/raid1/www/Hosts/bankrupt/TCR_Public/040623.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Wednesday, June 23, 2004, Vol. 8, No. 126
Headlines
AAT COMMS: S&P Rates Proposed $325M Senior Credit Facility at B-
ADELPHIA COMMUNICATIONS: Proposes Lease Rejection Procedures
ADVANCED MEDICAL: Gets Enough Consents to Amend 9-1/4% Sr. Notes
AIRLEASE: Board Decides to Cease Operations, Dissolve & Liquidate
AMERICAN PLASTIC: Case Summary & 39 Largest Unsecured Creditors
ANC RENTAL: Issues Notice To Assume And Assign 61 Contracts
ARCHIBALD: Picks M&M Meat Shops as Initial Bidder for Laura Secord
ARMSTRONG: Wants To Sell Land To Clark & Hessinger For $910,000
ASTRIS ENERGI: Obtains Approval to Dissolve ATSI Joint Venture
AURA SYSTEMS: Cures Default on Headquarters Facilities
BANC OF AMERICA: S&P Gives Low-B Preliminary Ratings to 6 Classes
BRIDGEPORT METAL: Hires Ware Fressola for Patent Infringement Work
CHAS COAL LLC: Case Summary & 20 Largest Unsecured Creditors
DAN RIVER: Panel Gets Nod to Employ Alston & Bird as Co-Counsel
DB COMPANIES: Wants to Hire Cohn Khoury as Lead Attorneys
DII IND: Wants Deadline To Remove Actions Moved to September 13
ENRON CORPORATION: Proposes CrossCountry Bidding Protocol
ENRON CORPORATION: Court Approves Petrobas Settlement Agreement
ENRON: Offshore Debtors Obtain Court Nod on U.S. Bank Settlement
EPICENTRIX TECH: Reports Name Change & Cease Trade Revocation
FEDERAL-MOGUL: 3rd Circuit Sends Asbestos Cases To Judge Rodriguez
FIBERMARK: Committee Hires Akin Gump as Bankruptcy Co-Counsel
FOAMEX: Technical Products Group Receives Federal Research Grant
GEORGETOWN STEEL: International Steel Closes $18M+ Asset Purchase
GREAT PLAINS: Kansas City Power to Redeem Preferred Securities
GRENADA MANUFACTURING: Wants Until July 4 to Make Lease Decisions
HAYES LEMMERZ: Agrees to Extend ADP Avoidance Action Deadline
HEALTHSOUTH: Gets Requisite Consents to Amend 7.0% & 7.375% Notes
ISACSOFT: Receives 5-Year Contract from Province of Manitoba
J-C HAULING CO: Case Summary & 20 Largest Unsecured Creditors
JILLIAN'S ENTERTAINMENT: Appoints Kurtzman Carson as Claims Agent
HIGHWOODS PROPERTIES: Closes $18MM Network Operations Center Sale
KAISER ALUMINUM: Senior Subordinated Noteholders Form Committee
KROLL INC: Holders May Convert 1.75% Convertible Notes to Equity
LEFFERT DAIRY: Case Summary & 16 Largest Unsecured Creditors
MADISON ENTERTAINMENT: Case Summary & Largest Unsecured Creditors
MARKLIN PROPERTIES: Files Reorg. Plan and Disclosure Statement
MIRANT CORPORATION: Objects To Perryville Energy's 3 Mega Claims
MOLECULAR DIAGNOSTICS: Lantana Small Cap Holds 7.7% Equity Stake
NAPAM INVESTMENTS: Case Summary & 10 Largest Unsecured Creditors
NCI BUILDING: Completes Refinancing & Calls for Note Redemption
NEFF CORP: Improved Performance Prompts S&P's Positive Watch
NEWPOWER HOLDINGS: Kellogg Capital Discloses 10.74% Equity Stake
OPTIMAL GEOMATICS: Balance Sheet Insolvent by $16M at January 31
ORION TELECOMMUNICATIONS: Creditors Must File Claims by July 30
OXIS INTERNATIONAL: Ray Rogers Retires as CEO, Pres. and Chairman
PARMALAT: Lenders Agree to Extend Deadline for Plan Requirements
PEGASUS SATELLITE: Honoring Prepetition Employee Obligations
PEGASUS: Wants Court Nod To Continue Support Services Agreement
PEGASUS: Court Says DirecTV May Market Service in Same Territories
PG&E NATIONAL: Equilon Pays ET Gas $6M+ to Settle Contract Dispute
PORTOLA PACKAGING: Posts $42.3 Million Deficit at May 31, 2004
POT OF GOLD PORTA: Case Summary & 20 Largest Unsecured Creditors
PROTECTIVE FINANCE: S&P Raises Series 1 Class D Rating to BB+
QWEST COMMS: Opens New Spanish-Speaking Service Center in Phoenix
RCN CORP: U.S. Trustee Appoints Unsecured Creditors' Committee
REVLON CONSUMER: S&P Assigns B- Rating to Senior Secured Debt
REVLON INC: Refinances Debt and Updates 2004 Outlook
ROO GROUP: Expands Operations to Meet Sales Demand
RS GROUP: Appoints Ian Dennis Russell to Board of Directors
SBD INC: Case Summary & 16 Largest Unsecured Creditors
SHOPKO SORES: Fitch Places Low-B Ratings on Watch Positive
SHYPPCO FINANCE: Fitch Downgrades Class A-2B Rating to BB-
TELETECH HOLDINGS: Completes Debt Reduction Plan
THERMACLIME: S&P Places B- Corp. Credit Rating on Watch Negative
TRINITY PLUMAS: Extends Barnett Shale Acquisition to July 19
UNIFAB INTERNATIONAL: Nasdaq to Delist Common Stock on June 28
UAL CORP: Asks Court to Authorize Settlement With Mae Entities
US AIRWAYS: Agrees to Settle AT&T Aircraft Claims For $16,918,817
US UNWIRED: S&P Raises Junk Ratings and Removes Credit Watch
VIVENDI UNIVERSAL: Lays-Off 350 Workers as Part of Turnaround Plan
WACHOVIA BANK: S&P Assigns Low-B Ratings to 6 Ser 2004-C12 Classes
WEIRTON: Gets Nod to Reject Contracts Except for GE Capital Lease
WESTERN WIRELESS: CFO to Present at Wachovia Conference Tomorrow
WINDERMERE SCHOOL: Asks to Employ Allen Lang as Special Counsel
W.R. GRACE: Proposes To Establish Non-Asbestos ADR Program
* Chadbourne & Parke LLP Adds Attorneys to Pro Bono Committee
* Upcoming Meetings, Conferences and Seminars
*********
AAT COMMS: S&P Rates Proposed $325M Senior Credit Facility at B-
----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B-' corporate
credit rating to St. Louis, Missourri-based wireless tower
operator AAT Communications Corp. In addition, the company's
proposed $325 million senior secured credit facility has been
assigned a 'B-' bank loan rating and a recovery rating of '3',
which denotes the expectation for meaningful recovery of principal
(50%-80%) in a hypothetical default. The new credit facility will
mostly be used to refinance about $185 million of bank debt. The
outlook is stable. Pro forma for the refinancing, AAT had
outstanding debt of about $200 million, or about $242 million
after adjusting for operating leases, at March 31, 2004.
"Ratings reflect AAT's significant leverage, expectations of
continued opportunistic acquisitions, and relatively small size
compared to most of its rated peers," said Standard & Poor's
credit analyst Michael Tsao. AAT's leverage, which was about 5.67x
debt to annualized post-management fee EBITDA pro forma for the
refinancing at the end of first-quarter 2004, is mainly the result
of the company's debt-financed acquisition of more than 1,250
towers from wireless carriers and other tower operators since mid-
2002. Management's acquisitive track record, combined with
available funding and potential acquisition opportunities, make it
likely that AAT will continue to make debt-financed acquisitions.
Somewhat tempering these concerns are solid tower industry
fundamentals. The tower industry is expected to benefit from
continued growth of the wireless industry, driven by a combination
of additional subscriber penetration and increasing minutes of
use. Pressure on carriers to further improve their network
quality, especially with the advent of number portability, should
also benefit tower operators. The tower industry has significant
competitive barriers, such as real estate zoning, high customer
switching costs, and long-term leasing contracts with provisions
for 3%-5% annual rental rate increases. Towers are also relatively
immune to technology risk because they are not dependent on the
type of transmission/reception technologies used by carriers and
do not face any economically viable alternative. There is also
good operating leverage, as towers have mostly fixed costs
relating to ground leases, taxes, and maintenance.
AAT is the sixth-largest tower operator in the U.S., with about
1,750 owned towers. A substantial portion of its revenues comes
from major wireless carriers and their affiliates. Unlike other
major tower operators, AAT is not involved in the volatile network
services business. Because the company is privately owned by a
group of financial investors, there is substantial likelihood that
it will be managed to achieve aggressive growth and return on
equity.
ADELPHIA COMMUNICATIONS: Proposes Lease Rejection Procedures
------------------------------------------------------------
Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, LLP, in
New York, informs the Court that the Adelphia Communications
(ACOM) Debtors are parties to 30,000 contracts and leases,
including around 1,200 unexpired real property leases and numerous
personal property leases, multiple dwelling unit cable service
agreements, and other executory contracts. Since the Petition
Date, ACOM Debtors have been evaluating their Leases and Contracts
to determine which should be rejected as unnecessary and
burdensome to their ongoing business operations. The ACOM Debtors
have already rejected around 100 leases and contracts.
Given that decisions must be made with respect to the remainder
of the Leases and Contracts in the weeks and months ahead, the
ACOM Debtors propose to establish procedures to facilitate an
expeditious and efficient process for rejecting the Leases and
Contracts:
(1) Any Lease or Contract the ACOM Debtors determined, in the
exercise of their business judgment, to be unnecessary and
burdensome to their ongoing business operations will be
rejected on 10-business day written notice, via facsimile
or overnight mail to:
-- the non-Debtor party under the Lease and its counsel;
-- the counsel for the Official Committee of Unsecured
Creditors;
-- the counsel for the Official Committee of Equity
Holders;
-- the counsel for the ACOM Debtors' lenders; and
-- the Office of the United States Trustee;
(2) The Rejection Notice will be accompanied by a copy of the
Court's order approving the Lease Rejection Procedures.
The Rejection Notice will be filed with the Court and
served on the Notice Parties;
(3) If an objection to a Rejection Notice is filed by a Notice
Party and is served on the ACOM Debtors' counsel before
the expiration of the 10-business day notice period, the
ACOM Debtors may schedule the matter to be heard at an
omnibus hearing that is at least three business days after
the ACOM Debtors provide telephonic, e-mail or facsimile
notice to the counsel for the objecting party of the
scheduled hearing date;
(4) If no objection to a Rejection Notice is timely received,
the applicable Lease or Contract will be deemed rejected,
and the related property, if any, will be deemed
abandoned, on the later of:
-- the date set forth in the Rejection Notice unless
otherwise agreed, in writing, by the ACOM Debtors and
the counterparty to the applicable Lease or Contract;
and
-- the date the Related Property is surrendered to the
counterparty;
(5) If a timely objection to a Rejection Notice is received
and the Court ultimately approves the rejection of the
applicable Lease or Contract, then the applicable Lease or
Contract will be deemed rejected, and the Related
Property, if any, will be deemed abandoned, as of the date
determined by the Court and set forth in any order
overruling the objection; and
(6) Claims arising out of the rejection of the Leases or
Contracts must be filed within 30 days of the date of the
Rejection Notice in accordance with the Bar Date Order.
The ACOM Debtors also seek the Court's authority to abandon
certain personal property relating to and, in most instances,
located in the premises governed by the Rejected Leases as of the
effective Rejection Date, to the extent that:
* they determine that any of their interest in the property
has little or no value -- either in connection with their
continuing operations or through a sale; or
* that the preservation of the property will be burdensome to
their estates, compared with the expense of removing or
storing the property.
In addition, the ACOM Debtors seek the Court's authority to
execute and deliver all instruments and documents, and other
actions as may be necessary or appropriate to implement and
effectuate the Rejection Procedures.
Ms. Chapman assures the Court that the counterparties to the
Leases and Contracts will not be prejudiced by the Rejection
Procedures because, on receipt of a Rejection Notice, the
counterparties will have received advance notice of the ACOM
Debtors' intent to reject a Lease or Contract, and of the
effective date of the rejection. (Adelphia Bankruptcy News, Issue
No. 62; Bankruptcy Creditors' Service, Inc., 215/945-7000)
ADVANCED MEDICAL: Gets Enough Consents to Amend 9-1/4% Sr. Notes
----------------------------------------------------------------
Advanced Medical Optics, Inc. (NYSE:AVO), announced that, as of
5:00 p.m., Eastern Daylight Time, on June 21, 2004, it had
received tenders and related consents from holders of
approximately 99.99 percent of the outstanding principal amount of
its 9-1/4 percent Senior Subordinated Notes due 2010 (CUSIP number
00763MAC2) pursuant to its previously announced offer to purchase
for cash any and all of the $70,000,000 outstanding principal
amount of the Notes and solicitation of consents to certain
proposed amendments to the indenture related to the Notes. The
Consent Solicitation expired on the Consent Date. Pursuant to its
terms, the Offer will remain open until 12:00 midnight, Eastern
Daylight Time, on July 8, 2004, unless extended or earlier
terminated. The Offer and the Consent Solicitation is conditioned
upon, among other things, the completion by AMO of financing
transactions to fund consummation of the Offer and the Consent
Solicitation.
AMO has received consents necessary to adopt the proposed
amendments to the indenture related to the Notes. Among other
things, these amendments would eliminate substantially all of the
indenture's restrictive covenants and certain events of default
contained in the indenture. The supplemental indenture effecting
the proposed amendments will become operative on the Initial
Payment Date, as described below.
Subject to the terms and conditions of the Offer and the Consent
Solicitation, AMO will pay the "Total Consideration" to the
holders who have validly tendered their Notes and validly
delivered their consents to the proposed amendments on or prior to
the Consent Date. Total Consideration will be determined based
upon the pricing formula set forth in the Offer to Purchase and
Consent Solicitation Statement, dated June 9, 2004, pursuant to
which the Offer and the Consent Solicitation are being made, with
June 22, 2004 being the price determination date. The Total
Consideration includes a consent payment of $30.00 per $1,000
principal amount of Notes, and is payable on the applicable
payment date.
Subject to the terms and conditions of the Offer and the Consent
Solicitation, AMO expects to accept for payment and pay for all
Notes that have been validly tendered and not validly withdrawn on
or prior to the Consent Date on or promptly following the first
business day after the Consent Date (the "Initial Payment Date").
AMO will pay to Holders who validly tender their Notes after the
Consent Date, but on or prior to the Expiration Date, the Total
Consideration minus the Consent Payment. Subject to the terms and
conditions of the Offer and the Consent Solicitation, AMO expects
to accept for payment and pay for all Notes that are validly
tendered and not validly withdrawn after the Consent Date, but on
or prior to the Expiration Date, on or promptly following the
first business day after the Expiration Date. In addition, AMO
may, at its option, elect to accept for payment, and pay for,
Notes on interim payment dates after the Initial Payment Date and
before the Final Payment Date. Holders will also be paid accrued
and unpaid interest from the last interest payment date to, but
not including, the applicable payment date.
Holders may not withdraw their tenders or revoke their consents at
any time after the Consent Date.
Lehman Brothers Inc. is acting as the exclusive dealer manager and
solicitation agent, Mellon Investor Services LLC is acting as the
information agent and The Bank of New York is acting as depositary
in connection with the Offer and the Consent Solicitation. Copies
of the Statement,, the Letter of Transmittal and Consent, and
other related documents may be obtained from the information agent
at (877) 698-6865. Additional information concerning the terms of
the Offer and Consent Solicitation may be obtained by contacting
Lehman Brothers at (800) 438-3242 (toll free) and (212) 528-7581
(collect).
About Advanced Medical Optics
Advanced Medical Optics, Inc. is a global leader in the
development, manufacturing and marketing of ophthalmic surgical
and eye care products. The company focuses on developing a broad
suite of innovative technologies and devices to address a wide
range of eye disorders. Products in the ophthalmic surgical line
include foldable intraocular lenses, phacoemulsification systems,
viscoelastics and related products used in cataract surgery, and
microkeratomes used in LASIK procedures for refractive error
correction. AMO owns or has the rights to such ophthalmic surgical
product brands as PhacoFlex, Clariflex, Array and Sensar foldable
intraocular lenses, the Sovereign phacoemulsification system with
WhiteStar(TM) technology and the Amadeus(TM) microkeratome.
Products in the contact lens care line include disinfecting
solutions, daily cleaners, enzymatic cleaners and lens rewetting
drops. Among the contact lens care product brands the company
possesses are COMPLETE, COMPLETE Blink-N-Clean, COMPLETE Moisture
PLUS(TM), ConseptF, Consept 1 Step, Oxysept 1 Step, Ultracare,
Ultrazyme, Total Care and blink(TM) branded products. Amadeus is a
licensed product of, and a trademark of, SIS, Ltd.
Advanced Medical Optics, Inc. is based in Santa Ana, California,
and employs approximately 2,300 worldwide. The Company has direct
operations in about 20 countries and markets products in
approximately 60 countries. For more information, visit the
Company's web site at http://www.amo-inc.com/
* * *
As reported in the Troubled Company Reporter's June 18, 2004
edition, Standard & Poor's Ratings Services affirmed its 'BB-'
corporate credit and bank loan ratings and its 'B' subordinated
debt rating on vision care company Advanced Medical Optics Inc.
At the same time, Standard & Poor's assigned its 'B' subordinated
debt rating to the company's proposed $275 million senior
subordinated convertible notes due in 2024.
The outlook is stable.
AIRLEASE: Board Decides to Cease Operations, Dissolve & Liquidate
-----------------------------------------------------------------
Airlease Ltd., A California Limited Partnership, (OTC Bulletin
Board: AIRL), announced that the Board of Directors of its General
Partner has approved the cessation of the Partnership's business
and the dissolution and liquidation of the Partnership. The
Board's decision was prompted by the Partnership's sale last month
of its three remaining aircraft. The Board is in the process of
conducting a review to estimate and provide for the final
liabilities of the Partnership.
In addition, the Board currently anticipates making only two more
distributions to Unitholders. First, the Board anticipates
declaring, at the time it files its second quarter Form 10-QSB
with the SEC, a distribution to the Unitholders of a majority of
the net available funds. Second, the Board anticipates terminating
the Partnership and making a final cash distribution to
Unitholders out of its remaining net available funds by the end of
2004. The Partnership will continue to file its periodic reports
with the Securities and Exchange Commission until the Partnership
is terminated.
AMERICAN PLASTIC: Case Summary & 39 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: American Plastic Surgery, LLC
3600 Mansell Road, Suite 150
Alpharetta, Georgia 30022
Bankruptcy Case No.: 04-69432
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
American Plastic Surgery of Florida, LLC 04-69433
Type of Business: The Debtor acquires, develops and manages
elective cosmetic and laser surgery centers.
See http://www.americanplasticsurgery.us/
Chapter 11 Petition Date: June 10, 2004
Court: Northern District of Georgia (Atlanta)
Judge: C. Ray Mullins
Debtor's Counsel: John A. Thomson, Jr., Esq.
Womble, Carlyle, Sandridge & Rice, PLLC
Suite 3500 One Atlantic Center
1201 West Peachtree Street
Atlanta, GA 30309
Tel: 404-888-7409
Fax: 404-870-4841
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
A. American Plastic Surgery's 19 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Mentor-Aesthetics Products $161,545
Allergan $31,160
Copeland/Studios $12,070
Maui Clinic Pharmacy $6,651
Condon, Dennis $3,606
Summer Street Properties LLC $3,437
Altavilla, Patricia $2,523
Permacare Janitorial Service $1,212
ADP, Inc. $953
Anesthesia Specialist $899
Infinite Conferencing $876
Aramatic Refreshment Servs. Inc. $780
DHL Express Inc. $775
Bellsouth $693
dMedia $500
Ascend Media, LLC $327
Bryant Answering Service $124
Crown Sanitary Supply, Inc. $107
Mahoney, Ellen M.D. $19
B. American Plastic Surgery of Florida's 20 Largest Unsecured
Creditors:
Entity Claim Amount
------ ------------
McKesson General Medical Corp. $35,071
United Anesthesia Group, Inc. $33,000
Galleria Professional $29,538
McKesson Specialty Dist. $27,097
Bellsouth Advertising Publishing Corp. $26,834
Pinnela, John $18,225
Tri Factors Investment Corp. $11,264
Byron Medical, Inc. $8,588
Employment Resources $7,652
Medallion Enterprises $4,792
Holy Cross Hospital $4,515
Telecheck Services, Inc. $4,500
McKesson $4,272
Health Waste Removal & Servs., Inc. $3,866
Proex Surgical Inc. $3,855
Reddy, Kris, M.D., P.A. $3,823
W.L. Gore & Associates, Inc. $3,580
Office Products America $3,118
Lynx Cosmetisoft $3,000
Larrieux, Rachel $2,455
ANC RENTAL: Issues Notice To Assume And Assign 61 Contracts
-----------------------------------------------------------
On August 21, 2003, the Court authorized the ANC Rental
Corporation Debtors' assumption and assignment of 233 leases and
contracts to Vanguard Car Rental USA, Inc., and established
procedures to assume and assign additional contracts and leases.
The August 21 Order states that the Debtors may seek authority to
assume and assign additional executory contracts and unexpired
non-residential real property leases by providing notice of their
intent to:
-- Alamo Rental (US), Inc.,
-- National Rental (US), Inc.,
-- Vanguard,
-- the counsel for Liberty Mutual Insurance Company, and
-- each counterparty to the agreement,
along with any cure amount.
Pursuant to the August 21 Order, the Debtors sent notices to
counterparties of 60 more contracts. The Debtors also provided
Liberty and the Official Committee of Unsecured Creditors with
copies of each Notice.
Consequently, the Court authorizes the Debtors to assume and
assign six contracts and equipment schedules to Vanguard:
Counterparty Contract
------------ --------
Zenrin USA, Inc. Trademark License Pact
ATEL Capital Equipment Fund, VIII, LLC Master Lease Agreement
Equipment Schedule 1A
Equipment Schedule 1B
Equipment Schedule 2A
Equipment Schedule 1B
The Debtors will also assume and assign to Vanguard 55 insurance
policies issued by Travelers Insurance Company:
A. Policy Holder -- Alamo Rent-A-Car, Inc.:
(1) Loss Sensitive Policy -- URLUB 394J0905,
(2) Loss Sensitive Policy -- URUB 397G6124,
(3) Loss Sensitive Policy -- URUB 398G0358,
(4) Loss Sensitive Policy -- UDSKUB 398G038A,
(5) Loss Sensitive Policy -- URJUB 398G0334,
(6) Loss Sensitive Policy -- URKUB 398G0346, and
(7) Loss Sensitive Policy -- URLUB 398G0592, and
B. Policy Holder -- National Car Rental Systems, Inc.:
(1) TRFMC 105T8405,
(2) TRNSL 105T6417,
(3) TRMH 105T8510,
(4) TRMH 105T8522,
(5) TRMH 105T8534,
(6) TRMV 106T5482,
(7) TRMV 106T5851,
(8) TRMV 106T6097,
(9) TRMV 106T6270,
(10) TRMV 106T6189,
(11) TRBLA 106T7230,
(12) TRMV 106T7346,
(13) TRMV 106T736A,
(14) TRBLA 106T744A,
(15) TRMV 106T779A,
(16) TRMV 106T8005,
(17) TRBLA 106T8091,
(18) TRBLA 132T7044,
(19) TRBLA 140T3580,
(20) TREEUB 191T4841,
(21) TRMV 193T7264,
(22) TRNSA 1931T7264,
(23) TREENSA 193T7381,
(24) TRND 199T0280,
(25) TDSJUB 201T0782,
(26) TROLJUB 224T3821,
(27) TC2JCAP 230T7830,
(28) TL2IUB 231T3314,
(29) TROLJUB 232T8075,
(30) TC2JUB 232T804A,
(31) TJUB 232T8131,
(32) TNSL 143T6771,
(33) TNSL 143T6763,
(34) TCPP 148T9205,
(35) TCA 148T9217,
(36) TCAS 149T6903,
(37) TCAM 149T6915,
(38) TCA 149T6927,
(39) TEENSA 166T8011,
(40) TMTC 189T5625,
(41) TSIEX 198T3244,
(42) TEENSA 198T7753,
(43) TJGLSA 198T8393,
(44) TJEAP 218T0734,
(45) TJCAP 230T8003,
(46) TJCAP 237T031A,
(47) TCSCSSC 240T0089, and
(48) CSCC 160T3203
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. 55; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ARCHIBALD: Picks M&M Meat Shops as Initial Bidder for Laura Secord
------------------------------------------------------------------
Chicago-based Archibald Candy Corporation announced that it has
selected M&M Meat Shops Ltd., Canada's largest retail chain of
specialty frozen foods, as the initial bidder in the sale of Laura
Secord, one of Canada's leading marketers and retailers of boxed
chocolates, scooped ice cream and other confectionery items.
