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/raid1/www/Hosts/bankrupt/TCR_Public/040607.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, June 7, 2004, Vol. 8, No. 112 Headlines 521 EAST 3RD STREET: Case Summary & Largest Unsecured Creditors 6000 SOUTH INDIANA: Case Summary & 20 Largest Unsecured Creditors ABRAXAS PETROLEUM: Commences 11-1/2% Notes Consent Solicitation ADELPHIA COMMS: Reports Special Schedules of Liabilities ACTUANT CORP: Buys Back Additional $32 Million 13% Senior Notes ADVANCED MEDICAL: S&P Affirms Corporate Credit Rating at BB- AMERICANA PUBLISHING: Reiterates First Quarter Earnings AMERIDEBT INC: Files for Chapter 11 Protection in Maryland AMERIDEBT INC: Case Summary & 11 Largest Unsecured Creditors ANC RENTAL: Court OKs Demand Letter Settlements Totaling $289,693 ASIA PAYMENT: Ex-Auditors Doubt Going Concern Viability BEAR ISLAND: S&P Alters Outlook to Stable & Affirms B- Corp Rating BRALORNE MINING: Ex-Auditors Question Going Concern Viability CELEBRITY WORLDWIDE: Case Summary & Largest Unsecured Creditors CONSECO CAPITAL: Fitch Affirms Low Ratings on 6 1994-1 Classes CORNERSTONE: Files Chapter 11 Petition to Implement Restructuring CORNERSTONE PROPANE: Case Summary & 55 Unsecured Creditors CREDIT SUISSE: Fitch Affirms Low Ratings on 6 2003-CK21 Classes DB COMPANIES: Files for Chapter 11 Protection to Facilitate Sale ENRON CORPORATION: Objects To Bank Group's $33 Billion Plus Claims EXABYTE CORP: PWC Declines Re-election as Independent Accountants FEDERAL-MOGUL: Has Until June 14 to Decide on Nippon Agreements FLEMING COMPANIES: Intends To Sell Slush Puppie for $918,000 FOOD MANAGEMENT: Case Summary & 27 Largest Unsecured Creditors GADZOOKS INC: Reports $12.7 Million May 2004 Net Sales GEO SPECIALTY: U.S. Trustee Appoints 7-Member Creditors' Committee HAVENS STEEL: 9 Largest Creditors Appointed to Serve Committee HIGH VOLTAGE: Hires Evercore Restructuring as Financial Advisors INTERSTATE BAKERIES: Increases Reserve for Workers' Compensation ITRON INC: Schlumberger Asset Purchase Gets Green Light JENOSYS ENTERPRISES: Provides Update on Restructuring Developments KAISER ALUMINUM: Court Gives Go-Ahead to $315 Million Alpart Sale L&J RESTAURANT: Case Summary & 20 Largest Unsecured Creditors LANGUAGE LINE: S&P Rates $55 Mil. Senior Discount Notes at CCC+ LEAP WIRELESS: Hires William Freeman as Cricket Communications CEO LOGISTICS MANAGEMENT: Presents Reorganization Plan to Shareholders MALAN REALTY: Raises $5.9 Million from Wood River Plaza Sale MERISANT WORLDWIDE: Amends Tender Offer for 12-1/4% Sr. Notes METALLURG INC: Missed Interest Payment Spurs S&P's 'D' Ratings MIKROS SYSTEMS: Beard Miller Replaces Lipman Selznick as Auditors MJ PAK INC: Voluntary Chapter 11 Case Summary MORGAN STANLEY: Fitch Assigns Low Ratings to 3 1997-HF1 Classes NATL CENTURY: NPF XII Subcomittee Modifies Klee Tuchin's Retention NATIONAL WASTE: U.S. Trustee Names 4-Member Creditors' Committee NBTY INC.: S&P Affirms Low-B Ratings & Revises Outlook to Stable NETWORK INSTALLATION: Dismisses Kabani & Company as Accountants NEW WEATHERVANE: Case Summary & 20 Largest Unsecured Creditors NUCENTRIX BROADBAND: Completes $51MM+ Asset Sale to Nextel OWENS CORNING: Lease Decision Period Extended through December 4 PARMALAT GROUP: Prosecutors Sue Ex-BofA Employees Over Scandal PARMALAT: Capitalia Adopts Plan To Protect Client Investments PENINSULA CAPITAL: Case Summary & 3 Largest Unsecured Creditors PENN TREATY: Reorganizes Senior Management Team PG&E NATIONAL: Court Okays USGEN's Employment of Charles River QVDS INC: Case Summary & 40 Largest Unsecured Creditors RCN CORPORATION: Employs Skadden Arps as Bankruptcy Counsel ROYAL OLYMPIC: Requests More Time to File Form 20F Filing with SEC SK GLOBAL: Judge Declines Cho Hung's Liquidating Plan Offer SOLUTIA INC: Calpine to Continue Operating Decatur Energy Center SPIEGEL GROUP: May 2004 Net Sales Decrease to $109.3 Million SPRING AIR: Lease-Related Decision Extended through August 19 THOMPSON PRINTING: New Jersey Court Okays Disclosure Statement TOUCHSTONE: L J Soldinger Replaces Stonefield as Accountant TRENWICK: Committee Hires Ben Branch as Financial Consultant UNITED AIRLINES: Court Approves Heidrick's Retention as Consultant US AIRWAYS: Releases Improved May 2004 Traffic Results VISKASE COS.: S&P Rates Corp. Credit & Senior Secured Notes at B- WATERFORD ON LAKE: US Trustee Unable to Form Creditors Committee WESTPOINT: Court Extends Exclusive Time to File Plan to July 29 WILSONS THE LEATHER: May 2004 Store Sales Decrease to $16MM * Foley & Mansfield's Virginia Johnson Elected to FDCC * BOND PRICING: For the week of June 7 - June 11, 2004 ********* 521 EAST 3RD STREET: Case Summary & Largest Unsecured Creditors --------------------------------------------------------------- Debtor: 521 East 3rd Street, LLC 521 East 3rd Street Mount Vernon, New York 10553 Bankruptcy Case No.: 04-13867 Type of Business: The Debtor is a Fee Owner of industrial building. Chapter 11 Petition Date: June 4, 2004 Court: Southern District of New York (Manhattan) Debtor's Counsel: Charles E. Simpson, Esq. Windels, Marx, Lane & Mittendorf, LLP 156 West 56th Street New York, NY 10019 Tel: 212-237-1000 Fax: 212-237-1215 Total Assets: $1,301,000 Total Debts: $1,464,456 Debtor's 4 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Small Business Guarantor liability $280,587 Administration 26 Federal Plaza, Ste. 3108 New York, NY 10278 City of Mount Vernon Real Property $150,000 HSBC USA Guarantor liability $133,869 Empire State Development Unknown Corp. 6000 SOUTH INDIANA: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: 6000 South Indiana Apartments 6000 South Indiana Avenue Chicago, Illinois 60637 Bankruptcy Case No.: 04-21221 Chapter 11 Petition Date: June 2, 2004 Court: Northern District of Illinois (Chicago) Judge: Bruce W. Black Debtor's Counsel: Barry A. Chatz, Esq. Arnstein & Lehr 120 South Riverside Plaza Suite 1200 Chicago, IL 60606 Tel: 312-876-7100 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 ------ --------------- ------------ Internal Revenue Service Federal Income taxes $510,562 Mall Stop 5010 CHI due from Estate of 230 S. Dearborn Street George C. Graham for Chicago, IL 60604 rental Income from property Continental Casualty Co. Judgment against $36,150 estate of general partner of debtor Internal Revenue Service Income tax due from $14,102 Estate of George C. Graham from rental property Internal Revenue Service Income tax due from $13,000 Estate of George C. Graham Marke Plumbing, Inc. $11,088 BGK Security Services $5,573 Ted' DuMore $2,018 Brown & Son Landscaping $1,893 Galewood $1,500 Hopkins Mid American J.V. $917 The Home Depot Supply $717 National Waste $756 Reliable Office Supplies $383 SBC $279 Clover Locksmiths $221 Miller Laundry Systems $137 PeachTree Business Products $63 Ice Mountain $38 6000 South Indiana LLC Lawsuit against Unknown Estate of George C. Graham, Case No. 03 CH 02311 ABRAXAS PETROLEUM: Commences 11-1/2% Notes Consent Solicitation --------------------------------------------------------------- Abraxas Petroleum Corporation (AMEX:ABP) announced the commencement of a consent solicitation relating to its 11-1/2% Secured Notes due May of 2007. The record date for the Consent Solicitation is May 3, 2004. As of the record date there was approximately $128 million aggregate principal amount of the notes outstanding. Abraxas is soliciting consents to modify the covenant currently limiting the Company to $10 million per year in capital expenditures. Assuming holders of a majority of the principal amount of the notes consent, capital expenditures will instead be limited so that the ratio of the Company's consolidated EBITDA to the sum of the Company's consolidated cash interest expense plus its capital expenditures minus the net proceeds the Company receives from certain qualifying equity security or subordinated debt offerings must not be less than 1.0 to 1.0 for any fiscal year beginning with the fiscal year ending December 31, 2004. The consent payment to be paid for each consent properly delivered prior to the expiration of the consent solicitation will be $10 in cash for each $1,000 principal amount of notes. If consents received from Holders exceed the majority consent requirement, Abraxas will pay the consent payment on a pro rata basis. Holders of notes who do not consent will not be eligible to receive the consent payment. The consent solicitation will be open until 5:00 p.m., New York City time, on Monday, June 14, 2004, unless terminated or extended by Abraxas in its sole discretion. This announcement is not an offer to purchase, a solicitation of an offer to purchase, or a solicitation of consent with respect to any securities. The consent solicitation is being made solely by a Consent Solicitation Statement dated June 3, 2004. Guggenheim Capital Markets, LLC is serving as Solicitation Agent in connection with the consent solicitation. Questions regarding the terms of the consent solicitation may be directed to the Solicitation Agent at 212-381-7500. Global Bondholder Services Corporation is serving as Tabulation Agent and Information Agent in connection with the consent solicitation. Questions regarding the delivery procedures for the consents and requests for additional copies of the consent solicitation statement or related documents may be directed to the Information Agent at 212-430-3774. About the Company Abraxas Petroleum Corporation is a San Antonio-based crude oil and natural gas exploitation and production company. The Company operates in Texas, Wyoming and western Canada. At March 31, 2004, Abraxas Petroleum Corporation's balance sheet shows a total stockholders' deficit of $75,828,000 compared to a deficit of $72,203,000 at December 31, 2003. ADELPHIA COMMS: Reports Special Schedules of Liabilities -------------------------------------------------------- The Adelphia Communications (ACOM) Debtors, in supplement their Schedules of Liabilities, inform the Court that these creditors hold Unsecured Non-Priority Claims aggregating $57,720,797: Creditor Amount of Claim -------- --------------- Cable News Network, Inc. $14,307,609 219,432 42,370 513,220 Cartoon Network, Inc. 2,278,785 Turner Classic Movies, LP 2,348,370 Turner Network Sales, Inc. 9,833,188 300,200 Turner Network Television, Inc. 27,153,084 Court TV 160 Discovery Kids -- LA 40,340 Encore 260,487 ESPN News 66,643 Game Show Network 57,955 Health Network, LLC 10,759 Outdoor Life 213,767 Starz 74,428 In view of the additional amounts, the ACOM Debtors' liabilities aggregate $7,908,292,270. (Adelphia Bankruptcy News, Issue No. 60; Bankruptcy Creditors' Service, Inc., 215/945-7000) ACTUANT CORP: Buys Back Additional $32 Million 13% Senior Notes --------------------------------------------------------------- Actuant Corporation (NYSE:ATU) announced that it has repurchased an additional $32 million of its 13% Senior Subordinated Notes due 2009 at a premium on the open market. This brings the total 13% Notes repurchased since its August 31, 2003 fiscal year-end to approximately $81 million. Following the repurchases, approximately $29 million of the original $200 million 13% Notes remains outstanding. The Company's Revolving Credit Agreement provided funding for the purchases. The recent 13% Notes repurchases will result in a net-of-tax charge of approximately $6.5 million (or approximately $0.26 per diluted share) in the third quarter of fiscal 2004, representing the combination of premiums paid above principal value for the notes, transaction expenses, and the non-cash write-off of a portion of capitalized debt issuance costs. The Company will report its operating results for the quarter ended May 31, 2004 on Thursday, June 17. Actuant, headquartered in Milwaukee, Wisconsin, is a diversified industrial company with operations in more than 20 countries. The Actuant businesses are leading companies in the highly engineered position and motion control systems and branded tools and supplies markets. Products are offered under such established brand names as Dresco, Enerpac, Gardner Bender, Kopp, Kwikee, Milwaukee Cylinder, Nielsen Sessions, Power-Packer, and Power Gear. * * * As reported in the Troubled Company Reporter's May 5, 2004 edition, Standard & Poor's Ratings Services assigned its 'BB' rating to the $250 million senior revolving credit facility of Actuant Corp. (BB/Stable/--). Proceeds from the credit facility, maturing Feb. 19, 2009, were used to refinance the company's existing secured revolving credit facility. ADVANCED MEDICAL: S&P Affirms Corporate Credit Rating at BB- ------------------------------------------------------------ Standard & Poor's Ratings Services affirmed its 'BB-' corporate credit and senior secured debt ratings and its 'B' subordinated debt rating on vision care company Advanced Medical Optics Inc. The ratings were removed from CreditWatch, where they were placed April 22, 2004, when AMO announced that it would acquire the ophthalmic surgical business of Pfizer Inc. for $450 million in cash. At March 26, 2004, the Santa Ana, California-based company had approximately $235 million of debt outstanding. The outlook is stable. "The rating actions reflect our opinion that the new acquisition will strengthen AMO's cataract franchise by adding well- established viscoelastic products, an important line it previously lacked," said Standard & Poor's credit analyst Jill Unferth. The acquisition is also expected to strengthen the company's new- product pipeline, enabling it to offer new refractive intraocular lenses, and provide AMO with a small foothold in a new market, the glaucoma device business. All together, these new products should strengthen AMO's competitive position with surgeons by enabling it to market a suite of well-established, complementary surgical products. Although AMO will incur considerable new debt to fund the transaction, the company has demonstrated financial discipline in repaying debt associated with its mid-2002 spin-off from Allergan Inc. AMO has also successfully taken steps to improve its cost structure and operating efficiency. Savings generated by these efforts, together with the operating cash flow generated by AMO's expanded ophthalmic surgical portfolio, should sufficiently supplement cash flow from the new product lines to allow the company to deleverage to pre-acquisition levels within several quarters. Santa Ana, California-based Advanced Medical Optics manufactures ophthalmic devices for refractive and cataract eye surgery. It also makes products and solutions for contact lens care. The company's pending acquisition of Pfizer's ophthalmic surgical business will also give it the well-known Healon line of viscoelastic products, used in ocular surgery; CeeOn and Tecnis IOLs, used in cataract surgery; the Baerveldt glaucoma shunt; as well as manufacturing and R&D facilities in the Netherlands, Sweden, and India. Since becoming independent, AMO has strengthened its defense against changing eye-care technologies and competitive market factors by launching new and evolved products and honing its operating efficiency. Since mid-2002, the company has increased its sales of, and market share in, foldable IOLs, IOL delivery systems, and phacoemulsification systems. Medium-term sales growth will likely rest on new iterations of these higher-technology- content products, new refractive implants, and possible core-line acquisitions, such as the pending transaction. Contact lens solutions, particularly the well-entrenched COMPLETE line, should also generate a relatively stable revenue stream. The company is expected to realize savings as it further disengages its R&D and manufacturing assets from Allergan's and strengthens its internal infrastructure. However, third-party reimbursement both in the U.S. and overseas remains a critical factor for this company, owing to its operating concentration in a relatively narrow range of ophthalmic surgical procedures. AMERICANA PUBLISHING: Reiterates First Quarter Earnings ------------------------------------------------------- Americana Publishing, Inc. (OTC Bulletin Board: APBH) announced on May 13, 2004 that the liquidation through bankruptcy of its wholly owned subsidiary, Corporate Media Group, Inc., resulted in a one-time extraordinary gain for this quarter of $2,166,803. The company has noted that it received negative communications from various shareholders concerning the listing on the Berlin Exchange as well as the posting of the financial statements on Yahoo! Therefore, the company feels it's important to re-release this first quarter earnings report. As a result of this extraordinary gain, the Company also announced first quarter earnings of $466,102. "These positive developments are a result of a number of business initiatives taken over the past year," said George Lovato, Jr., president and CEO of Americana Publishing. "These initiatives include reducing overhead, selling off excess inventories and installing an efficient state-of-the-art duplication operation. All these actions make our business more efficient while providing improved customer service. "Americana had an outstanding first quarter and we anticipate at current order levels that the second quarter will surpass first quarter results," said Lovato. About Americana Publishing, Inc. Americana Publishing, Inc. is a vertically integrated multimedia publishing company whose primary business is publishing and selling audio books, print books and electronic books in a variety of genres. Sales of its products are conducted through the Internet as well as a distribution network of more than 35,000 retail stores, libraries and truck stops. According to the Audio Publishers Association, annual sales of audio books are nearly $2 billion. Currently 42 million Americans listen to audio books and 58 percent of that group listen to more than two per month. * * * GOING CONCERN UNCERTAINTY In its Form 10-KSB for the fiscal year ended December 31, 2003, Americana Publishing, Inc. states: "Our financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. During the years ended December 31, 2003 and 2002, we incurred losses of $2,520,972 and $2,615,518, respectively. In addition, as of December 31, 2003, our total current liabilities exceeded our total current assets by $2,895,438, and our shareholders' deficit was $2,525,828. These factors, among others, raise substantial doubt about our ability to continue as a going concern." AMERIDEBT INC: Files for Chapter 11 Protection in Maryland ---------------------------------------------------------- AmeriDebt, a non-profit credit counseling organization, announced that -- in an effort to best serve the interests of its consumer clients -- it has filed for Chapter 11 protection in the U.S. Bankruptcy Court in Greenbelt, Maryland. The filing in no way will impede AmeriDebt's current operations. AmeriDebt will continue providing credit counseling and debt management services to all of its existing consumers. Per existing practices, payments made by AmeriDebt consumers are processed through a separate trust account that will not be affected by this filing, and both past and future payments will continue to be disbursed to creditors on a timely basis. On June 5, AmeriDebt issued the following statement: "AmeriDebt's first priority is and always has been serving its consumer clients. As such, we recognize that the protections afforded by Chapter 11 are vital for the uninterrupted continuation of these services. Each day we strive to provide the best quality credit counseling and debt management services to American consumers, and we will continue to do so throughout the bankruptcy protection process." AmeriDebt announced on November 1, 2003, that it had stopped enrolling new consumer clients so the organization could focus on serving the counseling and educational needs of its existing clients. The agency suspended all television, radio and Internet outreach aimed at attracting new consumer clients, and the organization made clear that there would be no interruption in service to its existing clients. AMERIDEBT INC: Case Summary & 11 Largest Unsecured Creditors ------------------------------------------------------------ Debtor: AmeriDebt, Inc. 12800 Middlebrook Road Germantown, Maryland 20874 Bankruptcy Case No.: 04-23649 Type of Business: The Debtor is a credit counseling company. See http://ameridebt.org/ Chapter 11 Petition Date: June 5, 2004 Court: District of Maryland (Greenbelt) Debtor's Counsel: Stephen W. Nichols, Esq. Deckelbaum, Ogens, et al. 3 Bethesda Metro Center, Suite 200 Bethesda, MD 20814 Tel: 301-961-9200 Total Assets: $8,387,748 Total Debts: $12,362,695 Debtor's 11 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Michael Cass, et al $8,000,000 c/o Macey Chern & Diab 444 North Wells St., Ste 301 Chicago, IL 60610 The Ballenger Group $3,691,362 321 Ballenger Center Dr. Frederick, MD 21703 Dell Financial Secured Value: $54,622 $3,000 All Steel Secured Value: $32,846 $14,461 Dell Financial Secured Value: $30,491 $4,500 Zone Telecom $5,268 Suleiman Shihadeh $5,000 John Adams, Jr. & Catherine $3,200 Moody ERC I, LLC $2,960 Thompson West $686 Primus $4 ANC RENTAL: Court OKs Demand Letter Settlements Totaling $289,693 ----------------------------------------------------------------- Before November 13, 2003, ANC Rental Corporation made demands on certain entities in respect of payments they made within the 90-day period prior to the Petition Date. Approximately 189 entities responded to the Debtors' demand letters by agreeing to settle the Debtors' avoidance claims. The Settlement Amounts total $289,693. The Demand Letter Settlements include: Amount Settlement Entity Demanded Amount ------ -------- ---------- Aardvark Windshield Repair $5,360 $1,295 Advanced Electronics 7,357 4,782 Beaman Automotive Group 6,114 3,974 Business Card Service 4,795 2,398 Busking Construction, Inc. 6,563 1,500 New Grace Spinal & Rehab CTR 6,420 3,000 Northwest Prot Service, Inc. 6,293 1,500 Pavement Maintenance, Inc. 7,495 4,872 RMG Investigations, Inc. 4,042 1,415 Twin City Security, Inc. 7,011 4,557 In exchange for the payments and the waiver of "resulting claims" based on the payments, the Debtors agreed to compromise its avoidance claims against all 189 parties. No adversary proceedings were filed against the 189 entities based on the claims. Joseph Grey, Esq., at Stevens & Lee, P.C., in Wilmington, Delaware, contends that in each of these cases, the amount demanded was less than $7,500 and is, therefore, relatively difficult to pursue in a cost-effective manner. The Debtors have not begun adversary proceedings to prosecute these claims. The limitations period of Section 546 has passed, making further prosecution of these claims problematic. Thus, the demand letter settlements represent the best return available to the Debtors, their estates and their creditors. The Court approves the demand letter settlements. Headquartered in Fort Lauderdale, Florida, ANC Rental Corporation, is the world's