/raid1/www/Hosts/bankrupt/TCR_Public/040521.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Friday, May 21, 2004, Vol. 8, No. 100
Headlines
ACCESSPOINT: Selling Merchant Portfolio to Raise Funds & Pay Debt
ADELPHIA BUSINESS: Resolves Comcast License & Claim Disputes
AIR CANADA: Reaches Impasse in CAW Discussions on Cost Realignment
ALARIS MEDICAL: S&P Places Low-B Ratings on Watch Positive
ALL AMERICAN HOMES: Case Summary & 20 Largest Unsecured Creditors
ALTERNATIVE FUEL: Accepts $547,500 Contract for Iranian Project
AMERCO: Asks Court to Disallow & Expunge Seven IRS Tax Claims
AMERCO: Complies with SEC Request for Documents
AMERICAN SOIL: Exploring Financing Options to Meet Capital Needs
BEACON POWER: Faces Possible Nasdaq Delisting on November 15, 2004
BIOGAN INTERNATIONAL: Disclosure Statement Hearing on May 26
CABLETEL COMMS: Toronto Stock Exchange Suspends Securities Trading
CME TELEMETRIX: FY 2003 Net Loss Narrows to $2.6 Million
CENTURION CDO VII: S&P Rates Classes D1 & D-2 at BB
CHAMPIONLYTE: Expects Havana Contract to Yield Positive Q2 Results
CONTINENTAL AIRLINES: S&P Revises Outlook to Negative from Stable
COVANTA: Heber Debtors File 1st & 2nd Post-Confirmation Reports
COYOTE LANDING: Case Summary & 7 Largest Unsecured Creditors
DANKA BUSINESS: March 31 Balance Sheet Insolvent by $64.8 Million
DESERT HEALTH: Strained Liquidity Raises Going Concern Uncertainty
DIRECTVIEW: Stockholders' Deficit Climbs to $836,453 at March 31
DISTRIBUTION DYNAMICS: Seeks to Employ Eisner as Accountants
ENRON CORPORATION: Wants Court to Nix Eleven Mega Claims
EQUIFIN INC: First Quarter 2004 Net Loss Increases to $378,000
ERN LLC: Gets Court Okay to Hire Linowes and Blocher as Counsel
FIRST VIRTUAL: Delayed Form 10-Q Prompts Nasdaq's Delisting Notice
FLEMING: Claims Classification & Treatment Under 3rd Amended Plan
FORD CREDIT: S&P Assigns BB Prelim Rating to 2004-A Class D Notes
FURNAS COUNTY: Wants to Bring-In Woods & Aitken as Attorneys
GENTEK: S&P Keeps Positive Watch on BB- Rating After Krone Sale
GENTEK: Court Classifies Stepanian $290K Cure Claim as Unsecured
GLD INC: Case Summary & 9 Largest Unsecured Creditors
GLOBAL CROSSING: Agrees to Settle Tax Claims for $132,389
GLOBAL CROSSING: Secures $100 Mil. Bridge Loan from ST Telemedia
GRAHAM STEEL CORP: Case Summary & 20 Largest Unsecured Creditors
IMPERIAL PLASTECH: Names Stamatis Astras CEO & Robert Gallop CFO
INT'L ENVIRONMENTAL: Case Summary & Largest Unsecured Creditors
KROLL INC: Planned Marsh Acquisition Spurs S&P's Positive Watch
KRONFLI SPUNDALE: Case Summary & 20 Largest Unsecured Creditors
LEXAM EXPLORATIONS: Considers Options to Address Liquidity Issues
LUDGATE INSURANCE: U.S. Creditors Must Comply with U.K. Scheme
MARINER HEALTH: Offers To Swap $175MM Unregistered Notes Due 2013
MASSMUTUAL GLOBAL: S&P Assigns Low-B Ratings to Classes M-1 & M-2
MIRANT AMERICAS: Wants Stay Modified To Set Off PG&E Gas Claim
NASH FINCH COMPANY: Shutting Down Underperforming Stores
NEW WORLD: Signs-Up Saul Ewing as Bankruptcy Attorneys
NEXTEL PARTNERS: 11% Senior Note Tender Offer to Expire on May 25
NICOLA INTERNATIONAL: Case Summary & Largest Unsecured Creditors
NRG ENERGY: Searches for New Independent Auditor as PwC Resigns
OWENS CORNING: Asks Court to Approve Goldman, et al. Settlement
PARMALAT CAPITAL: Preliminary Injunction Hearing Set for June 4
PG&E NATIONAL: Court Okays Global Settlement Pact with Algonquin
PHILLIPS VAN: Posts Improved Q1 Results & Raises 2004 Guidance
PLEJ'S LINEN: Secures Nod to Hire Rayburn Cooper as Attorneys
QWEST COMMS: Porsche Cars Renews 2-Year $6 Million Contract
RAPIDTRON INC: Needs More Capital to Sustain Operations
RELIANT ENERGY: Fitch Ratings Optimistic about Planned Asset Sale
RESIDENTIAL ACCREDIT: Fitch Affirms B Rating on 1998-QS9 Class B-2
RXBAZAAR INC: Auditors Express Doubt in Going Concern Ability
SOLUTIA INC: Retirees Commence Action to Protect Benefits
SPIEGEL GROUP: Pangea Acquisition Wins Bid for Newport Assets
STELCO: Monitor Ernst & Young Files 4th CCAA Restructuring Report
SUNNY DELIGHT: Moody's Rates 1st & 2nd Lien Facilities at Ba3/B1
SYBRON DENTAL: Moody's Upgrades Low-B Ratings Following Merger
TANGO INC: Plans to Boost Revenue Through Retail Distribution
TERRA BLOCK: Pollard-Kelley Airs Going Concern Uncertainty
TITANIUM METALS: S&P Upgrades Corporate Credit Rating to B from B-
TRENWICK: Committee Hires Towers Perrin for Financial Advice
VITAL BASICS: Signs-Up Randall Male as Financial Consultant
WMC FINANCE: Commences Tender Offer for 11-3/4% Senior Notes
WOMEN FIRST: Wants to Retain Young Conaway as Bankruptcy Counsel
WRENN ASSOCIATES: Taps Fougere & Associates as Accountant
* BOOK REVIEW: The Financial Giants In United States History
*********
ACCESSPOINT: Selling Merchant Portfolio to Raise Funds & Pay Debt
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AccessPoint Corporation is a vertically integrated provider of
electronic transaction processing and value-added business
services. Its transaction processing service routes, authorizes,
captures, and settles all types of non-cash payment transactions
for retailers and businesses nationwide. It services the payment
processing needs of sellers by (1) providing merchant
underwriting, risk management and account services, and
(2) supporting the network and technology services necessary for
both retail (in-store) and Internet point of sale transactions. To
this core function it provides sellers with a entire suite of
integrated business applications that centralize the management of
(A) both in-store and online transaction processing and
accounting, (B) automated web site design, hosting services and
catalog creation and management, (C) merchandising and benefits
management, (D) order processing and tracking services, and (E) a
whole host of reporting and monitoring tools.
Management has indicated that during the coming twelve months, the
Company will not be able to satisfy the cash requirements and has
no financing alternatives to satisfy the obligations except for
the sale of a portion of the merchant portfolio. The plans for the
coming twelve months include the contemplation of a sale of the
merchant portfolio for the purpose of recapitalizing the company
and paying down debt. Should a portion of the merchant portfolio
be sold, AccessPoint will be forced to reduce the staffing levels
in line with the reduction in revenue realized. During the coming
twelve months, the Company will continue to pursue enhancements of
the existing Merchant Manager and Transaction Manager products to
meet the demands of an increasingly competitive marketplace. It
does not anticipate the development of any products during the
coming twelve-month period and will not expend significant
resources on the research or development of new product lines.
The Company's net loss for the year ended December 31, 2003 was
$50,615, as compared to the net loss of $6,846,552 for the year
ended December 31, 2002. The difference is the result of the
increase in Income from operations and decrease in Other expense.
The Company had cash of $28,393 at December 31, 2003, as compared
to cash of $35,961 at December 31, 2002. AccessPoint has negative
working capital at December 31, 2003 and believes that cash
generated from operations will not be sufficient to fund the
current and anticipated cash requirements and the pay down of
existing debts.
Mendoza Berger & Company, LLP., the Company's independent
auditors, in their Auditors Report dated March 23, 2004, stated,
in part, "the Company has suffered recurring losses from
operations and its limited capital resources raise substantial
doubt about its ability to continue as a going concern."
ADELPHIA BUSINESS: Resolves Comcast License & Claim Disputes
------------------------------------------------------------
Comcast Cable Communications, LLC, and the Adelphia Business
Solutions, Inc. (ABIZ) Debtors are successors-in-interest to
certain lease agreements wherein Comcast licensed to the ABIZ
Debtors the exclusive indefeasible use of certain miles of fiber
optic communications systems.
Comcast alleges that certain defaults exist under the Agreements,
as to which Comcast filed 72 unsecured proofs of claim against
the ABIZ Debtors.
The ABIZ Debtors and Comcast agreed to:
(1) the assumption of the Agreements by the ABIZ Debtors,
subject to an amendment; and
(2) a cure of the Defaults and resolution of the Claims.
The Agreements and the fiber optic communications systems are
essential to the ABIZ Debtors' ability to provide
telecommunications services to their customers in their four core
business markets.
Accordingly, the Parties stipulate that:
(1) The term of each of the Agreements will be 20 years from
April 7, 2004.
(2) The Calculation of Payments provision for each of the
Agreements will be the same as that reflected in Annex A
of the Agreement pertaining to the Jacksonville, Florida
market. A full-text copy of Annex A is available for free
at: http://bankrupt.com/misc/Comcast_Agreement_Annex_A.pdf
(c) The Schedule of Maintenance, Acceptance, and Documentation
for all Agreements will be the same as that reflected in
Annex B of the Jacksonville Agreement. A full-text copy
of Annex B is available for free at:
http://bankrupt.com/misc/Comcast_Agreement_Annex_B.pdf
In full satisfaction of the cure obligations of the ABIZ Debtors
under the Agreements, pursuant to Section 365(b)(1) of the
Bankruptcy Code, and the Claims, the ABIZ Debtors will pay
Comcast the sum of:
-- $893,234; and
-- 36 equal monthly installments of $40,574, commencing on the
first day of the first month after the Effective Date.
Headquartered in Coudersport, Pennsylvania, Adelphia Business
Solutions, Inc., now known as TelCove -- http://www.adelphia-
abs.com/ -- is a leading provider of facilities-based integrated
communications services to businesses, governmental customers,
educational end users and other communications services providers
throughout the United States. The Company filed for Chapter 11
protection on March March 27, 2002 (Bankr. S.D.N.Y. Case No. 02-
11389) and emerged under a chapter 11 plan on April 7, 2004.
Harvey R. Miller, Esq., Judy G.Z. Liu, Esq., Weil, Gotshal &
Manges LLP represent the Debtors in their restructuring efforts.
When the Company filed for protection from its creditors, it
listed $ 2,126,334,000 in assets and $1,654,343,000 in debts.
(Adelphia Bankruptcy News, Issue No. 59; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
AIR CANADA: Reaches Impasse in CAW Discussions on Cost Realignment
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Air Canada announced that it has reached an impasse after 16 days
of discussions with the CAW aimed at achieving the CAW's share of
the $200 million cost savings to be achieved in order to satisfy
the labour condition in the Deutsche Bank Standby Purchase
Agreement and the GE Capital Aviation Services Global
Restructuring Agreement.
"There was insufficient movement in the union's response to the
Company's offer of May 17 to warrant a continuation of
discussions," said Paul Brotto, Executive Vice President, Cost
Control and Planning. "The Company's proposal to the CAW is
consistent with what was agreed to by all other employee groups
at Air Canada and Air Canada Jazz in terms of productivity and
wage reductions. We salute the leadership of ACPA, CUPE, the
IAMAW, CALDA, and the Jazz unions, ALPA, the Teamsters, and CALDA
for the tremendous work accomplished in the past few weeks. We are
too close to our goal to turn back. And so we will immediately
commence discussions with Deutsche Bank and GECAS to determine
next steps."
Agreements were reached with the International Association of
Machinists and Aerospace Workers representing 14,500 technical
operations and airport ground service, finance, cargo and clerical
personnel, the Air Canada Pilots Association, representing
approximately 3000 pilots at the mainline carrier, the Canadian
Airline Dispatchers Association, representing flight dispatchers.
and CUPE, representing approximately 5,800 flight attendants.
Tentative agreements have also been reached with all unions
representing Air Canada Jazz employees - the Airline Pilots
Association, CALDA, CAW, and Teamsters Canada. Air Canada
management and non-unionized staff have also contributed their
share of the $200 million cost savings target.
The CAW Airline Division represents approximately 5000 customer
sales and service agents and crew schedulers at Air Canada and
approximately 1400 employees at Air Canada Jazz comprised of
customer service agents, maintenance and engineering staff and
crew schedulers.
On May 14, 2004, Air Canada and The Office of the Superintendent
of Financial Institutions reached an agreement which satisfies the
pension funding relief condition in the Deutsche Bank Standby
Purchase Agreement, eliminating one of the two remaining
conditions that must be satisfied.
Headquartered in Saint-Laurent, Quebec Canada, Air Canada --
http://www.aircanada.ca/-- represents Canada's only major
domestic and international network airline, providing scheduled
and charter air transportation for passengers and cargo. The
Company filed for CCAA protection on April 1, 2003 (Ontario
Superior Court of Justice, Case No. 03-4932) and Section 304
petition with the U.S. Bankruptcy Court for the Southern District
of New York (Case No. 03-11971). Matthew A. Feldman, Esq., and
Elizabeth Crispino, Esq., at Willkie Farr & Gallagher serve as the
Debtors' U.S. Counsel. When the Debtors filed for protection from
its creditors, they listed C$7,816,000,000 in assets and
C$9,704,000,000 in liabilities.
ALARIS MEDICAL: S&P Places Low-B Ratings on Watch Positive
----------------------------------------------------------
Standard & Poor's Ratings Services placed its 'BB-' corporate
credit rating, its 'BB' senior secured bank loan rating, and its
'B' subordinated debt rating on San Diego, California-based ALARIS
Medical Systems Inc. on CreditWatch with positive implications.
"The CreditWatch listing follows the announcement that Cardinal
Health Inc., a large medical products distribution firm, will
acquire the innovative manufacturer of medication safety products
for $2 billion," said Standard & Poor's credit analyst Jill
Unferth. Upon completion of the transaction, Cardinal is expected
to assume ALARIS' debt, including its $175 million 7.25% senior
subordinated notes due in 2011, and the ratings will be raised to
levels consistent with Cardinal's credit quality. At March 31,
2004, ALARIS had $338 million of debt outstanding.
ALL AMERICAN HOMES: Case Summary & 20 Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: All American Homes Inc.
dba Coldwell Banker All-American Associates
622 South 320th Street
Federal Way, Washington 98003
Bankruptcy Case No.: 04-16016
Type of Business: The Debtor is engaged in the business of
Commercial and Residential Real Estate.
See http://www.cbaaa.com/
Chapter 11 Petition Date: May 4, 2004
Court: Western District of Washington (Seattle)
Judge: Samuel J. Steiner
Debtor's Counsels: Charles E. Shigley, Esq.
Marc L. Barreca, Esq.
Preston Gates & Ellis LLP
925 4th Avenue Suite 2900
Seattle, WA 98101
Tel: 206-370-8135
Fax: 206-623-7022
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
------ --------------- ------------
Coldwell Banker Real Estate Promissory Note $851,295
Financial Services
1 Campus Drive, Wing 2A
Parsippany, NJ 07054
Maria G. St. John Investor $215,000
Verna E. Trenbeath Investor $195,000
Jane L. Morgan Investor $110,000
Vivian W. St. John Investor $109,108
David Tupa Investor $104,433
Horst R. & Brigitte Koslan Investors $100,000
Robert Kolb Investor $100,000
Michael J. Bray Investor $100,000
Gerard S. or Marilyn Investors $87,550
M. Arsenault
Delores L. Meik Investor $85,000
Bernice Lemmel Investor $85,000
Chloe Marie Investor $77,202
William P. Harris Investor $75,000
Stanley L. Lemmel Investor $70,585
Sylvia I. Sullivan Investor $70,000
Karen Kautzman Investor $60,000
Carl O. Nyberg Investor $60,000
Jeremy R. or Ruby I. Campbell Investors $60,000
Fumiko Yoshida $50,000
ALTERNATIVE FUEL: Accepts $547,500 Contract for Iranian Project
---------------------------------------------------------------
Alternative Fuel Systems Inc. (TSX:ATF) announced that the Company
has accepted contracts valued at $547,500 U.S. (about $764,000
CDN) with the Iranian Heavy Diesel Engine Manufacturing Company
to design and build equipment to allow a 3.3 megawatt nominal
capacity heavy duty diesel electrical generator to run on a
mixture of natural gas and diesel fuel. Phase one of the contract
covers six engineering milestones, the first five of which are
valued at about $433,000 CDN. These five milestones are scheduled
for completion over the next seven months. After customer
acceptance of the deliverable for each milestone, payment will be
drawn against a Letter of Credit that is now in place.
The last milestone of the first phase involves final testing
of equipment in Iran, and is valued at $21,000 CDN. This payment
will occur at a later date, once the equipment for the project has
been commissioned.
The second phase of the contract involves building the hardware
and controllers for the project. The value of the second phase of
the contract is $222,000 U.S. ($310,000 CDN). This phase is
scheduled for completion within seven months, with one shipment to
trigger payment from a second Letter of Credit that is also in
place.
Although AFS anticipates that both phases of the contract will be
completed, there is no guarantee that such will occur. The
contracts carry a standard holdback of 10% of total value, which
will be released upon successful completion of all phases, final
acceptance of the work by DESA, and expiry of the twelve-month
warranty period.
With respect to the company's CCAA proceedings, meetings of
creditors and securityholders of AFS have been scheduled for
June 29, 2004 to vote on the Company's Plan of Arrangement. In
order for those meetings to be held, approval to file the Plan
must be obtained from the Court of Queen's Bench of Alberta.
AFS is a Canadian environmental technology company providing
innovative and cost-effective solutions to the growing global
problem of harmful exhaust emissions from internal combustion
engines. AFS has commercialized electronic engine management
systems enabling diesel and gasoline engines to operate on
cleaner burning natural gas. AFS' natural gas systems and
components are installed worldwide in new vehicles manufactured by
Original Equipment Manufacturers, or retrofitted in existing
fleets. AFS is headquartered in Calgary, Canada and trades on the
Toronto Stock Exchange under the trading symbol ATF.
AMERCO: Asks Court to Disallow & Expunge Seven IRS Tax Claims
-------------------------------------------------------------
The Reorganized AMERCO Debtors object to seven Proofs of Claim
filed by the Department of Treasury, Internal Revenue Service:
(a) Claim No. 14 and 15, which appear to be two different
pages of the same original claim, dated August 11, 2003.
In Claim Nos. 14 and 15, the IRS asserts $371,892 in
unsecured priority claims and $24,567,584 in unsecured
general claims;
(b) Claim No. 5, dated August 12, 2003, states that it is
Amendment No. 1 to the proof of claim filed on August 11,
2003. In Claim No. 5, the IRS asserts $24,564,476 in
unsecured priority claims and $675,000 in unsecured
general claims;
(c) Claim No. 6, dated August 13, 2003, states that it is
Amendment No. 2 to the proof of claim filed on August 11,
2003. In Claim No. 6, the IRS asserts $34,065,986 in
unsecured priority claims and $675,000 in unsecured
general claims. Claim No. 6 is identical to Claim No. 5
with the exception of two new entries -- March 31, 1999
for $6,082,791 and March 31, 2003 for $256,892;
(d) Claim Nos. 517 and 589 are duplicates of Claim No. 6; and
(e) Claim No. 632, dated November 12, 2003, states that it is
Amendment No. 4 to the proof of claim filed on August 11,
2003. In Claim No. 632, the IRS asserts $34,105,986 in
unsecured priority claims and $675,000 in unsecured
general claims.
Bruce T. Beesley, Esq., at Beesley, Peck & Matteoni, Ltd., in
Reno, Nevada, informs the Court that after extensive
investigation and with the full cooperation of the Reorganized
Debtors, the IRS has determined that Amerco has no net tax
liability to the IRS in connection with the IRS's Claim. To the
contrary, the IRS has determined that, with respect to the
corporate income tax returns for years ending March 31, 1995,
March 31, 1996 and March 31, 1997, Amerco has overpaid the IRS by
about $6,400,000 in connection with prepetition tax liabilities,
which constitutes the IRS's Claim. Thus, any liability on the
part of Amerco with respect to the corporate income tax claims
have been discharged.
With respect to potential corporate income tax liabilities for
the fiscal years ending March 31, 1998 and March 31, 1999, Mr.
Beesley points out that the corporate income tax returns for
these years were filed, and Amerco's ongoing investigation on the
claims related to these claims is expected to disclose further
net overpayments by Amerco to the IRS, warranting a finding of
discharge of any liability. The corporate income tax return for
the year ending March 31, 2003 was filed, and all tax liabilities
satisfied. With respect to any claim related to WT-FICA taxes
for the quarter ending June 30, 2003, Amerco's investigation
demonstrated full payment of the taxes, as referred in IRS Forms
941 produced to the IRS. Hence, these claims have also been
discharged. Moreover, Amerco's investigation disclosed that
Amerco had no obligation to file IRS Form 1042 with respect to
foreign tax returns for tax years 1994 and later, of which the
IRS has already been advised.
Accordingly, the Reorganized Debtors ask Judge Zive to disallow
and expunge Claim Nos. 5, 6, 14, 15, 517, 589 and 632.
Headquartered in Reno, Nevada, AMERCO's principal operation is U-
Haul International, renting its fleet of 96,000 trucks, 87,000
trailers, and 20,000 tow dollies to do-it-yourself movers through
over 1,000 company-owned centers and 15,000 independent dealers
located throughout the United States and Canada. The Company
filed for chapter 11 protection on June 20, 2003 (Bankr. Nev. Case
No. 03-52103). Craig D. Hansen, Esq., Jordan A. Kroop, Esq.,
Thomas J. Salerno, Esq., and Carey L. Herbert, Esq., at Squire,
Sanders & Dempsey LLP, represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed $1,042,777,000 in total assets and
$884,062,000 in liabilities. (AMERCO Bankruptcy News, Issue No.
27; Bankruptcy Creditors' Service, Inc., 215/945-7000)
AMERCO: Complies with SEC Request for Documents
-----------------------------------------------
To clarify any confusion in the market place resulting from a
recently published article, AMERCO (Nasdaq: UHAL) said that on
Thursday, May 13, 2004, the United States Bankruptcy Court in Reno
Nevada ruled that it has jurisdiction over potential claims filed
by the Securities and Exchange Commission (SEC), and that as of
April 21, 2004, the company had complied with the SEC's
Administrative Subpoenas, having produced over 1.4 million
documents, including e-mails.
The company is pleased with the Court's findings and will continue
to cooperate fully with the SEC fact-finding inquiry.
For more information about AMERCO and to review the court
documents in their entirety, visit http://www.amerco.com/
About AMERCO
Headquartered in Reno, Nevada, AMERCO's principal operation is U-
Haul International, renting its fleet of 96,000 trucks, 87,000
trailers, and 20,000 tow dollies to do-it-yourself movers through
over 1,000 company-owned centers and 15,000 independent dealers
located throughout the United States and Canada. The Company
filed for chapter 11 protection on June 20, 2003 (Bankr. Nev. Case
No. 03-52103). Craig D. Hansen, Esq., Jordan A. Kroop, Esq.,
Thomas J. Salerno, Esq., and Carey L. Herbert, Esq., at Squire,
Sanders & Dempsey LLP, represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed $1,042,777,000 in total assets and
$884,062,000 in liabilities.
AMERICAN SOIL: Exploring Financing Options to Meet Capital Needs
----------------------------------------------------------------
American Soil Technologies, Inc. develops, manufactures and
markets cutting-edge technology that decreases the need for water
in dry land farming, irrigated farming and other plant growing
environments while increasing crop yield and reducing the
environmental damage caused by common farming practices.
The Company manufactures two primary products: Agriblend(R), a
patented soil amendment developed for agriculture, and
Nutrimoist(TM), developed for homes, parks, golf courses and other
turf related applications.
The Company experienced losses in its last two fiscal years. The
Company expects that as a result of its efforts during the last
two years to develop strategic alliances, marketing agreements,
and distribution networks, sales volume in subsequent periods
should increase.
Revenue from the sale of agricultural products increased from
$201,950 during the Company's prior fiscal year to $479,336 in its
current fiscal year. Since these arrangements are new and
untested, it is uncertain whether these actions will be sufficient
to produce net operating income for the fiscal year 2004. However,
and according to the Company, given the gross margins on the
Company products, future operating results should be improved.
Cash and cash equivalents totaled $31,720 and $15,606 at December
31, 2003 and at June 30, 2003, respectively. Net cash used by
operations was $1,006,914 for the year ended June 30, 2003
compared to net cash used by operations of $679,699 for the
comparable year ended June 30, 2002. The Company has historically
relied upon one of its officers and significant shareholders to
provide cash to meet short term operating cash requirements.
American Soil Technologies has a working capital deficiency,
(current assets less current liabilities) of $98,805 as of
December 31, 2003 and $125,458 as of June 30, 2003 compared to a
deficit in working capital $582,530 as of June 30, 2002. The
positive change in working capital is because debentures payable
is no longer current.
The Company has incurred an accumulated deficit of $10,260 and has
a working capital deficit of approximately $99,000 as of December
31, 2003. The ability of the Company to continue as a going
concern is dependent on obtaining additional capital and financing
and operating at a profitable level. The Company intends to seek
additional capital either through debt or equity offerings and to
increase sales volume and operating margins to achieve
profitability. The Company's working capital and other capital
requirements during the next fiscal year and thereafter will vary
based on the sales revenue generated by the recent accumulation of
additional products and the distribution and sales network the
Company has created and will continue to grow.
