW: Greyhound Unit's Facility Compliance Still Uncertain LEGACY HOTELS: Posts Improved Revenues for First Quarter 2004 MACK FARMS INC: Case Summary & 20 Largest Unsecured Creditors METALS USA: Fulbright & Jaworski Submits Post-Confirmation Report METRIS COMPANIES: First Quarter 2004 Results Turn Positive METRIS: S&P Places Junk Counterparty Rating on Watch Developing MINORPLANET: Secures Increased $1.6 Million Funding Commitment MIRANT CORP: Objects to Perryville Energy's $1 Billion Claim MIRANT CORP: Court Okays Proposed Reclamation Claim Procedures NANOGEN: Receives Ontario Court Approval to Acquire SynX Pharma NAT'L CENTURY: Erwin Katz Appointed as Unencumbered Assets Trustee NATIONAL ENERGY: Most Creditors Say Yes to Reorganization Plan NORAMPAC INC: Releasing First Quarter Results on April 27 OAKWOOD HOMES: Clayton Homes Acquires Assets for $372.5MM Cash OMEGA HEALTHCARE: Declares Stock Dividends Payable on May 17 OMEGA HEALTHCARE: Releasing First Quarter Results on April 27 ORION TELECOMMS: Rosenfeld of Triax Capital to Serve as CRO OWENS-ILLINOIS: First Quarter 2004 Net Earnings Climb to $49MM OXIS INTERNATIONAL: Axonyx Inc. Discloses 56.8% Majority Stake PAC-WEST TELECOMM: Will Report First Quarter Results on April 28 PARMALAT GROUP: Committee Brings-In Cole Schotz as Special Counsel PG&E NAT'L: Obtains Go-Signal for $30M TransCanada Break-Up Fee PILLOWTEX: Agrees to Recharacterize GECC Lease Schedule C-97-1 PREMCOR REFINING: Fitch Assigns BB- Senior Unsecured Debt Rating RICHARD MARTIN MGMT: Voluntary Chapter 11 Case Summary ROGERS COMMS: Reports Improved 1st Quarter 2004 Financial Results SEMCO ENERGY: Declares Quarterly Dividend Payable on May 15 SHAW GROUP: Commences $25 Million Equity Offering SILICON GRAPHICS: March 2004 Balance Sheet Insolvency Tops $164MM SOLUTIA INC: Court Approves Non-Core Asset Sale Procedures SPIEGEL: Takes Steps to Rationalize Catalog & Corporate Functions STELCO: Union Urge Members to Attend May 1 Hamilton Rally TIMKEN CO: Shareholders Elect Jerry Jasinowski as New Director TRANS-INDUSTRIES: Auditors Express Going Concern Qualification TRAVEL SERVICE: Case Summary & 19 Largest Unsecured Creditors TRIAD HOSPITALS: Publishes First Quarter Operating Results UNITED AIRLINES: Inks Stipulation Settling Milepost Dispute US AIRWAYS: Woos Court to Enforce Philip Morris Agreement US AIRWAYS: S&P Keeps Ratings on Watch Negative as CEO Resigns USI HOLDINGS: Closes Public Offering of $11MM Common Stock WARNACO GROUP: Annual Shareholders' Meeting Set for May 19, 2004 WCI STEEL: Files Reorganization Plan in N.D. Ohio Bankr. Court WESTCHESTER COUNTY HEALTH: S&P Lowers Rating Two Notches to BB WICKES: Employs RE/MAX as Michigan Real Estate Broker W.R. GRACE: Delivers First Quarter 2004 Financial Results WORLDCOM/MCI: Board Adopts Shareholder Rights Plan XM SATELLITE: Closes $200M Sr. Secured Floating Rate Note Offering * Corp. Finance Attorney William Burke Returns to Sheppard Mullin * Cadwalader's Charlotte Office Tops Chambers & Partners Rankings ********* AK STEEL: May Surcharge Electrical Steel Products ------------------------------------------------- AK Steel (NYSE: AKS) said that, effective with shipments on May 1, 2004, the surcharge to its electrical steel sheet and strip products will be $150 per ton ($7.50/cwt.). AK Steel previously implemented a surcharge to its electrical steels beginning with February 2004 shipments. The amount of the surcharge is adjusted monthly based upon changes in raw material costs. This surcharge has been implemented to partially offset extraordinary increases in raw material costs, particularly costs of energy and steel scrap. Headquartered in Middletown, Ohio, AK Steel -- whose December 31, 2003 balance sheet shows a $52.8 million shareholders' equity deficit -- produces flat-rolled carbon, stainless and electrical steel products for automotive, appliance, construction and manufacturing markets, as well as tubular steel products. ANALYTICAL SURVEYS: Names Hamid Akhavan Senior VP -- Operations --------------------------------------------------------------- Analytical Surveys, Inc. (ASI) (Nasdaq: ANLT), a leading provider of utility-industry data collection, creation and management services for the geographic information systems (GIS) markets, announced Hamid Akhavan has rejoined the Company as senior vice president of operations. Akhavan spent more than 20 years with the Company in a variety of high-level positions in both operations and sales. He continued to work as a consultant to the Company after his departure from his project implementation position in January 2004. During his tenure at ASI, Akhavan has been directly involved in the performance and delivery of more than 100 GIS projects. He has extensive experience in the utility mapping sector and has worked on and managed data collection and conversion projects for customers in the electric, gas, water, wastewater, cable and telephone industries. "I am pleased and excited to be rejoining the leadership of ASI," Akhavan said. "The Company has put in place the personnel and the processes to achieve high-end project performance. I share ASI's focus of meeting and exceeding customer expectations." Analytical Surveys Inc. (ASI) provides technology-enabled solutions and expert services for geospatial data management, including data capture and conversion, planning, implementation, distribution strategies and maintenance services. Through its affiliates, ASI has played a leading role in the geospatial industry for more than 40 years. The Company is dedicated to providing utilities and government with responsive, proactive solutions that maximize the value of information and technology assets. ASI is headquartered in San Antonio, Texas and maintains operations in Waukesha, Wisconsin. For more information, visit http://www.anlt.com/ * * * As reported in Troubled Company Reporter's January 8, 2004 edition, Analytical Surveys, Inc. said that its financial statements issued on December 29, 2003, contained a going-concern qualification from its auditors relating to the Company's fiscal 2003 financial statements. The Company's independent auditor, KPMG, LLP, issued such a going-concern qualification on the financial statements of the Company for each fiscal year since the fiscal 2000 results were reported on January 17, 2001. The going-concern qualification was issued by KPMG based on the significant operating losses reported in fiscal 2003 and 2002 and a lack of external financing to fund working capital and debt requirements. Since fiscal 2000, ASI has replaced the Board of Directors and senior management team, eliminated all bank debt and recapitalized the Company with a convertible debenture, and is implementing a corporate turnaround effort designed to improve operating efficiencies, reduce and eliminate cash losses and position ASI for profitable operations. Additionally, the Company's sales and marketing team is pursuing market opportunities in both traditional digital mapping and newly launched data management initiatives. ANC RENTAL: Court Confirms 3rd Amended Chap. 11 Liquidating Plan ---------------------------------------------------------------- William J. Burnett, Esq., at Blank Rome, LLP, in Wilmington, Delaware, tells the Court that the ANC Rental Debtors' Plan is feasible. Mr. Burnett assures Judge Walrath that the Debtors have, or will have available, sufficient cash resources to fund all the payments on the Effective Date. Moreover, Mr. Burnett asserts that the Debtors satisfied the requirements of Section 1129(a) of the Bankruptcy Code, warranting the confirmation of the Plan: (A) Section 1129(a)(1) Section 1129(a)(1) requires that a plan comply with the applicable provisions of the Bankruptcy Code. Mr. Burnett contends that the Plan satisfies all of the applicable provisions of the Bankruptcy Code. (B) Section 1129(a)(2) Pursuant to Section 1129(a)(2), the Debtors, as proponents of the Plan, have complied with all of the provisions of the Bankruptcy Code, including, without limitation, the disclosure and solicitation requirements of Section 1125 and 1126. The Debtors transmitted solicitation materials including Ballots to the Holders of Claims in Class 2 entitled to vote on the Plan, and non-materials to the Holders of Claims in Class 1, Class 3 and Class 4, and to the Holders of Ad Valorem Tax Claims and Other Secured Claims only after the Bankruptcy Code approved the Disclosure Statement as containing adequate information. These materials were distributed in compliance with the requirements of the Solicitation Procedures Order, the Bankruptcy Code and the Bankruptcy Rules. (C) Section 1129(a)(3) Section 1129(a)(3) states that a plan must be proposed in good faith and not by any means forbidden by law. Mr. Burnett notes that the Debtors' and the Committee's objectives in proposing the Plan were for the valid business purpose of resolving disputes and satisfying, to the extent possible, the Debtors' obligations. (D) Section 1129(a)(4) Section 1129(a)(4) requires that all payments made or to be made by the plan proponent, by the debtor or by a person issuing securities or acquiring property under the plan, for services or for costs and expenses in or in connection with the case, or in connection with the plan and incident to the case, have been approved by, or are subject to the approval of, the Court as reasonable. According to Mr. Burnett, all payments made or to be made by the Debtors to their retained advisors for services or for costs and expenses in or in connection with these Chapter 11 cases, or in connection with the Plan and incident to the Chapter 11 cases, have been approved by, or are subject to the approval of, the Court. (E) Section 1129(a)(5) Section 1129(a)(5) requires the plan proponent to disclose the identity and affiliations of any individual proposed to serve, after confirmation of the plan, as a director, officer, or voting trustee of the debtor, an affiliate of the debtor participating in a joint plan with the debtor or a successor to the debtor under the plan, and to show that the appointment to, or continuance in, the office of that individual is consistent with the interests of creditors and equity security holders and with public policy. Section 1129(a)(5) also requires the proponent of a plan of reorganization to disclose the identity of any insider that will be employed or retained by the reorganized debtor, and the nature of any compensation for that insider. The Debtors disclosed the identity of Denis O'Connor, as the proposed Liquidating Trustee and the sole director, officer and shareholder of the Debtors on and after the Confirmation. Consistent with Section 1123(a)(7) of the Bankruptcy Code, the Plan provides for Denis O'Connor, a senior managing director with FTI Consulting, to become the Liquidating Trustee to administer the Liquidating Trust in accordance with the Liquidating Trust Agreement as of the Confirmation Date. The designation of Denis O'Connor as Liquidating Trustee on and after the Confirmation Date is consistent with the interests of Holders of Claims and Interests and public policy. (F) Section 1129(a)(6) Section 1129(a)(6) requires a debtor to obtain the approval of any governmental regulatory commission, with jurisdiction over the debtor, with respect to any rate changes provided for in the debtor's plan of reorganization. The Plan does not provide for any changes in rates that require regulatory approval of any governmental agency. Section 1129(a)(6) is, accordingly, not applicable. (G) Section 1129(a)(7) Section 1129(a)(7) requires each creditor or equity interest holder in an impaired class to accept the plan of reorganization or receive or retain under the plan on account of a claim or interest property of a value, as of the effective date of that plan, that is not less than the amount that the holder would receive or retain if the debtor were liquidated under Chapter 7 of the Bankruptcy Code. Mr. Burnett contends that the Plan satisfies the "best interest" test. With respect to each Impaired Class of Claims, and each Impaired Class of Interests, each Claim Holder or Interest Holder of a Class either accepted the Plan or will receive or retain under the Plan on account of the Claim or Interest property of a value, as of the Effective Date, that is not less than the amount the Holders would receive or retain if the Debtors were liquidated on the Effective Date under Chapter 7 of the Bankruptcy Code. (H) Section 1129(a)(8) Section 1129(a)(8) requires that, with respect to each class of claims or interests under a plan, the class has either accepted the plan or is not impaired under the plan. Class 2 has accepted the Plan. Carole G. Donlin certified that at least two-thirds in dollar amount and more than one-half in number of the Holders of Claims in Class 2 -- General Unsecured Claims -- accepted the Plan. Because Classes 3 and 4 will receive no distribution and retain no interest under the Plan, they are deemed to have rejected the Plan. Because the requirements of Section 1129(a)(8) are not satisfied with respect to Classes 3 and 4, the Debtors ask the Court to confirm the Plan under Section 1129(b) as to those Classes. Class 3 consists of ANC Intercompany Claims. The Plan is fair and equitable with respect to these Claims because no Class junior to Class 3 under the Plan will receive or retain any property under the Plan on account of that junior Interest. The Plan does not discriminate unfairly with respect to Holders of Class 3 Claims because it provides for substantive consolidation of the Debtors' cases. The Plan is fair and equitable with respect to the Holders of Class 4 ANC Common Stock Interests as no Class junior to Class 4 under the Plan will receive or retain any property under the Plan on account of the junior Interest. In addition, the Plan does not discriminate unfairly with respect to Holders of Class 4 Interests. (I) Section 1129(a)(9) The Plan provides for the mandatory treatment of Allowed Administrative Expenses and Allowed Priority Claims pursuant to Sections 507(a)(1), (1)(3), (a)(4) and (a)(8) of the Bankruptcy Code, in accordance with Section 1129(a)(9) of the Bankruptcy Code, except to the extent that the Holder of a particular Claim has agreed in writing to a different treatment. (J) Section 1129(a)(10) Section 1129(a)(10) provides that at least one impaired class of claims must accept the plan of reorganization, determined without including any acceptance of that plan by any insider. As demonstrated by the Plan Vote Certification, at least one impaired Class of Claims has accepted the Plan. (K) Section 1129(a)(11) Section 1129(a)(11) permits a plan to be confirmed if it is feasible, i.e., it is not likely to be followed by liquidation or the need for further financial reorganization. The Debtors demonstrated that, on and after the Effective Date, they would have the ability to meet their financial obligations under the Plan and liquidate their remaining assets in the ordinary course. As required by Section 1129(a)(11), confirmation of the Plan is not likely to be followed by the liquidation or need for further financial reorganization of the Debtors, except as contemplated by the Plan. (L) Section 1129(a)(12) Section 1129(a)(12) requires that all fees payable under Section 1930 of the Judiciary Procedures Code, as determined by the court at the hearing on confirmation of the plan, either have been paid or the plan provides for the payment of all those fees on the effective date of the plan. The Debtors have paid all Chapter 11 statutory and operating fees required to be paid during these cases and filed all fee statements required to be filed. Pursuant to Section 13.1 of the Plan, all fees payable pursuant to Section 1930 of the Judiciary Procedures Code will be paid on the Effective Date. (M) Section 1129(a)(13) Section 1129(a)(13) requires the continuation of payment of all retiree benefits, at the level established pursuant to Section 1114 of the Bankruptcy Code at any time prior to confirmation of the plan, for the duration of the period the debtor has obligated itself to provide those benefits. Section 1129(a)(13) is not applicable to these Chapter 11 cases. As required by Section 1123(a)(5) of the Bankruptcy Code, the Plan contemplates adequate means for its execution and implementation including, but not limited to: (1) the substantive consolidation of the Chapter 11 Cases; and (2) the formulation and administration of the Liquidating Trust for the purposes of liquidating the Debtors' remaining assets, winding up their affairs, and making distributions to holders of Allowed Clams. Accordingly, Judge Walrath confirmed the Joint Liquidation Plan, as modified, on April 15, 2004, in accordance with Section 1129(a) and (b) of the Bankruptcy Code. The Court also approves the substantive consolidation of the Chapter 11 cases into a single case for purposes of distribution, confirmation and consummation of the Plan in accordance with Section 105(a). In addition, on the Confirmation Date: (1) all of the Debtors' assets and liabilities will be treated as though they were merged; (2) all of the Debtors' prepetition cross-corporate guarantees will be eliminated; (3) any obligation of any Debtor and all guarantees executed by one or more of the Debtors will be deemed to be one obligation of the consolidated Debtors; (4) any Claims filed or to be filed in connection with any obligation and guarantees will be deemed one Claim against the consolidated Debtors; (5) each and every Claim filed in the individual Chapter 11 Case of any of the Debtors will be deemed filed against the consolidated Debtors in the consolidated ANC Chapter 11 Case and will be deemed a single obligation of all of the Debtors under the Plan on and after the Confirmation Date; (6) all duplicative claims filed against more than one of the Debtors will be automatically expunged so that only one Claim survives against the consolidated Debtors but in no way will the claim be deemed allowed by reason of Section 9.7 of the Plan; and (7) the consolidated Debtors will be deemed, for purposes of determining the availability of the set-off rights under Section 553 of the Bankruptcy Code, to be one entity, so that, subject to other provisions of Section 553 of the Bankruptcy Code, the debts due to a particular Debtor may be offset against claims against another Debtor. 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) BOISE CASCADE: First Quarter 2004 Results Enters Positive Zone -------------------------------------------------------------- Boise Cascade Corporation (NYSE: BCC) (S&P, BB+ Corporate Credit Rating, Stable Outlook), reported first quarter 2004 net income of $63.5 million, or 66 cents per diluted share, compared with a net loss of $27.5 million, or 53 cents per diluted share, in first quarter 2003. Fourth quarter 2003 net income was $6.9 million, or 5 cents per diluted share. The quarter's results include a pretax gain of $59.9 million, or 40 cents per diluted share, from the sale of 79,000 acres of timberland in Louisiana. Before this special item, the company posted first quarter 2004 net income of $26.9 million, or 26 cents per diluted share. FINANCIAL HIGHLIGHTS Sales in first quarter 2004 nearly doubled to $3.5 billion, compared with $1.9 billion in the first quarter a year ago. Sales in fourth quarter 2003 were $2.4 billion. Sales increased primarily because of the acquisition of OfficeMax in December 2003 but were also aided by strong product prices in Boise Building Solutions. REVIEW OF OPERATIONS On December 9, 2003, Boise acquired OfficeMax, Inc. Following that acquisition, the company began reporting two operating segments, Contract and Retail, within Boise Office Solutions, its office products distribution business. Taken together, the two operating segments make up the company's Boise Office Solutions business. For first quarter 2004, Boise Office Solutions sales increased 150% to $2.3 billion, compared with the same quarter a year ago. Sales for locations operating in both periods, including OfficeMax locations on a pro forma basis, increased 5%. Total pro forma sales of office supplies and paper increased 4%, sales of technology products increased 5%, and sales of furniture were up 4%. Boise's office papers sold through Boise Office Solutions increased 16% to 167,000 tons, compared with a year ago. Boise Office Solutions operating income was $58.4 million, up from $20.7 million in first quarter 2003 and $40.0 million in fourth quarter 2003. The results increased, relative to comparison periods, due to the OfficeMax acquisition. The operating margin was 2.5%, compared with 3.2%, before a special item, in first quarter 2003 and 3.2% in fourth quarter 2003. In first quarter 2004, Boise Office Solutions achieved $12.6 million of the $80 million in integration synergies expected for the year. Integration costs of $8.9 million occurred primarily in the contract segment, as the business began to consolidate delivery warehouses, customer service centers, and administrative staffing. Boise Office Solutions also recorded acquisition- related step-up costs of $4.5 million. Boise Office Solutions, Contract, sales of $1.1 billion in first quarter 2004 were 19% higher than sales in first quarter 2003 and 16% higher than in fourth quarter 2003. Excluding foreign exchange gains, sales rose 15%. Year-over-year same-location sales, excluding foreign exchange gains, in the first quarter rose 4%. This segment reported first quarter 2004 operating income of $34.4 million, compared with $29.9 million, before a special item, in first quarter 2003 and $33.9 million in fourth quarter 2003. The operating margin was 3.1%, compared with 3.2% before a special item, in first quarter 2003 and 3.5% in fourth quarter 2003. Boise Office Solutions, Retail Segment Boise began reporting its Boise Office Solutions, Retail, segment on December 10, 2003. In first quarter 2004, segment sales of $1.2 billion were 1% higher, and same-store sales were 3% higher, than pro forma sales in first quarter 2003. Boise Office Solutions, Retail, reported operating income of $24.0 million and an operating margin of 2.0% in first quarter 2004. Boise Building Solutions Boise Building Solutions reported record operating income, before special items, of $68.4 million in first quarter 2004, compared with an operating loss of $8.5 million in the same quarter a year ago and operating income of $52.3 million, before a special item, in fourth quarter 2003. Results were higher than comparison quarters due to very strong plywood, lumber, and engineered wood products markets. Relative to first quarter 2003, average plywood prices increased 48%, and average lumber prices rose 26%. Year over year, unit sales volumes for plywood and lumber volume declined because of the sale of our Yakima, Washington, wood products facilities in February 2004. Building materials distribution sales increased 58%, compared with first quarter 2003. Sales of engineered wood products grew 33%. Relative to fourth quarter 2003, average lumber prices increased 11%, while average plywood prices decreased 2%. Unit sales volumes were 4% higher in plywood and lumber. Boise Paper Solutions Boise Paper Solutions reported an operating loss of $32.1 million in the first quarter before a pretax gain of $59.9 million on the previously announced sale of 79,000 acres of Louisiana timberland. By comparison, the business lost $700,000 in first quarter 2003 and $14.4 million in fourth quarter 2003. A reduction in linerboard and newsprint production during a major boiler rebuilding project in DeRidder, Louisiana, operating difficulties associated with adverse weather conditions, and other production issues all contributed to the loss in first quarter 2004. Average net selling prices for Boise's mix of paper products were down 5% from first quarter 2003 levels and up 1% from fourth- quarter levels. OUTLOOK "For Boise overall, we continue to expect significantly higher sales and income for full year 2004, relative to 2003, both as the result of the acquisition of OfficeMax and strong or improving performance in all of our businesses," said George J. Harad, chairman and chief executive officer. "In Boise Office Solutions, the second quarter of the year is always seasonally weak, for both the Contract and Retail segments. We expect sales to decline sequentially and operating income to be substantially lower than in the first quarter. However, we are pleased with the progress we are making in integrating OfficeMax into our operations and continue to expect to meet our targets for the full year of $80 million in integration synergies, same-store sales growth of 4% to 6%, and an operating margin of 2.4% to 2.6%. "In Boise Building Solutions, we expect this year's building season to continue to be robust and markets for wood products to remain strong through the summer," Harad said. "In Boise Paper Solutions, we have announced and are implementing price increases in our key grades, and our mills have returned to normal production levels," he said. "Boise Paper Solutions should return to profitability in the second quarter." About Boise Cascade Corporation Boise, headquartered in Boise, Idaho, provides solutions to help customers work more efficiently, build more effectively, and create new ways to meet business challenges. We own or control more than 2 million acres of timberland, primarily in the United States, to support our manufacturing operations. Boise had sales of $8.2 billion in 2003. Boise Office Solutions, headquartered in Itasca, Illinois, is a division of Boise and a premier multinational contract and retail distributor under the OfficeMax brand of office supplies and paper, technology products, and office furniture. Boise Office Solutions had 2003 sales of $4.0 billion. Boise Building Solutions, headquartered in Boise, Idaho, is a division of Boise and manufactures plywood, lumber, particleboard, and engineered wood products. The business also operates 27 facilities that distribute a broad line of building materials, including wood products manufacture d by Boise. Boise Building Solutions posted manufacturing sales of $824 million and distribution sales of $2.0 billion in 2003. Boise Paper Solutions, headquartered in Boise, Idaho, is a division of Boise and a manufacturer of office papers, a majority of which are sold through Boise Office Solutions. Boise Paper Solutions also manufactures printing, forms, and converting papers; value-added papers; newsprint; containerboard and corrugated containers; and market pulp. The division had 2003 sales of $1.9 billion. Visit the Boise Web site at http://www.bc.com/ BRIDGEPORT METAL: US Trustee Names 3-Member Creditors' Committee ---------------------------------------------------------------- The United States Trustee for Region 2 appointed 3 of the largest unsecured creditors of The Bridgeport Metal Goods Manufacturing Co. to serve on an Official Unsecured Creditors Committee in the company's Chapter 11 case: 1. Moldpro, Inc., Gary L. Barnard, President 36 Denman Thompson Avenue West Swanzey, New Hampshire 03446 Tel: 603-3572523 Fax: 603-3575061 2. Evelet Crafters, Inc. Robert A. Finkenzeller, President 2712 South Main Street Waterbury, Connecticut 06706 Tel: 203-7579221 Fax: 203-7572205 3. Garrett Hewitt International, (NY), Inc. Robert J. Graham, President 228 Danbury Road Wilton, Connecticut 06897 Tel: 203-7611542 Fax: 203-8340746 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 Bridgeport, Connecticut, Bridgeport Metal Goods Manufacturing Co. -- http://www.bmgmfg.com/-- is engaged in the business of manufacturing, decorating and assembling plastic cosmetic containers and packaging products. The Company filed for chapter 11 protection on March 30, 2004 (Bankr. D. Conn. Case No. 04-50412). Irve J. Goldman, Esq., and Jessica Grossarth, Esq., at Pullman & Comley represent the Debtor in their restructuring efforts. When the Company filed for protection from its creditors, it listed both estimated debts and assets of over $10 million. BUDGET GROUP: P. Hirsch Urges Court to Reinstate $2.2MM Claim ------------------------------------------------------------- Charles J. Brown, III, Esq., at Elzufon, Austin, Reardon, Tarlov & Mondell, P.A., in Wilmington, Delaware, tells Judge Case that Patricia Hirsch timely filed a $2,220,899 unsecured non- priority claim against the Budget Group Debtors due to personal injury. Ms. Hirsch based the claim on a judgment against the Debtors by the Circuit Court of the Fifteenth Judicial Circuit of Florida in and for Palm Beach County Florida, Case No. CL 00-1857. The judgment was rendered on May 22, 2002. At the time of the Debtors' bankruptcy petition, the Florida Case was in the post-trial motion stage and on September 17, 2002, Ms. Hirsch asked the Bankruptcy Court to lift the stay to allow the Florida Case to proceed. The Florida Case has since been appealed and is pending before the Florida State appellate court. The Debtors objected to the Hirsch Claim on January 6, 2004, stating that there was no supporting documentation to the claim. Mr. Brown relates that he has no record receiving the Debtors' formal objection. He just learned of the Debtors' objection upon receipt of the March 1, 2004, corrected Bankruptcy Court order. Accordingly, Ms. Hirsch asks Judge Case to reconsider the order and reinstate her claim. Mr. Brown assures the Court that the Debtors will be prejudiced if Ms. Hirsch's claim is reinstated. Many claim objections still remain pending. Reconsideration of the Corrected Order would not cause any prejudicial delay. Furthermore, the Debtors' objection seeks to expunge personal injury claims on the basis for providing no supporting documentation. However, pursuant to Section 157 of the Federal Rules of Judicial Procedure, the Bankruptcy Court, which is part of the U.S. District Court, lacks jurisdiction to address personal injury claims. Mr. Brown points out that in Rooker v. Fidelity Trust Co., 263 U.S. 413 (1923) and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462 (1983), the U.S. District Courts lack jurisdiction to hear a collateral attack on a state court judgment, including a judgment that is pending appeal. Moreover, since a personal injury claim is not based on a written instrument, there is typically no need to attach supporting documents to a personal injury proof of claim form. Mr. Brown assures Judge Case that Ms. Hirsch has not acted intentionally to delay consideration of her claim. 