third-largest publicly traded car rental company. The Company filed for chapter 11 protection on November 13, 2001 (Bankr. Del. Case No. 01-11200). On April 15, 2004, Judge Walrath confirmed the Debtors' 3rd amended Chapter 11 Liquidation Plan, in accordance with Section 1129(a) and (b) of the Bankruptcy Code. Upon confirmation, Blank Rome, LLP, and Fried, Frank, Harris, Shriver & Jacobson, LLP, withdrew as the Debtors' counsel. Gazes & Associates, LLP, and Stevens & Lee, PC, serve as substitute counsel to represent the debtors' post-confirmation interests. When the Company filed for protection from their creditors, they listed $6,497,541,000 in assets and $5,953,612,000 in liabilities. (ANC Rental Bankruptcy News, Issue No. 54; Bankruptcy Creditors' Service, Inc., 215/945-7000) ASIA PAYMENT: Ex-Auditors Doubt Going Concern Viability ------------------------------------------------------- On April 21, 2004 the accounting firm of Grant Thornton LLP (Canada) resigned as Asia Payment Systems' independent auditors. The Company indicates that Grant Thornton resigned because the Company does not fit the firm's client profile and given the fact that the Company's developing business will be China based. The report of Grant Thornton, LLP (Canada) on the Company's financial statements as of, and for, the years ended December 31, 2002 and 2003 contained an explanatory paragraph wherein Grant Thornton expressed substantial doubt about Asia Payment Systems' ability to continue as a going concern. The Company's Audit Committee has initiated interviews with SEC qualified certifying accountants in Hong Kong, China to select and appoint independent auditors for the year ending December 31, 2004. BEAR ISLAND: S&P Alters Outlook to Stable & Affirms B- Corp Rating ------------------------------------------------------------------ Standard & Poor's Ratings Services revised its outlook on Bear Island Paper Co. LLC to stable from negative, and affirmed its 'B-' corporate credit rating on the company. "The outlook revision reflects Standard & Poor's assessment that the risk of a meaningful decline in newsprint prices has been reduced and the expectation that Bear Island's financial profile and liquidity will improve in the near term as a result of continued modest increases in average realized newsprint prices," said Standard & Poor's credit analyst Dominick D'Ascoli. The ratings on Ashland, Virgina-based Bear Island reflect a single product offering, lack of operating and customer diversity, a very aggressive financial profile, and extremely thin liquidity. Ratings are currently supported by implicit support from parent company Brant-Allen Industries Inc. and the positive direction of newsprint pricing. Bear Island is a small producer of newsprint, with sales of $106 million for the 12 months ended March 31, 2004. Despite the general economic recovery in the U.S. in recent quarters, newsprint demand has experienced little improvement so far. Moreover, even if the pace of demand recovery accelerates, the increase would be from very depressed levels. Newsprint prices have risen $30 per ton in 2004, principally driven by supply restraint and cost pass-through, but more robust improvement is unlikely without higher demand. Bear Island sells newsprint to customers located in close proximity to its single mill in Virginia. Customer concentration is high, with the top five customers accounting for 77% of 2003 sales. Customer concentration, combined with a single product manufactured at one mill, results in a well-below-average business position. Furthermore, being a nonintegrated producer exposes the company to volatile raw-material costs. BRALORNE MINING: Ex-Auditors Question Going Concern Viability ------------------------------------------------------------- On February 5, 2004, Bralorne Mining Company dismissed Sellers & Andersen from its position as he Company's independent accountants. The audit report of Sellers & Andersen, on January 10, 2004, for the year ended November 30, 2003 contained a modification expressing substantial doubt as to the Company's ability to continue as a going concern. The Company's Board of Directors participated in and approved the decision to change independent accountants. On February 5, 2004, Bralorne Mining engaged Madsen & Associates, CPA's Inc. to audit its financial statements for the year ended November 30, 2004. CELEBRITY WORLDWIDE: Case Summary & Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Celebrity Worldwide, Inc. 20 East Sunrise Highway, Suite 202 Valley Stream, New York 11581 Bankruptcy Case No.: 04-83687 Type of Business: The Debtor is a Publisher of magazines. Chapter 11 Petition Date: June 2, 2004 Court: Eastern District of New York (Central Islip) Judge: Dorothy Eisenberg Debtor's Counsel: Marc A. Pergament, Esq. Weinberg Gross & Pergament LLP 400 Garden City Plaza Garden City, NY 11530 Tel: 516-877-2424 Total Assets: $53,504 Total Debts: $3,204,526 Debtor's 21 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ RP Donnelley & Sons Company $1,435,234 Accounts Receivable Dept. 120 Donnelley Drive Glasgow, KY 42141 Unimac Graphics, Inc. $266,769 350 Michele Place Carlstadt, NJ 07072 Quebecor World, Inc. $220,000 Kable News Co. $203,918 Rainbow Designs $100,861 Costello Shea & Gaffney, LLP $86,000 Bid Seps, Inc. $67,172 J. Willett Associates $58,500 Phoenix Capital & Management Group $42,447 Media Vast, Inc. $35,579 Abelman, Frayne & Schwab $35,172 Robert Colozza $34,552 Solomon, Greene & Ostrow, PC $27,807 American Express $26,131 Gerry Images, Inc. $23,200 United Healthcare $11,002 Brian Wood $10,515 David A. Beale, P.A. $10,000 Extreme Color Technologies, Inc. $9,700 Kable Fulfillment Service, Inc. $9,467 Dan Peterson Photography $9,270 CONSECO CAPITAL: Fitch Affirms Low Ratings on 6 1994-1 Classes -------------------------------------------------------------- Conseco Capital Management's pass-through certificates, series 1994-1 classes are affirmed by Fitch Ratings as follows: --$10.8 million class A-1 'BB'-; --$18.6 million class A-2 'BB-'; --$16.8 million class A-3 'BB-'; --$9.8 million class B remains at 'CC'; --$7.8 million class C remains at 'C'; --$7.8 million class D remains at 'C'. The affirmations follow Fitch's review of the transaction which closed in March 1994. As of the April 2004 distribution date, the pool's aggregate certificate balance has decreased 63.7%, to $71.7 million from $192.1 million at issuance. Of the original 68 loans in the pool, 31 remain outstanding. Of the outstanding pool, only 19% of the loans remain to investment grade tenants. Walmart (12%), Walgreens (3%), and Home Depot (5%) are the remaining investment grade tenants. Kmart (64%) and Food Lion (12%), whose parent company is Delhaize, comprise the majority of the other leases in the pool. The ratings of credit tenant lease transactions are highly sensitive to the movements of the corporate credit ratings of the underlying tenants. The ratings reflect the current credit ratings of the underlying tenants, and therefore affirmations are warranted. CORNERSTONE: Files Chapter 11 Petition to Implement Restructuring ----------------------------------------------------------------- CornerStone Propane Partners, L.P., the nation's sixth largest retail propane marketer, announced that it has reached an agreement with its senior secured creditors to restructure the Company. To implement the restructuring, Cornerstone filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code, together with a Plan of Reorganization that embodies the terms of the restructuring and is supported by the ad hoc debtholders' committee. The Chapter 11 filing includes the Company's wholly-owned U.S. subsidiaries. "During the past year, we have completed various strategic initiatives aimed at improving competitiveness, profitability and cash flow. Our goal is to maximize the value of the Company, and we believe this financial restructuring is the best alternative available to achieve this. The fact that we have already reached an agreement with certain of our lenders, and have filed a Plan of Reorganization should enable us to emerge from bankruptcy in an expedited fashion" said Curt Solsvig, Chief Executive Officer. The Company believes its existing cash position, augmented by the revenue it will continue to generate, will be more than adequate to fund ongoing operations during the restructuring process. In addition, CornerStone has reached an agreement with certain of its lenders to use cash collateral which, upon Bankruptcy Court approval, will enable CornerStone to use its cash reserves to fund the Company's ongoing operations. Mr. Solsvig emphasized that the restructuring should have no impact on the Company's ability to fulfill its commitment to clients, suppliers and employees. It intends to seek the necessary relief from the Bankruptcy Court to pay for operating business expenses and believes the Court will approve these requests. "We expect that our daily operations will continue as usual. Our suppliers will be paid for all supplies furnished and services rendered subsequent to the filing and our customers will continue to receive the same high-quality goods and services they have come to expect from us," said Solsvig. Solsvig continued, "We appreciate the ongoing loyalty and support of our employees. We thank them for their hard work and look forward to working together to make this restructuring successful and leading CornerStone towards a stronger, more profitable future." CornerStone filed its Chapter 11 case in the U.S. Bankruptcy Court for the Southern District of New York. Details regarding the case can be obtained at http://www.nysb.uscourts.gov/ or http://www.kccllc.net/cornerstone/ About CornerStone CornerStone is a Delaware limited partnership. For more information, visit http://www.cornerstonepropane.com/ CORNERSTONE PROPANE: Case Summary & 55 Unsecured Creditors ---------------------------------------------------------- Lead Debtor: Cornerstone Propane Partners, L.P. c/o E&S II LLC 10 Rockefeller Plaza, Suite 815 New York, New York 10020 Bankruptcy Case No.: 04-13855 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Cornerstone Propane, L.P. 04-13856 Cornerstone Holding Corp. 04-13857 Flame, Inc. 04-13858 Propane Continental, LLC 04-13859 Coast Energy Global Services, LLC 04-13860 Coast Energy Canada, LLC 04-13861 Type of Business: The Debtor is the nation's sixth largest retail propane marketer, serving more than 440,000 retail propane customers in over 30 states. See http://www.cornerstonepropane.com/ Chapter 11 Petition Date: June 3, 2004 Court: Southern District of New York (Manhattan) Debtors' Counsel: Matthew Allen Cantor, Esq. Kirkland & Ellis LLP 153 East 53rd Street, 39th Floor New York, NY 10022-4675 Tel: 212-446-4846 Fax: 212-449-4900 Total Assets: $582,455,000 Total Debts: $692,470,000 A. Cornerstone Propane Partners' 10 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Holders of Cornerstone Guarantees of notes $499,737,719 Propane, L.P. Senior Secured payable Notes due duly July 31, 2005 July 31, 2009, December 30, 2010, and January 31, 2013 c/o John Stohlman Patrick Giordano Bank of New York Trust Co., N.A. 600 North Pearl St., Ste 420 Dallas, TX 75201 Teachers Ins. & Annuity Senior Note $38,047,397 Association of America 730 Third Avenue New York, NY 10017-3206 River Run Senior Income Senior Note $22,828,437 Fund, LLC c/o River Run Management LLC Attn: Ian Wallace or Heather Broome 340 Madison Avenue; 24th Fl. New York, NY 10017 Nationwide Life Insurance Senior Note $7,609,479 Company Attn: Corporate Fixed-Income Securities Nationwide Life Insurance Co. One Nationwide Plaza (1-33-07) Columbus, OH 43215-2220 Richard D. Nye Settlement $200,000 T.E. Thompson (Wilford Real Property Lease Unknown Realty Company, Inc. Noah H. Key Real Property Leases Unknown Wayne and Donna Fietzek Real Property Lease Unknown O'Connell Family Partnership Real Property Lease Unknown And Melehan Family Partnership LP (JPP Investments - managing Property R&R Beau Holdings (Bob & Real Property Lease Unknown Lorraine Roy) B. Cornerstone Propane, L.P.'s 21 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Holders of Cornerstone Guarantees of notes $494,778,233 Propane, L.P. Senior Secured payable Notes due duly July 31, 2005 July 31, 2009, December 30, 2010, and January 31, 2013 c/o John Stohlman Patrick Giordano Bank of New York Trust Co., N.A. 600 North Pearl St., Ste 420 Dallas, TX 75201 SYN Inc. Loans $26,311,450 c/o 3101 S. Bishop Jones Place Sioux Falls, SD 57103 Northwestern Corporation Intercompany advances $23,291,535 125 S. Dakota Ave. Sioux Falls, SD 57104 Searcy County LP Gas Non-compete $455,929 750 Spring St. Marshall, AR 72650 Daniele & Rogers Non-compete $231,144 David Duffy Non-compete $225,857 Tri County Bottled Gas Non-compete $222,222 Richard Schatz Non-compete $184,079 Al Kingsley Non-compete $179,672 Pedley Gas, Inc. Note Payable $167,281 ConocoPhilips Trade debt $165,151 Richard Dietrich Non-compete $161,801 Deloitte & Touche Trade debt $118,500 Daniel Newell Director fees $99,000 Cabot Propane, Inc. Non-compete $70,422 Enron Trade Debt Unknown Duke Energy NGL Services Trade Debt Unknown Union Pacific Railroad Co. Trade Debt Unknown Ultramar Diamond Shamrock Trade Debt Unknown Corporation Compton Petroleum Corp. Trade Debt Unknown Markwest Hydrocarbons, Inc. Trade Debt Unknown C. Cornerstone Continental's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Holders of Cornerstone Guarantees of notes $494,778,233 Propane, L.P. Senior Secured payable Notes due duly July 31, 2005 July 31, 2009, December 30, 2010, and January 31, 2013 c/o John Stohlman Patrick Giordano Bank of New York Trust Co., N.A. 600 North Pearl St., Ste 420 Dallas, TX 75201 Henry Demers Note Payable $460,684 5328 Southwest 9th Place Cape Coral, FL 33914 Ray Murray Inc. Trade debt $7,070 Long Island Wholesalers Trade debt $5,923 F.W. Webb Co. Trade debt $4,264 Central Islip Plumbing Trade debt $4,026 Supply Inc. Coastline Freight & Charter Trade debt $3,167 Inc. Tarantin Tank & Eqpt. Co., Trade debt $3,100 Inc. Security Supply Trade debt $2,809 L W Tank Repair Trade debt $2,439 R E Michael Co., Inc. Trade debt $2,407 Rons Car Clinic Inc. Trade debt $2,365 James C. Greer Trade debt $2,059 Sid Harvey Industries Trade debt $1,866 Purchase Power Trade debt $1,795 Gilco Trucking & Repair Trade debt $1,523 American Welding & Tank Co. Trade debt $1,512 Bick & Heintz Inc. Trade debt $1,405 Thermo Products Trade debt $1,380 SBC Global Services Inc. Trade debt $1,345 D. Coast Energy Global Services' 1 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Holders of Cornerstone Guarantees of notes $494,778,233 Propane, L.P. Senior Secured payable Notes due duly July 31, 2005 July 31, 2009, December 30, 2010, and January 31, 2013 c/o John Stohlman Patrick Giordano Bank of New York Trust Co., N.A. 600 North Pearl St., Ste 420 Dallas, TX 75201 E. Coast Energy Canada's 1 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Holders of Cornerstone Guarantees of notes $494,778,233 Propane, L.P. Senior Secured payable Notes due duly July 31, 2005 July 31, 2009, December 30, 2010, and January 31, 2013 c/o John Stohlman Patrick Giordano Bank of New York Trust Co., N.A. 600 North Pearl St., Ste 420 Dallas, TX 75201 F. Flame, Inc.'s 1 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Holders of Cornerstone Guarantees of notes $494,778,233 Propane, L.P. Senior Secured payable Notes due duly July 31, 2005 July 31, 2009, December 30, 2010, and January 31, 2013 c/o John Stohlman Patrick Giordano Bank of New York Trust Co., N.A. 600 North Pearl St., Ste 420 Dallas, TX 75201 G. Cornerstone Holding Corp.'s 1 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Holders of Cornerstone Guarantees of notes $494,778,233 Propane, L.P. Senior Secured payable Notes due duly July 31, 2005 July 31, 2009, December 30, 2010, and January 31, 2013 c/o John Stohlman Patrick Giordano Bank of New York Trust Co., N.A. 600 North Pearl St., Ste 420 Dallas, TX 75201 CREDIT SUISSE: Fitch Affirms Low Ratings on 6 2003-CK21 Classes --------------------------------------------------------------- Credit Suisse First Boston's commercial mortgage pass-through certificates, series 2003-CK21, are affirmed by Fitch Ratings as follows: --$92.7 million class A-1 'AAA'; --$196 million class A-2 'AAA'; --$109 million class A-3 'AAA'; --$364.3 million class A-4 'AAA'; --Interest-only class A-X 'AAA'; --Interest-only class A-SP 'AAA'; --$32.1 million class B 'AA'; --$12.4 million class C 'AA-'; --$29.6 million class D 'A'; --$12.4 million class E 'A-'; --$12.4 million class F 'BBB+'; --$3.6 million class GLC 'BBB+'; --$19.8 million class G 'BBB'; --$14.8 million class H 'BBB-'; --$17.3 million class J 'BB+'; --$17.3 million class K 'BB'; --$4.9 million class L 'BB-'; --$13.6 million class M 'B+'; --$6.2 million class N 'B'; --$4.9 million class O 'B-'. Fitch does not rate the $17.3 million class P or $15 million class RCKB certificates. The rating affirmations follow Fitch's review of the transaction, which closed in April 2003. As of the May 2004 distribution date, the pool's aggregate certificate balance has decreased 1.1%, to $995.5 million from $1.0 billion at issuance. To date, there have been no loan payoffs or losses. The largest loan in the pool, Great Lakes Crossing (8.49%) maintains an investment grade credit assessment. As of year-end (YE) 2003, occupancy at the property has increased slightly to 92% from 91% at issuance. The Fitch stressed debt service coverage ratio has declined slightly to 1.91 times (x) as of YE 2003, from 1.93x at issuance. The Fitch stressed DSCR was calculated using net cash flow adjusted for market vacancy, capital reserves and non-cash items, divided by debt service utilizing a stressed refinance constant of 9.50%. Currently, there are no loans in special servicing, and one loan is currently 60-days delinquent. The delinquent loan (.17%) is a multifamily property located in Elkhart, IN. The property has experienced a decline in performance since issuance. DB COMPANIES: Files for Chapter 11 Protection to Facilitate Sale ---------------------------------------------------------------- DB Companies, Inc. announced that the Company and its four active subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the U. S. Bankruptcy Code. DB will continue to operate its business while in Chapter 11. The petitions were filed in U. S. Bankruptcy Court in Wilmington, Delaware on June 2, 2004. In consultation with its financial advisors, the Company has concluded that the best way to maximize value for its stakeholders is to pursue a sale of its assets, principally through a planned public auction of its convenience stores and gas stations. The Company filed under Chapter 11 to provide an orderly means to conduct the sale process and to distribute the sale proceeds to the Company's stakeholders. Under Chapter 11, a company is protected from its creditors while it continues to operate its business and negotiates a repayment plan. DB Companies also announced that, to fund its restructuring and continuing operations, the Company had cash collateral of $1.7 million as of the bankruptcy filing. The Company has requested the Court for authorization to use the cash collateral to pay vendors, suppliers and other business partners under normal terms for goods and services they provide during the reorganization process. In addition, DB Companies will pay its employees in the usual manner and it expects that their medical, dental, life insurance, disability, and other benefits will continue without disruption. In conjunction with the Company's bankruptcy filing, Mr. Robert Duffy has been elected by the Company's Board of Directors to serve as the Company's Chief Restructuring Officer during the pendency of the Chapter 11 proceeding. Mr. Duffy, 41, is currently a Senior Managing Director at FTI Consulting (NYSE: FCN - News) and has been working with the Company during its restructuring process. Prior to joining FTI in September 2002, Mr. Duffy was a Partner in the Business Recovery Services Practice of PricewaterhouseCoopers. Mr. Duffy has over twenty years of relevant business experience, including over sixteen years of experience in advising companies as well as their creditor constituencies in both financial and operational restructurings. "We very much appreciate the support we've received from our vendors during this difficult period," said Arthur J. DeBlois, III, the Company's Chief Executive Officer. "The Company believes that the planned public auction will maximize the value for all stakeholders." The Company operates and franchises a regional chain of "DB Mart" convenience stores and gas stations in Connecticut, Massachusetts, Rhode Island, and the Hudson Valley region of New York. Of the Company's 149 locations, 72 of the stores are operated directly by the Company and 77 are franchised to local operators. The Company also conducts a wholesale operation in motor fuels. The Company employs approximately 570 people and had 2003 revenues of $176 million. ENRON CORPORATION: Objects To Bank Group's $33 Billion Plus Claims ------------------------------------------------------------------ On September 24, 2003, the Enron Corporation Debtors filed a Complaint against Citigroup, Inc., JPMorgan Chase & Co., Canadian Imperial Bank of Commerce, Barclays, Merrill Lynch & Co., Inc., and Deutsche Bank AG, among others. The Debtors allege that the Bank Group knowingly participated in a scheme to manipulate and misstate Enron's financial condition from 1997 to 2001. The Complaint seeks to recover certain payments the Bank Group received as preferential or fraudulent transfers, to equitably subordinate their claims against the Debtors' estates, to recover damages, and to disallow, pursuant to Section 502(d) of the Bankruptcy Code, any claims filed by the Bank Group. Scott E. Ratner, Esq., at Togut, Segal & Segal, LLP, in New York, relates that the Bank Group filed at least 543 Proofs of Claim totaling $33,841,074,361. In addition to the Proofs of Claim, certain of the Bank Group may have been listed by the Debtors on their Schedules of Assets and Liabilities. The Debtors have reviewed each of the 543 Claims and have determined that each Claim has been asserted by the Bank Group under the Complaint. By this objection, the Debtors ask the Court to disallow, or equitably subordinate, the Bank Group's Claims on the grounds set forth in the Complaint and in furtherance of the Temporary Allowance Order. Mr. Ratner contends that the Bank Group should not be permitted to vote on the Plan absent the Court's order temporarily allowing their Claims for Plan voting purposes. (Enron Bankruptcy News, Issue No. 109; Bankruptcy Creditors' Service, Inc., 215/945-7000) EXABYTE CORP: PWC Declines Re-election as Independent Accountants ------------------------------------------------------------------ On April 16, 2004, Exabyte Corporation received notice from its independent