The Company will consider both the public and private sale of
securities and or debt instruments for expansion of its operations
if such expansion would benefit the overall growth and income
objectives of the Company. Should sales growth not materialize,
the Company may look to these public and private sources of
financing. There can be no assurance, however, that the Company
can obtain sufficient capital on acceptable terms, if at all.
Under such conditions, failure to obtain such capital likely would
at a minimum negatively impact the Company's ability to timely
meet its business objectives.
Epstein, Weber & Conover, P.L.C., independent auditors for the
Company, noted in its Auditor's Report under date of March 19,
2004: "The Company has suffered recurring losses from operations,
cash flow deficiencies from operations and has negative working
capital. These matters raise substantial doubt about the
Company's ability to continue as a going concern. The financial
statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts or the
amount and classification of liabilities that might result should
the Company be unable to continue as a going concern."
BEACON POWER: Faces Possible Nasdaq Delisting on November 15, 2004
------------------------------------------------------------------
Beacon Power Corporation (Nasdaq: BCON), a development stage
Company that designs and develops sustainable energy storage and
power conversion solutions that provide reliable electric power
for the renewable energy, telecommunications, distributed
generation and UPS markets, announced that it has received a
letter from Nasdaq dated May 17, 2004 indicating that the
Company's common stock has not met the $1.00 minimum bid price
requirement for continued listing for the past 30 days and that
the Company's common stock is, therefore, subject to delisting
from the Nasdaq SmallCap Market, pursuant to Nasdaq Marketplace
Rule 4310(c)(4). Therefore in accordance with Marketplace Rule
4310c(8)(I), the Company will be provided 180 calendar days, or
until November 15, 2004, to regain compliance or face delisting on
November 15, 2004.
"To attain compliance the Company's common stock must close at
$1.00 per share or more for ten consecutive days before November
15, 2004. In the event that the Company's stock does not meet this
requirement but meets the requirements for inclusion on the Nasdaq
SmallCap Market as set forth in Marketplace Rule 4310 c, the
Company would be granted an additional 180 calendar day period to
regain compliance." said Jim Spiezio, CFO of Beacon Power.
About Beacon Power Corporation
Beacon Power Corporation designs and develops sustainable energy
storage and power conversion solutions that provide reliable
electric power for the renewable energy, telecommunications,
distributed generation and UPS markets. Beacon's latest product is
the Smart Power M5, a 5-kilowatt power conversion system for grid-
connect solar power applications. The Smart Power M5 is a UL-
approved, "all-in-one" power conversion system incorporating
multiple high-performance components in one unit that delivers
instantaneous power in the event of a grid outage. Beacon is also
known for its advanced flywheel-based Smart Energy systems,
designed to provide reliable, environmentally friendly power
quality solutions for electric utility transmission and
distribution and other applications. For more information, go to
http://www.beaconpower.com/
* * *
As reported in the Troubled Company Reporter's April 1, 2004
edition, Beacon states that while it had cash and cash equivalents
of approximately $9.3 million at December 31, 2003, it continues
to incur losses. Based on the Company's rate of expenditure of
cash, and the additional expenditures expected in support of its
business plan, the Company will require additional financing in
early 2005 to continue as a going concern. Because there is no
certainty of Beacon successfully completing the required
financing, the Company's independent auditors inserted an
explanatory paragraph related to a going concern uncertainty into
the Company's most recent Form 10K. The Company is pursuing an
equity investment to alleviate these concerns.
"We have taken significant actions to reduce our cash expenditures
while maintaining our technical capabilities and focused on
identifying market opportunities. These efforts have resulted in
the introduction of our Smart Power M5 inverter system and market
interest in our Smart Energy Matrix flywheel systems for frequency
regulation of the power grid," said Bill Capp, president and CEO
of Beacon Power. "We will need to obtain an equity investment by
early 2005 to continue to execute our business plan and based on
the growing market interest in our products, I believe that we
will raise the necessary funds to continue operations and
implement our plan."
BIOGAN INTERNATIONAL: Disclosure Statement Hearing on May 26
------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware will
convene a hearing to consider the approval of Biogan
International, Inc.'s Disclosure Statement with respect to its
Liquidating Chapter 11 Plan.
As previously reported in the Troubled Company Reporter's
May 18, 2004 issue, the Debtor filed its Liquidating Chapter 11
Plan and Disclosure Statement with the Court.
The Honorable Peter J. Walsh will begin the hearing to consider
any changes or modifications in the Disclosure Statement at 3:00
p.m. on May 26, 2004.
Any written objection to the approval of the Disclosure Statement
must be received on or before May 19, 2004 by:
i) U.S. Bankruptcy Court for the District of Delaware
3rd Floor, 824 Market Street
Wilmington, Delaware 19801;
ii) counsel to the Debtor,
Michael R. Nesto, Esq.
Young Conaway Stargatt & Taylor LLP
The Brandywine Building, 1000 West Street, 17th Floor
Wilmington, Delaware 19801;
iii) William Harrington, Office of the Unites States Trustee
J. Caleb Boggs Federal Building, 844 N. King Street,
Wilmington, Delaware 19801
Headquartered in Toronto, Ontario, Canada, Biogan International,
Inc., was a mineral products smelter and seller. The Company
filed for chapter 11 protection on April 15, 2004 (Bankr. Del.
Case No. 04-11156). Michael R. Nestor, Esq., at Young Conaway
Stargatt & Taylor represent the Debtor. When the Company filed
for protection from its creditors, it listed $9,038,612 in total
assets and $8,280,792 in total debts.
CABLETEL COMMS: Toronto Stock Exchange Suspends Securities Trading
------------------------------------------------------------------
Cabletel Communications Corp. (AMEX: TTV) (TSX: TTV) announced
that trading of its securities on The Toronto Stock Exchange has
been suspended as a result of the Company's failure to maintain
continued listing requirements.
The Company also announced that, as a result of its previously
disclosed liquidity issues and working capital shortfall, it is
currently unable to file its annual financial statements and
related MD&A for the year ended December 31, 2003, its interim
financial statements and related MD&A for the three months ended
March 31, 2004, or its Annual Information Form (AIF) on a timely
basis as prescribed by Canadian securities laws.
As previously announced, the Company is exploring a restructuring
of the Company's corporate shell for a possible sale. Under such
circumstances the Company would seek to (i) restructure or resolve
creditor claims, and (ii) file financial statements, MD&A and AIF
as required. Furthermore, any such resolution may require the
Company to seek protection under applicable bankruptcy laws.
The Company will disclose relevant particulars of any insolvency
proceedings as they may arise in the future and the Company
further intends to file with the Securities Commissions throughout
the period in which it is in default, the same information it
provides to its creditors.
The 2003 annual financial statements and AIF are required to be
filed on or before May 19, 2004, and the first-quarter interim
financial statements were required to be filed on or before May
15, 2004. The Company is unsure of when it may be in a position to
file the financial statements, MD&A and AIF, as it depends upon
the results of its restructuring efforts. Should the Company not
file its 2003 annual financial statements and AIF on or before
July 19, 2004, and not file its first quarter 2004 interim
financial statements on or before July 15, 2004, the Ontario
Securities Commission may impose an Issuer Cease Trade Order
against the Company.
About Cabletel Communciations
Cabletel Communications offers a wide variety of products to the
Canadian television and telecommunications industries required to
construct, build, maintain and upgrade systems. The Company's
engineering division offers technical advice and integration
support to customers. Stirling Connectors, Cabletel's
manufacturing division supplies national and international
clients with proprietary products for deployment in cable, DBS
and other wireless distribution systems. More information about
Cabletel can be found at http://www.cabletelgroup.com/
CME TELEMETRIX: FY 2003 Net Loss Narrows to $2.6 Million
--------------------------------------------------------
CME Telemetrix Inc. (TSX Venture: CEM), a leading-edge developer
of near-infrared instruments, announced financial results for the
fourth quarter and year ended December 31, 2003.
"While we remain committed to developing our in-vivo glucose
monitoring technology for the multi-billion dollar diabetes
market, our immediate focus is to commercialize applications of
our near infrared diagnostic technology that can generate nearer
term revenue," said CME President and CEO Duncan MacIntyre. "Our
lead product, HemoNIR(TM), will provide reagentless in-vitro
measurement of hemoglobin in a clinical setting and is currently
undergoing internal validation."
For the year ended December 31, 2003 the Company incurred a net
loss from continuing operations of $2,589,000 ($0.29 per share)
compared with a net loss of $3,273,000 ($0.37 per share) for the
year ended December 31, 2002. The Company also reported a loss
from discontinued operations of $1,060,000 ($0.12 per share) for
the year in connection with the 1999 sale of the Advantage
Medical Division.
Revenue for the year ended December 31, 2003 was $164,000, a
decrease of $212,000 from the prior year, attributable to a
$111,000 decline in licensing and royalty revenue resulting from a
decline in Food Quantifier unit sales period-to-period. Recurring
interest income was $44,000 lower, and investment tax credit
interest $56,000 lower because of lower balances in short-term
investments and investment tax credits receivable during 2003, as
compared to 2002.
For 2003, research and development expenses decreased 24% to
$1,922,000 from $2,526,000 in 2002. General and administration
costs decreased 15% to $1,665,000 from $1,970,000 in the prior
year. This decrease was primarily due to a reduction in legal work
associated with protecting the Company's intellectual property.
At December 31, 2003, cash and short-term investments were
$253,000, compared to $1,524,000 at December 31, 2002. Subsequent
to year-end, the Company raised additional capital, net of
financing, costs of $1,860,000 through a private placement of
securities. Based on the current cash utilization rate, management
anticipates that the Company has sufficient capital resources to
sustain operations into the first quarter of 2005. Management is
pursuing several capital-raising initiatives including licensing
opportunities and additional private placements of equity.
CME Telemetrix is a leading developer of near infrared,
spectroscopy based, medical diagnostic technology. The Company has
an extensive portfolio of optical, electronic and algorithm
related patents in the field of blood analysis. Currently, the
Company's primary focus is the development of in-vivo and in-vitro
devices that utilize near infrared light to measure key blood
analytes. Additional information is available on the Company's
website at http://www.cmetele.com/
* * *
As reported in the Troubled Company Reporter's February 19, 2004
edition, CME Telemetrix is continuing to pursue strategic
initiatives, which include ongoing discussions with potential
partners and the exploration of merger and acquisition
opportunities. Also, to manage its cash position, management gave
working notice to substantially all of its employees of their
termination. This action ensures that should the Company not be
able to secure adequate short-term and long-term financing it will
not be liable for statutory termination payments.
"We regret having to take this action in light of the tremendous
dedication and loyalty our employees have demonstrated," said
Duncan MacIntyre, President and Chief Executive Officer. "We
remain committed to our goal of developing non-invasive blood
monitoring devices that will improve the quality of life of
millions of people, but in order for our scientists to continue
this vital work we must secure additional capital resources."
In the event that a financing solution is not found in the coming
weeks, the Company will take further steps to wind down
operations.
CENTURION CDO VII: S&P Rates Classes D1 & D-2 at BB
---------------------------------------------------
Standard & Poor's Ratings Services assigned its ratings to
Centurion CDO VII Ltd./Centurion CDO VII Corp.'s notes.
Centurion CDO VII Ltd. is a CDO backed primarily by senior secured
loans and is structured as a cash flow transaction.
The transaction is managed by American Express Asset Management
Group Inc., a wholly owned subsidiary of the American Express
Financial Corp.
The ratings are based on the following:
-- Adequate credit support provided by subordination and
excess spread;
-- 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;
-- Scenario default rates of 32.14% for the class A-1a, A-1b,
and A-2 notes, 25.26% for the class B notes, 21.72% for
the class C notes, 16.43% for the class D notes and 20.06%
for the class G combination securities; and break-even
loss rates of 43.95% for the class A-1a, 36.91% for the
class A-1b and A-2 notes, 27.64% for the class B notes,
23.63% for the class C notes, 21.39% for the class D
notes, and 22.17% for the class G combination securities;
-- Weighted average maturity (WAM) of 4.89 years for the
portfolio;
-- Default measure (DM) of 3.46%;
-- Variability measure (VM) of 1.61%; and
-- Correlation measure (CM) of 1.63 for the portfolio.
Under Standard & Poor's stresses, interest on the class B, C, and
D notes is deferred for some periods; thus, the rating on the
these notes addresses the ultimate payment of interest and
principal. The class G combination securities are rated to the
return of stated principal only and bear no stated rate of
interest.
Ratings Assigned
Centurion CDO VII Ltd./Centurion CDO VII Corp.
Class Rating Amount (mil. $)
A-1a AAA 198.0
A-1b AAA 22.0
A-2 AAA 632.5
B-1 (deferrable) A
22.5
B-2 (deferrable) A 76.5
C-1 (deferrable) BBB 3.0
C-2 (deferrable) BBB 27.2
D-1 (deferrable) BB 5.0
D-2 (deferrable) BB 25.3
Class G combination BBB- 7.1
securities
CHAMPIONLYTE: Expects Havana Contract to Yield Positive Q2 Results
------------------------------------------------------------------
ChampionLyte Holdings, Inc., (OTC Bulletin Board: CPLY) reported
operating results for the three months ended March 31, 2004.
Revenues were $237,182 with a loss of $.03 per share. The Company
had negligible operations in the comparable period last year.
"We are truly seeing the impact of a major company-wide
restructuring that has yielded high-quality products and vastly
improved marketing and distribution to, most recently, some of the
nation's premier grocery chains and specialty retailers," said
David Goldberg, president of ChampionLyte Holdings, Inc. "Our
sugar-free sports drinks and sugar-free syrups are clearly
products that are in demand and address growing national concerns
over obesity and diabetes. Both product lines are not only great
tasting but they contain no sugar, no calories and no
carbohydrates.
"Last week we announced a long-term distribution agreement with
our beverage subsidiary for a minimum of 18,000 cases, or ten
tractor trailer loads of ChampionLyte(R) sugar free sports drinks,
with Havana International Incorporated and FTZ Ship and Duty Free
Supplies Inc.," Goldberg said. "We shipped the first order last
month and we have just received a second order for 18,000
additional cases. We believe the Havana contract along with other
recent orders as well as reorders will have a positive impact on
2nd quarter results."
Havana distributes sugar-free ChampionLyte(R) to 16 states, cruise
ships, sea stores, duty free stores and the United States
military.
Miami-based Havana International distributes its products to
Tennessee, Texas, Michigan, Illinois, New Hampshire,
Massachusetts, West Virginia, Virginia, Pennsylvania, Georgia,
Kentucky, California, New York and New Jersey. It also distributes
to a number of major cruise lines.
ChampionLyte Beverages, Inc. manufactures and markets
ChampionLyte(R), the first completely sugar-free entry in the
multi-billion dollar isotonic sports drink market. It is the only
sports drink with no sugar, calories, sorbitol, saccharin,
aspartame, caffeine or carbonation. The reformulated product is
sweetened with Splenda(R), the trade name for Sucralose produced
by McNeil Nutritionals, a Johnson & Johnson company.
About ChampionLyte Holdings, Inc.
ChampionLyte Holdings, Inc. is a fully reporting public company
whose shares are quoted on the OTC Bulletin Board under the
trading symbol CPLY. Its recently formed beverage division,
ChampionLyte Beverages, Inc., a Florida corporation, manufactures,
markets and sells ChampionLyte(R), the first completely sugar-free
entry into the multi-billion dollar isotonic sports drink market.
Its The Old Fashioned Syrup Company subsidiary manufactures,
distributes and markets three flavors of sugar-free syrups. The
products are sold in more than 20,000 retail outlets including
some of the nation's largest supermarket chains.
At March 31, 2004, ChampionLyte Holdings' balance sheet shows a
total stockholders' deficit of $1,787,854.
CONTINENTAL AIRLINES: S&P Revises Outlook to Negative from Stable
-----------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its ratings, including
its 'B' corporate credit rating, on Continental Airlines Inc., but
revised the long-term rating outlook to negative from stable.
"The outlook revision follows the company's disclosure that high
fuel prices are expected to produce a loss in the second quarter
and, if they continue at current levels, 'a significant loss for
2004 and beyond'," said Standard & Poor's credit analyst Philip
Baggaley. "Continental is attempting to raise fares, but if
other airlines do not follow suit, then Continental may need to
seek concessions from its employees, a step that it has thus far
tried to avoid," the credit analyst continued. The company
projects that it will nevertheless finish the second quarter with
$1.5 billion to $1.6 billion of unrestricted cash, in line with
previous guidance, but continued high fuel prices and a
competitive domestic pricing environment will likely cause cash
balances to decline thereafter.
Continental's liquidity, a concern in late 2001, has improved but
remains somewhat constrained. Unrestricted cash and short-term
investments, $1.4 billion at March 31, 2004, are the principal
source of financial flexibility. The company is reevaluating
previous plans to contribute $300 million to its pension plans,
and may now instead fund only the minimum $17 million, taking
advantage of recent pension legislation. Current maturities of
debt and capital leases as of March 31, 2004, were about
$464 million. A large majority of capital expenditures (mostly
aircraft) have financing commitments in place, and cash capital
expenditures (net of refunds in aircraft pre-delivery deposits)
are forecast at $131 million during the remainder of 2004.
Continued significant losses could undermine liquidity and cause a
downgrade.
COVANTA: Heber Debtors File 1st & 2nd Post-Confirmation Reports
---------------------------------------------------------------
On January 15, 2004, the Heber Debtors filed with the Court their
first Post-Confirmation status report. On April 20, 2004, the
Heber Debtors filed their second Post-Confirmation status report,
reporting minimal progress since January.
James L. Bromley, Esq., at Cleary, Gottlieb, Steen & Hamilton, in
New York, tells Judge Blackshear that since November 21, 2003,
the Heber Debtors have taken these steps in connection with the
consummation of the Heber Plan:
a) On December 18, 2003, the Geothermal Sale closed and the
Equity Interests in Heber Field Company, Heber Geothermal
Company, Second Imperial Geothermal Company, L.P., and
Mammoth-Pacific, L.P., were transferred to Ormat Nevada,
Inc. Pursuant to the Alternative Transaction Purchase
Agreement, and as contemplated in the Heber Reorganization
Plan, Ormat Nevada exercised their option to directly
acquire the Equity Interests in Second Imperial Geothermal
Company, L.P. Because of the exercise of this option,
Ormat Nevada did not acquire the Equity Interests in these
Heber Debtor Holding Companies -- AMOR 14 Corporation,
Covanta SIGC Energy, Inc., and Covanta SIGC Energy II, Inc.
b) Upon the closing, all Contracts were assumed by the
applicable Debtor and assigned to the applicable Buyer
pursuant to the Heber Reorganization Plan.
c) Each of the conditions to the Effective Date pursuant to
the Heber Reorganization Plan occurred or was waived in
accordance with the Heber Reorganization Plan. As a
result, the Heber Reorganization Plan became effective
occurred on December 18, 2003 and each of the Heber
Debtors, including the Heber Debtor Holding Companies,
emerged from Chapter 11 protection.
d) Distributions have been made by the Reorganized Heber
Debtors on account of all Allowed Claims in Class 1, Class
2H, Class 3H and Class 7 under the Heber Reorganization
Plan.
e) Cure Amounts have been paid to the non-debtor
counterparties to the relevant contracts as identified in
the Heber Reorganization Plan and the Heber Confirmation
Order.
f) The Debtors are continuing to engage in the claims
reconciliation process with respect to Disputed Claims
against the Heber Debtors, including the review of Disputed
Claims and the prosecution of claims objections pursuant to
the Heber Reorganization Plan. The Heber Debtors noted in
their Second Report that, as of April 20, 2004, there were
five Disputed Claims for which they intend to file
objections within the next four weeks.
Headquartered in Fairfield, New Jersey, Covanta Energy Corporation
-- http://www.covantaenergy.com/-- is a publicly traded holding
company whose subsidiaries develop, own or operate power
generation facilities and water and wastewater facilities in the
United States and abroad. The Company filed for Chapter 11
protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826).
Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary,
Gottlieb, Steen & Hamilton represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
its creditors, they listed $3,280,378,000 in assets and
$3,031,462,000 in liabilities. (Covanta Bankruptcy News, Issue No.
56; Bankruptcy Creditors' Service, Inc., 215/945-7000)
COYOTE LANDING: Case Summary & 7 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Coyote Landing Apartments Limited Partnership
2806 Alpine Boulevard Suite E
Alpine, California 91901
Bankruptcy Case No.: 04-07785
Chapter 11 Petition Date: May 5, 2004
Court: District of Arizona (Phoenix)
Judge: Sarah Sharer Curley
Debtor's Counsel: Carlos M. Arboleda, Esq.
Arboleda Brechner
4545 East Shea Boulevard, #120
Phoenix, AZ 85028
Tel: 602-953-2400
Fax: 602-482-4068
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 7 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Paramount Financial Group $1,709,540
4009 Columbus Road SW
Granville, OH 43023
Broadbent and Ass. $131,349
AD&D $20,250
Maricopa County Treasurer $6,337
Novogradac $1,509
F. Morton Cameron $908
Killip Land Planning $762
DANKA BUSINESS: March 31 Balance Sheet Insolvent by $64.8 Million
-----------------------------------------------------------------
Danka Business Systems PLC (Nasdaq:DANKY) announced fourth-quarter
and fiscal 2004 year-end results for the period ended March 31,
2004.
For the fourth-quarter the Company reported a net loss of
$96.4 million, which was largely attributable to certain
significant items, including a $50.8 million non-cash charge
against deferred tax assets; a $30.5 million restructuring charge;
and a $7.8 million provision for income tax expense. The charge
against the deferred tax assets was a result of the Company's
analysis under FAS 109 which evaluates the likelihood that such
net deferred tax assets and net loss carryforwards will ultimately
be realized. Excluding the restructuring charge, the Company
achieved operating earnings of approximately $1 million.
Danka's fourth-quarter revenue was $343.5 million, 3.5% lower than
the year-ago period but a 3.7% increase from the third quarter.
Adjusting for currency exchange, revenue was 10.9% lower than in
the year-ago period. Within that total, retail service revenue was
$160.8 million, 6.0% lower than the year-ago period but 2.8% and
3.5% higher than the third and second quarters, respectively.
Revenue from retail equipment and related sales, which include
software and professional services, was $125.3 million, a slight
decline from the year-ago quarter, but 9.3% higher than the third
quarter.
The sequential revenue improvements were driven in part by the
continued digital transformation of the company's business,
including an increase in the digital portion of the worldwide
equipment base to 55%. "I am pleased that, as expected, the
increased digital base has eased downward pressure on service
revenue which has been a major driver of our year on year revenue
declines," said Todd Mavis, Danka's Chief Executive Officer. "The
increased digital base has also resulted in an increase in
connectivity rates, due to more digital placements as well as
increased installations of Danka @ the Desktop(TM) solutions and
color systems. Increasing connectivity is important because it
helps to drive volumes in our installed base and, as a result, the
volume decline that we've experienced for some time is finally
beginning to flatten."
Continued progress in the company's growth initiatives also
contributed to the sequential increase in revenues. Revenue from
these offerings - which include software, professional services,
TechSource(TM) multi-vendor services, and printers - was 180%
higher than the year-ago quarter and 12% higher sequentially. "We
exited the fourth quarter with an annualized run rate of
approximately $65 million in our growth initiatives, which play a
vital role in enabling sales of our traditional offerings," said
Mavis. "I'm particularly pleased with our TechSource(TM) business
development, including the increase in our IBM business and the
recent establishment of a new service relationship with H-P, which
we expect to drive future growth in our service business."
"Our strategies for the analog-to-digital transition have resulted
this quarter in the stabilization of our service revenue,"
commented Todd Mavis. "This success, combined with the positive
impact from our growth initiatives, enabled us to increase total
revenue sequentially and achieve our largest revenue quarter of
the year. At the same time, we generated operating and free cash
flows of approximately $18 million and funded the implementation
of expense reductions in pursuit of our previously announced
target of $50 million-plus in annualized cost savings."
Gross margins in the fourth quarter were 35.0%, 270 basis points
lower than a year ago. The fourth-quarter margins were negatively
impacted versus the year-ago period by some larger, lower-margin
equipment transactions and a reduction in lease and residual
payments from a diminishing external lease funding program.
Sequentially, gross margins were down 130 basis points. Fourth-
quarter SG&A was $118.9 million or 34.6% of revenue. SG&A was 6.6%
lower than the year-ago quarter. Adjusting for currency exchange
SG&A would have been 12.7% lower than the year-ago period. SG&A
was 9.4% higher sequentially; however, this sequential increase
was largely due to several events in the fourth quarter, such as
the seasonal restart of calendar-year employee tax and vacation
accruals, an increase in bad debt expense, unfavorable foreign
exchange rates, and an increase in sales commissions associated
with higher equipment sales. In addition, the third quarter was
favorably impacted by a $3 million pension adjustment in Europe.
Continued Positive Cash Flow
Free cash flow for the fourth quarter was $18.5 million.
Significant cash items in the quarter included net working capital
contributions of $12.0 million, cost restructuring expenditures of
$8.7 million, and capital expenditures of $7.5 million. The
Company's cash balance increased by $7.7 million, to $112.8
million.
"Our continued ability to generate positive cash enabled us to
make significant progress in implementing our cost restructuring
program and invest in our growth initiatives," continued Mavis.
"We have seen a meaningful reduction in capital expenditures,
primarily because most of the spending on our Vision 21
reengineering program is behind us. In addition, although SG&A
expenses increased in the fourth quarter because of several
quarter-specific events, we still succeeded in attaining more of
our previously identified cost reductions. We will vigorously
execute on our cost reduction plans and expect to realize the
balance of our $51 to $56 million in annualized cost savings
during the middle of fiscal 2005."
Full-Year Results Summary and CFO Comments
For fiscal 2004 year, Danka reported:
-- Revenue of $1.3 billion, 4.9% less than the prior year. Much of
the decline is attributable to the impact on retail service
revenues by the previously discussed digital transition.
-- Free cash flow of $32.9 million, including a $31.3 million
increase in the company's cash balance from $81.5 million to
$112.8 million during the course of the year.