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) CASCADES: First Quarter 2004 Results Conference Call is on May 4 ---------------------------------------------------------------- Financial analysts are invited to attend Cascades Inc. first quarter results conference call: Tuesday, May 4, 2004 at 10:00 a.m. ET Dial numbers: (514) 807-8791 (416) 640-4127 Replay: (416) 640-1917 access code: 21046030(pound key) Media and other interested individuals are invited to listen to the live or deferred broadcast on the Cascades corporate Web site at http://www.cascades.com/ * * * As previously reported, Standard & Poor's Ratings Services revised its outlook on diversified paper and packaging producer Cascades Inc. to negative from stable. At the same time, the 'BB+' long- term corporate credit rating and 'BBB-' senior secured bank loan rating were affirmed. "The outlook revision stems from concerns that Cascades is unlikely to improve its credit profile in the near term and remains vulnerable to further weakening if challenging conditions persist," said Standard & Poor's credit analyst Clement Ma. CENTURION CDO: S&P Assigns BB Preliminary Ratings to Class D Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its preliminary ratings to Centurion CDO VII Ltd.'s $1.012 billion fixed- and floating-rate notes due 2016. The preliminary ratings are based on information as of April 20, 2004. Subsequent information may result in the assignment of final ratings that differ from the preliminary ratings. The preliminary ratings reflect: -- The expected commensurate level of credit support in the form of subordination to be provided by the notes junior to the respective classes; -- The cash flow structure, which is subject to various stresses requested by Standard & Poor's; -- The experience of the collateral manager; -- The coverage of interest rate risks through hedge agreements; and -- The legal structure of the transaction, which includes the bankruptcy remoteness of the issuer. The presale can also be found on the Standard & Poor's Web site at http://Standardandpoors.com/.Select Credit Ratings, and then find the article under Presale Credit Reports. PRELIMINARY RATINGS ASSIGNED Centurion CDO VII Ltd. Class Rating Amount (mil. $) ----- ------ --------------- A-1a AAA 198.000 A-1b AAA 22.000 A-2 AAA 632.500 B-1 A 22.500 B-2 A 76.500 C-1 BBB 3.000 C-2 BBB 27.205 D-1 BB 5.000 D-2 BB 25.300 G combination securities BBB- 7.100 Preferred equity certificates N.R. 87.995 COEUR D'ALENE: Files Securities Registration Statements with SEC ---------------------------------------------------------------- Coeur d'Alene Mines Corporation (NYSE: CDE) announced that it filed a registration statement on Form S-3 with the Securities and Exchange Commission to register the offer and sale by the Company from time to time of up to $250 million of various securities, which may include debt securities, preferred stock, common stock and or warrants. The Company will determine the use of proceeds of any particular offering only if and when the Company actually sells securities, but the Company currently expects that it will use the proceeds of any sale of any securities registered on Form S-3 registration statement for general corporate purposes, which may include expansion and development of existing operations, possible acquisitions of mining properties or other mining companies, for working capital to support the Company's growth or the repayment of indebtedness. In addition, the Company filed a registration statement on Form S-4 with the SEC to register the offer by the Company from time to time of up to 50 million shares of common stock to be used solely for exchanges, mergers, asset acquisitions and other forms of business combinations. The registration statements on Form S-3 and Form S-4 relating to these securities filed with the SEC have not yet become effective. These securities may not be sold nor may any offers to buy be accepted prior to the time that the particular registration statement becomes effective. Coeur d'Alene Mines Corporation (S&P, CCC Corporate Credit Rating, Positive) is the world's largest primary silver producer, as well as a significant, low-cost producer of gold. The Company has mining interests in Nevada, Idaho, Alaska, Argentina, Chile and Bolivia. COMMUNITY REINVESTMENT: S&P Rates $65.1M Series 2004C Bonds at BB ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'AAA' rating to Community Reinvestment Fund Affordable Housing No. 2 LLC's $86.9 million commercial mortgage pass-through interest only certificates series 2004X. Standard & Poor's also assigned its 'AAA', 'A', and 'BB' ratings to the fund's $65.1 million 2004A series A, $8.7 million series 2004B, and $8.7 million series 2004C commercial mortgage pass-through certificates, respectively. The outlook is stable. The ratings reflect a pledge of taxable first mortgage loans for 46 affordable multifamily properties, including seven senior housing developments; a concentration of very stable property types--100% of the loans are for multifamily, low-income housing tax credit properties; a disperse pool of properties, with 54% of par value in California, 28% in Florida, and 13% in Wisconsin; and credit support provided by the subordinate classes of 25% for the 'AAA', 15% for the 'A', and 5% for the 'BB' rated tranches to cover potential losses should the loans default. Standard & Poor's has determined that, on a weighted-average basis, the pool has a debt service coverage ratio of 1.22x, a beginning loan to value of 79%, and an ending loan to value of 18%. The sponsor of the transaction is the Community Reinvestment Fund (CRF). CRF was organized in 1988 as a Minnesota nonprofit corporation to promote social objectives such as job creation in economically distressed communities or among economically or socially disadvantaged groups, the creation or retention of affordable housing and revitalization of distressed communities or neighborhoods. Through its Community Reinvestment Program, CRF seeks to provide new loan capital for community-based development organizations by creating a secondary market for the program's development loans. The primary purpose of these development loans is to finance affordable housing for low- or moderate-income persons; to finance community services for low- or moderate-income persons; to promote economic development by financing small businesses or farms; and, to finance activities that revitalize or stabilize low- or moderate-income neighborhoods. Midland Services Inc. will be the master and special servicer for the transaction, tracking the performance of the loans, and will be responsible for advancing funds. Midland Services Inc., is an approved Standard & Poor's servicer, and has a strong servicer ranking. COMPUTERMAX: Case Summary & 20 Largest Unsecured Creditors ---------------------------------------------------------- Debtor: Computermax 5801 South Highway 1792 Fern Park, Florida 32730 Bankruptcy Case No.: 04-04332 Type of Business: The Debtor is Central Florida's largest leading provider of information technology products, services and solutions. See http://www.computermax.com/ Chapter 11 Petition Date: April 16, 2004 Court: Middle District of Florida (Orlando) Judge: Karen S. Jennemann Debtor's Counsel: Donald L. Dempsey, II, Esq. Donald L. Dempsey, II, P.A. 4321 Roosevelt Boulevard Jacksonville, FL 32210 Tel: 904-387-5262 Fax: 904-387-5263 Estimated Assets: $0 to $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Twelfth Orlando Corporation Building Lease $392,606 c/o RD Management Corp. 810 Seventh Ave, 28th Fl. New York, NY 10019 Banco Popular North America SBA Loan $230,000 SED International $182,000 Philips Hwy Commerce Pkway Building Lease $123,070 Twelfth Orlando Corporation Building Lease $38,500 Microtel International Inc. $34,286 Sun Trust Loan $32,149 Max Group $31,118 WinTec Industries $28,865 Amptron International, Inc. $25,000 IC Intracom $22,355 E-Case Inc. $14,719 Avus $14,122 TTX Computer Products Inc. $12,830 Aetna $9,000 TTX Computer Products Inc. $8,919 TSR Inc./Silicon Resources $8,379 Manifest Funding Services Equipment Lease $8,020 Platinum System, Inc. $5,808 BlueCross BlueShield Florida $4,760 CONSECO SENIOR: Receives Order From Florida Insurance Regulator --------------------------------------------------------------- Conseco, Inc. (NYSE:CNO) said that its Conseco Senior Health Insurance Company unit has received an order from the Florida Office of Insurance Regulation that affects approximately 18,000 home health care policies issued in Florida by Conseco Senior Health and its predecessor companies. Payments for the benefit of policyholders on these policies have exceeded the premiums received by a significant amount. The order provides that Conseco Senior Health will offer three alternatives to holders of these policies. The order also requires Conseco Senior Health to pursue a similar course of action with respect to approximately 21,000 home health care policies issued by Conseco Senior Health and its predecessor companies in other states, subject to consideration and approval by other state insurance departments. Conseco President and CEO Bill Shea said, "We commend the Florida Office of Insurance Regulation for approving a course of action that protects policyholders while providing Conseco Senior Health with the ability to both mitigate its losses and enhance its ability to pay future claims. Conseco Senior Health will move promptly to comply with the order." Conseco, Inc.'s insurance companies help protect working American families and seniors from financial adversity: Medicare supplement, long-term care, cancer, heart/stroke and accident policies protect people against major unplanned expenses; annuities and life insurance products help people plan for their financial future. For more information, visit Conseco's web site at http://www.conseco.com/ COTT CORP: Declares Record First Quarter 2004 Financial Results --------------------------------------------------------------- Cott Corporation (NYSE:COT; TSX:BCB) announced record sales and earnings per share for the first quarter ended April 3, 2004. Sales in the first quarter were up 26% to $370.9 million compared to $295.3 million last year. Excluding the impact of acquisitions and foreign exchange, sales were up 18%. Earnings per diluted share were $0.21; an increase of 40% from last year's reported $0.15. "Retailer branded soft drinks are outpacing category growth as in 2003," said Frank E. Weise, Cott's chairman and chief executive officer. "This strong performance underlines our customers' commitment to their own-brand beverage programs. At the same time, these record results are a credit to Cott employees and their delivery of superior products and services." Sales in the Company's UK/Europe business unit rose 45%, up 26% excluding foreign exchange. In the US business unit, sales were up 21%, up 15% excluding the impact of acquisitions. Canada saw a 25% increase in sales, up 9% excluding the impact of foreign exchange; and sales for the International business unit doubled to $14.7 million, of which sales in Mexico amounted to $9.0 million. Commenting on the sales growth, John K. Sheppard, Cott president and chief operating officer added, "Our customer-centric approach to the business continues to make a significant impact across all business units." He said sales growth in the Company's U.S. business unit was driven by new product development and merchandising programs, while in Canada it was as a result of Cott's continued efforts in the grocery channels. In the U.K. business unit, sales were up in all channels and were also favorably affected by the impact of the Nichols business. Sales in Mexico were up almost three fold, as customers there continue to demonstrate their commitment to building their retailer branded soft drink programs. Gross margin for the quarter was 19.0% compared to 19.1% last year. Operating income of $31.7 million was up 28% from last year's $24.8 million. Cott created a reserve against certain Canadian export receivables, resulting in a charge of $2.3 million in the first quarter. Earlier in the quarter, the Company announced that it had acquired assets of The Cardinal Companies of Elizabethtown, LLC, including a bottling facility located in Elizabethtown, Kentucky, with the objective of strengthening the Company's capabilities in the mid- western U.S. Full terms of this transaction were not disclosed. During the quarter, Cott announced the appointment of John K. Sheppard as chief executive officer, effective September 1, 2004. Sheppard currently serves as president and chief operating officer. Weise, the company's chief executive officer since 1998, will remain chairman with an active role in assisting management in long-term strategy, customer relations and investor relations. The Company also amended its guidance for the full year, raising its estimate of earnings per diluted share to $1.23-$1.27. Sales are expected to increase 12-15%. EBITDA is expected to reach $220 million to $225 million. Capital spending is expected to be held to $55 million in 2004. Finally, in response to evolving market practices and to the policies of representative shareowner groups, Cott announced that it has decided to amend its Common Share Option Plan to limit the number of options that may be granted to directors of Cott who are not also employees or officers of Cott. The amendment provides that the aggregate number of common shares that may be issued, pursuant to the exercise of options, to directors who are not also officers or employees of Cott be limited to 0.5% of the total number of issued and outstanding common shares on the date of the grant of options. Options that are held by directors that were granted to them when they were officers or employees of Cott will not be counted for purposes of calculating the 0.5% amount. This amendment is in addition to the amendment to the Option Plan that will be voted on at Cott's upcoming annual meeting, and while this amendment is not the subject of the upcoming vote, the Company intends to administer the Option Plan in accordance with this amendment pending regulatory approval. Currently, there are a total of 240,000 options that have been granted (and are outstanding) to directors who are not officers or employees of Cott, representing approximately 0.34% of the number of total issued and outstanding common shares. About Cott Corporation Cott Corporation (S&P, BB Long-Term Corporate Credit and BB+ Senior Secured Debt Ratings) is the world's largest retailer brand soft drink supplier, with the leading take home carbonated soft drink market shares in this segment in its core markets, the United States, Canada and the United Kingdom. DANA CORPORATION: Names CEO Michael J. Burns as Board Chairman -------------------------------------------------------------- Dana Corporation (NYSE: DCN) announced that its Board of Directors has named president and chief executive officer Michael J. Burns to the additional post of chairman. Mr. Burns becomes the eighth chairman in Dana's 100-year history, succeeding Glen H. Hiner, who had served in the position since the death of former Dana Chairman and CEO Joe Magliochetti last September. Mr. Hiner will continue as a director of Dana, a role he has served since 1993. "The Dana Board of Directors is pleased to appoint Mike Burns chairman of Dana, in keeping with our planned transition process," Mr. Hiner said. "Mike is an outstanding leader who is exceptionally qualified to lead Dana through its current transformation and into its second century." Mr. Burns was named president and CEO of Dana in February after 34 years with General Motors Corp., where he had most recently served as president of General Motors Europe, based in Zurich, Switzerland. During his career with General Motors, he held a variety of positions in operations, engineering, administration, and sales before moving to GM Singapore in 1981 as operations manager for Delco Electronics. After joining the GM Treasurer's Office in New York, he was subsequently promoted to director of Overseas Financial Analysis. He returned to Delco Electronics in 1987, where he advanced through a series of increasingly responsible positions, eventually becoming GM vice president and general manager of Delphi Delco Electronics Systems, a position he occupied before his most recent role in Europe. A native of Monticello, Indiana, Mr. Burns earned a bachelor's degree in Mechanical Engineering from Kettering University and a master's degree in Business Administration from The Wharton School of the University of Pennsylvania. Dana Corporation is a global leader in the design, engineering, and manufacture of value-added products and systems for automotive, commercial, and off-highway vehicles. Delivering on a century of innovation, the company's continuing operations employ approximately 45,000 people worldwide dedicated to advancing the science of mobility. Founded in 1904 and based in Toledo, Ohio, Dana operates technology, manufacturing, and customer-service facilities in 30 countries. Sales from continuing operations totaled $7.9 billion in 2003. * * * As reported in the Feb. 24, 2004, edition of the Troubled Company Reporter, Fitch Ratings initiated coverage on Dana Corporation and assigned a rating of 'BB' to Dana's senior unsecured debt. The Rating Outlook is Positive. The rating reflects an improved operating profile and a strengthening balance sheet characterized by significant debt reduction and healthy cash balances. Over the past several years, Dana has sharpened its strategic focus which has resulted in significant restructuring and divestiture programs. Restructuring actions have led to enhanced margins while divestitures have strengthened the balance sheet. Balancing out some of these positives are risks associated with unrelenting price pressures from light vehicle manufacturers for pricing concessions and continuing cost pressures which could jeopardize full realization of operating momentum going forward. Furthermore, Dana's current capital structure still has significant financial leverage and an under funded pension position will continue to require cash contributions. DANA CORPORATION: Declares Dividend Payable on June 15, 2004 ------------------------------------------------------------ Dana Corporation (NYSE: DCN) declared a dividend on its common stock of 12 cents per share, payable on June 15, 2004, to shareholders of record on June 1, 2004. Dana Corporation is a global leader in the design, engineering, and manufacture of value-added products and systems for automotive, commercial, and off-highway vehicles. Delivering on a century of innovation, the company's continuing operations employ approximately 45,000 people worldwide dedicated to advancing the science of mobility. Founded in 1904 and based in Toledo, Ohio, Dana operates technology, manufacturing, and customer-service facilities in 30 countries. Sales from continuing operations totaled $7.9 billion in 2003. * * * As reported in the Troubled Company Reporter's February 24, 2004 edition, Fitch Ratings initiated coverage on Dana Corporation and assigned a rating of 'BB' to Dana's senior unsecured debt. The Rating Outlook is Positive. The rating reflects an improved operating profile and a strengthening balance sheet characterized by significant debt reduction and healthy cash balances. Over the past several years, Dana has sharpened its strategic focus which has resulted in significant restructuring and divestiture programs. Restructuring actions have led to enhanced margins while divestitures have strengthened the balance sheet. Balancing out some of these positives are risks associated with unrelenting price pressures from light vehicle manufacturers for pricing concessions and continuing cost pressures which could jeopardize full realization of operating momentum going forward. Furthermore, Dana's current capital structure still has significant financial leverage and an under funded pension position will continue to require cash contributions. DAN RIVER: Gets Nod to Hire King & Spalding as Attorneys -------------------------------------------------------- Dan River Inc., and its debtor-affiliates sought and obtained approval from the Northern District of Georgia, Newnan Division, to employ King & Spalding LLP as their counsel in these bankruptcy cases and other proceedings. King & Spalding has been the Debtors' principal outside counsel for more than 14 years and has been providing restructuring advice to the Debtors for several months. In this engagement, King & Spalding will: (a) advise the Debtors with respect to their powers and duties as debtors-in- possession in the continued management and operation of their businesses; (b) take all necessary action to protect and preserve the estates of the Debtors, including the prosecution of actions on the Debtors' behalf, the defense of any actions commenced against the Debtors, the negotiation of disputes in which the Debtors are involved, and the preparation of objections to claims filed against the Debtors' estates; (c) prepare on behalf of the Debtors all necessary motions, applications, answers, orders, reports, and other papers in connection with the administration of the Debtors' estates; (d) negotiate and prepare on behalf of the Debtors a plan of reorganization, a disclosure statement, and all related documents; (e) negotiate and prepare documents relating to the disposition of assets, as requested by the Debtors; (f) advise the Debtors, where appropriate, with respect to federal, state, and foreign regulatory matters; (g) advise and represent the Debtors on litigation matters, specifically including (but not limited to) representation of the company in the pursuit of claims arising from alleged price fixing and customer allocation in the polyester staple fiber market; (h) advise the Debtors on antitrust matters, specifically including advice on distribution arrangements, pricing structures, and acquisitions by the company and others; (i) advise the Debtors on environmental matters, general corporate matters, ERISA and other employee benefits matters, securities law and SEC-related matters, finance and finance-related matters and transactions; and (j) perform such other legal services for the Debtors as may be necessary and appropriate. The Debtors will pay King & Spalding its current hourly rates, which range from: Designation Billing Rate ----------- ------------ attorneys $170 to $700 per hour document clerks and legal assistants $80 to $195 per hour James A. Pardo, Jr., a partner of King & Spalding reports that the Debtors gave the firm a $125,000 retainer. 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. DELTA WOODSIDE: Net Loss Doubles to $2.3 Million at March 27, 2004 ------------------------------------------------------------------ Delta Woodside Industries, Inc. (NYSE: DLW) reported net sales of $37.9 million for the quarter ended March 27, 2004, a decrease of 18.4% when compared to net sales of $46.5 million for the quarter ended March 29, 2003. The decrease from the prior year quarter was the result of reduced unit sales partially offset by a 6.0% increase in average sales price. For the nine months ended March 27, 2004, the Company reported net sales of $129.0 million as compared to net sales of $128.5 million for the previous year nine months ended March 29, 2003. The increase was the result of a 1.2% increase in average sales price partially offset by a decline in unit sales. Unit sales declined in both the quarter and nine-month periods primarily as a result of weaker retail sales partially offset by improved demand for military fabrics. Product mix changes accounted for the increase in average sales price. The Company reported an operating loss of $1.2 million for the quarter ended March 27, 2004 compared to an operating loss of $0.5 million in the prior year quarter. For the nine months ended March 27, 2004 the Company reported an operating loss of $1.3 million compared to an operating profit of $3.8 million for the nine months ended March 29, 2003. The Company reported a net loss of $2.3 million or $0.40 per common share for the quarter ended March 27, 2004 compared to a net loss of $1.1 million or $0.19 per common share for the quarter ended March 29, 2003. For the nine months ended March 27, 2004, the Company reported a net loss of $4.8 million or $0.82 per common share as compared to net income of $0.6 million and $0.10 per common share for the previous year's nine months ended March 29, 2003. The increase in operating loss in the current year quarter was the result of reduced absorption of manufacturing costs due to reduced running schedules and deteriorating margins on commodity products due to continued pressure from imports coupled with over capacity of domestic textile production, partially offset by an improved product mix. The operating loss for the current year nine month period resulted principally from unabsorbed manufacturing costs associated with reduced running schedules brought on by reduced customer demand. For the current quarter ended March 27, 2004 the Company recorded an income tax benefit of $35,000. For the prior year quarter and nine months ended March 29, 2003, the Company recorded a tax benefit of $0.7 million and a tax expense of $0.4 million, respectively. As a result of the operating loss in the current year third quarter, the Company's operating subsidiary Delta Mills, Inc. was not in compliance with the maximum leverage ratio covenant of its $50 million revolving credit agreement with GMAC at the end of the third quarter of fiscal 2004. GMAC has granted Delta Mills a waiver and amendment that waives the existing default with respect to the maximum leverage ratio covenant, temporarily amends the maximum leverage ratio covenant for the fourth quarter of fiscal 2004, and temporarily eliminates the fixed charge coverage ratio covenant for the fourth quarter of fiscal 2004. The waiver and amendment also reduces Delta Mills' availability under the credit facility by $7 million for the remaining term of the facility and increases the interest rates under the credit facility by 125 basis points; however, the interest rates will revert to their pre-amendment levels if Delta Mills has net income for fiscal 2005 and no event of default exists under the credit facility. The New York Stock Exchange announced on April 20, 2004 that trading on the NYSE in the common stock of the Company, ticker symbol DLW, will be suspended prior to the opening of trading on Friday, April 23, 2004, and that the NYSE will subsequently delist the Company's common stock. The Company intends to move its listing to the Over the Counter Bulletin Board (OTC-BB) and expects its common stock to be quoted on the OTC Bulletin Board beginning at the opening of trading on Friday, April 23, 2004. The Company was operating under a plan to address by March 31, 2004 its non-compliance with the NYSE's continued listing requirement to maintain an average global market capitalization of at least $15 million over a consecutive 30 trading-day period, but the Company was unable to return to compliance within the required time frame. Furthermore, the NYSE has announced that it is seeking to amend its continued listing criteria to require an average global market capitalization of $25 million. In addition, the NYSE has announced that it is seeking to amend its current continued listing criteria that require a listed company to maintain total stockholder's equity of $50 million if its average global market capitalization is less than $50 million to increase both thresholds to $75 million. It was evident to the Company that under the new NYSE continued listing criteria, the Company could meet neither the $25 million average global market capitalization requirement nor the $75 million total shareholder's equity requirement for companies with average global market capitalization of less than $75 million. The Company has decided to move its listing to the OTC Bulletin Board for the foreseeable future. If business conditions improve sufficiently for the Company to meet the listing criteria of one of the major exchanges, the Company will consider the possibility of moving its listing to one of the major exchanges. Delta Woodside Industries, Inc. -- whose corporate credit rating is rated at CCC by Standard & Poor's -- is headquartered in Greenville, South Carolina. Through its wholly owned subsidiary, Delta Mills, it manufactures and sells textile products for the apparel industry. The Company employs about 1,600 people and operates five plants located in South Carolina. DESI INSURANCE: Voluntary Chapter 11 Case Summary ------------------------------------------------- Debtor: Desi Insurance Agency Inc. 13615 South Chippewa Trail Lockport, Illinois 60440 Bankruptcy Case No.: 04-15236 Chapter 11 Petition Date: April 16, 2004 Court: Northern District of Illinois (Chicago) Judge: Pamela S. Hollis Debtor's Counsel: William D. Cherny, Esq. The Chawla Group, Ltd. 15 Spinning Wheel Road #126 Hinsdale, Il 60521 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20-largest creditors. DEXTERITY SURGICAL: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Dexterity Surgical, Inc. 5444 Westheimer Road, Suite 1970 Houston, Texas 77056 Bankruptcy Case No.: 04-35817 Type of Business: The Debtor is engaged in the distribution of instruments, equipment and surgical supplies, primarily used in hand-assisted laproscopic surgery. Chapter 11 Petition Date: April 19, 2004 Court: Southern District of Texas (Houston) Judge: Marvin Isgur Debtor's Counsel: Robert Andrew Black, Esq. Fulbright & Jaworski 1301 McKinney, Suite 5100 Houston, TX 77010 Tel: 713-651-5364 Fax: 713-651-5246 Total Assets: $3,639,923 Total Debts: $8,715,167 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ TFX Equities, Inc. and $2,837,039 Teleflex, Inc. 630 West Germantown Pike Suite 450 Plymouth Meeting, PA 19462 U.S. Surgical,. Inc. Judgment $2,500,000 P. O. Box 100777 Atlanta, GA 30384-0777 Christopher K. Black $784,079 982 Jamie Court Blue Bell, PA 19422 Kramer & Kramer, LLP $703,000 Attorneys & Counselors 1077 Rydal Road, Suite 100 Surgical Visions I, Inc. $640,534 2400 Mellwood, Suite 1316 Louisville, KY 40206 Frederick C. Feiler, Jr. $155,281 Apogee Medical, Inc. Trade debt $119,107 Beckman and Associates Legal fees $89,513 Jerome F. Flaherty $77,640 American Express Company $65,000 Dr. Clark Gerhart, MD $19,410 Ricardo G. Cedillo Legal fees $18,648 AICCO, Inc. Insurance $10,101 Renaissance Capital Growth Trade debt $10,000 Renaissance U.S. Growth Trade debt $10,000 PrimeSource Surgical Trade debt $5,424 Akin Doherty Klein & Feuge Auditors $4,468 Interpark-Tex, Ltd. Trade debt $3,520 ConMed Corporation Trade debt $1,962 Applied Medical Resources Trade debt $1,468 DRIVETIME: S&P Withdraws Low-B & Junk Counterparty & Debt Ratings ----------------------------------------------------------------- Standard & Poor's Ratings Services withdrew its 'B-/B' counterparty credit ratings and 'CCC' subordinated debt rating on DriveTime. "DriveTime is the largest used car dealership in the country. The firm's lending operations have focused on the subprime automobile lending market," said Standard & Poor's credit analyst Jeffrey Zaun. DIGITAL LIGHTWAVE: May File for Bankruptcy if Refinancing Fails --------------------------------------------------------------- Digital Lightwave, Inc. (Nasdaq:DIGL) a leading provider of optical networking technology and test instruments, reported in its Annual Report on Form 10-K for the fiscal year ended December 31, 2003 filed with the Securities and Exchange Commission its operating results for the fourth quarter and fiscal year 2003. The company's revenue for the fourth quarter of 2003 was $1.6 million, compared with revenue of $2.8 million for the fourth quarter of 2002. The company's net loss for the fourth quarter of 2003, was $4.4 million, or ($0.14) per diluted share, compared with a net loss of $38.8 million, or ($1.24) per diluted share, for its fourth quarter of 2002. The company's revenue for fiscal year 2003 was $7.5 million, compared with revenue of $17.8 million for the fiscal year 2002. Net loss for the fiscal year 2003 was $32.4 million, or ($1.03) per diluted share, compared with net loss of $63.5 million, or ($2.03) per diluted share, for the fiscal year 2002. The company reported that it has insufficient short-term resources for the payment of its current liabilities and that it is in active discussions with its creditors in order to restructure its outstanding liabilities and resolve outstanding legal actions brought against it. The company reported that it believes that if it is unable to obtain financing, and restructure its outstanding liabilities with its creditors, it expects that it will not have sufficient cash to satisfy its obligations or to fund its current working capital and capital expenditure requirements and may have no alternative but to seek bankruptcy protection. Further, the company reported it had a working capital deficit of $25.9 million at December 31, 2003, and expects to incur operating losses through at least the first half of 2004. These factors, among others discussed in the notes to the company's financial statements, have resulted in Grant Thornton LLP, the company's independent auditors, including in their report that there exists substantial doubt about the company's ability to continue as a going concern. "Fiscal year 2003 was a year of continued restructuring for the company," said Mr. James R. Green, President and Chief Executive Officer of Digital Lightwave. "During 2003 our industry continued to experience an economic downturn, and we continued to rescale our business. We reduced our workforce by 119 employees and focused on reducing operating expenses and controlling spending. We were successful in reaching settlement agreements with several of our vendors and creditors in which our liabilities and claims were reduced by $11.3 million. The company also reported in its Form 10-K that it received a letter from Optel Capital, LLC, an entity controlled by the company's principal stockholder and chairman of the board of directors, Dr. Bryan Zwan, confirming that Optel intends to continue to consider requests for funding and to make advances to the company during the second fiscal quarter of 2004, on substantially similar terms and applying the same course of dealing as Optel has considered and advanced funds to the company during the past six months. "Our outlook for 2004 is cautiously optimistic," said Mr. Green. "Currently, we are actively engaged in negotiations to settle our remaining outstanding liabilities and resolve the outstanding legal actions that have been brought against us and we look forward to putting these matters behind us. While we expect that we will continue to incur operating losses through at least the first half of 2004, we are seeing increased activity within the marketplace and our bookings rate has increased. We are also pleased that our relationship with Optel remains positive," said Mr. Green. About Digital Lightwave, Inc. Digital Lightwave, Inc. provides the global communications networking industry with products, technology