Under the agreement M&M Meat Shops, which was selected from a
group of bidding companies, will acquire all of the assets of
Laura Secord from Archibald and its Canadian subsidiary for an
estimated aggregate amount of C$25.5 million. In addition, M&M
Meat Shops has agreed to assume all of Laura Secord's existing
leases, supplier and customer arrangements and employees. However,
as specified in the definitive agreement signed with M&M Meat
Shops, approval of the transaction is conditional upon the outcome
of a formal auction process to be conducted under the joint
supervision of the Courts in the U.S. and Canada in connection
with the Chapter 11 proceedings initiated by Archibald, Laura
Secord's parent company, in January 2004.
This so called "stalking horse" process featuring the selection of
an initial - or stalking horse - bidder and a subsequent formal
auction process is common in the United States and is being
considered more frequently in Canada. In accordance with
procedures to be approved by the Courts, qualified potential
bidders in both countries will be able to review the agreement
executed with M&M Meat Shops and to submit competing bids before a
stated deadline to be approved by the Courts. In the event that
any parties submit qualified competing bids, Archibald expects to
convene a formal auction in Toronto at a date to be determined.
Following such date, the agreement with the successful bidder will
be submitted to the Courts for approval.
Any parties potentially interested in participating in the sale
process and submitting competing proposals may contact Michael
Levy of Paragon Capital Partners, the New York-based investment
banker advising Archibald in connection with its divestiture of
assets. Upon joint Court approval of the bidding procedures to be
followed, Archibald intends to make public additional information
in this regard.
"We're delighted that M&M Meat Shops will serve as our initial
bidder, or stalking horse," said Jim Ross, Archibald's Chief
Restructuring Officer. "M&M Meat Shops is one of Canada's most
successful franchise chains with proven knowledge of the retail
and foodservice industries. It has been recognized as one of the
country's best-managed companies and is known for its business
expertise and community involvement. M&M Meat Shops has set a
minimum bid threshold for others to exceed if they are interested
in acquiring Laura Secord."
Mac Voisin, President of M&M Meat Shops, said, "We're pleased to
have been chosen to provide the initial bid to acquire this
Canadian retail icon. With an excellent brand, history and
national reach, Laura Secord will make a wonderful partner. We
would love the opportunity to be that partner."
Tim Weichel, President of Laura Secord, said, "We welcome this
next stage in our sale process. We're confident that, together
with new ownership, we have the platform from which we can
continue to build our business and generate value. We're very
pleased that M&M Meat Shops has indicated that it will retain our
employees and maintain our ongoing relationships with suppliers,
customers, landlords and other stakeholders."
Laura Secord is taking certain procedural steps in connection with
Archibald's Court-supervised restructuring to facilitate the
cross-border auction process. Laura Secord will apply for an Order
of the Ontario Superior Court of Justice appointing an Interim
Receiver with limited powers.
"The application for the appointment of an Interim Receiver is
simply a procedural step taken in connection with the sale being
conducted under Archibald's restructuring process," Jim Ross
noted. "It is in no way indicative of Laura Secord's business or
prospects. The company is doing well and has a bright future
ahead, as evidenced by the number of parties that expressed
interest in participating in the sale process."
"Laura Secord is in excellent health and is well positioned for
continued success," Tim Weichel added. "The company continues to
enjoy tremendous good will, healthy performance, positive cash
flow and solid results. Most recently we've enjoyed a successful
Easter and Father's Day period, our "School's Out" teachers gift
program is showing strong growth, and we've enhanced our popular
ice cream offering with the introduction of some exciting new
products.
"Under the Order being sought, if granted, the Interim Receiver's
role will be limited to the sale process and will not include any
measure of control over Laura Secord itself. The business will
continue in the normal course and under management's direction.
Laura Secord has been and continues to be current on all of its
payments to its third party vendors, its landlords and its
employees. Laura Secord is not in monetary default of any of its
obligations."
The agreement with M&M Meat Shops and other materials concerning
the sale process will be available on the Web site --
http://www.kccllc.net/acc/-- of the U.S. claims agent in the
matter of Archibald's restructuring once those materials are filed
and approved.
Founded in 1913, Laura Secord operates 160 retail shops,
distributes its products in more than 2,000 third party retail
outlets across Canada and has 1,600 employees. Laura Secord's
business is conducted by Archibald Candy (Canada) Corporation, a
wholly-owned subsidiary of Laura Secord Holdings Corporation,
which is a wholly-owned subsidiary of Archibald. Archibald Candy
(Canada) Corporation is not a direct party to Archibald's U.S.
bankruptcy proceeding. Additional information on Laura Secord can
be found at http://www.laurasecord.ca/
A Kitchener-based business, M&M Meat Shops opened its first store
in 1980 and now has more than 375 locations across Canada,
including 200 in Ontario. M&M Meat Shops offers hundreds of meal
ideas for today's busy families ranging from succulent steaks to
delicious desserts. For more information on M&M Meat Shops visit
http://www.mmmeatshops.com/
ARMSTRONG: Wants To Sell Land To Clark & Hessinger For $910,000
---------------------------------------------------------------
Armstrong World Industries, Inc., proposes to sell, free and clear
of liens, claims and encumbrances, 28.1 acres of land located in
the Township of East Donegal, Lancaster County, Pennsylvania, to
Jeffrey S. Clark, Ann M. Clark, Mark C. Hessinger, and Jennifer C.
Hessinger. The Buyers will use the property as a distribution
center for outdoor power equipment.
AWI also seeks the Court's permission to pay Commercial Prime
Properties a 6% commission on this sale. The purchase price is
$910,000, or $32,500 per acre.
AWI owns a parcel of vacant land consisting of approximately 98
acres located at the east end of its Marietta plant in the
Township of East Donegal, Pennsylvania. AWI bought the property
in 1973 with the original intent of expanding the Marietta plant.
Prior Failed Sales
The property has never been used by AWI. In July 1998, AWI
concluded that it did not anticipate any future need for the
property and determined to sell it. Accordingly, AWI employed
Commercial Prime Properties, then known as Commercial Industrial
Brokers, Inc., to help sell it. For almost 6 years Commercial
Prime engaged in extensive efforts to sell the property. In that
time period, only two parties, other than the Buyers, expressed
serious interest. The first prospective buyer negotiated to buy
50 of the 98 acres for $34,500 an acre. That transaction was
terminated by the prospective buyer because of obstacles it met in
the development process. A second prospective buyer expressed
interest in the entire 98 acres at $34,500 per acre, and AWI was
authorized by the Court to sell the property. However, the buyer
could not find the necessary financing to close.
AWI and Commercial Prime believe that there is a limited market
for the property for various reasons, including its site in an
industrial area. Even though there has been a substantial amount
of industrial acreage on the market in Lancaster County, very
little has actually sold because of a depressed market arising
from the better access to highways available in neighboring
highways, and their more aggressive promotion of industrial
growth.
The Sale Terms
The Buyers have deposited $5,000 with Commercial Prime, with the
remainder of the purchase price to be paid at closing. AWI will
pay $35,000 to Commercial Prime on closing from the purchase
price.
The Sale Agreement is expressly contingent on the Buyers' receipt
of zoning approval from East Donegal Township to use the Marietta
property as a distribution center. After completion of the due
diligence period, the Buyers have an additional 240 days to
obtain, at their sole cost, all necessary governmental agency
permits and approvals for their intended use. If these approvals
are not forthcoming within that period, the parties agree to an
extension of 30 additional days.
The sale is conditioned on the satisfactory completion of the
Buyers' due diligence to be carried out over a 90-day period after
the Court's approval of the sale. If any defects are discovered,
notice will be given to AWI, and if not cure, the sale agreement
will be void and the deposit will be returned to the Buyers.
Headquartered in Lancaster, Pennsylvania, Armstrong World
Industries, Inc. -- http://www.armstrong.com/-- the major
operating subsidiary of Armstrong Holdings, Inc., designs,
manufactures and sells interior finishings, most notably floor
coverings and ceiling systems, around the world. The Company
filed for chapter 11 protection on December 6, 2000 (Bankr. Del.
Case No. 00-04469). Stephen Karotkin, Esq., Weil, Gotshal &
Manges LLP and Russell C. Silberglied, Esq., at Richards, Layton &
Finger, P.A., represent the Debtors in in their restructuring
efforts. When the Debtors filed for protection from their
creditors, they listed $4,032,200,000 in total assets and
$3,296,900,000 in liabilities. (Armstrong Bankruptcy News, Issue
No. 62; Bankruptcy Creditors' Service, Inc., 215/945-7000)
ASTRIS ENERGI: Obtains Approval to Dissolve ATSI Joint Venture
--------------------------------------------------------------
Astris Energi Inc., the world's leading alkaline fuel cell
technology company, announced that the Quebec Superior Court has
ruled in Astris' favour and supported its application to
immediately wind up and liquidate Astris Transportation Systems
Inc., a corporation that was formed jointly with Care Automotive
Inc. Astris served notice in November 2003 that its agreements
with Care were effectively terminated, as Care did not meet its
funding commitment for the proposed joint venture which was to
manufacture and market Astris fuel cell systems for vehicular use.
"We are pleased to have this situation successfully settled," said
Jiri Nor, President and Chief Executive Officer. "Our focus is on
progressing toward pilot production of our POWERSTACK MC250 later
this summer, to be followed by full-scale production. We have
signed one agreement and are discussing others which would support
pilot production."
About Astris Energi Inc.
Astris is a late-stage development company committed to becoming
the leading provider of affordable fuel cells and fuel cell
generators internationally. Over the past 20 years, more than $17
million has been spent on the development of Astris' AFC. The
company is commencing pilot production of its POWERSTACK(TM) MC
250 technology in 2004. Astris is the only publicly traded company
in North America focused exclusively on the alkaline fuel cell.
Additional information is also available at the company's website
at http://www.astris.ca
At December 31, 2003, Astris Energi Inc.'s balance sheet shows a
total shareholders' deficit of $135,975.
AURA SYSTEMS: Cures Default on Headquarters Facilities
------------------------------------------------------
Aura Systems, Inc. (OTC Bulletin Board: AURA) announced that it
has cured the default on its headquarters facilities and that the
previously announced foreclosure sale has been cancelled.
Additionally, the Company has entered into a sale and leaseback
agreement with a purchaser of the facilities whereby the Company
will remain in its current location under a four year lease
arrangement. The sale and leaseback transaction should close
within the next 120 days.
About Aura Systems
Aura Systems Inc., an ISO 9001 certified company, is a technology
leader in mobile power. The Company develops and sells AuraGen(R)
mobile induction power systems to the industrial, commercial and
defense mobile power generation markets. The Company's unique and
patented energy solution is the only proven, commercially
available pure sine wave power system that can continuously
provide thousands of watts of power at low engine speed, and is
fully integrated under the vehicle hood. The AuraGen(R) is capable
of generating full power, up to 8,500 watts, at all engine speeds
including enhanced engine idle speed for gasoline engines and at
idle speed for bigger diesel engines. The AuraGen(R) combines
sophisticated mechanical and electronics design, advanced
engineering and breakthrough electromagnetic technology to produce
a highly reliable and flexible mobile power generating system that
creates alternating current (AC) and direct current (DC)
electricity, both with and without the engine on. For more
information about the Company's AuraGen(R) product visit the
company's website at http://www.aurasystems.com/
BANC OF AMERICA: S&P Gives Low-B Preliminary Ratings to 6 Classes
-----------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Banc of America Commercial Mortgage Inc.'s
$1.16 billion commercial mortgage pass-through certificates series
2004-3.
The preliminary ratings are based on information as of June 21,
2004. Subsequent information may result in the assignment of final
ratings that differ from the preliminary ratings.
The preliminary ratings reflect the credit support provided by the
subordinate classes of certificates, the liquidity provided by the
fiscal agent, the economics of the underlying loans, and the
geographic and property type diversity of the loans. Classes A-1,
A-2, A-3, A-4, A-5, B, C, D, and E are currently being offered
publicly. The remaining classes will be offered privately.
Standard & Poor's analysis determined that, on a weighted average
basis, the pool has a debt service coverage of 1.58x, a beginning
LTV of 90.7%, and an ending LTV of 78.0%.
Preliminary Ratings Assigned
Banc of America Commercial Mortgage Inc.
Class Rating Amount ($)
A-1 AAA 23,000,000
A-2 AAA 34,000,000
A-3 AAA 125,000,000
A-4 AAA 110,000,000
A-5 AAA 414,397,485
B AA 28,879,200
C AA- 11,551,680
D A 24,547,319
E A- 11,551,680
A-1A AAA 284,159,066
F BBB+ 15,883,560
G BBB 11,551,680
H BBB- 15,883,560
J BB+ 4,331,880
K BB 5,775,840
L BB- 5,775,840
M B+ 4,331,880
N B 2,887,920
O B- 2,887,920
P N.R. 18,771,480
X* AAA 1,155,167,990**
*Interest-only class. **Notional amount. N.R.-Not rated.
BRIDGEPORT METAL: Hires Ware Fressola for Patent Infringement Work
------------------------------------------------------------------
The Bridgeport Metal Goods Manufacturing Company sought and
obtained approval from the U.S. Bankruptcy Court for the District
of Connecticut, Bridgeport Division, to employ Ware, Fressola, Van
Der Sluys and Adolphson, LLP as its Special Counsel.
The Debtor relates that Ware Fressola represented it prepetition
in connection with the preparation and prosecution of patent
applications in the United States and foreign countries.
The firm has:
i) advised the Debtor regarding various infringement issues;
ii) evaluated new developments both for freedom from
infringement and potential patent liability;
iii) negotiated various agreement including license agreements;
iv) prepared schedules for potential buyers; and
v) represented the Debtor in third-party discovery matters.
The Debtor wishes to retain Ware Fressola to continue handling all
infringement issues, which are pivotal to the resolution of its
chapter 11 proceeding and the reorganization of the Debtor.
Ware Fressola will continue the patent-related services. The
Debtor tells the Court that the firm has extensive knowledge of
all matters that fall within the purview of intellectual property.
The hourly rates charged by the firm range from $180 to $330 per
hour. James Frederick, Esq., is anticipated to have primary
responsibility on this case. Mr. Frederick's current hourly rate
is $320 per hour.
Headquartered in Bridgeport, Connecticut, Bridgeport Metal Goods
Manufacturing Co. -- http://www.bmgmfg.com/-- is engaged in the
business of manufacturing, decorating and assembling plastic
cosmetic containers and packaging products. The Company filed for
chapter 11 protection on March 30, 2004 (Bankr. D. Conn. Case No.
04-50412). Irve J. Goldman, Esq., and Jessica Grossarth, Esq., at
Pullman & Comley represent the Debtor in their restructuring
efforts. When the Company filed for protection from its
creditors, it listed both estimated debts and assets of over $10
million.
CHAS COAL LLC: Case Summary & 20 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Chas Coal, LLC
830 South Main Street, Suite 3
London, Kentucky 40741
Bankruptcy Case No.: 04-60972
Type of Business: The Debtor is a provider of high quality, low
sulfur Eastern Kentucky coal.
See http://www.chascoal.com/
Chapter 11 Petition Date: June 17, 2004
Court: Eastern District of Kentucky (London)
Judge: Joseph M. Scott Jr.
Debtor's Counsel: Robert Gregory Lathram, Esq.
Law Offices of R. Gregory Lathram, P.S.C.
113 West 5th Street
London, KY 40741
Tel: 606-862-1600
Total Assets: $28,080,624
Total Debts: $8,601,895
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Georgia Power Company $1,500,000
c/o Southern Company Services, Inc.
Post Office Box 2641
Birmingham, AL 3521-8160
Virginia Electric & Power Company $462,000
Innsbrook Technical Center
5000 Dominion, Boulevard 1NW
Superior Highwall Miners, Inc. $247,000
South Mississippi Electric Power $226,864
Associate
National City Leasing Corporation $216,273
Phillips Machine Service, Inc. $173,043
Asher Land & Mineral LTD $145,979
DiamondHead Coal Sales $131,128
Industrial Supply $103,530
Begley Resources, Inc. $87,753
Whayne Supply Company $82,024
Ashland Bulk Plant #5 $73,762
Mineral Labs, Inc. $63,531
Van Meter Insurance, Inc. $47,424
Commonwealth Administrators, LLC $33,160
Security Engineers, Inc. $30,614
Kentucky Utilities $29,521
Detroit Edison Company $25,000
Austin Sales, Inc. $22,562
Brooks Tire Service, Inc. $17,097
DAN RIVER: Panel Gets Nod to Employ Alston & Bird as Co-Counsel
---------------------------------------------------------------
The Official Unsecured Creditors Committee appointed in Dan River
Inc.'s chapter 11 cases sought and obtained approval from the U.S.
Bankruptcy Court for the Northern District of Georgia, Newnan
Division, to hire Alston & Bird LLP as its co-counsel.
The Committee expects Alston & Bird to:
a) assist, advise and represent the Committee and its
constituencies in connection with the administration of
the Debtors' cases;
b) assist, advise and represent the Committee in any
investigation of the acts, conduct, assets, liabilities
and financial condition of the Debtors, the operation and
profitability of the Debtors, the operation of the
Debtors' businesses and the desirability of the
continuance or disposition of such businesses, and any
other matters relevant to the Debtors' cases or to the
formation of the plan or plans of reorganization;
c) assist, advise and represent the Committee in its
participation in the negotiation, formulation and drafting
of a plan or plans of reorganization, and in its advice to
those represented by the Committee as to the Committee's
recommendation with respect to any such plan or plans of
reorganization;
d) assist, advise and represent the Committee with respect to
the legal issues raised by the Debtors' business
operations;
e) assist, advise and represent the Committee with respect to
any investigation of causes of action that may enhance the
Debtors' estates;
f) assist, advise and represent the Committee in the
performance of all of its duties and powers under the
Bankruptcy Code and the Bankruptcy Rules and in the
performance of such other services as are in the interest
of those represented by the Committee.
The hourly rates of those associates, counsel and partners of
Alston & Bird who may be involved in these cases are:
Professionals Billing Rate
------------- ------------
Dennis J. Connolly $545 per hour
Mark I. Duedall $420 per hour
Jason H. Watson $420 per hour
William S. Sugden $185 per hour
Headquartered in Danville, Virginia, Dan River Inc.
-- http://www.danriver.com/-- is a designer, manufacturer and and
marketer of textile products for the home fashions, apparel
fabrics and industrial markets. The Company filed for chapter 11
protection on March 31, 2004 (Bankr. N.D. Ga. Case No.
04-10990). James A. Pardo, Jr., Esq., at King & Spalding
represents the Debtors in their restructuring efforts. When the
Debtors filed for protection from their creditors, they listed
$441,800,000 in total assets and $371,800,000 in total debts.
DB COMPANIES: Wants to Hire Cohn Khoury as Lead Attorneys
---------------------------------------------------------
DB Companies, Inc., and its debtor-affiliates ask the U.S.
Bankruptcy Court for the District of Delaware for permission to
hire Cohn Khoury Madoff & Whitesell LLP as lead counsel in their
chapter 11 proceedings.
The Debtors tell the Court that the Firm has extensive expertise
and experience in bankruptcy law and particularly in representing
debtors in Chapter 11 cases. Additionally, the Firm has become
intimately familiar with the Debtors' businesses and operations.
Cohn Khoury will:
a. provide legal advice with respect to the Company's powers
and duties as debtors-in-possession in the continued
operation of its business and management of its property;
b. assist with the planned sale of the Company's assets;
c. prepare on behalf of the Company necessary applications,
motions, answers, orders, reports and other legal papers;
d. appear in, and to protect the interests of the Company
before this Court;
e. negotiate, prepare and seek confirmation of any plan of
liquidation that may be pursued by the Company; and
f. perform all other legal services for the Company which may
be necessary and proper in these Chapter 11 cases.
The current hourly rates of the Firm's attorneys and paralegals
are:
Professionals Billing Rate
------------- ------------
Daniel C. Cohn $520 per hour
A. Davis Whitesell $395 per hour
David B. Madoff $375 per hour
Michael A. Khoury $355 per hour
Kristin M. McDonough $275 per hour
Christopher M. Candon $235 per hour
Michelle L. P. Alston $145 per hour
(paralegal)
Headquartered in Pawtucket, Rhode Island, DB Companies, Inc. --
http://www.dbmarts.com/-- operates and franchises a regional
Chain of DB Mart convenience stores in Connecticut, Massachusetts,
Rhode Island, and the Hudson Valley region of New York. The
Company filed for chapter 11 protection on June 2, 2004 (Bankr.
Del. Case No. 04-11618). William E. Chipman Jr., Esq., at
Greenberg Traurig, LLP represents the Debtors in their
restructuring efforts. When the Company filed for protection from
their creditors, they listed estimated assets of over $50 million
and debts of approximately $65 million.
DII IND: Wants Deadline To Remove Actions Moved to September 13
---------------------------------------------------------------
The DII Industries, LLC Debtors ask the Court to extend the time
within which they may file notices of removal with respect to
civil actions pending on the Petition Date, through and including
September 13, 2004, without prejudice to their right to seek
further extensions.
The Debtors are parties to numerous civil actions pending in
various tribunals, and relating to a wide variety of claims.
Michael G. Zanic, Esq., at Kirkpatrick & Lockhart, LLP, in
Pittsburgh, Pennsylvania, explains that the Debtors have no
present intention to remove any of the Prepetition Actions.
Nevertheless, an additional extension of the Removal Period is
warranted to preserve the possibility of removal in the unlikely
event that the Debtors' Chapter 11 cases fail to achieve the
swift and orderly resolution expected.
Mr. Zanic notes that by means of its Stay Relief Order, the Court
has authorized the continuation of all non-asbestos or silica-
related litigation against the Debtors during the pendency of
their Chapter 11 cases. The Debtors' request to extend their
Removal Period does not seek to alter or impair the protection
granted by the Stay Relief Order in any way. Furthermore, the
rights of the Debtors' adversaries will not be prejudiced by an
extension since they will be able to continue litigation of the
Prepetition Actions pending removal, and may seek to have any
removed Prepetition Action remanded to the State Court pursuant
to 28 U.S.C. Section 1452(b) following its removal.
The Court will convene a hearing on July 21, 2004 to consider
the Debtors' request. By application of Local Bankruptcy Rule
9013-6 for the Western District of Pennsylvania, the Debtors'
Removal Period is extended until the disposition of the Debtors'
request.