-- Gross debt at year-end was $244 million and Net debt at year
end was $131.2 million, a 13.3% decrease from the end of the
prior fiscal year.
-- SG&A of $465.2 million, a 4.1% decline from the prior year.
-- Capital expenditures of $44.5 million, 8.4% lower than the
prior year.
"Looking at the past year, we're pleased that we were able to
complete our senior note offering last July, finish the U.S.
conversion to Oracle, continue to generate cash, and continue
reducing our net debt. Going forward we will be very focused on
reducing costs in pursuit of our goal of SG&A not exceeding 30% of
total revenue," stated Mark Wolfinger, Danka's chief financial
officer. "With our strong liquidity and cash positions we are now
well positioned to meet and fund both our growth opportunities and
our restructuring initiatives."
At March 31, 2004, Danka Business Systems' balance sheet reflects
a stockholders' deficit of $64,755,000.
About Danka
Danka delivers value to clients worldwide by using its expert
technical and professional services to implement effective
document information solutions. As one of the largest independent
providers of enterprise imaging systems and services, the company
enables choice, convenience, and continuity. Danka's vision is to
empower customers to benefit fully from the convergence of image
and document technologies in a connected environment. This
approach will strengthen the company's client relationships and
expand its strategic value. For more information, visit Danka at
http://www.danka.com/
Danka is a registered trademark and Danka @ the Desktop and
TechSource are trademarks of Danka Business Systems PLC. All other
trademarks are the property of their respective owners.
DESERT HEALTH: Strained Liquidity Raises Going Concern Uncertainty
------------------------------------------------------------------
Desert Health Products Inc. is engaged in the packaging, sale and
distribution of branded and store brand (private label) vitamins,
nutritional supplements, skin care and animal care products.
Desert Health has focused its marketing and registration efforts
primarily in the foreign marketplace.
The Company's net loss was $2,369,546 for the year ended December
31, 2003 as compared to net loss of $2,211,703 for the year ended
December 31, 2002. This increase was the result of increasing
financing costs and a reduction of inventory to market in the
amount of $43,682 as well as increasing activity and related
additional expenses.
Net revenue was not sufficient to meet operating expenses for the
year ended December 31, 2003. In addition, as of December 31,
2003, the Company's current liabilities exceeded its
current assets by $2,041,845. These factors create an uncertainty
regarding the Company's ability to continue as a going concern.
Since inception, Desert Health has financed its cash flow
requirements through debt financing, issuance of common stock for
cash and services, and minimal cash balances. As it continues its
marketing activities in Europe, Asia and North America, it may
continue to experience net negative cash flows from operations,
pending receipt of sales revenues, and will be required to obtain
additional financing to fund operations through common stock
offerings and bank borrowings to the extent necessary to provide
working capital.
DIRECTVIEW: Stockholders' Deficit Climbs to $836,453 at March 31
----------------------------------------------------------------
DirectView, Inc. (DRVW) (OTCBB:DRVW) a full-service provider of
high-quality, cost efficient videoconferencing technologies and
services, reported results for the 1st quarter 2004 earlier this
week. Net Sales improved from $81,700 for 1st quarter 2003 to
$144,402 for the 1st quarter 2004, representing a 76.7% increase.
Furthermore gross profit improved from $54,399 for the 1st quarter
2003 to $103,638 for the 1st quarter 2004, a 91% increase from the
same period a year earlier. With the acquisitions of Meeting
Technologies in Q1 2004 the pro forma net sales amount is
$203,573.
Michael Perry, CEO of DirectView, Inc., said: "I am pleased to
report the improved results for the 1st quarter 2004. Looking
forward, our financial goals are to restructure our debt while
continuing to grow our top line revenues. This improvement is
further evidence of the acceptance the videoconferencing equipment
and services we provide as a preferred means of cost efficient,
reliable communication. As the industry matures we hope to garner
a growing share of this market by providing the customer with
exceptional service and professional advice."
At March 31, 2004, DirectView Inc.'s balance sheet shows a
stockholders' deficit of $836,453 compared to a deficit of
$824,995 at December 31, 2003.
About DirectView, Inc.
DirectView Inc., http://www.DirectViewInc.com,is a full-service
provider of high-quality, cost efficient videoconferencing
technologies and services. DirectView provides multipoint
videoconferencing, network integration services, custom room
design, staffing, document conferencing and IP / Webconferencing
services to businesses and organizations in the United States and
around the world. DirectView conferencing services enable our
clients to cost-effectively, instantaneously conduct remote
meetings by linking participants in geographically dispersed
locations.
DISTRIBUTION DYNAMICS: Seeks to Employ Eisner as Accountants
------------------------------------------------------------
Distribution Dynamics, Inc., and its debtor-affiliates want to
hire the firm of Eisner LLP as its accountants. The Debtors tell
the U.S. Bankruptcy Court for the District of Minnesota that the
services of Eisner are necessary to enable them to maximize the
value of their estates and to reorganize successfully.
Eisner will provide tax and accounting services to assist the
Debtors in the course of these chapter 11 cases, including:
a) completion of tax returns for the fiscal year ended
September 30, 2003; and
b) completion of the 401(k) audits for ERISA filings.
The customary hourly rates charged by Eisner personnel anticipated
to be assigned to this case are:
Professionals Billing Rate
------------- ------------
Partners $300 to $350 per hour
Managers/Directors $210 to $290 per hour
Supervisors $160 to $210 per hour
Seniors $135 to $160 per hour
Administration/Paraprofessionals $85 to $135 per hour
Headquartered in Eden Prairie, Minnesota, Distribution Dynamics,
Inc. -- http://www.distributiondynamics.com/-- helps companies
improve bottom-line results by providing fasteners and Class 'C'
commodities. The Company filed for chapter 11 protection on April
26, 2004 (Bankr. Minn. Case No. 04-32489). Mark J. Kalla, Esq.,
at Dorsey & Whitney LLP represents the Debtors in their
restructuring efforts. When the Company filed for protection from
their creditors, they listed both estimated debts and assets of
over $10 million.
ENRON CORPORATION: Wants Court to Nix Eleven Mega Claims
--------------------------------------------------------
The Enron Corporation Debtors object to the proofs of claim filed
by:
* the Dynegy Claimants,
* Roy E. Kimsey,
* Abbey National Treasury Services, and
* Transportadora Brasileira Gasaduto Bolivia-Brasil, S.A.
and Petrobras Gas S.A - Gasperto, formerly known as
Petrobras Fertilizantes S.A.
The Dynegy Claims
After reviewing the seven Claims filed by the Dynegy Claimants
based on amounts allegedly owed to one or more of the Dynegy
Claimants pursuant to a Master Netting Setoff and Security
Agreement entered into on November 8, 2001, between the Debtors
and the Dynegy Claimants, the Debtors determine that:
(a) the Master Netting Agreement is avoidable;
(b) if properly calculated under the Master Netting
Agreement, the Dynegy Claimants owe about $230,000,000
in settlement payments to the Enron Companies, plus
interest as calculated pursuant to the Master Netting
Agreement, and attorneys' fees as allowed by law;
(c) the Claims are duplicative of each other;
(d) the Dynegy Claimants failed to indicate what amount was
specifically owed by which Debtor to which Dynegy
Claimant; and
(e) the Dynegy Claimants failed to provide sufficient details
to support the amount asserted.
Accordingly, the Debtors ask the Court to disallow and expunge
the seven Dynegy Claims:
Claimant Claim No. Amount
-------- --------- ------
Dynegy Marketing & Trade, et al. 1340000 $93,558,630
1339700 93,558,630
1339800 93,558,630
1340100 93,558,630
1340200 93,558,630
1340300 93,558,630
1339900 93,558,630
The Kimsey Claim
The Debtors argue that:
(a) by the principles of res judicata, Mr. Kimsey cannot
relitigate the claims that have been fully adjudicated
by the District Court of Harris County, Texas, 333rd
Judicial District; and
(b) Mr. Kimsey failed to substantiate his claim with
sufficient evidence to support the claim amount.
Thus, the Debtors ask Judge Gonzalez to disallow and expunge
Claim No. 16513 for $7,216,593 in its entirety.
The Abbey Claim
Abbey National states that its claim is simply for "securities
fraud under federal law and Texas state law, common law fraud,
and negligent misrepresentation." Other than this brief
statement, Melanie Gray, Esq., at Weil, Gotshal & Manges, LLP, in
New York, notes that the Abbey National Claim does not set forth
any facts in support of its alleged fraud and negligent
misrepresentation claims that would support any legal basis.
Accordingly, the Debtors ask the Court to disallow and expunge
Abbey National's Claim No. 13585 for $41,125,000.
Transportadora's and Petrobras' Claims
According to Ms. Gray, Transportadora and Petrobras failed to
provide sufficient information or documentation to support their
Claims and the Claims do not contain evidence to support the
Debtors' liability for the Claims.
Thus, the Debtors ask the Court to disallow and expunge these
Claims in their entirety:
Claimant Claim No. Amount
-------- --------- ------
Petrobras Gas 2453200 $17,572,000
Transportadora Brasileira 2453100 17,572,000
(Enron Bankruptcy News, Issue No. 107; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
EQUIFIN INC: First Quarter 2004 Net Loss Increases to $378,000
--------------------------------------------------------------
EquiFin, Inc. (AMEX:II and II,WS) reported results for its first
fiscal quarter ended March 31, 2004. Revenues for the first
quarter increased 57.6% to $643,000, compared to revenues of
$408,000 for the same period a year ago. For the quarter ended
March 31, 2004, the Company had a net loss from its continuing
operations of $378,000 or $0.05 per share, compared to a loss of
$396,000 or $0.05 per share from continuing operations for the
same quarter in 2003. Income from discontinued operations was
$65,000 for the quarter ended March 31, 2003 bringing the net loss
to $331,000 or $.04 per share for the first quarter of 2003.
For the quarter ended March 31, 2004, the Company's portfolio of
commercial loans performed without significant change from the
beginning of the year. Outstanding credits, and the interest and
fees derived from these credits remained relatively constant. The
first quarter results were impacted, by the amortization for debt
expense which increased from $73,000 in the first quarter of 2003
to $149,000 during the first quarter of 2004. Selling, general and
administrative expenses rose to $659,000 in the first quarter of
2004 from $570,000 last year as a result principally of a stock
option repurchase and expenses of personnel and investor
functions.
"It will be incumbent on us in the coming months to aggressively
pursue ways to grow our portfolio of loans from small businesses,"
said Mr. Craig, EquiFin's President and Chief Executive Officer.
"We continue to pursue innovative financing options and ways to
grow through acquisition. At the same time, we will examine ways
to reduce costs, until such time as we attain the critical mass
necessary in our loan portfolio."
Additionally, we will continue to review opportunities to maximize
our position in the small business finance field given the need to
establish a critical mass of portfolio to support basic asset
based finance activities."
* * *
In its Form 10-KSB for fiscal year ended December 31, 2003 filed
with the Securities and Exchange Commission, Equifin, Inc.
reports:
Liquidity and Capital Resources
"Cash used in operating activities amounted to $916,000 for the
year ended December 31, 2003. Investing activities required cash
of $6,904,000, which included $7,474,000 for development of the
loan portfolio which was offset to an extent by $250,000 received
from the sale of a participation. Financing activities provided
$8,510,000 in cash, which included $6,066,000 in borrowings and
$2,880,000 from the sale of convertible notes. The result of
these activities was a net increase in cash of $690,000 which
increased cash to $1,078,000 at year-end December 31, 2003.
"In December 2001, Equinox Business Credit Corp., an 81% owned
subsidiary of the Company, entered into a Loan and Security
Agreement with Wells Fargo Foothill, which provided for the
initiation of a $20,000,000 revolving credit facility. The
agreement provides for interest at the prime rate plus 1.25%
(equal to 5.25% at December 31, 2003). Equinox is permitted to
borrow under the Credit Facility at up to 85% of the borrowing
base, which consists of eligible notes receivable, as defined in
the Agreement. Under the terms of the Agreement, as amended,
Equinox must maintain tangible net worth (including subordinated
debt) of $3,000,000 from December 31, 2003 through February 29,
2004; $3,050,000 through May 31, 2004; $3,100,000 through August
31, 2004 and $3,150,000 thereafter; a leverage ratio, as defined,
of not more than 5 to 1 and an interest coverage ratio of not less
than 1.1 to 1, increasing to 1.25 to 1 beginning April 2004.
Equinox did not maintain the tangible net worth requirement for
December 31, 2002, January 31, 2003, February 28, 2003 and June
30, 2003 and the interest coverage ratio at September 30, 2003.
Through amendments to the Agreement, the lender waived the
defaults for those periods.
"During 2004, Equinox is also required to realize, for each fiscal
quarter in 2004, 75% of its projected revenues and projected
earnings before tax based on projections previously furnished to
Foothill. All the assets and the capital stock of Equinox are
pledged to secure the Credit Facility, which is also guaranteed by
the Company. There was $9,839,000 outstanding on the Credit
Facility at December 31, 2003. The Agreement matures December 19,
2004 and the has lender informed the Company that it does not
currently intend to renew the agreement.
"The Company will seek to replace the credit facility prior to
maturity, however there can be no assurance that such efforts will
be successful. If our current facility is not replaced, we might
negotiate a sale of our portfolio, apply all cash flow generated
by the loans securing the facility to pay down our borrowings
thereby adversely effecting our liquidity position. In this
situation, we may not be able to satisfy our outstanding loan
commitments, originate new loans or continue to fund our
operations."
Also, the report of Equifin Inc.'s independent public accountants
includes this paragraph:
"The Company incurred net losses and negative cash flows from its
operating activities during 2003 and 2002. As of March 12, 2004,
the Company did not have any other source of funds to replace the
funds provided by the credit facility when it expires in December
2004. Such matters raise substantial doubt about the Company's
ability to continue as a going concern."
ERN LLC: Gets Court Okay to Hire Linowes and Blocher as Counsel
---------------------------------------------------------------
The U.S. Bankruptcy Court District of Maryland, Baltimore
Division, gave its stamp of approval to ERN, LLC, to employ
Linowes and Blocher LLP, as its counsel in its chapter 11
proceeding.
Linowes and Blocher will:
a. advise the Debtor with respect to its powers and duties as a
debtor-in-possession in the continued management of his
financial affairs;
b. represent the Debtor in proceedings instituted by or against
Debtor;
c. prepare any necessary applications, orders, reports, and
other legal papers;
d. assist the Debtor in the preparation of its Schedules and
Statement of Financial Affairs and any amendments thereto
that Debtor may be required to file in this case;
e. assist the Debtor in the preparation, presentation and
confirmation of a Plan of Reorganization and Disclosure
Statement, including negotiations with creditors and other
parties in interest with respect thereto; and
f. perform any other legal services necessary or appropriate
to assist the Debtor in discharging its duties as a debtor-
in-possession.
Linowes and Blocher will bill the Debtor at its customary hourly
rates:
Professionals Designation Billing Rate
------------- ----------- ------------
James A. Vidmar, Jr. Partner $325 per hour
Carrie B. Weinfeld Associate $210 per hour
Rebecca S. Beste Associate $190 per hour
Katy J. Le Vie Paralegal $125 per hour
Headquartered in Baltimore, Maryland, ERN, LLC
-- http://www.ern-llc.com/-- provides point of sale check
guaranty and credit card servicing to merchants. The Company
filed for chapter 11 protection on April 28, 2004 (Bankr. Md. Case
No. 04-20521). Carrie Weinfeld, Esq., James A. Vidmar, Jr., Esq.,
and Rebecca S. Beste, Esq., at Linowes and Blocher, LLP represent
the Debtor in its restructuring efforts. When the Company filed
for protection from its creditors, it listed $1,159,361 in total
assets and $12,878,478 in total debts.
FIRST VIRTUAL: Delayed Form 10-Q Prompts Nasdaq's Delisting Notice
------------------------------------------------------------------
First Virtual Communications, Inc. (Nasdaq: FVCX), announced that
the Company received a letter from Nasdaq on May 18, 2004 noting
the failure of the Company to file its Quarterly Report on Form
10-Q for the period ended March 31, 2004 by the filing deadline of
May 17, 2004, a violation of Marketplace Rule 4310(c)(14). As a
result, the Company's securities are subject to delisting from The
Nasdaq SmallCap Market and, at May 20, 2004, the Company's trading
symbol was changed from "FVCX" to "FVCXE".
The Company has requested a hearing before a listing
qualifications panel to review this determination by Nasdaq Staff.
Any delisting action will be stayed pending the panel's decision.
While there can be no assurance that the panel will grant the
Company's request for continued listing, the Company's management
is actively working to maintain the listing.
On April 30, 2004, the Company announced that the Audit Committee
of its Board of Directors had engaged independent counsel to
conduct an investigation after the Company became aware of several
irregular sales transactions involving its sales operations in
China. The Company will not file its Quarterly Report until its
auditors have completed their review for the three months ended
March 31, 2004. That review will not be finished until the ongoing
investigation is completed.
About First Virtual Communications
First Virtual Communications is a premier provider of
infrastructure and solutions for real time rich media
communications. Headquartered in Redwood City, California, the
Company also has operations in Europe and Asia. More information
about the company can be found at http://www.fvc.com/
FLEMING: Claims Classification & Treatment Under 3rd Amended Plan
-----------------------------------------------------------------
The Fleming Companies, Inc.'s Third Amended Plan provides for the
classification and treatment of claims and interests, as modified:
Class Description Treatment
----- ----------- ---------
N/A Administrative Paid in cash, in full on Plan
Expense Claims Effective Date; provided that
any claim for professional fees
by a professional not retained
by the Debtors or the
Committees for "substantial
contribution" will be debt of
PCT and paid by PCT.
Allowed Claims are estimated to
be in the range of $96 million
to $125 million as of the
Effective Date.
Deemed to accept the Plan.
N/A Priority Tax Claim (1) If payment of the Allowed
Claim is not secured or
guaranteed by a surety bond
or other similar
undertaking, commencing on
the Plan Effective Date,
the Claimant will be paid
the principal amount of the
Claim plus simple interest
on any outstanding balance
from the Effective Date
calculated at the interest
rate available on 90-day
U.S. Treasuries on the
Effective Date, in quarterly
deferred Cash payments over
a period not to exceed six
years after the date of
assessment of the tax on
which the Claim is based,
unless the Debtors and the
Claimant mutually agree to
a different treatment or as
otherwise ordered by the
Court.
(2) If payment of the Allowed
Claim is secured or
guaranteed by a surety bond
or other similar
undertaking, the Claimant
will be required to seek
payment of its Claim
from the surety in the first
instance. Only after
exhausting all right to
payment from its surety bond
will the Claimant be
permitted to seek payment
from the Debtors.
To the extent the surety pays
the Allowed Claim in full, the
Claim will be extinguished. The
surety's Claim against the
Debtors for reimbursement is not
entitled to be paid as a
Priority Tax Claim.
To the extent the surety holds
no security for its surety
obligations, it will have a
Class 6 Claim.
To the extent the surety holds
security for its surety
obligations, the surety will
have a Class 3A Claim.
Allowed Claims are estimated to
be in the range of $11 million
to $13 million as of the Plan
Effective Date.
Deemed to accept the plan.
N/A DIP Claims Paid in cash, in full.
Allowed Claims estimated to be
in the range of $25 million to
$30 million, as of the
Plan's Effective Date.
Deemed to accept the plan.
1A Other Priority Paid in cash, in full.
Non-Tax Claims
Allowed Claims estimated to be
in the range of $6 million to
$15 million, as of the Effective
Date.
Deemed to accept the plan.
1B Property Tax Claims Paid in cash, in full.
The Allowed Claim will be paid
the principal amount of such
Claim plus simple interest on
Any outstanding balance from the
Effective Date calculated at the
interest rate available on 90-
day U.S. Treasuries on the
Plan's Effective Date, in
quarterly deferred Cash
payments over a period not to
exceed six years after the date
of assessment of the tax on
which the Claim is based, unless
the Debtors and the Claimant
mutually agree to a different
treatment.
Allowed Claims estimated to be
in the range of $5 million to
$6 million, as of the Effective
Date.
Impaired. Entitled to vote.
2 Prepetition Lenders' Paid in full.
Secured Claims
Exit Financing Facility and
Tranche B Loan will not be
secured by the assets
transferred to the PCT or the
RCT.
Allowed Claims estimated to be
$200 million to $220 million as
of the Effective Date.
Deemed to accept the plan.
3A Other Secured Claims On the Effective Date, or
that are not Class 1B after that as soon as
Claims practicable, each
Holder of an Allowed Claim --
e.g. PMSI Holders, equipment
financing lenders, etc. -- will
receive one of these treatments,
at the Debtors' option, such
that they will be rendered
unimpaired pursuant to Section
1124 of the Bankruptcy Code:
(i) The payment of the
Allowed Claim in full,
in Cash;
(ii) The sale or disposition
proceeds of the property
securing the Allowed
Claim to the extent of
the value of the Holder's
interests in the
property; or
(iii) The surrender to the
Holder of the property
securing the Claim.
Allowed Claims are estimated to
be in the range of $750,000 to
$2 million as of the Effective
Date.
Deemed to accept the plan.
3B Approved TLV On the Effective Date, or as
Reclamation soon as practicable, the RCT
Claims will issue the Class 3B
Preferred Interests in favor of
the Holders of Allowed TLV
Reclamation Claims in the
estimated aggregate amount of
such Allowed Claims under the
Term Sheet -- with the interests
to be reissued as such Claims
are allowed by Final Order or
settlement -- and grant a first-
priority lien to such Holders on
the RCT Assets entitling each
Holder of an Allowed TLV Claim
to its Ratable Proportion of the
RCT Assets up to the total
amount of each Holder's Allowed
TLV Claim, in full satisfaction,
settlement, release and
discharge of each Allowed TLV
Reclamation Claim against the
RCT Assets.
Reconciliation of Class 3B
Claims will be done in
accordance with the Plan.
Class 3B Preferred Interests
will earn interest, which
will begin to accrue 60 days
after the Effective Date at the
Wall Street Journal listed
prime rate.
As additional security, Core-
Mark Newco will provide a junior
secured guarantee.
Assuming the Reclamation Term
Sheet settlement is approved,
Allowed Claims are estimated to
be in the range of $43 million
to $60 million, as of the
Effective Date prior to giving
effect to any of the deductions
asserted by the Debtors which
will be transferred to the RCT
and will be paid in full under
the Plan by the RCT or Core-Mark
Newco.
Impaired. Entitled to vote.
3C DSD Trust Claims Each Holder of an Allowed Claim
will be paid the Ratable
Proportion of the DSD Settlement
Fund. The DSD Settlement Fund
will be $17.5 million.
Impaired. Entitled to vote.
4 PACA & PASA Claims In full satisfaction,
settlement, release, and
discharge of, and in
exchange for, each Allowed
PACA/PASA Claim that is due and
payable on or before the
Effective Date, on the Effective
Date or as soon as practicable
thereafter, the Holder of such
Claim will be paid the principal
amount of such Claim on any
outstanding balance, unless the
Holder consents to other
treatment.
Allowed Claims estimated to be
in the range of $8 million to
$14 million, as of the Effective
Date.
Deemed to accept the plan.
5 Non-TLV Claims On the Effective Date, or as
soon as practicable after that,
the RCT will issue Class 5
Preferred Interests in favor of
the Holders of Allowed Non-TLV
Reclamation Claims in the
estimated aggregate amount of
their Allowed Claims and grant a
second priority lien on the RCT
Distributable Assets entitling
each Holder to its Ratable
Proportion of RCT Assets, after:
(i) all Class 3B Claims are
paid in full; and
(ii) Core-Mark Newco is
reimbursed for its
payment under the TLV
Guaranty.
As additional security for the
Class 5 Preferred, Core-Mark
Newco will provide a junior
guarantee.
Allowed Claims estimated to be
in the range of $62 to $90
million as of the Effective
Date prior to giving effect to
any of the deductions asserted
by the Debtors. Holders of
Class 5 Claims will be paid a
Ratable Proportion of their
Allowed Non-TLV Reclamation
Claims, up to the full amount,
by the RCT or Core-Mark Newco.
In the event the RCT has
proceeds for distribution
after satisfaction of all
Allowed TLV Reclamation Claims
and Net Non-TLV Reclamation
Claims and repayment to Core-
Mark Newco of advances under
the Guarantees, the Holders of
Allowed Class 5 Claims will be
entitled to be paid their pro
rata share of the remaining
RCT Assets up to the full
amount of their Non-TLV
Reclamation Claims.
Impaired. Entitled to vote.
6 General Unsecured On the Effective Date, each
Claims other than Holder of an Allowed General
Convenience Claims Unsecured Claim will be paid in
full satisfaction, settlement,
release and discharge of and in
exchange for each and every
Allowed General Unsecured Claim,
at the Debtors' option, in one
or a combination of:
(i) issuance of a Ratable
Proportion of New Common
Stock, subject to
dilution from the
issuance of warrants to
the Tranche B Lenders and
through the Management
Incentive Plan; or
(ii) in the event the Debtors,
with the consent of the
Creditors Committee,
elect to sell some or all
of their assets, a
Ratable Proportion of
Cash remaining from the
sale of those assets
after all of the Allowed
Unclassified Claims and
Claims in Classes 1
through 5 have been
satisfied in full.
As additional consideration,
each Holder of an Allowed
General Unsecured Claim will be
entitled to a Ratable Proportion
of excess proceeds, if any,
available from the PCT after
payment by the PCT of all claims
and obligations required to be
made by the PCT under the Plan
or the PCT Agreement.
Allowed Claims estimated to be
in the range of $2.6 billion to
$3.2 billion, as of the
Effective Date. Based on this
estimated range of Allowed
Claims and the estimated value
of New Common Stock, the Holders
will receive stock in Core-Mark
Newco with a value equal to 4%
to 7% of the Allowed Amount of
each Holder's Claim.
Holders of Senior Notes will
receive a higher recovery due to
their contractual seniority to
the Holders of Senior
Subordinated Notes. Holders of
Senior Notes will receive stock
in Core-Mark Newco with a value
equal to approximately 11.5% of
the Allowed Amount of the
Holder's Claim.