and services that enable the efficient development, deployment and management of high-performance networks. Digital Lightwave's customers -- companies that deploy networks, develop networking equipment, and manage networks -- rely on its offerings to optimize network performance and ensure service reliability. DSL.NET: 2003 Audit Report Includes Going Concern Qualification --------------------------------------------------------------- DSL.net, Inc. (NASDAQ: DSLN), a leading nationwide provider of broadband communications services to businesses, disclosed that in compliance with Nasdaq Marketplace Rule 4350 (b)(1)(B), that the independent audit report filed with the Company's Annual Report on Form 10-K for the year ended Dec. 31, 2003, included a qualification for a going concern. The disclosure in this press release is required under the above Nasdaq rule and does not represent any change to the Company's recently filed Annual Report on Form 10-K. About DSL.net DSL.net, Inc. is a leading nationwide provider of broadband communications services to businesses. The Company combines its own facilities, nationwide network infrastructure and Internet Service Provider (ISP) capabilities to provide high-speed Internet access, private network solutions and value-added services directly to small- and medium-sized businesses or larger enterprises looking to connect multiple locations. DSL.net product offerings include T-1, DS-3 and business-class DSL services, virtual private networks (VPNs), frame relay, Web hosting, DNS management, enhanced e-mail, online data backup and recovery services, firewalls and nationwide dial-up services, as well as integrated voice and data offerings in select markets. For more information, visit http://www.dsl.net/ ECHOSTAR: Extends Form 10-K Filing as Co. Completes Restatement --------------------------------------------------------------- EchoStar Communications Corporation notified the SEC that it would be unable to file its Annual Report on Form 10-K for the period ended December 31, 2003, by the March 15, 2004, due date without unreasonable effort or expense. Accordingly, the Company is extending the filing of its Annual Report on Form 10-K pursuant to Rule 12b-25 under the Securities Exchange Act of 1934, as amended. In a Form 8-K filed with the Securities and Exchange Commission on March 11, 2004, EchoStar announced that it might seek a 15-day extension of the filing deadline for its Annual Report on Form 10- K for the year ended Dec. 31, 2003. The SEC recently informed EchoStar it believes EchoStar over reserved approximately $30 million for the replacement of smart cards. Those cards, which provide security that only paying customers can receive programming delivered by EchoStar, become obsolete as a result of piracy. During prior years, ending in 2002, EchoStar accrued the estimated cost to replace those cards, which are included in satellite receivers that EchoStar sells and leases to consumers. The SEC did not object to the accruals to replace the smart cards in satellite receivers sold to and owned by consumers. However, the SEC believes that EchoStar should not have accrued a liability for the replacement of smart cards in satellite receivers owned by EchoStar and leased to consumers. The SEC initially expressed the view that reversal of the accrual would require EchoStar to restate its results for 2001, which would have required a re-audit of those financial statements. On March 12, 2004, the SEC informed EchoStar it would not object if EchoStar were to restate its financial statements for 2002 to record a reversal of approximately $17 million originally accrued in 2001 and $4 million originally accrued in 2000, and to reverse the approximately $9 million originally accrued in 2002 for these smart cards. As a result, a restatement of results for 2001 is not required to be performed. EchoStar intends to restate its financial statements for 2002 to reduce Subscriber related expenses by approximately $30 million, improving previously reported pre-tax operating results by an equal amount. EchoStar currently expects to reduce its previously reported pre-tax loss for 2002 by approximately $30 million from approximately $809 million to approximately $779 million. A restatement of the 2002 consolidated financial statements must be completed before KPMG can complete its audits and report on EchoStar's consolidated financial statements for the years ended December 31, 2003 and 2002 and before EchoStar can file its Annual Report on Form 10-K for 2003. Under the circumstances the Company cannot complete the restatement by the March 15th filing deadline without unreasonable effort or expense. EchoStar Communications Corporation (NASDAQ: DISH) (S&P, BB- Corporate Credit Rating, Stable) serves over 9 million satellite TV customers through its DISH Network(TM), and is a leading U.S. provider of advanced digital television services. DISH Network's services include hundreds of video and audio channels, Interactive TV, HDTV, sports and international programming, together with professional installation and 24-hour customer service. DISH Network is the leader in the sale of digital video recorders (DVRs). EchoStar has been a leader for 23 years in satellite TV equipment sales and support worldwide. EchoStar is included in the Nasdaq-100 Index (NDX) and is a Fortune 500 company. Visit EchoStar's Web site at http://www.echostar.com/ ENRON: Wants Time to Serve Preference Lawsuits Extended to June 9 ----------------------------------------------------------------- Neil Berger, Esq., at Togut, Segal & Segal, LLP, in New York, relates that during the Summer of 2003, the Enron Corporation Debtors commenced more than 200 adversary proceedings in these cases to avoid and recover transfers that were made by the Debtors during the 90 days prior to the Petition Date. During November and the first two days of December 2003, the Debtors commenced 933 additional adversary proceedings to: avoid and recover transfers pursuant to Sections 547, 548 and 550 of the Bankruptcy Code; subordinate claims; recover damages based on improper conduct; collect sums due and payable to the Debtors pursuant to various agreements; and recover property of the Debtors' estates. Mr. Berger notes that during the same time period, nearly 4,000 adversary proceedings were filed with the Clerk of the Court in the bankruptcy cases of Ames Department Stores, Inc. and Bethlehem Steel Corporation. The Clerk of the Court has been responsive to the Debtors' needs for the issuance of summonses in their cases. However, the sheer volume of the demands in the Debtors' cases and the other cases pending in the Court has unavoidably delayed the issuance of summonses and, consequently, the service of process in the Adversary Proceedings. The Debtors have been promptly attempting to effect service of process in each of their Adversary Proceedings as summonses have been issued. The Clerk of the Court already issued 348 summonses so far. Notwithstanding, process has only recently been mailed in a number of the Adversary Proceedings and the Debtors continue to await the issuance of the remaining summonses for Adversary Proceedings that were timely commenced. Rule 7004(m) of the Federal Rules of Bankruptcy Procedure provides that "[i]f service of the summons and complaint is not made upon a defendant within 120 days after the filing of the complaint, the court, upon motion or on its own initiative after notice to the plaintiff, shall dismiss the action without prejudice as to that defendant or direct that service be effected within a specified time; provided that if the plaintiff shows good cause for the failure, the court shall extend the time for service for an appropriate period." By this motion, the Debtors ask the Court to extend to and including June 9, 2004 the service period set forth in Bankruptcy Rule 7004(m) with respect to adversary proceedings the Debtors commenced prior to March 9, 2004. According to Mr. Bergen, an extension of the 120-day Service Period will: -- provide the Clerk of the Court the additional time needed to issue the remaining summonses; -- enable the Debtors to complete service of process in Adversary Proceedings that were timely commenced; and -- prevent the filing of possible motions to dismiss the Adversary Proceedings pursuant to Bankruptcy Rule 7004(m). (Enron Bankruptcy News, Issue No. 105; Bankruptcy Creditors' Service, Inc., 215/945-7000) ESHEL MANAGEMENT: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Eshel Management New Lots LLC 1950 Coney Island Avenue Brooklyn, New York 11223 Bankruptcy Case No.: 04-12690 Chapter 11 Petition Date: April 20, 2004 Court: Southern District of New York (Manhattan) Debtor's Counsel: Joel Martin Shafferman, Esq. Solomon Pearl Blum Heymann & Stich, LLP 40 Wall Street, 35th Floor New York, NY 10005 Tel: 212-267-7600 Fax: 212 267-2030 Total Assets: $900 Total Debts: $4,977,501 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Eshel Management LLC $3,968,517 1950 Coney Island Avenue Brooklyn, NY 11223 Con Edison $438,410 JAF Station P.O. Box 1702 New York, NY 10116-1702 Phillips Nizer $258,474 666 Fifth Avenue New York, NY 10103-0084 Keyspan Home Energy Service $108,122 Advantage Wholesale Supply $74,342 Goldberg & Lustiq, Esqs. $30,050 Premier Contracting Of NY Inc. $29,038 County Oil Company, Inc. $21,173 J. Doors Co. $13,505 ARB Roofing & Construction, Inc. $11,700 Golden Elevator Co., Inc. $10,641 Intersound Inc. $5,246 Hofman's Glass $2,697 Brooklyn House of Locks $1,300 Minkoff Locksmith LLC $1,248 Berger Boiler Corporation $1,234 S & H Glazer Bros $978 Pestrol $460 Big Apple Refinishing $216 Cohen & Hochman $150 EXIDE TECHNOLOGIES: Delaware Court Confirms Reorganization Plan --------------------------------------------------------------- Exide Technologies (OTCBB: EXDTQ), a global leader in stored electrical energy solutions, announced that the U.S. Bankruptcy Court for the District of Delaware had confirmed its Joint Plan of Reorganization, as to which the Official Committee of Unsecured Creditors was a co-proponent, and the Company expects to exit Chapter 11 in the next several weeks when the Plan becomes effective. Pursuant to the Plan: -- Exide's debt will be reduced by $1.3 billion -- Exide's existing stock will be cancelled and no distribution will be given to current shareholders -- 22.5 million new shares of common stock will be issued to the Company's pre-petition secured lenders, representing 90% of the Company's common stock -- Exide's 2.9% convertible notes and 10% senior notes will be cancelled, and the holders of such notes will share in the unsecured creditors' distribution -- 2.5 million shares of common stock and warrants to purchase 6.25 million shares of common stock at $32.11 per share will be issued to the Company's unsecured creditors, with approximately 13.4% of such common stock and warrants to be reserved for distribution to the holders of disputed claims under the Plan's claim reconciliation and allowance procedures Under the reconciliation and allowance process set forth in the Plan, the Official Committee of Unsecured Creditors, in consultation with the Company, established the reserve described above to provide for a pro rata distribution to holders of disputed claims as they become allowed. Although predictions regarding the allowance and classification of claims are inherently difficult to make, based on the Company's review to date of the available information, the Company believes the reserve is reasonable and adequate. To the extent the reserved shares of common stock and warrants are insufficient to provide such distribution, the Company may issue additional common stock and warrants with a Plan value equal to the additional allowed claims. In that event, the Company will also issue common stock to the pre-petition secured lenders sufficient to preserve the relative value of their recoveries under the terms of the Plan. Under the terms of the Plan, Exide's new common stock and warrants are expected to be listed on the NASDAQ National Market. Craig H. Muhlhauser, Chairman, Chief Executive Officer and President of Exide Technologies, said, "This is a terrific day for Exide. It has been two years since we filed for reorganization, and during that time we have made a number of difficult decisions designed to revitalize the Company. We have significantly reduced our debt and attracted new funding that will provide us with a very strong foundation for future growth. We have created a new Exide that is well positioned to build upon its global business and continue providing customers with the superior products, services and solutions that help make them successful." Muhlhauser continued, "This accomplishment would not have been possible without the support from our constituents. First, I want to thank our customers and suppliers for their strong commitment during this period. Their continued support has been crucial in our ability to successfully complete our restructuring. Second, I am gratified by the dedication of our employees. They rose to the challenge of staying focused on meeting our customers' needs, and I want to thank them for their hard work. This is a great new day for the entire Exide family." About Exide Technologies Exide Technologies, with operations in 89 countries and fiscal 2003 net sales of approximately $2.4 billion, is one of the world's largest producers and recyclers of lead-acid batteries. The Company's three global business groups - transportation, motive power and network power -- provide a comprehensive range of stored electrical energy products and services for industrial and transportation applications. Transportation markets include original-equipment and aftermarket automotive, heavy-duty truck, agricultural and marine applications, and new technologies for hybrid vehicles and 42-volt automotive applications. Industrial markets include network power applications such as telecommunications systems, fuel-cell load leveling, electric utilities, railroads, photovoltaic (solar-power related) and uninterruptible power supply (UPS), and motive-power applications including lift trucks, mining and other commercial vehicles. FERRELLGAS: Completes Blue Rhino Stock Acquisition for $343 Mil. ---------------------------------------------------------------- Ferrellgas Partners, L.P. (NYSE: FGP), one of the nation's largest and fastest growing retail propane marketers, announced that the stockholders of Blue Rhino Corporation (Nasdaq: RINO) have approved the previously announced merger, which is the first in a series of transactions in which Ferrellgas will acquire substantially all of the assets of Blue Rhino. Blue Rhino, which is based in Winston-Salem, North Carolina, is the nation's leading provider of branded propane tank exchange service and a leading provider of complementary products. The company's branded tank exchange service is offered at more than 30,000 retail locations in 49 states, Puerto Rico and the U.S. Virgin Islands through leading home improvement centers, mass merchants, hardware, grocery and convenience stores. In accordance with the terms of the agreements, Ferrellgas is acquiring substantially all of the assets of Blue Rhino from a subsidiary of Ferrell Companies, Inc. As previously announced on February 9, 2004, Ferrell Companies, the parent company of Ferrellgas' general partner, entered into a merger agreement to acquire all of the outstanding stock of Blue Rhino in an all-cash transaction. Blue Rhino stockholders owning approximately 71 percent of the outstanding common stock approved the merger at a special stockholders' meeting in Winston-Salem. Blue Rhino stockholders will receive $17 in cash for each share of Blue Rhino stock outstanding as of April 20, 2004. Total payment for the Blue Rhino equity is approximately $343 million. "This is a historic day for Ferrellgas," said James E. Ferrell, Chairman and Chief Executive Officer. "Blue Rhino's summer grilling season cash flow provides a perfect complement to Ferrellgas' winter heating season cash flow, and the addition of Blue Rhino immediately makes Ferrellgas the largest player in the fastest-growing segment of the retail propane industry." In connection with the transactions, Billy Prim, co-founder, Chairman and Chief Executive Officer of Blue Rhino, will join Ferrellgas' senior management team while continuing to oversee Blue Rhino's day-to-day operations. He also has been appointed to the Board of Directors of Ferrellgas, Inc., Ferrellgas Partners' general partner. Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas, L.P., serves more than one million customers in 45 states. Ferrellgas employees indirectly own more than 17 million common units of Ferrellgas Partners through an employee stock ownership plan. Ferrellgas Partners' commonunits trade on the New York Stock Exchange under the symbol FGP. * * * As reported in the Troubled Company Reporter's February 27, 2004 edition, Ferrellgas Partners, L.P.'s outstanding $218 million senior notes were affirmed at 'BB+' by Fitch Ratings. In addition, Ferrellgas, L.P.'s outstanding $534 million senior notes and $308 million bank credit facility were affirmed at 'BBB'. The ratings were removed from Rating Watch Negative where they were placed on Feb. 10, 2004. The Rating Outlook is Negative. The rating action follows Fitch's review of FGP's planned acquisition of all of the outstanding common stock of Blue Rhino Corp. The Negative Rating Outlook reflects Fitch's expectation that key consolidated credit measures will remain weak relative to FGP's rating in the near-term due to the initial leveraging impact of the RINO acquisition and the negative affect of recent warmer than normal weather on FGP's core propane distribution operations. In addition, there is some uncertainty over the future operating and financial performance at the merged company, including RINO's capacity to continue its robust historical growth rate and FGP's ability to extract expected synergies from the business combination. FERRELLGAS PARTNERS: Closes $250 Million Senior Note Offering ------------------------------------------------------------- Ferrellgas Partners, L.P. (NYSE: FGP) and Ferrellgas, L.P. announced that Ferrellgas Escrow LLC, a wholly-owned subsidiary of Ferrellgas, L.P., and Ferrellgas Finance Escrow Corp., a wholly- owned indirect subsidiary of Ferrellgas, L.P., closed a private placement of $250 million of 6-3/4% senior notes due 2014. The two subsidiaries are co-obligors under the senior notes and received net proceeds of approximately $243.5 million from the private placement based on an offering price of 99.637% per note and after deducting underwriting discounts and commissions. Ferrellgas Partners, L.P., through its operating partnership, Ferrellgas, L.P., serves more than one million customers in 45 states. Ferrellgas employees indirectly own more than 17 million common units of Ferrellgas Partners through an employee stock ownership plan. Ferrellgas Partners' commonunits trade on the New York Stock Exchange under the symbol FGP. * * * As reported in the Troubled Company Reporter's February 27, 2004 edition, Ferrellgas Partners, L.P.'s outstanding $218 million senior notes were affirmed at 'BB+' by Fitch Ratings. In addition, Ferrellgas, L.P.'s outstanding $534 million senior notes and $308 million bank credit facility were affirmed at 'BBB'. The ratings were removed from Rating Watch Negative where they were placed on Feb. 10, 2004. The Rating Outlook is Negative. The rating action follows Fitch's review of FGP's planned acquisition of all of the outstanding common stock of Blue Rhino Corp. The Negative Rating Outlook reflects Fitch's expectation that key consolidated credit measures will remain weak relative to FGP's rating in the near-term due to the initial leveraging impact of the RINO acquisition and the negative affect of recent warmer than normal weather on FGP's core propane distribution operations. In addition, there is some uncertainty over the future operating and financial performance at the merged company, including RINO's capacity to continue its robust historical growth rate and FGP's ability to extract expected synergies from the business combination. FIBERMARK: Wants to Continue Hiring Ordinary Course Professionals ----------------------------------------------------------------- FiberMark, Inc., and its debtor-affiliates want the U.S. Bankruptcy Court for the District of Vermont's authority to continue the employment of the professionals they utilized in the ordinary course of their businesses. The Debtors report that they customarily retain the services of various attorneys, accountants and other professionals to represent them in matters arising in the ordinary course of their businesses, unrelated to their chapter 11 cases. The Debtors seek authorization to retain the Ordinary Course Professionals without the necessity of a separate, formal retention application for each professional, and pay the each professional for their postpetition services. The Debtors point out that there is a significant risk that some Ordinary Course Professionals would be unwilling to provide services, and that others would suspend services pending a specific order authorizing the services. Since many of the matters are active on a day-to-day basis, any delay or need to replace professionals could have significant adverse consequences. The Debtors agree to cap payments to each professional at $20,000 per month. The Debtors also propose that aggregate monthly payments to all Ordinary Course Professionals be limited to $300,000, unless additional payments are authorized for any month by agreement of the United States Trustee, the Committee and the Lender. 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. FLEMING: Wants Court to Fix June 19 Plan Confirmation Hearing Date ------------------------------------------------------------------ Fleming Companies, Inc. and its debtor-affiliates ask the Court to establish: -- June 19, 2004 as the start of the plan confirmation hearing; -- June 4, 2004 as the deadline for serving confirmation objections; -- The date of approval of the Disclosure Statement as the record date for purposes of determining which creditors are entitled to vote on the Plan; and -- June 4, 2004 as the voting deadline. The Debtors also propose this Plan and Disclosure Statement timeline: Date Event ---- ----- 04/19 (X) Approval of Disclosure Statement X + 14 Mail Plan Solicitation Packets and Notices, publish confirmation notice; The Debtors' virtual database ready for objectors X + 30 Objectors' discovery requests due; designation of witnesses for Confirmation Hearing X + 40 Additional exhibits to Plan due; The Debtors' discovery requests to potential objectors; identification of the Debtors' witnesses for Confirmation Hearing X + 50 Additional document production by the Debtors X + 53 Documents due from objectors X + 56-65 Fact witness depositions X + 60 Disputed creditors deadline to File 3018(a) motions; all expert reports due X + 65 Expert rebuttal reports due X + 70-75 Expert depositions X + 75 Ballots due; objections to Plan due; file Plan supplement; discovery cutoff for Confirmation Hearing X + 80 Final witness and exhibit lists due; motions in limine X + 85 Briefs in support of Plan; responses to Plan confirmation X + 90 Confirmation Hearing; hearing on 3018(a) motions X + 95 Confirmation order signed X + 100 Plan Effective Date The Debtors believe that the Second Amended Disclosure Statement contains all pertinent information necessary for the holders of claims to make an informed decision about whether to vote to accept or reject the Plan. Notwithstanding, the Debtors seek the Court's authority to make necessary non-substantive conforming changes to the Plan and the Disclosure Statement without further hearing and prior to solicitation. Reclamation Committee Objects The Reclamation Committee complains that the proposed discovery schedule is unreasonable, the proposed procedures lack a reasonable and streamlined temporary allowance procedure for claims to which an objection has been filed, and the implication of completing a ballot requires clarification. The ballot form must clarify that the completion of the ballot will not prejudice a creditor's right to an award of an allowed administrative expense claim. The Reclamation Committee argues that the order the Debtors proposed contains provisions described as procedural, but which actually affect the fundamental substantive right of reclamation creditors to participate meaningfully in the plan process. 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. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000) FULTON STREET: Fitch Cuts Class C Fixed-Rate Notes' Rating to B --------------------------------------------------------------- Fitch Ratings affirms five classes and downgrades one class of notes issued by Fulton Street CDO, Ltd./Funding Corp. The following classes have been affirmed: -- $180,000,000 class A-1A floating-rate notes due April 20, 2032 'AAA'; -- $148,000,000 class A-1B floating-rate notes due April 20, 2032 'AAA'; -- $34,000,000 class A-2 floating-rate notes due April 20, 2037 'AA'; -- $9,000,000 class B-1 fixed-rate notes due April 20, 2037 'BBB'; -- $10,000,000 class B-2 floating-rate notes due April 20, 2037 'BBB'. The following class has been downgraded: -- $7,000,000 class C fixed-rate notes due April 20, 2037 to 'B' from 'BB'. The transaction, a collateralized bond obligation (CBO), is supported by a diversified portfolio of asset-backed securities (ABS), residential mortgage-backed securities (RMBS) and commercial mortgage-backed securities (CMBS). Fitch has had discussions with the Clinton Group, Inc. (Clinton), the collateral manager, regarding the current state of the portfolio and their investment strategy going forward. Fitch has reviewed the credit quality of the individual assets comprising the portfolio and has conducted cash flow modeling of various default timing and interest rate stress scenarios. As a result, Fitch has determined that the original rating assigned to the class C notes of Fulton no longer reflects the current risk to noteholders. The downgrade of the class C notes is a result of deterioration in the credit quality of Fulton's collateral pool. According to its March 15, 2004 trustee report, 1.29% of Fulton's collateral pool was defaulted per Fulton's governing documents. As part of its analysis, Fitch identified an additional 1.33% of the collateral pool whereby default is a real possibility. Both the distressed and defaulted assets represent exposures to the aircraft lease and manufactured housing sectors. These assets, coupled with other assets that have migrated in credit quality, have contributed to a decrease in Fulton's overcollateralization levels. As of March 15, 2004, all overcollateralization tests (A-1, A-2, B, C) were passing at 118.4%, 107.2%, 101.9% and 100.1%, respectively, versus triggers of 115%, 104%, 101% and 100%. Clinton is currently considering an amendment to allow the weighted average coupon to decrease modestly below the required level of 7.65%. If the amendment is passed, Clinton may be able to purchase collateral which might ultimately provide additional credit enhancement to all classes of notes. Fitch will continue to monitor and review this transaction for future rating adjustments. Additional deal information and historical data are available on the Fitch Ratings web site at http://www.fitchratings.com/ GRACE DIGITAL: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: Grace Digital Media, LLC 1919 M Street, North West Washington, District of Columbia 20036 Bankruptcy Case No.: 04-00571 Type of Business: The Debtor is a full service production facility providing clients with services for media content creation, management and distribution. See http://www.gracedigitalmedia.com/ Chapter 11 Petition Date: April 6, 2004 Court: District of Columbia (Washington) Judge: S. Martin Teel, Jr. Debtor's Counsel: David E. Lynn, Esq. Docter, Docter & Lynn, P.C. 666 11th Street, North West Suite 1010 Washington, DC 20001-4542 Tel: 202-628-6800 Estimated Assets: $10 Million to $50 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ 1919 M Street Assoc., LP $1,751,626 1000 Connecticut Ave., N.W. Suite 1110 Washington, DC 20036 U.S. Chamber of Commerce Rent $150,156 Verizon CABS $110,184 Davis Construction Services $61,932 Qwest Communications $58,398 Verizon $55,755 Verestar $52,769 Cabot Industrial Properties LP $40,756 Avid Technology Inc. $28,990 Williams & Connolly LLC $28,536 Communications Engineering $27,611 Inc. Cananwill Inc. Business Insurance $22,050 Century Magnetics Inc. $16,473 Vista Communications $16,389 CDW Computers Centers Inc. $16,148 Sony Electrics Inc. $15,728 Skehan Communications Group $13,711 Inc. Witel Communications LLC $13,653 Xytech Systems Corporation $12,462 Dean Mechanical Contractors $11,313 Inc. HOST MARRIOTT: Directors Vote to Declassify Board ------------------------------------------------- Host Marriott Corporation (NYSE: HMT) announced that its Board of Directors voted unanimously to declassify its Board in support of annual elections of all its Directors. Under the current classified system, directors are elected to staggered three-year terms. Stockholders will vote on the Board's declassification proposal at the 2004 annual meeting to be held Thursday, May 20. Approval of the proposed resolution requires the affirmative vote of the holders of at least two-thirds of the outstanding shares of the Company's common stock. Host Marriott is a Fortune 500 lodging real estate Company that currently owns or holds controlling interests in 111 upscale and luxury hotel properties primarily operated under premium brands, such as Marriott, Ritz-Carlton, Hyatt, Four Seasons, Westin and Hilton. For further information, visit the Company's website at http://www.hostmarriott.com/ * * * As reported in the Troubled Company Reporter's March 12, 2004 edition, Standard & Poor's Ratings Services assigned its 'B+' rating to Host Marriott LP's proposed $375 million cash pay exchangeable senior debentures due 2024. Proceeds from the notes will be used to redeem a portion of Host Marriott LP's existing $1.2 billion 7.875% series B senior notes due 2008 and to pay fees and expenses. Concurrently, Standard & Poor's affirmed its ratings, including its 'B+' corporate credit rating, on Host Marriot Corp. The outlook is stable. "The ratings for Host reflect its very high debt leverage and the expectation that credit measures will remain weak for the ratings for several quarters, given Standard & Poor's expectation for a gradual lodging industry recovery," said Standard & Poor's credit analyst Sherry Cai. "These factors are partially offset by the high quality of Host's hotels, the geographic diversity of its portfolio, and its experienced management team. Moreover, the company's good liquidity position and historically good access to both debt and equity capital markets are viewed favorably," added Ms. Cai. ID KRIFF INC: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------- Debtor: I.D. Kriff, Inc. dba Americas Mattress dba National Mattress Superstore dba Kriffs Furniture 228 Arsenal Street Watertown, New York 13601 Bankruptcy Case No.: 04-12627 Type of Business: The Debtor operates a Mattress Store. Chapter 11 Petition Date: April 20, 2004 Court: Northern District of New York (Albany) Judge: Robert E. Littlefield Jr. Debtor's Counsel: David P. Antonucci, Esq. Antonucci Law Firm 12 Public Square Watertown, NY 13601 Tel: 315-788-7300 Fax: 315-788-1643 Total Assets: $208,481 Total Debts: $1,155,764 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Sandra Kriff $190,000 New York State Dept. Sales Tax $150,000 Taxation & Finance New York State Dept. $139,930 Taxation & Finance Key Bank Inventory loan and $116,602 Personally Key Bank Inventory loan and $85,460 Personally Small Business Admin. Disaster loan (ice $64,106 Storm) Test Trust Herb Kriff $51,000 Serta Mattress Company $49,108 Key Bank Line of Credit and $45,493 Personally NY State Dept. of Taxation $41,045 & Finance Internal Revenue Service 941 $30,000 Michael Parker $30,000 Harden Furniture $19,582 Pinto Mucenski & Watson $14,285 Action Lane Industries $13,387 Puleski Furniture $10,499 La-Z-Boy Chair Co. $10,411 Bassett Furniture Ind. $7,082 Vaughan Furniture $6,683 Mohawk Factoring Inc. $6,014 INTERPLAY ENTERTAINMENT: Looks for More Funds as Bankruptcy Looms ----------------------------------------------------------------- As of December 31, 2003, Interplay Entertainment Corp. had a working capital deficit of $14.8 million, and a cash balance of approximately $1.2 million. The Company anticipates that its current cash reserves, plus its expected generation of cash from existing operations will only be sufficient