Headquartered in Houston, Texas, Kellogg, Brown & Root is engaged
in the engineering and construction business, providing a wide
range of services to energy and industrial customers and
government entities in over 100 countries. DII has no business
operations. The Company filed for chapter 11 protection on
December 16, 2003 (Bankr. W.D. Pa. Case No. 02-12152). Jeffrey N.
Rich, Esq., Michael G. Zanic, Esq., and Eric T. Moser, Esq., at
Kirkpatrick & Lockhart LLP, represent the Debtors in their
restructuring efforts. (DII & KBR Bankruptcy News, Issue No. 14;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
ENRON CORPORATION: Proposes CrossCountry Bidding Protocol
---------------------------------------------------------
Enron Corporation, Enron Operations Services, LLC, and Enron
Transportation Services, LLC, and non-debtor affiliate EOC
Preferred, LLC, wish to implement a competitive bidding process
that is designed to generate a maximum recovery for the Debtors.
Hence, the Debtors ask the Court to:
(a) establish procedures for the solicitation and
consideration of qualified proposals, and for selection
of the highest or best proposal, to purchase the Equity
Interest;
(b) approve the Sellers' payment of a break-up fee to
NuCoastal, LLC, on the conditions set forth in the
Purchase Agreement;
(c) authorize and schedule the Auction at which higher bids
will be solicited for the sale of the Equity Interest to
be held on September 1, 2004;
(d) schedule the Sale Hearing on September 9, 2004 where the
Sellers will seek authority to enter into the Purchase
Agreement with NuCoastal or the Winning Bidder; and
(e) approve the Notice Procedures.
The Bidding Procedures
The Debtors propose these Bidding Procedures:
A. Auction Date and Time
The Auction will be held on September 1, 2004, commencing at
10:00 a.m. at the offices of Weil, Gotshal & Manges, LLP, in
767 Fifth Avenue, New York, New York.
B. Adjournment of Auction
The Auction may be adjourned as the Sellers, upon
consultation with the Creditors Committee, deem appropriate.
Reasonable notice of adjournment and the time and place for
the Auction resumption will be given to NuCoastal, all
entities submitting Competing Bids and the Creditors
Committee.
C. Bidding Process
The Sellers will, in consultation with the Creditors
Committee:
(a) determine whether any person is a Qualified Bidder;
(b) coordinate the efforts of potential bidders in conducting
their due diligence reviews;
(c) receive offers from Qualified Bidders;
(d) provide notice to all relevant parties of these Bidding
Procedures and the Auction; and
(e) evaluate and negotiate any bid.
D. Qualification as Bidder
Any entity that wishes to make a bid for the Equity Interest
must submit a Qualified Bid to purchase the Equity Interest
in conformity of the Bidding Procedures. Only Qualified
Bidders may participate in the Auction.
E. Qualified Bids
To be a Qualified Bidder, an offer to purchase must include:
(a) a $25,000,000 cash deposit;
(b) sufficient information to demonstrate that it has the
financial wherewithal and ability to consummate the
contemplated transactions and the ability to satisfy the
Section 363(m) of the Bankruptcy Code requirements; and
(c) evidence that it has obtained authorization and approval
with respect to the submission of its bids.
F. Bid Requirements
The Sellers, upon consultation with the Creditors Committee,
will entertain bids that are on substantially the same terms
and conditions as those set forth in the Purchase Agreement.
Each Competing Bid must be accompanied by a deposit at least
equal to $25,000,000, delivered in the form of:
-- wire transfer to:
JPMorgan Chase Bank
500 Stanton Christiana Road
Newark, DE 19713
ABA#021000021
For Credit to Weil, Gotshal & Manges, LLP Special Account
Account#0158-37-474
Reference: 43889.0003/CCE/M.Sosland; or
-- a cashier's check to:
Weil, Gotshal & Manges, LLP
Attention: Norman LaCroix, Director of Accounting
767 Fifth Avenue
New York, New York 10153
Reference: Enron/CrossCountry Transaction; or
-- an irrevocable letter of credit to the benefit of:
JPMorgan Chase Bank, as Escrow Agent
600 Travis Street, Suite 1150
Houston, Texas 77002
If a bidder, other than NuCoastal, is the Winning Bidder, it
will immediately direct Weil, Gotshal & Manges, LLP, to
transfer its Earnest Money Deposit into an escrow account as
required by the purchase agreement.
Competing Bids must be in writing, signed by the bidder's
authorized representative and received no later than
5:00 p.m. on August 23, 2004 by Enron Corporation, Weil,
Gotshal & Manges, LLP, The Blackstone Group, LP, Milbank,
Tweed, Hadley & McCloy, LLP, and Porter & Hedges LLP.
Any Competing Bid must be presented under a contract
substantially similar to the Purchase Agreement, marked to
show any modifications.
The initial overbid must be at least $45,000,000 greater than
the Preliminary Purchase Price.
G. Due Diligence
Any Qualified Bidder who desires to conduct due diligence
regarding the Equity Interest should contact:
Raffiq Nathoo
Senior Managing Director
The Blackstone Group
e-mail: nathoo@blackstone.com
Tel: (212) 583-5000
Fax: (212) 583-5349
Before parties are allowed to conduct due diligence, they must
execute a Confidentiality Agreement.
H. Auction
The Sellers will, after the Bid Deadline and prior to the
commencement of the Auction, upon consultation with the
Creditors Committee:
(a) evaluate all Competing Bids received;
(b) invite all Qualified Bidders to participate in the
Auction; and
(c) determine which Competing Bid reflects the highest or
best offer for the Equity Interest and will announce it
at the commencement of the Auction.
The Sellers may reject any Competing Bid that is not in
conformity with the requirements of the Bankruptcy Code, the
Bankruptcy Rules, the Local Rules, the Bidding Procedures
Order or that is in contrary to the best interests of the
Sellers and the Debtors' estates and creditors.
Subsequent bids at the Auction, including those of NuCoastal,
must be in increments of at least $10,000,000 higher than the
highest prior bid. If NuCoastal is the Winning Bidder at the
conclusion of the Auction, its Purchase Price will be
credited by the amount of the Purchaser Credit.
I. Irrevocability of Certain Bids
The Winning Bidder's bid will remain open and irrevocable in
accordance with the terms of the Purchase Agreement executed.
The bid of the next highest bidder will remain open and
irrevocable until the earlier to occur of (i) the
consummation of the sale and (ii) 90 days after entry of the
Sale Order.
J. Retention of Earnest Money Deposit
The Earnest Money Deposit of the Winning Bidder will be
retained by the Sellers in accordance with the purchase
agreement. The Earnest Money Deposit of the next highest
bidder will be held until the earlier to occur of (i) the
consummation of a sale of the Equity Interest and (ii) 90 days
after the entry of the Sale Order.
K. Failure to Close
In the event a Winning Bidder fails to consummate the
proposed transaction by the agreed closing date, the Sellers
will retain or return the Earnest Money Deposit and the
parties maintain the right to pursue all available remedies.
The Sellers are free to consummate the proposed transaction
with the Back-up Bidder at the Auction without need for an
additional Court order.
L. Non-Confirming Bids
With the exception of the Initial Overbid, and the provisions
concerning the Purchaser Credit, the Sellers, in consultation
with the Creditors Committee, will have the right to
entertain non-conforming bids.
M. Expenses
Any bidders presenting bids will bear their own expenses in
connection with the sale of the Equity Interest, whether or
not the sale is ultimately approved.
N. Conflicts
Any conflicts between the terms and provisions of the Bidding
Procedures Order and the Purchase Agreement will be resolved
in favor of the Bidding Procedures Order.
Martin A. Sosland, Esq., at Weil, Gotshal & Manges, LLP, in New
York, contends that the proposed bidding procedures are fair and
reasonable as they may enable the Sellers to induce one or more
potential purchasers to submit a higher or better bid than that
of NuCoastal.
Break-Up Fee
In the event the Purchase Agreement is terminated due to the
execution of a definitive agreement with the Winning Bidder other
than NuCoastal or the Sellers have breached the Purchase
Agreement, NuCoastal will be entitled to a $25,000,000 break-up
fee. The Break-Up Fee will be an administrative expense claim
under Sections 503(b) and 507(a)(1) of the Bankruptcy Code.
According to Mr. Sosland, the approval of the Break-Up Fee and
other forms of protection in connection with the sale of
significant assets has become an established practice in Chapter
11 cases. The Break-Up Fee, which was negotiated at arm's
length, should be approved because:
-- it is reasonable in relation to the size of the proposed
sale;
-- it does not hamper any other party from offering a higher
or better bid; and
-- NuCoastal has undertaken extensive work in investigating,
negotiating and drafting the necessary agreements.
Notice Procedures
Upon entry of the Bidding Procedures Order, the Sellers propose
to:
(i) serve, on or before June 25, 2004, a copy of the notice
of the Bidding Procedures, the Auction and the Sale
Hearing to:
-- NuCoastal and its counsel;
-- the Creditors Committee's counsel, Milbank, Tweed,
Hadley & McCloy, LLP;
-- the Office of the U.S. Trustee;
-- JPMorgan Chase's counsel, Davis, Polk & Wardwell;
-- the Employee Committee's counsel, Kronish Lieb Weiner &
Hellman, LLP;
-- the ENA Examiner, Harrison Goldin;
-- all entities who have filed notices of appearances as
of June 15, 2004, requesting service of papers;
-- all relevant taxing authorities;
-- any entity known to them to assert a lien, claim or
interest in the Equity Interest;
-- all parties who expressed in writing an interest in
acquiring the Equity Interest; and
-- those entities identified as potentially qualified
bidders;
(ii) provide electronic notification of the Sale Motion, the
Bidding Procedures Notice and the Bidding Procedures
Order by filing a copy of the Bidding Procedures Notice
with the Court; and
(iii) on or before July 8, 2004, publish the Bidding Procedures
Notice once in one or more publications they deem
appropriate, including, but not limited to, The Wall
Street Journal (national edition).
Citrus Capital Stock Agreement
The Citrus Capital Stock Agreement provides that if either
Principal -- El Paso, formerly known as Sonat, Inc., or Enron --
experience a change in control, the other Principal will have the
option to:
(i) purchase for cash all of the Citrus stock owned by the
Principal to which the change of control relates; or
(ii) require the Non-Electing Principal to purchase for cash
all of the Electing Principal's Citrus stock.
However, Mr. Sosland notes that pursuant to the terms of the
Citrus Capital Stock Agreement, a change in control will not be
deemed to have occurred in the circumstances where a transaction
has been previously approved by the Continuing Directors of the
Principal.
The initial board of directors of CrossCountry consisted of five
individuals who were appointed by the Sellers in connection with
the formation and implementation of CrossCountry. Pursuant to a
Court order dated December 1, 2003, authorizing and approving the
assignment by Enron to CrossCountry or its designee of the Citrus
Capital Stock Agreement, Enron plans to assign, and CrossCountry
plans to assume, the Citrus Capital Stock Agreement.
Accordingly, upon assignment of the Citrus Capital Stock
Agreement to CrossCountry, the members of CrossCountry's board of
directors serving at that time will constitute the "Continuing
Directors" of the "Principal" for all purposes and will be
entitled to nominate successor "Continuing Directors" under the
Citrus Capital Stock Agreement.
Mr. Sosland tells the Court that to facilitate the sale of the
Equity Interest and for the benefit of the Debtors' estates, the
CrossCountry Board of Directors will approve the proposed sale
transaction prior to the Closing. Thus, upon the assignment by
Enron and the assumption by CrossCountry of the Citrus Capital
Stock Agreement, the "Continuing Directors" of the Principal will
be deemed to approve the transaction in accordance with the terms
of the Citrus Capital Stock Agreement. (Enron Bankruptcy News,
Issue No. 113; Bankruptcy Creditors' Service, Inc., 215/945-7000)
ENRON CORPORATION: Court Approves Petrobas Settlement Agreement
---------------------------------------------------------------
Enron Corporation, through its affiliates, Enron Argentina CIESA
Holdings S.A., Enron Pipeline Company Argentina S.A., and
Ponderosa Assets, LP, owns 50% of the capital stock of Compania
de Inversiones de Energia S.A. Petrobas Brasileiro, S.A.,
through its affiliates Petrobas Energia S.A., formerly known as
Compania Naviera Perez Companc S.A.C.F.I.M.F.A., and Petrobras
Hispano Argentina S.A., owns the remaining 50% of the capital
stock of CIESA.
CIESA is the controlling shareholder of Transportadora de Gas del
Sur S.A., which engages in the business of transporting natural
gas throughout Argentina and processing natural gas and marketing
liquid petroleum gases. CIESA owns:
(i) 405,192,594 ordinary A shares of TGS, which shares
constitute 100% of the issued and outstanding TGS A
Shares and 51% of the total issued and outstanding
capital stock of TGS; and
(ii) 34,133,200 ordinary B shares of TGS, which shares
constitute 4.3% of the total issued and outstanding
capital stock of TGS.
Martin A. Sosland, Esq., at Weil, Gotshal & Manges, LLP, in New
York, relates that TGS, which was formed in 1992 in connection
with the privatization of Gas del Estado S.E., the Argentine
state-owned gas company, was granted a 35-year license to operate
Argentina's largest natural gas pipeline system. The
privatization was undertaken pursuant to a competitive bidding
process under prescribed bidding rules -- the Pliego. In
connection with the bid process, Enron formed the "Enron Economic
Group," of which it was considered the "Controlling Company" and
Transwestern Pipeline Company was considered a member.
In 1992, when Enron, through EPCA, and Perez Companc obtained
their indirect ownership interest in TGS via their ownership of
CIESA, they and certain of their Affiliates entered into several
agreements, undertakings, covenants and other obligations
relating to the acquisition of TGS's business, including, without
limitation:
(i) an Owners Agreement, dated as of November 13, 1992, by
and among EPCA, Citicorp Equity Investments S.A. and
Perez Companc;
(ii) a Shareholders Agreement, dated as of November 13,
1992, by and among EPCA, Citicorp Equity and Perez
Companc;
(iii) a Technical Assistance Agreement, dated as of
November 13, 1992, by and between TGS and EPCA;
(iv) a Guaranty, dated as of November 13, 1992, made by
Transwestern, in favor of the other Owners guaranteeing
EPCA's performance of the obligations under the Owners
Agreement, the Shareholders Agreement; and
(v) a Bid Agreement, dated as of November 13, 1992, by and
among EPCA, Citicorp Equity and Perez Companc. The Bid
Agreement has expired pursuant to its terms and is of
no further force or effect.
In November 2001, Mr. Sosland reports that Citicorp North
America, Inc., as agent for a group of banks under a loan that
provided financing for an affiliate of Enron, delivered a notice
to Enron asserting that it had appointed Citibank, N.A., as a
"portfolio manager" with respect to certain assets of Enron
Affiliates, including Ponderosa's indirect ownership interests in
CIESA and TGS, and that the portfolio manager has certain rights
with respect to the disposition of the assets. Enron has
disputed the validity, effectiveness and scope of CNAI's asserted
appointment. Enron and CNAI are currently in negotiations to
resolve the dispute and determine the methodology under which
Enron, with or without CNAI's participation, will manage and
dispose of the assets of Ponderosa, including the indirect
ownership interests in CIESA and TGS.
In January 2002, the Argentine government enacted legislation
that adversely and significantly impacted TGS's financial
condition and, consequently, CIESA's investment in TGS. The
devaluation of the Argentine peso and the elimination of certain
currency conversions caused TGS to default on certain of its
financial obligations. As a result, TGS and CIESA have each
undertaken a financial restructuring which may include, among
other alternatives, a renegotiation of their obligations with
third party lenders.
The Parties wish to settle and resolve certain matters among them
regarding their investment in TGS and CIESA, and release each
other from certain obligations. The parties have engaged in
extensive, arm's-length and good faith negotiations and
discussions concerning the subject matter of the Settlement and
Release Agreement.
Accordingly, Enron seeks the Court's approval of the Settlement
and Release Agreement, and authority to implement and consummate
the transactions contemplated thereby among Enron, Petrobras,
PESA, Petrobras Hispano, EACH, EPCA and Ponderosa, which provides
that:
(i) each of the Petrobras Release, the Enron Release and the
Transwestern Release, wherein they release each other
from claims and obligations, will be simultaneously
effected;
(ii) EPCA, PESA and their applicable Affiliates will amend the
Owners Agreement to provide that PESA will replace EPCA
as the entity that nominates the General Manager of TGS
pursuant to Article 4.3 of the Owners Agreement; and
(iii) the First Swap Transactions and the Second Swap
Transactions will be subsequently effected upon
satisfaction of certain conditions precedent, including,
with respect to the First Swap Transactions, the granting
by ENARGAS of the ENARGAS Release.
Under the First Swap Transactions, on the First Swap Closing
Date, these obligations, covenants and agreements will be
simultaneously effected:
* EACH and EPCA will transfer to a business trust established
by the Parties, or a designee of PESA, free and clear or
any and all Liens, (i) 66,008,813.50 CIESA A Shares, which
constitute about 100% of the CIESA A Shares and 25.5% of
the capital stock of CIESA, and (ii) 37,534,424.50 CIESA B
Shares, which constitute about 14.5% of the capital stock
of CIESA;
* the Petrobras Parties will transfer to EPCA, or a
designated Affiliate, free and clear of any and all Liens,
58,410,452 Petrobras B Shares, constituting about 7.35% of
the capital stock of TGS; and
* the Shareholders Agreement and the Owners Agreement, and
all amendments thereto, will be terminated and the New
Shareholders Agreement will be executed and delivered to
the parties thereto and to the Trust.
The New Shareholders Agreement will provide, among other things:
(i) certain preemptive and tag along rights for each of the
shareholders of CIESA;
(ii) that Ponderosa will retain the right to have appointed
through CIESA one director of TGS so long as Ponderosa
maintains, a 10% or greater ownership interest in CIESA;
(iii) that Ponderosa's direct or indirect ownership interest
and voting interest in CIESA will not be diluted below
10% of the outstanding capital stock of CIESA without
the prior written consent of Ponderosa; and
(iv) that PESA will be the entity that nominates the General
Manager of TGS consistent with the same rights granted to
PESA pursuant to the Owners Agreement, as amended.
Under the Second Swap Transactions, on the Second Swap Closing
Date, these obligations, covenants and agreements will be
simultaneously effected:
* subject to the simultaneous transfer of TGS B Shares, EACH
and EPCA collectively will transfer and convey, free and
clear of any and all Liens, 25,885,809.50 CIESA B Shares to
any person PESA designates, which shares constitute 100% of
the CIESA B Shares held by EACH and EPCA, collectively, and
represent about 10% of the total issued and outstanding
capital stock of CIESA; and
* each of the Petrobras Parties will vote their equity
interests in CIESA in favor of CIESA transferring and
conveying 34,133,200 TGS B Shares to EPCA or its Affiliate
as it may designate, which shares constitute 100% of the TGS
B Shares held by CIESA and represent about 4.3% of the total
issued and outstanding capital stock of TGS.
In addition, the parties agree that EPCA's portion of the
management fee payable by TGS under the terms of the Technical
Assistance Agreement will be 57% and PESA's portion of the
Management Fee will be 25%. The remaining 18% will be held by
EPCA in a segregated bank account subject to certain conditions.
Mr. Sosland argues that with the Settlement Agreement, Enron
proposes to resolve certain issues related to its indirect
interests in CIESA and TGS without litigation. The Settlement
Agreement simplifies and clarifies the Parties' interests and
rights with respect to TGS.
* * *
Judge Gonzalez approves the parties' settlement. (Enron Bankruptcy
News, Issue No. 113; Bankruptcy Creditors' Service, Inc., 215/945-
7000)
ENRON: Offshore Debtors Obtain Court Nod on U.S. Bank Settlement
----------------------------------------------------------------
The Offshore Debtors sought and obtained the Court's approval of
their Settlement Agreement with Enron Corporation and U.S. Bank,
National Association.
Ted A. Berkowitz, Esq., at Farrell Fritz, PC, in Uniondale, New
York, relates that through a Shareholders Agreement entered into
by GE Energy Financial Services, Inc., and Debtor Enron Mauritius
Company's subsidiary, Enron Enterprises (Mauritius) Company, EMC
owns 80% of Dabhol Power Company. Dabhol was formed to develop,
construct, own and operate a power station and an LNG
regasification facility and associated port facilities near the
village of Dabhol in the State of Maharashtra, India, and to sell
power to Maharashtra State Electricity Board pursuant to a Power
Purchase Agreement, dated as of December 8, 1993.
The Government of Maharashtra, India and the Government of India
guaranteed MSEB's obligations under the Power Purchase Agreement.
However, in January 2001, MSEB defaulted in its payment
obligations to Dabhol and purported to rescind the Power Purchase
Agreement. In addition, Maharashtra and India failed to honor
their guarantees. These events set in motion a series of events
that brought the Project to a halt.
In connection with the Project, Dabhol borrowed significant funds
and received other credit support from a number of Indian,
international or offshore, and government-supported lenders,
including OPIC. U.S. Bank was appointed by and acts as Offshore
Collateral Agent to the Secured Parties.
EMC agreed with U.S. Bank to contribute certain funds as equity
to Dabhol in connection with the Dabhol Power Project under:
(i) a Phase II Equity Contribution and Subscription
Agreement, dated as of May 6, 1999; and
(ii) a Phase II Project Completion Agreement, dated as of
May 6, 1999.
Mr. Berkowitz reports that each of the OPP Debtors is a party to
a Pledge Agreement with U.S. Bank whereby EMC pledged its Dabhol
shares to U.S. Bank, and Offshore Power Production C.V. and Enron
India Holdings Ltd. each pledged their EMC shares to U.S. Bank to
secure the payment of Dabhol's obligations to any Secured Party
under the terms of the financing and other security documents
supporting the financings. The pledged shares are held by U.S.
Bank in the United States.
According to Mr. Berkowitz, Enron guaranteed EMC's obligations
under the Equity Contribution Agreement and the Completion
Agreement pursuant to a Phase II Equity Contribution Guaranty,
dated as of May 6, 1999. The Secured Parties are also
beneficiaries under guaranties issued by the Government of
Maharashtra, India and the Government of India.
With MSEB's cessation of payments, the Secured Parties ceased
advancing funds for Phase II of the Project and the obligations
to the Secured Lenders are in default. Accordingly, U.S. Bank
filed numerous proofs of claim against the OPP Debtors and Enron.
In aggregate, U.S. Bank asserts almost $25,000,000,000 in
monetary claims under the Agreements.
On April 3, 2003, the Debtors objected the validity of U.S.
Bank's Claims. Later, the parties entered into two Stipulations
wherein U.S. Bank agreed, among other things:
(a) to withdraw all claims arising out of the Equity
Contribution Agreement; and
(b) that the maximum amount of claims under the remaining
claims it asserted was limited to the Maximum Completion
Support Amount, the Phase I Outstanding Indebtedness and
the Phase II Outstanding Indebtedness.
Mr. Berkowitz reports that the parties conducted and completed
discovery on Enron's and the OPP Debtors' Objection to the
Remaining U.S. Bank Claims. The Enron Parties' position is that
there is no liability under the Completion Agreement because
numerous conditions precedent to EMC's obligations to contribute
funds under the agreements were never satisfied. The Enron
Parties also assert that the OPP Debtors' obligations under the
Pledge Agreements are non-recourse obligations that can be
satisfied by tendering their pledged shares to U.S. Bank and
that, in any event, the amount of those obligations cannot exceed
the "Total Outstanding Indebtedness" owed to all Secured Parties
under their loans to Dabhol.