Impaired. Entitled to vote.
7 Convenience Claims On or as soon as practicable
after the Effective Date, each
Holder of an Allowed Convenience
Claim will receive a Cash
distribution equal to 10% of the
amount of its Claim; provided
however, the aggregate amount of
the Allowed Class 7 Claims will
not exceed $10,000,000. If the
aggregate amount of the Allowed
Class 7 Claims exceeds
$10,000,000, each Holder will
receive its Ratable Proportion
of $1,000,000.
Allowed Claims estimated to be
in the range of $5 million to
$10 million, as of the Effective
Date.
Impaired. Entitled to vote.
8 Equity Interests No distribution.
Deemed to reject the Plan.
9 Intercompany Claims No distribution.
Deemed to reject the Plan.
10 Other Securities No distribution.
Claims and Interests
Deemed to reject the Plan.
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. 33; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
FORD CREDIT: S&P Assigns BB Prelim Rating to 2004-A Class D Notes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Ford Credit Auto Owner Trust 2004-A's $1.912 billion
asset-backed notes and certificates series 2004-A.
The preliminary ratings are based on information as of May 19,
2004. Subsequent information may result in the assignment of final
ratings that differ from the preliminary ratings.
The preliminary ratings reflect credit support composed of the
subordination of 6.57% for class A, 3.76% for class B, and 1.88%
for class C; and a nonamortizing, fully funded reserve account
equal to 0.50% of initial gross principal balance. The payment
structure also features a turbo mechanism by which excess spread
after covering losses and building up the reserve fund to its
required level will be used to pay the securities until the
requisite overcollateralization is reached. Furthermore, although
asset-backed yields have generally increased since Ford Motor
Credit Co.'s prior securitization, the discount rate applied to
the receivables for the yield supplement overcollateralization
amount was increased to offset the deterioration in available
excess spread, thus allowing hard credit enhancement to remain
unchanged.
Preliminary Ratings Assigned
Ford Credit Auto Owner Trust 2004-A
Class Rating Amount (mil. $)
A-1 A-1+ 346.000
A-1A N.R. 140.000
A-2 AAA 535.000
A-3 AAA 559.000
A-4 AAA 200.785
B A 56.235
C BBB 37.490
D BB 37.490
*N.R.-Not rated.
FURNAS COUNTY: Wants to Bring-In Woods & Aitken as Attorneys
------------------------------------------------------------
Furnas County Farms asks the U.S. Bankruptcy Court for the
District of Nebraska to approve its application to employ the
professional services of Joseph H. Badami, Esq., James A.
Overcash, Esq., and the law firm of Woods & Aitken LLP as
attorneys in its bankruptcy proceeding.
The firm will:
a. give the Debtor legal advice with respect to its powers and
duties as Debtor-in-Possession and in the continued
operation of its business and in the management and
liquidation of its property;
b. prepare on behalf of the Debtor necessary legal documents;
c. prepare and file a Plan of Reorganization and accompanying
Disclosure Statement for an on behalf of Debtor; and
d. perform all other legal services for Debtor as may be
reasonably requested by Debtor and as are reasonably
necessary herein.
Woods & Aitken LLP will bill the Debtor its current hourly rates
of:
Professional Billing Rate
------------ ------------
legal assistants $60 per hour
attorneys $155 to $215 per hour
Headquartered in Columbus, Nebraska, Furnas County Farms is
engaged in owning, leasing, operating and managing swine
operations. The Company, along with 4 of its debtor-affiliates
filed for chapter 11 protection on May 3, 2004 (Bankr. D. Nebr.
Case No. 04-81489). When the Company filed for protection from
their creditors, they listed both estimated debts and assets of
over $50 million.
GENTEK: S&P Keeps Positive Watch on BB- Rating After Krone Sale
---------------------------------------------------------------
Standard & Poor's Ratings Services said that its 'BB-' corporate
credit rating on Gentek Inc. remains on CreditWatch with positive
implications where it was placed on March 26, 2004, when the
company announced that it had agreed to sell its Krone
communications business to unrated ADC Telecommunications Inc.
Standard & Poor's today also withdrew its 'B' senior secured
rating (with a second lien), as the debt was repaid in full with
asset sale proceeds. GenTek announced yesterday that it had
completed the sale for $294 million in cash and the assumption of
around $56 million of pension and employee-related liabilities.
Net proceeds mostly reduced debt and, after application of
proceeds, the company is expected to have $25 million-$35 million
of cash and less than $2 million in debt.
Hampton, New Hampshire-based GenTek Inc. is a diversified provider
of automotive and industrial products and specialty chemicals,
with revenues around $1 billion (before the Krone sale). The Krone
unit had revenues of $316 million and adjusted operating income of
$13 million in 2003. GenTek emerged from bankruptcy in November
2003.
Several key issues--distinct from the obvious benefits of
substantial debt reduction--will be considered in resolving the
CreditWatch. GenTek's remaining businesses are still diverse; some
are quite profitable, while others are more challenged. As
evidenced by the Krone sale, however, there is potential for
fairly large shifts in the company's business mix and financial
structure over time, as the new board of directors formulates
strategy.
"As a result, we expect to evaluate Gentek's corporate strategy
and financial policy," said Standard & Poor's credit analyst
Robert Schulz.
GenTek's new board, installed as a result of the bankruptcy
proceedings that ended in November 2003, is working to formulate
its strategy. GenTek's growth in the past was mainly through
acquisitions, but the company has indicated that it will now focus
on the remaining businesses--but even those businesses are
diverse, so an understanding of emphasis will be important.
While GenTek's debt has been substantially reduced as a result of
the Krone sale, the strategic direction and mix of organic growth
versus acquisitive growth is likely to require some future
financing. Understanding expectations for the capital structure
will be an important topic.
"We will consider the impact of these issues on the company's
prospective business and financial profile. If growth plans and
the resulting financial profile are considered to be improved and
sustainable, a modest upgrade is possible," Mr. Schulz said.
GENTEK: Court Classifies Stepanian $290K Cure Claim as Unsecured
----------------------------------------------------------------
Ira Stepanian served as a director of the Reorganized GenTek
Debtors from April 30, 1999 to November 10, 2003. In his capacity
as a director, Mr. Stepanian participated in several benefit
programs, including:
* The Deferred Compensation Plan for Non-Employee Directors
of GenTek, Inc.;
* The Retirement Plan for Non-Employee Directors of GenTek,
Inc.; and
* The Restricted Unit Plan for Non-Employee Directors of
GenTek, Inc.
On April 10, 2003, Mr. Stepanian filed Claim No. 3717 asserting:
(a) a $290,706 claim for prepetition services payment with
respect to the Deferred Compensation Plan;
(b) a claim for amounts he accrued under the Retirement Plan;
(c) a claim for amounts he accrued under the Restricted Unit
Plan; and
(d) a claim for indemnification, including contribution and
reimbursement that was incurred under the Debtors'
Articles or Certificate of Incorporation and Bylaws.
On October 22, 2003, the Reorganized Debtors obtained Court
authority to reject the Retirement Plan and the Restricted Unit
Plan. As to the executory contracts that were not targeted for
rejection, the Reorganization Plan generally provided, with
certain exceptions, that those executory contracts would be
deemed assumed.
On December 23, 2003, after consummation of the Reorganization
Plan, Mr. Stepanian amended his claim. He maintained his claims
for prepetition amounts that arose under the Restricted Unit Plan
and the Retirement Plan but withdrew that aspect of his original
claim that was predicated on a theory of indemnification. Mr.
Stepanian noted that the Reorganization Plan eliminated any
claims against him for which he might have sought indemnification.
Mr. Stepanian also withdrew that portion of his original claim
that alleged a claim under the Deferred Compensation Plan. Mr.
Stepanian maintained that, because the Deferred Compensation Plan
was not rejected by the Reorganized Debtors before Plan
confirmation, it was deemed assumed pursuant to the Plan.
Mr. Stepanian asserts a $290,000 claim for cure amounts in view
of the "deemed assumption" of the Deferred Compensation Plan.
By this motion, Mr. Stepanian asks the Court to compel the
Debtors to pay his cure claim. Mr. Stepanian contends that his
cure claim is entitled to administrative treatment.
Debtors Object
The Reorganized Debtors do not dispute Mr. Stepanian's Amended
Claim that asserts unsecured claims for amounts arising under the
Restricted Unit Plan or the Retirement Plan. However, the
Reorganized Debtors ask the Court to fix and allow the unsecured
claims for $6,530 and $325,411.
Also, the Reorganized Debtors do not object to Mr. Stepanian's
withdrawal of that portion of his original claim that was
predicated on indemnification grounds. The Reorganized Debtors,
however, oppose his Amended Claim to the extent it now seeks to
characterize the amounts allegedly owed to him under the Deferred
Compensation Plan as "cure amounts" entitled to administrative
claim treatment.
The Reorganized Debtors seek to fix and allow Mr. Stepanian's
claim under the Deferred Compensation Plan as a $290,706
unsecured claim because the Deferred Compensation Plan is not an
assumed executory contract. Any amounts owed to Mr. Stepanian
under the Deferred Compensation Plan constitute an unsecured
claim, not an administrative claim.
Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom,
LLP, in Wilmington, Delaware, points out that in In re Waste
Systems Int'l, Inc., 280 B.R. 824, 826 (Bankr. D. Del. 2002), the
court indicated that, with respect to executory contracts, it is
axiomatic that a contract is executory "only where the
obligations of both the bankrupt and the other party to the
contract are so far unperformed that the failure of either to
complete performance would constitute a material breach excusing
the performance of the other."
There was no continuing obligation owed by Mr. Stepanian as of
the Petition Date, where the non-performance of which would
constitute a breach excusing GenTek from its obligation to pay
Mr. Stepanian. Mr. Stepanian elected to stop deferring
compensation under the Deferred Compensation Plan as of June 30,
2002 -- almost four months before the Petition Date.
In In re Roth American, Inc., 107 B.R. 44, 46 (Bankr. M.D. Pa.
1989) "a contract is not executory if the only remaining
obligation is the payment of money." According to Mr. Chehi, the
only obligation that the Debtors owed to Mr. Stepanian under the
Deferred Compensation Plan as of the Petition Date was the
payment of money.
Mr. Chehi maintains that the Reorganization Plan expressly
provides that the Bankruptcy Court would address disputes
regarding the executory nature of any contract. The Plan's
"deemed assumption" provision simply does not apply. The Plan
specifically affords the Debtors an additional 30 days -- from
the date of entry of a final order of the Court -- to assume or
reject the contract found to be executory. Therefore, under the
terms of the Plan, in the event the Court determined that the
Deferred Compensation Plan is executory, the Reorganized Debtors
have 30 days to reject it. In that event, the Reorganized
Debtors would seek to reject the contract.
Mr. Stepanian's argument -- in correspondence sent to GenTek
shortly after he filed his Amended Claim -- that the
Reorganization Plan should be found to be unenforceable because
it is somehow in violation of the Bankruptcy Code, is simply
without merit, Mr. Chehi continues. Mr. Stepanian not only
failed to object to that particular Plan provision but actually
approved the filing of the Plan in his capacity as a director.
* * *
Judge Walrath classifies Mr. Stepanian's claim under:
-- the Retirement Plan as an unsecured claim for $325,411;
-- the Restricted Unit Plan as an unsecured claim for $6,530;
and
-- the Deferred Compensation Plan as an unsecured claim for
$290,706. (GenTek Bankruptcy News, Issue No. 32; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
GLD INC: Case Summary & 9 Largest Unsecured Creditors
-----------------------------------------------------
Debtor: G.L.D., Inc.
dba Chuck's
9990 Fairhope Avenue
Fairhope, Alabama 36532
Bankruptcy Case No.: 04-12918
Chapter 11 Petition Date: May 19, 2004
Court: Southern District of Alabama (Mobile)
Debtor's Counsel: C. Michael Smith, Esq.
Paul & Smith, P.C.
150 South Dearborn Street
Mobile, AL 36602-1606
Tel: 251-433-0588
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 9 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
McGuire Oil $17,000
Buffalo Rock $13,573
SouthTrust Bank $6,294
Blossman Gas $3,090
American Express $2,292
Alfa Agency Alabama, Inc. $2,152
Veeder-Root $660
H.T. Hackney $618
The Talking Phone Book $342
GLOBAL CROSSING: Agrees to Settle Tax Claims for $132,389
---------------------------------------------------------
These taxing authorities asserted claims against the Global
Crossing Debtors for unpaid taxes through the Effective Date:
* Bastrop Central Appraisal District, McDade ISD;
* County of Brazos, City of Bryan, City of College Station,
College Station ISD;
* County of Brewster, Alpine ISD, Marathon ISD;
* County of Comal;
* County of Denton, City of Justin, City of Krum, City
of Sanger, City of Ponder, Krum ISD, Ponder ISD, Sanger ISD,
Clear Creek Watershed Authority;
* Grimes and Grimes CAD;
* Groesbeck ISD;
* County of Guadelupe;
* County of Hardin, Kountze ISD, Lumberton ISD;
* Hays CISD;
* County of Liberty;
* Mexia, ISD;
* County of Presidio, Marfa ISD;
* County of Terrell, Terrell County ISD; and
* Valentine ISD
The Debtors and the Taxing Authorities stipulate and agree that:
(a) The Tax Claims reflect the totality of the Taxing
Authorities' claims against the Debtors through the
Effective Date;
(b) Without further delay, the Debtors will pay to the Taxing
Authorities $132,389 to satisfy the Tax Claims;
(c) The proofs of claim that relate to the Tax Claims will be
expunged, and the Taxing Authorities will release the
Debtors from any tax liability, interest, or penalties
relating to all of the Tax Claims including, without
limitation, any person who could be liable for the Tax
Deficiencies pursuant to the personal liability provisions
of the laws of the State of Texas or any other applicable
local or municipal law;
(4) The Stipulation resolves and discharges all of the
Debtors' audit liabilities for all taxes arising in
taxable periods through the Effective Date, including any
penalties or interest, and the Taxing Authorities will not
institute any assessment for taxes due, owing, payable, or
arising in connection with taxable periods through the
Effective Date, and will forbear from implementing any of
the assessment and collection remedies authorized by the
Bankruptcy Code or the laws of the State of Texas or any
other applicable local or municipal law;
(5) The Stipulation supersedes all prior agreements and
undertakings between the Parties relating to the Tax
Claims; and
(6) The Stipulation will be governed by the laws of the State
of Texas.
The payments to be made to the Taxing Authorities are:
Bastrop Central Appraisal District $6,242
Brazos, County of 24,787
Brewster, County of 18,977
Comal, County of 0
Denton, County of 45,987
Grimes and Grimes CAD 966
Guadalupe, County of 0
Hardin, County of 7,801
Hays CISD 0
Liberty, County of 0
Groesbeck ISD and Mexica ISD 26,119
Terrell, County of 0
Valentine ISD 1,507
Presidio and Marfa ISD 0
The 36 Proofs of Claim, totaling $662,669, to be expunged
include:
Taxing Authority Claim No. Amount
---------------- --------- ------
Bastrop CAD 1176 $7,655
Brazos, County of 1182 12,953
Brazos, County of 1228 12,953
Brewster, County of 1167 18,685
Brewster, County of 1172 18,685
Brewster, County of 1219 18,685
Denton, County of 1221 62,920
Denton, County of 1173 67,543
Denton, County of 1174 62,920
Denton, County of 1224 67,543
Groesbeck Independent School Dist. 1222 24,342
Groesbeck Independent School Dist. 1225 24,342
Guadalupe, County of 3853 30,061
Hardin, County of 1171 11,759
Hardin, County of 1226 11,759
Presidio, County of 6112 14,767
Presidio, Marfa ISD, County of 9642 14,767
Terrell CAD 1175 10,203
Terrell County Appraisal District 11086 16,055
Headquartered in Florham Park, New Jersey, Global Crossing Ltd.
-- http://www.globalcrossing.com/-- provides telecommunications
solutions over the world's first integrated global IP-based
network, which reaches 27 countries and more than 200 major cities
around the globe. Global Crossing serves many of the world's
largest corporations, providing a full range of managed data and
voice products and services. The Company filed for chapter 11
protection on January 28, 2002 (Bankr. S.D.N.Y. Case No.
02-40188). When the Debtors filed for protection from their
creditors, they listed $25,511,000,000 in total assets and
$15,467,000,000 in total debts. Global Crossing emerged from
chapter 11 on Dec. 9, 2003. (Global Crossing Bankruptcy News,
Issue No. 60; Bankruptcy Creditors' Service, Inc., 215/945-7000)
GLOBAL CROSSING: Secures $100 Mil. Bridge Loan from ST Telemedia
----------------------------------------------------------------
Global Crossing (Nasdaq: GLBCE) announced that it has finalized an
agreement with an affiliate of Singapore Technologies Telemedia
(ST Telemedia) providing for availability of up to $100 million of
secured bridge financing for Global Crossing's business
operations.
"Our financing arrangement with ST Telemedia will allow Global
Crossing to focus on what we do best: meeting our customers'
needs," said John Legere, CEO. "The advanced IP solutions we
deliver over our unique network consistently achieve high marks
for performance, and we will continue pursuing our goal of
becoming an industry leader."
"Global Crossing has overcome many obstacles during its
restructuring, in part due to the dedication and talent of its
employees, and we are pleased to provide the company with $100
million of financing at this time," said Lee Theng Kiat, ST
Telemedia's president and CEO.
Under the facility, which matures on December 31, 2004, Global
Crossing may borrow in phases over the next several months. The
loan agreement contains a number of significant conditions related
to financial targets and the company's cost of access review, all
of which are set forth in the company's Form 8-K filing with the
Securities and Exchange Commission.
About Global Crossing
Headquartered in Florham Park, New Jersey, Global Crossing Ltd.
-- http://www.globalcrossing.com/-- provides telecommunications
solutions over the world's first integrated global IP-based
network, which reaches 27 countries and more than 200 major cities
around the globe. Global Crossing serves many of the world's
largest corporations, providing a full range of managed data and
voice products and services. The Company filed for chapter 11
protection on January 28, 2002 (Bankr. S.D.N.Y. Case No.
02-40188). When the Debtors filed for protection from their
creditors, they listed $25,511,000,000 in total assets and
$15,467,000,000 in total debts. Global Crossing emerged from
chapter 11 on Dec. 9, 2003.
GRAHAM STEEL CORP: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Graham Steel Corporation
P.O. Box 658
Kirkland, Washington 98033
Bankruptcy Case No.: 04-16213
Type of Business: The Debtor offers concrete reinforcement
services. See http://www.grahamsteel.com/
Chapter 11 Petition Date: May 7, 2004
Court: Western District of Washington (Seattle)
Judge: Samuel J. Steiner
Debtor's Counsel: Diana K. Carey, Esq.
George S. Treperinas, Esq.
Karr Tuttle Campbell
1201 3rd Avenue Suite 2900
Seattle, WA 98101-3028
Tel: 206-224-8066
Fax: 206-682-7100
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
------ --------------- ------------
Nucor Steel Seattle, Inc. Trade debt $706,605
2424 S.W. Andover
Seattle, WA 98106-1100
Nucor-Yamato Steel Co. Trade debt $451,957
5929 East State Hwy 18
Armorel, Arkansas 72310
Cascade Steel Rolling Mills Trade debt $240,189
Western Coating, Inc. Trade debt $215,420
Brown-Strauss Steel Trade debt $155,906
Davis Wire Corporation Trade debt $39,143
PDM Steel Service Centers Trade debt $37,725
Dowco Consultants, Ltd. Trade debt $31,944
Pacific Stair Company, Inc. Trade debt $28,553
James C. Graham Trade debt $27,325
Tubular Steel, Inc. Trade debt $26,405
Dayton Superior Corporation Trade debt $21,169
Vulcan Products Company Trade debt $21,026
Arnold's Annex, An LLC Trade debt $19,704
MKE Detailing Service, Inc. Trade debt $19,670
Ace Galvanizing Trade debt $15,558
Bloch Steel Industries Trade debt $14,170
Industrial Finishings, LLC Trade debt $13,027
Erico, Inc. Trade debt $12,384
Rebar Designs Trade debt $11,430
IMPERIAL PLASTECH: Names Stamatis Astras CEO & Robert Gallop CFO
----------------------------------------------------------------
Imperial PlasTech Inc. (TSX-VEN: IPG) announced the appointment of
Mr. Stamatis N. Astras, currently the Managing Director of
Petzetakis USA, as Chief Executive Officer and Mr. Robert Gallop
as Chief Financial Officer of Imperial PlasTech Inc. and its
subsidiaries, effective immediately. These appointments position
the Company to become an integral part of A.G. Petzetakis S.A. as
it transitions from interim restructuring management.
A.G. Petzetakis S.A., the majority shareholder of Imperial
PlasTech, has reaffirmed to the Board its commitment to the
success and growth of the Company. A.G. Petzetakis was
instrumental in facilitating the restructuring of the Company by
investing significant capital and human resources in 2003 and the
first quarter of 2004 and intends to continue to support the
Company. With the newly appointed management team, the Company has
positioned itself, with the assistance of A.G. Petzetakis, to
benefit from A.G. Petzetakis' expansion in the North American
market.
The Company has received the resignations of Mr. Peter Perley,
Chief Executive Officer and director of the Company, and Mr. Mark
Weigel, Chief Financial Officer and Secretary of the Company.
Messrs. Perley and Weigel submitted their resignations during
negotiations for the transition of management. Messrs. Perley and
Weigel first joined Imperial PlasTech in July 2003 pursuant to a
court order under the Companies' Creditors Arrangement Act that
appointed them as directors of Imperial PlasTech and its
subsidiaries, and Mr. Perley as Chief Restructuring Officer, in
order to facilitate the restructuring of the Company. On January
30, 2004, the plan of compromise was implemented and the Company
successfully emerged from the restructuring proceedings.
"Peter and Mark significantly contributed to our restructuring
process which ultimately came to a successful conclusion," said
George Petzetakis, Chairman of the Board. "Their leadership,
strategic skills and vision were valuable during the most
tumultuous period of Imperial PlasTech's history. The time,
however, is right for the Company to transition from being under
the leadership of turnaround specialists, such as Peter and Mark,
to the leadership of the Petzetakis Group. We thank Peter and Mark
for their contributions to the successful emergence of the Company
and wish them every success in their pursuit of future
challenges."
In order to facilitate the change in management, Mr. Pavlos
Kanellopoulos has resigned from the Board in favour of Mr.
Stamatis Astras. The Company is also pleased to announce that Mr.
John Yarnell has been appointed to the board of directors by the
Board to fill the vacancy left by Mr. Perley's resignation. After
giving effect to the new appointments, the Imperial PlasTech board
now consists of Messrs. John Yarnell, William Thomson, George
Petzetakis, and Stamatis Astras and Ms. Bonnie Tarchuk. John
Yarnell and Stamatis Astras intend to stand for nomination in
place of Messrs. Perley and Kanellopoulos, respectively, as
directors of Imperial PlasTech at its upcoming Annual and Special
Meeting of Shareholders to be held on Tuesday, May 25, 2004.
As prebiously reported, the Company filed a plan of compromise or
arrangement with the Ontario Superior Court of Justice on November
18, 2003. At November 30, 2003, the Company was operating under
protection from its creditors pursuant to insolvency legislation
in Canada and the United States in order to facilitate the
restructuring of the Company. Subsequent to the financial year
end, the Company successfully emerged from the restructuring
proceedings
About A.G. Petzetakis S.A.
Founded in 1960 and listed on the Athens Stock Exchange since
1973, Petzetakis Group (ASE:PET) is a Greek multinational company
and one of the fastest growing manufacturers of plastic pipe and
hose systems in the world. The Group operates 11 major
manufacturing facilities in 6 countries in Europe and S. Africa,
with annual sales of CN$ 300 million and an extensive distribution
network of commercial subsidiaries in Europe, Africa, North
America, and the Middle East.
About the Company
Imperial PlasTech is a diversified plastics manufacturer supplying
a number of markets and customers in the residential,
construction, industrial, oil and gas and telecommunications and
cable TV markets. Currently operating out of facilities in Atlanta
Georgia, Peterborough Ontario and Edmonton Alberta, Imperial
PlasTech and its subsidiaries are focusing on the growth of their
core businesses and continue to assess their non-core businesses.
INT'L ENVIRONMENTAL: Case Summary & Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: International Environmental Corporation
2231 South 48th Street Suite 104/105
Tempe, Arizona 85282
Bankruptcy Case No.: 04-08268
Type of Business: The Debtor specializes in all areas of Asbestos
Abatement, Lead Remediation and Demolition.
See http://www.iecweb.com/
Chapter 11 Petition Date: May 11, 2004
Court: District of Arizona (Phoenix)
Judge: George B. Nielsen Jr.
Debtor's Counsel: Margaret A. Gillespie, Esq.
Collins, May, Potenza, Baran & Gillespie
2210 Bank One Center
201 North Central Avenue
Phoenix, AZ 85073-0022
Tel: 602-261-7103
Fax: 602-252-1114
Estimated Assets: $500,000 to $1 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 19 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Maricopa Business Park $68,400
Star Insurance Company $60,700
Internal Revenue Service $55,982
IDRA $48,000
Inline Distributing Co. $44,562
California E.D.D. $41,052
Abatix Environmental Co. $38,845
Aramsco $33,330
American Express $31,000
MEPCO Insurance Premium $29,008
Home Depot $26,211
Channel Islands Roofing Inc. $20,568
Allied Insurance $20,113
Southwest Regional Landfill $19,896
Howard's Carpet One $18,908
Wells Fargo Bank $17,910
MP Environmental Services $15,983
CT Inc. $14,999
Kaiser A/C & Sheet Metal $14,571
KROLL INC: Planned Marsh Acquisition Spurs S&P's Positive Watch
---------------------------------------------------------------
Standard & Poor's Ratings Services placed its ratings on Kroll
Inc., including its 'BB-' corporate credit rating, on CreditWatch
with positive implications following Marsh & McLennan Cos.'s (MMC;
AA-/Watch Neg/A-1+) announcement that it intends to acquire Kroll
for $1.95 billion in cash, with a significant portion to be
financed by prospective debt transactions.