to fund its anticipated expenditures into the second quarter of fiscal 2004. As of April 1, 2004, the Company was three months in arrears on the rent obligations for its corporate lease in Irvine, California. On April 9, 2004, the Company's lessor served it with a Three-Day Notice to Pay Rent or Surrender Possession. If the Company is unable to pay its rent, it may lose its office space, which would interrupt operations and cause substantial harm to business. The Company received notice from the Internal Revenue Service that it owes approximately $70,000 in payroll tax penalties, which the Company has appealed. The Company estimates that it owes an additional $10,000, which it has accrued in penalties for nonpayment of approximately $99,000 in Federal and State payroll taxes, which were due on March 31, 2004 and is still outstanding. There can be no guarantee that the Company will be able to meet all contractual obligations in the near future, including payroll obligations. The Company expects that it will need to substantially reduce its working capital needs and/or raise additional financing. If the Company does not receive sufficient financing it may (i) liquidate assets, (ii) sell the company (iii) seek protection from its creditors, and/or (iv) continue operations, but incur material harm to its business, operations or financial conditions. However, no assurance can be given that alternative sources of funding could be obtained on acceptable terms, or at all. These conditions, combined with the company's historical operating losses and its deficits in working capital, raise substantial doubt about the Company's ability to continue as a going concern. INTERPLAY: Engages SG Capital to Explore Strategic Options ---------------------------------------------------------- Interplay Entertainment Corp. (OTC Bulletin Board: IPLY) announced that it has retained the investment bank SG Capital to assist with an evaluation of strategic alternatives designed to enhance value to Interplay's shareholders. SG Capital will provide, among other services, assistance with the Company's financing efforts as it attempts to secure additional capital for product development and operations. SG Capital will also assist the Company with general business strategy and advice regarding potential strategic transactions, including a possible sale of the Company or its operating units. Commenting on the announcement, Interplay's Chairman and Chief Executive Officer Herve Caen said, "Management and the board do not believe that our current share price reflects the true value of the operations of our company. Accordingly, we have engaged SG Capital to explore strategic alternatives to improve and maximize shareholder value. We believe that their experience, capabilities and market focus fit the needs of Interplay and that SG Capital is uniquely qualified to assist the Company in this effort." Mr. Caen continued, "With Interplay's recent return to profitability and the strong performance of our industry as a whole, management and the board believe that the time is right to explore strategic opportunities for a much-improved Interplay." SG Capital, headquartered in Los Angeles, California, is an investment bank focused on advising middle-market companies on matters relating to mergers, acquisitions, divestitures, debt and equity financings, debt restructurings, recapitalizations and corporate governance issues. SG Capital's investment banking group focuses on middle market, emerging growth and small public companies primarily within the technology sector. More comprehensive information on SG Capital and its services are available through its website at http://www.sgcapital.com/ Interplay Entertainment Corp. -- whose September 30, 2003 balance sheet shows a total shareholders' equity deficit of about $16 million -- is a leading developer, publisher and distributor of interactive entertainment software for both core gamers and the mass market. Interplay currently balances its development efforts by publishing for personal computers as well as current and next generation video game consoles. Interplay releases products through Interplay, Black Isle Studios and its distribution partners. More comprehensive information on Interplay is available at http://www.interplay.com/ On March 29, 2004, Interplay Entertainment Corp. filed with the Securities and Exchange Commission a notice of its inability to timely file the company's form 10-K for the year ended December 31, 2003. JP MORGAN: Fitch Affirms Low-B Ratings for 6 Ser. 2001-CIBC3 Notes ------------------------------------------------------------------ Fitch Ratings upgraded J.P. Morgan Chase Commercial Mortgage Securities Corp.'s, pass-through certificates, series 2001-CIBC3, as follows: -- $36.9 million class B to 'AA+' from 'AA'; -- $36.9 million class C to 'A+' from 'A'; -- $9.8 million class D to 'A' from 'A-'. The following certificates are affirmed: -- $28.0 million class A-1 'AAA'; -- $174.8 million class A-2 'AAA'; -- $457.3 million class A-3 'AAA'; -- Interest-only classes X1 and X2 'AAA'; -- $27.1 million class E 'BBB'; -- $10.8 million class F 'BBB-'; -- $17.3 million class G 'BB+'; -- $6.5 million class H 'BB'; -- $6.5 million class J 'BB-'; -- $7.6 million class K 'B+'; -- $4.3 million class L 'B'; -- $4.3 million class M 'B-'. The $16.3 million class NR 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 on April 20 having similar characteristics. The certificates are collateralized by 125 fixed-rate mortgage loans secured by 137 properties. As of the April 2004 distribution date, the pool's aggregate principal balance has been reduced by 2.7% to $844.4 million from $867.5 million at issuance. There have been no delinquent or specially serviced loans to date. Fitch reviewed credit assessments of the Franklin Park Mall loan (10.4%) and the Kings Plaza pooled note (5.7%). The Fitch stressed debt service coverage ratio for each loan is calculated using servicer provided net operating income less reserves divided by Fitch stressed debt service payment. Based on their improved performance, both loans maintain investment grade credit assessments. The Franklin Park Mall loan is secured by a 1,072,383 square foot (sf), 291,215 sf in-line, regional mall located in Toledo, OH. Dillard's, 192,182 sf, is the only anchor that is a part of the collateral and non-collateral anchors include J.C. Penney, J.L. Hudson, and Jacobsen's. The Fitch stressed DSCR for the loan remains strong at 1.60 times for year-end (YE) 2002 compared to 1.45x at issuance. The Kings Plaza pooled note (5.7%) is secured by 1,050,000 sf mall located in Brooklyn, NY. The Kings Plaza mortgage loan consists of notes A1, A2, and B, with an aggregate original balance of $222 million. The A2 note, included in this transaction, is pari passu with the A1 note, in the JPMCC 2001-KP trust, which also contains the B note. Collateral for the loan includes 458,800 sf of in-line space, a 289,215 sf Sears anchor parcel, an adjacent surface and five-story parking deck, and a marina. The Fitch stressed DSCR for the pooled note remains strong at 2.32x for YE 2002 compared to 2.15x at issuance. LITFUNDING CORP: Inks Settlement Agreement with Creditors --------------------------------------------------------- LitFunding Corp., and California LitFunding have entered into a settlement agreement with petitioning creditors. The terms of this settlement are currently incorporated into a letter agreement. However, pursuant to the agreement between the parties, the terms of the settlement are being incorporated into, and made a part of, the Companies' Joint Chapter 11 Plan of Reorganization. The Settlement Agreement provides, among other things, for the dismissal of all litigation between the parties promptly after the confirmation of the Reorganization Plan. This resolution will bring to a close of over eleven months of litigation between the parties. The most significant achievements reached in the settlement include: 1. The dismissal with prejudice of all litigation between the parties effective upon the confirmation of the Reorganization Plan. However, the Settlement Agreement does not provide for the dismissal of the litigation pending between the Companies and a former employee regarding his alleged claims against the Companies, and the Companies counter-claims against this employee, nor does it dismiss litigation pending between an individual that is seeking compensation for bookkeeping services provided to the Companies prepetition. The Companies do not consider these litigation matters to be material and it does not believe that they have any merit; 2. The consensual treatment of the claims held by parties that advanced funds to the Companies pursuant to Investment/Equity Participation Agreements. In summary the terms of the Settlement Agreement provide that the claims held by the IEP Claimants will be incorporated into a single promissory note, which is recourse to only the collections from the lawsuits that predate the Settlement Agreement; and 3. An approved overhead allocation in favor of the Companies payable from collections from the lawsuit investments. However, if for any reason the IEP Plan Note is not paid in full, the Companies will become obligated to repay to the IEP Claimants a sum equal to the lesser of the shortfall on the IEP Plan Note, or the amount of the overhead charge advanced to the Companies under the terms of the Settlement Agreement. Prior to the hearing on the Reorganization Plan, the Companies anticipate entering into tentative agreements (subject to the service of an approved disclosure statement and the Reorganization Plan) with other creditors regarding their treatment under the terms of the Reorganization Plan. Although there is no assurance that the Reorganization Plan proposed by the Companies will be approved by the United States Bankruptcy Court, the Companies believe that the likelihood of court approval has substantially increased with the advent of the foregoing settlement. The resolution of the pending litigation with the IEP Claimants will enable the Companies to refocus their efforts on collecting delinquent accounts receivable owed by certain attorney/clients who received litigation advances from the Companies, but who have failed to repay these obligations. The Companies have applied to the State of Nevada to establish a new subsidiary of the holding company, which will be responsible for all future funding of cases. This new subsidiary will also manage and collect the portfolio of California LitFunding to satisfy the requirements of the settlement with the petitioners. California Litfunding aka Litfunding Corp. provides funding to the law industry. The company filed for Chapter 11 relief on January 26, 2004 (Bankr. C.D. Calif. Case No. 04-11622). Michael Marcelli, Esq. represents the Debtors in its restructuring efforts. When the Debtor filed for protection from its creditors, it listed total assets of $10 Million to $50 Million and total debts of $10 Million to $50 Million. KMART: Leona Celestine Wants Court to Okay Validity of $6.6M Claim ------------------------------------------------------------------ Leola Celestine, Curatrix of the interdict of Sylvia Green, Joseph Broussard and Lameka Broussard, holds a Judgment, dated October 19, 2000, against the Kmart Corporation Debtors for $1,452,000 together with interests and costs. According to James Wattigny, Esq., in Lafeyette, Louisiana, the Judgment was recorded in the offices of the Clerk of Court, Iberia Parish, State of Louisiana. The Judgment constitutes a judicial mortgage and lien on all property owned or leased by the Debtors in the Iberia Parish. Pursuant to Articles 3286, 3302, 3304, and 3307 of the Louisiana Civil Code, a judicial mortgage that is not affected or suspended by suspensive appeal was created by the filing of the judgment with the recorder of mortgages. Mr. Wattigny relates that legal mortgages burden all of the property of the Debtors that is made susceptible of mortgages, which include corporeal immovables with component parts, and the Debtors' rights in a lease of an immovable or property made susceptible of conventional mortgage. The Debtors presently lease a 12-acre tract of land with building improvements in Iberia Parish, designated as Store #7601. The Lease had an original term of 25 years with the option to renew 10 times, each for five-year periods. The Lease states a yearly consideration of $1, which is grossly understated. Ms. Celestine holds a secured claim to the extent that any equity exists in the leaseholder's interest of the Debtors. Mr. Wattigny contends that the burden of showing that the Debtors hold no equity in the Lease lies with the Debtors. Pursuant to the Reorganization Plan, Ms. Celestine is a secured claimholder entitled to receive cash equal to the value of her interest in the property of the Debtors' estate, which constitutes collateral. Thus, Ms. Celestine asks the Court to determine the validity and value of her timely filed secured claim for $6,646,589, and compel the Debtors to immediately pay the claim. (Kmart Bankruptcy News, Issue No. 70; Bankruptcy Creditors' Service, Inc., 215/945- 7000) LAIDLAW: Greyhound Unit's Facility Compliance Still Uncertain ------------------------------------------------------------- Based on the current financial forecast for the Laidlaw Inc. unit, Greyhound Lines, Inc., Senior Vice-President and Chief Financial Officer, Douglas A. Carty, says management is still unable to predict with reasonable assurance whether Greyhound Lines will remain in compliance with all of the terms of its revolving credit facility. There is less than one year until the October 24, 2004, expiration of the Greyhound Facility, Mr. Carty notes. Greyhound Lines intends to enter into discussions to extend the maturity and to modify certain of the other terms of the agreement. As of February 29, 2004, Greyhound Lines was in compliance with all covenants under the Greyhound Facility and had $5.0 million of cash borrowings, issued letters of credit of $56.6 million and availability of $56.8 million. However, Mr. Carty points out that Greyhound Lines may not be able to access such availability if an event of default exists. In addition, if an event of default occurs and is continuing, the lenders may seek to enforce remedies under the Greyhound Facility, including terminating the commitment to make loans or issue letters of credit, holding cash collateral for payment of Greyhound Lines' obligations under the Greyhound Facility and selling the collateral. Furthermore, an event of default under the Greyhound Facility may result in cross-defaults under other debt instruments of Greyhound Lines and its subsidiaries. Although Greyhound Lines has been successful in obtaining necessary extensions and modifications to the Greyhound Facility in the past, Mr. Carty says, there is no assurance that they will obtain them in the future or that the cost of any future extensions, modifications or other changes in the terms of the Greyhound Facility would not have a material effect on Greyhound Lines or Laidlaw. In the event that the parties are unable to agree on an extension of the facility beyond its current maturity date, and that modifications suitable to the parties are not obtained, Greyhound Lines will be required to seek a replacement for the Greyhound Facility from other financing sources. Should alternate sources of financing not be available, then Greyhound Lines may not be able to satisfy its obligations as they become due and may not be able to continue as a going concern. If the "going concern" basis on which Greyhound Lines' consolidated financial statements were prepared was not appropriate for those consolidated financial statements, then significant adjustments would need to be made to the carrying value of the assets and liabilities, the reported revenue and expenses and balance sheet classifications used by Greyhound Lines. Accordingly, if the changes were made to Greyhound Lines' consolidated financial statements, significant adjustments would be required to Laidlaw's consolidated financial statements. Mr. Carty explains that Laidlaw's compliance with the financial and other covenants in its senior secured credit facility is generally not dependent on the financial results or financial condition of Greyhound Lines, as Greyhound Lines' performance has been excluded for purposes of determining compliance with such provisions. Consistent with the intent to exclude events solely related to Greyhound Lines, Laidlaw's senior secured credit facility specifies that a default by Greyhound Lines under the Greyhound Facility or a bankruptcy filing by Greyhound Lines would not be an event of default under Laidlaw's senior secured credit facility. In addition, in January 2004, Laidlaw amended its senior secured credit facility to clarify that an event of default is not triggered under Laidlaw's controlled group liabilities under ERISA with respect to Greyhound Lines' pension plans in the context of a Greyhound Lines bankruptcy filing. Should Greyhound Lines be unable to continue as a going concern, Laidlaw may be required to honor certain of Greyhound Lines' lease commitments and pension obligations. Laidlaw's management believes that any required expenditures with respect to these liabilities would not materially impact Laidlaw's financial condition. (Laidlaw Bankruptcy News, Issue No. 47; Bankruptcy Creditors' Service, Inc., 215/945-7000) LEGACY HOTELS: Posts Improved Revenues for First Quarter 2004 ------------------------------------------------------------- Legacy Hotels Real Estate Investment Trust (TSX: LGY.UN) announced its unaudited financial results for the three months ended March 31, 2004. All amounts are in Canadian dollars unless otherwise indicated. "We are pleased to report improving performance through most of our portfolio with revenue per available room up 2.5%," commented Neil J. Labatte, Legacy's President and Chief Executive Officer. "The travel recovery in both Canada and the U.S. is encouraging, with occupancies increasing throughout the majority of our portfolio. Our Canadian portfolio's RevPAR exceeded 2002 levels for the comparable period. In addition, our recent diversification in the United States appears well timed as the U.S. lodging industry is benefiting from improving travel demand." Continued Mr. Labatte. "The first quarter is traditionally Legacy's lowest earnings period, however, we are encouraged by recent trends, which point to the anticipated strong recovery in the lodging sector in 2004." Three Months Ended March 31, 2004 First quarter revenues increased $19.9 million or 15.3% to $150.2 million. The addition of The Fairmont Olympic Hotel, Seattle in August 2003 contributed $11.0 million in revenues during the quarter. Our second U.S. property, in Washington, D.C., also benefited from improving travel demand in the U.S. Together, both properties achieved revenue growth of 9% on a U.S. currency basis over their performance in 2003. The average Canadian dollar exchange rate has appreciated approximately 14% compared to the first quarter of 2003, which reduces the Canadian dollar equivalent of our U.S. revenues. Revenues at our Canadian portfolio increased in virtually all markets, led by improved performance at Fairmont The Queen Elizabeth following the completion of its major renovation project in the second quarter of 2003. Our properties in British Columbia benefited from strong demand growth at each of the hotels. The Toronto market continues to strengthen with occupancy and revenues at our three Toronto hotels returning to historical levels for the first quarter. Performance at Fairmont Le Ch�teau Frontenac was below expectations this quarter as a result of lower than anticipated U.S. and international travel demand. The lower demand is consistent with first quarter results for other major Canadian resorts which rely on this customer segment. Hotel EBITDA(1) more than doubled to $11.1 million in the first quarter. Hotel EBITDA margin, defined as hotel EBITDA as a percentage of revenues, improved to 7.4% compared with 4.2% in the first quarter of 2003 as a result of higher occupancy and diligent adherence to cost control measures. A $7.8 million increase in amortization, primarily due to a change in accounting policy (See Trust Developments), contributed to the increase in the first quarter net loss of $26.4 million or $0.28 diluted net loss per unit compared to a loss of $21.4 million or $0.24 diluted net loss per unit in 2003. Net loss was also impacted by increased interest and amortization expenses related to the recent hotel acquisition in Seattle. Distributable loss(2) per unit for the period improved to $0.15 per unit compared to a net loss of $0.17 per unit in the prior period. Given the seasonality of the portfolio and the fixed nature of certain operating costs, first quarter results are not indicative of results for the full year. Legacy historically incurs a loss in the first quarter. RevPAR for the portfolio increased 2.5% to $88.37 for the first quarter of 2004 compared to 2003. The strength in occupancy, which improved 2.9 points, offset the drop in average daily rate ("ADR") of 2.4%. After adjusting for the foreign exchange impact, RevPAR increased approximately 5% over 2003. At the Fairmont managed properties, RevPAR increased 5.0% to $97.95 as a result of a 4.8 point improvement in occupancy and a 3.4% decrease in ADR. Strong performance was experienced through the majority of the portfolio led by an approximate 40% RevPAR improvement at Fairmont The Queen Elizabeth following the completion of its extensive renovation program in the spring of 2003. Strong performance at each of our hotels in British Columbia contributed to an approximate 20% RevPAR improvement for the region. Reduced visitation from U.S. and international travellers resulted in an approximate 15% RevPAR decline at Fairmont Le Chateau Frontenac. At the Delta managed properties, RevPAR of $69.64 was down 3.7% due to a drop in both occupancy and ADR of 0.8 points and 2.4%, respectively. Performance at our Ottawa and Montreal hotels was below expectations this quarter, which led to the overall decline in RevPAR. Both properties are anticipating strong performance through the balance of the year with annual results expected to exceed 2002 levels. Trust Developments Effective January 1, 2004, Legacy has adopted the straight-line method of amortization for hotel buildings in accordance with new accounting standards issued by the Canadian Institute of Chartered Accountants. This change in accounting policy has been applied prospectively. While significantly impacting net income, this change does not affect distributable income and therefore will not impact future distributions to unitholders. Capital expenditures during the quarter totalled $4.9 million. Following the completion of several significant capital projects over the past three years, Legacy anticipates investing approximately $45 million in its properties in 2004. Attractive returns on the capital invested are expected once the properties realize the full benefit of these improvements, which typically occurs two to three years after completion. Outlook "Group business bookings for the balance of this year remain ahead of booking levels experienced at this time last year for the corresponding period. This trend is promising since booking levels at the end of March 2003 had not yet been impacted by cancellations due to SARS concerns," commented Mr. Labatte. "While it is still early in the recovery, we remain optimistic with respect to the strength of recovery for our critical summer leisure and tour business. Our preliminary expectations are that both occupancies and rates in 2004 will return to levels realized in 2002." Continued Mr. Labatte, "We recognize the importance of distributions to our unitholders. Should our performance and business volumes continue to build as expected over the next few months, we would hope to resume distributions in the second quarter." Legacy has published a Supplemental Information Package for the three months ended March 31, 2004, which provides a summary of corporate data, financial highlights and portfolio data. Investors are encouraged to access the Supplemental Information Package on Legacy's Web site at http://www.legacyhotels.ca/ The Supplemental Information Package will also be provided upon request. Requests may be made by e-mail to investor@legacyhotels.ca or by phoning 1-866-627-0641. Legacy is Canada's premier hotel real estate investment trust with 24 luxury and first-class hotels and resorts with over 10,000 guestrooms located in Canada and the United States. The portfolio includes landmark properties such as Fairmont Le Ch�teau Frontenac, The Fairmont Royal York, The Fairmont Empress and The Fairmont Olympic Hotel, Seattle. The company's December 31, 2003, balance sheet discloses a working capital deficit of about CDN$72.3 million. MACK FARMS INC: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Mack Farms, Inc. P.O. Box 1077 Lake Wales, Florida 33859 Bankruptcy Case No.: 04-07796 Chapter 11 Petition Date: April 19, 2004 Court: Middle District of Florida (Tampa) Judge: K. Rodney May Debtor's Counsel: Richard C. Prosser, Esq. Stichter, Riedel, Blain & Prosser PA 110 E. Madison Street, Suite 200 Tampa, FL 33602 Tel: 813-229-0144 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Farm Credit Line of Credit $2,000,000 P.O. Box 715 Okeechobee, FL 34973 Kenneth Hyatt Judgment $1,889,500 26691 Hwy 60 East Lake Wales, FL 33898 Howard Fertilizer Trade Debt $187,348 Griffin Fertilizer Trade Debt $72,251 International Paper Trade Debt $41,612 Johnson Plants Trade Debt $37,444 Weyerhaeuser Company Trade Debt $32,288 Fox Packaging Trade Debt $27,843 Billingsley Produce Trade Debt $27,532 Gargiulo Inc. Trade Debt $24,542 General Bag Trade Debt $19,320 U.A.P. Trade Debt $16,385 Tedder, James, Worden Trade Debt $14,000 Suwanee Farms Trade Debt $13,866 Triangle Chemical Trade Debt $13,190 South Florida Potato Growers Trade Debt $12,816 Southeast Farms Trade Debt $8,388 Troyer Brothers Trade Debt $7,528 United States Treasury $7,041 Trinity Transport Trade Debt $4,395 METALS USA: Fulbright & Jaworski Submits Post-Confirmation Report ----------------------------------------------------------------- The Metals USA, Inc. and its debtor-affiliates' Counsel, Johnathan C. Bolton, Esq., at Fulbright & Jaworski, LLP, in Houston, Texas, outlines the payments made by the Debtors: FEES AND EXPENSES Trustee Compensation $0 Fee for Attorney for Trustee 0 Other Professional Fees and $9,982,000 All Expenses, including Fee for Attorney for Debtor DISTRIBUTIONS Priority Creditors 835,000 Unsecured Creditors Pro Rata Share of million shares of common stock in the Reorganized Debtors based on $370,700,000 in claims Equity Security Holders 0 Other Distributions 718,000 including payments to Debtor -------------- TOTAL RECEIPTS AND DISTRIBUTIONS $2,393,044,000 ============== The fees paid to the U.S. Trustee are considered expenses of the estate and reported under Other Professional Fees. (Metals USA Bankruptcy News, Issue No. 42; Bankruptcy Creditors' Service, Inc., 215/945-7000) METRIS COMPANIES: First Quarter 2004 Results Turn Positive ---------------------------------------------------------- Metris Companies Inc. (NYSE:MXT) reported net income for the quarter ended March 31, 2004 of $41.6 million, or $0.47 per share. This compares to a net loss of $82.8 million or a $1.62 loss per share for the quarter ended March 31, 2003. "Our first quarter results continue the trend of improvement we have seen during the previous two quarters," said David Wesselink, Metris Chairman and Chief Executive Officer. "Our delinquency rate in the Metris Master Trust decreased to 10.5% as of March 31, 2004 the lowest level since July 2002, while the three-month average excess spread increased to 4.61%. We are also announcing a new two-year conduit facility that will help us to meet our funding requirements through April 2006, a significant achievement in our funding plan. We are pleased with the two-year term of the deal considering most conduit structures mature within 364 days." During the quarter the Company changed the presentation of its income statement to better represent the ongoing operations of the Company. Revenues for the quarter ended March 31, 2004 were $178.6 million, a 59.7% increase over $111.8 million for the quarter ended March 31, 2003. The increase is primarily due to a $157.0 million increase in securitization income, reflecting improved performance in the Metris Master Trust. This increase was partially offset by a $42.6 million reduction in credit card loan interest and fee income due to a $624.7 million reduction in average credit cards loans, and a $36.0 million reduction in enhancement services income due to the sale of our membership club and warranty business in the third quarter of 2003. Total expenses were $114.3 million for the quarter ended March 31, 2004, a decrease of $125.0 million from $239.3 million for the quarter ended March 31, 2003. Provision for loan losses was income of $6.1 million for the quarter ended March 31, 2004, compared to expense of $44.8 million for the quarter ended March 31, 2003, reflecting the significant reduction in credit card loans during the past year and slightly improved credit quality. The remaining $74.1 million reduction in expense reflects the sale of our membership club and warranty business and the significant reduction in our credit card operations during the past year. The three-month average excess spread in the Metris Master Trust was 4.61 percent as of March 31, 2004, compared to 3.62 percent as of December 31, 2003, and 2.37 percent as of March 31, 2003. The two-cycle plus delinquency rate in the Metris Master Trust was 10.5 percent as of March 31, 2004, compared to 11.0 percent as of December 31, 2003, and 11.7 percent as of March 31, 2003. The gross default rate of the Metris Master Trust for the first quarter of 2004 was 19.28 percent, compared to 19.10 percent in the fourth quarter of 2003 and 21.45 percent in the first quarter of 2003. As of March 31, 2004, the Company's managed credit card loans were $7.5 billion compared to $8.1 billion as of December 31, 2003. The Company's owned credit card portfolio was $74 million, down from $129 million at December 31, 2003. The managed net charge-off rate for the first quarter of 2004 was 17.8 percent, compared to 21.7 percent in the previous quarter, and 18.0 percent for the first quarter of 2003. The owned net charge-off rate was 71.0 percent, compared with 56.6 percent in the previous quarter, and 4.5 percent in the first quarter of 2003. The managed delinquency rate was 10.4 percent as of March 31, 2004, compared to 11.1 percent as of December 31, 2003, and 11.5 percent as of March 31, 2003. The owned delinquency rate was 15.0 percent as of March 31, 2004, compared to 15.8 percent as of December 31, 2003, and 8.2 percent as of December 31, 2003. Metris Receivables Inc., a wholly owned subsidiary of Metris Companies Inc., has entered into an agreement to establish a committed, two-year $800 million conduit facility for the purpose of financing credit card receivables in the Metris Master Trust, subject to certain initial funding conditions, all of which are expected to be met. The first funding into the conduits is expected to be in May 2004 to defease Series 2001-3, which is currently scheduled to mature in August 2004. This two-year conduit facility will allow for the maturing term securitization transaction to be funded into the conduit as it matures and will provide for the future defeasance of those maturing deals through April 2006. The conduit is expected to be repaid through the periodic issuance of future term securitization transactions issued from the Metris Master Trust and through future attrition of the loan portfolio. Metris Companies Inc. (NYSE: MXT), 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: S&P Places Junk Counterparty Rating on Watch Developing --------------------------------------------------------------- Standard & Poor's Ratings Services placed its ratings on Metris Cos. Inc., including Metris' 'CCC-' long-term counterparty credit rating, on CreditWatch with developing implications. "The CreditWatch listing is driven by operational and financial developments at the Minnetonka, Minn.