The Parties have engaged in arm's-length and good faith
negotiations and discussions concerning the Remaining U.S. Bank
Claims. The Parties agree to these settlement terms:
A. Secured Parties' Completion Agreement Claims
U.S. Bank, on behalf of the Secured Parties, will acknowledge
and agree that all obligations of EMC under the Completion
Agreement will be deemed to have been satisfied, and
therefore, all obligations of Enron pursuant to the Guaranty
Agreement will be deemed to have been satisfied. In this
connection, Claim No. 14305 against EMC and Claim No. 14303
against Enron will be deemed withdrawn, with prejudice, and
expunged and disallowed in their entirety.
B. Obligation of Enron
Each of Enron and OPP will agree to hold, in the aggregate,
directly or through their affiliates, at least 26% of the
issued share capital of Dabhol -- the GOI Hold Requirement --
until:
(1) a lower percentage holding of the issued share capital of
Dabhol by Enron or OPP is permitted under paragraph 3(d)
of the guarantee of the GOI issued in connection with the
Dabhol Power Project; or
(2) Enron ceases to meet the GOI Hold Requirement as a result
of (x) the transfer by any of the Enron Parties of its
ownership interests in Dabhol or any of the other Enron
Parties to the Secured Parties or the Offshore
Collateral Agent on behalf of the Secured Parties, (y)
compliance by the Enron Debtors with any judicial or
administrative rule, order, decree or legal process, or
(z) the transfer by any of the Enron Parties of its
ownership interests in Dabhol or any of the other Enron
Parties pursuant to the terms of any plan of
reorganization; provided, however, that Enron or OPP will
not be deemed in breach of its undertaking in the
Settlement Agreement or have any liability if a violation
of the GOI Hold Requirement has occurred as a result of
any of the transfers or other transactions comprising the
Transaction pursuant to the Purchase Agreement completed
at the first Closing on April 27, 2004, and Enron and OPP
make no representation as to whether the Transaction may
have resulted in a violation of the GOI Hold Requirement
or its undertaking under the Settlement Agreement.
C. Secured Parties' Pledge Agreement Claims
As of the Settlement Date, the Enron Parties agree that the
Pledge Agreements will be deemed to be valid and enforceable
to create a perfected security interest in the Pledged
Collateral to secure the Obligations. Consistent with the
terms of the Stipulation and notwithstanding Section 1111(b)
of the Bankruptcy Code or any similar provision whereby the
holder of a non-recourse claim is permitted to have recourse
against the applicable debtor, with respect to the claims
the Secured Parties may have against the Enron Parties in
connection with the Pledge Agreements, including those claims
evidenced by Claim Nos. 14304, 14321 and 14306, the Parties
agree that the Secured Parties' recourse against the Enron
Parties in connection with the Pledge Agreements will be
limited solely to the Pledged Collateral and that the Secured
Parties will have no recourse against the Enron Parties for
those claims and waive any and all rights they may have
pursuant to the Bankruptcy Code or otherwise to any allowed
claim against the Pledgors in an amount in excess of the
value of the Pledged Collateral and to any recourse claim
against the Pledgors.
D. Consistent with a Plan of Reorganization
Enron will acknowledge and agree that the Plan, as amended
from time to time, will not be inconsistent with the Parties'
rights and interests as set forth in the Settlement
Agreement. The OPP Debtors will agree that any plan of
reorganization submitted by or on behalf of any of the OPP
Debtors will not be inconsistent with the Parties' rights and
interests as set forth in the Settlement Agreement.
Mr. Berkowitz contends that pursuant to Rule 9019 of the Federal
Rules of Bankruptcy Procedure, the settlement is warranted
because it extinguishes over $186 million of claims U.S. Bank
asserted against EMC. Moreover, the Secured Parties waive any
rights they may have against the OPP Debtors in an amount in
excess of the value of the Pledge Collateral. Absent the
settlement, the OPP Debtors would need to engage in lengthy,
uncertain and expensive litigation to determine the validity of
the Remaining U.S. Bank Claims. (Enron Bankruptcy News, Issue No.
113; Bankruptcy Creditors' Service, Inc., 215/945-7000)
EPICENTRIX TECH: Reports Name Change & Cease Trade Revocation
-------------------------------------------------------------
EPICentrix Technologies, Inc. announces that following approval by
the Company's shareholders at a Special Meeting held on June 17
2004, the name of the Company will soon be changed to "Ventura
Gold Corp.", subject to regulatory approval. In addition, the
Company's shareholders approved a change of business of the
Company from the technology sector to return to the mineral
resource sector.
The Company has been notified by the British Columbia Securities
Commission and the Alberta Securities Commission that full
revocation of the cease trade orders affecting the Company's
shares can be expected from the BCSC and the ASC within the next
few days. This full revocation follows the March 2004 partial
revocations of the cease trade orders by the BCSC and ASC
and approval by the NEX Board of the TSX Venture Exchange, which
allowed the Company to complete an interim CDN$335,000 non-
brokered private placement financing.
Approval by the NEX for the resumption of trading of the Company's
shares on the NEX is pending the issue of the full revocation
orders from the BCSC and the ASC.
Following the acquisition of a mineral resource property of merit
the Company will seek additional equity financing to fund
exploration of the acquired property and, as soon as possible, its
reinstatement as a Tier-2 company on the TSX Venture Exchange.
At December 31, 2003, EPICentrix Technologies, Inc.'s balance
sheet shows a total shareholders' deficit of US$565,961 compared
to a deficit of US$739,841 at December 31, 2002
The Company provides the following background information and
experience of the current Board of Directors of the Company,
as elected at the Annual and Special Meeting of the Company's
shareholders on February 27, 2004:
Stephen Kay, President, CFO and a Director
Mr. Kay is a geologist with 31 years of gold exploration
experience in Europe, South Africa, South America and the USA.
Since 1993 he has been President, CEO and a director of
International Minerals Corporation, a gold exploration and
development company, which is listed on the Toronto, Zurich and
Frankfurt Stock Exchanges with a market capitalization in excess
of CDN$300 million. He is also an independent director of Arizona
Star Resources, Consolidated Puma Resources and Victoria
Resources. During Mr. Kay's tenure with the junior public
companies listed above, none have had exploration projects that
have become operating mines. During his 10 years (1973-1983) with
Gold Fields Mining Corporation, he was responsible for the initial
drilling of the 3 million ounce Mesquite gold deposit in
California. With Amselco Exploration from 1983 to 1985, he was
involved in the discoveries of the Colosseum and Yellow Aster gold
mines, also in California.
Rod McKeen, Secretary and a Director
Mr. McKeen is a lawyer and senior partner with Axium Law Group in
Vancouver, Canada since January 2004. Mr. McKeen has 22 years
experience in all facets of securities and corporate law
pertaining to the mining and exploration industry. Prior to
forming Axium Law Group, Mr. McKeen was a partner in the law firm
of Gowlings Lafleur Henderson LLP from April 2000 to December
2003 and a partner with the law firm Montpellier McKeen Varabioff
Talbot and Guiffre from July 1996 to March 2000. Mr. McKeen's
practice encompasses emerging to mid-size mineral resource
companies with projects and operations around the world and
involves dealing with stock exchanges and mergers, acquisitions
and financing transactions on a similarly global basis. He is
also Secretary and a co-director with Mr. Kay of International
Minerals Corporation.
Horst Gudemann, Director
Mr. Gudemann is an independent geological consultant with 17
years experience in precious metal and diamond exploration in the
USA, China and more recently in Mongolia. He worked in senior
management as a consultant in several private mineral exploration
and environmental companies before joining then Vancouver Stock
Exchange-listed Asia Minerals Corporation from May 1996 until
April 1998, where as a consultant he was responsible for business
development for Asia Minerals' precious metal activities in the
USA and China. In October 2000, Asia Minerals changed its name to
American Bonanza Gold Mining Corp (TSX-V: BZA). Since 1998, Mr.
Gudemann has been involved in several private mining and
exploration related ventures and in 2002 was founder, Vice
President and a director of MX Capital Corporation, which
recently went public as TSX Venture-listed Asia Gold Corporation,
a well-financed mineral exploration company operating in Mongolia
that is controlled 51% by Ivanhoe Mines. In addition, Mr.
Gudemann recently was successful in optioning several other
precious and base metal properties in Mongolia to the TSX
Venture-listed company, Kaieteur Resource Corporation. During Mr.
Gudemann's tenure with the junior public companies listed above,
none have had exploration projects that have become operating
mines.
Jamie Dunlap, Director
Mr. Dunlap is a Registered Professional Engineer ("PE") with 40
years experience worldwide in International Project Management,
General Management, Construction Management, Engineering,
Business Development and Construction of marine, civil,
industrial, and oil and gas field related development projects
involving all fiscal, legal, cost, regulatory and client
relations aspects. He spent 22 years with Brown and Root (a
subsidiary of Fortune 500 American company, Halliburton)
ultimately serving as General Manager Business Development with
responsibility for all Marine Business activities in the Western
Hemisphere. He was later employed as Vice President of Offshore
Services and Technology Worldwide for Enron Engineering &
Construction Company from 1997 until Enron's demise in 2001.
Although Mr. Dunlap has not been employed directly in the
precious metal industry to date, he brings a wealth of
international hands-on technical and financial experience from
the related oil and gas sector.
FEDERAL-MOGUL: 3rd Circuit Sends Asbestos Cases To Judge Rodriguez
------------------------------------------------------------------
In his capacity as Chief Judge of the United States Court of
Appeals for the Third Circuit, Anthony J. Scirica, designates
Judge Joseph H. Rodriguez of the United States District Court for
the District of Delaware in the matter of In Re: Federal-Mogul
Global, Inc., Dist. of Del. Bankruptcy No. 01-10578. Judge
Rodriguez will handle the duties formerly assigned to Judge Wolin
"for such time as may be required to complete the business" of
the Federal-Mogul cases.
Judge Wolin requested the reassignment of the Federal-Mogul cases
due to his impending retirement from the bench.
Judge Rodriguez was born on December 12, 1930 in Camden, New
Jersey. He earned his law degree from Rutgers University and was
in private practice with the law firm of Brown and Connery. In
1982, he left to serve in the Office of Public Advocate/Public
defenders of the state of New Jersey, in a Cabinet position. The
New Jersey Office of the Public Defender describes Judge
Rodriguez as a prominent trial attorney and former chairman of
the State Commission on Investigation and the Board of Higher
Education.
Judge Rodriguez became U.S. District Judge in 1985. In 1999, he
was the recipient of the "Medal of Honor Award" from the New
Jersey State Bar Foundation and the "William J. Brennan Jr.
Award" from the Association of Federal Bar of the State of New
Jersey. Judge Rodriguez is also a recipient of the St. Thomas
More Society Award. The award is given annually to a Catholic
attorney who has distinguished himself or herself in the legal
profession or on the bench.
Headquartered in Southfield, Michigan, Federal-Mogul Corporation
-- <http://www.federal-mogul.com/>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. 57; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
FIBERMARK: Committee Hires Akin Gump as Bankruptcy Co-Counsel
-------------------------------------------------------------
The Official Unsecured Creditors Committee appointed in FiberMark,
Inc.'s chapter 11 cases sought and obtained approval from the U.S.
Bankruptcy Court for the District of Vermont to retain Akin Gump
Strauss Hauer & Feld LLP as its co-counsel, nunc pro tunc to
April 7, 2004.
Akin Gump will:
a. advise the Committee with respect to its rights, duties
and powers in these chapter 11 cases;
b. assist and advise the Committee in its consultations with
the Debtors relative to the administration of these
chapter 11 cases;
c. assist the Committee in analyzing the claims of the
Debtors' creditors and the Debtors' capital structure and
in negotiating with holders of claims and equity
interests;
d. assist the Committee in its investigation of the acts,
conduct, assets, liabilities and financial condition of
the Debtors and their subsidiaries and affiliates and of
the operations of such entities;
e. assist the Committee in its analysis of, and negotiations
with, the Debtors or any third party concerning matters
related to, among other things, the assumption or
rejection of certain leases of non residential real
property and executory contracts, asset dispositions,
financing of other transactions and the terms of one or
more plans of reorganization for the Debtors and
accompanying disclosure statements and related plan
documents;
f. assist and advise the Committee as to its communications
to the general creditor body regarding significant matters
in these chapter 11 cases;
g. represent the Committee at all hearings and other
proceedings;
h. review and analyze applications, orders, statements of
operations and schedules filed with the Court and advise
the Committee as to their propriety, and to the extent
deemed appropriate by the Committee, support, join or
object thereto;
i. assist the Committee in lobbying, if appropriate;
j. assist the Committee in preparing pleadings and
applications as may be necessary in furtherance of the
Committee's interests and objectives;
k. prepare, on behalf of the Committee, any pleadings,
including without limitation, motions, memoranda,
complaints, adversary complaints, objections or comments
in connection with any of the foregoing; and
l. perform such other legal services as may be required or
are otherwise deemed to be in the interests of the
Committee in accordance with the Committee's powers and
duties as set forth the Bankruptcy Code, the Bankruptcy
Rules or other applicable law.
Akin Gump will charge for its legal services on an hourly basis in
its ordinary and customary hourly rates. Akin Gump's rates range
from:
Designation Billing Rate
----------- ------------
Partners $325 - $775 per hour
Special Counsel and Counsel $325 - $725 per hour
Associates $185 - $450 per hour
Paraprofessionals $ 45 - $195 per hour
The professionals currently expected to have primary
responsibility for providing services to the Committee are:
Professional Designation Billing Rate
------------ ----------- ------------
Fred S. Hodara Partner $725 per hour
Kerry E. Berchem Partner $500 per hour
Jonathan L. Gold Counsel $450 per hour
John Storz Counsel $440 per hour
Angela Ferrante Associate $425 per hour
Laura Luo Associate $300 per hour
Brian M. Agboh Associate $240 per hour
Headquartered in Brattleboro, Vermont, FiberMark, Inc.
-- http://www.fibermark.com/-- produces filter media for
transportation applications and vacuum cleaning; cover stocks and
cover materials for books, graphic design, and office supplies and
base materials for specialty tapes, wallcoverings and sandpaper.
The Company filed for chapter 11 protection on March 30, 2004
(Bankr. D. Vt. Case No. 04-10463). Adam S. Ravin, Esq., D. J.
Baker, Esq., David M. Turetsky, Esq., Rosalie Walker Gray, Esq.,
at Skadden, Arps, Slate, Meagher & Flom LLP represent the Debtors
in their restructuring efforts. When the Debtors filed for
protection from its creditors, they listed $329,600,000 in total
assets and $405,700,000 in total debts.
FOAMEX: Technical Products Group Receives Federal Research Grant
----------------------------------------------------------------
Foamex International Inc. (NASDAQ:FMXI), the leading manufacturer
of flexible polyurethane and advanced polymer foam products in
North America, announced that its Technical Products Group has
been selected by the Federal Aviation Administration to receive a
congressionally appropriated Research and Development award in the
amount of $729,062. The appropriation was made available at the
request of members of the Pennsylvania and Indiana Congressional
delegations, and through the leadership of Pennsylvania Senators
Arlen Specter and Rick Santorum. The research funds will be used
by Foamex's R&D Group to further the development of the Company's
reticulated polyurethane Safety Foam technology for mitigating the
effects of post-crash fuel fires in commercial passenger aircraft.
The FAA has placed significant emphasis on passenger aircraft fuel
tank fires, particularly since the tragic accident involving TWA
800 in July 1996. Foamex has more than 30 years of experience in
supplying Safety Foam products to the U.S. Military to mitigate
fuel related fires in military aircraft and has been a key
innovator in the continued development and improvement of the
technology during that period. Safety Foam products continue to be
used by the U.S. Military to protect aircraft such as the C-130 P-
3, F-15 and others. Safety Foam is a flexible, lightweight, 3-
dimensional polymer fire screen that has helped prevent fuel tank
fires caused by gunfire, electrical ignition, lightning strike and
static discharge and is also believed to reduce the effects of
post-crash fuel fires. Foamex participated with the FAA in
cooperative research aimed at lessening the fire hazards
associated with fuel release during survivable crashes over the
last year and believes that this new action by Congress and the
FAA further recognizes the potential value of Safety Foam products
to mitigate fuel fire hazards associated with commercial aircraft,
possibly saving passenger lives.
Foamex utilizes unique VPF(SM) technology that may be employed in
the development of the advanced foam products that further improve
aircraft fire safety. VPF(SM) uses a fully enclosed environmental
chamber to control the conditions under which the polyurethane
foam is produced and allows independent control of foam properties
and performance characteristics not normally possible in
conventional foam making. Foamex is the only U.S. based foam
manufacturer possessing this technology. Foamex's Vice President
for Technology, Dr. Chiu Chan commented: "Foamex's predecessor
collaborated with the U.S. Air Force to create the original Safety
Foam technology more than 30 years ago. Combining those years of
valuable experience together with recent novel technologies, such
as VPF(SM), strongly positions us to develop innovative products
that are suitable for today's commercial aircraft market and will
improve the safety of air travel." Together with its other
technical strengths such as foam reticulation, Foamex is uniquely
capable of supporting the FAA and is pleased to be part of this
important work.
About Foamex International Inc.
Foamex, headquartered in Linwood, PA, is the world's leading
producer of flexible polyurethane and advanced polymer foam
products in North America. Foamex Technical Products is the
industry leader in developing innovative solutions in Automotive,
Defense, Aerospace, Consumer, Electronics, Medical, Transportation
and Industrial markets. For more information visit the Foamex web
site at http://www.foamex.comor
http://www.foamextechnicalproducts.com,e-mail Foamex at
techline@foamex.com or call the Technical Products Techline at
800-767-4997.
At March 28, 2004, Foamex International Inc.'s balance sheet shows
a shareholders' deficit of $205.3 million compared to a deficit of
$203.1 million as of December 28, 2003.
GEORGETOWN STEEL: International Steel Closes $18M+ Asset Purchase
-----------------------------------------------------------------
International Steel Group Inc. (NYSE: ISG) announced that it has
completed the acquisition of the assets of the Georgetown Steel
Company facility in Georgetown, South Carolina, for a purchase
price of $18 million in cash, plus assumed liabilities.
"We want to thank the Georgetown community, the County of
Georgetown and the United Steelworkers of America for their
support in completing this transaction," said Rodney B. Mott,
ISG's President and Chief Executive Officer. "We are committed to
restarting and operating this facility. It has the reputation in
the steel rod industry of producing high quality steel rod and we
intend on maintaining this reputation."
The Georgetown plant has the capability to produce high-quality
wire rod products, which are used to make low carbon fine wire
drawing, wire rope, tire cord, high-carbon machinery, and
upholstery springs. The facility has annual steelmaking capacity
of 1 million tons and rolling capacity of 800,000 tons, and also
has the capacity to produce 500,000 tons annually of Direct
Reduced Iron (DRI), a scrap substitute. Georgetown Steel filed for
Chapter 11 bankruptcy protection in October 2003 and the plant has
been idle since then.
"We have been looking to improve our product mix by broadening our
offering of value-added products, and we are excited about
entering the rod and wire market, which offers substantial growth
opportunities for ISG," Mott added.
About International Steel Group Inc.
International Steel Group Inc. is the second largest integrated
steel producer in North America, based on steelmaking capacity.
The Company has the capacity to cast more than 18 million tons of
steel products annually. It ships a variety of steel products from
11 major steel producing and finishing facilities in six states,
including hot-rolled, cold-rolled and coated sheets, tin mill
products, carbon and alloy plates, rail products and semi-finished
shapes serving the automotive, construction, pipe and tube,
appliance, container and machinery markets.
About Georgetown Steel
Headquartered in Georgetown, South Carolina, Georgetown Steel
Company, LLC manufactures high-carbon steel wire rod products
using the Direct Reduced Iron (DRI) process. The Company filed
for chapter 11 protection on October 21, 2003 (Bankr. S.C. Case
No. 03-13156). Michael M. Beal, Esq., at McNair Law Firm P.A.,
represent the Debtor in its restructuring efforts. When the
Company filed for protection from its creditors, it listed
estimated debts and assets of over $50 million each.
GREAT PLAINS: Kansas City Power to Redeem Preferred Securities
--------------------------------------------------------------
Kansas City Power & Light (NYSE: GXP) announced that on July 21,
2004, the company will redeem a series of preferred securities
issued by a subsidiary financing trust.
The redemption covers the entire issue of 8.3% Trust Originated
Preferred Securities issued by KCPL Financing I with a face value
of $150 million. As the preferred securities are being redeemed at
par, security holders will receive $25 per preferred security,
plus accrued and unpaid distributions to the redemption date.
Distributions to be paid on June 30, 2004, to record holders as of
June 29, 2004, will be paid in the normal manner in the amount of
$0.51875 per security.
Call notices for this issue are being mailed Monday by JPMorgan
Chase Bank, as trustee. The preferred securities trade on the New
York Stock Exchange under the ticker KLTPrT, CUSIP No. 482432200.
Great Plains Energy Incorporated (NYSE:GXP), headquartered in
Kansas City, MO, is the holding company for Kansas City Power &
Light Company, a leading regulated provider of electricity in the
Midwest; and Strategic Energy LLC, an energy management company
providing load aggregation and power supply coordination. The
Company's web site is http://www.greatplainsenergy.com/
* * *
As reported in the Troubled Company Reporter's June 8, 2004
edition, Standard & Poor's Ratings Services assigned its
preliminary rating of 'BBB-' to Great Plains Energy Inc.'s senior
and subordinated unsecured debt securities, and 'BB+' to the
trust-preferred securities filed by the energy holding company
under a $648.2 million shelf registration filed with the SEC on
April 15, 2004.
At the same time, Standard & Poor's affirmed the company's
ratings, including the 'BBB' corporate credit rating. The
affirmation incorporates the expectation that a significant
portion of any debt issuance under the shelf will be used for debt
refinancing or repayment. The outlook is stable.
GRENADA MANUFACTURING: Wants Until July 4 to Make Lease Decisions
-----------------------------------------------------------------
Grenada Manufacturing, LLC is asking the U.S. Bankruptcy Court for
the Northern District of Mississippi to extend its time under 11
U.S.C. Sec. 365(d)(4) to decide on its unexpired nonresidential
real property leases.
The Debtor tells the Court that it hasn't made a determination
with regard to the assumption or rejection of its unexpired
leases. The Debtor tells the Court that it will need until July
4, 2004 to determine whether it will assume, assume and assign, or
reject its unexpired nonresidential real property leases.
The Debtor assures the Court that the requested extension will not
cause any undue prejudice to any creditors and parties-in-interest
in its case.
Headquartered in Grenada, Mississippi, Grenada Manufacturing, LLC,
filed for chapter 11 protection on April 5, 2004 (Bankr. N.D.
Miss. Case No. 04-12077). Craig M. Geno, Esq., at Harris & Geno
PLLC represents the Debtor in its restructuring efforts. When the
Company filed for protection from its creditors, it listed both
estimated debts and assets of over $10 million.
HAYES LEMMERZ: Agrees to Extend ADP Avoidance Action Deadline
-------------------------------------------------------------
In a Court-approved stipulation, the HLI Creditor Trust and ADP,
Inc., agree to extend the deadline by which the Trust may bring
an action under Sections 544, 545, 547, 548, 550 or 553 of the
Bankruptcy Code against ADP to December 6, 2004.
Furthermore, ADP waives any defense under Section 546(a) of the
Bankruptcy Code or the statute of limitations, or periods of
repose as to any Avoidance Action filed by HLI Creditor Trust on
or prior to December 6, 2004. (Hayes Lemmerz Bankruptcy News,
Issue No. 50; Bankruptcy Creditors' Service, Inc., 215/945-7000)
HEALTHSOUTH: Gets Requisite Consents to Amend 7.0% & 7.375% Notes
-----------------------------------------------------------------
HealthSouth Corp. (OTC Pink Sheets: HLSH) announced that holders
of more than a majority in principal amount of its 7.000% Senior
Notes due 2008 and 7.375% Senior Notes due 2006 have already
delivered consents to approve proposed amendments to, and waivers
under, the indenture governing such notes. HealthSouth has
delivered evidence of its receipt of the requisite consents to the
trustees for these issues which have made these consents
irrevocable.