New York, New York-based Kroll is a leading provider of financial
and security consulting services. Kroll acquired turnaround
specialist Zolfo Cooper, LLC, founded by Stephen F. Cooper, in
Sept. 2002 for $153 million in cash and stock. Kroll's total debt
was roughly $200 million as of March 31, 2004.
In resolving the CreditWatch listing for Kroll, Standard & Poor's
will review the terms of the transaction, in particular, MMC's
intentions with regard to the existing indebtedness of Kroll.
KRONFLI SPUNDALE: Case Summary & 20 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Kronfli Spundale Mills Inc.
4440 East 26th Street
Vernon, California 90023
Bankruptcy Case No.: 04-17327
Type of Business: The Debtor manufactures high-quality
fabrics. See http://www.kronfli.com/
Chapter 11 Petition Date: May 11, 2004
Court: Central District of California (Los Angeles)
Judge: Sheri Bluebond
Debtor's Counsel: Philip A. Gasteier, Esq.
Robinson, Diamant & Wolkowitz, P.C.
1888 Century Park East, Suite 1500
Los Angeles, CA 90067
Tel: 310-277-7400
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
------ --------------- ------------
Dellex, Inc. Trade Debt $455,697
80 Clay Road
Lewes, DE 19958
Spectrum Textured Yarn, Inc. Trade Debt $438,457
P.O. Drawer 669
136 Patterson Road
Kings Mountain, NC 28086
Unifi, Inc. Trade Debt $238,783
Turksever Enterprises Trade Debt $136,463
L. A. County Tax Collector Unsecured Prop Taxes $133,114
TNS Mills, Inc. Trade Debt $117,891
Four Leaf Textiles LLC Trade Debt $117,891
Atlantic Fine Yarns, Inc. Trade Debt $64,165
Yale/Chase Material Handling Trade Debt $63,253
Resch Polster Alpert & Berger Attorney Fees $54,215
Textiles La Alsaciana SA De Trade Debt $50,987
CV Carrelera A Resurreccion
CS America Trade Debt $38,494
Prominent USA Trade Debt $30,315
City of Vernon Electric Bill $25,644
Carrier Services, Inc. Trade Debt $25,596
D&B Factors, Parkdale Trade Debt $23,359
Azul Textile, S.A. de C.V. Trade Debt $23,356
State Compensation Fund Worker's Comp $14,883
Remium
Unisun Multinational, Inc. Trade Debt $13,585
A Plus International Trade Debt $13,498
LEXAM EXPLORATIONS: Considers Options to Address Liquidity Issues
-----------------------------------------------------------------
Lexam Explorations Inc. (TSX VENTURE:LEX) released its financial
results for the quarter ended March 31, 2004.
Financial Results
(All amounts are expressed in Canadian dollars)
Lexam recorded a loss of $23,271 during the three months ended
March 31, 2004, compared to earnings of $202,875 during the
corresponding period in 2003. The loss in the first quarter of
2004 can largely be attributed to expenditures for administrative
costs of $23,934, up from $17,783 for the same period in 2003.
Earnings during the first quarter of 2003 resulted from the sale
of Lexam's investment in Miramar Mining Corp. which was sold for
total proceeds of $339,418.
Joint Venture Agreement
During the first quarter of 2004, an agreement was reached with an
independent and privately held oil and gas company to conduct
additional exploration of Lexam's 100,000+ acre oil and gas
property located in south central Colorado over the next two
years. A program of 2D seismic data acquisition was completed in
February that added approximately 60 line miles (97 km) of new
data that is being processed and incorporated with the 60 miles
(97 km) of existing Lexam data over the prospect. The program is
designed to provide additional information and identify potential
well locations for the purpose of testing the Lexam property by
drilling. Should a production decision be made, Lexam would retain
a 12.5% production royalty on its 75% interest of the property's
oil and gas rights.
Financial Condition
Lexam is currently not able to continue its exploration efforts
and discharge its liabilities in the normal course of business,
and may not be able to ultimately realize the carrying value of
its assets, subject to, among other things, being able to raise
sufficient additional financing to fund its exploration programs.
In addition to the joint venture agreement, the Company may pursue
additional actions to address these issues, such as seeking
additional sources of debt or equity financing and investigating
possible reorganization alternatives.
Capital Stock
At March 31, 2004, the Company had 38,107,436 common shares
outstanding. A total of 40,957,436 shares would have been
outstanding had all options been exercised.
LUDGATE INSURANCE: U.S. Creditors Must Comply with U.K. Scheme
--------------------------------------------------------------
Pursuant to a petition filed by the Board of Directors of Ludgate
Insurance Company Limited on January 30, 2004, under Section 204
of the U.S. Bankruptcy Code, the U.S. Bankruptcy Court for the
Southern District of New York, on April 8, 2004, entered a
permanent injunction to:
(i) permanently give effect to the U.K. scheme of arrangement
in the U.S. that shall be binding and enforceable against
all Scheme Creditors in the U.S.;
(ii) permanently enjoin all U.K. Scheme Creditors from taking
action in contravention to the Scheme of Arrangement;
(iii) permanently enjoin Scheme Creditors from:
(a) seizing, repossessing, transferring, relinquishing
or disposing any property of the Company in the
U.S.;
(b) commencing any action in connection with any Claim;
(c) enforcing any judgment, assessment, order or award
obtained in connection with any claim;
(d) invoking, enforcing any statute, rule or requirement
of law requiring the Company to establish security
in the form of bond or letter of credit;
(e) drawing down any letter of credit established by, on
behalf or at the request of the Company in excess of
amounts authorized by the terms of contract;
(f) withdrawing from, setting of against, or otherwise
applying property that is subject to trust or escrow
agreement in which the Company has interest in
excess of amounts authorized by the terms of
contract;
(iv) require all entities in possession of the Company
property in the U.S. or its proceeds, shall turn over and
account such to the Petitioner or Scheme Advisors;
(v) require all Scheme Creditors that are beneficiaries of
letters of credit or parties to any trust or escrow to:
(a) provide notice to the Scheme Advisors of any
drawdown on any letter of credit, withdrawal from,
setoff against, or other application of property
that the Company has an interest in, to permit the
Scheme Advisors to asses the propriety of such
actions;
(b) turn over and account to the Scheme Advisors all
funds resulting from such actions in excess of
amounts authorized in the terms of contract;
(vi) require all Scheme Creditors having a claim of any
nature, to place the Scheme Advisors' U.S. Counsel on the
master service list of any such actions or legal
proceedings to ensure that the counsel shall receive:
(a) copies of all documents served by the parties to
such actions or legal proceedings and
(b) all correspondence circulated in the master list.
LUDGATE INSURANCE COMPANY LIMITED ceased underwriting insurance
policies and went into run-off on December 31, 1991. The run-off
of the Company's business was administered by HS Weavers
(Underwriting) Agencies Limited until 1990, when the
responsibility to run-off the Company was transferred to Southwark
Run-off Service Limited and then subsequently to Atropos
Management Services Limited. The appointment of Atropos as run-
off manager was terminated effective December 31, 1994. As of
January 1, 1995, the run-off of the Company has been administered
by the Company itself.
Since 1992, the Company has implemented a series of initiatives
which have materially improved its financial position. As a result
of these initiatives, the volume and value of outstanding
transactions have been substantially reduced. This has enabled the
Company to implement a comprehensive reconciliation program with
respect to the Company's broker balances and reinsurance
recoveries. The Company's audited balance sheet as of December
31, 2002 shows total assets of US$15,605,133 and total liabilities
of US$11,600,655 resulting in shareholders' funds of US$4,004,478.
Ludgate says there's been no material change in the Company's
position since that time.
As a result of the Company's determination to cease to write
business, the Company has been in run-off since December 31, 1991.
Typically, a run-off of an insurance company may take twenty or
more years to complete. The payment of claims would be
correspondingly slow. To shorten the Company's run-off period and
to reduce administrative costs, the Petitioner has formulated the
Scheme pursuant to section 425 of the Companies Act 1985 in the
U.K., to address claims. Given that the Company is solvent, trade
creditors will be paid in the normal course of business unless and
until an Insolvency Event, as defined in the Scheme, occurs. An
Insolvency Event is defined in the Scheme as:
(1) The making of an order by the High Court to compulsorily
wind up the Company pursuant to the Insolvency Act 1986;
(2) The commencement of a creditor's voluntary liquidation of
the Company in accordance with the Insolvency Act;
(3) The appointment of an administrator for the Company in
accordance with the Insolvency Act;
(4) The appointment of a provisional liquidator for the
Company in accordance with the Insolvency Act; or
(5) A determination by the Company at any time that the amount
available to pay on account of Claims is or will be
insufficient to fully satisfy all Claims.
Ludgate Insurance Company Limited's Board of Directors filed a
Sec. 304 Petition on January 30, 2004 (Bankr. S.D.N.Y. Case No.
04-10590) to prevent U.S. creditors from grabbing any U.S. assets
and forcing them to comply with the U.K. Scheme. The Honorable
Robert D. Drain oversees the Sec. 304 proceeding. Howard Seife,
Esq., at Chadbourne & Parke, represents Ludgate.
MARINER HEALTH: Offers To Swap $175MM Unregistered Notes Due 2013
-----------------------------------------------------------------
Mariner Health Care, Inc., offers to exchange up to $175,000,000
in aggregate principal amount of its registered 8-1/4% senior
subordinated notes due 2013 -- the exchange notes -- for all of
its outstanding unregistered 8-1/4% senior subordinated notes due
2013 -- the initial notes.
The initial notes and the exchange rates will be guaranteed by
certain of Mariner's present and future domestic restricted
subsidiaries with unconditional guarantees of payment that will
rank junior in right of payment to Mariner's senior debt, but
will rank equal in right of payment to its future senior
subordinated debt. Certain of Mariner's subsidiaries do not
guarantee the initial notes and will not guarantee the exchange
notes.
The initial notes were issued on December 19, 2003. The terms of
the exchange notes are identical to the terms of the initial
notes except that the exchange notes are registered under the
Securities Act of 1933, as amended, and therefore are freely
transferable, subject to certain conditions. The exchange notes
evidence the same indebtedness as the initial notes.
In a regulatory filing with the Securities and Exchange
Commission dated May 13, 2004, C. Christian Winkle, Mariner
President and Chief Executive Officer, outlined the risks
associated with the exchange offer.
Among other things, Mr. Winkle relates that Mariner's substantial
level of indebtedness could adversely affect its financial
condition and prevent the Company from fulfilling its obligations
under the exchange notes. Furthermore, the Company is permitted
to incur substantially more debt, which may exacerbate the risks.
To service its indebtedness, Mariner will require a significant
amount of cash, the availability of which depends on many factors
beyond its control. The company cannot assure that the business
will generate sufficient cash flow from operations, that
anticipated revenue growth and improvement of operating
efficiencies will be realized, or that future borrowings will be
available under the senior credit facility in an amount
sufficient to service its indebtedness.
The right to receive payments on these notes is junior to
Mariner's senior indebtedness and possibly all of its future
borrowings.
Not all of the subsidiaries will guarantee the notes. According
to Mr. Winkle, a note holder will not have a claim as a creditor
against the subsidiaries that are not guarantors of the notes,
and any indebtedness and other liabilities, including trade
payables, of those subsidiaries will effectively be senior to the
note holder's claims against those subsidiaries. In the event of
a bankruptcy, liquidation or reorganization of any of the non-
guarantor subsidiaries, the holders of the non-guarantor
subsidiaries' indebtedness and their trade creditors will
generally be entitled to payment of claims from the assets of the
non-guarantor subsidiaries before any assets are made available
for distribution to Mariner.
If Mariner fails to meet its payment or other obligations under
the senior credit facility, the lenders under senior credit
facility could foreclose on, and acquire control of,
substantially all of its assets. The indenture for the notes and
senior credit facility restricts Mariner's ability and the
ability of most of its subsidiaries to engage in some business,
financial and corporate actions. Mariner may not have the
ability to raise the funds necessary to finance any change of
control offer required by the indenture.
Upon the occurrence of certain specific kinds of change of
control events, Mariner will be required to offer to repurchase
all outstanding notes at 101% of their principal amount plus
accrued and unpaid interest and special interest. However, it is
possible that Mariner will not have sufficient funds at the time
of the change of control to make any required repurchases of
notes or that restrictions in the company's senior credit
facility will not allow those repurchases. The failure to
purchase tendered notes would constitute a default under the
indenture governing the notes, which, in turn, would constitute a
default under the senior credit facility.
If an active trading market for the exchange notes does not
develop, the liquidity and value of the exchange notes could be
harmed. Although the exchange notes are eligible for trading,
Mariner cannot assure that an active trading market will develop
for the exchange notes. If no active trading market develops,
the noteholders may not be able to resell their exchange notes at
their fair market value or at all.
A full-text copy of Mariner's prospectus with respect to the
exchange offer is available for free at:
http://www.sec.gov/Archives/edgar/data/882287/000095014404005430/g89013sv4.htm#103
(Mariner Bankruptcy News, Issue No. 58; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
MASSMUTUAL GLOBAL: S&P Assigns Low-B Ratings to Classes M-1 & M-2
-----------------------------------------------------------------
Standard & Poor's Ratings Services withdrew its rating on the
class P notes issued by MassMutual Global CBO I Ltd., a CBO
transaction collateralized by emerging market securities.
The rating withdrawal follows the complete redemption of the P
notes following an exchange of the notes for the pledged class P
collateral of $6.5 million of U.S. Treasury Strips plus $5.815
million of the transaction's class B notes. The exchange occurred
May 17, 2004.
Rating Withdrawn
MassMutual Global CBO I Ltd.
Rating Balance (mil. $)
Class To From Previous Current
P NR AAA $6.500 $0.00
Other Outstanding Ratings
MassMutual Global CBO I Ltd.
Balance
Class Rating Current (mil.$)
A-1 AAA $119.535 million
A-2 AAA $71.000 million
A-3 A+ $15.000 million
M-1 BB $23.50 million
M-2 B $4.400 million
MIRANT AMERICAS: Wants Stay Modified To Set Off PG&E Gas Claim
--------------------------------------------------------------
Frances Smith, Esq., at Haynes and Boone, LLP, in Dallas, Texas,
relates that prior to the Petition Date, Pacific Gas & Electric
Company and Mirant Americas Energy Marketing, LP, were parties to
a Master Gas Purchase and Sales Agreement dated September 1,
1997. The Master Gas Agreement was terminated by the parties
before the Petition Date.
PG&E and MAEM also entered into various natural gas purchase
transactions under the Master Gas Agreement.
PG&E filed for Chapter 11 protection in the United States
Bankruptcy Court for the Northern District of California on
April 6, 2001. PG&E's confirmed reorganization plan became
effective on April 12, 2004. Under PG&E's reorganization plan,
general unsecured claims are entitled to be paid in full, in
cash, with applicable interest.
Ms. Smith reports that on September 5, 2001, MAEM filed a proof
of claim in PG&E's bankruptcy proceedings for $8,876,214,
representing amounts due to it on account of the Gas
Transactions. PG&E, on the other hand, filed a $5,486,600 claim
on December 15, 2003 against MAEM for amounts allegedly due to
PG&E on account of the Gas Transactions.
MAEM and PG&E agree to resolve all matters relating to the Gas
Claims. The parties stipulate and agree that:
* The MAEM Gas Claim will constitute an allowed claim against
PG&E in the PG&E bankruptcy proceedings for $8,876,214;
* The PG&E Gas Claim will constitute an allowed claim against
MAEM in these proceedings for $5,486,600;
* PG&E will be entitled to set off the PG&E Gas Claim against
the MAEM Gas Claim. The resulting balance of $3,389,614
will be an allowed general unsecured claim against PG&E in
the PG&E bankruptcy proceedings and will be satisfied as any
other unsecured claim against PG&E;
* PG&E agrees that it will not assert any further setoffs
against the Deficiency Claim of any kind or nature
whatsoever; and
* PG&E reserves all of its rights with respect to any claim
filed against the Debtors other than the PG&E Gas Claim and
the Debtors reserve all of their rights with respect to any
claims filed against PG&E other than the MAEM Gas Claim.
The Debtors also reserve the right to object to any claim
filed by PG&E in the Debtors' bankruptcy proceedings other
than the PG&E Gas Claim and PG&E reserves the right to
object to any claim filed by the Debtors in the PG&E
bankruptcy proceedings other than the MAEM Gas Claim.
By this motion, the Debtors ask the Court to approve the
Stipulation and lift the automatic stay under Section 362(a) of
the Bankruptcy Code to permit the parties to implement the
setoffs provided for in the Stipulation.
Ms. Smith points out that the agreed setoff is fair and
reasonable because:
-- the Master Gas Agreement is a bilateral agreement between
the parties, therefore, the PG&E Gas Claim and the MAEM
Gas Claim constitute mutual debts;
-- both the PG&E Gas Claim and the MAEM Gas Claim arose prior
to the Petition Date; and
-- all other claims between the parties are not affected by
the Stipulation.
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. 33; Bankruptcy Creditors' Service, Inc., 215/945-7000)
NASH FINCH COMPANY: Shutting Down Underperforming Stores
--------------------------------------------------------
Nash Finch Company (Nasdaq:NAFC), a leading national food retailer
and distributor, announced that it will exit its Buy n Save(R) and
Avanza(R) retail formats, closing its five Buy n Save outlets, and
three Avanza outlets located in Chicago and Pueblo, Colorado. At
this time, the Company intends to seek purchasers for its three
Denver area Avanza stores. It will also close ten conventional
outlets, primarily operating under the EconoFoods(R) banner. The
21 stores involved represent approximately 15% of the Company's
annualized retail sales, and approximately 3% of its total
annualized sales. The Company expects that the store closures will
be completed by the end of its second fiscal quarter.
Although the decision to close stores was difficult, the Company
has determined that prospects for improvement at these locations
and formats within an acceptable time frame are not sufficient to
justify continued investment. Exiting these underperforming assets
is consistent with the Company's commitment to continue to lower
operating costs, improve its balance sheet, and focus investment
and attention on core areas of its business that offer a better
return to shareholders.
As a result of the closures, the Company expects to realize an
annualized improvement to pre-tax earnings of approximately $16
million. The annualized improvement to Consolidated EBITDA(1), net
of future lease-related payments, is expected to be approximately
$6 million. The Company also expects to incur pre-tax charges in
the second quarter 2004 totaling approximately $42 million, the
vast majority of which represents asset impairment charges and
provisions for future lease costs. Cash generated by the sale of
inventory and other assets is expected to exceed the cash outflows
associated with the closures. The stores involved in these actions
are served by four of the Company's 15 distribution centers, and
do not represent a material portion of the volume or profit of any
of those distribution centers.
The locations affected by this announcement are:
1. EconoFoods, 2601 South Louise Avenue, Sioux Falls SD
2. EconoFoods, 101 Iowa Avenue West, Marshalltown IA
3. EconoFoods, 1411 Flammang Drive, Waterloo IA
4. EconoFoods, 3470 55th Street NW, Rochester MN
5. EconoFoods, 1200 16th Street SW, Rochester MN
6. EconoFoods, 801 West Town Line Road, Creston IA
7. EconoFoods, 2915 McClain Drive, Cedar Falls IA
8. EconoFoods, 300 Gilbert, Charles City IA
9. EconoFoods, 1800 51st Street NE, Cedar Rapids IA
10. Sun Mart(R), 1510 East 20th Street, Scottsbluff NE
11. Buy n Save, 822 South Broadway, Albert Lea MN
12. Buy n Save, 20 Signal Hills Road, West St. Paul MN
13. Buy n Save, 7632 Brooklyn Blvd., Brooklyn Park MN
14. Buy n Save, 4152 Lakeland Avenue North, Robbinsdale MN
15. Buy n Save, 1700 Rice Street, Maplewood MN
16. Avanza, 2551 West Cermak, Chicago IL
17. Avanza, 5220 South Pulaski, Chicago IL
18. Avanza, 1153 South Prairie Avenue, Pueblo CO
19. Avanza, 5801 W. 44th Avenue, Denver CO
20. Avanza, 1320 South Federal Blvd., Denver CO
21. Avanza, 7305 Pecos Street, Denver CO
About Nash Finch
Nash Finch Company is a Fortune 500 company and one of the leading
food retail and distribution companies in the United States with
nearly $4 billion in fiscal year 2003 annual revenues. Nash Finch
owns and operates retail stores primarily in the Upper Midwest,
and its food distribution business serves independent retailers
and military commissaries in 27 states, the District of Columbia,
Europe, Cuba, Puerto Rico, and Iceland. Further information is
available on the company's website at http://www.nashfinch.com
* * *
As reported in the Troubled Company Reporter's January 30, 2004
edition, Standard & Poor's Ratings Services revised its outlook on
Nash Finch Co. to negative from stable.
Ratings, including the 'B+' corporate credit rating, were
affirmed. The outlook revision reflects continued competitive
pressures from traditional supermarket operators and supercenters,
which are expected to restrain recovery in same-store sales from
very weak levels.
"The ratings on Minneapolis, Minnesota-based Nash Finch reflect
its relatively small scale in the highly competitive food
wholesaling and supermarket industries," said Standard & Poor's
credit analyst Mary Lou Burde. Given the difficulty of competing
on price with larger companies, Nash Finch must continue to
improve operating efficiencies and service levels. These risks are
mitigated by the company's stabilized food distribution business
over the past three years and leading market positions in many
upper-Midwest markets. The company has annual sales of about $3.9
billion.
NEW WORLD: Signs-Up Saul Ewing as Bankruptcy Attorneys
------------------------------------------------------
New World Pasta Company and its debtor-affiliates ask the U.S.
Bankruptcy Court for the Middle District of Pennsylvania for
permission to employ Saul Ewing LLP as their co-counsel in their
chapter 11 cases.
Saul Ewing has extensive experience and knowledge in the field of
debtors' and creditors' rights and business reorganizations under
Chapter 11 of the Bankruptcy Code. The Debtors further relate
that the firm is familiar with their businesses. In preparing for
these Chapter 11 cases, Saul Ewing has become familiar with the
Debtors' businesses and affairs and with many of the potential
legal issues that may arise in the context of these Chapter 11
cases.
The attorneys and paralegals presently designated to represent the
Debtors and their current standard hourly rates are:
Professionals Designation Billing Rate
------------- ----------- ------------
Norman L. Pernick partner $465 per hour
Eric L. Brossman partner $335 per hour
Jay A. Shulman special counsel $310 per hour
Robyn F. Pollack associate $260 per hour
Robert J. Bein associate $215 per hour
Brian Lepsis associate $165 per hour
Maronetta F. Miller paralegal $130 per hour
Lori Zerbe paralegal $130 per hour
Bonnie L. Davis legal assistant $115 per hour
Saul Ewing is expected to provide legal services including:
(a) advising the Debtors of their rights, powers, and duties
as debtors and debtors-in-possession;
(b) advising the Debtors concerning, and assisting in, the
negotiation and documentation of financing agreements,
debt restructurings, cash collateral arrangements and
related transactions;
(c) reviewing the nature and validity of liens asserted
against the estates and advising the Debtors concerning
the enforceability of such liens;
(d) preparing, on behalf of the Debtors, all necessary and
appropriate applications, motions, pleadings, draft
orders, notices schedules, and other snow documents, and
reviewing all financial and other reports to be filed in
these cases;
(e) advising the Debtors concerning corporate and tax-related
issues in connection with these cases;
(f) advising the Debtors concerning, and preparing responses
to, applications, motions, pleadings, notices, and other
papers that may be filed and served in these cases;
(g) counseling the Debtors in connection with the consummation
of any plan of reorganization and related documents; and
(h) performing all other legal services for, and on behalf of,
the Debtors that may be necessary or appropriate in the
administration of these cases.
The Debtors have also asked for the Court's approval in their
retention of Skadden, Arps, Slate, Meagher & Flom LLP. Skadden and
Saul Ewing will work closely together to coordinate the
representation of the Debtors in these cases, and to ensure that
there is no unnecessary duplication of effort.
Headquartered in Harrisburg, Pennsylvania, New World Pasta Company
-- http://www.nwpasta.com/-- is the leading dry pasta
manufacturer in the United States. The Company filed for chapter
11 protection on May 10, 2004 (Bankr. M.D. Pa. Case No. 04-02817).
Eric L. Brossman, Esq., at Saul Ewing LLP represents the Debtors
in their restructuring efforts. When the Company filed for
protection from its creditors, they listed both estimated debts
and assets of over $100 million.
NEXTEL PARTNERS: 11% Senior Note Tender Offer to Expire on May 25
-----------------------------------------------------------------
Nextel Partners, Inc. (Nasdaq:NXTP) announced that in connection
with its previously announced consent solicitation commenced in
connection with the tender offer for its 11% Senior Notes due 2010
(CUSIP Nos. 65333FAF4 and 65333FAH0), Nextel Partners has accepted
for purchase approximately $352.5 million aggregate principal
amount of the outstanding 11% Notes, representing approximately
98.8% of the total principal amount of the 11% Notes outstanding
immediately prior to the commencement of the tender offer.
Nextel Partners has paid $1,123.44 per $1,000 principal value at
maturity for any 11% Notes tendered before May 11, 2004, or total
consideration of approximately $396.1 million, excluding accrued
and unpaid interest. Nextel Partners has also received the
consents necessary to amend the indentures governing the 11% Notes
to eliminate certain restrictive covenants and certain related
event of default provisions.
The tender offer expires at midnight, New York City time, on
May 25, 2004, unless further extended by Nextel Partners. Holders
who validly tender their 11% Notes after the Consent Date, but
prior to the expiration of the tender offer will receive $1,088.44
per $1,000 principal value at maturity of the 11% Notes tendered,
excluding accrued and unpaid interest. The tender offer is being
made solely upon the terms and is subject to the conditions set
forth in an Offer to Purchase and Consent Solicitation Statement,
dated April 28, 2004. This announcement is not an offer to
purchase, or a solicitation of an offer to purchase, with respect
to any 11% Notes.