-based credit card company that will bring Metris' funding situation to a head during the final two weeks of April," said Standard & Poor's credit analyst Jeffrey Zaun. "Specifically, the firm's upcoming corporate debt issue will make or break Metris' ability to fund operations through 2005. "Metris' operating performance has improved and its funding through 2005 ill be locked in if its upcoming corporate debt issue is successful," added Mr. Zaun. "Standard & Poor's will monitor the firm's situation vis-�-vis regulatory investigations as well as its ability to demonstrate a competitive advantage in the credit card industry." MINORPLANET: Secures Increased $1.6 Million Funding Commitment -------------------------------------------------------------- Minorplanet Systems USA, Inc. (Nasdaq:MNPLQ), a leading provider of telematics-based management solutions for commercial fleets, reported that the company had obtained an increase in the original funding commitment of $1.3 million to $1.6 million. The funding commitment of $1.6 million will be in the form of a convertible promissory note with the principal balance due 36 months from the date of closing, with an annual interest rate of 12 percent. The Company is required to pay 36 monthly accrued interest-only payments on the principal balance, with the initial interest payment due 30 days from closing. Following the initial year of the note, the Company may elect to repay the loan without premium or penalty. The lender may elect at any time prior to the maturity date of the note to convert all or any part of the principal or accrued interest to common stock, discounted at a rate of 20 percent of the market value if the election is made within the initial year of the loan or 15 percent of the market value if the election is made thereafter. Market value for purposes of conversion is defined as the average trading price of the common stock five days before and five days after the date the lender elects to exercise the conversion. The closing of the financing transaction is subject to bankruptcy court approval of the financing and obtaining confirmation of the debtor's plan of reorganization prior to June 30, 2004. About Minorplanet Systems USA, Inc. Based in Richardson, Texas, Minorplanet Systems USA, Inc. -- http://www.minorplanetusa.com/-- develops and implements mobile communications solutions for service vehicle fleets, long-haul truck fleets and other mobile-asset fleets, including integrated voice, data and position location services. Minorplanet, along with two affiliates, filed for chapter 11 protection (Bankr. N.D. Texas, Case No. 04-31200) on February 2, 2004. Omar J. Alaniz, Esq. and Patrick J. Neligan, Jr., Esq. of Neligan Tarpley Andrews and Foley LLP represent the Debtors in their restructuring efforts. When Minorplanet filed for bankruptcy, it estimated assets and debts at $10 million to $50 million. MIRANT CORP: Objects to Perryville Energy's $1 Billion Claim ------------------------------------------------------------ On December 15, 2003, Robin E. Phelan, Esq., at Haynes and Boone LLP, in Dallas, Texas, relates that Perryville Energy Partners LLC filed four proofs of claim against the Mirant Corp. Debtors, including Proof of Claim No. 6261 against Mirant Americas Energy Marketing LP for $1,015,651,565. Claim No. 6261 is based on damages causes by MAEM's rejection of the Tolling Agreement, dated April 30, 2001, between Perryville and MAEM and unpaid amounts allegedly owed to Perryville under the Tolling Agreement. The Debtors object to Claim No. 6261 and ask the Court to disallow or, in the alternative, reduce Claim No. 6261 on these grounds: (a) Perryville has grossly overstated the amount of damages that it is entitled to recovery as a result of the Debtors' rejection of the Tolling Agreement. Perryville apparently asserts that it is entitled to an allowed rejection claim in the aggregate amount of all future payments that it may have been entitled to received from MAEM under the Tolling Agreement. Perryville's calculation of its rejection damages is overstated for several reasons, including, but not limited to, its failure to account for any mitigation of its alleged damages and its failure to apply any discount rate to its alleged rejection damages to reflect the present value of future payments under the Tolling Agreement; (b) Claim No. 6261 contains no information supporting Perryville's damage calculation, demonstrating Perryville's mitigation of its damages or explaining why Perryville is entitled to costs and professional fees; (c) Perryville failed to supply any meaningful support for treatment of Claim No. 6261 as a secured claim; and (d) As Perryville partly asserts postpetition pre-rejection amounts in Claim No. 6261, this portion of the claim is duplicative of the allegations contained in Perryville's pending motion to compel administrative claim payment, which the Debtors are defending. 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. 29; Bankruptcy Creditors' Service, Inc., 215/945-7000) MIRANT CORP: Court Okays Proposed Reclamation Claim Procedures -------------------------------------------------------------- Prior to the Petition Date, the Mirant Corp. Debtors ordered goods from various vendors on varying credit terms. Given the extension of credit by various vendors, the Debtors are perpetually in possession of goods for which payment has not been made at the time of delivery. Under the laws of most states and the Bankruptcy Code, sellers who ship goods on credit may have the right under certain circumstances to reclaim the goods. Before the commencement of a case under the Bankruptcy Code, reclamation rights of sellers are governed by state law. Upon commencement of a Chapter 11 bankruptcy case, reclamation rights are governed by Section 546(c) of the Bankruptcy Code, which provides that sellers, who have sold goods to debtors in the ordinary course of the seller's business, may reclaim the goods if (i) the debtor has received the goods while insolvent and (ii) the seller makes a demand in writing (a) before 10 days after receipt of the goods by the debtor or (b) if the 10-day period expires after the commencement of the case, before 20 days after receipt of the goods by the debtor. Notwithstanding, a court may deny reclamation if (i) a seller is granted an administrative priority claim pursuant to Section 503(b) of the Bankruptcy Code or (ii) the payment of the seller's claim is secured by the granting of a lien or a security interest in the property of the debtor. The Debtors received correspondences from numerous vendors asserting some form of reclamation. Many of the Notices were received outside the prescribed time period for making a demand for reclamation pursuant to Section 546(c). In addition, other Notices did not provide sufficient description to put the Debtors on notice of a reclamation claim. Nevertheless, the Debtors undertook an effort to examine each Notice and corresponding reclamation claim in an effort to amicably reconcile any dispute with individual vendors. Accordingly, the Debtors sought and obtained Court approval, pursuant to Sections 105(a) and 546(c), to establish these procedures for the resolution of reclamation claims against them: (a) On or before April 10, 2004, the Debtors will begin to implement the Reclamation Procedures by filing with the Court and serving, along with a copy of the Reclamation Claims Procedure Order, a statement identifying the Reclamation Claims of which the Debtors have received notice and the Debtors' proposed treatment of the Reclamation Claims. The Notice Statement will contain: -- the Claimant; -- the amount of the asserted Reclamation Claim; -- the address, telephone, and facsimile number to which all communications regarding the asserted Reclamation Claim will be sent by the Debtors; -- the date upon which the Debtors received notice of the Reclamation Claim; and -- the Debtors' proposed treatment of the Reclamation Claim. In addition, the Debtors will provide a letter to the Claimants listed on the Notice Statement detailing the preliminary reclamation analysis, and the Debtors' proposed treatment of the Reclamation Claim. The Debtors will serve the Notice Statement upon all parties listed on the Notice Statement and upon the Limited Service List; (b) On or before May 10, 2004, all persons or entities asserting a Reclamation Claim that dispute the proposed treatment of their Reclamation Claim contained in the Notice Statement must notify the Debtors in writing of their dispute of the proposed treatment. In addition, any party or entity that believes it has a Reclamation Claim that has been omitted from the Notice Statement must send a Notice of Dispute to the Debtors. Accompanying the Notice of Dispute, the parties must provide the Debtors with all documentation (i) in support of the asserted Reclamation Claim and (ii) demonstrating that timely notice of the asserted Reclamation Claim was provided to the Debtors. Parties must serve the Notice of Dispute and supporting documentation on the Debtors' counsel at this address: Mark J. Elmore, Esq. Haynes and Boone, LLP 901 Main Street, Suite 3100 Dallas, Texas 75202 Telephone: 214 651 5265 Facsimile: 214 200 0905 (c) The Debtors will then have until June 10, 2004 to: (1) review its business records to determine the validity of the facts and circumstances alleged in the Notice of Dispute; (2) inform the holder of its findings; and (3) use its discretion to determine whether the proposed allowed amount of each Reclamation Claim should be revised, either upward or downward. After reviewing the Reclamation Claims in light of the additional information provided with the Notice of Dispute, the Debtors will file a revised statement listing those Reclamation Claims which they believe to have been correctly asserted and allowable according to applicable law. The Statement of Reclamation Claims will identify (i) the Claimant asserting the Reclamation Claim and (ii) the proposed treatment of the Claimant's Reclamation Claim. The Debtors will file the Statement of Reclamation Claims with the Court on or before June 10, 2004 and will serve the Statement of Reclamation Claims upon all persons or entities identified on the Statement of Reclamation Claims, the Notice Statement, all persons who provided the Debtors' counsel with a Notice of Dispute, and the Limited Service List; (d) The Debtors will treat the Reclamation Claims in accordance with applicable law, including Section 546(c)(2), in the amount as indicated in the Statement of Reclamation Claims. Accordingly, to the extent proceeds exist in the reclamation goods after satisfaction of any prior secured claims against such goods, the Debtors propose to treat the allowed Reclamation Claims as administrative expense claims payable according to the terms of a confirmed plan of reorganization after considering possible claims and defenses to avoidance actions and applying the provisions of Section 502(d) of the Bankruptcy Code; (e) If a party asserting a Reclamation Claim disagrees with any part of the Statement of Reclamation Claims, this party will file and serve a written request for judicial adjudication of the Reclamation Claim on or before July 10, 2004. The Request for Judicial Resolution must allege, with specificity, that its Reclamation Claim meets all the requirements for treatment as a valid reclamation claim pursuant to applicable state law and Section 546(c). In proposing this reclamation process and proposed treatment, the Debtors do not admit or concede that they were insolvent; (f) After filing the Request for Judicial Resolution, the Court will establish a hearing date, which will be used to establish discovery procedures and fix trial dates to adjudicate the treatment of the Reclamation Claim; (g) In the event that a party asserting a Reclamation Claim does not file and serve a Request for Judicial Resolution prior to July 10, 2004, then the holder of a Reclamation Claim will be deemed to have waived any objection to the Debtors' proposed treatment of the Reclamation Claim described in the Statement of Reclamation Claim. If a Reclamation Claim is not included in the Statement of Reclamation Claims or is included as a claim of zero, a Claimant failing to file and serve a Request for Judicial Resolution would concede that no Reclamation Claim is allowable; (h) The failure of a party asserting a Reclamation Claim materially to comply with these procedures will constitute a waiver of the party's right to object to the proposed determination of the Reclamation Claim as set forth in the Debtors' Statement of Reclamation Claim, unless the Court orders otherwise; (i) If a person or entity asserting a Reclamation Claim (i) fails to submit a timely Notice of Dispute, or (ii) submits a Notice of Dispute but thereafter fails to file and serve a timely Request for Judicial Resolution, this party will be bound by the Debtors' determination of the Claimant's Reclamation Claim as set forth in the Debtors' Statement of Reclamation Claims with respect thereto; and (j) The Court will retain jurisdiction over the Debtors and the holders of Reclamation Claims with respect to any matter, claims, rights, or disputes arising from or related to the Reclamation Claims or the Reclamation Procedures, including, without limitation, its implementation. 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. 29; Bankruptcy Creditors' Service, Inc., 215/945-7000) NANOGEN: Receives Ontario Court Approval to Acquire SynX Pharma --------------------------------------------------------------- Nanogen, Inc. (Nasdaq: NGEN) and SynX Pharma Inc. (TSX: SYY) announced that the Ontario Superior Court of Justice has approved the plan of arrangement for Nanogen to acquire SynX in an all-stock transaction. SynX shareholders and debentureholders met in Toronto on April 15, where they overwhelmingly approved the transaction by 99.8% and 100% of the votes respectively. The total consideration for the SynX common shares is fixed at approximately CDN$16.3 million. With approximately 11.4 million SynX shares and share equivalents outstanding, it is expected that each SynX common shareholder will be entitled to receive approximately CDN$1.426 per SynX share in Nanogen common stock. The exchange ratio will be determined on the closing date. At closing, Nanogen will acquire the existing CDN$3.5 million principal amount of subordinated secured debentures of SynX in exchange for shares of Nanogen common stock. About Nanogen Nanogen, Inc. develops and commercializes products for the in vitro diagnostics market. The company seeks to establish the unique, open-architecture NanoChip(R) Molecular Biology Workstation and NanoChip(R) Cartridge as the standard platform for the prediction, diagnosis and treatment of genetic and infectious diseases. Nanogen offers Analyte Specific Reagents and related products to research and clinical reference labs for the development of tests for the detection of genetic mutations associated with a variety of diseases, such as cystic fibrosis, Alzheimer's disease, and cardiovascular disease. The company's ten years of research involving nanotechnology may also have future applications in medical diagnostics, biowarfare and other industries. For additional information please visit Nanogen's Web site at http://www.nanogen.com/ * * * In its Form 10-K For the fiscal year ended December 31, 2003, Nanogen Inc, reports: "We expect that our existing capital resources, combined with $33.7 million in gross proceeds from the sale of the Company's common stock in March 2004, and anticipated revenues from potential product sales, reagent rentals, leases or other types of acquisition programs for the NanoChip System, sponsored research agreements, contracts and grants will be sufficient to support our planned operations, including an estimated investment of approximately $6-8 million related to the pending acquisition of SynX and wind down costs related to our joint venture, Nanogen Recognomics, through at least the next eighteen months. This estimate of the period for which we expect our available sources of liquidity to be sufficient to meet our capital requirements is a forward-looking statement that involves risks and uncertainties, and actual results may differ materially. "Our future liquidity and capital funding requirements will depend on numerous factors including, but not limited to, commercial success of our products, or lack thereof, the extent to which our products under development are successfully developed and gain market acceptance, the timing of regulatory actions regarding our potential products, the costs and timing of expansion of sales, marketing and manufacturing activities, prosecution and enforcement of patents important to our business and any litigation related thereto, the results of clinical trials, competitive developments, and our ability to maintain existing collaborations and to enter into additional collaborative arrangements. "We have incurred negative cash flow from operations since inception and do not expect to generate positive cash flow to fund our operations for at least the next several years. We may need to raise additional capital to fund our research and development programs, to scale-up manufacturing activities and expand our sales and marketing efforts to support the commercialization of our products under development. Additional capital may not be available on terms acceptable to us, or at all. If adequate funds are not available, we may be required to curtail our operations significantly or to obtain funds through entering into collaborative agreements or other arrangements on unfavorable terms. Our failure to raise capital on acceptable terms when needed could have a material adverse effect on our business, financial condition or results of operations." NAT'L CENTURY: Erwin Katz Appointed as Unencumbered Assets Trustee ------------------------------------------------------------------ Pursuant to Section IV.D.3 of the National Century Debtors' Fourth Amended Plan of Liquidation, the Official Committee of Unsecured Creditors, on behalf of itself and the Official Subcommittee of NPF VI Noteholders and the Official Subcommittee of NPF XII Noteholders, designates Erwin I. Katz as the Unencumbered Assets Trustee. On the Effective Date of the Plan, the Unencumbered Assets Trustee will be authorized to take all steps necessary to complete the formation of the Unencumbered Assets Trust. The Unencumbered Assets Trust will have all duties, powers, standing and authority necessary to implement the Plan and to administer and liquidate the Assets of the Unencumbered Assets Trust for the benefit of the holders of beneficial interests in the Unencumbered Assets Trust. Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- is the market leader in healthcare finance focused on providing medical accounts receivable financing to middle market healthcare providers. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. D. Ohio Case No. 02-65235). Paul E. Harner, Esq., Jones, Day, Reavis & Pogue represents the Debtors in their restructuring efforts. (National Century Bankruptcy News, Issue No. 37; Bankruptcy Creditors' Service, Inc., 215/945-7000) NATIONAL ENERGY: Most Creditors Say Yes to Reorganization Plan -------------------------------------------------------------- National Energy & Gas Transmission, Inc. (NEGT) announced that preliminary results show more than 98 percent of its voting creditors agreed to accept the company's Plan of Reorganization, a blueprint for the company to emerge from Chapter 11. In terms of a percentage by dollar amount of all voting claims, more than 94 percent voted in favor of the plan. The final voting results will be filed with the bankruptcy court prior to NEGT's confirmation hearing scheduled for April 28. NEGT expects to emerge from bankruptcy shortly thereafter. The Plan of Reorganization provides for NEGT to issue to its unsecured creditors 100 percent of its equity, and $1 billion in notes and excess cash. The company announced in February that it agreed to sell the Gas Transmission Northwest Corporation to TransCanada Corporation through an auction process that is currently ongoing. NEGT is evaluating additional asset sales. Its USGen New England subsidiary remains in a separate Chapter 11 proceeding. NEGT, based in Bethesda, Md., voluntarily filed for protection under Chapter 11 with the U.S. Bankruptcy Court for the District of Maryland, Greenbelt Division on July 8, 2003. NORAMPAC INC: Releasing First Quarter Results on April 27 --------------------------------------------------------- Financial analysts are invited to attend Norampac Inc.'s first quarter results conference call: Tuesday, April 27, 2004 at 10:00 a.m. ET Dial numbers: (514) 940-2795 (416) 640-4127 Replay: (416) 640-1917 access code: 21046057 Media and other interested individuals are invited to listen to the live or deferred broadcast on the Cascades corporate website at http://www.cascades.com/ Norampac (S&P, BB+ Long-Term Corporate Credit Rating, Stable Outlook) owns eight containerboard mills and twenty-four corrugated products plants in the United States, Canada and France. With an annual production capacity of more than 1.6 million short tons, Norampac is the largest containerboard producer in Canada and the seventh largest in North America. Norampac, which is also a major Canadian manufacturer of corrugated products, is a joint venture company owned by Domtar Inc. (symbol: DTC-TSE) and Cascades Inc. (symbol: CAS-TSE). OAKWOOD HOMES: Clayton Homes Acquires Assets for $372.5MM Cash -------------------------------------------------------------- Reorganized Sale OKWD (formerly known as Oakwood Homes Corporation (OTC Bulletin Board: OKWHQ)) announced that the Company has completed the sale of substantially all of its operations and non- cash assets to Clayton Homes, Inc., a subsidiary of Berkshire Hathaway Inc., for $372.5 million in cash, subject to certain adjustments. The asset sale was approved by the Company's creditors on March 22, 2004 pursuant to applicable bankruptcy law and all other conditions precedent to the sale have been satisfied. The sale proceeds and substantially all assets not sold to Clayton were conveyed to a liquidation trust for ultimate distribution to the Company's various constituencies as described in the Company's final amended plan of reorganization, as confirmed by the United States Bankruptcy Court for the District of Delaware on March 31, 2004. In accordance with the Plan, after the closing of the asset sale and the conveyance of assets to the liquidation trust, the Company will be left with a limited amount of cash that is being used to wind up its affairs. Following the asset sale, all shares of the capital stock of the Company will remain outstanding. However, in accordance with the terms of the Plan, the Company closed its stock transfer books and ceased recording transfers of shares of its common stock effective as of the close of business on April 16, 2004. Pursuant to the terms of the Plan, the Company also intends to promptly file an amendment to its articles of incorporation prohibiting the payment of any dividends or distributions on its capital stock, except for any final distribution, if any, payable to shareholders upon the completion of the liquidation of the Company. Oakwood Homes Corporation and its subsidiaries are engaged in the production, sale, financing and insuring of manufactured housing throughout the U.S. The Debtors filed for chapter 11 protection on November 15, 2002 (Bankr. Del. Case No. 02-13396). Robert J. Dehney, Esq., Derek C. Abbott, Esq., at Morris, Nichols, Arsht & Tunnell and C. Richard Rayburn, Esq., and Alfred F. Durham, Esq., at Rayburn Cooper & Durham, P.A., represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $842,085,000 in total assets and $705,441,000 in total debts. OMEGA HEALTHCARE: Declares Stock Dividends Payable on May 17 ------------------------------------------------------------ Omega Healthcare Investors, Inc. (NYSE:OHI) announced the Company's Board of Directors declared a common stock dividend of $0.18 per share and announced the release date of the Company's first quarter results and earnings call. Common Dividends The Company's Board of Directors announced a common stock dividend of $0.18 per share, which is a $0.01 per share, or 5.9%, increase over the previous quarter's dividend. The common stock dividend will be paid May 17, 2004 to common stockholders of record on April 30, 2004. At the date of this release the Company had approximately 46.3 million common shares outstanding. Preferred Dividends As previously announced on March 29, 2004, the Company's Board of Directors also declared its regular quarterly dividends for all classes of preferred stock to preferred stockholders of record on April 30, 2004. Series B and Series D preferred stockholders of record on April 30, 2004 will be paid dividends in the amount of $0.53906 and $0.47109, per preferred share, respectively, on May 17, 2004. Series A preferred stockholders of record on April 30, 2004 will receive a dividend in the amount of $0.57813, per preferred share. The liquidation preference for each of the Company's Series A, B and D preferred stock is $25.00. Regular quarterly preferred dividends represent dividends for the period February 1, 2004 through April 30, 2004 for the Series A and Series B preferred stock and February 10, 2004 through April 30, 2004 for the Series D preferred stock. Total dividend payments for all classes of preferred stock are approximately $4.6 million. Preferred Series A Redemption Also, as previously announced on March 29, 2004, the Company's Board of Directors authorized the redemption of all shares outstanding of its 9.25% Series A Cumulative Preferred Stock (NYSE:OHI PrA; CUSIP: 681936209). Omega expects the shares to be redeemed on April 30, 2004 for $25.00 per share, plus $0.57813 per share in accrued and unpaid dividends through the redemption date, for an aggregate redemption price of $25.57813 per share. Dividends on the shares of Series A preferred stock will cease to accrue from and after the redemption date, after which the Series A preferred stock will no longer be outstanding and holders of the Series A preferred stock will have only the right to receive the redemption price. Omega is a Real Estate Investment Trust investing in and providing financing to the long-term care industry. At March 31, 2004, the Company owned or held mortgages on 209 skilled nursing and assisted living facilities with approximately 21,400 beds located in 28 states and operated by 40 third-party healthcare operating companies. Standard & Poor's Ratings Services assigned its 'BB-' rating to Omega Healthcare Investors Inc.'s issued $200 million 7% senior notes due April 2014. Concurrently, the senior unsecured debt rating is raised to 'BB-' from 'B' and removed from CreditWatch positive, where it was placed March 5, 2004. Additionally, the rating on the preferred stock is raised to 'B' from 'B-' and removed from CreditWatch positive, where it was also placed March 5, 2004. The rating actions affect $526 million of rated securities. The outlook is stable. OMEGA HEALTHCARE: Releasing First Quarter Results on April 27 ------------------------------------------------------------- Omega Healthcare Investors, Inc. (NYSE:OHI) announced that it is scheduled to release its earnings results for the quarter ended March 31, 2004, on Tuesday, April 27, 2004. In conjunction with its release, the Company will be conducting a conference call on April 27, 2004, at 10 a.m. EDT to review its first quarter 2004 results and current developments. To listen to the conference call via webcast, log on to http://www.omegahealthcare.com/and click the "earnings call" icon on the Company's homepage. Webcast replays of the call will be available on the Company's website for at least two weeks following the call. Omega is a Real Estate Investment Trust investing in and providing financing to the long-term care industry. At March 31, 2004, the Company owned or held mortgages on 209 skilled nursing and assisted living facilities with approximately 21,400 beds located in 28 states and operated by 40 third-party healthcare operating companies. Standard & Poor's Ratings Services assigned its 'BB-' rating to Omega Healthcare Investors Inc.'s issued $200 million 7% senior notes due April 2014. Concurrently, the senior unsecured debt rating is raised to 'BB-' from 'B' and removed from CreditWatch positive, where it was placed March 5, 2004. Additionally, the rating on the preferred stock is raised to 'B' from 'B-' and removed from CreditWatch positive, where it was also placed March 5, 2004. The rating actions affect $526 million of rated securities. The outlook is stable. ORION TELECOMMS: Rosenfeld of Triax Capital to Serve as CRO ----------------------------------------------------------- Orion Telecommunications Corp., wants approval from the U.S. Bankruptcy Court for the Southern District of New York, in its application to employ Triax Capital Advisors, LLC as an independent contractor to provide management services. Triax Capital is a consulting organization specializing in advising companies, creditors, investors and other parties with interest in companies facing operational and financial difficulties. Triax Capital professionals have over 60 years of combined experience in financial consulting and turnaround management, including out-of-court workouts and bankruptcy proceedings. Robert Rosenfeld, a Managing Partner of Triax Capital, will serve as the Chief Restructuring Officer. Mr. Rosenfeld specializes in advising and managing troubled companies, providing litigation consulting and performing forensic investigations. He has over 19 years experience as an auditor, bankruptcy and turnaround advisor, crisis manager, and forensic accountant. Mr. Rosenfeld's responsibilities will include: i) oversight of all aspects of the management and operations of the Debtor's business, in such manner as he deems necessary or appropriate in consultation with the Chairman of the Board of Directors; and ii) make decisions with respect to all aspects of the management of the Debtor's business including, but not limited to, operations and employment matters and oversight of the bankruptcy process including, but not limited to, Bankruptcy Court reporting requirements, development of a Plan of Reorganization and Disclosure Statement, claims management, managing outside professionals in such other areas as the Debtor may identify as necessary or appropriate. Mr. Rosenfeld will be paid a $60,000 Monthly Fee. In addition, Triax Capital will be paid a reorganization incentive fee of not less than $250,000. 