HealthSouth is encouraged by the early response to its outstanding
consent solicitations and looks forward to closing all of them on
June 23, 2004. HealthSouth emphasized that if the conditions to a
consent solicitation are satisfied, any noteholders who do not
deliver valid consents prior to the expiration date of such
consent solicitation will not receive a consent fee. The consent
solicitations are currently scheduled to expire at 11:59 p.m., New
York City time, on June 23, 2004.
On June 8, 2004, HealthSouth announced that it reached an
agreement with its Unofficial Committee of Noteholders pursuant to
which HealthSouth will pay (i) $30.00 per $1,000 principal amount
of notes to holders of its 8.375% Senior Notes due 2011, 6.875%
Senior Notes due 2005 and 7.375% Senior Notes due 2006; (ii)
$32.50 per $1,000 principal amount of notes to holders of its
7.000% Senior Notes due 2008; and (iii) $45.00 per $1,000
principal amount of notes to holders of its 7.625% Senior Notes
due 2012. The payment of the consent fee remains conditioned upon
the proposed amendments to the indentures becoming operative.
Each holder of notes who consents to the proposed amendments will
also be waiving all alleged and potential defaults under the
indentures arising out of events occurring on or prior to the
effectiveness of the proposed amendments. Consents for any series
of notes may be revoked at any time prior to the date on which the
trustee under the indenture for that series receives evidence that
the requisite consents have been obtained.
This news release is not a solicitation of consents with respect
to any securities. The consent solicitations are being made only
pursuant to the terms and conditions of the consent solicitation
statements relating to each series of Notes and the accompanying
documents. These documents can be obtained from Innisfree M&A
Incorporated, the information agent, at 212-750-5833 (Banks and
Brokers Call Collect) or 888-750-5834 (Noteholders Call Toll-
Free). Questions regarding the solicitations should be directed to
Credit Suisse First Boston, the solicitation agent, at 800-820-
1653.
About HealthSouth
HealthSouth is the nation's largest provider of outpatient
surgery, diagnostic imaging and rehabilitative healthcare
services, with nearly 1,700 locations nationwide and abroad.
HealthSouth can be found on the Web at http://www.healthsouth.com/
ISACSOFT: Receives 5-Year Contract from Province of Manitoba
------------------------------------------------------------
ISACSOFT announced that it has received an exclusive 5 year
agreement from the Province of Manitoba for licensing of "La
Formule du savoir mathematics" courseware for grades 7 and 8
mathematics instruction in French.
"We are happy to see the expanded use of this high quality
resource and look forward to continued growth both in Canada and
internationally", said Ronald Brisebois, President and Chief
Executive of ISACSOFT.
LFS, which has been developed Using Rainbow technology, ISACSOFT's
standards-friendly eLearning content development platform, has
been proven in controlled testing environments that the
utilization of this highly interactive, technology-driven
courseware substantially improves student performance in
mathematics and encourages students to be lifelong learners.
This new licensing agreement is in addition to the licenses for
grades 9 and 10 which have been previously licensed to Manitoba
for mathematics instruction in French.
ISACSOFT also announced that with its partners, CCDMD and Edouard-
Montpetit CEGEP that its e-Knowledge and learning technology has
received two awards from the Quebec Ministry of Education for its
software offerings Chronos(TM) and "Quand le texte file doux"(TM).
"These awards are another example of the value of our e-Knowledge
platform", said Mr. Brisebois, "and is a further demonstration
that our solutions being developed using these technologies are
applicable across multiple industry and customer segments".
ISACSOFT is also announcing the appointment of Mr. Jean Goulet to
the Board of Directors. Professor Goulet is the dean of the
Science faculty at Sherbrooke University, a position which he has
held for the last seven years.
"Professor Goulet will be an important asset to our Board" stated
Mr. Brisebois, "as his experience and expertise will be extremely
useful as we expand our presence in the education market for our
eLearning solutions,"
ABOUT ISACSOFT
ISACSOFT -- whose December 31, 2003, ICASOFT's balance sheet shows
a total shareholders' deficit of $82,068 -- is a provider of
content-based software solutions to its international customers.
The revenue model is based on software licences, copyrighted
content development, recurring revenues and services. The
solutions of ISACSOFT include knowledge management, e-Learning
management and document management. ISACSOFT is headquartered in
Montreal, Canada with sales offices in New York, Barcelona and
Quebec City, as well as an international network of distributors.
J-C HAULING CO: Case Summary & 20 Largest Unsecured Creditors
-------------------------------------------------------------
Debtor: J-C Hauling Company
3803 Mine Haul Road
Millstadt, Illinois 62260
Bankruptcy Case No.: 04-32405
Type of Business: The Debtor provides material transportation
services. See http://www.jchauling.com/
Chapter 11 Petition Date: June 16, 2004
Court: Southern District of Illinois (East St. Louis)
Judge: Kenneth J. Meyers
Debtor's Counsel: Daniel D. Doyle, Esq.
Spencer Fane Britt & Browne LLP
120 South Central Avenue, 5th Floor
St. Louis, MO 63105
Tel: 314-863-7733
Fax: 314-862-4656
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
------ --------------- ------------
Columbia Quarry Material $76,198
R & M Oil Fuel/Oil $59,509
Tucker Tire Tires $51,411
Morrietta Contract Work $28,217
Wells Fargo Tax Deposits $20,568
Matzenbacher Contract Work $19,499
Sonnerborn Contract Work $18,120
GHP Past Health $17,137
Insurance
Independence Contract Work $16,407
Millenium Contract Work $16,097
Robert Krebel Contract Work $13,306
Jerry Hellige Contract Work $13,060
Dambacher Contract Work $11,155
Roy Wollmeier Contract Work $10,350
Gateway Sand and Travel Material $9,773
Barnett Trucking Contract Work $7,374
Kenneth Wilke Contract Work $7,335
Spaeth Welding Parts/Repairs $7,166
Iron Mountain Trap Rock Material $6,924
C&C Broker Contract Work $6,693
JILLIAN'S ENTERTAINMENT: Appoints Kurtzman Carson as Claims Agent
-----------------------------------------------------------------
Jillian's Entertainment Holdings, Inc., and its debtor-affiliates
ask the U.S. Bankruptcy Court for the Western District of Kentucky
for approval to appoint Kurtzman Carson Consultants LLC as their
notice, claims and balloting agent.
Kurtzman Carson will:
a. prepare and serve required notices in these Chapter 11
Cases, including:
(1) a notice of the commencement of these Chapter 11 Cases
and the initial meeting of creditors under Section
341(a) of the Bankruptcy Code;
(2) a notice of the claims bar date;
(3) notices of objections to claims;
(4) notices of any hearings on a disclosure statement and
confirmation of a plan or plans of reorganization; and
(5) other miscellaneous notices as the Debtors or Court
may deem necessary or appropriate for an orderly
administration of these Chapter 11 Cases;
b. within 5 business days after the service of a particular
notice, prepare for filing with the Clerk's Office a
certificate or affidavit of service that includes:
(i) an alphabetical list of persons on whom the notice
was served, along with their addresses and
(ii) the date and manner of service;
c. maintain copies of all proofs of claim and proofs of
interest filed in these Chapter 11 Cases;
d. maintain official claims registers in these Chapter 11
Cases by docketing all proofs of claim and proofs of
interest in a claims database that includes the following
information for each such claim or interest asserted:
(1) the name and address of the claimant or interest
holder and any agent thereof, if the proof of claim or
proof of interest was filed by an agent;
(2) the date the proof of claim or proof of interest was
received by Kurtzman Carson or the Court;
(3) the claim number assigned to the proof of claim or
proof of interest; and
(4) the asserted amount and classification of the claim.
e. implement necessary security measures to ensure the
completeness and integrity of the claims registers;
f. transmit to the Clerk's Office a copy of the claims
registers on a weekly basis unless requested more or less
frequently by the Clerk's Office;
g. maintain an up-to-date mailing list for all entities that
have filed proofs of claim or proofs of interest and make
such list available upon request to the Clerk's Office or
any party-in-interest;
h. provide access to the public for examination of copies of
the proofs of claim or proofs of interest filed in these
Chapter 11 Cases without charge during regular business
hours;
i. record all transfers of claims pursuant to Fed. R. Bankr.
P. 3001(e) and, if directed to do so by the Court, provide
notice of such transfers as required by Fed. R. Bankr. P.
3001(e);
j. comply with applicable federal, state, municipal and local
statutes, ordinances, rules, regulations, orders and other
requirements;
k. provide temporary employees to process claims as
necessary;
l. promptly comply with such further conditions and
requirements as the Clerk's Office or the Court may at any
time prescribe;
m. provide such other claims processing, noticing, balloting,
and related administrative services as may be requested
from time to time by the Debtors; and
n. act as balloting agent, which may include some or all of
the following services:
(1) printing of ballots including the printing of creditor
and shareholder specific ballots;
(2) preparing voting reports by plan class, creditor or
shareholder and amount for review and approval by the
client and its counsel;
(3) coordinating the mailing of ballots, disclosure
statement and plan of reorganization to all voting and
non-voting parties and provide affidavit of service;
(4) establishing a toll-free "800" number to receive
questions regarding voting on the plan; and
(5) receiving ballots at a post office box, inspecting
ballots for conformity to voting procedures, date
stamping and numbering ballots consecutively and
tabulating and certifying the results.
Kurtzman Carson will charge for services at its customary hourly
billing rates:
Consulting Services Billing Rate
------------------- ------------
Clerical $40 to $65 per hour
Case Manager $75 to $115 per hour
Bankruptcy Consultant $125 to $195 per hour
Senior Bankruptcy Consultant $225 to $295 per hour
Technology/Programming Consultant $125 to $195 per hour
Headquartered in Louisville, Kentucky, Jillian's Entertainment
Holdings, Inc. -- http://www.jillians.com/-- operates more than
40 restaurant and entertainment complexes in about 20 US states.
The Company filed for chapter 11 protection on May 23, 2004
(Bankr. W.D. Ky. Case No. 04-33192). Edward M. King, Esq., at
Frost Brown Todd LLC and James H.M. Sprayregen, P.C. at Kirkland &
Ellis LLP, represent the Debtors in their restructuring efforts.
When the Company filed for protection from their creditors, they
listed estimated assets of more than $100 million and estimated
debts of over $50 million.
HIGHWOODS PROPERTIES: Closes $18MM Network Operations Center Sale
-----------------------------------------------------------------
Highwoods Properties, Inc. (NYSE:HIW) announced that it has
completed the sale of the Network Operations Center building at
Highwoods Preserve in Tampa, Florida to The Depository Trust and
Clearing Corporation. The Company initially announced this
transaction in May 2004. Highwoods will receive net proceeds of
approximately $18 million for the two-story, 176,000-square foot
building, one third of which is shell space.
In addition, within the next 12 months The Depository Trust is
expected to purchase a 3.3-acre tract of vacant land within the
Preserve, originally designated for future expansion, for net
proceeds of approximately $1.5 million. As previously disclosed,
the Company will record an impairment charge of approximately $3.6
million in the second quarter related to the building sale. The
land sale will result in a gain of approximately $800,000 which
will be recorded when that sale is completed.
Ed Fritsch, President and COO of Highwoods Properties, stated,
"The Depository Trust wanted to accelerate the closing of this
transaction and everyone is pleased all the documentation could be
completed and processed two months ahead of schedule. The sale of
the Network Operations Center is an important milestone for
Highwoods Preserve and we are hopeful this will accelerate
interest among other corporations looking to relocate or establish
operations in this world-class campus located in a business
friendly state with a highly educated labor pool. The Depository
Trust is a blue chip company that settled transactions valued at
$923 trillion in 2003. The company will add prestige to Highwoods
Preserve and we look forward to working closely with them to
ensure a smooth transition as they assume responsibility for the
Network Operations Center."
About the Company
Highwoods Properties, Inc., a member of the S&P MidCap 400 Index,
is a fully integrated, self-administered real estate investment
trust that provides leasing, management, development, construction
and other customer-related services for its properties and for
third parties. As of March 31, 2004, the Company owned or had an
interest in 529 in-service office, industrial and retail
properties encompassing approximately 41.7 million square feet.
Highwoods also owns approximately 1,255 acres of development land.
Highwoods is based in Raleigh, North Carolina, and its properties
and development land are located in Florida, Georgia, Iowa,
Kansas, Maryland, Missouri, North Carolina, South Carolina,
Tennessee and Virginia. For more information about Highwoods
Properties, please visit our Web site at http://www.highwoods.com/
* * *
As reported in the Troubled Company Reporter's June 14, 2004
edition, Fitch Ratings affirms the 'BBB-' senior unsecured rating
on Highwoods Properties, Inc.'s $810 million of outstanding senior
unsecured notes due 2004 through 2018, and 'BB+' rating on $877
million of preferred stock. The Rating Outlook remains Negative.
The ratings reflect the strength of HIW's unencumbered asset base
as support for the company's unsecured borrowings, exceeding those
of similarly-rated peers. The Fitch calculated book value of HIW's
unencumbered assets exceeds unsecured borrowings by more than 2.7
times (x) (including land) and 2.45x (without land), as of first-
quarter 2004 (1Q'04). Likewise, the net operating income generated
by HIW's unencumbered assets is sufficient to cover its unsecured
interest expense by 3.2x. It is this unencumbered asset base that
remains the primary support for HIW's 'BBB-' senior unsecured
rating.
KAISER ALUMINUM: Senior Subordinated Noteholders Form Committee
---------------------------------------------------------------
In connection with the Kaiser Aluminum Corporation chapter 11
proceedings in Delaware, the Ad Hoc Committee of Kaiser Aluminum
Senior Subordinated Noteholders has formed to discuss certain
issues of mutual interest. Other Senior Subordinated Noteholders
who might have an interest in joining the discussions should
contact the Ad Hoc Committee's counsel:
Evan Flaschen, Esq.
Bingham McCutchen LLP
Telephone (860) 240-2723
Headquartered in Houston, Texas, Kaiser Aluminum Corporation
operates in all principal aspects of the aluminum industry,
including mining bauxite; refining bauxite into alumina;
production of primary aluminum from alumina; and manufacturing
fabricated and semi-fabricated aluminum products. The Company
filed for chapter 11 protection on February 12, 2002 (Bankr. Del.
Case No. 02-10429). Corinne Ball, Esq., at Jones, Day, Reavis &
Pogue, represent the Debtors in their restructuring efforts. On
September 30, 2001, the Company listed $3,364,300,000 in assets
and $3,129,400,000 in debts.
KROLL INC: Holders May Convert 1.75% Convertible Notes to Equity
----------------------------------------------------------------
Kroll Inc. (NASDAQ: KROL), the global risk consulting company,
announced that, in connection with its proposed transaction with
Marsh & McLennan Companies, Inc. (MMC), the holders of Kroll's
1.75% Convertible Subordinated Notes due 2014 will be entitled to
convert their notes into shares of Kroll common stock. Currently,
an aggregate of $175 million principal amount of these notes is
outstanding.
As previously announced, Kroll and MMC have entered into a merger
agreement pursuant to which Kroll would become a subsidiary of MMC
and Kroll stockholders would receive $37.00 in cash for each of
their shares of Kroll common stock. Kroll has scheduled a special
meeting of stockholders to be held in New York City on July 8,
2004 at 11:00 a.m., local time, to consider and vote on the
adoption of the merger agreement with MMC.
Pursuant to the terms of the indenture governing the notes,
holders of notes will be entitled to convert their notes at any
time during the period beginning 15 calendar days before the
anticipated effective date of the merger and ending 15 calendar
days after the actual effective date of the merger. Kroll
anticipates that the merger will be effective on July 8, 2004
following the special meeting of stockholders, based on the
assumption that the merger agreement with MMC will be adopted by
Kroll's stockholders at the special meeting and all other
conditions to the merger will be satisfied or waived. Accordingly,
holders of notes may convert their notes during the period
commencing on Wednesday, June 23, 2004 and ending on the day that
is 15 calendar days after the merger is actually effective. If the
merger becomes effective on July 8, 2004, the conversion period
will end on Friday, July 23, 2004.
Holders who convert their notes prior to completion of the merger
will receive 28.5205 shares of Kroll common stock per $1,000
principal amount of notes. Cash will be paid in lieu of fractional
shares. Each share of Kroll common stock that the notes are
converted into will be converted in the merger into the right to
receive $37.00 in cash. Accordingly, assuming consummation of the
merger, holders of notes who convert prior to the merger and hold
such shares of Kroll common stock until the merger is completed,
and do not exercise appraisal rights under Delaware law, would be
entitled to receive approximately $1,055 per $1,000 principal
amount of notes. Conversion of the notes is irrevocable and will
be binding even if the merger is not completed. Kroll cannot give
any assurances that the merger will be completed on July 8, 2004,
or that it will be completed at all.
Holders who convert their notes following the completion of the
merger will receive $37.00 per share of Kroll common stock that
such note would have been convertible into had it been converted
immediately prior to the merger, which is equal to approximately
$1,055 per $1,000 principal amount of notes.
Holders of notes as of the close of business on July 1, 2004, the
record date for the first interest payment on the notes, will be
entitled to receive such interest payment on their notes, which
Kroll will pay on July 15, 2004. Holders that convert their notes
prior to the close of business on July 1, 2004 will not be
entitled to receive any interest on their notes. Holders as of the
record date that convert their notes during the period from after
the close of business on July 1 through July 14, 2004 will receive
the interest payment on their notes on July 15, 2004 but, in
accordance with the terms of the indenture governing the notes,
are required to pay to Kroll an amount equal to that interest
payment upon the conversion of their notes. Holders as of the
record date that convert their notes on or after July 15, 2004
will be entitled to retain the interest payment on their notes.
Holders of notes that remain outstanding after the conversion
period relating to the merger as described above will not be able
to convert their notes unless and until a subsequent conversion
event occurs, and each note will then be convertible only into
$37.00 per share of Kroll common stock that such note would have
been convertible into had it been converted immediately prior to
the merger, which is equal to approximately $1,055 per $1,000
principal amount of notes. Kroll cannot assure holders that
another conversion event will occur following the merger.
About the Company
Kroll Inc. (NASDAQ: KROL), the world's leading independent risk
consulting company, provides a broad range of investigative,
intelligence, financial, security and technology services to help
clients reduce risks, solve problems and capitalize on
opportunities. Headquartered in New York with more than 60 offices
on six continents, Kroll has a multidisciplinary corps of more
than 2,600 employees and serves a global clientele of law firms,
financial institutions, corporations, non-profit institutions,
government agencies and individuals. Kroll has four business
groups: (1) Background Screening, which provides employee,
mortgage and resident screening, substance abuse testing, and
identity theft services; (2) Consulting Services, which provides
investigations, intelligence, security, forensic accounting,
litigation consulting, and valuation services; (3) Corporate
Advisory & Restructuring, which provides corporate restructuring,
operational turnaround, strategic advisory services, financial
crisis management, and corporate finance services; and (4)
Technology Services, which provides data recovery, electronic
discovery, and computer forensics services and software. For more
information, please visit: http://www.krollworldwide.com/
* * *
As reported in the Troubled Company Reporter's May 21, 2004
edition, Standard & Poor's Ratings Services placed its ratings on
Kroll Inc., including its 'BB-' corporate credit rating, on
CreditWatch with positive implications following Marsh & McLennan
Cos.'s (MMC;AA-/Watch Neg/A-1+) announcement that it intends to
acquire Kroll for $1.95 billion in cash, with a significant
portion to be financed by prospective debt transactions.
In resolving the CreditWatch listing for Kroll, Standard & Poor's
will review the terms of the transaction, in particular, MMC's
intentions with regard to the existing indebtedness of Kroll.
LEFFERT DAIRY: Case Summary & 16 Largest Unsecured Creditors
------------------------------------------------------------
Debtor: Leffert Dairy, LLC
16188 7th Road
Plymouth, Indiana 46563
Bankruptcy Case No.: 04-33341
Chapter 11 Petition Date: June 17, 2004
Court: Northern District of Indiana (South Bend Division)
Judge: Harry C. Dees, Jr.
Debtor's Counsel: Mark E. Wagner, Esq.
Kizer & Neu
1406 West Plymouth Street
P.O. Box 158
Bremen, IN 46506
Tel: 574-546-2626
Fax: 574-546-2608
Total Assets: $1,051,275
Total Debts: $2,500,595
Debtor's 16 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Standard Federal Bank N.A. Claim incurred for $2,052,500
2600 West Big Beaver Road loans to operate
Troy, MI 48084 dairy
Value of Security:
$840,475
Unsecured Balance:
$1,212,025
Fulton-Marshall L.P. Incurred as operating $576,418
P.O. Box 568 loan for 2004 crop
Rochester, IN 46975 cost
Value of Security:
$10,000
Unsecured Balance:
$66,418
Farm Service Agency Incurred for loan to $170,000
operate dairy
operation
Macy Elevator, Inc. Charges on Account $69,523
James and Frances Leffert Incurred on or about $30,000
1/1/02 as a contract
Farm Plan Charges on Account $25,353
South County Veterinary Veterinary bill $11,668
Services
Premium Dairy Sales, Inc. Operating costs $7,298
New Holland Plan Charges on Account $7,169
Case Credit Charges on Account $5,877
Granstrom Farms, LLC Operating costs $5,010
Zimmerman Sales & Service Charges on account $4,342
Shauns Family Dairy Corn chopping $3,400
Northstar Cooperative Operating costs $2,770
Michiana Contracting, Inc. Charges on Account $1,866
Duhois Distributors, Inc. Operating costs $1,679
MADISON ENTERTAINMENT: Case Summary & Largest Unsecured Creditors
-----------------------------------------------------------------
Debtor: Madison Entertainment, LLC
dba Madison Theater
728 Madison Avenue
Covington, Kentucky 41011
Bankruptcy Case No.: 04-21491
Type of Business: The Debtor owns a theater that offers a variety
of live music, comedy, sports and film events.
See http://www.madisontheateronline.com/
Chapter 11 Petition Date: June 13, 2004
Court: Eastern District of Kentucky (Covington)
Judge: William S. Howard
Debtor's Counsel: David A. Kruer, Esq.
Dearfield, Kruer & Warren, LLC
602 Main Street, Suite 700
Cincinnati, OH 45202
Tel: 513-421-4428
Fax: 513-421-4009
Estimated Assets: $500,000 to $1 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 13 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Provident Bank mixed use building $2,789,913
1 East Fourth Street, MS2340 comprised of live
Cincinnati, Ohio 45202 entertainment
theater of approx.
13,000 square feet,
adjacent business
offices, and four
residential
Secured Value:
$750,000
City of Covington mixed use building $149,000
comprised of live
entertainment
theater of approx.
13,000 square feet,
adjacent business
offices, and four
residential
Secured Value:
$750,000
Ginter Electrical mixed use building $124,589
Contractors, LLC comprised of live
entertainment
theater of approx.
13,000 square feet,
adjacent business
offices, and four
residential
Secured Value:
$750,000
County of Kenton real estate taxes for $45,400
'02 and '03
Restaurant Equipment Dist., mixed use building $20,000
Inc. comprised of live
entertainment
theater of approx.
13,000 square feet,
adjacent business
offices, and four
residential
Secured Value:
$750,000
City of Covington Real estate tax for $9,100
'02 and '03
ASCAP License fees $8,400
Select Specialties mixed use building $8,000
Corporation comprised of live
entertainment
theater of approx.