A portion of the 11% Notes accepted for purchase were funded with
proceeds from Nextel Partners' private placement of $25 million
aggregate principal amount of 8 1/8% Senior Notes due 2011, which
closed on May 19, 2004. The offer and sale of the 8 1/8% Notes
have not been registered under the Securities Act of 1933, as
amended, and the 8 1/8% Notes may not be offered or sold in the
United States absent registration or an applicable exemption from
registration requirements of the Securities Act and applicable
state securities laws.
Nextel Partners also announced that its wholly owned subsidiary,
Nextel Partners Operating Corp., has refinanced its existing $375
million tranche B term loan with a new $700 million tranche C term
loan. The borrowings under the new term loan will be used to repay
the existing tranche B term loan as well as fund a portion of the
tender offer for the 11% Notes. The new term loan will bear
interest at LIBOR plus 2.50% and will mature on May 31, 2011,
compared with an interest rate of LIBOR plus 3.00% and maturity
date of November 30, 2010 under the existing tranche B term loan.
J.P. Morgan Securities Inc. and Morgan Stanley Senior Funding,
Inc. acted as Joint Lead Arrangers and Joint Bookrunners on the
new term loan.
A more comprehensive description of the tender offer and consent
solicitation can be found in the Offer to Purchase and Consent
Solicitation Statement, dated April 28, 2004. Nextel Partners has
retained Morgan Stanley & Co. Incorporated and J.P. Morgan
Securities Inc. to serve as Dealer Managers and Solicitation
Agents for the tender offer. Requests for documents may be
directed to D.F. King & Co., Inc., the Information Agent, by
telephone at (800) 487-4870 (toll-free) or in writing, at 48 Wall
Street, New York, New York 10005. Questions regarding the tender
offer may be directed to Morgan Stanley at (800) 624-1808 (toll
free) or (212) 761-1941, or in writing at 1585 Broadway, Second
Floor, New York, NY 10036, or JPMorgan at (212) 270-9769, or in
writing at 270 Park Avenue, New York, NY 10017.
About Nextel Partners
Nextel Partners, Inc., (Nasdaq:NXTP), based in Kirkland, Wash.,
has the exclusive right to provide digital wireless communications
services using the Nextel brand name in mid-sized and rural
markets in 31 states where approximately 53 million people reside.
Many of these markets are contiguous to Nextel Communications'
existing properties. Like Nextel Communications, Nextel Partners
exclusively uses Motorola's iDEN technology, which allows wireless
services to be provided over lower special mobile radio
frequencies. At the end of first-quarter 2004, there were about
1.3 million subscribers, with a substantial mix of these in the
construction, transportation, manufacturing, government, and
services sectors. Although Nextel Communications owns about 31% of
Nextel Partners, it does not provide any credit support to the
company.
* * *
As reported in the Troubled Company Reporter's May 11, 2004
edition, Standard & Poor's Ratings Services raised its ratings on
Kirkland, Washington-based wireless telecom carrier Nextel
Partners Inc. The corporate credit rating was raised to 'B+' from
'B-' and was removed from CreditWatch, where it was placed with
positive implications on May 3, 2004, after the company announced
that it would use proceeds from a proposed incremental bank term
loan and proposed new senior unsecured notes to refinance Nextel
Partner's 11% senior notes due 2010. The outlook is stable.
NICOLA INTERNATIONAL: Case Summary & Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Nicola International Inc.
4561 Colorado Boulevard
Los Angeles, California 90039
Bankruptcy Case No.: 04-20210
Type of Business: The Debtor imports bottles and distributes
high-quality olive oils from major olive
producing countries in the Mediterranean
region. See http://www.nicolainternational.com/
Chapter 11 Petition Date: May 5, 2004
Court: Central District of California (Los Angeles)
Judge: Maureen Tighe
Debtor's Counsel: Ron Bender, Esq.
Levene Neale Bender Rankin & Brill
1801 Avenue of Stars Suite 1120
Los Angeles, CA 90067
Tel: 310-229-1234
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Amexim Inc. $884,331
1320 Balmoral Drive
Glendale, CA 91207
Medolio L.T.D. $373,634
69 Thiras Street
164 51 Athens Greece
Tripsas S.A. $282,911
P.O. Box 90
35100 Aeghion
Cavino Winery & Distillery $268,098
55 Plantation Street
GR 104 35 Athena Greece
Agromet $138,399
Al Nakhil Co. $133,952
Akmar $127,252
Sicopa $114,499
Olives & Foods, Inc. $106,536
MPS Exports Co. $102,130
West Coast Products Corp. $89,374
Phoenicia Wholesale $71,035
Intercomm Foods S.A. $69,230
L.A. County Tax Collector $68,076
Albert Brokerage $53,632
Silpay E.I.R.LTDA $47,500
Interchamp Company, Ltd. $44,121
MKHHSTE $30,240
Marvioliva Pilas, S.L. $28,579
Nader Trading, Inc. $28,334
NRG ENERGY: Searches for New Independent Auditor as PwC Resigns
---------------------------------------------------------------
NRG Energy, Inc. (NYSE:NRG), a wholesale power generation company,
announced that it has initiated a search for a new independent
auditor because PricewaterhouseCoopers, LLP, will not be standing
for re-election as the Company's independent auditor for the year
ended December 31, 2004. PwC will complete its review of the
Company's Form 10-Q for the quarter ended March 31, 2004. As
previously announced, NRG is scheduled to announce its first
quarter 2004 financial results on Tuesday, May 11, 2004.
NRG noted that for the two most recent fiscal years and through
April 27, 2004, there have been no disagreements with PwC on any
matters of accounting principles or practices, financial statement
disclosure or auditing scope or procedure.
NRG has already commenced discussions with other accounting firms
and the NRG Board of Directors' Audit Committee is moving promptly
to engage a new auditor.(NRG Energy Bankruptcy News, Issue No. 27;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
OWENS CORNING: Asks Court to Approve Goldman, et al. Settlement
---------------------------------------------------------------
The Owens Corning Debtors ask the Court to approve a settlement
agreement and stipulation among Owens Corning, O.C. Funding B.V.,
Goldman, Sachs & Co., Special Situations Investing Group, Inc.,
and WestLB AG.
In 1991, Owens Corning formed OC Funding, a closed company with
limited liability organized under the laws of Netherlands, for
the purpose of obtaining financing for Owens Corning and its
subsidiaries. OC Funding is an indirect wholly owned non-debtor
subsidiary of Owens Corning, through its wholly owned, non-debtor
subsidiary, IPM, Inc. OC Funding has no other material
liabilities other than:
1. the OC Funding Debentures,
2. the KBC Bank Debt, and
3. the WestLB Debt
The OC Funding Debentures
In 1991, OC Funding issued 10% Guaranteed Debentures due 2001 in
the aggregate principal amount of $150,000,000, which were
guaranteed by Owens Corning on an un-subordinated basis. The OC
Funding Debentures were issued pursuant to an indenture dated as
of May 15, 1991, among OC Funding as issuer, Owens Corning as
guarantor, and The Bank of New York as indenture trustee.
Substantially all of the net proceeds from the OC Funding
Debentures were lent by OC Funding to Owens Corning pursuant to a
loan agreement dated June 11, 1991. This intercompany loan was
evidenced by a promissory note in the principal amount of
$148,000,000.
Payment on the intercompany loan was made subject to the terms of
a schedule containing certain contractual subordination
provisions.
As of the Petition Date, the principal amount of $42,395,000 of
OC Funding Debentures remained outstanding. The Bank of New York
filed Claim No. 9137 against Owens Corning for $43,855,272 on
account of the guarantee, plus accrued interest and other fees
and expenses.
The KBC Bank Debt
KBC Bank Nederland N.V. lent $20,000,000 to OC Funding pursuant
to a Credit Agreement dated August 10, 1999. This loan was
guaranteed on an un-subordinated basis by Owens Corning. OC
Funding subsequently lent the proceeds of its borrowing under the
KBC Agreement to Owens Corning, which executed a promissory note
to OC Funding in the principal amount of $20,000,000. This
promissory note contained no subordination provisions.
KBC Bank filed Claim No. 5749 based on its guarantee from Owens
Corning amounting to $20,379,264.
The WestLB Debt
WestLB, formerly known as Westdeutsche Landesbank Girozentrale,
lent $10,000,000 to OC Funding under a Credit Facility dated
February 24, 2000. This loan was guaranteed on an un-
subordinated basis by Owens Corning. OC Funding subsequently
lent the proceeds of this loan, together with an additional
$1,800,000, to Owens Corning. This intercompany borrowing was
represented by a promissory note in the principal amount of
$11,800,000. The promissory note contained no subordination
provisions.
As of the Petition Date, $10,135,236, including accrued interest,
was outstanding under the WestLB Facility. WestLB filed Claim
No. 6997 for $11,266,997 based on its guarantee from Owens
Corning. The Claim includes $1,131,761 in postpetition interest.
OC Funding -- Scheduled Claims
OC Funding holds scheduled claims against Owens Corning on
account of the intercompany loans aggregating $74,227,644.
The Netherlands Bankruptcy Petition
On May 2, 2003, Special Situations filed an involuntary
bankruptcy petition against OC Funding in the Netherlands, which
was ultimately withdrawn on July 10, 2003. On May 22, 2003,
Goldman Sachs filed its own involuntary petition against OC
Funding.
Subsequent to the filings, discussions commenced with Goldman, as
the beneficial holder of more than 50% of the outstanding OC
Funding Debentures, as well as with the other Claimants,
regarding the claims and issues arising from the OC Funding
Debentures, the KBC Agreement and the WestLB Facility. In the
course of these discussions, Goldman asserted that the
subordination provisions applicable to the loan agreement between
Owens Corning and OC Funding, with respect to the loan by OC
Funding to Owens Corning of the proceeds from the issuance of the
OC Funding Debentures, was not properly disclosed to the
purchasers of the OC Funding Debentures and, for a variety of
reasons, was not enforceable.
Owens Corning disagreed with these assertions and argued that:
-- Goldman was barred from asserting that there were
deficiencies in the disclosures relative to the OC Funding
Debentures since Goldman had served as the underwriter for
the OC Funding Debentures; and
-- the intention to loan the proceeds to Owens Corning was
clearly stated in the disclosure documents.
Separately, Owens Corning disputed the right of both OC Funding
and the Claimants to hold allowed claims against the Owens
Corning estate on account of the OC Funding Debentures, the KBC
Agreement and the WestLB Facility. Owens Corning asserted that,
whether or not the contractual subordination of OC Funding's
claim against Owens Corning was effective, any claims of OC
Funding against Owens Corning should be disallowable in
bankruptcy, as being effectively duplicative of the claims
asserted against Owens Corning by the Bank of New York, Special
Situations and WestLB.
After considerable discussion, the parties agreed to resolve
their disputes relating to the OC Funding Petition, the OC
Funding Debentures, the KBC Agreement, the WestLB Facility and
certain related matters pursuant to these terms:
(1) These general, unsecured, non-priority claims will be
allowed in Owens Corning's Chapter 11 proceeding:
(a) The Bank of New York's Claim No. 9137 for $43,855,272,
arising in connection with the direct guarantee by
Owens Corning of the OC Funding Debentures. This
Claim will constitute a Bondholder Claim and, for
purposes of the Plan, will be included in Class 5;
(b) Special Situations' Claim No. 5749, for $20,387,333,
arising in connection with the direct guarantee by
Owens Corning of obligations under the KBC Agreement.
This Claim will constitute a Senior Indebtedness
Claim and will be included within Class 6B;
(c) WestLB Claim No. 6997, for $10,135,236, arising in
connection with the direct guarantee by Owens Corning
of obligations under the WestLB Facility. This Claim
will constitute a Senior Indebtedness Claim under the
Plan and will be included in Class 6B;
(d) OC Funding will be deemed to have an allowed claim
against Owens Corning amounting to $50,858,291,
representing a negotiated portion of the claims of OC
Funding against Owens Corning under the intercompany
notes entered into in connection with the OC Funding
Debentures, the KBC Agreement and the WestLB Facility.
This claim will constitute a General Unsecured Claim
under the Plan and will be included in Class 6A; and
(e) OC Funding will be deemed to have an allowed claim
against Owens Corning for $23,336,305, representing
the remaining portion of its claims against Owens
Corning arising from the OC Funding Debentures, the
KBC Agreement and the WestLB Facility. This claim
will constitute a Subordinated Claim under the Plan
and will be included within Class 11;
(2) Owens Corning will make all distributions on account of
OC Funding's Allowed Claims directly to the Bank of New
York, Special Situations and WestLB, or their successors
and assigns, ratably in accordance with the principal
amounts of the claims;
(3) So long as the terms of the Settlement Agreement are
included in or incorporated into the Plan, each of the
Claimants, in its capacity as a party to the Settlement
Agreement, will not contest the confirmation of the Plan
or the approval of the Disclosure Statement relating to
the Plan, or cause anyone to contest the confirmation of
the Plan or the approval of the Disclosure Statement on
its behalf based on the treatment of the claims resolved
pursuant to the Settlement Agreement;
(4) The Settlement Agreement contains a mechanism by which the
holders of OC Funding Debentures, other than Goldman, may
"join" the Agreement, by executing a Joinder Agreement, as
specified in the Settlement Agreement;
(5) Goldman represents that it will take all action necessary
to cause the dismissal, with prejudice, of the Court
proceeding in The Netherlands, captioned Goldman
Sachs/Petition for the Bankruptcy of OC Funding BV, No.
54729/FT-RK 03.514;
(6) All Claimants are refrained from commencing, prosecuting,
continuing or cooperating with any involuntary petition in
bankruptcy, dissolution, winding-up, liquidation or
reorganization with respect to OC Funding, either directly
or indirectly; and
(7) The parties exchange mutual releases.
Norman L. Pernick, Esq., at Saul Ewing, LLP, in Wilmington,
Delaware, contends that the Settlement Agreement resolves, in a
manner that the Debtors believe is fair, reasonable and
beneficial, the claims of the Claimants, as well as the
intercompany claims of OC Funding, against Owens Corning. In so
doing, the Settlement Agreement resolves multiple issues as to
whether:
-- the Claimants can recover against Owens Corning through a
direct claim under the guaranty and simultaneously assert a
"derivative" claim for the same amount through OC Funding;
-- the subordination provisions applicable to the loan
agreement between Owens Corning and OC Funding, with
respect to the loan by OC Funding to Owens Corning of the
OC Funding Debentures proceeds, are enforceable; and
-- the disclosures with respect to the OC Funding Debentures
were adequate or, if inadequate, whether any inadequacies
can be the subject of a claim brought by Goldman.
Mr. Pernick adds that the Settlement Agreement permits the
Debtors to avoid the disruption that would result in both the
Netherlands and throughout the rest of Europe from an OC Funding
bankruptcy filing in the Netherlands, or from a bankruptcy filing
by OC Funding in the U.S. Bankruptcy Court for the District of
Delaware. Even if OC Funding were not forced into a bankruptcy
proceeding, a failure to resolve the issues addressed by the
Settlement Agreement likely would divert key management from
important business duties, to the overall detriment of the
Company.
Headquartered in Toledo, Ohio, Owens Corning --
http://www.owenscorning.com-- manufactures fiberglass insulation,
roofing materials, vinyl windows and siding, patio doors, rain
gutters and downspouts. The Company filed for chapter 11
protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837).
Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom
represents the Debtors in their restructuring efforts. On Jun 30,
2001, the Debtors listed $6,875,000,000 in assets and
$8,281,000,000 in debts. (Owens Corning Bankruptcy News, Issue No.
75; Bankruptcy Creditors' Service, Inc., 215/945-7000)
PARMALAT CAPITAL: Preliminary Injunction Hearing Set for June 4
---------------------------------------------------------------
Judge Drain adjourns the hearing to consider the Liquidators
request for preliminary injunction to June 4, 2004 at 10:00 a.m.
In the interim, all persons subject to the jurisdiction of the
United States Bankruptcy Court are enjoined and restrained from
commencing or continuing any action to collect a prepetition debt
against Parmalat Capital Finance without obtaining relief from
the Court.
Any objections to the further continuation of the Preliminary
Injunction must be in writing, filed with the U.S. Bankruptcy
Court for the Southern District of New York and served by June 3,
2004.
Parmalat Finanziaria SpA's time to answer the Section 304
Petitions is extended until June 21, 2004.
Headquartered in Wallington, New Jersey, Parmalat USA Corporation
-- http://www.parmalatusa.com/-- generates more than 7 billion
euros in annual revenue. The Parmalat Group's 40-some brand
product line includes milk, yogurt, cheese, butter, cakes and
cookies, breads, pizza, snack foods and vegetable sauces, soups
and juices and employs over 36,000 workers in 139 plants located
in 31 countries on six continents. The Company filed for chapter
11 protection on February 24, 2004 (Bankr. S.D.N.Y. Case No. 04-
11139). Gary Holtzer, Esq., and Marcia L. Goldstein, Esq., at
Weil Gotshal & Manges LLP represent the Debtors in their
restructuring efforts. On June 30, 2003, the Debtors listed
EUR2,001,818,912 in assets and EUR1,061,786,417 in debts.
(Parmalat Bankruptcy News, Issue No. 16; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
PG&E NATIONAL: Court Okays Global Settlement Pact with Algonquin
----------------------------------------------------------------
On October 8, 2003, USGen New England, Inc., and Algonquin Gas
Transmission Company entered into a stipulation providing for the
rejection of certain gas transportation contracts between them.
Algonquin filed revised tariff sheets with the Federal Energy
Regulatory Commission to implement meter access charges
applicable to natural gas deliveries to USGen's Manchester Street
and Brayton Point facilities on October 9, 2003.
USGen asked the Court to enforce the Stipulation for Algonquin's
violation of the automatic stay. Algonquin objected to USGen's
request.
Consequently, the parties agreed to withdraw without prejudice,
USGen's request and Algonquin's objection.
On December 19, 2003, Algonquin filed Claim No. 197, as amended
on January 9, 2004 by Claim No. 349, asserting $481 million in
damages arising from USGen's rejection of the gas transportation
contracts. Algonquin and its affiliates -- Texas Eastern
Transmission, LP, and Moss Bluff Hub Partners, LP -- also asked
the Court to lift the automatic stay in USGen's and the NEG
Debtors' cases so it may apply certain funds drawn from a letter
of credit issued by JPMorgan Chase Bank for the benefit of
Algonquin, Texas Eastern, and Moss Bluff. USGen, NEG, the ET
Debtors and JPMorgan disputed Algonquin's Lift Stay request.
To avoid further litigation, the PG&E Debtors entered into a
Global Settlement with Algonquin to resolve the issues relating to
USGen's Enforcement Request, the Lift Stay Request, the Algonquin
Claim in USGen's Chapter 11 case, and the pending FERC Filing.
The salient provisions of the Global Settlement Agreement are:
(a) Algonquin and its affiliates, Texas Eastern and Moss
Bluff, are allowed to retain $3,020,594 from the JPMorgan
Letter of Credit to be applied against unpaid obligations
of USGen, ET Gas, ET Power, and Attala Energy Company, a
non-Debtor affiliate of NEG. Attala is named as an
applicant under the Letter of Credit;
(b) Algonquin will return $6,979,406 of excess funds to USGen
from the JPMorgan Letter of Credit. USGen will segregate
the Excess Funds in an interest-bearing account pending a
resolution of the claims to these funds that have been or
may be asserted by USGen, JPMorgan, ET Power and ET Gas;
(c) Algonquin is allowed a $4,000,000 general unsecured claim
in USGen's Chapter 11 case, in full and final satisfaction
of the Algonquin Claim including, without limitation, any
other prepetition claims arising under or in connection
with USGen's case;
(d) To resolve pending matters before the FERC, USGen and
Algonquin entered into various new gas transportation
service and rate agreements for future service on
Algonquin's pipeline system to provide, among other
matters, service to USGen's Manchester Street and Brayton
Point Facilities;
(e) The Enforcement and the Lift Stay Requests are dismissed
with prejudice; and
(f) All other claims of Algonquin in USGen's Chapter 11 case,
including but not limited to Claim Nos. 197 and 349, are
disallowed.
Contemporaneously, Algonquin is filing with the FERC:
-- a request to terminate the FERC proceedings; and
-- a tariff filing pursuant to Section 4 of the Natural Gas
Act to:
(i) restructure, in part, the service utilized to serve
the Manchester Street Facilities;
(ii) implement initial recourse rates for the lateral
facilities serving the Manchester Street and Brayton
Point Facilities; and
(iii) implement negotiated rate and discounted rate
agreements between USGen and Algonquin for future
service.
At the Debtors' request, the Court approves the Global Settlement
Agreement.
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.
21; Bankruptcy Creditors' Service, Inc., 215/945-7000)
PHILLIPS VAN: Posts Improved Q1 Results & Raises 2004 Guidance
--------------------------------------------------------------
Phillips-Van Heusen Corporation reported first quarter net income
of $1.6 million which, after deducting preferred stock dividends,
resulted in a net loss of $0.12 per diluted common share.
Excluding restructuring and other items, net income in the current
year's first quarter improved to $11.1 million, or $0.18 per
diluted common share, which was $0.05 ahead of the Company's
previous earnings guidance and the First Call consensus estimate.
In the prior year's first quarter, net loss was $2.2 million, or
$0.22 per diluted common share. Excluding restructuring and other
items, net income in the prior year's first quarter was $7.8
million, or $0.11 per diluted common share.
Restructuring and other items in the current year include the
costs of (i) exiting the wholesale footwear business and
relocating the Company's retail footwear operations, (ii) closing
underperforming retail outlet stores and (iii) debt extinguishment
associated with the Company's debt refinancing in February, 2004.
Restructuring and other items in the prior year include (i) the
operating losses of certain Calvin Klein businesses which the
Company has closed or licensed, and associated costs in connection
therewith and (ii) the costs of certain duplicative personnel and
facilities incurred during the integration of various logistical
and back office functions.
The 42% improvement in first quarter net income, excluding
restructuring and other items, was due to earnings increases in
both of the Company's operating segments. Operating earnings in
the Apparel and Related Products segment increased 37% over the
prior year as each of the Company's divisions registered earnings
improvement. The Company's wholesale apparel business continued
its strong sales and earnings growth, aided by excellent
performance in dress shirts. Positive comp store performance
across the Company's retail businesses for the quarter continued
the favorable trends begun during last year's Christmas season
and, coupled with clean inventories, yielded operating income
improvement. Operating earnings in the Calvin Klein Licensing
segment increased 7% over the prior year as the Company's growth
initiatives for that brand began to take hold.
Total revenues in the first quarter decreased 1% to $381.3 million
from $383.7 million in the prior year. The prior year's first
quarter includes $20.5 million of revenues from the wholesale
footwear business and $6.0 million from the Calvin Klein wholesale
collection apparel business. These businesses were exited as of
the end of fiscal 2003. Excluding these businesses, revenues from
ongoing operations increased 7% over the prior year. This increase
was driven by revenue growth in the Company's wholesale apparel,
retail outlet and Calvin Klein licensing businesses.
Commenting on these results, Bruce J. Klatsky, Chairman and Chief
Executive Officer, noted that "We are extremely pleased with our
first quarter results. The continued strong revenue and earnings
growth exhibited by our wholesale apparel and Calvin Klein
licensing businesses, combined with earnings increases in our
retail outlet businesses, enabled our earnings to be well ahead of
our previous earnings guidance. In addition, we ended the quarter
with a $78 million improvement in our net debt position over the
prior year as our strategic initiatives, which include exiting the
wholesale footwear business and the closing of underperforming
outlet stores across our retail chains, helped contribute to a 15%
decrease in receivables and a 23% decrease in inventories compared
with the prior year."
Mr. Klatsky continued, "Our focus remains on maximizing the growth
opportunities of the Calvin Klein brands and our existing
wholesale dress shirt and sportswear businesses. The Calvin Klein
better women's sportswear line, licensed to a joint venture formed
by Kellwood and GAV, has received excellent response and sales
have been strong since its launch in March. Similarly, our
bookings for the launch of the Calvin Klein men's better
sportswear line for Fall 2004 continue to exceed our initial
plans. We are also excited about our three new dress shirt
licensing arrangements with BCBG Max Azria, MICHAEL Michael Kors
and Chaps which will all principally begin shipping in late 2004."
Mr. Klatsky concluded, "Given our first quarter results, we are
raising our 2004 earnings per share guidance (excluding
restructuring and other items) to a range of $1.13 to $1.18, with
second quarter earnings in the range of $0.24 to $0.25 per share.
Including restructuring and other items, we anticipate that GAAP
earnings per share in 2004 will be in the range of $0.53 to $0.58,
with second quarter earnings in the range of $0.17 to $0.18 per
share. Total revenues in 2004 are expected to be $1.610 billion to
$1.625 billion, or an increase of approximately 1.75% - 2.75% over
2003. Revenues for 2004 are being impacted by the exiting of the
wholesale footwear business and the retail store closing program."
Phillips-Van Heusen Corporation (S&P, BB Corporate Credit Rating)
is one of the world's largest apparel and footwear companies. It
owns and markets the Calvin Klein brand worldwide. It is the
world's largest shirt company and markets a variety of goods under
its own brands, Van Heusen, Calvin Klein, Izod, Bass and G.H. Bass
& Co., and its licensed brands Geoffrey Beene, Arrow, Kenneth Cole
New York, Reaction by Kenneth Cole and BCBG Max Azia.
PLEJ'S LINEN: Secures Nod to Hire Rayburn Cooper as Attorneys
-------------------------------------------------------------
The U.S. Bankruptcy Court for the Western District Of North
Carolina, Charlotte Division, gave its stamp of approval to PLEJ'S
Linen Supermarket SoEast Stores LLC's application to retain and
employ Rayburn Cooper & Durham, P.A., as their bankruptcy counsel
in their chapter 11 proceedings.
The Debtors expect Rayburn Cooper to:
(a) provide legal advice with respect to the Debtors' powers
and duties;
(b) prepare and pursue confirmation of a plan and approval of
a disclosure statement;
(c) prepare on behalf of the Debtors necessary applications,
motions, answers, orders, reports and other legal papers;
(d) appear in Court and represent the interest of the Debtors
before the Court; and
(e) perform all other legal services for the Debtors that may
be necessary and appropriate in this case.