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-ILLINOIS: First Quarter 2004 Net Earnings Climb to $49MM -------------------------------------------------------------- Owens-Illinois, Inc., (NYSE: OI) reported first quarter 2004 net earnings of $49 million, or $0.29 per share (diluted), an increase of $14.6 million, or $0.09 per share, over first quarter 2003 net earnings of $34.4 million, or $0.20 per share (diluted). Higher unit shipments, increased selling prices, and improved manufacturing performance were the principal factors driving the increase. Steven R. McCracken, who joined Owens-Illinois on April 1 as Chief Executive Officer, said, "I'm gratified by these excellent first quarter results and excited about the potential for continued earnings growth. Our near-term imperative is completing the acquisition and successfully integrating BSN in addition to continuing to focus on liquidity improvement and debt reduction, all aimed at increasing investor value and ensuring our position as a leader in the global packaging industry." Business Review Summary First quarter 2004 net sales were $1.545 billion compared with first quarter 2003 net sales of $1.386 billion. EBIT for the first quarter of 2004 was $189.4 million compared with $157.7 million in the first quarter of 2003. The principal factors contributing to the increased 2004 EBIT were: an increase in worldwide glass volume; improved pricing and a more favorable product sales mix; productivity improvements and cost reductions, and favorable currency translation. Glass Containers Segment The Glass Containers segment reported first quarter 2004 net sales of $1,062.3 million compared with first quarter 2003 net sales of $930.6 million, an increase of 14.2%. EBIT for the first quarter of 2004 was $165.1 million, an increase of $38.7 million, or 30.6%, over the first quarter of 2003. EBIT margins of 15.5% in the first quarter of 2004 compare with EBIT margins of 13.6% in the first quarter of 2003. The positive effects of higher unit shipments (up 6.1%), increased selling prices, a more favorable product sales mix, higher capacity utilization, improved production efficiencies, and favorable currency translation have been partially offset by $6.4 million of lower pension income. Within the segment, North American glass container operations reported first quarter sales and EBIT improvements of approximately 3% and 9%, respectively, compared with the first quarter of 2003. The higher sales in 2004 were mainly due to increased selling prices and higher unit shipments. The increased EBIT in 2004 was mainly due to increased sales, higher capacity utilization, improved manufacturing efficiencies, lower maintenance and repair expense, and fixed cost savings resulting from two plant closings in the last half of 2003. Partially offsetting these positive factors was lower pension income. European glass container operations reported improved sales and EBIT of approximately 20% and 45%, respectively, for the first quarter of 2004 compared with the first quarter of 2003. These improved results were largely due to higher unit shipments and favorable currency translation rates, partially offset by modestly higher energy costs. During the first quarter, the Company announced that it had entered into a definitive agreement to acquire BSN Glasspack, S.A., the second largest glass container manufacturer in Europe. Closing of the transaction is subject to the parties securing all regulatory approvals and is expected to occur during the second quarter of 2004. Asia Pacific glass container operations reported increased sales and EBIT of approximately 25% and 35%, respectively, for the first quarter of 2004 compared with the first quarter of 2003. The positive impact of higher unit shipments and favorable currency translation were partially offset by lost production time as a result of a casualty loss at the Penrith, Australia plant and a gas supply interruption at the Adelaide, Australia plant. In the South American glass operations, first quarter 2004 sales and EBIT increased by approximately 30% and 85%, respectively, compared with the first quarter of 2003. The improved sales and EBIT were largely due to increased unit shipments and higher capacity utilization reflecting the non-recurrence of the national strike in Venezuela that began in early December 2002 and continued into the first quarter of 2003. The strike caused energy supply curtailments that forced the Company to temporarily idle its two plants in that country during the first quarter of 2003. Plastics Packaging Segment For the first quarter of 2004, the Plastics Packaging segment reported net sales of $483.1 million compared with net sales of $455.8 million in the first quarter of 2003. The higher net sales in 2004 reflect a combination of higher unit shipments (up 9.8%), resin pass-through price increases of approximately $14 million, and favorable currency translation rates. Partially offsetting these positive factors were modestly lower selling prices in several of the segments' product lines and the absence of sales from certain closures assets that were divested in the fourth quarter of 2003. Segment EBIT for the first quarter of 2004 was $55.9 million, an increase of $4.8 million, or 9.4%, over the first quarter of 2003. The principal factors contributing to the EBIT increase were higher sales and the absence of start-up costs for the deployment of new production machinery during 2003. Interest Expense Interest expense in the first quarter of 2004 was $114.4 million, an increase of $3.4 million compared with the first quarter of 2003. The higher interest expense was more than accounted for by the issuance of $900 million of fixed-rate notes in May 2003, the proceeds of which were used to repay lower-cost variable rate debt borrowed under the Company's bank credit agreement. Partially offsetting the higher fixed-rate interest were savings from the December 2003 repricing of the Senior Secured Credit Agreement and approximately $5 million in interest savings as a result of the Company's fixed-to-floating interest rate swap on a portion of its fixed-rate debt. Consolidated debt at the end of the first quarter of 2004 was $5.509 billion compared with $5.426 billion at year-end 2003, representing a seasonal increase of $83 million compared with a $218 million increase in the first quarter of 2003. Capital Spending Capital spending for the first quarter of 2004 totaled $82.5 million, $36.9 million lower than the first quarter a year ago. Reduction of base capital spending through enhanced capital efficiency was identified as one of the Company's key liquidity improvement initiatives in 2003 and will remain so going forward. Effective Tax Rate The Company's effective tax rate in the first quarter of 2004 was 29.9% compared with 29.0% for the full year 2003 (excluding separately taxed items.) Asbestos Asbestos-related cash payments in the first quarter of 2004 were $50.4 million, a reduction of $4.7 million, or 8.5%, from the first quarter of 2003. New claim filings were approximately 30% lower than in the first quarter of 2003. As of March 31, 2004, the number of asbestos-related lawsuits and claims pending against the Company was approximately 31,000, up from approximately 29,000 pending claims at December 31, 2003 due to a lower rate of claim disposition than in the comparable earlier period. Additionally, the Company believes that a significant number of those pending cases have exposure dates after the Company's 1958 exit from the business for which the Company takes the position that it has no liability or are subject to dismissal on account of their having been filed in improper forums. The Company anticipates that cash flows from operations and other sources will be sufficient to meet its asbestos-related obligations on a short-term and long- term basis. The Company expects to conduct its annual comprehensive review of its asbestos-related liabilities and costs in connection with finalizing and reporting its results for the full year. Company Profile Owens-Illinois is the largest manufacturer of glass containers in North America, South America, Australia and New Zealand, and one of the largest in Europe. Owens-Illinois also is a worldwide manufacturer of plastics packaging with operations in North America, South America, Europe, Australia and New Zealand. Plastics packaging products manufactured by Owens-Illinois include consumer products (blow molded containers, injection molded containers and closures and dispensing systems) and prescription containers. * * * As reported in the Troubled Company reporter's February 25, 2004 edition, Fitch Ratings downgraded Owens-Illinois' (NYSE: OI) bank debt to 'B+' and senior secured notes to 'B' following the announcement of its planned $1.5 billion acquisition of BSN Glasspack S.A. Fitch has also downgraded OI's senior unsecured notes to 'CCC+' from 'B-'; and convertible preferred stock to 'CCC' from 'CCC+' based on the deterioration in credit standing versus secured lenders as a result of pending and expected future financings. The Rating Outlook is Stable. The downgrades reflect the heightened debt load from the acquisition and the limited free cash flow available for de- levering at the combined entity over the near term. Prior to the acquisition, OI had total debt of approximately $5.3 billion and was roughly break-even on a cash flow basis after asbestos payments. Consolidated operating margins at OI have been steadily declining for a number of years, and were particularly impacted in 2003 by a 34% drop in plastics. Other factors hurting margins include lower volumes at the glass operations related to adverse weather, lower pension income and higher energy costs. Reported operating results also benefited from favorable exchange rates during 2003. Cash flow has been adversely impacted by higher interest rates, heavy capital expenditures and asbestos-related payments. OXIS INTERNATIONAL: Axonyx Inc. Discloses 56.8% Majority Stake -------------------------------------------------------------- On February 27, 2004, Axonyx Inc. became the registered owner of 12,437,034 shares of common stock of OXIS International, Inc. Together with 1,156,645 shares of common stock of the Company held by Marvin S. Hausman, M.D., Axonyx's Chairman and CEO, the Axonyx affiliated group owned as of such date an aggregate of 13,593,679 shares of OXIS common stock, representing approximately 51% of the Company's issued and outstanding voting stock on an as-converted to common stock basis. The transfers of OXIS common stock to Axonyx that were registered on February 27, 2004, were pursuant to separate stock exchange agreements with each of the following twenty-one current or former shareholders of the Company: Primus Limited, Livorno B.V., Perlan Financing N.V., Alexander Angerman and Judith E. Angerman, Joint Tenants, Jay S. Glick, The KAWIPS Trust, Kaplan Family Trust, Howard and Esther Lifshutz, Joint Tenants, Jill R. Collins, Manual Graiwer, Steven Pressman, Hugh Bancroft III Revocable Trust, UA 8/4/70, Arthur C. Piculell, Jr. and Dee W. Piculell, JTWROS, Moonraker Farms, Inc., Steven Brourman, M.D., Walter C. Bowen, Marycliff Investment Corporation, Integrated Capital Development Group, Ltd., Wistow Holdings Limited, Brender Services Limited and Triax Capital Management Inc. Under such stock exchange agreements, each dated on or after January 15, 2004, the twenty-one holders of OXIS common stock identified above agreed to exchange their 12,437,034 shares of OXIS common stock (in the aggregate) for approximately 1,439,197 unregistered shares of Axonyx common stock. On March 5, 2004, Axonyx became the registered owner of an additional 1,545,533 shares of OXIS common stock, raising its current ownership of OXIS common stock to 13,982,567 shares, or approximately 52.4% of the Company's issued and outstanding voting stock on an as-converted to common stock basis. Together with 1,156,645 shares of OXIS common stock held by Dr. Hausman, the Axonyx affiliated group now owns an aggregate of 15,139,212 shares of OXIS common stock, representing approximately 56.8% of the Company's issued and outstanding voting stock on an as-converted to common stock basis. The transfers of OXIS common stock to Axonyx that were registered on March 5, 2004 were pursuant to separate stock exchange agreements with each of the following four current or former shareholders of the Company: Lawrence Richman and Michelle Richman JTWROS, Lawrence Richman MD, Trustee, The Lawrence Richman MD Inc. Profit Sharing Trust UTA Dated 1/1/92, Richard Fedder and Suncraft Limited Under such stock exchange agreements, each dated on or after January 15, 2004, the four holders of OXIS common stock identified above agreed to exchange their 1,545,533 shares of OXIS common stock (in the aggregate) for approximately 178,847 unregistered shares of Axonyx common stock. The Company and Axonyx discussed implementation of Axonyx's intent to change the composition of the Company's Board of Directors, and reached an understanding with respect thereto. Thereafter, on March 10, 2004, Company directors William G. Pryor, Ted Ford Webb and Thomas M. Wolf resigned from the Company's Board of Directors, effective upon the satisfaction of certain conditions and at the later of: (i) 8:00 p.m. (Pacific) on the day following the filing with the Securities and Exchange Commission of the Company's Report on Form 10-K for the year ending December 31, 2003; and (ii) 8:00 p.m. (Pacific) on the tenth day after the Company has filed with the SEC, and transmitted to all holders of record of securities of the Company who would be entitled to vote at a meeting for election of directors, an information statement meeting the requirements of Rule 14f-1. Shortly after receipt of such resignations, the Company's Board of Directors on March 10, 2004, appointed each of Gosse Bruinsma, Colin Neill, Gerard Vlak and Steven Ferris to serve as a director of the Company effective at the later of: (i) 8:01 p.m. (Pacific) on the day following the filing with the Securities and Exchange Commission of the Company's Report on Form 10-K for the year ending December 31, 2003; and (ii) 8:01 p.m. (Pacific) on the tenth day after the Company has filed with the SEC and transmitted to all Shareholders the Information Statement. * * * In its latest Form 10-KSB filing, the company reported: "These financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred recurring losses and at December 31, 2003, had an accumulated deficit of $59,494,000. These factors, among others, indicate that the Company may be unable to continue as a going concern for a reasonable period of time. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that may be necessary should the Company be unable to continue as a going concern. The Company's continuation as a going concern is contingent upon its ability to obtain additional financing, and/or generate revenue and cash flow to meet its obligations on a timely basis. "The Company expects that additional capital will be required during 2004 to develop the programs to increase revenues. If the Company is unable to generate additional funding through an increase in revenues, additional borrowings or raising additional capital during 2004 it intends to curtail its operations through the reduction of personnel and facility costs and by reducing its research and development efforts; however, no assurances can be given that it will be able to do so. If the Company were to be unable to sufficiently curtail its costs in such a situation, it might be forced to seek protection of the courts through reorganization, bankruptcy or insolvency proceedings." PAC-WEST TELECOMM: Will Report First Quarter Results on April 28 ---------------------------------------------------------------- Pac-West Telecomm, Inc. (Nasdaq: PACW), a provider of broadband communications services to service providers and business customers in the western U.S., announced the date for its first quarter 2004 earnings release and conference call. Pac-West plans to announce its financial and operating results for the first quarter 2004 on Wednesday, April 28, 2004, after market close. An investor conference call will be held on Thursday, April 29, 2004 at 8:30 a.m. Pacific Time/11:30 a.m. Eastern Time. Investors are invited to participate by dialing 1-888-291-0829 or 706-679-7923. The call will be simultaneously webcast on Pac- West's website at http://www.pacwest.com/investor/ An audio replay will be available through May 13, 2004 by dialing 1-800-642-1687 or 706-645-9291 (passcode #6746445). About Pac-West Telecomm, Inc. Founded in 1980, Pac-West Telecomm, Inc. is one of the largest competitive local exchange carriers headquartered in California. Pac-West's network carries over 120 million minutes of voice and data traffic per day, and an estimated 20% of the dial-up Internet traffic in California. In addition to California, Pac-West has operations in Nevada, Washington, Arizona, and Oregon. For more information, visit Pac-West's website at http://www.pacwest.com/ * * * As previously reported in Troubled Company Reporter, Standard & Poor's Ratings Services lowered its corporate credit rating on Pac-West Telecomm Inc. to 'D' from 'CC'. The rating on the 13.5% senior notes due 2009 was lowered to 'D' from 'C'. S&P explained, "Given the company's significant dependence on reciprocal compensation (the rates of which the company expects to further decline in 2003) and its limited liquidity, Pac-West will likely find the implementation of its business plan continue to be challenging." PARMALAT GROUP: Committee Brings-In Cole Schotz as Special Counsel ------------------------------------------------------------------ The Official Committee of Unsecured Creditors appointed in the US Parmalat Debtors' Chapter 11 cases, reminds the Court that Chadbourne & Parke LLP, its lead counsel, represents matters adverse to GE Capital Corporation and Citigroup, Inc. While Chadbourne received waiver letters from GE Capital and Citigroup consenting to the firm's representation of the Committee, Chadbourne is prohibited from investigating or commencing litigation to recover monetary damages, or seeking equitable protection against GE Capital or Citigroup. For this reason, the Committee seeks the Court's authority to retain Cole, Schotz, Meisel, Forman & Leonard, PA as special conflicts counsel. Cole Schotz will: (a) assist and advise the Committee in its investigation of the claims that the Committee may have in connection with the GE Capital and Citigroup Conflicts Issues and Other Conflicts Issues; (b) provide the Committee with legal advice with respect to its rights, duties and powers regarding the GE Capital and Citigroup Conflicts Issues and Other Conflicts Issues; (c) prepare complaints, pleadings, motions, applications, objections and other papers as may be necessary in furtherance of the Committee's interests and objectives with respect to the GE Capital and Citigroup Conflicts Issues and Other Conflicts Issues; (d) analyze and advise the Committee of the meaning and import of all pleadings and other documents filed with the Court with respect to the GE Capital and Citigroup Conflicts Issues and Other Conflicts Issues; (e) represent the Committee at all hearings and other proceedings with respect to the GE Capital and Citigroup Conflicts Issues and Other Conflicts Issues; and (f) perform other legal services as may be required and are deemed to be in the interests of the Committee and the unsecured creditors with respect to the GE Capital and Citigroup Conflicts Issues and Other Conflicts Issues. The Committee believes that Cole Schotz is well qualified to act as its special conflicts counsel, and possesses extensive knowledge and expertise in the areas of bankruptcy and bankruptcy-related litigation. Cole Schotz will be compensated for its services on an hourly basis, plus reimbursement of actual and necessary expenses. The attorneys and paralegals that will be primarily involved in the firm's representation and their hourly rates are: Name Position Rate ---- -------- ---- Michael D. Sirota Partner $450 Stuart Komrower Partner 395 Ilana Volkov Partner 360 Marc Press Partner 350 Jeffrey Traurig Associate 250 Franck D. Chantayan Associate 200 Cole Schotz's current attorney and paralegal hourly fee rates are: Professional Rate ------------ ---- Partners $250 - 475 Counsel 250 - 280 Associates 140 - 290 Paralegals 85 - 135 Mr. Sirota, a member at Cole Schotz, discloses that the firm represents parties-in-interest in matters unrelated to the U.S. Debtors' cases or its representation of the Committee: Party Relationship to the Debtors ----- --------------------------- Comerica Bank One of 20 Largest Unsecured Creditors Tuscan/Lehigh Dairies One of 20 Largest Unsecured Creditors Zurich Insurance One of 20 Largest Unsecured Creditors Company Cole Schotz represents clients relating to potential environmental claims, which may require the firm to take a position adverse to Zurich or one of its affiliates. Cole Schotz does not believe that its representation of Comerica Bank, Tuscan/Lehigh Dairies or the clients whose positions may be adverse to Zurich disqualifies it from being retained as special conflicts counsel by the Committee. Cole Schotz also represented Parmalat Dairy & Bakery, Inc. as local counsel in 2000 with regards to its purchase of Mother's Cake & Cookie Co. and Archway Cookies, LLC, and represented Parmalat SpA in 2000 with regards to a pension review. Cole Schotz also represented Farmland Dairies in 1990. Cole Schotz's representation of Parmalat Dairy, Parmalat SpA and Farmland was completely unrelated to the U.S. Debtors' bankruptcy cases and does not disqualify the firm from being retained as the Committee's conflicts counsel. Mr. Sirota assures the Court that Cole Schotz does not hold or represent any interest adverse to the U.S. Debtors' estates. The firm is a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. 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. 12; Bankruptcy Creditors' Service, Inc., 215/945-7000) PG&E NAT'L: Obtains Go-Signal for $30M TransCanada Break-Up Fee --------------------------------------------------------------- Pursuant to a Stock Purchase Agreement with National Energy & Gas Transmission Inc. (formerly PG&E National Energy Group Inc.), TransCanada will be entitled to payment of a break-up fee and reimbursement of expenses if the Purchase Agreement is terminated by: (a) TransCanada if: (i) NEG willfully breach the Purchase Agreement; (ii) the Court has not approved the Bidding Procedures and the Purchase Agreement within specified periods of time, and the orders do not remain final, non- appealable orders as originally entered on the Bankruptcy Court docket, not subject to stay. However, the Break-up Fee is only payable in this case if NEG enters into an agreement with one or more third parties relating to an alternative transaction or consummate an alternative transaction within six months after the termination. In this event, the Break-up Fee is only paid upon the consummation of the alternative transaction; (iii) NEG or the "Acquired Companies" enter into an agreement with respect to an alternative transaction or the Court enters an order approving an alternative transaction, subject to the obligations of any Back-up Bidder in accordance with the terms of the Bidding Procedures. The Break-up Fee is only paid upon the consummation of the alternative transaction; (iv) the Court confirms a reorganization plan or a liquidation plan that rescinds, avoids or is otherwise inconsistent with the Purchase Agreement or the transactions contemplated by the Purchase Agreement; or (b) TransCanada or NEG if: (i) the Closing does not occur by November 20, 2004, so long as: -- certain conditions to closing set forth in the Purchase Agreement have been satisfied; and -- NEG enter into an agreement with one or more third parties for an alternative transaction or consummate an alternative transaction within six months after the date of the termination. The Break-up Fee is only paid upon a consummation of an alternative transaction; (ii) the auction is held and TransCanada American is not the Winning Bidder or the Back-up Bidder, or TransCanada American was the Back-up Bidder but is no longer obligated to remain as the Back-up Bidder pursuant to the terms of the Bidding Procedures. In this event, the Break-up Fee is only paid upon the consummation of transaction with the Winning Bidder or Back-up Bidder, or the consummation of an alternative Transaction with a third party within nine months of the date the Back-up Bidder transaction fails; or (iii) after the conclusion of the auction and before the approval of the Purchase Agreement, if NEG elects to seek confirmation and consummation of a stand-alone reorganization plan that does not contemplate a sale of GTNC to TransCanada or the Winning Bidder. In this event, the Break-up Fee is paid at or before the termination, if terminated by NEG, or within three business days of the termination, if terminated by TransCanada American. The parties agreed to a $30,000,000 Break-up Fee. The Break-Up Fee is equal to 2.5% of the $1,203,000,000 cash consideration being provided to NEG under the Purchase Agreement. The Expense Reimbursement is equal to TransCanada's actual documented reasonable fees and expenses incurred in connection with the transactions contemplated by the Purchase Agreement not to exceed $3,500,000, plus $500,000 for each 30-day period from 30th day after the Bidding Procedures is approved through the Termination Date, but in no event more than $5,000,000. NEG sought and obtained the Court's authority to pay the Break- up Fee and reimburse TransCanada's expenses. Headquartered in Bethesda, Maryland, PG&E National Energy Group, Inc. -- http://www.pge.com/-- develops, builds, owns and operates electric generating and natural gas pipeline facilities and provides energy trading, marketing and risk-management services. The Company filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md. Case No. 03-30459). Matthew A. Feldman, Esq., Shelley C. Chapman, Esq., and Carollynn H.G. Callari, Esq., at Willkie Farr & Gallagher represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $7,613,000,000 in assets and $9,062,000,000 in debts. (PG&E National Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) PILLOWTEX: Agrees to Recharacterize GECC Lease Schedule C-97-1 -------------------------------------------------------------- On April 22, 1992, Pillowtex Debtor Fieldcrest Cannon, Inc. entered into a master equipment lease agreement with General Electric Capital Corporation pursuant to which Fieldcrest would from time to time enter into separate lease schedules to lease equipment from GE Capital. On November 26, 1996, Fieldcrest and GE Capital executed equipment schedule C-97-1 to lease certain production equipment for use in the Debtors' manufacturing operations. The Master Lease Agreement was later amended to give the Debtors an option to purchase the Equipment at the conclusion of the lease term for no additional consideration. With the Court's approval, the Debtors assumed the Lease Agreement on May 9, 2002. On March 2, 2004, GE Capital assigned the Lease Agreement and its rights, title, interest, claims and remedies under it and in the Equipment, to GGST LLC for $37,500. Pursuant to the Court-approved sale of substantially all of the Debtors' assets to GGST, the Debtors and GGST must jointly determine whether each GE Capital Lease would be treated as a true lease or recharacterized as a financing lease or secured loan under the Bankruptcy Code. Upon their review of the Lease Agreement, the Debtors and GGST agreed that the Lease would be treated as a financing lease. In a Court-approved stipulation, the Debtors and GGST agreed to recharacterize the Lease Agreement pursuant to these terms: (a) The Lease Agreement is recharacterized as a financing lease or secured loan; (b) The Equipment is property of the Debtors' estates; (c) As of the Petition Date, the aggregate balance due or to become due under the Lease Agreement was $443,010; (d) The Debtors will transfer to GGST good legal and beneficial title to the Equipment, free and clear of all liens, claims, encumbrances and interest of any kind or nature; (e) GGST will have an allowed unsecured prepetition non- priority claim against Fieldcrest for $443,010 and will not be required to file a proof of claim; and (f) GGST releases and discharges the Debtors from any and all claims relating to the Lease Agreement. Headquartered in Dallas, Texas, Pillowtex Corporation -- http://www.pillowtex.com/-- sells top-of-the-bed products to virtually every major retailer in the U.S. and Canada. The Company filed for Chapter 11 protection on November 14, 2000 (Bankr. Del. Case No. 00-4211). David G. Heiman, Esq., at Jones, Day, Reavis & Poque represents the Debtors in their restructuring efforts. On July 30, 2003, the Company listed $548,003,000 in assets and $475,859,000 in debts. (Pillowtex Bankruptcy News, Issue No. 62; Bankruptcy Creditors' Service, Inc., 215/945-7000) PREMCOR REFINING: Fitch Assigns BB- Senior Unsecured Debt Rating ---------------------------------------------------------------- Fitch Ratings has assigned Premcor Refining Group's senior unsecured debt rating of 'BB-' to the proposed $400 million offering of senior notes by the company. Proceeds from the debt issuance along with the offering of 13,000,000 shares of common stock by Premcor Inc. will be used to finance the acquisition of the Delaware City, Delaware refinery from Motiva Enterprises LLC. The new notes will rank equally with PRG's existing senior unsecured debt. Fitch rates the debt of PRG and Port Arthur Finance Corp. (PAFC) as follows: PRG -- $1.0 billion secured credit facility 'BB'; -- Senior unsecured notes 'BB-'; -- Senior subordinated notes 'B'. PAFC -- Senior secured notes 'BB'. The debt of PRG and PAFC remains on Rating Watch Positive pending the acquisition of the Delaware City refinery which is expected to close early next month. RICHARD MARTIN MGMT: Voluntary Chapter 11 Case Summary ------------------------------------------------------ Debtor: Richard Martin Management, Inc. 307 62nd Avenue North Saint Petersburg, Florida 33702 Bankruptcy Case No.: 04-06922 Chapter 11 Petition Date: April 8, 2004 Court: Middle District of Florida (Tampa) Judge: Paul M. Glenn Debtor's Counsel: Michael R. Deminico, Esq. 4207 West San Rafaelsy Unit H Tampa, FL 33629 Tel: 813-281-3130 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20-largest creditors. ROGERS COMMS: Reports Improved 1st Quarter 2004 Financial Results ----------------------------------------------------------------- Rogers Communications Inc. (S&P, BB+ L-T Corporate Credit Rating, Negative) announced its consolidated financial and operating results for the first quarter ended March 31, 2004. Highlights of the first quarter of 2004 included the following: - Operating revenue grew 13.4% for the quarter, with all three operating companies contributing to the year-over- year growth, including 9.3% growth at Cable, 19.3% growth at Wireless and 9.7% growth at Media. - Consolidated quarterly operating profit grew 23.5% year- over-year, with Wireless contributing growth of 40.9%, Cable of 8.8% and Media of 8.3%. - Cable had quarterly growth in revenue generating units (RGUs) of 62,500 driven by growth in Internet subscribers of 38,000 and in digital cable households of 27,900 and offset by a net loss of basic subscribers of 3,400. - On February 12, 2004, we announced with Cable a plan for the deployment of an advanced broadband Internet Protocol (IP) multimedia network to support digital voice-over-cable telephony and other new voice and data services across the Rogers Cable service areas with initial service availability expected in mid-2005. - Wireless postpaid voice and data subscriber net additions of 83,200 represented an increase of 35.9% compared to the first quarter of 2003, driven by the combination of increased gross activations and reduced churn levels. Average monthly postpaid wireless churn for the first quarter was reduced to 1.73%, while average monthly revenue per postpaid voice and data subscriber (ARPU) increased 2.6% to $55.74. - In the seasonally lowest quarter of the year, revenue at Media increased 9.7% year-over-year with 14.1% growth at Radio, 23.2% growth at Television and 10.6% growth at The Shopping Channel while Publishing revenues remained flat. Approximately 40.0% of the growth in Television revenues was driven by improved revenue results at Sportsnet, with the remainder being attributable to the acquisition of a 50% interest in Dome Production Partnership on January 2, 2004. - We recorded a loss of $64.8 million in the quarter compared to net income of $23.7 million in the first quarter of 2003. This $88.5 million decrease in net income is attributable to year-over-year growth in operating profit of $72.6 million, offset by an aggregate of $161.1 million of increases in other expenses principally a loss on foreign exchange on U.S. dollar-denominated debt compared to a substantial gain in 2003 and a loss on repayment of long-term debt in the current quarter. - On January 1, 2004, we adopted the accounting policy of expensing the fair value of stock-based compensation granted to employees over the estimated vesting period of the stock options. This increased operating expenses for the quarter by $3.0 million. - As announced in December 2003, early in March 2004, Wireless began transitioning its branding to Rogers Wireless from Rogers AT&T Wireless, bringing greater clarity to the Rogers brand in Canada. - In January 2004, Cable and Yahoo! Inc. announced a multi- year alliance to provide a powerful new broadband Internet experience. The alliance combines the unique advantages of one of the industry's pioneers in high-speed Internet access with one of the world's most recognized global internet brands. - During the quarter, the following financing transactions occurred: i. On February 20, 2004, Wireless completed a private placement of an aggregate principal amount of US$750.0 million 6.375% Senior Secured Notes due 2014. ii. On February 23, 2004, Cable redeemed $300.0 million aggregate principal amount of its 9.65% Senior Secured Second Priority Debentures due 2014, at a redemption price of 104.825% of the aggregate principal amount. iii. On March 11, 2004, Cable completed a private placement of an aggregate principal amount of US$350.0 million 5.50% Senior Secured Second Priority Notes, due 2014. iv. On March 26, 2004, Wireless redeemed, for aggregate US$734.7 million, its US$196.1 million 8.30% Senior Secured Notes due 2007, US$179.1 million 8.80% Senior Subordinated Notes due 2007, and US$333.2 million 9.375% Senior Secured Debentures due 2008. - On April 15, 2004, we filed a final shelf prospectus with each of the provinces in Canada and in the United States, under which we will be able to offer up to aggregate US$750.0 million of Class B Non-Voting shares, preferred shares, debt securities, warrants, share purchase contracts or units, or any combination thereof, for a period of 25 months. The final shelf prospectus will provide us with additional financial flexibility and the ability to quickly access the capital markets to take advantage of market opportunities. "The solid