13,000 square feet,
adjacent business
offices, and four
residential
Secured Value:
$750,000
BMI License fees $6,000
Robert McMahon, Esq. Various legal $5,800
services
Mike Kraus, CPA on-going accounting $3,500
services
Cincinnati Bell Yellow page $3,400
advertising,
disputed as a
consequence of
improper
classification
Tom Gaither advertising $3,400
renderings
MARKLIN PROPERTIES: Files Reorg. Plan and Disclosure Statement
--------------------------------------------------------------
Marklin Properties LLC filed its Chapter 11 Plan of Reorganization
along with a Disclosure Statement explaining that plan with the
U.S. Bankruptcy Court for the District of Arizona, Tucson
Division. Full-text copies of the documents are available for a
fee at:
http://www.researcharchives.com/bin/download?id=040617025928
and
http://www.researcharchives.com/bin/download?id=040617030128
The Plan provides for the classification of six classes of claims
and interests according to their treatment:
Class Treatment
----- ---------
1 - Administrative Unimpaired. Will be paid in cash payment
Claims in full.
2 - Past Due Real Unimpaired. Will be paid in full in cash
Estate Taxes or cashiered funds on or before 30 days of
confirmation of the Plan or upon refinance
of the property as approved by the court,
whichever is sooner.
3 - Secured Claims Unimpaired. On or before the confirmation
date of the Plan, debtor will "cure" the
default by either:
(1) payment of all amounts payable and
reinstate the original maturity date
of the note, or
(2) obtain refinancing of the note and
approval of such refinancing to pay
Eloy Biltmore Holdings, L.L.C. the
amounts due plus all unpaid principal
due under the note for a release of
its lien upon the property, or
(3) obtain approval of a sale of all or a
portion of the property within 12
months of the Effective Date of the
Plan.
4 - Secured Second Impaired. The note will accrue interest at
Liens 6% per annum from the filing of this
Chapter 11 proceeding and shall be due and
payable upon sale of the property or 24
months from the Effective Date of the
Plan.
5 - Unsecured Impaired. Will bear no interest from the
Claims date of filing and will be paid in full in
the amount of the claim upon sale of the
real property, but not later than 24
months from close of escrow.
6 - Equity Holders Unimpaired. Will retain their equity
position in the company.
Headquartered in Scottsdale, Arizona, Marklin Properties LLC filed
for chapter 11 protection on May 21, 2004 (Bankr. D. Ariz. Case
No. 04-02566). Jerry L. Cochran, Esq., at Cochran & Dahl, PC
represents the Debtor in its restructuring efforts. When the
Company filed for protection from its creditors, it listed
$11,167,619 in total assets and $8,355,012 in debts.
MIRANT CORPORATION: Objects To Perryville Energy's 3 Mega Claims
----------------------------------------------------------------
Robin E. Phelan, Esq., at Haynes and Boone, LLP, in Dallas,
Texas, relates that on December 15, 2003, Perryville Energy
Partners, LLC, filed four proofs of claim against the Mirant Corp.
Debtors. The Debtors have already objected to Claim No. 6261.
The remaining three Claims are:
(1) Claim No. 6262 against Mirant Americas, Inc., as a secured
claim for $98,650,000. Claim No. 6262 is based on Mirant
Americas' obligation under a Guaranty dated August 23,
2002, purporting to partially guarantee Mirant Americas
Energy Marketing, LP's obligation to Perryville under a
Tolling Agreement;
(2) Claim No. 6263 against Mirant Americas as an unsecured
claim for $98,650,000. Claim No. 6263 is also based on
Mirant Americas' obligation under a Guaranty dated
August 23, 2002, purporting to partially guarantee Mirant
Americas Energy Marketing, LP's obligation to Perryville
under a Tolling Agreement; and
(3) Claim No. 6264 against Mirant Corporation for
$177,178,391. Claim No. 6264 is based on an Amended and
Restated Parent Guaranty, dated June 20, 2002, as
amended on August 23, 2002, purporting to partially
guarantee Mirant Americas Energy Marketing, LP's
obligations under the Tolling Agreement.
The Debtors object to Claim Nos. 6262, 6263 and 6264, and ask the
Court to disallow or, in the alternative, reduce the Claims on
these grounds:
1. For Claim No. 6262 and 6263
* While the Debtors have not yet completed their analysis of
the issue, they believe that discovery in connection with
the Objection will demonstrate that the Mirant Americas
Guaranty constitutes a fraudulent obligation pursuant to
Section 548(a) of the Bankruptcy Code and New York's
codification of the Uniform Fraudulent Conveyance Act, made
applicable by Section 544(b) of the Bankruptcy Code;
* Claim Nos. 6262 and 6263 are overstated;
* Claim Nos. 6262 and 6263 contain insufficient supporting
documentation that would support Perryville's damage
calculation, its mitigation of the damages or why it is
entitled to costs and professional fees;
* Perryville failed to establish a basis for treatment of
Claim No. 6262 as a secured Claim; and
* Claim Nos. 6262 and 6263 are duplicative of each other.
2. For Claim No. 6264
* Mirant has no guaranty obligation upon satisfaction of
Perryville's senior indebtedness. Pursuant to the Mirant
Guaranty, Mirant's liability to Perryville is limited to
a percentage of amounts due under Perryville's senior
credit facility. Perryville intends to use the proceeds
from the Entergy Sale to satisfy its senior indebtedness
in full. Thus, Mirant's obligation under the Mirant
Guaranty will be eliminated;
* Claim No. 6264 is overstated;
* Perryville failed to supply any meaningful support for
its damage calculation, and failed to demonstrate its
mitigation of the damages or explain why it is entitled
to costs and professional fees; and
* Perryville failed to establish a basis for treatment of
Claim No. 6264 as a secured claim.
Headquartered in Atlanta, Georgia, Mirant Corporation --
http://www.mirant.com/-- together with its direct and indirect
subsidiaries, generate, sell and deliver electricity in North
America, the Philippines and the Caribbean. The Company filed for
chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03-
46590). Thomas E. Lauria, Esq., at White & Case LLP represent the
Debtors in their restructuring efforts. When the Company filed
for protection from their creditors, they listed $20,574,000,000
in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News,
Issue No. 36; Bankruptcy Creditors' Service, Inc., 215/945-7000)
MOLECULAR DIAGNOSTICS: Lantana Small Cap Holds 7.7% Equity Stake
----------------------------------------------------------------
Lantana Small Cap Growth LLC beneficially owns, with sole voting
and dispositive powers, 5,547,882 shares of the common stock of
Molecular Diagnostics, Inc. The amount held represents 7.7% of
the outstanding common stock of the Company.
Molecular Diagnostics -- whose March 31, 2004 balance sheet
shows a total stockholders' equity deficit of $5,856,000 --
develops cost-effective cancer screening systems, which can be
utilized in a laboratory or at the point-of-care, to assist in the
early detection of cervical, gastrointestinal, and other cancers.
The InPath System is being developed to provide medical
practitioners with a highly accurate, low-cost, cervical cancer
screening system that can be integrated into existing medical
models or at the point-of-care. More information is available at
http://www.Molecular-Dx.com/
NAPAM INVESTMENTS: Case Summary & 10 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Napam Investments, Inc.
P.O. Box 790
Bettendorf, Iowa 52722-0014
Bankruptcy Case No.: 04-03697
Type of Business: The Debtor is a single asset real estate
company.
Chapter 11 Petition Date: June 10, 2004
Court: Southern District of Iowa (Davenport)
Judge: Lee M. Jackwig
Debtor's Counsel: David P. Miller, Esq.
P.O. Box 4668
1707 Washington Street
Davenport, IA 52804
Tel: 563-322-1360
Fax: 563-324-5109
Total Assets: $1,248,112
Total Debts: $1,489,991
Debtor's 10 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Sohan Singh Gill Trade debt $25,000
United Building Centers Trade debt $20,427
Kone, Inc. Trade debt $19,583
Peterson Plumbing Trade debt $16,523
Quad Citiers Automatic Trade debt $15,514
Sprinkler Co., Inc.
Pastenak Law Firm PC Trade debt $4,000
Scott County Treasurer $3,618
Howard Steel Trade debt $2,566
White's Roofing Trade debt $1,600
City Of Davenport 1st lien on $116
real estate
NCI BUILDING: Completes Refinancing & Calls for Note Redemption
---------------------------------------------------------------
NCI Building Systems, Inc. (NYSE: NCS) announced that it has
completed a refinancing of its existing bank debt and has called
for redemption its $125 million of 9-1/4% senior subordinated
notes due 2009 at a redemption price of 104.625% of the aggregate
principal amount thereof, plus accrued interest through the
redemption date. The new $325 million senior, secured credit
facility consists of a six-year, $200 million term loan and a
five-year, $125 million revolver, both of which are secured by
receivables, inventory, machinery and equipment. The Company said
that after repayment of its previous borrowings and the redemption
of the senior subordinated notes, it expects to have approximately
$115 million in available borrowings under the new facility. As
discussed in the Company's second-quarter earnings release, NCI
expects to incur one-time expenses relating to the refinancing in
the third quarter of fiscal 2004 of approximately $9.8 million
($0.28 per diluted share after tax), representing the call premium
on the senior subordinated notes, the write off of unamortized
deferred debt issuance costs, and other related costs.
A.R. Ginn, Chairman and Chief Executive Officer, remarked, "These
transactions continue a multi-year trend in which NCI has steadily
strengthened its financial position, resulting in a recent
increase in the Company's corporate credit and bank loan ratings
by Standard & Poor's and Moody's. The restructuring of our debt at
Monday's interest rates is expected to reduce our annual interest
payments by approximately $8 million, assuming current average
loan balances. It also enhances our ability to improve our
industry leadership position through continuing initiatives to
expand our market share, product line and geographic reach."
This press release is not a notice of redemption of the 9 - 1/4%
senior subordinated notes due 2009. Persons with questions
regarding the redemption of the senior subordinated notes should
contact The Bank of New York Corporate Trust Department, the
Trustee and paying agent, at 101 Barclay Street, 8th floor, New
York, New York 10286, telephone 212-815-6907.
NCI Building Systems, Inc. is one of North America's largest
integrated manufacturers of metal products for the nonresidential
building industry. The Company operates manufacturing and
distribution facilities located in 16 states and Mexico.
* * *
As reported in the Troubled Company Reporter's May 27, 2004
edition, Standard & Poor's Ratings Services raised its corporate
credit and bank loan ratings on metal buildings manufacturer, NCI
Building Systems Inc., to 'BB' from 'BB-', and its subordinated
debt rating to 'B+' from 'B'. The outlook is stable.
At the same time, Standard & Poor's assigned its 'BB' bank loan
rating and its recovery rating of '3' to NCI's proposed $325
million senior secured credit facility, based on preliminary terms
and conditions. The rating is the same as the corporate credit
rating; this and the '3' recovery rating indicate that bank
lenders can expect meaningful recovery of principal (50% to 80%)
in the event of a default.
"The upgrade reflects NCI's improved financial profile resulting
from its ability to substantially reduce debt even during the past
few years of depressed nonresidential construction markets," said
Standard & Poor's credit analyst Pamela Rice. NCI has reduced debt
by $350 million to $228 million at Jan. 31, 2004, since acquiring
Metal Building Components Inc. in 1998, including a reduction of
almost $200 million since the start of the industry downturn in
early 2001. The Houston, Texas-based company's competitive cost
position has enabled it to gain market share in this challenging
environment and generate over $50 million of free cash flow for
debt reduction in each of the past three years.
NEFF CORP: Improved Performance Prompts S&P's Positive Watch
------------------------------------------------------------
Standard & Poor's Ratings Services placed the ratings of Neff
Corp., including its 'B-' corporate credit rating, on CreditWatch
with positive implications.
"The placement reflects the improved operating performance and
financial profile stemming from Neff's turnaround, and improved
industry fundamentals," said Standard & Poor's credit analyst John
Sico. "We could raise the ratings modestly if the company can
demonstrate sustained credit metrics notwithstanding increased
capital spending that will become necessary."
Miami, Florida-based Neff Corp. is a relatively modest-size
regional equipment rental company that operates mainly in the
Sunbelt, through nearly 70 locations. Total debt outstanding as of
March 31, 2004, was about $250 million.
Neff has benefited from an increase in rental rates and equipment
utilization. Neff's credit protection measures have improved.
Neff has held down its capital spending and is generating positive
free cash flow. However, the aging of its fleet, especially its
core earthmoving equipment, has increased maintenance and repair
costs. Capital spending is expected to increase as a result of
this aging and the improved industry conditions.
While the industry is not expecting any significant recovery in
the near term, some signs of improvement, including increased
rental rates in the second half of 2003 and first quarter 2004,
and the industry's deliberate aging of the fleet and reduced
capital spending may be helping to shrink the oversupply of
construction equipment.
NEWPOWER HOLDINGS: Kellogg Capital Discloses 10.74% Equity Stake
----------------------------------------------------------------
Kellogg Capital Group, LLC beneficially owns 6,753,450 shares of
the common stock of NewPower Holdings, Inc., with sole voting and
dispositive powers. 6,753,450 shares represents 10.74% of the
total outstanding common stock of NewPower Holdings.
As previously reported, on August 15, 2003, the United States
Bankruptcy Court for the Northern District of Georgia, Newnan
Division confirmed the Second Amended Chapter 11 Plan with respect
to NewPower Holdings, Inc. and TNPC Holdings, Inc., a wholly owned
subsidiary of the Company. As previously reported, on February 28,
2003, the Bankruptcy Court previously confirmed the Plan, and the
Plan has been effective as of March 11, 2003, with respect to The
New Power Company, a wholly owned subsidiary of the Company. The
Plan became effective on October 9, 2003 with respect to the
Company and TNPC.
OPTIMAL GEOMATICS: Balance Sheet Insolvent by $16M at January 31
----------------------------------------------------------------
Optimal Geomatics Inc., TSX-VEN: OPG announced its results for the
2004 annual fiscal year end. Revenues rose to $4,496,022, a 95%
increase from the previous year. Gross profit increased, for a
second year to $1,332,288 representing a gross margin of 30%.
2004 Fiscal Highlights include:
- Corporate Name Change Legal name change from Avcan Systems
Inc. to Optimal Geomatics Inc.
- Strategic changes in Management team Colum Caldwell, new
President and CEO, Dmitri Rosenrauch CTO, Roger Bannon CFO,
Nigel Appleton UK Managing Director
- Announcements of Private Placement of Common Shares
3,699,233 common shares used for working capital
- Growth of Sales and Technical Team Sales Team adds Kevin
Eaton, GIS Business Development, 25yrs experience in land
survey, GIS, and Pipeline regulation. Robert Iantria, North
American Account Manager, diverse background including
survey, photogrammetry, GIS, remote sensing, and
engineering. Martin Berzins, Technical Support Manager,
20yrs experience in the overhead powering industry.
- Growth in revenue almost doubled from previous year
Revenue up from $2,308,375 to $4,496,022, a 95% increase
- Received Additional contracts from existing customers
TXU-Oncor, Connectiv, and EKU, contracts awarded
maintaining strong relationships with our customers
- New contract received from Pipeline Customer
Oklahoma Natural Gas contract for pipeline services
totaling over $500,000 USD
Colum Caldwell, the President, and Chief Executive Officer of
Optimal commented, "It's been a pivotal year for Optimal. We have
continued to achieve the short-term objectives set out for us over
the past two years to refocus the organization. The team is
motivated to have the coming year be a breakthrough year for the
company. We will continue to seek out partners and build business
relationships to help maximize margins and explore new
initiatives."
At January 31, 2004, Optimal Geomatics' balance sheet shows a
deficit of $15,892,655.
There will be a conference call on July 27th at 10:15am PST to
discuss the results. Analysts, investment professionals,
shareholders, members of the media, and other interested parties
who wish to participate can attend the AGM at the offices of Axium
Law Group1107 unsmuir Street, Vancouver BC) or call five minutes
prior to scheduled time at 604-899-1159 Vancouver local, or 403-
232-6311 outside Vancouver, pass codes will be available on our
website. Alternatively, you can listen to the playback by visiting
our website at http://www.optimalgeo.com/2004AGM.html/
About Optimal Geomatics Inc.
Optimal Geomatics specializes in providing highly accurate aerial
mapping solutions to a customer-base, which is primarily composed
of Electric and Gas utilities. Optimal employs a number of aerial
surveying systems, including its proprietary Vid/Tracker for data
acquisition, and applies innovative technology, techniques and
expertise for in-house processing. The Company's unique mapping
products and services help utilities reduce cost, improve
efficiency, and better-manage their assets by turning raw data
into highly valuable geospatial information and engineering
reports. Optimal's customers include many of the major utilities
across North America and Europe.
ORION TELECOMMUNICATIONS: Creditors Must File Claims by July 30
---------------------------------------------------------------
The United States Bankruptcy Court for the Southern District of
New York, set 5:00 p.m. on July 30, 2004, as the deadline for all
creditors owed money on account of claims arising prior to
April 1, 2004, by Orion Telecommunications Corp., to file their
proofs of claim.
Proof of claim forms must be filed either by mailing or delivering
the original form by hand or overnight courier to:
United States Bankruptcy Court
Southern District of New York
One Bowling Green, Room 534
New York, New York 10004-1408
Six categories of claims are exempted from the Bar Date:
(a) claims already properly filed;
(b) claims scheduled in the right amount and not disputed,
contingent or unliquidated;
(c) claims previously allowed by the Bankruptcy Court;
(d) claims already paid in full;
(e) claims subject to another bankruptcy court-imposed
deadline; and
(f) administrative expense claims.
Headquartered in New York, New York, Orion Telecommunications
Corp. -- http://www.oriontelecommunications.com/-- is a market-
leading manufacturer and distributor of telecommunication
services. The company filed for chapter 11 protection on April 1,
2004 (Bankr. S.D.N.Y. Case No. 04-12203). Frank A. Oswald, Esq.,
at Togut, Segal & Segal LLP represents the Debtor in its
restructuring efforts. When the Company filed for protection from
its creditors, it listed $16,347,957 in total assets and
$97,588,754 in total debts.
OXIS INTERNATIONAL: Ray Rogers Retires as CEO, Pres. and Chairman
-----------------------------------------------------------------
OXIS International, Inc. (OTCBB:OXIS) (Nouveau Marche:OXIS)
announced the retirement of Ray R. Rogers, its Chief Executive
Officer, President and Chairman of the Board. Rogers has decided
to retire after more than a decade of service to OXIS and related
companies.
Dr. Gosse B. Bruinsma, MD, a current member of the Board, has been
elected Chairman of the Board of Directors and will assume the
role of acting CEO until a permanent CEO has been hired. Dr.
Bruinsma will be assisted by Manus O'Donnell, a seasoned
executive, who has been engaged as a special advisor to the OXIS
Board. Manus O'Donnell will be located at OXIS's Portland
headquarters. Dr. Bruinsma is President and Chief Operating
Officer of Axonyx Inc, the majority shareholder in OXIS with an
ownership of approximately 54% of the common shares outstanding.
The Company has engaged The Stevenson Group, an executive search
firm experienced in conducting CEO searches in the
healthcare/diagnostics area.
"The OXIS Board thanks Ray for his leadership and valuable
contributions over the years," stated Dr. Bruinsma. "We wish him
well in his future endeavors."
"The Company is well positioned to advance its oxidative stress
technologies," stated Mr. Rogers. "With the new majority
shareholder in place, it is the appropriate time for me to step
down and assist in the Company's leadership transition as it moves
forward to the next phase of growth."
OXIS International Inc., headquartered in Portland, Oregon,
focuses on developing technologies and products to research,
diagnose, treat and prevent diseases associated with damage from
free radical and reactive oxygen species -- diseases of oxidative
stress. The Company holds the rights to three therapeutic classes
of compounds in the area of oxidative stress, and develops,
manufactures and markets products and technologies to diagnose and
treat diseases caused by oxidative stress.
* * *
Liquidity and Capital Resources
In its Form 10-QSB for the quarterly period ended March 31, 2004
filed with the Securities and Exchange Commission, Oxis
International Inc. reports:
"The Company's working capital deficit increased during the first
quarter of 2004 by $14,000, from a deficit of $36,000 at December
31, 2003, to a deficit of $50,000 at March 31, 2004. The decrease
in working capital resulted primarily from the net loss of
$593,000 adjusted for depreciation and amortization, $56,000, and
an investment in equipment and patents, $87,000.
"Cash and cash equivalents decreased from $372,000 at December 31,
2003, to $308,000 at March 31, 2004. This decrease of $64,000 is a
result of $483,000 used for operations and $87,000 invested in
equipment and patents, offset by the receipt of $570,000 from the
receipt of bridge loans proceeds on January 14, 2004 upon the sale
of the Notes.
"The Notes became immediately due and payable upon the closing of
the Acquisition. As of the date of the filing of this report, the
Company has not received a notice from any Note Holder notifying
the Company of its failure to repay the Notes at or following the
Acquisition. Accordingly, the Company believes there has not been
an Event of Default under the Notes. However, upon receipt of such
a notice, the Company will either need to repay all or a portion
of the $570,000 principal under the Note(s), plus accrued
interest, or permit conversion at the Event of Default Conversion
Price.
"The Company expects to incur operating losses for the foreseeable
future. These losses and expenses may increase and fluctuate from
quarter to quarter. There can be no assurance that the Company
will ever achieve profitable operations. The report of the
Company's independent auditors on the Company's financial
statements for the period ended December 31, 2003, includes an
explanatory paragraph referring to the Company's ability to
continue as a going concern."
PARMALAT: Lenders Agree to Extend Deadline for Plan Requirements
----------------------------------------------------------------
Pursuant to the DIP Financing Agreement and the Final DIP Order,
the Parmalat U.S. Debtors are required to provide the Postpetition
Lenders, on or before April 22, 2004, with:
(i) definitive documentation relating to the sale of the
assets of Farmland Dairies, LLC, and Milk Products of
Alabama, LLC, acceptable to a majority in interest of
the Lenders, in their sole discretion; or
(ii) a business plan acceptable to a majority in interest of
the Lenders, in their sole discretion, for
substantially all of the assets of Farmland and Milk
Products not subject to the definitive documentation.
The U.S. Debtors' failure to satisfy these requirements
constitutes an Absolute Termination Event, and the Lenders are
immediately authorized to cease extending credit to or for the
benefit of the Debtors, and terminate the DIP Facility.
By letter agreements, General Electric Capital Corporation, as
Postpetition Agent, agreed to extend the deadline to June 7,
2004.
By this stipulation, the parties agree that the U.S. Debtors
will:
(a) provide the Lenders, on of before June 25, 2004, with a
business plan acceptable to a majority in interest of the
Lenders, in their sole discretion, for substantially all
of the assets of Farmland;
(b) provide the Lenders, on or before July 20, 2004, with a
term sheet for a plan of reorganization;
(c) provide the Lenders, on or before August 25, 2004, with a
draft plan of reorganization; and
(d) file a plan of reorganization and accompanying disclosure
statement, on or before August 23, 2004.
In all other respects, the Final DIP Order will remain in full
force and effect.
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. 21; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
PEGASUS SATELLITE: Honoring Prepetition Employee Obligations
------------------------------------------------------------
Robert J. Keach, Esq., at Bernstein, Shur, Sawyer & Nelson, in
Portland, Maine, relates that the Pegasus Satellite
Communications, Inc. Debtors employ 329 salaried employees and 613
hourly employees. The continued and uninterrupted service of the
Employees is essential to the Debtors' continuing operations and a
successful Chapter 11 process.
To minimize the personal hardship the Employees will suffer if
prepetition employee-related obligations are not paid when due,
and to maintain the Employees' morale during this critical time,
the Debtors sought and obtained the Court's authority to:
(a) pay all prepetition Employee claims for wages, salaries,
contractual compensation, bonuses, sick pay, personal pay,
holiday pay, vacation pay and accrued compensation;
(b) make all payments for which Employee payroll deductions
were made;
(c) reimburse all prepetition Employee business expenses;
(d) make prepetition contributions and pay benefits under
certain Employee benefit plans;
(e) honor workers' compensation obligations;
(f) pay other miscellaneous Employee-related costs; and
(g) continue Employee programs with respect to vacations,
sick, personal and holiday leave and certain health,
welfare, savings and other benefit programs.