accountants, PricewaterhouseCoopers LLP, that they were declining to stand for re-election as the Company's independent accountants for the fiscal year ending December 31, 2004. PwC's reports on the Company's financial statements for the past two fiscal years expressed substantial doubt as to the Company's ability to continue as a going concern. Exabyte Corporation (OTCBB: EXBT) provides innovative tape storage solutions to customers whose top buying criteria is value: capacity/price, speed, data reliability and ease-of-use. Exabyte, an industry innovator since 1987, is the recognized value-leader in tape storage and automation solutions for servers, workstations, LANs and SANs. With groundbreaking VXA Packet Technology, the most significant advancement in tape in the last decade, Exabyte's VXA-2 solutions provide SMB and departmental users dramatically higher capacity, speed and data reliability at competitive prices. Exabyte's drives and automation products are rugged, robust and reliable solutions for users of VXAtape, LTO and MammothTape. Exabyte has a worldwide network of OEMs, distributors and resellers that share the Company's commitment to value and customer service, including partners such as IBM, HP, Fujitsu Siemens Computers, Apple Computer, Toshiba, Logitec, Acer, Kontron, Lynx, Bull, Tech Data, CDW, Ingram Micro and Arrow Electronics. Visit http://www.exabyte.com/for more information FEDERAL-MOGUL: Has Until June 14 to Decide on Nippon Agreements --------------------------------------------------------------- Pursuant to a Second Stockholders' Agreement dated December 15, 1993, Nippon Piston's interests in AE Goetze were converted into 862 shares of non-voting, non-convertible Class B Common Stock in AE Goetze. The Joint Venture Agreement terminated and superseded the 1987 Stock Purchase Agreement and the 1988 Stockholders Agreement. Nippon Piston believes that T&N Industries, Inc. subsequently acquired Goetze Corporation and AE Goetze. Powertrain Systems, a part of the T&N Group, subsequently became successor-in-interest to AE Goetze. Later, Powertrain Systems changed its name to Federal Mogul Piston Rings, Inc. Under the Joint Venture Agreement, the Board of Directors of AE Goetze consisted of 5 members, one nominated by Nippon Piston, and four nominated by AE Goetze. Goetze elected all of the directors. The Joint Venture Agreement provides that the directors, including the Nippon Piston Director, have continuing responsibility for the management of Federal-Mogul Piston Rings. The Joint Venture Agreement allows Nippon Piston to put its shares of Federal-Mogul Piston Rings pursuant to certain restrictions and requirements. Each of the parties also has certain continuing restrictions and obligations under the Joint Venture Agreement for Federal-Mogul Piston Rings' benefit. The Joint Venture Agreement remains in full force and effect until either the parties mutually agree to terminate the agreement or there remains only one shareholder in the joint venture. Nippon Piston and Goetze Corporation also entered into a license agreement dated January 5, 1988, which was partly restated and replaced by another license agreement on April 22, 1998 among Nippon Piston, Federal-Mogul Corporation and Powertrain Systems. The parties under the Restated License Agreement agreed to exchange technology for use in the design, manufacture and sale of piston rings in North America. Nippon Piston is also required to provide training and assistance to Federal-Mogul Piston Rings in North America as well as at Nippon Piston's facilities in Japan. To the extent applicable, Nippon Piston is similarly permitted to seek technical assistance from Federal-Mogul Piston Rings. Both parties are also required to make royalty payments to one another upon the sale of products, which employ the other party's technology. In addition, Federal-Mogul Piston Rings is also required to compensate Nippon Piston for providing technical resources and marketing support pursuant to the License Agreement. The License Agreement can be terminated immediately on the occurrence of certain events, including: (a) any action whereby the result is that neither Nippon Piston nor its affiliate is a stockholder of Powertrain; (b) the notice of termination by either party on the failure of the other party or any of its Affiliates, within 30 days after receipt of prior written notice, to remedy a material breach of any provision of the License Agreement or any other Related Agreement; and (c) the assignment or purported assignment, or the granting of a security interest or other encumbrance of the License Agreement by either party without the written consent of the other. Since the Petition Date, Nippon Piston and the Federal-Mogul Corporation Debtors have been involved in these disputes. James E. O'Neill, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, P.C., in Wilmington, Delaware, asserts that the decision regarding the assumption or rejection of the two Agreements should either be denied or deferred until Plan confirmation. Mr. O'Neill maintains that the Debtors have much more at stake from any decision to assume or reject the Agreements. The Debtors also require additional time to assess whether the Agreements should be assumed or rejected in light of the legal consequences and business ramifications likely to flow from their ultimate decision. The issues raised by Nippon should not be considered in isolation but should be determined in connection with the adversary proceeding commenced by Nippon, or proceedings to determine the allowability of Nippon's proofs of claim and interests. If the Court fixes any deadline for the assumption or rejection before plan confirmation, Mr. O'Neill suggests that the deadline should be set no sooner than 90 days after the hearing date for several reasons: (a) The Debtors need to investigate the consequences of assumption or rejection from a legal standpoint; (b) The Debtors require certain information from a business standpoint to make an informed and sound business judgment. The Debtors require additional time to: (1) investigate and determine whether Nippon's technology provided to them under the License Agreement is being utilized in product lines, parts or automotive components, which are being marketed currently by the Debtors; and (2) verify the present and projected sales volume of parts and components utilizing Nippon's technology; (c) The Debtors need to investigate the potential consequences of rejection of the License Agreement in light of the effect of Section 365(n) of the Bankruptcy Code, whether: (1) there has been any Federal-Mogul technology licensed to Nippon pursuant to the cross-license provisions of the License Agreement; and (2) the technology falls within the definition of intellectual property; (d) There will be no prejudice to Nippon if the assumption or rejection deadline is deferred for at least 90 days. Nippon waited almost 2 1/2 years to file its request, and the request itself contains no allegation of any prejudice to Nippon. Nippon received or will receive all postpetition royalty payments to which it is entitled under the License Agreement. Nippon will continue to be paid future royalties as they become due under the License Agreement pending a final disposition of the Agreements; and (e) The Debtors are not dilatory in dealing with Nippon's Agreements. The Debtors are parties to over 3,400 executory contracts and unexpired leases, and have filed 17 motions to reject burdensome or unnecessary executory contracts. As of April 6, 2004, with only a small number of minor exceptions, no executory contracts or unexpired leases have been assumed by the Debtors. Accordingly, the Debtors ask the Court to deny Nippon's request. In the alternative, the Debtors ask the Court to fix a deadline to assume or reject the Stockholders Agreement and the License Agreement no sooner than 90 days after the hearing of the request. * * * Judge Lyons gives the Debtors until June 14, 2004 to either assume or reject the Joint Venture Agreement and the License Agreement. Nippon will have 60 days from the date of the rejection notice to file a claim against the Debtors for all outstanding amounts owed under the Joint Venture Agreement and the License Agreement, including any unmatured, contingent, and unliquidated sums. In the event that the Debtors assert that either or both of the agreements are not executory contracts, the Debtors must file a request returnable before June 14, 2004 for a determination to the effect. Headquartered in Southfield, Michigan, Federal-Mogul Corporation -- http://www.federal-mogul.com/-- is one of the world's largest automotive parts companies with worldwide revenue of some $6 billion. The Company filed for chapter 11 protection on Oct. 1, 2001 (Bankr. Del. Case No. 01-10582). Lawrence J. Nyhan, Esq., James F. Conlan, Esq., and Kevin T. Lantry, Esq., at Sidley Austin Brown & Wood and Laura Davis Jones, Esq., at Pachulski, Stang, Ziehl, Young, Jones & Weintraub, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, they listed $10.15 billion in assets and $8.86 billion in liabilities. (Federal-Mogul Bankruptcy News, Issue No. 56; Bankruptcy Creditors' Service, Inc., 215/945-7000) FLEMING COMPANIES: Intends To Sell Slush Puppie for $918,000 ------------------------------------------------------------ The Fleming Companies, Inc. intends to sell their Slush Puppie Business to Andrew M. Head for $918,000, subject to adjustment. The Debtors acquired the Slush Puppie Business from Mr. Head as part of the Debtors' acquisition of Head Distributing Company in April 2002. The Business is a segment of the Debtors' Fleming Convenience division. Slush Puppies are name-brand, frozen beverages that are particularly popular in the warm weather months. Head Distributing currently operates 2,671 pieces of Slush Puppie and related equipment in convenience stores throughout Florida, Alabama, Georgia and Tennessee. Convenience store owners pay Head Distributing a fee for supplying, maintaining and servicing the Slush Puppie Equipment in their stores. Those fees are a secondary source of income for Head Distributing. To facilitate its servicing of the Equipment in convenience stores, Head Distributing maintains five facilities comprising 34,010 square feet. These facilities house an inventory of products necessary to maintain the Equipment. Head Distributing also employs 26 individuals who service the Equipment on-site in the convenience stores. The Debtors have operated the Slush Puppie Business for more than two years, during which period the Business has failed to produce an acceptable profit. Moreover, the Slush Puppie Business is a poor fit with the Fleming Convenience business model. Fleming Convenience's principal business involves the distribution of consumer-packaged goods and store supplies to the domestic and Canadian convenience retail industry. The Slush Puppie Business operates under a substantially different model. Fleming Convenience must not only deliver Slush Puppie supplies to participating convenience stores, but must also service and maintain the Slush Puppie equipment located in those stores. In this way, the Slush Puppie Business diverges from the principal Fleming Convenience business model, creating logistic and operational difficulties for the Debtors. In July 2003, the Debtors decided to sell or otherwise dispose of the Slush Puppie Business. At that time, and in light of Mr. Head's prior ownership of the Slush Puppie Business, the Debtors approached him to see if he was interested in reacquiring the business. Since then, the Debtors and Mr. Head have engaged in extensive, arm's-length negotiations with regard to the Debtors' sale of all or part of the Slush Puppie Business. Time is now of the essence since a sale of the Slush Puppie Business will produce the highest and best value if consummated before the onset of the warm weather season. The Slush Puppie Assets The assets of the Slush Puppie Business consist of: * 2,310 pieces of equipment, of which 2,271 are owned by the Debtors. The Debtors intend to sell the Owned Equipment and reject the leases for the remaining Equipment; * accounts receivable; * 3,244 pieces of non-capitalized equipment; * inventory; * six non-residential real property leases, including four dedicated storage facilities located in: (1) Jacksonville, Florida, (2) Lavergne, Tennessee, (3) Jackson, Tennessee, and (4) Smyrna, Georgia and a fifth facility in Adel, Georgia which serves as a dual-purpose storage/sales office facility; * 400 pieces of leased equipment; and * 22 license agreements with Slush Puppie Corporation entitling the Debtors to the exclusive rights to market Slush Puppies in various territories. All related real property leases, except for the Adel lease, all leases of non-owned equipment, and all Slush Puppie licenses are to be rejected and are not part of the sale. The Sale Terms The Debtors and Mr. Head will abide by these terms: (1) The purchase price to be paid by Mr. Head for the Property will be: (i) $594,368 for the Fixed Assets and the Non-Capitalized Equipment; plus (ii) 100% of the Debtors' actual acquisition cost of the inventory on the Closing Date; plus (iii) 100% of the book value of the Accounts Receivable aged 30 days or less and 50% of the book value of the Accounts Receivable aged more than 30 days, in each case as reflected on the Debtors' balance sheet on the Closing Date. On the business day before the Closing Date, a physical count of the Inventory will be made by the parties. (2) Payment of the Purchase Price: (a) Mr. Head will deliver to the Debtors a $91,800 deposit in the form of a certified or cashier's check made out to Core-Mark International, Inc., to be held in escrow until the consummation of the Sale; and (b) At Closing, Mr. Head will be required to deliver the balance of the Purchase Price to the Debtors via wire transfer of immediately available funds or by certified or cashiers check. (3) If Mr. Head fails to complete the Closing as provided in the Asset Purchase Agreement, or otherwise default in an material respect under the Asset Purchase Agreement, the Debtors will have the right to specifically enforce the terms of the Asset Purchase Agreement against Mr. Head. If the Debtors fail to complete the Closing, or otherwise default in any material respect under the Asset Purchase Agreement, Mr. Head's sole and exclusive remedies will be the right to either: (i) specifically enforce the terms of the Asset Purchase Agreement against the Debtors, provided, however, that the Sale Order has been entered; or (ii) terminate the Asset Purchase Agreement immediately upon written notice to the Debtors, and receive a full refund of the Deposit. (4) The Slush Puppie Assets will be conveyed to Mr. Head in "as is, where is" condition, without warranties of any kind by the Debtors as to the condition or suitability of the Slush Puppie Assets. (5) The Closing will take place within five business days after the Court approves the Sale. The Debtors will bear the risk of loss or casualty for the Slush Puppie Assets prior to the Closing. (6) The Debtors will permit Mr. Head and his agents to access the Warehouses and use the leased Equipment upon reasonable advance notice during normal business hours, for the period beginning the date an order is entered approving the sale and ending on May 31, 2004. (7) Possession of the Slush Puppie Assets will be delivered to Mr. Head at Closing. As soon as reasonably possible after the Closing Date, Mr. Head will, at his own expense, remove the Slush Puppie Assets from the warehouse located in Adel, Georgia and indemnify the Debtors against claims made by any third parties in regard to the removal. (8) Any relevant non-compete provisions in any agreement between Mr. Head and the Debtors will be null and void as to the Slush Puppie Business after the sale is approved. 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. 34; Bankruptcy Creditors' Service, Inc., 215/945-7000) FOOD MANAGEMENT: Case Summary & 27 Largest Unsecured Creditors -------------------------------------------------------------- Lead Debtor: Food Management Group, LLC One Michael Frey Drive Eastchester, New York 10709 Bankruptcy Case No.: 04-22880 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Bronx Donut Bakery, Inc. 04-22883 KMA-I, Inc. 04-22890 KMA-II, Inc. 04-22891 KMA-III, Inc. 04-22892 Type of Business: The Debtor is engaged in the business of managing 24 Dunkin Donuts franchises throughout Westchester and Bronx Counties, and New York City. Chapter 11 Petition Date: June 1, 2004 Court: Southern District of New York (White Plains) Judge: Adlai S. Hardin Jr. Debtors' Counsels: Jonathan S. Pasternak, Esq. Joseph Corneau, Esq. Rattet, Pasternak & Gordon Oliver, LLP 550 Mamaroneck Avenue, Suite 510 Harrison, NY 10528 Tel: 914-381-7400 Fax: 914-381-7406 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million A. Food Management Group's 6 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Richard Pu, Esq. $472,998 1065 Avenue of the Americas New York, NY 10018 Stuart B. Ratner, PC $22,127 Marcus & Kliegman PC $20,000 Certilman Balin $3,465 S. Buxbaum & Company, P.C. $3,000 CNA Insurance $462 B. KMA-I, Inc.'s 5 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Dunkin Donuts $34,324 Mid-Atlantic DCP $14,869 Zurich $12,300 Baskin-Robbins USA, Co. $2,390 Allied DomecQ Unknown C. KMA-II, Inc.'s 6 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Dunkin-Donuts $40,779 Mid-Atlantic DCP $16,170 Travelers $10,308 Baskin-Robbins USA, Co. $319 EcoLab Pest Elimination $308 Allied DomecQ Unknown D. KMA-III, Inc.'s 5 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Dunkin-Donuts $41,992 Mid-Atlantic DCP $18,224 Travelers $10,385 Zurich $7,063 Baskin-Robbins USA, Co. $349 E. Bronx Donut Bakery, Inc.'s 5 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Mid-Atlantic DCP $17,078 CitiCapital $3,244 All State $1,344 All Safe Fire Protection $500 EcoLab Pest Elimination $286 GADZOOKS INC: Reports $12.7 Million May 2004 Net Sales ------------------------------------------------------ Gadzooks, Inc. (OTC Pink Sheets: GADZQ) announced that sales for the four weeks of fiscal May ended May 29, 2004 totaled $12.7 million. Comparable store sales decreased 19.5 percent for the May period, compared to a 5.1 percent increase for fiscal May 2003. Total sales for the first 17 weeks of fiscal 2004 were $68.6 million, of which $13.2 million was generated by stores now closed. Comparable store sales for the Company's current 250 store base declined 11.5 percent for the 17 weeks ended May 29, 2004. "We are rapidly approaching the one-year anniversary of our conversion to an all female concept in July of 2003," said Jerry Szczepanski, Chairman and Chief Executive Officer. "We continue to grow our new business and look forward to a true comparison of our results when we reach the month of July. Our current comparable store sales results are being significantly impacted by the fact that the April to June time period of 2003 was used to close out our mens business. From July 2004 forward, the prior year men's liquidation will not have an impact on monthly comparable store sales comparisons." Dallas-based Gadzooks is a specialty retailer of casual clothing, accessories and shoes for 16-22 year-old females. May was the Company's eleventh month as a female-only concept. Gadzooks now operates 250 stores in 40 states. The Company currently intends to retain and operate approximately 250 stores in the future; however, there can be no guarantee that the Company will not subsequently decide to close any of these stores. Headquartered in Carrollton, Texas, Gadzooks, Inc. -- http://www.gadzooks.com/-- is a mall-based specialty retailer providing casual apparel and related accessories for youngsters, between the ages of 14 and 18. The Company filed for chapter 11 protection on February 3, 2004 (Bankr. N.D. Tex. Case No. 04- 31486). Charles R. Gibbs, Esq., and Keith Miles Aurzada, Esq., at Akin Gump Strauss Hauer & Feld, LLP represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $84,570,641 in total assets and $42,519,551 in total debts. GEO SPECIALTY: U.S. Trustee Appoints 7-Member Creditors' Committee ------------------------------------------------------------------ The United States Trustee for Region 3 appointed 7 creditors to serve on an Official Committee of Unsecured Creditors in GEO Specialty Chemical, Inc.'s Chapter 11 case: 1. Jeremy Bloomer Airlie Opportunity Fund, LP 115 East Putnam Avenue Greenwich, Connecticut 06830 Tel: 203-661-6200 Fax: 203-661-0479 2. E. Cary Holcomb Oppenheimer & Co., Inc. 125 Broad Street New York, New York 10004 Tel: 212-668-5030 Fax: 212-825-4063 3. Robert Katz Senvest International, LLC 680 Fifth Avenue, Suite 1300 New York, New York 10019 Tel: 212-977-2466 Fax: 212-489-1248 4. David Clayton Merrill Lynch Investment Managers, on behalf of certain funds 800 Scudders Mill Rd., Area 1B Plainsboro, New Jersey 08536 Tel: 609-282-3001 Fax: 609-282-2940 5. Richard H. Walker, Jr., Esq. South Jersey Gas Company 1 South Jersey Plaza Folsom, New Jersey 08037 Tel: 609-567-4000 x 4250 Fax: 609-561-7130 6. Frank J. Grippo Indenture Trustee J.P. Morgan Trust Company 4 New York Plaza Floor 15 New York, New York 10004-2413 Tel: 212-623-6736 Fax: 212-623-6624 7. Ronald J. Gumbaz Delphi Petroleum, Inc. 12 Broad Street, 5th Floor Red Bank, New jersey 07701 Tel: 732-741-6642 Fax: 732-741-6760 Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Harrison, New Jersey, GEO Specialty Chemicals, Inc. -- http://www.geosc.com/-- develops, manufactures and markets a wide variety of specialty chemicals, including over 300 products sold to major industrial customers for various end-use applications including water treatment, wire and cable, industrial rubber, oil and gas production, coatings, construction, and electronics. The Company filed for chapter 11 protection on March 18, 2004 (Bankr. N.J. Case No. 04-19148). Howard S. Greenberg, Esq., Morris S. Bauer, Esq., and Stephen Ravin, Esq., at Ravin Greenberg, PC represent the Debtors in their restructuring efforts. On September 30, 2003, the Debtors listed total assets of $264,142,000 and total debts of $215,447,000. HAVENS STEEL: 9 Largest Creditors Appointed to Serve Committee -------------------------------------------------------------- The United States Trustee for Region 13 named nine of the largest unsecured creditors of Havens Steel Company's chapter 11 case to serve on the Official Committee of Unsecured Creditors: 1. Alberici Constructors, Inc. Hillsdale Fabricators 2150 Kienlen Avenue St. Louis, Missouri 663121 Telephone: 314-261-2611 ext. 2450 Telecopier: 314-385-6069 Email: thess@alberici.com Contact: Theresa M. Hess 2. Adams & Smith, Inc. 1380 West Center Street Lindon, Utah 84042 Telephone: 801-785-6900 Telecopier: 801-785-6400 Email: dorrie@adamsmithinc.com Contact: Dorrie Reitano 3. Nucor-Yamato Steel Co. P.O. Box 1228 Blytheville, Arkansas 72316 Telephone: 