financial and operating results of the first quarter were an excellent start to the year and were relatively balanced across all of the operating companies," said Ted Rogers, President and CEO of Rogers Communications. "Continued sharpening of our sales and marketing focus combined with ongoing operational enhancements, new product deployments and a disciplined approach to our markets is the plan for 2004 and we are well on track to again delivering double-digit growth in both revenues and operating profit. In addition to the healthy operating results and excellent strategic positioning, our recent refinancing activities opportunistically captured the benefits of extremely attractive interest rates, add to our financial flexibility, and further assure that we are well-financed for continued success into the future." SEMCO ENERGY: Declares Quarterly Dividend Payable on May 15 ----------------------------------------------------------- The Board of Directors of SEMCO ENERGY, Inc. (NYSE: SEN) declared a quarterly dividend of $.075 per share on the Common Stock of the Company. The dividend is payable on the 15th day of May 2004 to shareholders of record at the close of business on April 30, 2004. SEMCO ENERGY, Inc. (S&P, BB- Corporate Credit Rating, Negative) is a diversified energy and infrastructure company that distributes natural gas to approximately 391,000 customers in Michigan and Alaska. It owns and operates businesses involved in natural gas pipeline construction services, propane distribution and intrastate pipelines and natural gas storage in several regions in the United States. In addition, SEMCO provides information technology, specializing in serving mid-sized companies in various sectors. SHAW GROUP: Commences $25 Million Equity Offering ------------------------------------------------- The Shaw Group Inc. (NYSE: SGR) announced the offering of 2,040,000 shares of its common stock at $12.35 per share. Credit Suisse First Boston, the sole manager of the offering, has also been granted an option to purchase up to an additional 306,000 shares to cover over-allotments, if any. The Company intends to use the approximately $25 million in net proceeds of the offering for general purposes, including providing funding for its outstanding tender offer for its Liquid Yield Option(TM) Notes due 2021 (Zero Coupon -- Senior) (LYONs) which may be put to the Company in May, 2004; and to replenish working capital expended in connection with increased business activity as well as the acquisition of Energy Delivery Systems last December. The common stock is being offered pursuant to the Company's effective universal shelf registration statement. This news release does not constitute an offer to sell or the solicitation of an offer to buy the common stock described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The offering may be made only by means of a prospectus and related prospectus supplement. Credit Suisse First Boston LLC acted as the sole underwriter for the offering. Copies of the prospectus supplement relating to the offering may be obtained from the offices of Credit Suisse First Boston LLC, One Madison Avenue, New York, NY 10010, (telephone number 212-325-2580). The Shaw Group Inc. is a leading global provider of engineering, procurement, construction, maintenance, fabrication, manufacturing, consulting, remediation, and facilities management services for government and private sector clients in the power, process, environmental, infrastructure and emergency response markets. The Company is headquartered in Baton Rouge, Louisiana and employs approximately 15,000 people at its offices and operations in North America, South America, Europe, the Middle East and the Asia-Pacific region. For further information, please visit the Company's Web site at http://www.shawgrp.com/ * * * As reported in the Feb. 10, 2004, issue of the Troubled Company Reporter, Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating and its other ratings on The Shaw Group Inc. At the same time, Standard & Poor's revised the outlook on the company to negative from stable. "The outlook revision reflects the fact that profitability and cash flow generation for fiscal 2004 ending August will be weaker than previously anticipated, because of continuing challenges on a few problem projects, reduced expectations of asset divestitures, and weakness in the higher margin pipe manufacturing operation," said Standard & Poor's credit analyst Heather Henyon. As a result, it is unlikely that Shaw will be able to meet Standard & Poor's expectations of total debt to EBITDA of 2.5-3x and EBITDA to interest coverage in the 3x area in 2004. However, a growing backlog of more steady environmental and infrastructure projects may enable the company to achieve an acceptable credit profile in the intermediate term. SILICON GRAPHICS: March 2004 Balance Sheet Insolvency Tops $164MM ----------------------------------------------------------------- Silicon Graphics (NYSE: SGI) announced results for its third fiscal quarter, which ended March 26, 2004. Revenue for the quarter was $230 million, up 6% from $217 million one year ago. Gross margin was 45.4% in the third quarter, compared with 37.1% in the same quarter one year ago. Operating expenses for the third quarter were $111 million, compared with $128 million the same quarter one year ago. SGI's third-quarter operating loss was $7 million, compared with an operating loss of $48 million for the third quarter fiscal 2003. The third- quarter net loss was $4 million or $0.02 per share, compared with a net loss of $35 million or $0.17 per share one year ago. At March 26, 2004, Silicon Graphic's balance sheet shows a total stockholders' deficit of $164,448,000 compared to $164,891,000 at June 27, 2003 SGI's GAAP Other Operating Expenses generally consist of non- operating items that change in composition and vary in amount from quarter to quarter. As a result, management believes that a non- GAAP presentation of operating expenses would be useful to investors to facilitate period to period comparisons of SGI's operating results. Non-GAAP operating expenses for the third quarter were $102 million, excluding $9 million in Other Operating Expense, compared with non-GAAP operating expenses of $125 million one year ago, excluding $3 million in Other Operating Expense. The current quarter Other Operating Expenses consisted of primarily non-cash charges relating to the previously announced headquarters consolidation. Excluding Other Operating Expenses, SGI's third- quarter non- GAAP operating profit was $2 million, compared to a non-GAAP operating loss of $45 million one year ago. "SGI delivered a solid quarter with a year-on-year increase in revenue, although order rates in North America are not as strong as we had projected," said Bob Bishop, Chairman and CEO of Silicon Graphics. "We've also strengthened the balance sheet and accelerated our transition to Linux-based high-performance computing. SGI continues to offer the world's most powerful and scalable storage, compute, and visualization systems, and we expect that moving to a Linux base will open even more opportunities for us in the technical and creative markets." Unrestricted cash, cash equivalents and marketable investments on March 26, 2004 were $146 million as compared with $141 million at the end of the third quarter of fiscal 2003. SGI, also known as Silicon Graphics, Inc., is the world's leader in high-performance computing, visualization and storage. SGI's vision is to provide technology that enables the most significant scientific and creative breakthroughs of the 21st century. Whether it's sharing images to aid in brain surgery, finding oil more efficiently, studying global climate or enabling the transition from analog to digital broadcasting, SGI is dedicated to addressing the next class of challenges for scientific, engineering and creative users. With offices worldwide, the company is headquartered in Mountain View, Calif., and can be found on the Web at http://www.sgi.com/ SOLUTIA INC: Court Approves Non-Core Asset Sale Procedures ---------------------------------------------------------- Solutia, Inc. and its debtor-affiliates anticipate that during the pendency of their Chapter 11 cases, they will attempt to sell a number of non-core assets that are of relatively de minimis value compared to their total asset base, which is on a consolidated basis over $2,900,000,000. Many of the asset sales may constitute transactions outside the ordinary course of the Debtors' business that typically would require individual Court approval. The Debtors contend that requiring Court approval for each miscellaneous asset sale would be administratively burdensome to the Court and costly for the Debtors' estates. In certain cases, the costs and delays associated with seeking individual Court approval of a sale would potentially eliminate, or substantially undermine, the economic benefits of the transaction. Accordingly, to reduce these burdens and costs, the Debtors sought and obtained Court approval for its proposed Non-Core Asset Sale Procedures. Under the process, the Debtors will use the Non-Core Asset Sale Procedures to obtain more expeditious and cost-effective review by interested parties, in lieu of individual Court approval, of certain sales involving less valuable, non-core assets. All other sale transactions outside the ordinary course of the Debtors' businesses would remain subject to Court approval on an individual basis. The Non-Core Asset Sale Procedures (1) Transactions The Non-Core Asset Sale Procedures would apply only to asset sale transactions outside the ordinary course of business involving, in each case, the transfer of $5,000,000 or less, as measured by the amount of cash and other consideration to be received by the Debtors on account of the assets to be sold, including any assumption of liabilities or payment by the buyer of aggregate cure costs in connection with the assumption and assignment of any related executory contracts and unexpired leases. The Debtors would be permitted to use the Non-Core Asset Sale Procedures to sell assets that are encumbered by liens, encumbrances or other interests only if the holders consent to the sale. Similarly, the Debtors would be permitted to sell assets co-owned by a Debtor and a third party only upon express or implied consent of the co- owner. (2) Notice For Non-Core Asset Sales for which the total consideration is between $250,000 and $5,000,000 or for which a donation or abandonment is contemplated, the Debtors propose these procedures: (a) After the Debtors enter into a contract or contracts contemplating a Non-Core Asset Sale, they will serve a notice of the proposed sale on: -- the United States Trustee for the Southern District of New York; -- counsel to the Creditors Committee; -- counsel to the Official Committee of Retirees; -- counsel to the agents for the Debtors' postpetition secured lenders; -- counsel to the Indenture Trustee for the secured public debt service issued by the Debtors; -- counsel to the Ad Hoc Committee for the secured public debt securities issued by the Debtors; -- all other known parties holding or asserting liens on or other interests in the assets that are the subject of the proposed sale; and -- if applicable, the non-debtor parties to all executory contracts and unexpired leases that the Debtors propose to assume and assign. (b) Each Sale Notice must include these information with respect to the proposed sale: -- a description of the assets and their locations; -- the identity of the non-debtor party to the proposed sale and any relationships between the party and the Debtors; -- the identities of any parties holding lien on or other interests in the assets proposed to be sold, and a statement indicating that all liens and interests are capable of monetary satisfaction; -- the material economic terms and conditions of the proposed sale; -- identification of the executory contracts and unexpired leases that the Debtors propose to assume and assign in connection with the proposed sale and the related cure amounts; -- instructions regarding the procedures to assert objections to the proposed sale; and -- the Debtors' basis for believing that the consideration for the sale is fair and equitable or that donation or abandonment is appropriate. With respect to each Sale Notice, the Interested Parties have through 5:00 p.m. on the 10thcalendar day after the service date to object to the proposed sale. If no objections were properly asserted before the expiration of the Notice Period, the Debtors would be authorized to consummate the Proposed Sale. Upon either the expiration of the Notice Period without the receipt of any objections or the written consent of all interested parties, the proposed sale would be deemed final and fully authorized by the Court. If any significant economic terms of the proposed sale were amended after transmittal of the Sale Notice but before the expiration of the Notice Period, the Debtors would be required to send a revised Sale Notice to all Interested Parties describing the sale as amended. If a revised Sale Notice is required, the Notice Period would be extended for an additional five calendar days. (3) Objection Procedures Objections to any proposed Non-Core Asset Sale must: (a) be in writing; (b) be served on the Interested Parties and the Debtors' counsel before the expiration of the Notice Period; and (c) state with specificity the grounds for objection. (4) De Minimis Non-Core Asset Sales A De Minimis Sale will be deemed final and fully authorized by the Court, without following the Notice Procedures and without further Court approval. De Minimis Sales are any Non-Core Assets Sales involving: (a) the transfer of $250,000 or less in total consideration or value; (b) no proposed assumption and assignment of any executory contracts; and (c) no known parties other than the DIP Lenders and the Indenture Trustee of the 11.25% Debentures hold or assert liens or other interests in the De Minimis Sale. Within 45 days after the end of each quarter, the Debtors will provide interested parties with a report itemizing the assets sold and consideration received for each De Minimis Sale completed during the quarter. (5) Effect of Sale The Debtors propose that, for each Non-Core Asset Sale, buyers will take title to the assets free and clear of liens, claims, encumbrances and other interests, pursuant to Section 363(f) of the Bankruptcy Code. Headquartered in St. Louis, Missouri, Solutia, Inc. -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Company filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. (Solutia Bankruptcy News, Issue No. 11; Bankruptcy Creditors' Service, Inc., 215/945-7000) SPIEGEL: Takes Steps to Rationalize Catalog & Corporate Functions ----------------------------------------------------------------- The Spiegel Group announced that, as part of its ongoing restructuring process, it is taking steps to rationalize its operations, making headcount reductions at its Spiegel Catalog division and its corporate support staff. On April 6, 2004, the company announced that it was in preliminary negotiations with a party interested in purchasing Spiegel Catalog. While the company's negotiations with the interested party are ongoing, the company also continues to work with its financial advisor, Miller Buckfire Lewis Ying & Co., to evaluate and assist in determining potential interest in Spiegel Catalog. The company cautions that there can be no assurance that any purchase transaction involving Spiegel Catalog will occur. The company said that sufficient uncertainty exists as to whether a potential buyer would assume the majority of the current Spiegel Catalog work force. Therefore, it is rationalizing the Spiegel Catalog business to facilitate any transition of either the business or certain assets of the Spiegel Catalog business in the event a purchase transaction should be negotiated with an interested party, if any, and to minimize ongoing operating losses of the Spiegel Catalog business. Bill Kosturos, interim chief executive officer and chief restructuring officer of The Spiegel Group, said, "While we are involved in active discussions with an interested party, we are continuing to take steps to minimize the ongoing operating losses of the Spiegel Catalog business and to help facilitate any possible transaction. Although this has been a difficult decision to reach, rationalizing the Spiegel Catalog business will make it a smaller entity." As a result, the company said that as required under the Workers Adjustment and Retraining Notification Act, notices were issued to approximately 255 employees at Spiegel Catalog and Spiegel, Inc., with layoffs occurring over the next two months. The majority of the employees affected are located at the company headquarters and its data center, which are both in the Chicago area. The company will provide severance and other benefits to affected associates. Geralynn Madonna, president and chief executive officer of Spiegel Catalog, commented, "While this was a very tough business decision, I would like to recognize the dedication and hard work of the Spiegel Catalog employees and those in our corporate support staff. As we work through this process, we remain steadfast in our commitment to provide a one-stop shopping destination and the highest level of service to our customers." About Spiegel Catalog Long before online shopping sites presented endless merchandise to consumers at the click of the mouse, Spiegel Catalog offered consumers a world of products with just the turn of a page. Founded in 1865, Spiegel has provided catalog concepts to its customers since 1905 and e-commerce since 1995. Offering the benefits of shopping via a variety of channels including its trademark "big book" semiannual catalogs, specialty catalogs, and e-commerce site -- http://www.spiegel.com/-- Spiegel provides quality, convenient shopping and a 360-degree lifestyle experience that is essential for its busy customers. About The Company The Spiegel Group is an international, specialty retailer marketing fashionable apparel and home furnishings to customers through catalogs, specialty retail and outlet stores, and e- commerce sites, including eddiebauer.com, newport-news.com and spiegel.com. The Spiegel Group's businesses include Eddie Bauer, Newport News and Spiegel Catalog. Investor relations information is available at http://www.thespiegelgroup.com/ STELCO: Union Urge Members to Attend May 1 Hamilton Rally --------------------------------------------------------- National leaders of the United Steelworkers are urging as many people as possible to attend an all-important rally at Hamilton's Copps Coliseum on Saturday, May 1st, as a community gesture of solidarity with active Stelco employees and retirees, who are committed to preserving their pensions and benefits in the wake of the restructuring of Stelco Inc. Ken Neumann, the Steelworkers' incoming national director, and the outgoing director, Lawrence McBrearty who is stepping down as of this Friday (April 23), said Tuesday that the May 1st rally is about more than the future of thousands of Hamilton's citizens. "Anyone who believes that workers are not responsible for bad management and corporate self-reward, and that workers and retirees are owed a future of dignity instead of poverty, should be there on May 1st," said Neumann, who will be among the featured speakers and heads of unions who will be present at Copps Coliseum. "Steelworkers are not prepared to roll over and accept a process that demands secrecy and blame for a situation that they did not create," added McBrearty. "No company can survive without the production capability of its workforce, most of whom are skilled and prepared to work with blood and sweat to make their companies successful. It is time more people realized this fundamental fact instead of the false rhetoric of those in control of Canada's economy." The rally begins at noon and will also include live entertainment. Neumann will be sworn in as national director at the Steelworkers' National Policy Conference, being held this week (April 21-24) in Vancouver at the Westin Bayshore hotel. The conference is open to media. Stelco Inc. is Canada's largest and most diversified steel producer. Stelco is involved in all major segments of the steel industry through its integrated steel business, mini-mills, and manufactured products businesses. Stelco has a presence in six Canadian provinces and two states of the United States. Consolidated net sales in 2002 were $2.8 billion. To learn more about Stelco and its businesses, go to http://www.stelco.ca/ TIMKEN CO: Shareholders Elect Jerry Jasinowski as New Director -------------------------------------------------------------- At The Timken Company's annual meeting of shareholders on April 20, Jerry J. Jasinowski, president of the National Association of Manufacturers, was elected for a three-year term expiring at the 2007 annual meeting. Also at the annual meeting, James W. Griffith, John A. Luke, Jr., Frank C. Sullivan and Ward J. Timken were re-elected for three- year terms expiring 2007. The remaining eight directors are as follows: Robert W. Mahoney, Jay A. Precourt, Ward J. Timken, Jr. and Joseph F. Toot, Jr. -- terms expiring at the 2005 annual meeting. Joseph W. Ralston, John M. Timken, Jr., W. R. Timken, Jr. and Jacqueline F. Woods -- terms expiring at the 2006 annual meeting. Mr. Jasinowski, a one-time factory worker, joined the U.S. Air Force as an intelligence officer. He went on to become assistant professor of economics at the U.S. Air Force Academy. In the early 1970s, he managed research and legislative affairs for the Joint Economic Committee of Congress. In 1976, he served as director of the Carter Administration's economic transition team for the departments of Treasury, Commerce, Labor, the Council of Economic Advisors and the Federal Reserve. He later was appointed assistant secretary for policy at the U.S. Department of Commerce. Since 1990, Mr. Jasinowski has served as president of the National Association of Manufacturers (NAM), the largest industry trade group in the country, with 14,000 member companies across all industrial sectors. The NAM is one of the country's most respected authorities on political, economic and manufacturing trends and the most effective advocate of manufacturing interests. Mr. Jasinowski earned his bachelor's degree in economics from Indiana University, his master's degree in economics from Columbia University and is a graduate of the Harvard Business School's Advanced Management Program. 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. TRANS-INDUSTRIES: Auditors Express Going Concern Qualification -------------------------------------------------------------- Trans-Industries, Inc. (Nasdaq: TRNI), announced, in conformance with Nasdaq's Marketplace Rule 4350(b)(1)(B), that its Form 10-K for the fiscal year ended December 31, 2003, which was filed on April 14, 2004, contained an audit opinion that included a going concern qualification. The audit opinion cited the Company's recurring losses from operations, cash flow difficulties, and the fact the Company is in default of the terms of its credit facility. About the Company The Company is a leading provider of lighting systems and related components to the mass transit market as well as a supplier of information hardware and software solutions on Intelligent Transportation Systems (ITS) and mass transit projects. ITS utilizes integrated networks of electronic sensors, signs and software to monitor road conditions, communicate information to drivers and help transportation authorities better manage traffic flow across their existing infrastructures. TRAVEL SERVICE: Case Summary & 19 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: Travel Service Network Inc. 222 East State Batavia, Illinois 60510 Bankruptcy Case No.: 04-15270 Type of Business: The Debtor is a privately held corporation, established in 1985, providing services and programs within the travel and hospitality industry. See http://www.travelservicenetwork.com/ Chapter 11 Petition Date: April 16, 2004 Court: Northern District of Illinois (Chicago) Judge: John H. Squires Debtor's Counsel: James A Chatz, Esq. Arnstein & Lehr 120 South Riverside Plaza, Suite 1200 Chicago, IL 60606 Tel: 312-876-7100 Estimated Assets: $50,000 to $100,000 Estimated Debts: $1 Million to $10 Million Debtor's 19 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Internal Revenue Service employment taxes for $1,813,796 Mail Shop 5010 CHI Travel Service 230 S. Dearborn Street Network, Inc. Chicago, IL 60604 State of Kansas $822,738 R. Lee McGowan, Asst. D.A. 100 N. Kansas Avenue Olathe, KS 66061 Internal Revenue Service employment taxes for $677,881 Mail Shop 5010 CHI TSN Travel, Inc. 230 S. Dearborn Street Chicago, IL 60604 AT & T Corp. $90,111 Leedsworld, Inc. $49,899 American Express Co. $44,795 Sabre, Inc. $31,914 Knight Adjustment Bureau $26,762 Fastclick.com, Inc. $24,091 Commercial Recovery $20,152 UCN $19,388 Bell Trans $14,254 Ostrow Reisin Berk & Abrams $12,200 Federal Express Corp. $9,570 Susan Meyer - Law Offices Legal Services $7,131 Baker, Miller, Markoff & Legal Services $6,840 Krasny LLC Teller, Levit & Silvertrust, $4,777 PC Renaissance Cruises, Inc. $3,530 et al. c/o Tabas, Freedman & Soloff, P.A. ADT Security Services, Inc. $2,632 TRIAD HOSPITALS: Publishes First Quarter Operating Results ---------------------------------------------------------- Triad Hospitals, Inc. (NYSE:TRI) announced consolidated financial results for the three months ended March 31, 2004. The Company reported revenues of $1.13 billion; earnings before interest, taxes, depreciation, amortization, and other items of $161.7 million; diluted earnings per share from continuing operations of $0.66; diluted EPS from discontinued operations of $0.63; and diluted EPS of $1.29. On a same-facility basis compared to the prior year three month period, inpatient admissions increased 5.9%, adjusted admissions increased 7.1%, inpatient surgeries increased 6.9%, patient revenue per adjusted admission increased 4.5%, patient revenues increased 11.9%, and revenues increased 11.2%. Same-facility results included facilities owned for the full first quarter of both years and excluded facilities acquired in the fourth quarter of 2003 and facilities classified as discontinued operations. The Company reported as discontinued operations the results from El Dorado Hospital, Alice Regional Hospital, and Medical Center at Terrell. The Company also reported as discontinued operations the results associated with two hospitals and three ambulatory surgery centers in the Kansas City area that the Company owned but leased to another operator. The Company sold El Dorado on February 1 for $33 million. The Company sold the Kansas City facilities on March 10 for $136 million and recorded a pre-tax gain of $84 million on the sale; the gain, as well as the lease revenues and depreciation expense prior to the sale, are reported in discontinued operations for the quarter. The Company reached a definitive agreement on February 20, 2004, to sell Alice for $18 million and expects to close the sale in the second quarter of 2004. The Company plans to terminate its lease of the Terrell facility and to transfer operations of the facility to a third party in the second quarter of 2004. Cash flow from operating activities was $56.2 million, or $69.4 million excluding cash interest and cash tax of $13.2 million. Cash flow from operating activities was impacted by three uses of cash that the Company had expected: (a) an annual retirement plan contribution of $23 million (for expenses accrued in 2003); (b) annual incentive compensation payments of $21 million (for expenses accrued in 2003); and c an investment in working capital of $23 million related to four Arkansas facilities acquired in the fourth quarter of 2003 (for which the Company did not acquire the seller's accounts receivable). The Company spent $103.9 million on capital expenditures during the quarter. The Company paid debt principal on its term loans of $33.2 million during the quarter, using some of the proceeds from the sale of El Dorado. At March 31, cash and cash equivalents were $92.2 million, and the Company had $222 million available under its $250 million revolving credit facility which was reduced by $28 million of outstanding letters of credit. Long-term debt outstanding was $1.73 billion, and stockholders' equity totaled $2.18 billion. As previously disclosed, the Company's allowance for doubtful accounts includes an amount beyond what the Company's historical experience would require, in order to reflect growth in uninsured patient receivables and potential further deterioration in the collectibility of those receivables. The Company reiterated its guidance for 2004 diluted EPS from continuing operations of $2.28-2.36. The Company continues to expect its provision for doubtful accounts to comprise approximately 10% of net revenue in 2004 (before implementation of a new charity policy), but the Company believes the provision will continue to be subject to change throughout 2004 based on evolving business conditions and the effectiveness of Company actions in response, and this could significantly impact 2004 EPS. Triad, through its affiliates, owns and manages hospitals and ambulatory surgery centers in small cities and selected larger urban markets. The Company currently operates 54 hospitals (including two under construction) and 14 ambulatory surgery centers in 16 states with approximately 8,700 licensed beds. In addition, through its QHR subsidiary, the Company provides hospital management, consulting and advisory services to more than 200 independent community hospitals and health systems throughout the United States. * * * As reported in the Troubled Company Reporter's November 5, 2003 edition, Standard & Poor's Ratings Services assigned its 'B' rating to Triad Hospitals Inc.'s $450 million senior subordinated notes due 2013, issued under Rule 144A. At the same time, Standard & Poor's affirmed Triad's corporate credit (BB-), senior secured, senior unsecured, and subordinated debt ratings. Proceeds from the new issue will be used to repay existing subordinated debt and for general corporate purposes. The senior secured bank loan is rated one notch above the corporate credit rating. Based on collateral value estimates, Standard & Poor's believes that these measures offer a strong likelihood of full recovery of bank debt in the event of default. Total debt outstanding as of Sept. 31, 2003, was $1.6 billion. "The speculative-grade ratings on Triad reflect Standard & Poor's concern about the company's aggressive growth strategies, risks associated with potentially weaker future reimbursement by the government and other third-party payors, growing bad debt reserves, and the challenges the company faces to maintain or improve its local market positions," said credit analyst David Peknay. UNITED AIRLINES: Inks Stipulation Settling Milepost Dispute ----------------------------------------------------------- The United Airlines Inc. Debtors, Allied Capital Corporation and Van Ness Hotel, Inc., have reached a stipulation settling a dispute between Milepost Properties, LLC, doing business as Arnold Hotel and Congdon Properties, LLC, and United Air Lines, Inc. In March 1998, the Debtors entered into a Hotel Room Agreement with Milepost. On January 16, 2003, the Debtors filed a Notice of Intent to Reject the Agreement. On January 31, 2003, Allied, alleging to be a secured lender of Milepost, objected to the Notice, asserting that the Agreement is not a lease and that damages are not limited by Section 502(b)(6) of the Bankruptcy Code. Milepost Properties filed a general unsecured claim for $28,021,793 on May 9, 2003. Milepost transferred the claim to Van Ness Hotel. The Debtors, Allied and Van Ness agree that: (a) The Agreement is deemed rejected as of January 31, 2003; (b) Allied and Van Ness reserve all rights to argue that the Agreement is not a lease but constitutes a rental agreement; (c) The Debtors reserve their rights to argue that the Agreement is a lease of real property subject to the limitations of Section 502(b)(6) of the Bankruptcy Code; and (d) Allied reserves its right to argue that because the Debtors have not responded to the Objection, they have waived or are estopped in their arguments. 