Judge Haines also directs the applicable banks and other
financial institutions to receive, process, honor and pay all
prepetition checks drawn on the Debtors' payroll accounts to make
the payments.
Wages, Salaries, and Other Compensation
The average monthly payroll for the Debtors' salaried and hourly
Employees is about $3,200,000. The Employees are paid through a
bi-weekly payroll cycle where certain Employees are paid one week
in arrears and certain Employees are paid in-real-time terms.
The Debtors employ Ceridian Corporation to calculate and issue
the Employees' paychecks and direct deposits. The paychecks and
direct deposits are drawn on Ceridian bank accounts. Most
recently, the Debtors paid Ceridian on June 2, 2004. Outstanding
unpaid wages, salaries and other compensation owed to the
Employees and to the Contract Workers aggregate $293,000.
Vacation, Sick, Personal Leave and Holidays
The Employees are covered by the Debtors' vacation policy. Under
the Vacation Policy, full-time Employees are eligible for up to
four weeks of paid vacation annually depending on the number of
hours worked, position, and number of years of credited service.
Part-time Employees accrue vacation time on a pro-rated basis in
accordance with the number of hours worked during a pay period,
not to exceed 10 days per calendar year. The total annual cost
to the Debtors for the Employees' vacation time under the
Vacation Policy is about $1,300,000. The Debtors do not
anticipate a payout for unused vacation days as of the Petition
Date.
The Debtors also provide full-time and part-time Employees with
sick pay benefits in the event that an Employee becomes ill and
is unable to work. Full and part-time Employees also receive up
to four personal days per calendar year. The total annual cost
to the Debtors for the Employees' sick leave is about $600,000
and $475,000 for personal leave, aggregating $1,075,000, and is
included in gross payroll.
Furthermore, Mr. Keach notes that Employees have seven paid
holidays each year -- New Year's Day, Martin Luther King Day,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. If an hourly Employee is scheduled to work one of
these holidays, the Employee is entitled to receive holiday pay
equal to one day's pay in addition to the Employee's otherwise
applicable hourly salary for that day.
Reimbursable Business Expenses
Employees may incur a variety of business expenses that are
typically reimbursed by the Debtors pursuant to their normal
business practices. The reimbursable business expenses incurred
by the Employees include business travel expenses and
entertainment expenses. All Reimbursable Business Expenses were
incurred with the understanding that they would be reimbursed by
the Debtors. As of the Petition Date, the Debtors estimate that
there are no amounts owing with respect to Reimbursable Business
Expenses.
Insurance Benefits
The Debtors provide medical, prescription drug, dental and vision
insurance, life insurance, long-term disability, accidental death
and dismemberment insurance and other related insurance to their
Employees.
The Debtors provide their full-time Employees -- at a
substantially reduced cost -- with certain medical, prescription
drug, dental and vision insurance programs through various
providers. The average monthly cost for all these Health
Benefits is $437,500 of which about 26% is withheld from Employee
payroll on average as their required contributions to the various
Health Benefit plans. As of the Petition Date, the Debtors
estimate that accrued payables with respect to the Health Benefit
plans may aggregate $1,600,000 to be paid over time in the
ordinary course.
According to Mr. Keach, the Debtors provide their active full-
time Employees with life and disability insurance programs
underwritten by Unum Life Insurance Company of America. Those
insurance policies are 100% employer-paid and begin on the first
of the month after two full calendar months of employment for
eligible Employees. As of the Petition Date, the Debtors have no
amounts owing to Unum Life.
The Debtors also offer their active full-time Employees other
optional insurance benefits, which the Employees fully pay for,
like term life insurance, whole life insurance, dependent life
insurance, critical care insurance and short-term disability
insurance. The Debtors withhold the applicable premium amounts
from the participating Employees' paychecks and subsequently
forward the amount to the appropriate insurance provider, which
is UnumProvident Corporation. As of the Petition Date, the
Debtors believe that there are no amounts owing to UnumProvident.
Savings Plan
The Debtors have a defined savings plan for their Employees,
which is qualified under Section 401(k) of the Internal Revenue
Code. The Saving Plan is administered by Prudential Investment
Management Services, LLC. All active Employees who have
completed at least one full calendar month of service are
eligible to participate in the Savings Plan. Pursuant to the
Savings Plan, the Debtors deduct the appropriate amounts from
each participating Employee's payroll check and transfer the
withheld funds to the plan trustee. In addition, under the
Savings Plan, the Debtors provide matching contributions, in
Pegasus Communications Corporation common stock, equal to 100% of
each participating Employee's pre-tax contribution up to 6% of
the Employee's annual base salary. As of the Petition Date, the
Debtors believe that no amounts are owing with respect to amounts
deducted from the Employees' paychecks but not yet remitted to
the third-party recipients, and all matching contributions with
respect to the deductions have been made.
Employee Stock Purchase Plan
The Debtors offer their Employees the opportunity to participate
in their employee stock purchase plan. Pursuant to the Stock
Purchase Plan, eligible Employees may opt to purchase stock in
Pegasus Communications Corporation, at a 15% discount, in an
amount of up to 10% of their basic rate of compensation for each
payroll period. The Debtors deduct the after-tax amount of the
contribution from each participating Employee's payroll check and
on or around the last business day of a calendar quarter, the
contribution amount deducted from a participating Employee's
paycheck is applied towards the purchase of Pegasus
Communications stock. As of the Petition Date, the estimated
contribution amount deducted from the Employee's paycheck
participating in the Stock Purchase Plan, but not yet applied
towards the price of Pegasus Communications stock, is about
$24,000.
Workers' Compensation Obligations
and Related Insurance
As required by certain states, the Debtors maintain workers'
compensation policies and programs to provide Employees with
workers' compensation coverage for claims arising from or related
to their employment with them. The Debtors currently insure
their workers' compensation liabilities pursuant to a policy
between Pegasus Communications and Hartford Underwriters
Insurance Company. Pursuant to the policy, Employees seeking
reimbursement for work-related injuries file an incident report
with the Debtor entity where the injury occurred. Hartford then
investigates and determines which claims are meritorious.
Currently, there are six workers' compensation claims pending
against the Debtors, totaling $45,346. Because the Hartford
policy does not have a cap or deductible, as of the Petition
Date, there are no amounts owing by the Debtors with respect to
workers' compensation claims.
Severance Benefits
The Debtors provide certain severance benefits to their Employees
who have been involuntarily terminated for reasons other than
unsatisfactory performance. The applicable amount of severance
benefit under the Severance Plan for:
(i) non-exempt staff is two weeks of base pay for each year
of service with a minimum of two weeks;
(ii) exempt staff is two weeks of base pay for each year of
service with a minimum of four weeks;
(iii) manager is 13 weeks of base pay;
(iv) director is 26 weeks of base pay;
(v) vice president is 52 weeks of base pay;
(vi) senior vice president and above -- are determined on an
individual basis but typically range from 18 to 24
months of base pay.
The Debtors are currently paying severance benefits for three
former employees with an estimated outstanding liability of about
$20,000.
Mr. Keach contends that continuing the Staff Severance Program is
vital to the retention of Employees and any interruption in the
program would severely harm the Debtors' estates. The majority
of the Employees eligible for the Staff Severance Program work in
the Debtors' call centers, which directly service the Debtors'
customer base and are thus critical to the Debtors' operations.
Payroll Taxes and Deductions
The Debtors make bi-weekly payments to Ceridian to cover all
outstanding tax obligations relating to employee and employer
payroll taxes. Ceridian is responsible for filing and making
payments to the appropriate federal, state and local taxing
authorities. The estimated amount of the Debtors' accrued
employee and employer payroll taxes, which have not been
forwarded to Ceridian as of the Petition Date, is about $74,000.
The employee portion is included in the gross pay of the
Employees.
Other Benefits
The Debtors provide a number of other miscellaneous benefits to
certain Employees. The Debtors offer their new full-time
Employees 50 options on Pegasus Communications stock and their
part-time Employees 25 options. The Debtors also offer their
full-time Employees who have been employed one year, an
educational assistance program of up to $2,500 per calendar year
to pursue career-related educational course work at accredited
institutions. Furthermore, the Debtors provide their Employees
with an assistance program offering confidential counseling
services. The Debtors also offer qualified Employees paid leave
for jury duty, bereavement and certain military duties.
Mr. Keach points out that few employees will continue to work for
an entity that has filed a bankruptcy petition without assurance
that they will be timely paid. The most critical employees tend
to be the ones most able to secure new positions. Payment of the
Employee Obligations will not prejudice the Debtors' other
creditors because, with the exception of the Health Benefits, all
unpaid amounts would give rise to priority claims under Sections
507(a)(3) and (4) of the Bankruptcy Code.
Headquartered in Bala Cynwyd, Pennsylvania, Pegasus Satellite
Communications, Inc. -- http://www.pgtv.com/-- is a leading
independent provider of direct broadcast satellite (DBS)
television. The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. D. Me. Lead Case No. 04-20889) on
June 2, 2004. Leonard M. Gulino, Esq., and Robert J. Keach, Esq.,
at Bernstein, Shur, Sawyer & Nelson, represent the Debtors in
their restructuring efforts. When the Debtors filed for protection
from their creditors, they listed $1,762,883,000 in assets and
$1,878,195,000 in liabilities. (Pegasus Bankruptcy News, Issue No.
3; Bankruptcy Creditors' Service, Inc., 215/945-7000)
PEGASUS: Wants Court Nod To Continue Support Services Agreement
---------------------------------------------------------------
The Pegasus Satellite Communications, Inc. Debtors, on one hand,
and non-debtor affiliate Pegasus Communications Management
Company, on the other hand, are parties to a Support Services
Agreement, executed on June 2, 2004 and effective as of May 1,
2004. The Agreement memorializes the structure and services of
the informal agreements that existed for at least five years
before its execution. In anticipation of their Chapter 11 cases,
the Debtors concluded that it was necessary to formalize an
allocation methodology that would conform to their postpetition
corporate structure. The Agreement contains an allocation method
that the Debtors believe is appropriate.
Robert J. Keach, Esq., at Bernstein, Shur, Sawyer & Nelson, in
Portland, Maine, relates that pursuant to the Agreement, Pegasus
Communications provides these types of services to the Operating
Affiliates:
(a) Accounting and Financial Reporting
(b) Cash and Treasury Management
(c) Communications -- Investor Relations and Corporate
(d) Employee Benefit Plan Management
(e) Engineering and Research and Development
(f) Executive and Staff Administration
(g) Financial Planning and Analysis
(h) General and Administrative Services
(i) Global Sales and Service
(j) Government Operations
(k) Human Resources and Administration
(l) In-House Legal Administration
(m) Insurance
(n) Payroll Management
(o) Purchasing, Procurement and Transportation Administration
(p) Quality Assurance
(q) Systems Administration
(r) Tax Services
(s) Miscellaneous Services and Costs
The Operating Affiliates compensate Pegasus Communications for
the Support Services based on the actual cost. The amount
Pegasus Communications charges the Operating Affiliates for the
Support Services is based on an estimate of the level of effort
devoted by Pegasus Communication to each of the Operating
Affiliates, including:
-- the cost of compensation of each Operating Affiliate
compared to total cost of compensation of all Operating
Affiliates;
-- the net assets employed by each Operating Affiliate
compared to total net assets of all Operating Affiliates;
-- the net revenue generated by each Operating Affiliate
compared to total net revenue generated by all Operating
Affiliates; or
-- other similar allocation methods.
According to Mr. Keach, the methodology for allocating Pegasus
Communications' costs for the Support Services under the
Agreement may be broken down into two tiers. The fist tier is
allocated based on aggregate salaries for employees:
(i) 7% to Pegasus Communications Corporation based on
aggregate salaries for employees of Pegasus Development
Corporation and its WiBand division; and
(ii) 93% to Pegasus Satellite Communications, Inc., and its
subsidiaries based on aggregate salaries for the
employees of Pegasus Satellite Television, Inc., and
Pegasus Broadcast Television, Inc.
Under the second tier, the Debtors allocate the 93% allocated to
Pegasus Satellite Communications under the first tier to the
Debtors based on net revenue:
(i) 97% is allocated to the Debtors' Satellite division; and
(ii) 3% is allocated to the Debtors' Broadcast division.
The Debtors estimate that the aggregate cost for Pegasus
Communications' Support Services provided to the Debtors is about
$1,900,000 per month, and $140,000 for the Debtors' non-debtor
affiliates.
Pursuant to the Agreement, the Operating Affiliates and Pegasus
Communications also share the costs for certain services and
benefits:
(a) Employee Bonuses and Compensation
(b) Employee Stock Purchase Plan
(c) Healthcare, Medical, Insurance and Other Employee
Welfare Plans
(d) Property and Casualty Insurance
(e) Office Space
(f) Telecommunication Services
(g) 401(k) Plan
(h) Other Miscellaneous Shared Services
Charges for the Shared Services are based on each Operating
Affiliate's share of actual costs incurred by Pegasus
Communications in performing the services.
The Debtors estimate that the aggregate cost for Pegasus
Communications' Shared Services provided to the Debtors is about
$800,000 per month, and $250,000 per month for the Debtors' non-
debtor affiliates.
Pursuant to Section 363 of the Bankruptcy Code, the Debtors seek
the Court's authority to continue using Pegasus Communications'
Services pursuant to the Agreement.
Mr. Keach asserts that without Pegasus Communications' provision
of the Services, the Debtors would be forced to either perform
the Services themselves or outsource them to third-parties --
neither of which are economically viable options.
Performing the Services themselves would require the Debtors to
expend valuable time and money to familiarize and train their
employees with the numerous and varied tasks performed in
connection with the Services, contends Mr. Keach. Saddling the
Debtors' employees with additional tasks at this critical time
would essentially divert their attention from their assigned
responsibilities and ultimately the reorganization efforts at
hand.
Moreover, outsourcing the Services is not a viable, cost-
effective option. Since Pegasus Communications merely charges
the Debtors its share of the costs to perform the Services rather
than being profit-based -- as a third-party would be -- the
Debtors do not believe that any other party would perform the
Services at equal to or lesser cost. Thus, continuation of the
Agreement is a cost-efficient vehicle for the Debtors to receive
services necessary to their daily business operations and
reorganization efforts.
Headquartered in Bala Cynwyd, Pennsylvania, Pegasus Satellite
Communications, Inc. -- http://www.pgtv.com/-- is a leading
independent provider of direct broadcast satellite (DBS)
television. The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. D. Me. Lead Case No. 04-20889) on
June 2, 2004. Leonard M. Gulino, Esq., and Robert J. Keach, Esq.,
at Bernstein, Shur, Sawyer & Nelson, represent the Debtors in
their restructuring efforts. When the Debtors filed for protection
from their creditors, they listed $1,762,883,000 in assets and
$1,878,195,000 in liabilities. (Pegasus Bankruptcy News, Issue No.
3; Bankruptcy Creditors' Service, Inc., 215/945-7000)
PEGASUS: Court Says DirecTV May Market Service in Same Territories
------------------------------------------------------------------
A federal judge in the U.S. bankruptcy court in Portland, Maine,
denied Pegasus' request for a temporary restraining order against
DIRECTV to prevent DIRECTV from marketing its service directly to
consumers in areas served by Pegasus Satellite Television, Inc.
The court's ruling allows DIRECTV to continue to market its
service and activate new customers in Pegasus territories.
"We are pleased that Judge Haines understood our position and is
allowing DIRECTV to continue to offer a competitive multichannel
alternative for millions of consumers in rural America," said
Steve Cox, executive vice president, Sales, Distribution and
Business Development, DIRECTV, Inc.
On June 1st, DIRECTV, Inc. and NRTC agreed to end NRTC's exclusive
DIRECTV service distribution contract effective immediately. In
connection with the agreement, NRTC's separate agreements with its
members and affiliates, including Pegasus, for sale of DIRECTV
services, were terminated, with an effective date of August 31,
2004. Pegasus Satellite Communications Corporation and certain of
its subsidiaries, including Pegasus Satellite Television, Inc.,
filed a voluntary petition for relief under chapter 11 of the U.S.
bankruptcy code on June 2nd.
Until the effective date of the member and Pegasus contract
terminations on Aug. 31, 2004, DIRECTV will provide services
through the NRTC to its members and Pegasus on a non-exclusive
basis so that DIRECTV service to customers in NRTC territories
will not be disrupted.
DIRECTV is the nation's leading digital multichannel television
service provider with more than 12.6 million customers. DIRECTV
and the Cyclone Design logo are registered trademarks of DIRECTV,
Inc., a unit of The DIRECTV Group, Inc. (NYSE:DTV). The DIRECTV
Group is a world-leading provider of digital multichannel
television entertainment, broadband satellite networks and
services, and global video and data broadcasting. The DIRECTV
Group is 34 percent owned by Fox Entertainment Group, which is
approximately 82 percent owned by News Corporation Ltd.
Headquartered in Bala Cynwyd, Pennsylvania, Pegasus Satellite
Communications, Inc. -- http://www.pgtv.com/-- is a leading
independent provider of direct broadcast satellite (DBS)
television. The Company, along with its affiliates, filed for
chapter 11 protection (Bankr. D. Me. Lead Case No. 04-20889) on
June 2, 2004. Leonard M. Gulino, Esq., and Robert J. Keach, Esq.,
at Bernstein, Shur, Sawyer & Nelson, represent the Debtors in
their restructuring efforts. When the Debtors filed for protection
from their creditors, they listed $1,762,883,000 in assets and
$1,878,195,000 in liabilities. (Pegasus Bankruptcy News, Issue No.
3; Bankruptcy Creditors' Service, Inc., 215/945-7000)
PG&E NATIONAL: Equilon Pays ET Gas $6M+ to Settle Contract Dispute
------------------------------------------------------------------
NEGT Energy Trading - Gas Corporation and Equilon Enterprises,
LLC, doing business as Shell Oil Products US, resolved issues
arising out the termination of a Master Firm Purchase/Sale
Agreement between them dated March 1, 1999. Pursuant to the
Settlement Agreement, Equilon Enterprises will pay $6,476,850 to
ET Gas in full and final satisfaction of all claims arising out
of the March 1999 Sale Agreement. The parties also agreed to
release each other from any liabilities arising out of the March
1999 Sale Agreement.
Additionally, Equilon Enterprises withdraws Claim No. 00143,
which asserted $1,377,181 against National Energy and Gas
Transmission, Inc., relating to the March 1999 Sale Agreement
termination.
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.
23; Bankruptcy Creditors' Service, Inc., 215/945-7000)
PORTOLA PACKAGING: Posts $42.3 Million Deficit at May 31, 2004
--------------------------------------------------------------
June 21, 2004 / Business Wire
Portola Packaging, Inc. reported results for its third quarter of
fiscal year 2004, ended May 31, 2004. Sales were $62.3 million
compared to $53.7 million for the same quarter of the prior year.
For the first nine months of fiscal 2004 sales were $176.3 million
compared to $156.8 million for the first nine months of fiscal
2003. Portola had operating income of $0.3 million for the third
quarter of fiscal year 2004, compared to operating income of $3.8
million for the third quarter of fiscal year 2003. For the first
nine months of fiscal 2004 the Company had an operating loss of
$2.2 million compared to operating income of $6.4 million for the
first nine months of fiscal 2003. Portola reported a net loss of
$4.4 million for the third quarter of fiscal year 2004 compared to
a net loss of $28,000 for the same period of fiscal year 2003, and
a net loss of $16.2 million for the first nine months of fiscal
2004 compared to a net loss of $2.4 million for the same period in
fiscal 2003.
Gross profit decreased $0.3 million to $11.6 million for the third
quarter of fiscal year 2004 compared to $11.9 million for the
third quarter of fiscal year 2003. Gross profit decreased
$2.8 million to $30.2 million for the first nine months of fiscal
2004 compared to $33 million for the first nine months of fiscal
2003. The decrease in gross profit was mainly attributable to
resin price increases, decreased sales volume in the US and
competitive pricing pressures in the US and the UK markets. In
addition, the Company incurred one-time relocation and plant
consolidation expenses of $0.4 million and $1.4 million during the
third quarter and first nine months of fiscal 2004, respectively,
that were charged to cost of sales.
The Company incurred pretax restructuring charges of $1.6 million
during the third quarter of fiscal 2004 and $3.5 million pretax
restructuring charges during the first nine months of fiscal 2004
compared to $0.4 million for the first nine months in fiscal 2003.
Foreign exchange loss for the third quarter of fiscal 2004 totaled
$0.7 million as compared to a gain of $0.9 million for the same
period in fiscal 2003. Foreign exchange gain for the first nine
months of fiscal 2004 totaled $1.6 million compared to a gain of
$0.8 million for the same period in fiscal 2003.
During the third quarter of fiscal 2004, the Company closed on the
sale of its manufacturing facility in Chino, California at a net
sales price of $3.3 million and recognized a gain of $1.0 million.
The Company also entered into a contract to sell its manufacturing
facility in San Jose, California, at a net sales price of
approximately $3.2 million. The transaction is expected to close
in July 2004.
As previously reported, the Company purchased certain machinery
and equipment for production of dairy closures, together with
certain inventory, accounts receivable, and other assets, from a
competitor in the United Kingdom. The purchase price was
approximately $4.1 million. This machinery and equipment is
expected to be utilized in the UK and other Portola facilities
outside of the UK. The competitor has ceased production of 38mm
dairy closures for the UK market.
During the third quarter of fiscal year 2004, appraisals were
completed for the Company's real estate, machinery and equipment,
which resulted in an additional $15 million of availability to the
current borrowing base under its senior secured credit facility.
After subtracting the minimum availability of $5 million, the
Company's borrowing capacity has increased to approximately
$35 million at the end of the third quarter of fiscal 2004.
The Company's results for the third quarter and first nine months
of fiscal 2003 do not include the results of Tech Industries,
Incorporated which was acquired by the Company in the first
quarter of fiscal 2004.
EBITDA, decreased $3.7 million to $5.6 million in the third
quarter of fiscal year 2004 compared to $9.3 million in the third
quarter of fiscal year 2003, and decreased $8.4 million to
$12.4 million for the first nine months of fiscal 2004 compared to
$20.8 million for the first nine months of fiscal 2003. Adjusted
EBITDA, which excludes the effect of restructuring charges,
(gains) losses on sale of assets, loss on warrant redemption, one-
time relocation costs, one-time Tech clean up costs and warrant
interest (income) expense, decreased to $6.5 million in the third
quarter of fiscal 2004 compared to $9.3 million in the third
quarter of fiscal 2003 and decreased to $18.5 million for the
first nine months of fiscal 2004 from $21.1 million for the same
period in fiscal 2003.
At May 31, 2004, Portola Packaging, Inc.'s balance sheet shows a
stockholders' deficit of $42.3 million compared to a deficit of
$26.1 million at August 31, 2003.