Rayburn Cooper has informed the Debtor that its billing rates for
this year vary from:
Professionals Billing Rate
------------- ------------
partners $205 to $425per hour
associates $125 to $170 per hour
paraprofessionals $75 to $95 per hour
Rayburn Cooper reports its fee schedule for the year 2004:
Attorneys Billing Rate
--------- ------------
C. Richard Rayburn, Jr. $425 per hour
Albert F. Durham $350 per hour
W. Scott Cooper $285 per hour
Paul R. Baynard $255 per hour
Patricia B. Edmondson $220 per hour
James B. Gatehouse $210 per hour
G. Kirkland Hardymon $205 per hour
Sherry L. Huckabee $170 per hour
David S. Melin $170 per hour
J. Christopher Riddle $150 per hour
John R. Miller, Jr. $150 per hour
Heather N. Johnson $125 per hour
Ross R. Fulton $125 per hour
Paralegals Billing Rate
---------- ------------
Julia L. Robinson $95 per hour
Deborah L. Gould $85 per hour
Lisa S. Kelly $85 per hour
Donna N. George $75 per hour
Elizabeth A Vincent $75 per hour
Headquartered in Rock Hill, South Carolina, Plej's Linen
Supermarket SoEast Stores LLC, with its debtor-affiliates, are
engaged primarily in two core businesses: retail sale of first
quality program home accessories for bed, bath, window, decorative
and house wares and limited closeout and discontinued
opportunistic merchandise; and wholesale distribution of similar
bed and bath textiles. The Company filed for chapter 11 protection
on April 15, 2004 (Bankr. W.D. N.C. Case No.
04-31383). John R. Miller, Jr., Esq., and Paul R. Baynard, Esq.,
at Rayburn Cooper & Durham, P.A., represent the Debtors in their
restructuring efforts. When the Company filed for protection from
their creditors, they listed both estimated debts and assets of
over $10 million.
QWEST COMMS: Porsche Cars Renews 2-Year $6 Million Contract
-----------------------------------------------------------
Qwest Communications International Inc. (NYSE: Q) announced that
Porsche Cars North America, the exclusive importers of Porsche
vehicles for the United States and Canada, has renewed its two-
year, six-million dollar contract with Qwest for advanced
communications network services throughout its 260 locations in
North America.
Qwest is providing Porsche with a range of data and communication
products including: switched and dedicated voice services, toll
free services, dedicated Internet access (DIA), international and
domestic frame relay, international and domestic private lines and
menu routing services.
Using Qwest's communications services Porsche employees can better
communicate across the company's multiple locations on Qwest's
high-speed network and quickly process customers' requests for
specific Porsche parts and services. Qwest is also powering 800-
PORSCHE with its Web contact center solutions, which helps Porsche
route its customers' calls and answer requests for service and
roadside assistance.
"Porsche customers are the most demanding in the world," said Phil
Davis, general manager, IT, Porsche Cars North America. "We
strive, along with our dealers, who are on the front line of
customer contact, to meet and exceed their expectations. Porsche
needs to provide its dealers with the best service possible, and
Qwest has helped us do that. They continue to implement quickly
and maintain a high level of customer service commitment."
"We are thrilled to continue our relationship with Porsche and
provide them with the full gamut of network services. From faster
communication and an enhanced online experience, to making call
centers more efficient, Qwest has Porsche's communications needs
covered to help them better serve their customers," said Cliff
Holtz, executive vice president of Qwest business markets group.
"Porsche's contract renewal illustrates that Qwest's dedication to
providing best-in-class service is truly resonating with our
customers and we are confident we will continue to enhance our
reputation as a customer-centric communications service provider."
About Porsche Cars North America
Porsche Cars North America, Inc., based in Atlanta, Ga., and its
subsidiary, Porsche Cars Canada, Ltd., are the exclusive importers
of Porsche vehicles for the United States and Canada. A wholly
owned indirect subsidiary of Dr. Ing. h.c.F Porsche AG, PCNA
employs approximately 200 people who provide Porsche vehicles,
parts, marketing and training for its 204 dealers in North
America. They, in turn, provide Porsche with best-in-class
service.
About Qwest
Qwest Communications International Inc. (NYSE: Q) is a leading
provider of voice, video and data services to more than 25 million
customers. The company's 46,000 employees are committed to the
"Spirit of Service" and providing world-class services that exceed
customers' expectations for quality, value and reliability. For
more information, please visit the Qwest Web site at
http://www.qwest.com
At March 31, 2004, Qwest Communications International, Inc.'s
balance sheet shows a stockholders' deficit of $1,251,000,000
compared to a deficit of $1,016,000,000 at December 31, 2003.
RAPIDTRON INC: Needs More Capital to Sustain Operations
-------------------------------------------------------
Rapidtron Inc. is headquartered in Costa Mesa, California, and
intends to become the leading provider of Radio Frequency (RF)
smart card access control and ticketing/membership systems by
providing the premier technology for operator-free entry and exit
turnstiles.
The Company is currently the exclusive North American distributor
for Axess AG, an Austrian developer and manufacturer of software
and equipment for entry and exit control utilizing bar code and
Smart chip technology. The equipment consists of cards, card
readers, turnstiles, radio frequency emitters and other equipment
which may be identified as useful in a particular market. Axess
AG manufactures some of the equipment components and assembles
others manufactured by various European vendors. Axess AG has
installed its RF smart card technology in over 2,000 smart access
gates and 1,000 point-of-sale systems to transit companies and
vacation resorts in Europe.
As of December 31, 2002, the Company had $443,312 in total assets,
including $10,835 in cash, $79,159 in accounts receivable,
$252,436 in inventories, and $73,911 in prepaid expenses and other
current assets. As of December 31, 2003, it had $1,055,243 in
total assets, including $84,256 in cash, $317,387 in accounts
receivable, $558,202 in inventories, and $67,676 in prepaid
expenses and other current assets. The Company considers the
accounts receivable to have a high probability of collection, as a
majority of the receivables are from large customers in the
fitness club industry.
At December 31, 2003, the Company had a working capital deficit of
$396,115. Its negative cash flow from operations resulted
primarily from losses, increased receivables and inventory along
with the pay down of payables to key vendors in order to support
growth in the fitness category. Cash flow needs were met for the
December 31, 2003 quarter through sales revenues and the proceeds
of convertible loans and private equity placements. During the
three month period ended December 31, 2003, Rapidtron sold a total
of 182,500 shares of restricted common stock to three accredited
investors for total consideration of $193,673 and paid total
commissions of $13,367 in connection with the sale of its common
stock.
Management expects to continue operating at a negative cash flow
through at least the first quarter of fiscal year 2004 as
Rapidtron continues efforts to develop its business. Thus, its
success, including the ability to fund future operations, depends
largely on the Company's ability to secure additional funding.
Mangement cannot assure that Rapidtron will be able to consummate
debt or equity financings in a timely manner, on a basis favorable
to the Company, or at all.
The Company needed cash flow of approximately $125,000 per month
during the first quarter of 2004 to pay for rent, salary,
marketing, services, software interface, inventory, and
receivables, excluding the anticipated increase in expenses
related to sales and marketing efforts and new business
development. It expects to receive cash flow from revenues
averaging at least approximately $700,000 to $1,250,000 per month
during 2004.
During 2004, management expects to need cash flow of approximately
$2,000,000 for operating expenses, new business development,
potential merger opportunities, marketing, services, and software
development for interface with business systems in targeted
industries, inventory and receivables. It is anticipated that
Rapidtron will receive cash flow from operating revenues totaling
approximately $8,400,000 to $15,000,000 in 2004.
Historically, Rapidtron has financed operations through cash flow
from operations, debt proceeds and the sale of equity securities.
It is anticipated that it may be required to sell additional
equity securities and/or incur additional debt until such time as
it can generate sufficient revenues from operations to cover
operating expenses. Currently the Company has no external sources
of liquidity. The allocation of cash flow in operating the
business will be dictated by where those resources can optimize
results through the production of sustained revenue growth. If
the Company does not raise the necessary capital or earn
sufficient revenue to cover the foregoing expenses, it will reduce
variable overhead, such as marketing expenses, travel and
entertainment, software development, and reduction of personnel as
feasible. In the event it is unable to generate capital from
loans, the sale of stock, or revenues, it will be forced to sell
its assets or curtail operations until additional capital is
available.
On March 17, 2004, the Company's independent auditors indicated:
"As of December 31, 2003, the Company has a working capital
deficit of approximately $396,000, recurring losses from
operations, an accumulated deficit of approximately $4,385,000 and
has generated an operating cash flow deficit of approximately
$2,700,000 for the year then ended. As discussed in Note 1 to the
financial statements, additional capital will be necessary to fund
the Company's long-term operations. These conditions, among
others, raise substantial doubt about the Company's ability to
continue as a going concern."
RELIANT ENERGY: Fitch Ratings Optimistic about Planned Asset Sale
-----------------------------------------------------------------
Reliant Energy, Inc. announced that it reached a definitive
agreement to sell a portion of its New York-based generating
portfolio to Canadian based Brascan Corp. for $900 million in
cash. The assets to be sold consist of 770 megawatts (MW) of
generating capacity located in upstate New York, including 675 MW
of hydropower plants. Fitch Ratings continues to maintain the
following credit ratings for RRI:
--Senior secured debt 'B+';
--Senior unsecured debt 'B';
--Convertible senior subordinated notes 'B-'.
The Rating Outlook remains Stable.
On balance, Fitch views the planned asset divestiture as a
positive credit development. In particular, the loss in future
earnings and cash flow resulting from the sale should be offset by
the expected reduction in consolidated debt leverage and improved
financial flexibility and asset coverage at the RRI holding
company level. Specifically, RRI will be required to utilize net
cash proceeds from the transaction to substantially reduce
outstandings under the Orion Power (ORN) New York/Midwest term
loan facilities ($1.1 billion (net of restricted cash) as of March
31, 2004) which are scheduled to mature in October 2005. In
addition to reducing near-term refinancing risk, Fitch notes that
full repayment of the ORN subsidiary debt would substantially
improve RRI's ability to extract excess cash generated by ORN for
debt service at the corporate level.
The transaction is slated to close within three months subject to
Hart Scott Rodino review and regulatory approval by the FERC and
the New York Public Service Commission. Fitch will continue to
monitor developments related to the sale as well as RRI's overall
progress in achieving its stated goals for reducing debt leverage
over the next several years.
RESIDENTIAL ACCREDIT: Fitch Affirms B Rating on 1998-QS9 Class B-2
------------------------------------------------------------------
Fitch Ratings has taken action on the following Residential
Accredit Loan mortgage-pass through certificate:
Residential Accredit Loans, Inc. Mortgage Asset Backed Pass-
Through Certificates, Series 1998-QS9
--Classes A, R affirmed at 'AAA';
--Class M-1 affirmed at 'AAA';
--Class M-2 affirmed at 'AAA';
--Class M-3 affirmed at 'AA';
--Class B-1 affirmed at 'BBB-';
--Class B-2 affirmed at 'B'.
These affirmations are due to credit enhancement levels consistent
with future loss expectations.
RXBAZAAR INC: Auditors Express Doubt in Going Concern Ability
-------------------------------------------------------------
RxBazaar, Inc. is a distributor of brand and generic
pharmaceutical and medical products, as well as other related
products aimed at its target market of independent pharmacies. It
sells its products to distributors, wholesalers, pharmacies and
other customers and organizations licensed to purchase
pharmaceutical products. On February 23, 2001, the Company
acquired FPP Distribution, Inc. RxBazaar conducts business in all
fifty U.S. states as well as Puerto Rico.
RxBazaar's revenues and results of operations have been
significantly affected, and are likely to continue to be affected,
by a shortage of working capital. The Company needs working
capital to buy inventory, since its business depends on having a
sufficient amount of enough different products to attract
customers and generate sales. As of December 31, 2003, it had
5,420 different products posted for sale on its website, with a
total listed sales value of approximately $257 million. Management
believes that the number of items posted for sale is an indication
of continued interest in its online marketplace among potential
sellers, and makes the site more attractive to buyers. The number
of items posted for sale, however, does not directly effect the
Company's financial condition or results of operations. Unless it
is able to attract additional buyers to its website, increase
sales and improve its gross profit margin, it will not be able to
operate profitably.
At December 31, 2003 the Company's auditors expressed doubt about
RxBazaar's ability to continue as a going concern. Management has
been addressing this issue by seeking arrangements to raise
additional working capital through one or more offerings of debt
or equity securities to strengthen the Company's financial
condition and support its growth. If able to generate sufficient
working capital by selling it s securities, then management hopes
to conduct operations on a profitable basis, and to generate
additional working capital for operations. However, there is no
assurance that RxBazaar will be able to raise the necessary
capital to sustain operations or operate profitably.
SOLUTIA INC: Retirees Commence Action to Protect Benefits
---------------------------------------------------------
The Official Committee of Retirees wants to safeguard health,
disability, and life insurance benefits for over 24,000 retirees,
spouses and dependents of Solutia, Inc., and its former parent
company Monsanto Company, now Pharmacia Corporation. The
Retirees who are at particular risk are those whose poor health
makes health, disability, and life insurance otherwise
unavailable.
Nicholas A. Franke, Esq., at Spencer Fane Britt & Browne, LLP, in
St. Louis, Missouri, relates that Solutia currently pays
approximately $100,000,000 yearly for retirement benefits, with
more than $1,000,000,000 in total retiree benefit claims.
Solutia currently pays an estimated $60,000,000 per year for
those who retired from Monsanto, who hold a total of some
$800,000,000 in retiree benefit claims.
Mr. Franke asserts that timing is critically important to the
Retirees. If Solutia reduces or terminates current retiree
benefits prior to a determination of the obligations of
Monsanto's corporate successors to provide those same benefits,
the retirees would be irreparably harmed by the absence of
health, disability, and life insurance benefits while the
Retirees' recourse to the non-debtors is being adjudicated.
Solutia will be unable to formulate a meaningful proposal to
Retirees until the obligations of the former Monsanto Company,
Pharmacia Corporation, and Pharmacia's former subsidiary, renamed
Monsanto Company, to pay Retiree Benefits upon Solutia's default
are finally determined.
According to Mr. Franke, Solutia has agreed to disclose to the
Retirees Committee the most complete and reliable information now
available regarding the Retirees' benefit plans and collective
obligations to the Retirees under those plans. Solutia and the
Retirees Committee plan to formulate an acceptable proposal for
possible modification of benefits immediately after a
determination of the Defendants' shared obligations for Retiree
Benefits.
Without prior determination of the obligations of Pharmacia and
Monsanto II, the Retirees may be forced to bear severe reductions
or even terminations of Retiree Benefits although Pharmacia and
Monsanto II later could be found liable to pay those same Retiree
Benefits. Retirees, particularly those now uninsurable due to
severe illness, would unnecessarily suffer from reduced or
canceled health, disability, and life insurance benefits if
Pharmacia and Monsanto II obligations for those benefits are
later determined.
Without prior determination of all obligations to Retirees, there
can be no assurance that a reduction of Retiree Benefits under
Section 1114 of the Bankruptcy Code would be fair and equitable
to all creditors, Solutia, and all affected parties.
Mr. Franke maintains that Pharmacia and Monsanto II are
responsible for providing Retiree Benefits because:
(a) Retirees never consented to the delegation or otherwise
agreed to release Monsanto from its obligations to provide
promised Retiree Benefits to its former employees;
(b) Monsanto delegated the obligations to provide the Retiree
Benefits to Solutia in violation of Monsanto's contractual
promises under ERISA and common law;
(c) Monsanto had promised Retirees lifetime and vested Retiree
Benefits;
(d) Retirees relied, to their detriment, on Monsanto's
promises of lifetime and vested Retiree Benefits; and
(e) Monsanto intentionally misrepresented to Retirees the
future security of the Retiree Benefits in violation of
its fiduciary duties under ERISA.
If Solutia does not continue to provide the Retirees with current
levels of health benefits and is determined to be insolvent, the
Retirees can look to Pharmacia and Monsanto II for Retiree
Medical Benefits, as made clear in a 2001 Class Action Settlement
Agreement between some Retirees and Solutia, Pharmacia, and
Monsanto II, and under the common law of delegation.
However, the 2001 Settlement Agreement does not affect the rights
of Retirees who were not part of the class action and who now
seek a determination that Pharmacia and Monsanto II must provide
health benefits as successors to the former Monsanto, which
delegated its Retiree Benefit obligations to Solutia. These
Retirees include former Monsanto employees who retired after
October 19, 2001. The Settlement Agreement also would not bar
recourse to Pharmacia and Monsanto II for promised disability and
life insurance benefits upon Solutia's default after Section
1114 procedures.
Mr. Franke contends that because the Retirees never consented to
any non-recourse delegation to Solutia of Monsanto's duties to
provide Retiree Benefits, Monsanto remains obligated to provide
Retiree Benefits. Pharmacia and Monsanto II succeeded to
Monsanto's obligations to provide the Retiree Benefits. In
addition, by delegating its Retiree Benefit obligations to
Solutia, a less financially stable company than Monsanto was at
the time, Monsanto violated its contractual promises to its
employees under ERISA and common law and its fiduciary duties
under ERISA.
Absent prompt determination of all Retiree Benefits rights held
by all Retirees against the Defendants, all Retirees risk losing
significant health, disability, and life insurance benefits that
ultimately are the obligations of Pharmacia and Monsanto II.
Accordingly, the Retirees Committee seeks a declaratory judgment
from the Court that Pharmacia and Monsanto II, as Monsanto's
successors, share responsibility for providing the Retiree
Benefits to the Retirees, and that Pharmacia and Monsanto II must
pay Retiree Benefits to the Retirees if Solutia reduces or
terminates Retiree Benefits pursuant to Section 1114 of the
Bankruptcy Code.
The Retirees Committee also asks the Court to equitably
subordinate all claims held by Pharmacia and Monsanto II
resulting from their payment of Retiree Benefits on behalf of
Solutia after a finding of joint and several liability.
Subordination to a priority below that of the class of general
unsecured claims is appropriate due to Monsanto's inequitable
actions, misrepresentations, and other misconduct related to the
delegation of Retiree Benefits to Solutia. Payment of these
claims only after payment in full of all other unsecured claims
is consistent with the Bankruptcy Code under the circumstances.
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. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SPIEGEL GROUP: Pangea Acquisition Wins Bid for Newport Assets
-------------------------------------------------------------
At the Auction, Pangea Acquisition 8 Limited submitted the
highest and best offer of $28,600,000 for substantially all
assets of Newport News, Inc., Newport News Services, LLC, and New
Hampton Realty Corp. NNI Acquisition, Inc., submitted a
$28,350,000 offer and is, therefore, the Back-up Bid.
Thus, the Court authorizes the Debtors to consummate and
implement the Sale of the Newport Assets to Pangea pursuant to
all transactions contemplated under the Final Purchase Agreement.
Judge Blackshear also authorizes the Debtors to assume and assign
to Pangea the Designated Contracts, and Pangea to assume the
Assumed Liabilities.
Headquartered in Downers Grove, Illinois, Spiegel, Inc. --
http://www.spiegel.com/-- is a leading international general
merchandise and specialty retailer that offers apparel, home
furnishings and other merchandise through catalogs, e-commerce
sites and approximately 560 retail stores. The Company filed for
Chapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No.
03-11540). James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq.,
at Shearman & Sterling represent the Debtors in their
restructuring efforts. When the Company filed for protection from
its creditors, it listed $1,737,474,862 in assets and
1,706,761,176 in debts. (Spiegel Bankruptcy News, Issue No. 25;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
STELCO: Monitor Ernst & Young Files 4th CCAA Restructuring Report
-----------------------------------------------------------------
Stelco Inc. (TSX:STE) announced that the Fourth Report of the
Monitor has been issued and filed by Ernst & Young Inc. and is now
available through a link provided on Stelco's Web site.
The Report provides an update on developments surrounding the
Company's Court-supervised restructuring under the Companies'
Creditors Arrangement Act since the tabling of the Third Report of
the Monitor on April 7, 2004. Contents of the Fourth Report of the
Monitor include, but are not limited to, the following.
Discussions with stakeholders
The Monitor reports that the Company has initiated or continued
discussions with representatives of a number of stakeholders since
the issuance of the Third Report. These stakeholders include
Active Salaried Employees; Retired Salaried Employees; Locals of
the USWA; banks; bondholders, plus the governments of Hamilton,
Ontario and
Canada.
Stelco advised the Monitor that it has provided a Stakeholder
Presentation to a number of stakeholders and that it would like to
provide representatives of the USWA Locals with that Presentation
if appropriate confidentiality arrangements are entered into. The
Monitor reports that Stelco has offered to meet with these
representatives to review the table of contents of the
presentation in order to discuss which segments would need to be
covered by a confidentiality agreement. The Monitor is advised
that this issue has not been resolved.
The Monitor reports that the Company has also offered to meet with
the representatives of the Locals and to provide them with the
non-confidential elements of a Pension Plan Presentation. No such
meeting has occurred.
The Lake Erie collective bargaining agreement
The Monitor reports that USWA Local 8782 has indicated that it
desires to bargain for a new collective bargaining agreement. The
Monitor understands that the Company has advised the Local of the
view that, in light of Stelco's circumstances, it would be more
practical and appropriate to discuss the Lake Erie CBA in the
context of the broader discussions the Company wishes to have with
all
stakeholders, including the other USWA Locals, as part of the
restructuring process. The Monitor understands that Local 8782
does not wish to proceed with collective bargaining discussions
within that wider context. The Local has submitted a request for
the appointment of a Conciliation Officer. The Monitor notes that
the Company has taken the position that the request is stayed
pursuant of the terms of the Initial Order issued by the Court on
January 29, 2004. The Ontario Ministry of Labour has yet to
respond to the request.
The Monitor's concern about
the lack of progress and the status of Lake Erie
Although the Company and the USWA Locals have made some progress
in having preliminary discussions regarding the restructuring
process, the Report states that "...the Monitor is concerned with
the lack of tangible progress that has been made." The Report also
adds that "The potential expiry of the Lake Erie CBA must be
addressed forthwith," noting that, "In all likelihood, a strike of
any length would result in the liquidation of Stelco."
The Monitor agrees with the Ontario Government that the
appointment of a neutral third party mediator would be a positive
step in assisting Stelco and the USWA Locals to commence
meaningful dialogue with respect to the restructuring. However,
the Report notes the Monitor's concern that the other stakeholders
must ultimately be involved in the restructuring process once the
discussions between the Company and the USWA Locals have reached a
point where the participation of the other stakeholders is
warranted.
Other stakeholders are concerned
The Monitor notes that others are expressing concern about the
uncertainty at Lake Erie and the nature of the discussions that
should be held. Automotive customers have expressed concerns
to Stelco and to the Monitor about continuity of supply. In
addition, the Monitor has had discussion with Counsel to a group
indicating it represents the holders of more than 50% of the
Company's senior unsecured debentures. That Counsel has expressed
the belief that if restructuring discussions are to be successful
they must provide for the involvement of all significant
stakeholders.
Rising steel prices, rising costs
The Monitor reports that customers and suppliers have continued to
support and maintain business relations with the Company. Revenues
continued to improve in April due to price increases in an
environment marked by strong customer demand for steel products.
The Monitor notes that it is not clear how long these conditions
will prevail given the volatile nature of worldwide steel markets.
The Report adds that revenues also rose due to surcharges invoiced
to customers in order to recover increased production costs.
The Monitor reports that Stelco continues to incur substantially
higher costs. Increased production costs are being driven by
unprecedented cost increases for such raw materials as scrap and
coke. Production costs remain high relative to other North
American producers against whom the Company must compete.
Since December 2003, the Report notes, the Company has increased
the use of its credit facilities despite the strong market
conditions and improved production levels.
Production and shipments
The Monitor reports that semi-finished steel production for the
Company's integrated steel operations (Hamilton and Lake Erie)
during the month of April totalled 369,293 net tons. Production
for the first four months of 2004 totalled 1,501,663 net tons,
compared to 1,471,812 net tons produced during the same period in
2003. Shipments in April stood at 354,129 net tons. Shipments for
the first four months of this year totaled 1,395,578 net tons,
compared to 1,351,469 net tons shipped during the same period last
year.
Cash flow forecasts
The Monitor reports the Company's forecast that the
total facility utilization of the Existing Stelco Financing
Agreement will increase by $20.6 million during the period
starting May 15, 2004 and ending September 30, 2004, and will peak
at $295.6 million during the same period. This figure could vary
substantially depending upon the timing of working capital
fluctuations during this period. Based on Stelco's current cash
flow projections, the Company forecasts that it will not need to
draw on the DIP Facility through the period ending September 30,
2004.
The sale of certain Welland Pipe assets
The Report notes that due to the lack of market demand in North
America for very large diameter pipe, the decision to close the
operations of Welland Pipe, located in Welland, Ontario, was
announced by the Company in March 2003. Since that time the
Company has worked to find a buyer for both of Welland Pipe's
steel fabricating mills - the Spiral Pipe Mill and the U&O Mill.
The Monitor reports that Welland Pipe is currently negotiating
with a potential buyer of the Spiral Pipe Mill and hopes to be in
a position to seek the Court's approval of a sale transaction
on May 27, 2004. The Report adds that it is anticipated that a
formal sale process for the sale of the U&O Mill will be
implemented in the near future.
The sale of CHT real property
As outlined in previous Reports, the facilities of this subsidiary
specialising in the heat-treating of steel plate, located in
Richmond Hill, Ontario, have been idled and will not reopen.
Further to a previously announced decision, the Monitor reports
that the Company has recently listed CHT's real property for sale
with a listing price of $3.25 million. Seven offers have been
received, none of which are acceptable to CHT. The Monitor is
advised that further negotiations are continuing with interested
parties.