870-762-7111 Telecopier: 870-762-1130 Email: kprevost@nucor-yamato.com Contact: Keith Prevost 4. M.C. Painting Corporation 1195 Haverford Road Crum Lynne, Pennsylvania 19022 Telephone: 610-833-5732/610-238-0880 Telecopier: 610-833-2583 Email:mcpainting@comcast.net Contact: Evangelos M. Calombaris 5. Multi-Phase Inc. 173 Old Beaver Grade Road Coraopolis, Pennsylvania 15108 Telephone: 412-788-9455 Telecopier: 412-788-9456 Email: jrosgony@multiphaseinc.com Contact: James M. Rosgony 6. Nicholas J. Bouras, Inc. P.O. Box 662 25 DeForest Avenue Summit, New Jersey 07901-2154 Telephone: 908-077-6617 Telecopier: 908-277-2818 Email: Garyruckelshaus@bourasinc.com Contact: Gary E. Rusckelshaus 7. Merrill Iron & Steel, Inc. 900 Alderson St. P.O. Box 110 Schofeild, Wisconsin 54476-1488 Telephone: 715-355-8924 Telecopier: 715-355-8444 Email: mklussendorf@merrilliron.com Contact: Michael J. Klussendorf 8. Southeastern Contstruction and Maintenance, Inc. 1150 Pebbledale Road P.O. Box 1055 Mulberry, Florida 33860 Telephone: 863-428-1511 ext. 239 Telecopier: 863-428-1110 Email: JasonH@Southeasterncon.com Contact: Jason Howell 9. Continental Construction, Inc. Derr Steel Erection Company 13400 Trinity Boulevard Euless, TX 76040 Telephone: 817-571-4044 Telecopier: 817-571-4544 Email: bobderr@derrsteel.com Contact: Bob Derr Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Kansas City, Missouri, Havens Steel Company -- http://www.havenssteel.com/-- provides design-build services from engineering to fabrication and erection to steel management systems and on-site project management. The company filed for chapter 11 protection on March 18, 2004 (Bankr. W.D. Mo. Case No. 04-41574). Jonathan A. Margolies, Esq., and R. Pete Smith, Esq., at McDowell, Rice, Smith & Buchanan represents the Debtors in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of over $10 million each. HIGH VOLTAGE: Hires Evercore Restructuring as Financial Advisors ---------------------------------------------------------------- The U.S. Bankruptcy Court for the District Of Massachusetts, Eastern Division gave its stamp of approval to High Voltage Engineering Corporation to employ Evercore Restructuring L.P. as its financial advisors. As financial advisors to the Debtors, Evercore Restructuring will: a) assist in the evaluation of the Debtors' businesses and prospects; b) assist in the development of the Debtors' long-term business plan and related financial projections; c) assist in the development of financial data and presentations to the Debtors' Board of Directors, various creditors and other third parties; d) analyze the Debtors' financial liquidity and evaluate alternatives to improve such liquidity; e) analyze various restructuring scenarios and the potential impact of the scenarios on the value of the Debtors and the recoveries of those stakeholders impacted by any restructuring, reorganization and/or recapitalization of the Debtors affecting existing or potential debt obligations or other claims including, without limitation, senior debt, junior debt, trade claims, general unsecured claims, etc.; f) provide strategic advice with regard to restructuring or refinancing the Debtors' Obligations; g) evaluate the Debtors' debt capacity and alternative capital structures; h) participate in negotiations among the Debtors and their creditors, suppliers, lessors and other interested parties with respect to a Restructuring, an equity investment in the Debtors and a possible sale, merger, or other disposition of all or a portion of the Debtors or their assets; i) assist the Debtors in preparing marketing materials in conjunction with a possible Transaction, Investment, Financing or debtor in possession financing; j) assist the Debtors in identifying potential buyers or parties in interest to a Transaction and assist in the due diligence process; k) assist and advise the Debtors concerning the terms, conditions and impact of any proposed Transaction; l) assist in arranging DIP Financing for the Debtors as requested; m) testify in court or at depositions in furtherance of a Restructuring, Investment, Financing, DIP Financing or Transaction; and n) provide such other advisory services as are customarily provided in connection with the analysis and negotiation of a Restructuring, Investment, Financing, DIP Financing or Transaction, as requested and mutually agreed. Evercore Restructuring will receive: i) $100,000 per month as an advisory fee; ii) a Restructuring Fee equal to 1.0% of the face amount of the 10-3/4% Senior Notes Due 2004; iii) an Investment Fee equal to 3.0% of aggregate value of any Investment; iv) a Financing Fee of 1.0% of the total facility size of any Financing; and v) a Transaction Fee equal to 1.25% of the Consideration received in any Sale Transaction. Headquartered in Wakefield, Massachusetts, High Voltage Engineering Corp., designs and manufactures technology-based products in three segments: power conversion technology and automation, advanced surface analysis instruments and services, and monitoring instrumentation and control systems for heavy machinery and vehicles. The Company filed for chapter 11 protection on March 1, 2004 (Bankr. Mass. Case No. 04-11586). Christian T. Haugsby, Esq., and Douglas B. Rosner, Esq., at Goulston and Storrs, PC represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of more than $100 million. INTERSTATE BAKERIES: Increases Reserve for Workers' Compensation ---------------------------------------------------------------- Interstate Bakeries Corporation (NYSE:IBC) announced that it has increased its reserve for workers' compensation during fiscal 2004 with a charge to pretax income of approximately $40 million. The Company, together with its insurance advisors, determined that it was necessary to modify the manner in which it was calculating its estimates of workers compensation reserves, primarily as a result of increases in the Company's fiscal 2004 actual expenses associated with workers' compensation claims, particularly in the state of California, and increases in healthcare costs nationwide. As a result of this modification, the Company determined that this increase, which represents an approximately 40% increase in total reserves for workers' compensation expenses, was required. The Company is currently reviewing whether all or a part of the charge relates to the fourth quarter or prior quarters in fiscal 2004. If the Company determines that all or a portion of the charge should have been taken in a quarter prior to the fourth quarter, it would be required to restate its financial statements for such prior quarters. On May 27, 2004, the Company amended the leverage and interest coverage covenants in its senior secured credit facility to exclude the effect of the additional workers' compensation reserve of up to $40 million. The Company otherwise would not have been able to comply with these covenants as of the end of its fiscal year 2004, which ended on May 29. These financial covenants had previously been adjusted on May 7, 2004, to provide additional flexibility for the fourth quarter of 2004. During the first quarter of fiscal 2005 and thereafter, such covenants will revert to the levels that were applicable under the facility prior to the May 7 amendment. The Company is actively exploring options for refinancing its debt or further amending its senior secured credit facility to provide additional flexibility during fiscal 2005. However, there is no assurance that the Company will be successful in obtaining such refinancing or amendment. About the Company Interstate Bakeries Corporation is the largest baker and distributor of fresh baked bread and sweet goods in the U.S. under various national brand names including Wonder, Hostess and Home Pride, as well as regional brand names such as Butternut, Dolly Madison, Drake's and Merita. The Company, with 55 bread and cake bakeries and more than 1,000 distribution centers located in strategic markets from coast to coast, is headquartered in Kansas City, Missouri. ITRON INC: Schlumberger Asset Purchase Gets Green Light ------------------------------------------------------- Itron Inc. (Nasdaq:ITRI) announced that the Federal Trade Commission has terminated the waiting period required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 in connection with Itron's purchase of Schlumberger Limited's electricity metering products business. This favorable decision from the FTC means that Itron is now able to move ahead with the remaining steps to close the acquisition. The acquisition is expected to close no later than June 30, 2004. The SEM acquisition includes Schlumberger's electricity meter manufacturing and sales operations in the United States and the electricity meter operations of certain foreign affiliates of Schlumberger in Canada, Mexico, Taiwan and France. The purchase price for SEM has been adjusted down $7 million to $248 million, subject to post closing working capital adjustments. The purchase price, together with related fees and expenses, will be financed with proceeds from Itron's new $240 million senior secured credit facility and from a recently completed private placement of $125 million in senior subordinated notes. "SEM is the market leader in state-of-the art electricity meters, with a long track record of strong revenue, earnings and cash flow," said LeRoy Nosbaum, Itron chairman and CEO. "This acquisition will enable Itron to capitalize on the increasing demand for electronic meters with integrated AMR functionality and provides our customers with a more highly integrated suite of products and a broader, more attractive array of value propositions." Nosbaum commented that preliminary estimates indicate the acquisition of SEM will add between 15 and 25 cents to Itron's expected pro forma EPS in the second half of 2004 and that the Company intends to narrow that estimate between now and when it reports second quarter 2004 results on July 19, 2004. "Now that we have FTC approval, we can have detailed discussions with SEM about revenue expectations by customer and other financial matters that until now, we were not able to have." Pro forma EPS excludes intangible amortization expenses, restructuring charges and in- process R&D charges. However, Nosbaum added that the Company would fall short of analyst expectations for second quarter earnings partially due to approximately $1.2 million in net interest expense associated with the $125 million in financing the Company completed in early May, that is now in escrow, and an $800,000 write-off of the Company's remaining minority investment in Lanthorn Technologies, which ceased operations last week. Nosbaum added that, the Company is likely to see slightly lower than expected second quarter revenues due to several AMR orders that have not yet closed. "We knew coming into 2004 that the first half of the year would be challenging. While our performance in the first six months is turning out to be less than we had hoped for, much of the business that has been delayed remains quite active in our pipeline. SEM is expected to be more accretive than we had initially anticipated and our preliminary estimates for combined financial results in the second half of 2004 reflect good, strong growth." As previously disclosed, part of the FTC clearance process required Itron to license certain of its existing electric meter module and other AMR technology to a competing third party. Itron announced that the licensee is Hunt Technologies in Pequot Lakes, MN and that the licensing agreement will become effective upon closing of the SEM acquisition. About Itron Itron is a leading technology provider and critical source of knowledge to the global energy and water industries. More than 2,800 utilities worldwide rely on Itron technology to deliver the knowledge they require to optimize the delivery and use of energy and water. Itron delivers value to its clients by providing industry-leading solutions for meter data collection, energy information management, demand side management and response, load forecasting, analysis and consulting services, transmission and distribution system design and optimization, web-based workforce automation, C&I customer care, enterprise and residential energy management. To know more, start here: http://www.itron.com/ As reported on the Troubled Company Reporter, April 30, 2004 issue, Standard & Poor's Ratings Services assigned its 'B' subordinated debt rating to Itron Inc.'s $125 million subordinated debt due 2012 issued under Rule 144A and Regulation S under the Securities Act of 1933. The proceeds will be used to partially finance its $255 million acquisition of electricity metering business, SEM, from Schlumberger Ltd. (A+/Negative/A-1), repay outstanding indebtedness, and for general corporate purposes. JENOSYS ENTERPRISES: Provides Update on Restructuring Developments ------------------------------------------------------------------ On November 4, 2003, Jenosys announced that it was commencing production of its Class II Products and that an initial order of 200 Systems had been received. Subsequently, on December 18, 2003, Jenosys Technologies Inc, the wholly owned subsidiary, filed an assignment into bankruptcy under the Bankruptcy and Insolvency Act. The order for the 200 Systems was with JTI. The completion of this order for the full 200 Systems was dependent on Jenosys's ability to generate sufficient revenue from other products and, if necessary, to utilize the capital markets and current shareholders to raise additional funds, which they had done in the past, to facilitate the purchase of all of the materials to complete the delivery of the Systems. Unfortunately, Jenosys did not generate sufficient revenues and the company was not able to raise the required funds, and therefore was unable to fulfill its commitments and meet its obligations in a timely manner. JTI was able to complete and deliver 20 of the Systems prior to December 18, 2004. KPMG was appointed the trustee for JTI, and all assets of JTI were realized on and sold to compensate the creditors of JTI. Jenosys Enterprises Inc, the parent company, has not filed for assignment into bankruptcy, but its sole assets are the shares of JTI and the inter-company loans to JTI. Jenosys does not have any assets, however, it has liabilities of approximately $1,600,000, which is mainly due to debenture holders ($1,500,000) and a small number of other creditors. Jenosys is preparing a plan to settle all outstanding debts with the issuance of shares from the treasury with the exception of our current auditor, as they are unable to accept shares of a company that they audit. After the debt settlements, there will not be any significant liabilities to Jenosys, and this will allow Jenosys to pursue new business opportunities. Mr. Greg Andrews has been appointed a director and President of Jenosys, and he will be responsible for identifying and pursuing new business opportunities for Jenosys. Mr. Jean-Pierre Desbiens has resigned from the board of directors. Jenosys has been suspended and halted from trading on the TSX Venture Exchange, pending a company contact and a review of its business affairs by the TSX. As Jenosys has no operations, the company will be transferred to the NEX board of the TSX upon reinstatement of trading. KAISER ALUMINUM: Court Gives Go-Ahead to $315 Million Alpart Sale ----------------------------------------------------------------- Kaiser Aluminum said that, in a special hearing that concluded June 3, the U.S. Bankruptcy Court for the District of Delaware ruled that the company should proceed with the sale of its interests in and related to the Alpart alumina refinery in Jamaica to Hydro Aluminium a.s. in accordance with Hydro's previously announced exercise of its right of first refusal under the Alpart partnership agreement. As disclosed in Kaiser's Form 10-Q for the first quarter of 2004, the base purchase price is $295 million plus certain adjustments, which are expected to be in the range of $20 million. The transaction is expected to result in a gross sales price in the range of $315 million and a pre-tax gain of approximately $100 million. The company is currently working with the lenders under the Post- Petition Credit Agreement for an amendment that would, among other things, authorize the sale of the company's interests in Alpart and certain other commodity assets. In the interim, Kaiser Aluminum has obtained a waiver under this Credit Agreement that, among other things, permits the sale of the company's interests in Alpart. The company currently expects that the proceeds from the sale will be held in escrow pending the completion and approval by the Court of the amendment to the Credit Agreement and the Intercompany Agreement. Based on the Court order, Kaiser intends to proceed expeditiously toward a closing within the next several weeks. However, no assurances can be given in this regard. L&J RESTAURANT: Case Summary & 20 Largest Unsecured Creditors ------------------------------------------------------------- Debtor: L&J Restaurant Corporation dba Bear Rock Cafe 1759 Pine Mesa Grove Colorado Springs, Colorado 80917 Bankruptcy Case No.: 04-21257 Type of Business: The Debtor operates a franchise restaurant. See http://www.bearrockfoods.com/ Chapter 11 Petition Date: May 24, 2004 Court: District of Colorado (Denver) Judge: Debtor's Counsel: Robert M. Duitch, Esq. 665 SouthPointe Court, Suite 150 Colorado Springs, CO 80906-8839 Tel: 719-632-3450 Fax: 719-632-0006 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 ------ --------------- ------------ Christofferson Commercial Leasehold $62,243 Builders, Inc. Improvements- Shops at Briargate CS Lifestyle Center, LLC Rent and other $38,562 charges due Bear Rock Systems, Inc. Franchise Fees $30,000 Citadel Crossing Associates, Rent and other $26,957 LLP charges due Bank Card Services Charges for Equipment $21,445 American Express Credit charges for $20,400 POS System US Food Service, Inc. Merchandise $19,465 Network Services Merchandise- Paper $15,800 Products Young Electric Sign Company Signage at Citadel $15,687 location Commissary Operations, Inc. Merchandise- Food & $14,000 Paper Products Colorado Dept. of Revenue Sales Tax $13,050 The Gazette Advertising $7,867 Trane Company Equipment for Citadel $5,929 Crossing location Dan Brubaker Construction $4,150 Management Momentum Printing LLC Menus $2,222 Utica National Insurance General Liability $1,856 Group Insurance Colorado Springs Utilities Utility Services $1,309 Imaging Technologies Menu Boards $978 Services, Inc. WTSC Communications Phone System - $707 Citadel location Cape Fear Trading, Inc. Uniforms $700 LANGUAGE LINE: S&P Rates $55 Mil. Senior Discount Notes at CCC+ --------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'CCC+' rating to parent Language Line Holdings Inc.'s $55 million senior discount notes due 2013. In addition, Standard & Poor's affirmed its 'B' corporate credit rating on Language Line Inc. Pro forma for the transactions, Monterey, California-based Language Line had total debt plus debt- like securities outstanding of $618.8 million. The outlook is stable. The ratings reflect the price-competitive over-the-phone interpretation market and Language Line's high debt leverage. These concerns are only partially mitigated by the company's dominant share in the niche outsourced-OPI market, a flexible cost structure, favorable demographic trends, and good discretionary cash flow. LEAP WIRELESS: Hires William Freeman as Cricket Communications CEO ------------------------------------------------------------------ Leap Wireless International, Inc., a leading provider of innovative and value-driven wireless communications services, announced that William Freeman has been appointed as the Chief Executive Officer of Leap's operating subsidiary, Cricket Communications, Inc. In his new role, Freeman will oversee the corporate and local business operations of Cricket, which provides wireless service in 39 markets across the country. Additionally, Freeman will assume a seat on Leap's board of directors when it emerges from Chapter 11 bankruptcy and will be appointed as CEO of Leap when court approval has been obtained. Freeman will be succeeding Harvey P. White as CEO of Leap. "Cricket Communications is a leading telecommunications company offering customers products and services that bring value to their everyday lives," said Mr. Freeman. "I am pleased to assume the role of CEO and am impressed by the strength of the company's overall business proposition. With Leap and Cricket nearing emergence from Chapter 11, I am excited about the company's growth prospects and bright future. Together, the executive team, the company's employees and I are dedicated to continue providing consumers with affordable wireless services. I hope to build further on the success of the business as it continues to advance as a leader in the wireless industry." "I am very confident in the decision to appoint Bill as CEO," said, Michael Targoff, a member of Leap's board of directors. "He brings an extensive portfolio of experience grounded in the telecommunications industry, and this experience, combined with an underlying energy to drive the business to its fullest potential, are ideal traits for a CEO. I believe we have found a great leader and we are fortunate to have him join the company." Freeman brings to Cricket nearly 30 years of experience in the telecommunications industry, including his most recent position as president of Verizon Public Communications Group, a business unit of Verizon Communications focused on payphones, prepaid programs, long distance and other services. As president, Freeman was responsible for all strategic planning, business development, marketing, sales, and other functions necessary to support a $600 million nationwide business with a staff of 1,300. Under his leadership, the Verizon Public Communications Group acquired several additional business units and won a substantial strategic partnership as a preferred provider to a major convenience store chain that was launching a prepaid card business. Prior to joining Verizon, from 1974 to 2000 Freeman held various leadership positions at Bell Atlantic Corporation, including president and CEO of Bell Atlantic, Washington D.C. and of Bell Atlantic, New Jersey. In these roles, Freeman was responsible for overall company performance including earnings performance, customer service levels, regulatory issues, government relations, customer outreach and philanthropy. From 1988-1989, Freeman served as a Presidential Exchange Fellow and worked in the United States General Accounting Office, Trade, Energy and Finance Group where he developed recommendations by the U.S. for the economic structure of the European Union, as well as working on various import and export issues for the administration and the Senate. Currently, Freeman sits on the corporate boards of the CIT Group and Value Added Communications, Inc. Freeman is also