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 AIRWAYS: Woos Court to Enforce Philip Morris Agreement --------------------------------------------------------- US Airways Group Inc. and its debtor-affiliates ask Judge Mitchell to enforce a letter agreement, dated March 26, 2003, with Philip Morris Capital Corporation. In March 2003, the Debtors decided to reject the leases for 16 Philip Morris Aircraft. To incentivize the Debtors to assume the Leases without modification, Philip Morris agreed to make Restructuring Payments on July 1, 2003, January 5, 2004, July 1, 2004 and December 31, 2004. Without this commitment, the Debtors would have rejected the Leases. The Debtors agreed to forfeit the Restructuring Payments if they violated a negative covenant, namely that Standard & Poor's Ratings Services and Moody's Investors Service will not rate U.S. Airways' senior unsecured debt below B3 and B-, nor lapse into a status of credit watch with negative implications. John Wm. Butler, Jr., Esq., at Skadden, Arps, Slate, Meagher & Flom, explains that this negative covenant did not affirmatively require U.S. Airways either to incur senior unsecured debt or obtain or achieve a certain rating on such debt. At the time of the Agreement, U.S. Airways did not have senior unsecured debt outstanding. Hence, there were no ratings and no contractual requirements to issue this debt. The negative covenant provided that if U.S. Airways issued this debt, its rating could not fall below a certain level, nor be placed on credit watch with negative implications. Therefore, U.S. Airways has not at any time been in breach of the negative covenant. As provided for in the Confirmation Order, the Debtors assumed the 16 Philip Morris Aircraft Leases without modification, in exchange for additional funding from Philip Morris. Now, Philip Morris refuses to comply with the Agreement by refusing to pay $5,117,702 that is currently past due, and threatening to withhold the $10,000,000 due later this year. According to Mr. Butler, Philip Morris' actions violate the Confirmation Order. Notwithstanding, Philip Morris refuses to make the January 5, 2004 Restructuring Payment on the ground that the negative covenant was violated. Philip Morris deprives the Debtors of the primary consideration that induced them to assume the 16 Leases under the Plan. (US Airways Bankruptcy News, Issue No. 52; Bankruptcy Creditors' Service, Inc., 215/945-7000) US AIRWAYS: S&P Keeps Ratings on Watch Negative as CEO Resigns -------------------------------------------------------------- Standard & Poor's Ratings Services said that its ratings remain on CreditWatch review for a possible downgrade following the resignation of the president and CEO of US Airways Group Inc. (B-/Watch Neg/--), David Siegel on April 19, 2004. Bruce Lakefield a member of the company's board of directors, succeeded Mr. Siegel. "Mr. Siegel's resignation, which was not unexpected, was apparently due to unwillingness of the airline's unions to consider further labor cost concessions without a change in senior management, a situation that has become common in the airline industry over the past year," said Standard & Poor's credit analyst Philip Baggaley. "In addition, Mr. Siegel's employment contract allowed him to receive a substantial termination payment if he resigned during April 2004." Standard & Poor's ratings on US Airways Group Inc. and its US Airways Inc. subsidiary (both B-/Watch Neg/--), which were lowered to current levels Jan. 9, 2004, remain on CreditWatch with negative implications, where they were placed on Dec. 10, 2003. Standard & Poor's plans to conclude its review of the company over the next several weeks. Bruce Lakefield, a retired Lehman Brothers executive, has been chairman of the board's finance and strategy, and human resources committees and actively involved in the company's efforts to restore its financial health. David Bronner, head of the investment fund that owns a controlling interest in US Airways Group, remains chairman of the company. USI HOLDINGS: Closes Public Offering of $11MM Common Stock ---------------------------------------------------------- U.S.I. Holdings Corporation, (Nasdaq: USIH) announced the closing of its offering of 11,229,578 common shares, of which 4,025,000 shares were sold by the Company via forward sale agreements with affiliates of two of the underwriters and 7,204,578 shares were sold by various selling shareholders, at $14.72 per common share. The total shares offered includes 1,464,728 shares of common stock (939,728 shares from the selling shareholders and 525,000 shares from the forward purchasers) sold pursuant to the underwriters' over-allotment option at the public offering price, less the underwriting discount. In connection with the offering, the Company entered into forward sale agreements pursuant to which J.P. Morgan Securities Inc., and an affiliate of Merrill Lynch, Pierce, Fenner & Smith Incorporated agreed to borrow and sell 4,025,000 shares of the Company's common stock. The Company expects to receive net proceeds initially valued at $55.5 million upon settlement of the forward sale agreement, which will be within the next twelve months. The Company expects to use the net proceeds from its sale of common shares for working capital and general corporate purposes, including possible acquisitions. The Company did not receive any of the net proceeds from the sale of the common shares by the selling shareholders. The offering was led by Merrill Lynch & Co., and JPMorgan. Banc of America Securities LLC acted as a senior co-manager and Fox- Pitt, Kelton, Keefe Bruyette & Woods, Stephens Inc. and SunTrust Robinson Humphrey acted as co-managers for the offering. The common shares were offered under the Company's shelf registration statement which was filed with, and declared effective by, the Securities and Exchange Commission. 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/ WARNACO GROUP: Annual Shareholders' Meeting Set for May 19, 2004 ---------------------------------------------------------------- The Warnaco Group, Inc., will hold its annual meeting of stockholders on May 19, 2004, at 11:00 a.m., at The Westin New York at Times Square, 270 West 43rd Street, in New York. The purpose of the meeting is to: -- elect seven directors to serve until the next annual meeting and until their successors have been elected and qualified; -- ratify the appointment of Deloitte & Touche, LLP, as the Company's independent auditors for the fiscal year ending January 1, 2005; and -- transact other business as may properly come before the Annual Meeting. Warnaco's Board of Directors has fixed the close of business on April 6, 2004 as the record date for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting. A list of stockholders entitled to vote at the Annual Meeting will be available at the principal executive offices of the Company located at 501 Seventh Avenue in New York 10018 for at least ten days before the Annual Meeting, and will also be available for inspection at the Annual Meeting. The current members of the Board of Directors are: 1. David A. Bell, 2. Robert A. Bowman, 3. Richard Karl Goeltz, 4. Joseph R. Gromek, 5. Sheila A. Hopkins, 6. Charles R. Perrin, and 7. Cheryl Nido Turpin The current Board members are also the seven nominees for directors. The Warnaco Group, Inc. is a manufacturer of intimate apparel, menswear, jeanswear, swimwear, men's and women's sportswear, better dresses, fragrances and accessories. The Company filed for Chapter 11 protection on June 11, 2001 (Bankr. S.D.N.Y. Case No. 01-41643). Elizabeth McColm, Esq., and Kelley Ann Cornish, Esq., at Sidley, Austin Brown & Wood represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $2,372,705,638 in assets and $3,078,347,176 in debts. (Warnaco Bankruptcy News, Issue No. 60; Bankruptcy Creditors' Service, Inc., 215/945-7000) WCI STEEL: Files Reorganization Plan in N.D. Ohio Bankr. Court -------------------------------------------------------------- WCI Steel, Inc. announced that a Plan of Reorganization approved by the company's independent board of directors has been filed in the U.S. Bankruptcy Court for the Northern District of Ohio, Eastern Division. The reorganization plan, which will enable WCI to emerge from bankruptcy, is subject to approval by the bankruptcy court and a vote of creditors and other stakeholders. An integral component of WCI's reorganization plan is the tentative labor agreement reached April 14 with the United Steelworkers of America. The proposed contract must be ratified by USWA Local 1375 members and approved by the bankruptcy court in connection with the reorganization plan. Patrick G. Tatom, WCI's president and chief executive officer, said the new labor pact was reached after two months of negotiations involving WCI, the USWA and The Renco Group, Inc., WCI's ultimate parent company. "This agreement is a significant milestone in our reorganization efforts and represents the strong commitment of The Renco Group to WCI's future," Tatom said. The labor contract would become effective upon WCI's emergence from bankruptcy. "We're extremely pleased that the USWA has pledged its support for WCI's Plan of Reorganization and will work with the company to obtain prompt approval from the bankruptcy court," Tatom added. On Sept. 16, 2003, WCI filed a voluntary petition for protection under Chapter 11 of the U.S. Bankruptcy Code. WCI is an integrated steelmaker producing more than 185 grades of custom and commodity flat-rolled steel at its Warren, Ohio facility. WCI products are used by steel service centers, convertors and the automotive and construction markets. The company has approximately 1,700 employees. WESTCHESTER COUNTY HEALTH: S&P Lowers Rating Two Notches to BB -------------------------------------------------------------- Standard & Poor's Ratings Services said it lowered its rating two notches to 'BB' from 'BBB-' on $113 million of Westchester County Health Care Corp., N.Y.'s senior lien bonds. The rating was also removed from CreditWatch with negative implications, where it was placed on Jan. 8, 2004. The outlook on the rating is negative. In addition, Standard & Poor's affirmed its 'AAA' rating on $140 million of the corporation's subordinate lien debt. "The lowered rating reflects the likelihood that the corporation will be dependent on an uncertain stream of governmental support for long-term viability," said Standard & Poor's credit analyst Liz Sweeney. The negative outlook reflects that the corporation is facing a multitude of issues, including a large operating gap for 2004, a sizable pension payment due in December, and continued liquidity needs in the next year, the solutions for which are not yet apparent. Although the corporation recently announced a package of support from Westchester County and New York State totaling about $35 million, all of it is a onetime boost to help the corporation survive in the short term, but does not insure long-term success and does not improve underlying operations. It is Standard & Poor's opinion that reliance on additional governmental fixes will be an ongoing and essential element of the corporation's survival, yet the timing, scope, and conditions under which such support would be provided are not yet apparent. The lowering of the rating affects $113 million of senior lien debt, which is backed by a revenue pledge of Westchester Medical Center. The rating action does not affect the $140 million subordinate lien debt, which is rated 'AAA' based on a guarantee of Westchester County. The county is rated 'AAA'. However, the county's rating will continue to be evaluated in light of the county's guarantees on behalf of the corporation and its current and future support for the corporation. The rating is removed from CreditWatch with negative implications, where it was placed in January 2004 when the corporation announced that operating losses for 2003 and 2004 would be significantly higher than previously estimated, and that the corporation faced a liquidity shortage. Since then, the top two administrators have resigned or retired, and the county has stepped in to take a more active role in the oversight of the corporation. An oversight committee was created that includes members of the corporation's board and the county, which will oversee distribution of the financial aid package funds as well as the recently approved contract with Pitts Management, a health care consulting firm that has been retained for a management and operational improvement engagement. WICKES: Employs RE/MAX as Michigan Real Estate Broker ----------------------------------------------------- The U.S. Bankruptcy Court for the Northern District of Illinois, Eastern Division, gave its stamp of approval to Wickes, Inc.'s application to employ RE/MAX Commercial Group, Inc., as its real estate broker. The Debtor has selected RE/MAX because of the firm's experience and knowledge in commercial and real estate sales in general and of the Debtor's commercial property in particular. RE/MAX will be employed solely with respect to the marketing and sale of certain commercial real property owned by the Debtor located in Niles, Michigan. The Debtor believes that the services of RE/MAX as its real estate broker will help it maximize the value of the Real Property for the benefit of its creditors and other parties-in-interest. David L. Bickell reports that the firm is a "disinterested person," as that term is defined in section 101(14) of the Bankruptcy Code. RE/MAX's commission will be equal to 6% of the Purchase Price or 3% of the sales price in the event the Real Property is sold to a party other than the Buyer at auction. Headquartered in Vernon Hills, Illinois, Wickes Inc. -- http://www.wickes.com/-- is a retailer and manufacturer of building materials, catering to residential and commercial building professionals, repairs and remodeling contractors and project do-it-yourself consumers. The Company filed for chapter 11 protection on January 20, 2004 (Bankr. N.D. Ill. Case No. 04- 02221). Richard M. Bendix Jr., Esq., at Schwartz Cooper Greenberger & Krauss represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $155,453,000 in total assets and $168,199,000 in total debts. W.R. GRACE: Delivers First Quarter 2004 Financial Results --------------------------------------------------------- W.R. Grace & Co. (NYSE:GRA) reported that 2004 first quarter sales totaled $518.5 million compared with $444.8 million in the prior year quarter, an increase of 16.6%. Revenue from improved volume and product mix accounted for over half of the increase, with favorable currency translation effects from a weaker U.S. dollar and acquisitions also contributing. Grace reported first quarter net income of $15.8 million, or $0.24 per share, compared with a net loss of ($2.3 million), or ($0.04) per share, in the first quarter of 2003. Pre-tax income from core operations in the first quarter of 2004 was $38.5 million compared with $13.5 million in the first quarter of 2003, a 185.2% increase, reflecting improved economic conditions, including stronger construction activity in the U.S., and cost structure improvements from successful productivity initiatives. "Our first quarter operating results were very good, with strong sales from each product line and a record first quarter profit from our Performance Chemicals segment," said Grace's Chairman and Chief Executive Officer Paul J. Norris. "Our strategic and operating initiatives are delivering positive results, allowing us to capitalize on stronger economic activity worldwide." CORE OPERATIONS Davison Chemicals Catalyst and Silica Products First quarter sales for the Davison Chemicals segment were $270.9 million, up 13.3% from a prior year quarter that reflected relatively weaker economic conditions. Excluding the effects of favorable currency translation, sales were up 6.7% for the quarter. Sales of catalyst products, which include refining catalysts, polyolefin catalysts and other chemical catalysts, were $187.3 million, up 11.5% compared with the prior year quarter. Most of the increase resulted from favorable product mix factors including added revenue to cover higher metals costs, with the remainder attributable to favorable currency effects. Sales of silica products were $83.6 million, up 17.6% compared with the first quarter of 2003, with currency effects of the stronger Euro contributing about 11.7 percentage points of the increase. Improvement was also attributable to growth programs in separations applications and from higher volumes into most consumer segments, showing evidence of a stronger economy in the United States and Asia Pacific. Operating income of the Davison Chemicals segment for the first quarter was $32.0 million, 57.6% higher than the 2003 first quarter; operating margin was 11.8%, higher than the prior year quarter by 3.3 percentage points. The increase in operating income was driven primarily by improved sales in North America and in the Asia Pacific region, as well as foreign currency translation effects. First quarter operating margin was enhanced by a favorable product mix, improved manufacturing costs and positive results from productivity initiatives. Performance Chemicals Construction Chemicals, Building Materials, and Sealants and Coatings First quarter sales for the Performance Chemicals segment were $247.6 million, up 20.4% from a relatively weak prior year quarter. Favorable currency translation accounted for 6.9 percentage points of the increase. Sales of specialty construction chemicals, which include concrete admixtures, cement additives and masonry products, were $116.4 million, up 28.2% versus the year- ago quarter (20.6% excluding favorable currency translation impacts). Revenues from Grace's acquisition in Germany (completed October 1, 2003) accounted for about one-fifth of the construction chemicals sales increase. Sales were up in all geographic regions, reflecting the success of new product programs and sales initiatives in key economies worldwide, as well as increased U.S. construction activity. Sales of specialty building materials, which include waterproofing and fire protection products, were $59.8 million, up 11.8% compared with the first quarter of 2003 (up 8.2% excluding favorable currency translation impacts). The first quarter results reflect strong sales of waterproofing materials, particularly underlayments for residential re-roofing, offset by continuing declines in fire protection products caused by changes in building codes and some weather-related project delays in January. Sales of specialty sealants and coatings, which include container sealants, coatings and polymers, were $71.4 million, up 16.3% compared with the first quarter of 2003 (up 7.5% excluding favorable currency translation impacts). Higher sales in coatings and closure sealants, particularly outside North America, accounted for most of the increase. Operating income for the Performance Chemicals segment was $27.6 million, compared with $12.1 million in the prior year quarter, a 128.1% increase and a record for the first quarter. Operating margin of 11.1% was 5.2 percentage points higher than the 2003 first quarter margin. Improved operating income and margins reflected increased sales volume from all product lines and the success of productivity and cost containment programs across the business segment. Corporate Costs First quarter corporate costs related to core operations were $21.1 million, a $2.2 million increase from the prior year quarter. The increase is primarily attributable to performance related compensation. In addition, effective in March 2004, Grace began accounting for currency fluctuations on a EUR 292 million intercompany loan between Grace's subsidiaries in the United States and Germany as a component of operating results instead of as a component of other comprehensive income. The change was prompted by new tax laws in Germany and by Grace's cash flow planning for its Chapter 11 reorganization which indicated that it is no longer reasonable to treat this loan as part of the permanent capital structure in Germany. The change in currency related to this loan over the first quarter was $9.8 million unfavorable, $8.5 million of which is reflected in other comprehensive income and $1.3 million of which is reflected in Grace's operating statements as part of noncore other (income) expense. CASH FLOW AND LIQUIDITY Grace's cash flow provided by operating activities was $20.7 million for the 2004 first quarter, compared with $9.7 million for the comparable period of 2003. First quarter 2004 pre-tax income from core operations before depreciation and amortization was $65.7 million, 72.0% higher than 2003. These results reflect the higher income from core operations described above. Cash used for investing activities was $8.3 million during the first quarter of 2004, primarily for capital replacements. At March 31, 2004, Grace had available liquidity in the form of cash ($325.3 million), net cash value of life insurance ($92.9 million) and unused credit under its debtor-in-possession facility ($216.1 million). Grace believes that these sources and amounts of liquidity are sufficient to support its strategic initiatives and Chapter 11 proceedings for the foreseeable future. CHAPTER 11 PROCEEDINGS On April 2, 2001, Grace and 61 of its United States subsidiaries and affiliates, including its primary U.S. operating subsidiary W. R. Grace & Co.-Conn., filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware (the "Filing"). Grace's non-U.S. subsidiaries and certain of its U.S. subsidiaries were not part of the Filing. Since the Filing, all motions necessary to conduct normal business activities have been approved by the Bankruptcy Court. Most of Grace's noncore liabilities and contingencies (including asbestos-related litigation, environmental remediation claims, tax disputes and other potential obligations) are subject to compromise under the Chapter 11 process. The Chapter 11 proceedings, including litigation and the claims resolution process, could result in allowable claims that differ materially from recorded amounts. Grace will adjust its estimates of allowable claims as facts come to light during the Chapter 11 process that justify a change, and as Chapter 11 proceedings establish court-accepted measures of Grace's noncore liabilities. See Grace's recent Securities and Exchange Commission filings for discussion of noncore liabilities and contingencies. Grace is a leading global supplier of catalyst and silica products, specialty construction chemicals, building materials, and sealants and coatings. With annual sales of approximately $2 billion, Grace has over 6,000 employees and operations in nearly 40 countries. For more information, visit Grace's Web site at http://www.grace.com/ WORLDCOM/MCI: Board Adopts Shareholder Rights Plan -------------------------------------------------- MCI, Inc., (MCIAV.PK) announced its Board of Directors has adopted a Shareholder Rights Plan designed to protect company shareholders in the event of takeover activity. Under the plan, shares of MCI Common Stock would be made available to shareholders at a reduced price should anyone acquire 15 percent or more of outstanding shares of that stock. "MCI's Board believes that the Rights Plan represents a sound, reasonable and customary means of safeguarding the interests of our shareholders," said MCI Chairman Nicholas Katzenbach. "It is designed to ensure they realize the long-term value of their investment. The Rights Plan encourages anyone seeking to acquire the Company to treat all shareholders fairly." In adopting the Rights Plan, the MCI Board declared a dividend of one right for each outstanding share of MCI Common Stock to stockholders of record on April 30, 2004. The Rights become exercisable upon the earlier of: 1) 10 days following a public announcement by another person or group that it has acquired beneficial ownership of 15 percent or more of the outstanding shares of common stock; or 2) 10 business days following the commencement of a tender offer or exchange offer to acquire beneficial ownership of 15 percent or more of the outstanding shares of MCI common stock. Certain qualifying tender offers made to all stockholders will not trigger the Rights. The Rights expire on the date of the 2007 annual meeting, unless earlier redeemed at a price of $.001 per Right. If the Rights become exercisable, they permit the holders to acquire common stock with a market value equal to twice the exercise price or could permit holders to acquire common stock of an acquirer of MCI with a market value equal to twice the exercise price. About MCI MCI Inc., (MCIAV.PK), is a leading global communications provider, delivering innovative, cost-effective, advanced communications connectivity to businesses, governments and consumers. With the industry's most expansive global IP backbone, based on the number of company-owned POPs, and wholly-owned data networks, MCI develops the converged communications products and services that are the foundation for commerce and communications in today's market. For more information, go to http://www.mci.com/ Headquartered 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. XM SATELLITE: Closes $200M Sr. Secured Floating Rate Note Offering ------------------------------------------------------------------ XM Satellite Radio Holdings Inc. (Nasdaq: XMSR) announced that its subsidiary, XM Satellite Radio Inc., completed a $200 million offering of Senior Secured Floating Rate Notes due 2009, guaranteed by XM Satellite Radio Holdings Inc. The interest rate for the initial quarterly period is 6.65%, floating at LIBOR plus 5.5% thereafter. The notes were offered by the initial purchasers solely to certain qualified institutional buyers pursuant to Rule 144A, have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States absent registration or an applicable exemption from registration under the Securities Act and applicable state securities laws. XM is transforming radio, an industry that has seen little technological change since FM, almost 40 years ago. XM's programming features 100 coast-to-coast digital channels: 71 music channels, more than 30 of them commercial-free, from hip hop to opera, classical to country, bluegrass to blues; and 29 channels of sports, talk, children's and entertainment. For the first time on radio XM brings to the car the same diverse selection of news sources available in the home on cable and DIRECTV. As reported in the Troubled Company Reporter's April 16, 2004 edition, Standard & Poor's Ratings Services assigned its 'CCC+' rating to XM Satellite Radio Inc.'s proposed Rule 144A $125 million senior secured floating rate notes due 2009. At the same time, Standard & Poor's affirmed its 'CCC+' corporate credit rating on the company and its parent, XM Satellite Radio Holdings Inc., which are analyzed on a consolidated basis. The outlook is stable. Proceeds will primarily be used to refinance existing debt. On a pro forma basis, the Washington, D.C.-based satellite radio broadcaster will have about $744 million in debt, before discounts. * Corp. Finance Attorney William Burke Returns to Sheppard Mullin ----------------------------------------------------------------- William M. Burke has rejoined Sheppard, Mullin, Richter & Hampton LLP as a Special Counsel in the Finance & Bankruptcy Practice Group. Burke originally joined the firm in 1967 and spent 18 years practicing at Sheppard Mullin. Burke joined Shearman & Sterling in 1986 and retired from that firm in 2003. "Returning to Sheppard Mullin is truly a homecoming for me. I am very excited about resuming my practice, as well as playing a role in the firm's strategic planning, attorney training and client development," said Burke. Richard Brunette, chair of the Finance & Bankruptcy Practice Group, commented, "We are thrilled to welcome Bill back to the firm. From his earliest days at Sheppard Mullin, Bill has dedicated his career to law reform efforts and adds to our strength in the areas of corporate finance and commercial lending." Burke's global transactional experience is vast. He has represented lenders, borrowers and arrangers in structuring and executing complex leveraged finance, project finance and structured finance transactions, in many cases creating novel and innovative deal structures. Burke's merger and acquisition work includes creating joint ventures to establish automobile finance operations in Asia. His structured finance work encompasses complex domestic and cross-border securitizations in Japan, Indonesia, Korea and other countries in Asia, including a groundbreaking public securitization of non-performing real estate loans in Japan. Burke represented the Philippine government in massive public works projects at the Subic Bay Freeport. Having won three cases in the United States Supreme Court, as well as several cases in the Ninth Circuit Court of Appeals, the California Supreme Court and the California Court of Appeals, Burke has a wealth of experience in complex appellate litigation. He has served on the Council of the American Law Institute and as a member of the National Conference of Commissioners on Uniform State Laws. Acting for both organizations, Burke chaired the Drafting Committee that revised Article 9 of the Uniform Commercial Code and led the national effort to secure the adoption of this complex new law in record time in all 50 states and the District of Columbia. Burke is a former member of the Permanent Editorial Board of the Uniform Commercial Code and is currently a member of both the American College of Commercial Finance Lawyers and the American College of Bankruptcy. He has authored numerous handbooks on domestic and cross-border securitization, a treatise on Lender Liability, a treatise on Article 9 Foreclosure, and numerous articles on corporate and commercial finance issues. Burke received the 2003 Lifetime Achievement Award from the Business Law Section of the State Bar of California. Burke received his law degree from the Stanford Law School in 1967 and his undergraduate degree from California State University at Northridge in 1964. About Sheppard, Mullin, Richter & Hampton LLP Sheppard Mullin is a national law firm with more than 400 attorneys and eight offices in Los Angeles, San Francisco, Orange County, San Diego, Santa Barbara, West Los Angeles, Del Mar Heights, and Washington, D.C. The full-service firm provides legal expertise and counsel for U.S. and international clients in a wide range of practice areas, including Corporate; Entertainment and Media; Finance; Government Contracts; Intellectual Property; Labor and Employment; Litigation; Real Estate/Land Use; and Tax, Trusts and Estate Planning. The firm was founded in 1927. For more information, please visit http://www.sheppardmullin.com/ * Cadwalader's Charlotte Office Tops Chambers & Partners Rankings ----------------------------------------------------------------- Chambers & Partners, a publisher of guides to the legal profession, has ranked Cadwalader, Wickersham & Taft LLP's Charlotte office as the leading Capital Markets & Securitization firm in Charlotte. In the just published second edition of "Chambers USA: America's Leading Lawyers of Business," Charlotte partners Jim Carroll, Steven Cohen and Stuart Goldstein also topped the rankings, capturing the top spots as Charlotte's leading lawyers in Capital Markets & Securitization. Described as a specialty boutique in North Carolina, Cadwalader's Charlotte office represents commercial and investment banks in complex financial transactions. Practice areas in Charlotte include Capital Markets, Banking & Finance, Real Estate Finance and Financial Restructuring. Mr. Carroll is a member of the Firm's Real Estate Finance Department, Mr. Cohen is a member of the Firm's Banking & Finance Department and Mr. Goldstein is a member of the Firm's Capital Markets Department. Cadwalader lawyers collaborate routinely with their colleagues across practice groups and offices providing clients with the ability to look at deals from every angle, arriving at optimal solutions. Chambers & Partners researchers spent a year canvassing clients and lawyers across the US to obtain a consistent market view of which firms and attorneys are considered leaders in their field. Over 4500 telephone interviews were conducted and thousands of comments were collected. Additional information is available at http://www.chambersandpartners.com. Cadwalader, Wickersham & Taft, established in 1792, is one of the world's leading international law firms, with offices in New York, Charlotte, Washington and London. Cadwalader serves a diverse client base, including many of the world's top financial institutions, undertaking business in more than 50 countries in six continents. The firm offers legal expertise in securitization, structured finance, mergers and acquisitions, corporate finance, real estate, environmental, insolvency, litigation, health care, banking, project finance, insurance and reinsurance, tax, and private client matters. More information about Cadwalader can be found at http://www.cadwalader.com/ ********* 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 ***