The full text of the Fourth Report of the Monitor will be
available through a link on Stelco's Web site at
http://www.stelco.ca/
To view the documents now please refer to the following:
http://files.newswire.ca/349/fourthmonitorreports.pdf
http://files.newswire.ca/349/fourthmonitorreportcharts.pdf
Stelco Inc. is a large and diversified Canadian steel producer. It
is involved in all major segments of the steel industry through
its integrated steel business, mini-mills, and manufactured
products businesses. Consolidated net sales in 2003 were $2.7
billion.
SUNNY DELIGHT: Moody's Rates 1st & 2nd Lien Facilities at Ba3/B1
----------------------------------------------------------------
Moody's Investors Service assigned first time ratings for Sunny
Delight Beverages Company, which includes a Ba3 rating to the
proposed $300 million first lien credit facility and a B1 rating
to the proposed second lien term loans up to $75 million. The
outlook is stable.
The $300 million first lien credit facility consists of a
$50 million revolver maturing in 5 years, a $150 million term loan
maturing in 7 years and a Euro equivalent US$100 million term loan
maturing in 7 years.
The ratings recognizes consumers' longstanding brand awareness,
promising trends in targeted demographics, and its value pricing
strategy as compared to other branded juices. Even though there is
a history of decent margins and returns during operations as a
business units under Procter & Gamble (Aa3 senior unsecured
rating), the business and execution risks connected with Sunny
Delight's intention to become a stand-alone entity, constrain the
ratings. Business risk includes the company's ability on materials
sourcing consistent with historical prices under Procter & Gamble
and maintaining product position separate of the resources
afforded by Procter & Gamble. Less than optimal results during the
fiscal year ended June 30, 2003 as the company underwent a faulty
marketing and advertising strategy, the unstable nature of
consumers with dietary preferences (e.g. low carbohydrates or low
sugar), and the competitive environment of the fragmented beverage
industry also constrain the ratings. The ratings also show risks
related to the management's ability to rejuvenate the brands
without negative effects on profitability.
The stable ratings outlook shows some tolerance for decent
fluctuations in financial performance during the company's
transition and integration process, says Moody's.
The ratings are dependent on the realization of the proposed
collateral agreements and final documentation review and
intercompany funding relationships.
Sunny Delight Beverages Company is a global manufacturer and
distributor of juice drinks under two brand names: Sunny D and
Punica. Products are sold in the US, Canada, the United Kingdom,
Ireland, France, Spain, and Portugal with Punica having a leading
market position in Germany and being one of the largest fruit-
based drinks in Europe.
SYBRON DENTAL: Moody's Upgrades Low-B Ratings Following Merger
--------------------------------------------------------------
Moody's Investors Service upgraded the ratings of Sybron Dental
Specialties, Inc. (SDS), to reflect the merger of Sybron Dental
Management, Inc. into SDS.
Ratings affected are:
-- $150 million Senior Secured Revolver due, 2007, to Ba2 from
Ba3
-- $90 million Senior Secured Term Loan due, 2009, to Ba2 from
Ba3
-- $150 million Senior Subordinated Notes, due 2012, to B1 from
B2
-- Senior Implied Rating, to Ba2 from Ba3
-- Senior Unsecured Issuer Rating, to Ba3 from B1
The outlook for the ratings is stable.
Moody's based its action on SDS' successful track record of both
organic growth and growth through acquisition combined with the
expected material improvement in credit measures over the past
several years.
Reportedly, SDS' debt has fallen from $341 million as of fiscal
year end September 30, 2002 to about $278 million as of fiscal
year end 2003. For the six months ended March 31, 2004, SDS's debt
has fallen further to $249 million. Moody's expects debt to reduce
another $30 to $40 million in fiscal 2004 to just above $200
million; a 40% reduction in debt since the end of the 2002. Lower
debt levels combined with stable operating performance has caused
SDS debt metrics to improve, says Moody's.
The upgrades incorporate the effects of a positive operating
environment shaped by an aging population and the strong market
positions in many of its diverse product lines. SDS' position as
one of the top three providers in the dental and orthodontics
markets and its strong brands are viewed as key positives.
The stable ratings outlook reflects Moody's belief that SDS may
continue to reduce debt with improving cash flow but is likely
approaching a debt/equity ratio with which it is comfortable. If
management continues to reduce debt or if its credit profile
continues to improve at the same rate that has occurred over the
past several years, there could be positive movement in the
outlook and ratings.
Orange, California- based Sybron Dental Specialties, Inc., is a
leading manufacturer of products for the professional dental,
orthodontics and infection control markets in the United States
and abroad.
TANGO INC: Plans to Boost Revenue Through Retail Distribution
-------------------------------------------------------------
Todd Violette, chairman and COO of Tango Incorporated
(OTCBB:TNGO), is pleased to announce that Tango's management team
has agreed to pursue the opportunity of distributing pre-printed
tee shirts. This is a change in direction for the Company, which
in the past has been a full service contract screen printer for
major brand name apparel labels.
"I am delighted to announce that this arrangement will provide
Tango the opportunity to maximize our efficiencies and fund our
rapid growth, while simultaneously accomplishing our goal of
increased profitability through expansion into the retail fashion
industry. We believe the market for pre-printed tee shirts to be
in excess of $2 billion a year domestically, and we are well
positioned to tap into that business. Tango can achieve higher
margins and position itself to have greater revenue growth over
the next five years. We have seen apparel companies grow their
revenues to in excess of $200 million within five years. We
believe that there is no reason that we cannot accomplish this
because we are already associated with many distribution
channels," said Todd Violette, COO.
Tango believes that the launch of its products will demonstrate
cutting-edge printing innovation. This line will showcase Tango's
printing techniques, and will have a cross-promotional purpose of
providing customers with innovated prints and embellishments that
are not offered by competitors. In addition the Company plans to
concurrently launch its anti-counterfeiting program that clients
can purchase when they have their shirts printed by Tango.
About Tango
Tango Incorporated -- whose January 31, 2004 balance sheet
shows a stockholders' deficit of $1,053,342 -- is a leading
garment manufacturing and distribution company, with a goal of
becoming a dominant leader in the industry. Tango pursues
opportunities, both domestically and internationally. Tango
provides major branded apparel the ability to produce the highest
quality merchandise, while protecting the integrity of their
brand. Tango serves as a trusted ally, providing them with quality
production and on time delivery, with maximum efficiency and
reliability. Tango becomes a business partner by providing
economic solutions for development of their brand. Tango provides
a work environment that is rewarding to its employees and at the
same time having aggressive plan for growth. Tango is currently
producing for many major brands, including Nike, Nike Jordan and
Chaps Ralph Lauren. Go to http://www.tangopacific.com/for more
information.
TERRA BLOCK: Pollard-Kelley Airs Going Concern Uncertainty
----------------------------------------------------------
Effective March 23, 2004 Terra Block International appointed
Pollard-Kelley Auditing Services, Inc., Fairlawn, Ohio, as its new
independent accountants, commencing with the audit for the fiscal
year ended December 31, 2003, to replace Melton & Co., P.C. The
decision to change independent accountants was approved by the
Board of Directors of the Company.
In its audit report, Pollard-Kelley states, "The Company has not
generated significant revenues or profits to date. This factor
among others, may indicate the Company will be unable to continue
as a going concern. The Company's continuation as a going concern
depends upon its ability to generate sufficient cash flow to
conduct its operations and its ability to obtain additional
sources of capital and financing. The accompanying consolidated
financial statements do not include any adjustments that might
result from the outcome of this uncertainty."
Terra Block International, Inc., a Nevada Corporation, and
formerly L.L. Brown International, Inc., engages in the
application of technologically advanced building products and
technologies through a licensing agreement between its subsidiary
Terra Block Consolidated, Inc. and Terra Block, Inc. The Company
has the exclusive right to make, have made, use and sell TBI
products anywhere in the world. The licensing agreement provides
Terra Block the rights to all patented technologies, trade secret
materials, copyrights, trademarks and all intellectual property.
This technology and expertise is referred to as the "Terra Block
System" and has been used worldwide for 25 years.
TITANIUM METALS: S&P Upgrades Corporate Credit Rating to B from B-
------------------------------------------------------------------
Standard & Poor's Rating Services said it raised its corporate
credit rating on Titanium Metals Corp. to 'B' from 'B-'. The
outlook is stable.
At the same time, Standard & Poor's raised its preferred stock
rating to 'CCC' from 'D' and assigned this rating to the company's
proposed 6.75% Series A convertible preferred stock offering,
which is being issued to tender the company's outstanding 6.625%
convertible preferred securities, Beneficial unsecured convertible
securities. Completion of the tender offer is expected to occur in
the third quarter of 2004.
"The corporate credit rating upgrade reflects Standard & Poor's
assessment that aerospace demand for titanium has reached its
nadir and should begin to improve in 2005," said Standard & Poor's
credit analyst Dominick D'Ascoli. The preferred stock rating
upgrade follows the company's payment of $22 million in accrued
interest and its intention to resume quarterly interest payments
beginning June 1, 2004.
The ratings on Denver, Colorado-based Titanium Metals reflect its
limited product diversity and reliance on the commercial aerospace
industry, somewhat offset by its low debt level and ample
liquidity. Titanium Metals produces titanium from multiple
facilities in the U.S. and Europe, accounting for approximately
18% of worldwide titanium-milled products.
Despite the weak conditions that have existed in the aerospace
industry since the tragic events of Sept. 11, 2001, the company
has withstood the challenges posed by such depressed market
conditions largely through adherence to cost-cutting efforts while
preserving liquidity through working capital management. Indeed,
the company generated $20 million in operating profit before
depreciation and amortization in 2003.
The majority of sales is to the highly cyclical and mature
aerospace market, which accounted for approximately 67% of
Titanium Metals' modest $406 million revenue for the 12 months
ended March 31, 2004. Commercial aviation, which makes up over 80%
of the company's aerospace sales volume, has been severely
affected by the Sept. 11, 2001, terrorist attacks, a sluggish
global economy, the Iraq war, and the SARS epidemic. As a result
of deep losses at many airlines, aircraft orders declined over
this period. Standard & Poor's believes aircraft build rates have
reached trough levels and will linger at these levels in 2004,
growing slowly thereafter as the global economy improves and
airline companies recover. The company benefits from low debt
levels of $16 million (including capital and capitalized operating
leases).
TRENWICK: Committee Hires Towers Perrin for Financial Advice
------------------------------------------------------------
The Official Committee of Unsecured Creditors of Trenwick America
Corporation received permission from the United States Bankruptcy
Court for the District of Delaware to retain and employ Towers,
Perrin, Forster & Crosby as its financial and actuarial advisors.
Brendan L. Shannon, Esq., at Young, Conaway, Stargatt & Taylor,
relates that before filing for chapter 11 protection, Trenwick
agreed with their major creditor constituencies to pursue avenues
of recovery and estate maximization beyond traditional insurance
"run-off" recoveries. To assist the Committee and its
professionals in this exercise, the Committee turned to Towers
Perrin for advice.
Specifically, Towers Perrin will evaluate:
(a) the Debtors' past transactions;
(b) the Debtors' claim reserves;
(c) the capital adequacy the Debtors' of subsidiaries and
affiliates; and
(d) the Debtors' financial condition based on several
benchmarks.
Mr. Shannon tells the Court that Towers Perrin is well qualified
to represent the Committee because it's a specialized consulting
firm focused exclusively on insurance and financial services.
Towers Perrin is the world's largest independent employer of
actuaries focused on insurance, operating through a network of 42
offices in 20 countries. The Firm's clients include Allstate,
Chubb, ING, Prudential and Zurich Financial.
Towers Perrin professionals will bill at their customary hourly
rates:
Position Rate
-------- ----
Principals $900-$325 per hour
Senior Consultants $715-$235 per hour
Consultants $435-$145 per hour
Staff Analysts $290-$50 per hour
The four individuals who will work with the Committee are:
-- Stephen P. Lowe $610 per hour
-- Douglas J. Collins $780 per hour
-- Kate O'Reilly $480 per hour
-- Samir Shah $520 per hour
Mr. Shannon assures the Court that Towers Perrin is
"disinterested" and does not hold or represent an interest adverse
to the Committee or the Debtors' estates in any related matters.
Greenhill & Co., Inc., as previously reported in the Troubled
Company Reporter, serves as Trenwick's financial advisor.
Greenhill is paid $175,000 per month and expects to collect a
$1,000,000 restructuring transaction fee when a plan of
reorganization is consummated.
Trenwick America Corporation, headquartered in Stamford,
Connecticut, is a holding company for operating insurance
companies in the U.S. The Company filed for chapter 11 protection
on August 20, 2003 (Bankr. Del. Case No. 03-12635). Christopher
S. Sontchi, Esq., and William Pierce Bowden, Esq., at Ashby &
Geddes and Benjamin Hoch, Esq., with Irena Goldstein, Esq., and
Carey D. Schreiber, Esq., at Dewey Ballantine LLP represent the
Debtors in their restructuring efforts. As of June 30, 2003, the
Debtor listed approximate assets of $400,000,000 and debts of
$293,000,000. On August 20, 2003, Trenwick Group, Ltd., and
LaSalle Re Holdings Limited also filed insolvency proceedings in
the Supreme Court of Bermuda. On August 22, 2003, the Bermuda
Court granted an order appointing Michael Morrison and John
Wardrop, partners of KPMG in Bermuda and KPMG LLP in the United
Kingdom, respectfully, as Joint Provisional Liquidators in respect
of TGL and LaSalle. The Bermuda Court granted the JPLs the power
to oversee the continuation and reorganization of these companies'
businesses under the control of their boards of directors and
under the supervision of the U.S. Bankruptcy Court and the Bermuda
Court.
VITAL BASICS: Signs-Up Randall Male as Financial Consultant
-----------------------------------------------------------
Vital Basics, Inc., sought and obtained approval from the U.S.
Bankruptcy Court for the District of Maine, to employ Randall E.
Male, President of Milo Enterprises, Inc., as its financial
consultant in the company's chapter 11 proceeding.
Mr. Male will:
a) consult with the Debtor and its legal counsel regarding
sales of assets and debt restructuring;
b) provide ongoing financial advice;
c) prepare projected financial statements;
d) assist with preparation of financial reports;
e) serve as an expert witness;
f) assist with the formulation of a plan of reorganization;
g) advice with respect to the sale and disposition of assets,
if required;
h) provide financial advice with respect to the Debtor's
wholly owned subsidiary, Vital Basics Media, Inc., which
is also a debtor under Chapter 11 of the Bankruptcy Code;
i) provide such other financial advice and consultation as
may be necessary or advisable in connection with the
Debtor's and its subsidiary's Chapter 11 cases.
Mr. Male received a $10,000 retainer from the Debtor. He will
bill the Debtor his current hourly rates of $250 for his services
and a 1% success fee upon a successful asset sale or financing.
Headquartered in Portland, Maine, Vital Basics, Inc.
-- http://www.vitalbasics.com/-- is engaged in the business of
Sales, through direct consumer marketing and at retail, of
nutraceutical and related products throughout the United States
and Canada. The Company filed for chapter 11 protection along with
its debtor-affiliate, Vital Basics Media, Inc., on
May 10, 2004 (Bankr. D. Maine Case No. 04-20734). George J.
Marcus, Esq., at Marcus, Clegg & Mistretta, P.A., represents the
Debtor in its restructuring efforts. When the Debtors filed for
protection from their creditors, Vital Basics, Inc., listed
$6,291,356 in total assets and $16,314,589 in total debts; Vital
Basics Media, Inc., listed total assts of $378,308 and total debts
of $179,242.
WMC FINANCE: Commences Tender Offer for 11-3/4% Senior Notes
------------------------------------------------------------
WMC Finance Co. announced that it has commenced a cash tender
offer and consent solicitation for all of its outstanding 11-3/4%
Senior Notes due 2008.
The tender offer and consent solicitation is being made pursuant
to an Offer to Purchase and Consent Solicitation Statement and
related Consent and Letter of Transmittal dated May 19, 2004,
which set forth a more detailed description of the tender offer
and consent solicitation. The tender offer will expire at 5:00
p.m. (EDT) on June 17, 2004, unless extended or terminated. The
consent solicitation will expire at 5:00 p.m. (EDT) on June 3,
2004, unless extended or terminated.
Under the terms of the tender offer, the consideration for each
$1,000.00 principal amount of the Notes tendered will be
determined on the second business day preceding the scheduled
expiration date of the tender offer, as more fully described in
the Statement.
In conjunction with the tender offer, WMC Finance Co. is also
soliciting the consent of holders of the Notes to eliminate
substantially all of the restrictive covenants and certain events
of default under the indenture governing the Notes and to
eliminate the obligations of WMC Finance Co. to register the Notes
under the related registration rights agreement. WMC Finance Co.
will make a consent payment to all holders whose consents have
been validly tendered and not withdrawn prior to the expiration
date of the consent solicitation.
The closing of the tender offer and consent solicitation is
subject to certain conditions with respect to the Notes,
including, but not limited to: (i) the receipt of consents to
amend the indenture and the registration rights agreement from the
holders of at least a majority of the outstanding principal amount
of such Notes; and (ii) the consummation of the pending
acquisition of WMC Finance Co. by General Electric Capital
Corporation.
WMC Finance Co. has retained Credit Suisse First Boston LLC to
serve as the exclusive Dealer Manager and Solicitation Agent for
the tender offer and the consent solicitation. Requests for
documents may be directed to Georgeson Shareholder Communications,
Inc., the Information Agent, by telephone at (800) 733-0805 (toll-
free) or (212) 440-9800 (collect). Questions regarding the tender
offer may be directed to Credit Suisse First Boston LLC at (800)
820-1653 (toll-free) or (212) 538-0652 (collect).
About WMC
WMC Finance Co. is a leading nationwide mortgage company that,
through its operating subsidiaries, originates and sells
residential mortgage loans on a wholesale basis in the alternative
mortgage market. The alternative mortgage market is composed of
Alt-A and sub-prime lending. WMC Finance Co. is headquartered in
Woodland Hills, California.
* * *
As reported in the Troubled Company Reporter's April 23, 2004
edition, Standard & Poor's Rating Services placed its ratings for
Woodland Hills, California-based-WMC Finance Co., including the
company's 'B' counterparty credit and 'B-' senior unsecured debt
ratings, on CreditWatch with positive implications.
"The CreditWatch placement follows GE Consumer Finance's
announcement that it plans to acquire WMC Finance Co," said
Standard & Poor's credit analyst Steven Picarillo.
"Resolution of this CreditWatch placement will be finalized upon
the completion of this transaction, which is subject to regulatory
approval and is expected to occur in third-quarter 2004," Mr.
Picarillo said.
WOMEN FIRST: Wants to Retain Young Conaway as Bankruptcy Counsel
----------------------------------------------------------------
Women First Healthcare, Inc., seeks permission from the U.S.
Bankruptcy Court for the District of Delaware to employ Young
Conaway Stargatt & Taylor, LLP as its attorneys in its chapter 11
proceeding.
The Debtor has also asked for the Court's approval to retain
Latham & Watkins LLP as its bankruptcy co-counsel. Young Conaway
has discussed with Latham a division of responsibility and will
make every effort to avoid duplication.
The principal attorneys and paralegals presently designated to
represent the Debtor and their current standard hourly rates are:
Professionals Billing Rate
------------- ------------
Michael R. Nestor $385 per hour
Sean M. Beach $295 per hour
Kara S. Hammond $200 per hour
Michelle Smith $100 per hour
Young Conaway will:
a. provide legal advice with respect to the Debtor's power
and duty as debtor in possession in the continued
operation of its business and management of its
properties;
b. prepare and pursue confirmation of a plan and approval of
a disclosure statement;
c. prepare on behalf of the Debtor necessary applications,
motions, answers, orders, reports and other legal papers;
d. appear in Court and to protect the interests of the Debtor
before the Court; and
e. perform all other legal services for the Debtor which may
be necessary and proper in this proceeding.
Headquartered in San Diego, California, Women First HealthCare,
Inc. -- http://www.womenfirst.com/-- is a specialty
pharmaceutical company dedicated to improve the health and
well-being of midlife women. The Company filed for chapter 11
protection on April 29, 2004 (Bankr. Del. Case No. 04-11278).
Michael R. Nestor, Esq., and Sean Matthew Beach, Esq., at Young
Conaway Stargatt & Taylor represent the Debtor in its
restructuring efforts. When the Company filed for protection from
its creditors, it listed $49,089,000 in total assets and
$73,590,000 in total debts.
WRENN ASSOCIATES: Taps Fougere & Associates as Accountant
---------------------------------------------------------
Wrenn Associates, Inc., asks for permission from the U.S.
Bankruptcy Court for the District of New Hampshire to employ
Fougere & Associates as its accountant.
The Debtors tell the Court that they need to retain Fougere &
Associates to:
a) assist Management in preparing and reviewing financial
statements and projections to be used in the ordinary
course of business and as exhibits for various purposes of
this case;
b) prepare the Debtor's federal and state tax returns,
including those that will more probably have to be filed
in the Commonwealth of Massachusetts and the States of
Connecticut, Maine, New Hampshire and Vermont; and
c) provide other services that may be necessary in this case.
Excluded from Fougere & Associates' services are any
responsibility for investigating, identifying and reporting
potential fraudulent transfers, preferential transfers and claims
against management or insiders.
The professionals who are likely to render their services in this
case are:
Accountants Billing Rate
----------- ------------
Richard Fougere $250 per hour
Corinne Caprano $210 per hour
Carol Latorre $185 per hour
Robert Zirkel $160 per hour
Judith Maguire $130 per hour
Margaret Moran $115 per hour
Joanne Atkinson $95 per hour
Jeannine Agresti $80 per hour
Headquartered in Merrimack, New Hampshire, Wrenn Associates, Inc.
-- http://www.wrenn.com/-- is a construction management firm.
The Company filed for chapter 11 protection on
April 16, 2004 (Bankr. D. N.H. Case No. 04-11408). William S.
Gannon, Esq., represents the Debtor in its restructuring efforts.
When the Company filed for protection from its creditors, it
listed $4,037,000 in total assets and $7,778,494 in total debts.
* BOOK REVIEW: The Financial Giants In United States History
------------------------------------------------------------
Author: Meade Minnigerode
Publisher: Beard Books
Softcover: 260 pages
List Price: $34.95
Order your personal copy today at
http://www.amazon.com/exec/obidos/ASIN/1587981491/internetbankrupt
The financial giants were Stephen Girard, John Jacob Astor, Jay
Cooke, Daniel Drew, Cornelius Vanderbilt, Jay Gould, and Jim Fisk.
The accomplishments of some have made them household names today.
But all were active in the mid 1800s. This was a time when the
United States, having freed itself from Great Britain only a few
decades earlier, was gaining its stride as an independent nation.
The country was expanding westward, starting to engage in
significant international trade, and laying the foundations for
becoming a major industrial power. Astor, Vanderbilt, Gould, and
the others played major parts in all these areas. During the Civil
War in the first half of the 1860s, some became leading suppliers
of goods or financiers to the Federal government.
Minnigerode's focus is the highlights of the life of each of the
seven. Along with this, he identifies each one's prime
characteristics contributing to his road to fortune and how his
life turned out in the end. Not all of the men managed to keep and
pass on the fortunes they amassed. They are seen a "financial
giants" not only because they made fortunes in the early days of
American business and industry, but also for their place in laying
out the groundwork for American business enterprise, innovation,
and leadership, and for the notoriety they had in their day.
Minnigerode summarizes the style or achievement of each man in a
single word or short phrase. Stephan Girard is "The Merchant
Banker"; Cornelius Vanderbilt, "The Commodore." "The Old Man of
the Street" summarizes Daniel Drew"; with "The Wizard of Wall
Street" summarizing Jay Gould. Jim Fisk is "The Mountebank."
Jay Cooke, "The Tycoon," was to be "known throughout the country
for his astonishingly successful handling of the great Federal
loans which financed the Civil War." After the War, one of the
leaders of the Confederacy remarked that the South was really
defeated in the Federal Treasury Department thus, even on the
enemy side, giving recognition to Cooke's invaluable work of
enabling the Federal government to meet the huge costs of the War.
After the War, having earned the reputation as "the foremost
financier in the country," Cooke became involved in many large
financial ventures, including the building of a railroad to link
the East and West coasts of America. In this railroad venture,
however, Cooke and his banking firm made a fatal misstep in
investing in the Northern Pacific railway. The Northern Pacific
turned out to be a house of cards. When Cooke's firm was unable to
meet interest payments it owed because of money it had put into
the Northern Pacific, the firm went bankrupt; and this caused
alarm in the stock market and financial circles.
The roads to wealth of the "financial giants" were not smooth.
Like others amassing great wealth, they had to take risks. The
tales Minnigerode tells are not only instructive on how
individuals have historically made fortunes in business and the
characteristics they had for this, but are also cautionary tales
on the contingency of great wealth in some circumstances. Jim
Fisk, for instance, a larger-than life character "jovial and quick
witted [who was also] a swindler and a bandit, a destroyer of law
and an apostle of fraud," was presumably killed by a former
business partner. Unlike Cooke and Fisk, Cornelius Vanderbilt and
John Jacob Astor built fortunes that lasted generations.
Vanderbilt - nicknamed Commodore - starting in the New York City
area, built ships and established domestic and international
merchant and passenger lines. With the government coming to depend
on these with the rapid growth of commerce of the period and the
Civil War for a time, Vanderbilt practically had monopolistic
control of private shipping in the U.S. Astor made his fortune by
developing trade and other business in the upper Midwest, which
was at the time the sparsely-populated frontier of America, rich
in natural resources and other potential with the Great Lakes and
regional rivers as a means for transportation.
Although the social and business conditions in the early and mid
1800s when the U.S. was in the early stages of its development
were unique to that period, by concentrating on the
characteristics, personalities, strategies, and activities of the
seven outstanding businessmen of this period, Minnigerode
highlights business traits and acumen that are timeless. His
sharply-focused, short biographies are colorful and memorable.
This author has written many other books and worked in the
military and government.
*********
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, Rizande B. Delos Santos, Paulo
Jose A. Solana, Jazel P. Laureno, 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-
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for the term of the initial subscription or balance thereof are
$25 each. For subscription information, contact Christopher
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*** End of Transmission ***