active in the not-for-profit sector, including service as the vice chairman of the board of trustees of Drew University and as a member of the board of Junior Achievement Worldwide. Freeman holds a Bachelor of Arts degree in economics from Drew University and a Masters of Business Administration in finance and management from Rutgers University. About Cricket Service Cricket(R) service is an affordable wireless alternative to traditional landline service and appeals to customers who want the most affordable, predictable and best wireless value. With a commitment to value, predictability and simplicity as the foundation of its business, Cricket designs and markets wireless products to meet the needs of everyday people. Cricket(R) service is available in 39 markets in 20 states across the country stretching from New York to California. For more information, please visit http://www.mycricket.com/ About Leap Headquartered in San Diego, California, Leap Wireless International Inc. -- whose March 31, 2004 balance sheet shows a stockholders' deficit of $921,775,000 -- is a customer-focused company providing innovative communications services for the mass market. Leap pioneered the Cricket Comfortable Wireless(R) service that lets customers make all of their local calls from within their local calling area and receive calls from anywhere for one low, flat rate. For more information, visit http://www.leapwireless.com/ LOGISTICS MANAGEMENT: Presents Reorganization Plan to Shareholders ------------------------------------------------------------------ Logistics Management Resources, Inc. (OTCBB:LMRI), announced its plan of reorganization to its shareholders. "The plan" stated Danny L. Pixler, LMRI's current President and Chief Executive Officer, "is the product of considerable reflection and, as such, is multi-faceted and comprehensive. It includes the appointment of Anthony R. Russo, a seasoned financial services executive who joined our board in January 2003, as President and Chief Executive Officer, my assumption of the responsibilities as LMRI's Chairman of the Board, the adoption of a business development company investment and value added services model, a change of the Company's corporate name to 'American Business Corporation', a move to and expansion of the Company's offices at 477 Madison Avenue, New York, NY, and an increase in the Company's authorized capital to 500,000,000 common shares to accommodate the plan's execution." "We are excited that Mr. Russo has agreed to join our Company and lead its redirection," stated Pixler, "he brings the creativity and energy necessary to restoring the Company's access to future business opportunities. In just the last three weeks of working together, we have selected a new business model and direction, acquired our first portfolio company, Hybrid-Systems.com, Inc., and called a Special Meeting of Shareholders to be held 10:00 AM (EDT) on June 17, 2004, at the Company's new offices." Hybrid-Systems.com, Inc. is a Florida corporation engaged in the manufacture and sale of specialized computing devices. Hybrid was acquired for 5,000,000 newly issued shares of the Company's common stock, subject to reduction based upon the completion of Hybrid's audited financial statements. When asked to comment on the announcement, Mr. Russo responded that he "looked forward to building the Company's next generation of business relationships and contributing his experience to the commercial opportunities the Company was already beginning to attract." Until November 2000, LMRI's principal holdings centered in the freight transportation services business styled "US Trucking", when four of its seven units were forced into bankruptcy due to failing market conditions. LMRI subsequently ceased and disposed of its remaining three units in 2003 without seeking protection of the bankruptcy courts, settled substantially all of the claims that arose from the failed freight transportation business and focused on its reporting and administrative requirements with a persistent vision toward acquiring new business opportunities and redirecting its affairs. Logistics Management Resources, Inc. -- whose March 31, 2004 balance sheet reports a stockholders' deficit of $17,462,107 -- is a holding company with its headquarters in Louisville, Kentucky. The Company's operating revenues are derived from its wholly owned subsidiary, Interstate University, Inc. a driver training school headquartered in Evansville, Indiana. The Company continues to investigate acquisition and merger opportunities. MALAN REALTY: Raises $5.9 Million from Wood River Plaza Sale ------------------------------------------------------------ Malan Realty Investors, Inc. (NYSE: MAL), a self-administered real estate investment trust, announced it has sold its Wood River, Illinois property and completed the redemption of its convertible subordinated debentures. Wood River Plaza, located at 1501 Vaughan Road, is a 147,470 square-foot shopping center anchored by Wal-Mart. The purchaser of the property is Woodriver Partners, LLC. Gross cash proceeds to Malan from the transaction were approximately $5.9 million, which were used to pay down debt. The company completed the redemption of its convertible subordinated debentures on June 1, 2004. The final aggregate principal balance of its 9.5 percent Convertible Subordinated Debentures due July 15, 2004 was $7.1 million. The convertible subordinated debentures were issued as part of the company's initial public offering in 1994. "We are pleased to complete the sale of this property and the final redemption of the convertible subordinated debentures," said Jeffrey Lewis, president and chief executive officer of Malan Realty Investors. "With this sale and debt reduction, we have paid off approximately $110 million of company debt over the last year." Malan Realty Investors, Inc. is continuing to liquidate its assets and currently expects that no later than August 28, 2004, any then remaining assets and liabilities will be transferred to a liquidating trust. Each shareholder of Malan will automatically become the holder of one unit of beneficial interest in the trust for each share of Malan common stock, and all outstanding shares of Malan common stock will automatically be deemed cancelled. Malan Realty Investors will seek relief for the trust from registering the units under Section 12(g) of the Securities Exchange Act of 1934, as amended, and its obligation to file periodic reports. Subject to limited exceptions related to transfer by will, interstate succession or operation of law, the units will not be transferable nor will a unit holder have authority, opportunity or power to sell or in any other manner dispose of any units. As a result, the beneficial interests in the liquidating trust will not be listed on any securities exchange or quoted on any automated quotation system of a registered securities association. Shareholders who may need or wish liquidity with respect to their company common stock before the liquidating trust makes liquidating distributions should look into selling their shares while the common stock is still traded on an established market. About the Company Malan Realty Investors, Inc. owns and manages properties that are leased primarily to national and regional retail companies. In August 2002, the company's shareholders approved a plan of complete liquidation. The company owns a portfolio of 20 properties located in seven states that contains an aggregate of approximately 1.3 million square feet of gross leasable area. * * * As reported in the Troubled Company Reporter's May 18, 2004 edition, Malan Realty Investors, Inc. is continuing to liquidate its assetsand currently expects that no later than August 28, 2004, any then remaining assets and liabilities will be transferred to a liquidating trust. Each shareholder of Malan will automatically become the holder of one unit of beneficial interest in the trust for each share of Malan common stock, and all outstanding shares of Malan common stock will automatically be deemed cancelled. Malan Realty Investors, Inc. will seek relief for the trust from registering the units under Section 12(g) of the Securities Exchange Act of 1934, as amended, and its obligation to file periodic reports. MERISANT WORLDWIDE: Amends Tender Offer for 12-1/4% Sr. Notes ------------------------------------------------------------- Merisant Worldwide, Inc. (formerly known as Tabletop Holdings, Inc.) announced that it has amended the terms of its tender offer for its 12-1/4% Senior Subordinated Discount Notes due 2014 (CUSIP Nos. 87336NAA9 and U81965AA0). As a result of this amendment, if the Expiration Date has not occurred prior to August 15, 2004, holders that have validly tendered their Notes may withdraw such tendered Notes at any time after 9:00 a.m., New York City time, on August 15, 2004 and prior to the earlier of the Expiration Date and 5:00 p.m., New York City time, on August 31, 2004. Consents validly delivered prior to the Consent Date with respect to Notes, the tender of which is withdrawn during the Additional Withdrawal Period, will not as a result of such withdrawal be revoked and may not otherwise be revoked after the Consent Date. As a result, assuming that the proposed amendments to the indenture, which amendments are described in the Offer to Purchase and Consent Solicitation Statement dated May 20, 2004, become operative, a holder who chooses to withdraw previously tendered Notes during the Additional Withdrawal Period will, as of the date that the Notes are accepted for payment pursuant to the terms of the offer, hold Notes governed by the amended indenture. The proposed amendments to the indenture would eliminate substantially all of the restrictive covenants and certain events of default and related provisions contained in such indenture. Merisant Worldwide also announced that it has extended the Consent Date applicable to its solicitation of consents to the proposed amendments. The date by which holders may validly deliver consents has been extended from 5:00 p.m., New York City time, on June 3, 2004 to 5:00 p.m., New York City time, on June 7, 2004, unless further extended. Holders that validly tender their Notes and validly deliver a consent prior to the Consent Date will be entitled to receive the total consideration. Holders who validly tender their Notes after the Consent Date but prior to 5:00 p.m., New York City time, on June 18, 2004, unless extended, will be entitled to receive the tender offer consideration. Except as otherwise described above, all terms and conditions of the tender offer and consent solicitation are unchanged. Credit Suisse First Boston LLC is the dealer manager for the offer and the solicitation agent for the solicitation. MacKenzie Partners, Inc. is the information agent and Wells Fargo Bank, National Association is the depositary in connection with the offer and solicitation. The offer and solicitation are being made pursuant to the Offer to Purchase and Consent Solicitation Statement, dated May 20, 2004, and the related Consent and Letter of Transmittal, which together set forth the complete terms of the offer and solicitation. Copies of the Offer to Purchase and Consent Solicitation Statement and related documents may be obtained from MacKenzie Partners, Inc. at 212-929-5500. Additional information concerning the terms of the offer and the solicitation may be obtained by contacting CSFB at 1-800-820-1653. About Merisant Worldwide Chicago, Illinois-based Merisant Worldwide, through its operating subsidiary Merisant Co., is a processor, packager, and marketer of low-calorie tabletop sweeteners, primarily aspartame-based products. * * * As reported in the Troubled Company Reporter's May 12, 2004 edition, Standard & Poor's Ratings Services placed its ratings on Merisant Worldwide Inc. and its wholly owned subsidiary Merisant Co. on CreditWatch with negative implications. This includes Merisant Worldwide's 'B+' corporate credit and its 'B-' senior subordinated debt ratings, and Merisant Co.'s 'B+' corporate credit, its 'B+' senior secured bank loan, and its 'B-' senior subordinated debt ratings. Negative implications mean that the ratings could be affirmed or lowered following the completion of Standard & Poor's review. The CreditWatch placement follows Merisant Worldwide's recent S-1 filing with the SEC(filed under Tabletop Holdings) for an initial public offering of income deposit securities, representing shares of its common stock and new senior subordinated notes. "Standard & Poor's believes that the IDS structure, in general, exhibits an extremely aggressive financial policy. Merisant Worldwide will have significantly reduced its financial flexibility given the anticipated high dividend payout rate," said Standard & Poor's credit analyst David Kang. As a result, the structure limits the company's ability to weather potential operating challenges and also reduces the likelihood for future deleveraging. METALLURG INC: Missed Interest Payment Spurs S&P's 'D' Ratings -------------------------------------------------------------- Standard & Poor's Rating Services lowered its corporate credit rating on Metallurg Inc. and its parent Metallurg Holdings Inc. to 'D' from 'CCC-'. Standard & Poor's also lowered the ratings on Metallurg's 11% senior notes due 2007 and Metallurg Holdings' 12.75% senior discount notes due 2008 to 'D' from 'CC'. "The downgrade follows the company's announcement that it did not make the $5.5 million interest payment due June 1, 2004, on the 11% senior notes due 2007," said Standard & Poor's credit analyst Dominick D'Ascoli. Standard & Poor's believes it is unlikely payment will be remedied within the 30-day grace period under the bond indenture and that the default will be general, as Metallurg is restricted from upstreaming funds to Metallurg Holdings to meet its July 15, 2004, interest payment to public holders of its 12.75% senior discount notes due 2008. New York, New York-based Metallurg produces specialty metals, alloys and metallic chemicals used by manufacturers of steel, aluminum, and superalloys. Weak demand in the past couple of years from the global steel and aluminum industries, as well as significantly reduced demand from major customers in the aerospace sector has led to lower margins. Reduced margins, combined with an overleveraged capital structure, have put the company in a distressed position. MIKROS SYSTEMS: Beard Miller Replaces Lipman Selznick as Auditors ----------------------------------------------------------------- On February 17, 2004, Mikros Systems Corporation accepted the resignation of Lipman, Selznick & Witkowski as the Company's independent auditors and has engaged the services of Beard Miller Company LLP as independent auditors. The change in auditors was effective February 17, 2004. This determination was approved by the Company's Board of Directors. Beard Miller Company LLP will audit the financial statements of the Company for the fiscal year ending December 31, 2003. Lipman's prior audit report on the Company's financial statements for each of the two most recent fiscal years in the period ended December 31, 2002 contained uncertainty as to the Company's ability to continue as a going concern. MJ PAK INC: Voluntary Chapter 11 Case Summary --------------------------------------------- Debtor: MJ Pak Inc. 14352 Ventura Boulevard Sherman Oaks, California 91423 Bankruptcy Case No.: 04-13769 Type of Business: The Debtor provides dry cleaning services. Chapter 11 Petition Date: May 28, 2004 Court: Central District of California (San Fernando Valley) Judge: Geraldine Mund Debtor's Counsel: Michael Jay Berger, Esq. Law Offices of Michael Jay Berger, Esq. 9454 Wilshire Boulevard, 6th Floor Beverly Hills, CA 90212-2929 Tel: 310-271-6223 Total Assets: $30,000 Total Debts: $664,000 The Debtor did not file a list of its 20-largest creditors. MORGAN STANLEY: Fitch Assigns Low Ratings to 3 1997-HF1 Classes --------------------------------------------------------------- Fitch Ratings upgrades Morgan Stanley Capital I, Inc.'s commercial mortgage pass-through certificates, series 1997-HF1 as follows: --$9.3 million class E to 'AA+' from 'AA'. In addition, Fitch affirms the following certificates: --$100.9 million class A-2 'AAA'; --Interest only class X 'AAA'; --$55.7 million class B 'AAA'; --$34 million class C 'AAA'; --$27.8 million class D 'AAA'; --$41.7 million class F 'BBB-'; --$4.6 million class G 'BB+'; --$10.8 million class H 'B'. The $7.7 million class J remains at 'CCC'. Fitch does not rate the $4.0 million class K certificates. The upgrade to class E is the result of increased subordination levels due to loan payoffs and amortization. As of the May 2004 distribution date, the pool's collateral balance has been reduced 49%, to $296.6 million from $616.4 million at issuance. Two loans (2.6%) are currently being specially serviced, including a 60 days delinquent (1.1%) and a 90 days delinquent (1.45%) loans. The 90 days delinquent loan is secured by a healthcare property located in East Northport, NY. The special servicer, GMAC Commercial Mortgage Corp., is currently determining a workout strategy. The 60 days delinquent loan, secured by a multifamily property in San Antonio, TX recently transferred to the special servicer. The special servicer is evaluating options. NATL CENTURY: NPF XII Subcomittee Modifies Klee Tuchin's Retention ------------------------------------------------------------------ In the National Century Financial Enterprises, Inc. Chapter 11 bankruptcy proceedings, the Official Subcommittee of Noteholders of NPF XII, Inc., sought and obtained the Court's authority to modify the retention of Klee Tuchin Bogdanoff & Stern, LLP, as special conflicts litigation counsel. The Court authorizes Klee Tuchin to: -- investigate and conduct discovery with respect to the claims by Credit Suisse First Boston; and -- if appropriate, in the NPF XII Subcommittee's judgment, file and prosecute the claims against CSFB on behalf of the NPF XII estate. Robert Jay Moore, Esq., at Milbank, Tweed, Hadley & McCloy, in Los Angeles, California, relates that in October 2003, the Court authorized NPF XII Subcommittee to retain Klee Tuchin to conduct discovery and file appropriate pleadings in connection with a proposed settlement of intercompany claims. At that time, the NPF XII Subcommittee opposed the Intercompany Settlement in its then form. The Debtors and the NPF XII Subcommittee have subsequently agreed on the form of Intercompany Settlement, currently embodied in the Debtors' Fourth Amended Joint Liquidation Plan. Under the Settlement Agreement and the Plan, all claims and causes of action that the Debtors hold against CSFB under Chapter 5 of the Bankruptcy Code, and other applicable laws for the avoidance and recovery of payments to CSFB are to be assigned to the CSFB Claims Trust, for the sole benefit of the NPF XII Noteholders. The Plan defines the CSFB Payments as "the $75 million in principal payments and related payments of fees and interest made by NPF XII in September 2002 to CSFB." The Plan treats the CSFB Claims differently from other potential claims or causes of action against CSFB, and claims or causes of action against other potential defendants. The CSFB Claims are being pursued solely for the benefit of the NPF XII Noteholders who are the sole beneficiaries under the CSFB Claims Trust under the Plan. In contrast, the Plan transfers causes of action against other defendants, as well as other potential claims or causes of action against CSFB that are not "for the avoidance and recovery of the CSFB Payments" to the Unencumbered Assets Trust, which will pursue those claims for the benefit of all unsecured creditors of the NCFE Debtors in accordance with the Plan. Accordingly, the engagement of Klee Tuchin is very specific to the CSFB Payments and CSFB Claims only. Klee Tuchin and the NPF XII Subcommittee will not have the authority to provide any release to CSFB or otherwise involve itself in any claims against CSFB other than as relate to the CSFB Claims as defined in the Plan. David M. Stern, a member of Klee Tuchin, relates that the firm is "disinterested person" as defined in Section 101(14) of the Bankruptcy Code, and as required by Section 327. Headquartered in Dublin, Ohio, National Century Financial Enterprises, Inc. -- http://www.ncfe.com/-- is the market leader in healthcare finance focused on providing medical accounts receivable financing to middle market healthcare providers. The Company filed for Chapter 11 protection on November 18, 2002 (Bankr. D. Ohio Case No. 02-65235). Paul E. Harner, Esq., Jones, Day, Reavis & Pogue represents the Debtors in their restructuring efforts. (National Century Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., 215/945-7000) NATIONAL WASTE: U.S. Trustee Names 4-Member Creditors' Committee ---------------------------------------------------------------- The United States Trustee for Region 3 appointed four creditors to serve on an Official Committee of Unsecured Creditors in National Waste Services of Virginia, Inc.'s Chapter 11 case: 1. General Excavation, Inc. Attn: Karen F. Jenkins 9745 James Madison Highway, Warrenton, Virginia 20187 Phone: 540-439-2202, Fax: 540-439-3795; 2. Cedar Mountain Stone Corp. Attn: Robert F. Lanham P.O. Box 12, 10496 Quarry Dr., Mitchells, Virginia 22729 Phone: 540-829-7203, Fax: 540-829-5593; 3. Brett Aggregates, Inc. Attn: Mark E. Hills 4794 Finlay Street, Richmond Virginia 23231 Phone: 804-222-5788, Fax: 804-222-8330; and 4. Ryan Incorporated Central Attn: Matthew J. Ryan P.O. Box 206, Janesville Wisconsin 53547 Phone: 608-754-2291, Fax: 608-754-2293. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Little Creek, Delaware, National Waste Services of Virginia, Inc. -- http://www.natwaste.com/-- collects, processes and disposes solid non-hazardous waste and recycling materials. The Company filed for chapter 11 protection on March 4, 2004 (Bankr. Del. Case No. 04-10709). Michael Gregory Wilson, Esq., at Hunton & Williams represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated debts and assets of over $10 million each. NBTY INC.: S&P Affirms Low-B Ratings & Revises Outlook to Stable ---------------------------------------------------------------- Standard & Poor's Ratings Services revised its outlook on vitamin, mineral, and supplement manufacturer NBTY Inc. to stable from negative. At the same time, Standard & Poor's affirmed its 'BB' corporate credit and senior secured bank loan ratings, as well as its 'B+' subordinated debt rating on the company. The outlook revision reflects NBTY's successful integration of the Rexall Sundown wholesale vitamin business, which it acquired in July 2003. "The ratings on NBTY Inc. reflect its moderate debt leverage, its aggressive growth strategy, and the risk of adverse publicity about vitamin products on its sales," said Standard & Poor's credit analyst Martin S. Kounitz. These factors are somewhat mitigated by the company's strong position and diversified distribution channels in the VMS industry. The ratings assume that Bohemia, New York-based NBTY will not make large debt-financed acquisitions in the intermediate term, but will apply free cash flow to reduce debt. The bank loan is rated 'BB', the same as the corporate credit rating, and has a recovery rating of '3'. This indicates that the asset values provide lenders with the expectation of meaningful recovery of principal (50%-80%) in a default scenario. NBTY is a vertically integrated VMS manufacturer and marketer, with a strong retail presence in the U.K. The company's vertical integration and ability to produce low-cost products provide an advantage by enabling NBTY to price its products competitively. A three-tiered distribution strategy that includes retail, wholesale, and direct-response channels provides the company with diversification and lowers distribution risk. The Rexall acquisition bolstered the wholesale channel. The firm has retained and grown shelf space among the food, drug, and mass merchant retailers that Rexall Sundown serves by improving formulations and replacing certain items with Nature's Bounty branded products. However, the market continues to be highly competitive and fragmented in all distribution channels. As a result, NBTY has little pricing power. NETWORK INSTALLATION: Dismisses Kabani & Company as Accountants --------------------------------------------------------------- On April 29, 2004 the Board of Directors of Network Installation Corporation dismissed Kabani & Company, Inc. as the Company's independent accountants and appointed the firm of Rose, Snyder & Jacobs, to serve as independent public accountants of the Company for the fiscal year ending December 31, 2004. Kabani & Company's report on the Company's consolidated financial statements for the fiscal years ended December 31, 2003 and December 31, 2002 were modified to include an explanatory paragraph wherein they expressed substantial doubt about Network Installation's ability to continue as a going concern. About Network Installation Corp. Network Installation Corp. -- whose March 31, 2004 balance sheet reflects a stockholders' deficit of $1,607,403 -- provides communications solutions to the Fortune 1000, Government Agencies, Municipalities, K-12 and Universities and Multiple Property Owners. These solutions include the design, installation and deployment of data, voice and video networks as well as wireless networks and Wi-Fi. Through its wholly-owned subsidiary Del Mar Systems International, Inc., the Company also provides integrated telecom solutions including Voice over Internet Protocol (VoIP) applications. Network Installation maintains offices in Irvine, Los Angeles, Gold River and San Marcos, CA; Las Vegas, NV and Phoenix, AZ. To find out more about the company, visit http://www.networkinstallationcorp.net/ NEW WEATHERVANE: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Lead Debtor: New Weathervane Retail Corporation 300 John Downey Drive New Britain, Connecticut 06051 Bankruptcy Case No.: 04-11649 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- New Weathervane Real Estate Corp. 04-11650 Type of Business: The Debtor is a Women's specialty retailer. See http://www.wvane.com/ Chapter 11 Petition Date: June 3, 2004 Court: District of Delaware Judge: Peter J. Walsh Debtor's Counsel: William R. Firth, III, Esq. Pepper Hamilton LLP Hercules Plaza, Suite 5100 1313 Market Street Wilmington, DE 19899-1709 Tel: 302-777-6500 Fax: 302-421-8390 Total Assets: $28,710,000 Total Debts: $24,576,000 Debtor's 20 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Fashion Links International Limited $1,147,657 76 LaSalle Road West Hartford, CT 06107 CRS Retail Systems $339,741 15 Governor Drive Newburgh, NY 12550 Chain Link Graphix II $202,747 Sizzle Beach $150,671 Deloitte & Touche LLP $146,037 McCoy Ltd. $135,426 United Healthcare Insurance Co. $119,623 Icici Infotech, Inc. $81,858 Schwarz $74,718 Westfarms Mall, LLC $73,940 Interiors Ltd. $71,235 NSB/STS $56,083 Grunfeld Desiderio Lebowitz $55,343 Jump Clothing $53,094 4835 Rockaway Center Assoc. $52,840 4836 Braintree Property Assoc. $51,614 4920 Mayflower Emerald Square $51,546 Fed Ex $49,489 GGP/Homart II LLC-Natick Mall $48,897 Jones Raphael & Oulundsen Inc. $48,051 NUCENTRIX BROADBAND: Completes $51MM+ Asset Sale to Nextel ---------------------------------------------------------- Nucentrix Broadband Networks, Inc. (Pink Sheets:NCNXQ), announced that it has closed the sale of its Federal Communications Commission licenses and related assets to Nextel Spectrum Acquisition Corp., a wholly-owned subsidiary of Nextel Communications Inc. (Nasdaq:NXTL), for $51 million in cash plus the assumption of certain liabilities. As previously reported, the sale of assets to Nextel was part of a joint plan of liquidation confirmed by the U.S. Bankruptcy Court for the Northern District of Texas on May 3, 2004. Nucentrix expects that the Plan will become effective on June 10, 2004. Accordingly, as of 3:00 p.m. on Wednesday, June 9, 2004, Nucentrix common stock no longer will be available for quotation on the Pink Sheets Electronic Quotation Service. In addition, as of June 10, 2004, all outstanding shares of Nucentrix common stock will be canceled and the transfer books for the common stock will be closed. After payment to creditors of Nucentrix, record holders of Nucentrix common stock as of June 10, 2004, will be entitled to receive distributions of remaining net proceeds pursuant to, and subject to the conditions of, the Plan. About Nucentrix Nucentrix Broadband Networks, Inc. provides broadband wireless Internet services using radio spectrum licensed by the Federal Communications Commission. This spectrum commonly is referred to as MMDS (Multichannel Multipoint Distribution Service) and ITFS (Instructional Television Fixed Service). Nucentrix is the third largest holder of MMDS and ITFS spectrum in the U.S. Nucentrix holds the rights to an average of approximately 128 MHz of MMDS and ITFS spectrum, covering over 8 million households in over 90 primarily medium and small markets across Texas, Oklahoma and the Midwest. Nucentrix also holds licenses for 20 MHz of WCS (Wireless Communications Services) spectrum at 2.3 GHz covering over 2 million households, primarily in Texas. OWENS CORNING: Lease Decision Period Extended through December 4 ---------------------------------------------------------------- Jeremy Ryan, Esq., at Saul Ewing, LLP, in Wilmington, Delaware, relates that as of the Petition Date, Owens Corning was party to 347 unexpired non-residential real property leases. The Debtors have made substantial and consistent progress in evaluating these leases. The Debtors rejected 74 leases and assumed, or assumed and assigned, 23 others. Taking into account the 81 leases that expired postpetition, the Debtors are currently party to 169 prepetition non-residential real property leases. Most of the Unexpired Leases are for space the Debtors use for conducting the production, warehousing, distribution, sales, sourcing, accounting and general administrative functions that comprise their businesses, and are important assets of their estates. According to Mr. Ryan, the Debtors had scheduled assets in excess of $6,000,000,000, employed around 20,000 employees and operated production and distribution facilities in locations throughout the country, many of which are located in the leased premises that are the subject of the Unexpired Leases. The Debtors' leased premises are vital to their reorganization efforts and thus constitute an integral component of their strategic business plan. Even if a particular location ultimately is slated for closure, the Unexpired Lease for the location may contain favorable terms that would allow the Debtors to assume and assign the lease for value. Mr. Ryan believes that given the size and complexity of their portfolio of Unexpired Leases, the Debtors should not at this time be compelled to assume substantial, long-term liabilities under the Unexpired Leases -- potentially creating administrative expense claims -- or forfeit benefits associated with some leases, to the detriment of the Debtors' ability to preserve the going concern value of their business. Mr. Ryan explains that addressing decisions to assume or reject prior to the confirmation of their Plan would compel the Debtors to make premature decisions as to their leases, and would cause them to run the risks in the assumption of substantial long-term liabilities or the forfeiture of favorable leases. More fundamentally, requiring the Debtors to assume or reject the Unexpired Leases at this point in their cases may foreclose them or other parties from pursuing plan modifications or alternative plan structures that rely on different dispositions of some or all of the Unexpired Leases than is presently contemplated. The Debtors maintain that a result like that would be inconsistent with the interests of creditors and inappropriate under the circumstances of their Chapter 11 cases. The Debtors' Chapter 11 cases additionally have complex inter- creditor issues, involving numerous competing creditor groups like bond holders, an unsecured bank group, trade creditors and those creditors holding "present" and "future" asbestos claims. The multiple issues between and among these creditor constituencies add layers of complexity to the Debtors' bankruptcy cases. Consequently, the Court allows the debtor to extend their lease decision period through and including December 4, 2004, subject to the rights of each lessor under an Unexpired Lease to ask the Court to shorten the Extension Period and specify a period of time in which the Debtors must determine whether to assume or reject an Unexpired Lease. 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. 76; Bankruptcy Creditors' Service, Inc., 215/945-7000) PARMALAT GROUP: Prosecutors Sue Ex-BofA Employees Over Scandal -------------------------------------------------------------- Bank of America Corporation Chief Accounting Officer, Neil A. Cotty, disclosed in a regulatory filing dated May 7, 2004 with the Securities and Exchange Commission that the Public Prosecutor's Office for the Court of Milan, Italy, filed criminal charges against three former BofA employees, Antonio Luzi, Luis Moncada, and Luca Sala in connection with the Parmalat scandal. The Prosecutor's Office also filed related charges for administrative liability against BofA in accordance with the normal rules of criminal procedure. BofA's activities and certain former or current employees in Milan are currently being investigated. BofA, through certain of its subsidiaries, have provided financial services to Parmalat and its related entities. On January 8, 2004, the Italian authorities identified Luca Sala, a former BofA employee, as a subject of the investigation. On March 2, the Italian authorities named three additional employees in the Milan office as subject to investigation. On March 18, BofA's counsel in Italy was informed by the Public Prosecutor's Office for the Court of Milan, Italy, that a request had been filed with the Court of Milan for an accelerated trial with respect to BofA for administrative liability arising out of the actions of several of the bank's former employees who allegedly committed illegal acts relating to Parmalat. Messrs. Luzi, Moncada, and Sala were also the subject of a request for accelerated trial. On March 24, the Milan Court rejected those requests. 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. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) PARMALAT: Capitalia Adopts Plan To Protect Client Investments ------------------------------------------------------------- Capitalia Group reported that the company's "Investment Protection Plan" became effective in March 2004. The plan was developed to restore customer confidence and protect the investments made by Group retail customers in corporate bonds issued by companies that have sought bankruptcy protection, including Cirio, Parmalat, Giacomelli. In a press release dated May 13, 2004, Capitalia reported that 3,796 customers accounting for less than 0.1% of the Group retail customers were identified. Customers will have up until May 15 to accept the protection provided by Capitalia under the plan. The cost of the Plan, estimated at about [EUR]41,000,000, was fully provisioned in the income statement for financial year 2003. To date, about 83% of the customers have accepted Capitalia's proposal. 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. 17; Bankruptcy Creditors' Service, Inc., 215/945-7000) PENINSULA CAPITAL: Case Summary & 3 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Peninsula Capital Group, Inc. 895 Embarcadero Drive #210 El Dorado Hills, California 95762 Bankruptcy Case No.: 04-25405 Type of Business: The Debtor is a Real Estate developer. Chapter 11 Petition Date: May 25, 2004 Court: Eastern District Of California (Sacramento) Judge: Michael S. McManus Debtor's Counsel: Todd M. Bailey, Esq. McDonough Holland & Allen PC 555 Capitol Mall 9th Floor Sacramento, CA 95814 Tel: 916-444-3900 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 3 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Howard A. Brown, Jr. Loans $6,000 Lakemont Homes, Inc. Loans Unknown Foothill Residents for Lawsuit Unknown Appropriate Land Use PENN TREATY: Reorganizes Senior Management Team ----------------------------------------------- Penn Treaty American Corporation (NYSE: PTA) announced the following changes within its senior management team: Executive Vice President Cameron Waite, who has held the position of Chief Financial Officer since joining the Company in May 1996, will relinquish that role to become Executive Vice President of Strategic Operations. In this newly created position, Mr. Waite will focus on the Company's many strategic initiatives, including the further development of regulatory and statutory affairs, reinsurance partnerships, and ongoing profitability enhancement programs. Mr. Waite holds a Bachelor of Arts in Economics from Dickinson College and a Master of Business Administration from Lehigh University. Mr. Waite has 21 years of experience in the financial services industry. Mark Cloutier, who has served as Vice President and Chief Accounting Officer since joining the Company in August 2002, advances to Senior Vice President and Chief Financial Officer. Mr. Cloutier's primary responsibilities include the Company's financial operations, financial reporting, internal controls, treasury functions and facilities management. He will focus special attention to the ongoing compliance with the provisions of the newly enacted Sarbanes-Oxley legislation. Mr. Cloutier has over 20 years of experience in the financial services sector including 9 years with a Big Four accounting firm. He has an extensive knowledge of the accounting treatment for long-term care insurance contracts, public reporting and internal financial controls. Mr. Cloutier holds a Bachelor of Science in Accounting from Temple University and is a Certified Public Accountant. William W. Hunt, President and Chief Executive Officer, stated, "Properly aligning Penn Treaty's management team with the Company's goals and objectives is a necessary ingredient for timely success. Cam has been instrumental in the Company's financial restructuring over the past three years. His skills and experience are ideal for his new position as Strategic Operations Officer; a role that is critical to the elevation of the Company's position in the marketplace." Mr. Hunt continued, "I am very confident that Mark will provide strong financial leadership to the Company. Since joining the Company almost two years ago, Mark has implemented tighter controls and instilled stronger financial discipline to our organization. He is a great addition to our senior leadership team. Penn Treaty has many opportunities ahead to create value for all of our stakeholders. I am very confident that Cam and Mark will continue to contribute significantly to our success." The Company, through its wholly owned direct and indirect subsidiaries, Penn Treaty Network America Insurance Company, American Network Insurance Company, American Independent Network Insurance Company of New York, Penn Treaty (Bermuda), Ltd., United Insurance Group Agency, Inc., and Network Insurance Senior Financial Consultants Company, is primarily engaged in the underwriting, marketing and sale of individual and group accident and health insurance products, principally covering long-term nursing home and home health care. * * * As reported in the Troubled Company Reporter's February 9, 2004 edition, Standard & Poor's Ratings Services assigned its 'CC' subordinated debt rating to Penn Treaty America Corp.'s (NYSE:PTA) $14 million, 6.25% subordinated convertible notes, which are due on Oct. 15, 2008. The notes were issued in a private placement to accredited investors. The terms of the notes are identical to those of the company's existing 6.25% subordinated convertible notes due 2008, except that the newly issued notes may not be converted until after May 31, 2004, and until shareholder ratification and approval of the issuance of the notes and the related shares of common stock is obtained. Ratings List Penn Treaty American Corp. Counterparty credit rating CCC-/Positive/-- Subordinated debt rating CC PG&E NATIONAL: Court Okays USGEN's Employment of Charles River -------------------------------------------------------------- In the PG&E National Energy Group Inc. Chapter 11 bankruptcy proceedings, USGen asks the Court to authorize its lead bankruptcy counsel, Blank Rome, LLP, to employ Charles River Associates Incorporated as expert consultants On January 2, 2004, USGen New England, Inc., initiated an adversary proceeding against Bear Swamp Generating Trust No. 1, LLC, Bear Swamp Generating Trust No. 2, LLC, Bear Swamp I, LLC, and Bear Swamp II, LLC, due to several controversies that exist between them. The adversary proceeding is currently pending before the Bankruptcy Court. The dispute began when USGen sought to reject its uneconomic leases and related agreements with the Bear Swamp counterparties. USGen's obligations under those leases included $44 million in lease payments in 2004, which necessitated the rejection of the Bear Swamp leases and related agreements. The Bear Swamp counterparties promptly contested USGen's proposed rejection by filing several objections and discovery requests. Through extensive settlement discussions spanning many weeks, USGen negotiated an interim settlement agreement through which the Bear Swamp counterparties consented to a rejection of the leases and related agreements to the extent the Court determines they constitute a lease rather than a secured financing. By this application, USGen asks the Court to authorize its lead bankruptcy counsel, Blank Rome, LLP, to employ Charles River Associates Incorporated as expert consultants, nunc pro tunc to April 7, 2004, to provide expert support and analysis with respect to the Bear Swamp Adversary Proceeding. John Lucian, Esq., at Blank Rome, LLP, in Baltimore, Maryland, relates that Charles River is a nationwide consulting firm with experience and expertise in the discrete field of asset and enterprise valuation with respect to leveraged leasing, lease transactions and other aspects of the utility industry. USGen believes that Charles River is uniquely able to provide the necessary services in the most efficient and timely manner. Charles River, at Blank Rome's request, may also be called on to: (a) prepare an expert report or an expert rebuttal report; (b) assist in trial preparation including witness interviews and depositions; (c) testify in depositions or at trial with respect to Charles River's expert report; and (d) assist in discovery and case analysis. Confidentiality To the extent that Charles River provides advisory services to Blank Rome in connection with its consultation, Charles River's work will be performed at Blank Rome's sole direction, and will be for the sole and exclusive purpose of assisting Blank Rome in its representation of USGen. As a result, Charles River's work may be integral to Blank Rome's formation of mental impressions and legal theories, which may, in turn be used in counseling and in the representation of USGen. For Charles River to carry out its responsibilities, it may be necessary for Blank Rome to disclose its legal analysis as well as other privileged information and attorney work product to Charles River. USGen also asks the Court to declare that any writings, analysis, communications, and mental impressions formed, made, produced, or created by Charles River in connection with its assistance of Blank Rome in the Bear Swamp Adversary Proceeding are Blank Rome's work product in its capacity as USGen's counsel. According to Mr. Lucian, the confidential and privileged status of the Charles River Work Product will not be affected by the fact that Charles River will be compensated entirely by USGen rather than Blank Rome. Fees and Expenses USGen will compensate Charles River on an hourly basis and reimburse any actual and necessary expenses. Charles River's hourly rates are: President and Vice President $425 - 750 Senior Consultants 350 - 950 Principals 375 - 575 Associate Principals 340 - 435 Senior Associates 290 - 420 Consulting Associates 200 - 300 Associates 185 - 290 Analysts 160 - 185 Support Staff 100 Julie R. Solomon, Vice-President of Charles River, assures the Court that the firm does not have any connection with or hold any interest adverse to USGen or any party-in-interest. Ms. Solomon, however, discloses that Charles River currently provides consulting services to National Energy & Gas Transmission, Inc. Charles River's services for NEG are limited to providing economic and financial analysis of gas and electric markets, and its effect on the operation and value of various tolling agreements. * * * Judge Mannes authorizes the Debtors' counsel, Blank Rome, LLP, to employ Charles River Associates Incorporated as expert consultants, nunc pro tunc to April 7, 2004. 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. 22; Bankruptcy Creditors' Service, Inc., 215/945-7000) QVDS INC: Case Summary & 40 Largest Unsecured Creditors ------------------------------------------------------- Lead Debtor: QVDS, Inc. 6555 Nancy Ridge Drive, Suite 100 San Diego, California 92121 Bankruptcy Case No.: 04-05003 Debtor affiliates filing separate chapter 11 petitions: Entity Case No. ------ -------- Blindsgalore.com, Inc. 04-05004 Type of Business: The Debtor is engaged in the business of Home Furnishings. See http://www.qvds.com/ Chapter 11 Petition Date: June 2, 2004 Court: Southern District of California (San Diego) Judge: Peter W. Bowie Debtors' Counsel: David L. Osias, Esq. Allen Matkins Leck Gamble & Mallory LLP 501 West Broadway, 9th Floor San Diego, CA 92101 Tel: 619-235-1526 Fax: 619-233-1158 Total Assets Total Debts ------------ ----------- QVDS, Inc. $627,730 $1,232,660 Blindsgalore.com, Inc. $399,012 $7,585,007 A. QVDS, Inc.'s 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Nancy Ridge Tech. Center Property lease $354,557 6350 Nancy Ridge Dr. #106 San Diego, CA 92121 Chase Automotive Finance Auto lease $36,911 Gray Cary Ware & Freidenrich Services $31,860 Mercedes-Benz Credit Auto lease $28,618 Dell Financial Services equipment lease $15,056 Geoffrey Parnass Services $14,626 Shaw Binary Systems, Inc. Trade $14,500 Pacific Building Group Trade $9,730 Remx Financial Staffing Trade $6,836 Pitney Bowes, Inc. Equipment lease $5,573 Verio, Inc - 20 Trade $5,399 Dell Account Trade $4,804 Kroll Ontrack Trade $4,450 CDW Computer Centers, Inc. Trade $3,504 T-Mobile Trade $3,236 Business Office Outfitters Trade $2,177 South Coast Building Trade $2,167 Services Tele Pacific Trade $2,138 Staples Trade $2,076 Wilson, Kevin vacation pay $1,868 (terminated employee) B. Blindsgalore.com, Inc.'s 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Bali/Spring Window Fashions Trade $2,288,696 PO Box 75002 Charlotte, NC 28275 Elmar Trade $715,224 601 Davisville Rd Willow Grove, PA 19090 Paymentech Chargebacks $538,000 4 Northeastern Blvd. Salem, NH 03079-1952 Google Inc. Trade $524,429 PO Box 39000 San Francisco, CA 94139-3181 Levolor Trade $397,154 29 E. Stephenson St. Freeport, IL 61032 Prestige Window Fashions Trade $311,989 PO Box 307003 Charlotte, NC 28233-3251 M&B/Alta Window Solutions Trade $173,204 Overture Services Trade $160,000 Norman International Inc. Trade $155,214 Microsoft Corp. Trade $149,278 NOVA Chargebacks $100,000 Comfortex Trade $89,088 California Window Coverings Trade $87,000 Wells Fargo Mastercard- $81,869 (1806) Timber Bl Timber Blind Trade $70,973 American Express - 32001 Credit card $69,478 Purchases Knapp, Petersen and Clarke $52,362 Market Logic Trade $49,640 Gulf Coast Window Coverings Trade $47,086 Vista Trade $45,416 RCN CORPORATION: Employs Skadden Arps as Bankruptcy Counsel ----------------------------------------------------------- The RCN Corp. Debtors seek the Court's authority to employ Skadden, Arps, Slate, Meagher & Flom, LLP, as of the Petition Date, to represent them as their bankruptcy counsel in connection with the filing of their Chapter 11 petitions and the prosecution of their Chapter 11 cases. Deborah M. Royster, RCN Corporation's General Counsel and Corporate Secretary, relates that Skadden Arps has represented the Debtors on various matters since September 1997. This includes advising the Debtors in connection with general corporate matters, investments, tax, litigation advice, securities, debt offerings, real estate and mergers and acquisitions. Before September 1997, Skadden Arps represented Commonwealth Telephone Enterprises, Inc., RCN's former parent, in connection with its spin-off of RCN. Beginning in October 2003, Skadden Arps was retained to assist the Debtors in their current restructuring efforts by, among other things, advising the Debtors regarding restructuring matters in general, and preparing for the potential commencement and prosecution of Chapter 11 cases for the Debtors. Ms. Royster points out that the Debtors have selected Skadden Arps as their attorneys because of the firm's prepetition experience with, and knowledge of the Debtors and their businesses, as well as Skadden Arps' experience and knowledge in the field of debtors' and creditors' rights and business reorganizations under Chapter 11 of the Bankruptcy Code. The Debtors submit that continued representation by Skadden Arps is critical to the success of their reorganization because the firm is uniquely familiar with their business and legal affairs. Specifically, Skadden Arps will be: (a) advising the Debtors with respect to corporate transactions and corporate governance; (b) advising the Debtors with respect to their powers and duties as debtors-in-possession in the continued management and operation of their businesses and properties; (c) negotiating and reviewing appropriate documents, and preparing any agreements with creditors, equity holders and investors; (d) reviewing and preparing pleadings, making court appearances and taking other actions as are deemed necessary and desirable; (e) advising and consulting on the conduct of the cases, including all of the legal and administrative requirements of operating in Chapter 11; (f) initiating, prosecuting or defending litigation that may arise during the course of the cases, as to which there is no disqualifying conflict; (g) negotiating and preparing, on the Debtors' behalf, a plan of reorganization, disclosure statement and all related agreements and documents and take any necessary action on the Debtors' behalf to obtain confirmation and consummation of the plan; and (h) performing all other necessary legal services and providing all other necessary legal advice to the Debtors in connection with these Chapter 11 cases. Pursuant to the October 7, 2003 Engagement Agreement between the parties, Skadden Arps will apply to the Court for compensation and reimbursement of expenses. The Debtors and their non-debtor affiliates paid Skadden Arps a $500,000 replenishing retainer for professional services and expenses, which was increased to $1,491,882 pursuant to a letter dated January 24, 2004. Virtually the entire Retainer remains available as a retainer for application against future services. Skadden Arps and the Debtors have agreed that Skadden Arps' bundled rate structure will apply to these cases and, therefore, the firm will not be seeking to be separately compensated for certain staff, clerical and resource charges. Currently, the hourly rates under the bundled rate structure are: partners and of-counsel $495 - 760 associates 280 - 485 legal assistants and support staff 80 - 195 The hourly rates are subject to periodic increases in the normal course of the firm's business, often due to the increased experience of a particular professional. Skadden Arps anticipates performing services on behalf of both the Debtors and their non-debtor affiliates. Services performed exclusively for the Debtors will be reflected in fee applications filed with the Court. Services performed exclusively for non- debtor affiliates will be billed directly to the non-debtor affiliates, will not be billed to the estates, and therefore will not be reflected in fee applications filed with the Court. In circumstances where services are rendered to both Debtors and non-debtor affiliates which are for the benefit of both -- like services in respect of restructuring the Senior Credit Facility -- Skadden Arps will allocate a proportional amount of its fees and expenses for the services to the non-debtor entities, and will only seek payment from the estates of that portion allocated to the Debtors. Consistent with the firm's policy with respect to its other clients, Skadden Arps will continue to charge the Debtors for all other services provided and for other charges and disbursements incurred in the rendition of services. These charges and disbursements include, among other things, costs for telephone charges, photocopying, travel, business meals, computerized research, messengers, couriers, postage, witness fees and other fees related to trials and hearings. Charges and disbursements are invoiced pursuant to Skadden Arps' Policy Statement Concerning Charges and Disbursements Under Standard Bundled Rate Structure. Before the Petition Date, Skadden Arps submitted invoices to the Debtors and their non-debtor affiliates on a regular, periodic basis, for professional fees and expenses, including estimated unposted professional fees and expenses. A year before the Petition Date, in the ordinary course of business, the Debtors and their non-debtor affiliates paid $9,947,774 for services rendered -- including an estimate of services rendered through the Petition Date -- of which $8,568,609 was related to restructuring activities, and as reimbursement for charges and disbursements. This amount includes payments for advice in connection with general corporate matters, investments, tax, litigation, securities, debt offerings, real estate, mergers and acquisitions and services rendered in contemplation of or in connection with these Chapter 11 cases. As promptly as practicable after all fees and charges accrued prior to the Petition Date have been finally posted, Skadden Arps will issue a final billing statement for the actual fees, charges and disbursements for the period prior to the Petition Date. The Final Billed Amount will be paid from amounts presently held by Skadden Arps and any balance will be held as a postpetition retainer to be applied against any unpaid fees and expenses approved by the Court with respect to Skadden Arps' final fee application in these cases or otherwise held as a retainer to be applied against any unpaid fees and expenses of non-debtor affiliates, in accordance with the Engagement Agreement. In the Engagement Agreement, Skadden Arps specifically disclosed to the Debtors that the firm may have represented or may currently represent creditors or other interested parties in matters unrelated to the Debtors, and intends to continue to represent the third parties in the future. Pursuant to the Engagement Agreement, the Debtors agreed that Skadden Arps' representation of the Debtors would not be used as a basis for disqualifying the firm from representing another client of the firm in any particular matter vis-a-vis any other third party. Jay M. Goffman, Esq., a partner at Skadden Arps, assures the Court that the firm is a "disinterested person," as that term is defined in Section 101(14) of the Bankruptcy Code, and does not hold or represent any interest adverse to the Debtors' estates. Headquartered in Princeton, New Jersey, RCN Corporation -- http://www.rcn.com/-- is a provider of bundled Telecommunications services. The Company, along with its affiliates, filed for chapter 11 protection (Bankr. S.D.N.Y. Lead Case No. 04-13638) on May 27, 2004. Frederick D. Morris, Esq., and Jay M. Goffman, Esq., at Skadden Arps Slate Meagher & Flom LLP, represent the Debtors in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $1,486,782,000 in assets and $1,820,323,000 in liabilities. (RCN Corp. Bankruptcy News, Issue No. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) ROYAL OLYMPIC: Requests More Time to File Form 20F Filing with SEC ------------------------------------------------------------------ Royal Olympic Cruise Lines (Nasdaq: ROCLF) announced that it has filed a request with the Securities and Exchange Commission for an extension for filing its Form 20-F for 2003. As previously reported, some of the Company's subsidiaries are under Section 45 protection in Greece. The Company has until 28 August 2004 to develop a restructuring plan acceptable to its lenders, after which the legal protection of Section 45 will expire. At this time, the Company has not obtained the financing necessary for it to continue in operation. Discussions with the Company's lenders are ongoing. However, the Company can offer no assurance that these discussions will be successful. SK GLOBAL: Judge Declines Cho Hung's Liquidating Plan Offer ----------------------------------------------------------- On behalf of Cho Hung Bank, New York Branch, Stephen B. Selbst, Esq., at McDermott, Will & Emery, in New York, argues that there is no reason why SK Global America Inc. plan of reorganization needs to be delayed further. "The Debtor has ceased operations and has already begun a liquidation. Its remaining non-cash assets consist principally of accounts receivables and inventory. The Debtor admits it is in the process of collecting these accounts receivables. Thus, the only plan that can be confirmed in this case is a liquidating plan," Mr. Selbst explains. According to Mr. Selbst, the Debtor's capital structure is not complex and the number of financial creditors is small. These facts belie the Debtor's claim that its Chapter 11 case is large and complex, calling for additional time to develop a plan of reorganization. Cho Hung Bank, the Debtor's senior secured creditor, together with Korea Exchange Bank, the Debtor's junior secured creditor, have advised the Debtor that they support the filing of a liquidating plan that will provide for the payment in full in cash of Cho Hung's claims and the recognition of KEB's junior secured status. Despite this clear statement from the Debtor's two secured creditors, however, the Debtor has yet to make any plan proposal to Cho Hung or KEB, instead claiming, as it did in its request, that it needs additional time for creditor negotiations. The Debtor bears the burden of establishing cause with respect to its request for an extension of exclusivity -- a burden that the Debtor has not come close to establishing. Given that the Debtor is already engaged in the process of liquidation, there is no reason to delay the filing of a plan. If exclusivity is terminated, Cho Hung together with KEB is prepared to file a liquidating plan for the Debtor, within 30 days. The Debtor should not be allowed to continue to use exclusivity to prevent Cho Hung and KEB from proposing a plan that will give effect to their relative lien priorities and bring the Chapter 11 case to a prompt conclusion, Mr. Selbst says. * * * Judge Blackshear declined Cho Hung's offer to file a liquidating plan for SK Global and granted the Debtor more time to negotiate, propose and file a chapter 11 plan. The Debtor's exclusive period to file a chapter 11 plan is extended to June 24, 2004, and the company has until August 9, 2004, to solicit acceptances of that plan.(SK Global Bankruptcy News, Issue No. 17; Bankruptcy Creditors' Service, Inc., 215/945- 7000) SOLUTIA INC: Calpine to Continue Operating Decatur Energy Center ---------------------------------------------------------------- Calpine Corporation (NYSE: CPN) and Solutia, Inc. recently negotiated a preliminary settlement agreement, ensuring Calpine's continued operation of the 690-megawatt Decatur Energy Center located on Solutia's chemical facility in Decatur, Ala. Solutia filed for Chapter 11 bankruptcy in December of 2003. The settlement agreement has been approved by the United States Bankruptcy Court Southern District of New York. Calpine also agreed to Solutia's rejection of agreements primarily related to the supply of power and steam to Solutia. Calpine retains the option to file claims for damages related to these agreements with the bankruptcy court. The Decatur Energy Center began operations in June 2002, originally providing steam and up to 140 megawatts of electricity to Solutia. The Decatur plant continues to supply 500 megawatts of capacity and up to 500 megawatts of on-peak associated energy to the Tennessee Valley Authority through May 2007. About Calpine Calpine Corporation (S&P, CCC+ Senior Unsecured Convertible Note and B Second Priority Senior Secured Note Ratings, Negative Outlook), celebrating its 20th year in power in 2004, is a leading North American power company dedicated to providing electric power to customers from clean, efficient, natural gas- fired and geothermal power facilities. The company generates power at plants it owns or leases in 21 states in the United States, three provinces in Canada and in the United Kingdom. Calpine is also the world's largest producer of renewable geothermal energy, and owns or controls approximately one trillion cubic feet equivalent of proved natural gas reserves in the United States and Canada. For more information about Calpine, visit http://www.calpine.com/ About Solutia 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. SPIEGEL GROUP: May 2004 Net Sales Decrease to $109.3 Million ------------------------------------------------------------ The Spiegel Group reported net sales of $109.3 million for the four weeks ended May 29, 2004, a 28 percent decrease compared to net sales of $150.9 million for the four weeks ended May 24, 2003. For the 21 weeks ended May 29, 2004, total sales declined 21 percent to $536.1 million from $680.0 million in the same period last year. The company also reported that comparable-store sales for its Eddie Bauer division decreased 7 percent for the four-week period and 2 percent for the 21-week period ended May 29, 2004, compared to the same periods last year. In 2003, net sales for May included $25.5 million in liquidation sales resulting from the sale and transfer of inventory to an independent liquidator in conjunction with the closing of 81 stores. Excluding the liquidation sales, the Group's net sales from retail and outlet stores fell 18 percent for the month compared to the same period last year, reflecting a decline in comparable-store sales and fewer stores compared to last year. The Group's direct net sales (catalog and e-commerce) decreased 7 percent for the month compared to the same period last year, primarily due to a planned reduction in catalog circulation. 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. SPRING AIR: Lease-Related Decision Extended through August 19 ------------------------------------------------------------- By order of the U.S. Bankruptcy Court for the Southern District of New York, Spring Air Partners - North America, Inc., and its debtor-affiliates obtained an extension of their lease decision period. The Court gives the Debtors until August 19, 2004 to decide whether to assume, assume and assign, or reject unexpired nonresidential real property leases. Headquartered in New York, New York, Spring Air Partners - North America, Inc., -- http://www.springair.com/-- is a bedding manufacturer in the United States, manufacturing mattresses and box springs under multiple brand names: Back Supporter(R), ComfortFlex(R), Four Seasons(R), Chattam and Wells(R), Posture Comfort(R) and Nature's Rest(R), for sale to local, regional and national retailers in the United States and Canada. The Company filed for chapter 11 protection on March 22, 2004 (Bankr. S.D.N.Y. Case No. 04-11915). Mark A. Broude, Esq., at Latham & Watkins represents the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed estimated assets of more than $10 million and estimated debts of over $50 million. THOMPSON PRINTING: New Jersey Court Okays Disclosure Statement -------------------------------------------------------------- The U.S. Bankruptcy Court for the District of New Jersey approved Thompson Printing Co., Inc.'s Amended Disclosure Statement as containing adequate information for the creditors to decide whether to approve or reject the reorganization plan. All acceptances and rejections of the Plan are due on July 6, 2004. Creditors shall be mailed a ballot conforming to Official Form 14. A hearing to confirm the Plan is scheduled for July 12, 2004. Headquartered in West Caldwell, New Jersey, Thompson Printing Co., Inc., is in the business of printing high end brochures for Fortune 500 companies, among others. The Company filed for chapter 11 protection on March 4, 2004 (Bankr. N.J. Case No. 04-17330). Richard Trenk, Esq., at Booker, Rabinowitz, Trenk, Lubetkin, Tully, DiPasquale & Webster, P.C., represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $603,508 in assets and $6,467,533 in debts. TOUCHSTONE: L J Soldinger Replaces Stonefield as Accountant ----------------------------------------------------------- On April 8, 2004, Stonefield Josephson, Inc. resigned as Touchstone Resources USA, Inc.'s independent accountant. The reports of Stonefield Josephson regarding the Company's financial statements for the fiscal year ended December 31, 2002 were modified to express substantial doubt about the Company's ability to continue as a going concern. On April 19, 2004, the Board of Directors of the Company engaged L J Soldinger Associates, LLC as its independent accountant. Touchstone Resources Ltd. is engaged in the business of acquiring interests in petroleum and natural gas rights, and the exploration for and development, production and sale of, petroleum and natural gas in the United States. TRENWICK: Committee Hires Ben Branch as Financial Consultant ------------------------------------------------------------ The Official Committee of Unsecured Creditors appointed in Trenwick America Corporation's chapter 11 case received permission from the United States Bankruptcy Court for the District of Delaware to retain and employ Dr. Ben S. Branch as its Financial Consultant. Dr. Branch is a Professor of Finance at the University of Massachusetts, located in Amherst. Committee Chair Richard Weill explains that prior to Trenwick stepping into chapter 11, the Debtors signed a Letter of Intent with their major creditor constituencies to restructure debt obligations and sell certain business operations. The Letter of Intent mandates that a consultant will investigate the Debtors and assist in developing avenues of recovery and estate maximization beyond traditional insurance run-off recoveries. Dr. Branch will investigate the Debtors operations, history and financial records to identify sources of recovery that are independent from the run-off operations of the Debtors' regulated subsidiaries. More specifically, Dr. Branch will evaluate the Debtors' past transactions to identify potential avoidance actions, fraudulent transfers and other potential causes of action. This may include claims against the Debtors' directors and officers. Mr. Weill assures the Court that Dr. Branch is qualified to assist and advise the Committee. Currently, Dr. Branch is the court- appointed Trustee in the Bank of New England bankruptcy pending in the United States Bankruptcy Court for the District of Massachusetts. Much like the insurance industry, the banking industry is heavily regulated, providing Dr. Branch with experience of particular value to these cases. Dr. Branch will bill the estates $600 per hour for his services and expect reimbursement of actual, reasonable and necessary out- of-pocket expenses. Dr. Branch will be entitled to indemnification by the Debtors for any claims arising from his services. Dr. Branch is a "disinterested person" as defined in Section 101(14) of the Bankruptcy Code. The current Creditors' Committee members are: * JP Morgan Chase Bank; * The Royal Bank of Scotland, PLC; * ING Bank N.V., London Branch; * Bank One Trust Company, N.A.; * HSBC USA; * John J. Gorman; and * Phoenix Partners L.P. 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. UNITED AIRLINES: Court Approves Heidrick's Retention as Consultant ------------------------------------------------------------------ In the United Airlines Inc. Chapter 11 bankruptcy proceedings, the Court approves the application of the Official Committee of Unsecured Creditors for permission to retain Heidrick & Struggles as special consultant. The Committee wants Heidrick to make recommendations on the composition and structure of the Board of Directors of UAL Corporation. Heidrick is a respected international organization with over 1,400 employees providing executive and director consulting services. Heidrick has a specialized board of directors review practice focused on the analysis of director backgrounds and skills, board and committee structure, and board operations. In the coming months, the Committee expects the Debtors to surmount the final obstacles to a reorganization. Under a plan of reorganization, it is likely that the Debtors will offer unsecured creditors a substantial stake in Reorganized UAL via conversion of existing claims to stock. Accordingly, the Committee's constituency has a vested interest in the continued success and viability of UAL. Carole Neville, Esq., at Sonnenschein, Nath & Rosenthal, relates that an active and effective Board of Directors is crucial to UAL's ability to remain competitive and profitable. UAL's Board will face unparalleled challenges guiding the airline through the worst recession in aviation industry history. The competitive and economic pressures will only increase as UAL faces its competitors without the protection of bankruptcy. The Committee needs professional advice and consultation to compose UAL's Board. While the Committee appreciates the efforts of the current Board, an independent review of its composition and structure will help the Committee fulfill its obligations and increase confidence in the confirmation process. Heidrick will: (a) assess the current Board and evaluate whether its structure and composition is adequate to guide post-confirmation UAL: (b) analyze whether the Board possesses the characteristics necessary for governing a publicly owned airline; (c) review the implications of the Sarbanes-Oxley legislation for the current Board structure and composition; (d) analyze the Board in relation to the existing state of the industry; and (e) provide any other services the Committee requests. After an initial phase of evaluation and recommendation, if instructed by the Committee, Heidrick will engage in a search and make specific suggestions on the placement of new Board members. Heidrick will be compensated on a flat fee basis, plus reimbursement of expenses. Heidrick will be paid $75,000 to conduct the initial review and analysis of the current UAL Board. If the Committee asks Heidrick to conduct a director search, Heidrick will be paid $100,000 for the placement of a single director or $75,000 per director if more than one director is placed. Fritz E. Freidinger, General Counsel of Heidrick, assures the Court that his firm does not hold or represent any interest adverse to the Committee, the Debtors, their creditors or other parties-in-interest in these cases. Heidrick is a "disinterested person" within the meaning of Section 101(14) Bankruptcy Code. Mr. Freidinger admits that Heidrick performed executive search services for the Debtors before the Petition Date. Heidrick filed a prepetition unsecured claim in these cases for $147,667 for unpaid fees. If this application is approved, Heidrick will waive the claim for unpaid fees. Heidrick received $76,780 from the Debtors for executive search services rendered within 90 days prior to bankruptcy. Headquartered in Chicago, Illinois, UAL Corporation -- http://www.united.com/-- through United Air Lines, Inc., is the holding company for United Airlines -- the world's second largest air carrier. the Company filed for chapter 11 protection on December 9, 2002 (Bankr. N.D. Ill. Case No. 02-48191). James H.M. Sprayregen, Esq., Marc Kieselstein, Esq., David R. Seligman, Esq., and Steven R. Kotarba, Esq., at KIRKLAND & ELLIS represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $24,190,000,000 in assets and $22,787,000,000 in debts. (United Airlines Bankruptcy News, Issue No. 49; Bankruptcy Creditors' Service, Inc., 215/945-7000) US AIRWAYS: Releases Improved May 2004 Traffic Results ------------------------------------------------------ Mainline revenue passenger miles for May 2004 increased 7.6 percent on a 4.9 percent increase in available seat miles compared to May 2003. The passenger load factor was 75.4 percent, which is a 1.9 percentage point increase compared to May 2003. For the first five months of 2004, mainline revenue passenger miles increased 10.7 percent on a 6.1 percent increase in available seat miles compared to the same period in 2003. The passenger load factor for the first five months of 2004 was 73.2 percent, a 3.0 percentage point increase compared to the same period in 2003. The three wholly owned subsidiaries of US Airways Group, Inc. -- Allegheny Airlines, Inc., Piedmont Airlines, Inc., and PSA, Inc. - - along with MidAtlantic Airways, reported an 43.0 percent increase in revenue passenger miles for May 2004 on 25.6 percent more capacity compared to May 2003. The passenger load factor was 61.8 percent, a 7.5 percentage point increase compared to May 2003. For the first five months of 2004, revenue passenger miles for the three wholly owned US Airways Express carriers and MidAtlantic increased 17.5 percent on a 6.9 percent increase in available seat miles compared to the first five months of 2003. The passenger load factor for the first five months of the year was 55.8 percent, a 5.0 percentage point increase compared to the same period in 2003. Mainline system passenger unit revenue for May 2004 is expected to decrease between 3.0 percent and 4.0 percent compared to May 2003. US Airways ended the month of May by completing 99.3 percent of its scheduled departures. * * * As reported in the Troubled Company Reporter's May 10, 2004 edition, US Airways, Inc., emerged from bankruptcy protection in March 2003 and has continued to incur losses from operations. For the quarter ending March 31, 2004, USAir reports a $181 million net loss. That loss wipes-out all shareholder equity in the carrier and the company's Mar. 31 balance sheet now shows a $64 million shareholder deficit. At the parent company level, US Airways Group, Inc.'s Mar. 31 balance sheet shows $30 million in shareholder equity. On May 5, 2004, S&P downgraded US Airways Group's and US Airways' corporate credit ratings to CCC+. As a result of the downgrade, GE, Embraer and Bombardier have the right to discontinue financing the Company's regional jet purchases, unless US Airways is able to meet alternative minimum financial tests. US Airways is not yet able to determine whether it meets these tests. US Airways does not presently have alternative sources of financing regional jet purchases nor does it have the ability to purchase regional jets without financing. The Company is in negotiations with GE and the aircraft manufacturers to amend or waive the credit rating condition precedent, as well as the alternative minimum financial tests. If US Airways is unable to meet the alternative minimum financial tests or the Company is not successful in obtaining such waivers or amendments, US Airways would be required to pay cancellation fees and/or liquidated damages of up to $90 million for the remainder of 2004 and $21 million in 2005 if US Airways is unable to obtain financing for the regional jet aircraft scheduled to be delivered during those periods. VISKASE COS.: S&P Rates Corp. Credit & Senior Secured Notes at B- ----------------------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B-' corporate credit rating to Willowbrook, Illinois-based Viskase Cos. Inc. At the same time, Standard & Poor's assigned its 'B-' rating to the company's proposed $90 million senior secured notes due 2011, based on preliminary terms and conditions. The senior secured notes are secured by domestic property, plant, and equipment, and a second lien on domestic accounts receivable and inventory, pursuant to an intercreditor agreement. The outlook is stable. Pro forma for the transaction, total debt will be about $90 million. The proceeds from the proposed notes will be used primarily to purchase the outstanding 8% senior subordinated secured notes, terminate its capital lease obligation with General Electric Capital Corp., and for fees and expenses. "The ratings incorporate a weak business profile as a global producer in the highly competitive casings niche within the packaging industry, a narrow scope of operations, and a very aggressive financial profile, following the company's emergence from Chapter 11 bankruptcy protection in April 2003," said Standard & Poor's credit analyst Liley Mehta. Partially offsetting factors include steady end markets, diversified customer relationships, and consistency in raw material costs. With annual sales of about $200 million, Viskase is a leading global producer of non-edible cellulosic, fibrous and plastic casings used to prepare and package processed meat products. These products include hot dogs, sausages, salami, and other various deli meats. Growth prospects are influenced by population growth, consumer preferences and dietary trends, and increased consumption of processed meat products in developing countries. There is also growth potential in the emerging plastic casings market, although acceptance is currently limited because fibrous casings offer certain functional advantages. In April 2003, Viskase emerged from bankruptcy. Subsequently, the company focused on improving its operating performance by restructuring its operations, implementing price increases, and reaffirming relationships with customers and suppliers. The company filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in November 2002 after operating performance and cash flow generation deteriorated due to pricing pressure, increased raw material costs, and intensified competitor activity. The competitive nature of this business and commodity-type product characteristics are negative factors, and plans for capacity expansion by competitors could lead to overcapacity and pricing declines. WATERFORD ON LAKE: US Trustee Unable to Form Creditors Committee ---------------------------------------------------------------- The United States Trustee reports to the U.S. Bankruptcy Court for the Western District of Texas that he is unable to appoint a creditors' committee in Waterford On Lake Travis, Ltd.'s chapter 11 case. The Justice Department official said that he attempted to solicit interest from the Debtor's twenty largest unsecured creditors of the Debtor. However, after excluding governmental units, secured creditors and insiders, he was unable to solicit enough interested parties to needed to form a committee. Additionally, at the creditors' meeting pursuant to Section 341(a) of the Bankruptcy Code, nobody attending expressed interest in forming a committee. Headquartered in Leander, Texas, Waterford On Lake Travis, Ltd., filed for chapter 11 protection on March 1, 2004 (Bankr. W.D. Tex. Case No. 04-11198). Duane J. Brescia, Esq., at Strasburger & Price, L.L.P., represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $9,429,928 in total assets and $6,750,080 in total debts. WESTPOINT: Court Extends Exclusive Time to File Plan to July 29 --------------------------------------------------------------- WestPoint Stevens Inc. agree with R2 Top Hat, Ltd., that the textile industry is in a state of great flux due to the rapid increase in the ability of foreign competition to deliver product to and service the needs of domestic customers. These changes will likely alter the way domestic manufacturers operate. However, the Debtors disagree with R2 in how best to respond to the widespread changes sweeping the textile industry and the extent of the Debtors' progress in moving their cases forward and developing a viable reorganization plan. John J. Rapisardi, Esq., at Weil, Gotshal & Manges, LLP, in New York, relates that R2's proposed solution for dealing with the problems affecting the entire industry is simply to pick a subjective "discount rate" and file a plan without thoughtful and careful consideration to the risks that the company may face upon emergence from Chapter 11. It chastises the Debtors for failing to take this approach and becoming bogged down in revisions to its business plan. While filing a reorganization plan as promptly as possible is the Debtors' paramount goal, the filing of a plan in the method and manner suggested by R2 borders on recklessness and would be a derogation of the Debtors' fiduciary obligations. WestPoint Stevens, Inc.'s preferred course of action is to base its Chapter 11 plan on a business plan that includes an appropriate long-term strategy to deal with foreign competition. To that end, WestPoint has employed Kurt Salmon Associates, a recognized expert in foreign competition. It has also proposed realistic milestones to allow creditor groups to monitor the Debtors' progress. Contrary to R2's assertions, the Debtors are not using their time to develop an "absolutely perfect" or "final" business plan to the prejudice to their creditor constituencies. WestPoint has made substantial progress in moving their Chapter 11 cases forward and seeks the additional time to ensure that it has a solid foundation on which to propose a viable Chapter 11 plan. Instead of supporting the Debtors in this process as every other creditor has, R2 seeks to terminate the Exclusive Periods to take control of the process and disenfranchise WestPoint's other creditors for its own benefit. It admitted as much when it submitted its Restructuring Proposals to the Debtors. Mr. Rapisardi contends that while there is nothing wrong with a creditor seeking to maximize its recovery, there is a problem with a Debtor doing so to the prejudice of all other creditors, absent a proper analysis, justification and supporting evidence. The Debtors understand R2's desire to have them emerge quickly form Chapter 11, but it cannot be done at the expense of other creditors in these cases without meeting the confirmation standards of the Bankruptcy Code. Until the Debtors' business plan is revised to deal with increased foreign competition and a proper valuation of the company based on that revised plan has been completed, no party is in a position to propose a viable Chapter 11 plan. Accordingly, the Debtors ask the Court to deny R2's objection. * * * After due deliberation, Judge Drain extends the Debtors' exclusive right to file a Chapter 11 plan through and including July 29, 2004, and their exclusive right to solicit acceptances of that plan through and including September 27, 2004. If the Debtors fail to satisfy any of the milestones specified within the applicable time period, giving effect to the applicable cure periods, the Debtors are directed to appear before the Court on shortened notice to the Creditors Committee, Lenders and R2 Top Hat, Ltd., at the earliest date on which the Court can accommodate the hearing. The hearing will establish whether good cause exists to continue the Exclusive Periods, it being understood that the failure to satisfy the Court as to why a milestone was not satisfied may result in a modification or termination of the Exclusive Periods by the Court. WestPoint Stevens Inc. and certain of its subsidiaries filed for protection under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York on June 1, 2003. WestPoint Stevens Inc. is the nation's premier home fashions consumer products marketing company, with a wide range of bed linens, towels, blankets, comforters and accessories marketed under the well-known brand names GRAND PATRICIAN, PATRICIAN, MARTEX, ATELIER MARTEX, BABY MARTEX, UTICA, STEVENS, LADY PEPPERELL, SEDUCTION, VELLUX and CHATHAM - all registered trademarks owned by WestPoint Stevens Inc. and its subsidiaries - and under licensed brands including RALPH LAUREN HOME, DISNEY HOME and GLYNDA TURLEY. WestPoint Stevens can be found on the World Wide Web at http://www.westpointstevens.com/ (WestPoint Bankruptcy News, Issue No. 23; Bankruptcy Creditors' Service, Inc., 215/945-7000) WILSONS THE LEATHER: May 2004 Store Sales Decrease to $16MM ----------------------------------------------------------- Wilsons The Leather Experts Inc. (Nasdaq:WLSN) reported sales of $16 million for the four weeks ended May 29, 2004, compared to $20.9 million for the four weeks ended May 31, 2003. Year-to-date sales have decreased 2.1% to $113.8 million compared to $116.2 million for the same period last year. Sales for the current fiscal year included approximately $20.8 million in liquidation sales resulting from the transfer of inventory to an independent liquidator in conjunction with the previously announced closing of approximately 111 stores. Comparable store sales decreased 6.4% for the four weeks ended May 29, 2004; this decrease compares to a 5.2% decrease in comparable store sales for the four weeks ended May 31, 2003. Year-to-date comparable stores sales have decreased 2.8% compared to a 1.0% decrease in comparable store sales for the same period last year. Year-to-date comparable store sales do not include sales from the stores that were liquidated. Commenting on these results, Joel Waller, Chief Executive Officer said, "Sales in our mall and outlet stores were negatively impacted by the shift in Memorial Day. Last year Memorial Day sales were included in May's comparable store sales figures; this year they have shifted to June. We estimate the negative impact of the Memorial Day shift on comparable store sales to be approximately 3.0% to 4.0%." Mr. Waller continued, "With the liquidation sales in the 111 stores completed, we are focusing our efforts on ensuring a strong fall season. In addition, we have made positive progress with respect to our refinancing of the 11 1/4% Senior Notes, with a special shareholders' meeting scheduled for June 24, 2004. We look forward to continuing our efforts to drive our business forward." About Wilsons Leather Wilsons Leather is the leading specialty retailer of leather outerwear, accessories and apparel in the United States. As of May 29, 2004, Wilsons Leather operated 457 stores located in 45 states and the District of Columbia, including 332 mall stores, 108 outlet stores and 17 airport stores. The Company regularly supplements its permanent mall stores with seasonal stores during its peak selling season from October through January. As reported in the Troubled Company Reporter's April 20, 2004 edition, Wilsons The Leather Experts Inc. (Nasdaq:WLSN) announced that it entered into an agreement to amend its revolving credit facility. The revolving credit facility, which is provided by GE Capital, CIT, Wells Fargo, and LaSalle, has been amended to waive defaults under previous EBITDA covenants, reset financial covenants for future time periods and, remove the April 15, 2004 deadline to amend, refund, renew, extend, or refinance its 11 1/4% Senior Notes. * Foley & Mansfield's Virginia Johnson Elected to FDCC ------------------------------------------------------ Virginia Easley Johnson of Foley & Mansfield PLLP, a national law firm based in Minneapolis with a branch in Miami, has been elected to the Federation of Defense and Corporate Counsel (FDCC). All FDCC members are experienced private practice attorneys, general counsel or insurance claims executives. Membership is granted through a peer review selection process. According to its roster, the FDCC was founded in 1936 and assists "in establishing standards for providing competent, efficient and economical legal services; to encourage and provide for continuing legal education of (its) members and to use the knowledge and experience of its membership for the promotion of public good." The FDCC has more than 1300 members from around the world, with only 75 having been elected in the state of Florida. As a member, Johnson will play a key role in the Substantive Law Sections and Committees. Johnson is the managing partner in the Miami office of Foley & Mansfield. Her practice focuses on general liability, toxic torts and medical malpractice. She works with corporate clients, national counsel, coordinating counsel and local counsel across the country. Johnson is admitted to practice in Florida and the United States District Court for the Southern and Middle Districts of Florida. She is a former member of the Civil Rules Committee for the Florida Bar, a current member of the Judicial Nominating Rules Committee for the Florida Bar, the Defense Research Institute, and the American Board of Trial Advocates. Johnson graduated from the University of Miami School of Law in 1985. She is currently an adjunct professor at UM School of Law where she teaches in the Litigation Skills program. Foley & Mansfield is a national law firm representing large corporations, small businesses and individuals. Practice groups include commercial litigation and transactions, bankruptcy, construction, products liability, employment law and intellectual property. Founded in 1989, Foley & Mansfield is based in Minneapolis with other offices in Detroit, Los Angeles, Miami, St. Louis and San Francisco. For more information call (612) 338-8878 or visit http://www.foleymansfield.com/Johnson may be reached at (305) 438-9899 or vjohnson@foleymansfield.com. The FDCC is headquartered in Tampa, Florida and can be reached at (813) 983-0022 or http://www.thefederation.org/ * BOND PRICING: For the week of June 7 - June 11, 2004 ------------------------------------------------------ Issuer Coupon Maturity Price ------ ------ -------- ----- American & Foreign Power 5.000% 03/01/30 65 AMR Corp. 10.200% 03/15/20 73 Atlas Air Inc. 9.250% 04/15/08 45 Atlas Air Inc. 10.750 08/01/05 45 Burlington Northern 3.200% 01/01/45 52 Burlington Northern 3.800% 01/01/20 73 Calpine Corp. 7.875% 04/01/08 59 Calpine Corp. 7.750% 04/15/09 57 Calpine Corp. 7.625% 04/15/06 75 Calpine Corp. 8.500% 02/15/11 58 Calpine Corp. 8.625% 08/15/10 58 Calpine Corp. 8.750% 07/15/07 61 Continental Airlines 4.500% 2/01/07 75 Comcast Corp. 2.000% 10/15/29 39 Cummins Engine 5.650% 03/01/98 70 Delta Air Lines 2.875% 02/18/24 58 Delta Air Lines 7.700% 12/15/05 60 Delta Air Lines 7.900% 12/15/09 47 Delta Air Lines 8.300% 12/15/09 38 Delta Air Lines 9.000% 05/15/16 42 Delta Air Lines 9.250% 03/15/22 41 Delta Air Lines 9.750% 05/15/21 41 Delta Air Lines 10.125% 05/15/10 49 Delta Air Lines 10.375% 02/01/11 49 Delta Air Lines 10.375% 12/15/22 43 Elwood Energy 8.159% 07/05/26 68 Foamex L.P. 9.875% 06/15/07 73 Finova Group 7.500% 11/15/09 56 Fleming Cos Inc 10.625% 07/31/07 0 Goodyear Tire 7.000% 03/15/28 75 Inland Fiber 9.625% 11/15/07 48 Liberty Media 4.000% 11/15/29 70 Lucent Tech 6.450% 03/15/29 75 Motorola Inc. 5.220% 10/01/97 75 National Vision 12.000% 03/30/09 62 Northwest Airlines 7.875% 03/15/08 63 Northwest Airlines 8.700% 03/15/07 70 Northwest Airlines 9.875% 03/15/07 72 Northwest Airlines 10.000% 02/02/09 66 Northern Pacific Railway 3.000% 01/01/47 51 Pegasus Satellite 11.250% 01/15/10 56 Salton Inc 10.750% 12/15/05 75 Salton Inc 12.250% 04/15/08 65 US West Capital 6.500% 11/15/18 73 US West Capital 6.875 07/15/28 72 ********* 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. Monthly Operating Reports are summarized in every Saturday edition of the TCR. 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- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***