About Portola Packaging, Inc
Portola Packaging is a leading designer, manufacturer and marketer
of tamper evident plastic closures used in dairy, fruit juice,
bottled water, sports drinks, institutional food products and
other non-carbonated beverage products. The Company also produces
a wide variety of plastic bottles for use in the dairy, water and
juice industries, including various high density bottles, as well
as five-gallon polycarbonate water bottles. In addition, the
Company designs, manufactures and markets capping equipment for
use in high speed bottling, filling and packaging production lines
as well as manufactures and markets customized five-gallon water
capping and filling systems. The Company is also engaged in the
manufacture and sale of tooling and molds used in the blow molding
industry. For more information about Portola Packaging, visit the
Company's web site at http://www.portpack.com/
About Portola Tech International
Portola Tech International is a leading manufacturer and marketer
of plastic packaging components to the cosmetic, fragrance and
toiletries industry. PTI's capabilities include injection and
compression molding, thermal and ultraviolet metallizing,
ultraviolet one coat spray technologies, silk screening, hot
stamping, lining and multiple component assembly. In addition to
offering the largest stock line of closures in the industry, with
over 450 styles and sizes, PTI has a complementary line of heavy
wall PETG and polypropylene jars. For more information about PTI,
visit PTI's web site at http://www.techindustries.com/
POT OF GOLD PORTA: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Pot of Gold Porta Potties, Inc.
39 Arrowhead Drive 20590
Jasper, Georgia 30143
Bankruptcy Case No.: 04-21474
Type of Business: The Debtor is engaged in the business of
renting portable toilets and dumpsters at
construction sites.
Chapter 11 Petition Date: June 18, 2004
Court: Northern District of Georgia (Gainesville)
Judge: Robert Brizendine
Debtor's Counsel: John B. Lyle, Esq.
John B. Lyle, P.C.
376 Powder Springs Street, Suite 140
Marietta, GA 30064
Tel: 770-421-9400
Total Assets: $979,377
Total Debts: $1,471,082
Debtor's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Bank of North Georgia 2003 Sterling pump $545,907
8025 Westside Parkway truck
Alpharetta, GA 30004 Secured Value:
$80,000
Claud M. Hicks $364,577
P.O. Box 998
Jasper, GA 30143
Helen Ridley $90,616
IRS Payroll taxes $63,991
Roger Ridley Deferred wages - 18 $52,000
months
Cherokee C&D Landfill $34,117
Tiffany Ridley Deferred wages - 18 $31,200
months
Greenlead Landfill $25,769
Bell South Advertising Desk $16,315
L&W Limestone $11,903
Wilson Air Conditioning $6,897
Service
Eagle Point Landfill $6,739
New Holland Plan $5,130
Jasper Tire Co. $4,789
Rogers Lake Landfill $4,580
Georgia Dept. of Revenue Payroll taxes $3,979
Builders Insurance Group $3,865
Auto Parts Company $3,432
Fuel Man $3,237
Jack Moore's Grading & $2,365
Hauling
PROTECTIVE FINANCE: S&P Raises Series 1 Class D Rating to BB+
-------------------------------------------------------------
Standard & Poor's Ratings Services raised its ratings on three
certificate classes from Protective Finance Corp. II's FASIT
Series 1. At the same time, the ratings on the remaining three
classes are affirmed.
The raised ratings are due to increased credit enhancement since
issuance due to amortization and loan payoffs. The affirmations on
the A-1 and A-2 certificates is based on the 'AA' rating on
Protective Life Insurance Co., while the affirmation on class E
reflects credit support that adequately supports the current
rating under various stress scenarios.
As of May 25, 2004, the trust collateral consisted of 291 loans
with an aggregate outstanding principal balance of $459.1 million.
The master servicer, Protective Life Insurance Corp., provided
year-end 2002 and year-end 2003 net cash flow debt service
coverage figures for 96.3% and 1% of the pool, respectively. Based
on this information, Standard & Poor's calculated a weighted
average DSC of 1.35x for the pool. The DSC figures exclude six
loans (2.77%) for which 2002 and 2003 financial data is not
available. There are no loans on the servicer's watchlist and
there have been no realized losses as of the last remittance
report.
The pool's average loan size is $1.6 million, with the top 10
loans comprising 15% of the pool by balance. Of the pool, 98.6% is
fully amortizing. The pool is geographically diverse, with
properties located in 31 states, and no state represents more than
10% of the pool. By property type, however, the pool is highly
concentrated in retail (83%).
As of the May 25, 2004 remittance date there are two loans with an
outstanding balance of $1.5 million (0.32%) that are with the
special servicer. The first asset is a 5,000 square foot (sq. ft.)
office building located in New Orleans, Louisiana. The special
servicer has negotiated a discounted payoff with the borrower and
the loan is expected to be paid off within the next few months
with a loss. The second asset is a 25,000 sq. ft. retail building
located in Church Hill, Tennessee that is REO. The tenant, Fleming
Foods, filed for chapter 11 and rejected the lease on this
property, causing the special to foreclose on the property.
The trust contains a "variable funding period" that allowed for
additional deposits of loans from the closing date until Sept. 30,
2002. The FASIT was created in 1997, was upsized in 1998, and was
upsized again in 1999.
Ratings raised
Protective Finance Corp. II
Commercial mortgage FASIT certificates series I
Rating
Class To From Credit Support
B AA A 24.92%
C A+ BBB 17.68%
D BB+ BB 9.65%
Ratings Affirmed
Protective Finance Corp. II
Commercial mortgage FASIT certificates series I
Class Rating Credit Enhancement
A-1 AA 32.15%
A-2 AA 32.15%
E B 4.82%
QWEST COMMS: Opens New Spanish-Speaking Service Center in Phoenix
-----------------------------------------------------------------
Qwest Communications International Inc. (NYSE:Q) announced the
opening of a Spanish-speaking small-business center in Phoenix.
The center is part of Qwest's company-wide initiative to provide
increasing quality of service and support to Spanish-speaking
customers in the growing Hispanic business and consumer markets.
The full-service center, named El Centro de Negocios (translated
as 'The Business Center') supports Spanish-speaking small-business
customers in Hispanic communities across all of Qwest's local
services market in 14 states. The center is staffed by Spanish-
speaking Qwest service representatives.
"Qwest is pleased to offer a resource that provides sales support
to small-business customers in the growing Hispanic market," said
Mark Pitchford, vice president of Qwest market management. "With
sales representatives who are fluent in Spanish, Qwest can now
communicate much better with our Hispanic small-business customers
and meet their needs more quickly."
"The center makes it easier for Spanish-speaking customers to do
business with Qwest," said Jeff Clark, vice president of small
business sales for Qwest's business markets group. "Customers
previously considering switching carriers due to difficulty in
receiving Spanish-language support are now staying with Qwest.
Spanish-speaking small-business customers can simply call and get
quick assistance through this new center."
The El Centro de Negocios is open 8 a.m. to 5 p.m. (MST).
Customers can call the center via Qwest's business customer care
number (1-800-603-6000, select the Spanish-language service
option).
About Qwest
Qwest Communications International Inc. (NYSE: Q) is a leading
provider of voice, video and data services to more than 25 million
customers. The company's 46,000 employees are committed to the
"Spirit of Service" and providing world-class services that exceed
customers' expectations for quality, value and reliability. For
more information, please visit the Qwest Web site at
http://www.qwest.com/
At March 31, 2004, Qwest Communications International, Inc.'s
balance sheet shows a stockholders' deficit of $1,251,000,000
compared to a deficit of $1,016,000,000 at December 31, 2003.
RCN CORP: U.S. Trustee Appoints Unsecured Creditors' Committee
--------------------------------------------------------------
Deirdre A. Martini, the United States Trustee for Region 2,
appointed three unsecured creditors to serve on an Official
Committee of Unsecured Creditors in the RCN Corp. Debtors' Chapter
11 cases:
(1) Tudor Investment Corp.
1275 King Street
Greenwich, CT 06831
Attn: Darryl L. Schall, Analyst
Tel. No. (818) 380-3065
Fax No. (203) 552-6248
(2) York Capital Management
390 Park Avenue, 15th Floor
New York, NY 10022
Attn: Eric Edidin
Tel. No. (212) 651-0500
Fax No. (212) 651-0501
(3) HSBC Bank USA
452 Fifth Avenue
New York, NY 10018-2706
Attn: Ms. Sandra E. Horwitz
Tel. No. (212) 525-1358
Fax No. (212) 525-1300
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. 4; Bankruptcy Creditors' Service, Inc., 215/945-7000)
REVLON CONSUMER: S&P Assigns B- Rating to Senior Secured Debt
-------------------------------------------------------------
Standard & Poor's Ratings Services affirmed its 'B-' corporate
credit rating on cosmetics manufacturer Revlon Consumer Products
Corp. At the same time, Standard & Poor's assigned a 'B-' senior
secured bank loan and a '2' recovery rating to Revlon's planned
$750 million term loan maturing in 2010. As part of this
transaction, Revlon is also issuing a $160 million revolving
credit facility, which will not be rated. The company will have
approximately $1.3 billion of debt outstanding, pro forma for the
planned transaction.
The '2' recovery rating on the term loan indicates that lenders
are expected to recover a substantial amount of principal (80% to
100%) in the event of a default.
The ratings on the company's existing bank loan and senior secured
notes have been affirmed, however, these will be withdrawn upon
the closing of the new term loan transaction.
Standard & Poor's has revised its outlook on Revlon to negative
from developing.
"The outlook revision follows Revlon's announcement that it has
revised its 2004 sales and earnings forecast downward," said
Standard & Poor's credit analyst Patrick Jeffrey. "Sales are now
expected to grow 3%, whereas, the previous forecast had expected
8%-9% growth. EBITDA, meanwhile, is now expected to be $190
million, a decline from the previous forecast of $200 million."
The planned $910 million senior secured bank loan will be used to
refinance $363 million of debt maturities in 2005, to refinance
existing bank borrowings, and eliminate a bank waiver agreement
for covenant violations that expires in January 2005. However, the
company will still have about $190 million of debt maturing in
2006 and about $328 million of debt maturing in 2008. A $110
million equity back-stop from primary shareholder MacAndrews &
Forbes is expected to be applied toward refinancing the 2006
maturities.
The developing outlook previously assigned to the company had
reflected the postponement of a previous debt offering and the
remaining near-term liquidity risk relating to debt maturities and
the expiration of the bank waiver agreement. Before Standard &
Poor's considers a stable outlook, Revlon will need to demonstrate
stability in its operations and maintain enough liquidity to
refinance its debt maturities due in 2006.
The rating on New York, New York-based Revlon reflects its
participation in the highly competitive mass-market cosmetics
industry, its high leverage, and an inconsistent operating
history. These risks are mitigated somewhat by the company's
leading position in the sector and some recent operating
performance improvement. Revlon faces two significantly larger
competitors with leading market positions, L'Oreal and Procter &
Gamble Co.
REVLON INC: Refinances Debt and Updates 2004 Outlook
----------------------------------------------------
Revlon, Inc. (NYSE: REV), as part of its overall plan to continue
to strengthen its brands, its relationships with retail customers,
and its organization, announced a series of refinancing
transactions, and updated its outlook for 2004.
In making the announcement, the Company indicated that its wholly-
owned subsidiary, Revlon Consumer Products Corporation, has signed
an agreement with Citicorp USA, Inc. and Citigroup Global Markets
Inc. for a fully-committed financing to refinance and extend to
2010 the maturities on the Company's debt that matures in 2005.
The refinancing transactions announced Monday follow the
consummation in March 2004 of the Company's successful exchange
offers, which reduced debt and increased equity by more than $800
million.
Commenting on the refinancing, Revlon President and CEO Jack Stahl
stated, "Revlon continues to make meaningful progress to create
long-term value and Monday's announcement outlines a key financial
building block to doing so. At the same time, we expect to achieve
strong growth in operating earnings for the year, despite our
current expectation of relatively modest growth in 2004 in the
overall U.S. mass market color cosmetics category."
RCPC expects to enter into new credit facilities with Citigroup
and a syndicate of lenders to refinance its existing credit
facility (approximately $290 million outstanding), to refinance
its 12% Senior Secured Notes ($363 million outstanding), and to
cover transactional fees and expenses, tender costs, and accured
interest (totaling approximately $95 million). RCPC currently
expects that the new credit facilities will be for an aggregate
amount of approximately $910 million, comprised of a $750 million
term loan and a $160 million asset-based multi-currency revolving
credit facility.
As part of the refinancing announced Monday, the Company indicated
that RCPC intends to shortly commence a cash tender offer to
purchase any and all of the $363.0 million aggregate principal
amount outstanding of its 12% Senior Secured Notes due 2005, at a
price calculated using a yield to maturity of the 1.875% U.S.
Treasury Note due November 30, 2005 plus 75 basis points. The
Company expects the new credit facilities to be executed
concurrently with the consummation of the tender offer, which is
currently expected to occur in mid- to late-July 2004, and that a
portion of the amounts borrowed will be used to purchase notes
validly tendered in the tender offer, to repay the existing credit
facility, to pay fees and expenses, and for general corporate
purposes.
As part of the planned tender offer, RCPC intends to solicit
consents from holders of its 12% Senior Secured Notes for certain
proposed amendments that would eliminate substantially all of the
restrictive covenants contained in the indenture governing such
notes and release the guarantees of RCPC's obligations, and the
collateral securing the obligations of RCPC and the guarantors,
under such indenture.
Consummation of the tender offer and consent solicitation will be
subject to various conditions, including but not limited to,
RCPC's entering into the new credit facilities and RCPC's
obtaining the required consents in the consent solicitation.
Consummation of the new credit facilities and related terms is
also subject to negotiation and execution of definitive documents
and various customary conditions. There can be no assurance that
any aspect of the refinancing will be consummated. The tender
offer will be made only upon the terms contained in any tender
offer materials provided to holders of the 12% Senior Secured
Notes.
2004 Outlook
Revlon also announced that it has revised its outlook for growth
for 2004. The Company indicated that it expects to generate
Adjusted EBITDA(1) for the year of approximately $190 million,
with operating income of approximately $90 million. The Company's
previous forecasts for Adjusted EBITDA and operating income were
$200 million and $100 million, respectively.
The Company indicated that it currently expects top-line growth of
approximately 3% versus year-ago, compared with its previous
expectation of growth in the 8% to 9% range. The revised sales
outlook largely reflects the Company's current expectation of
slower market growth in its key U.S. mass market(2) categories,
particularly color cosmetics, which the Company currently expects
to grow 1% to 2% in 2004, compared with 4% growth originally
expected. In addition, the current sales outlook also reflects the
Company's expectation that its U.S. color cosmetics business will
now grow in line with the overall category.
Importantly, the Company indicated that its productivity programs
are delivering savings faster than planned, and it is aggressively
managing costs to ensure spending, including brand support, is
right-sized in relation to the revised sales outlook. In addition,
Revlon indicated that its longer-term destination model outlook
for productivity and margin enhancement remains intact, targeting
operating margins of approximately 14% of gross sales within three
to five years. Finally, Revlon indicated that the revised outlook
for 2004 issued Monday supersedes previously forecasted
information by the Company for the year.
Commenting on the Company's 2004 outlook, Mr. Stahl indicated, "We
went into 2004 expecting a more robust U.S. color cosmetics
category than current trends would suggest. We are acting
responsibly by revising our spending plans to more appropriately
reflect our current top-line trends and expectations and by
accelerating productivity savings ahead of schedule. As a result,
I am pleased that we continue to expect strong growth in earnings
for the year."
About Revlon
Revlon is a worldwide cosmetics, fragrance, and personal care
products company. The Company's vision is to deliver the promise
of beauty through creating and developing the most consumer
preferred brands. Websites featuring current product and
promotional information can be reached at http://www.revlon.com
and http://www.almay.com/Corporate investor relations information
can be accessed at http://www.revloninc.com/
At March 31, 2004, Revlon Inc.'s consolidated balance sheet shows
a stockholders' deficit of $956.4 million compared to a deficit of
$1.72 billion at December 31, 2003.
ROO GROUP: Expands Operations to Meet Sales Demand
--------------------------------------------------
ROO Group, Inc. (OTC BB: ROOG) announced that, in order to meet
with growing demand for its on-demand video solutions, it has
leased an additional 5,000 square foot premises in Australia to
house its media operations staff, has appointed new staff within
its international operations area, and is adding sales and support
staff in the U.S.
ROO Group, Inc. Chairman and CEO, Robert Petty, stated, "The
demand for the company's video content solutions has increased
dramatically over the past 6 months and we expect to announce the
activation of two Fortune 100 customers over the following 60
days. We will continue to expand our sales and media operations in
line with our growth."
The growth in videos being viewed over the internet is clearly
displayed in the Arbitron and Edison Media research "Internet and
Multimedia 12", which found that over 50 million Americans have
viewed video over the internet in the past month and recommended
that advertisers look at running audio and video advertising, a
feature supported by ROO's platform.
The company's strategy continues to be to leverage its competitive
advantage as a result of the pacific time zone differences and
cost effectiveness of housing its media operations in Australia,
which avoids running nightshifts in the UK and USA, while
maintaining its sales and business development focus on the U.S.
and European markets.
The company has also recently announced its purchase of the
business assets of Undercover Media Pty Ltd., a provider of music
content, including photos, articles and interviews, to web sites
worldwide and whose clients and distribution partners include
Telstra Corporation, AAP, Coca Cola, Google, VH1, Nova, Artist
Direct and News Now. The company has also recently completed the
purchase of 80% of the ordinary shares of Reality Group Pty Ltd.,
a provider of integrated communication solutions, including
company branding solutions, through online advertising and direct
marketing solutions and whose clients include Saab Motor
Corporation and British Petroleum.
About ROO Group Inc.
ROO Group Inc. -- whose March 31, 2004 balance sheet shows a
stockholders' deficit of $900,417 -- is a global provider of
digital media solutions and technology that enables the
activation, marketing and distribution of digital media video
content over the Internet and emerging broadcasting platforms such
as set top boxes and wireless. RGI's products include syndication,
technology, integration, and management of topical video content
such as news, entertainment and fashion to its client's web sites.
The distribution, programming and integration of interactive
advertising solutions includes 15 to 30 second television-style
video advertisements which can be played before and after selected
topical video content over the Internet. In addition to the
expansion and development of ROO TV's -- http://www.rootv.com--
network of country-based video-only web sites, RGI's strategy for
2004 is to expand its distribution of products and services and
make strategic acquisitions in Asia Pacific, Europe and the United
States markets to accelerate the company's growth. More
information can be obtained from RGI's web site located at
http://www.roomedia.comor the company's corporate site at
http://www.roogroupinc.com/
RS GROUP: Appoints Ian Dennis Russell to Board of Directors
-----------------------------------------------------------
RS Group Of Companies, Inc. (formerly Rent Shield Corp.)
(OTCBB:RSGC), a provider of pass-through risk specialty insurance
and reinsurance products, announced that it has appointed Ian
Dennis Russell to its Board of Directors.
Mr. Russell, 52, has spent the last 35 years as a insurance
professional in the London and Lloyd's markets. He is currently
CEO of London-based Dashwood, Brewer & Phipps Ltd, a 70-year old
Lloyd's Insurance Broker noted for its broad expertise in numerous
product lines including marine, automobile, credit and aviation.
Mr. Russell also currently serves as a Director of Griffin
Insurance Association, a mutual insurance association for Lloyd's
Brokers Professional Indemnity Insurance. Prior to his work at
Dashwood, Mr. Russell held positions at Russell Tudor Price & Co.,
Ltd, Follows Weller-Poley & Co., Ltd., and Sedgwick Collins, Ltd.
RS Group of Companies recently announced that it had entered into
an agreement, subject to FSA approval, to purchase 49% of the
issued share capital of Dashwood, Brewer & Phipps Limited.
Commenting on the appointment, John Hamilton, CEO of RS Group of
Companies, stated, "Ian Russell is an outstanding addition to the
RSGC Board. He is recognized as a significant player in the London
and Lloyd's insurance markets. He brings to RSGC a wealth of
leadership, experience and an extensive network of relationships
and contacts in the insurance industry."
About RS Group of Companies, Inc.
RS Group of Companies, Inc. -- whose December 31, 2003balance
sheet records a stockholders' equity deficit of $966,088 --
has developed and is implementing a strategy to design, structure
and sell a broad series of pass-through risk specialty insurance
and reinsurance platforms throughout North America. In November
2003, through its wholly owned subsidiaries, the Company
introduced its core pass-through risk solution, RentShield(TM)
-- http://www.rentshieldexpress.com/-- a residential rental
guarantee program being offered to North America's $300 billion
residential real estate rental market. It is estimated that there
are over 38 million rental units in the United States and Canada.
Rental Guarantee was first developed in Finland to provide surety
to residential property developers and is being used as an
extremely effective marketing tool in the United Kingdom for the
buy-to-let market. It protects investments in the rental units by
receiving a guaranteed income on a certain timeline. Go to
http://www.rentshieldcorp.com/for more information.
SBD INC: Case Summary & 16 Largest Unsecured Creditors
------------------------------------------------------
Debtor: SBD, Inc.
1615 North Broadway
Mt. Pleasant, Iowa 52641
Bankruptcy Case No.: 04-03892
Chapter 11 Petition Date: June 21, 2004
Court: Southern District of Iowa (Des Moines)
Judge: Lee M. Jackwig
Debtor's Counsel: Michael P. Mallaney, Esq.
Hudson, Mallaney & Shindler, P.C.
5015 Grand Ridge Drive, Suite 100
West Des Moines, IA 50265-5749
Tel: 515-223-4567
Fax: 515-223-8887
Estimated Assets: $500,000 to $1 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 16 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Dan E. McAllister $1,063,005
3971 Gulfshore Blvd. North #603
Naples FL 34103
Monsanto Company $586,000
800 North Lindbergh Blvd.
St. Louis MO 63167
Green Acres Land Company $251,755
300 South Jefferson
Mt Pleasant IA 52641
Pilot Grove Savings Bank $127,619
Bio Plant Research $54,000
The RTS Corp. $50,000
Scott McAllister Farms $42,500
Hensley, Kim & Edgington, LLC $36,814
Kamlet Shepherd & Reichert LLP $34,860
Petrie Bauer LLP $25,289
First National Bank $6,410
Rande A. McAllister, Esq. $3,201
Wellmark of Iowa $2,252
Farm & Home Publishers $448
IOS Capital $334
ABC Fire Extinguisher $256
SHOPKO SORES: Fitch Places Low-B Ratings on Watch Positive
----------------------------------------------------------
Fitch Ratings has placed the 'BB-' secured bank facility and 'B'
senior note ratings of ShopKo Stores Inc. on Rating Watch
Positive. Approximately $250 million of debt is affected.
The Positive Rating Watch recognizes Shopko's aggressive debt
retirement over the past three years, which has resulted in a
significant improvement in credit metrics. Since fiscal 2001,
Shopko has retired approximately $450 million of long-term debt.
As a result, total adjusted debt to EBITDAR has strengthened for
the past twelve months ended May 1, 2004 to 2.5 times (x) versus
4.3x in fiscal 2001 and EBITDAR/interest plus rents has improved
to 3.8x versus 2.6x over the same period. Still of concern is
Shopko's competitive operating environment, as the company faces a
dramatic increase in Wal-Mart discount stores and supercenters in
the upper Midwest since 1988 and near-term margin pressure as a
result of a highly promotional retail strategy.
Fitch will be closely monitoring Shopko's operating results over
the next few quarters as the company focuses on maintaining
positive comparable store sales and improving gross margins. Fitch
is anticipating the margins will improve ahead of fiscal 2003
levels, as the company focuses on improved pricing and selling
higher gross margined items. The events leading to an upgrade
include the retirement of the $55 million 9% senior notes due Nov.
15, 2004 and an improvement in operating income, a direct result
of margin improvement. Once the 9% notes are retired, Shopko will
have one remaining public debt issue on its balance sheet, the
$100 million 9.25% senior unsecured notes due March 2022. The
remainder of Shopko's long-term debt includes bank debt,
mortgages, and capital lease obligations. Cash flow from
operations will be used to update its store base, as Shopko has
used free cash flow to retire debt versus investment in
infrastructure over the past few years.
SHYPPCO FINANCE: Fitch Downgrades Class A-2B Rating to BB-
----------------------------------------------------------
Fitch Ratings affirms one tranche and downgrades two tranches
issued by Shyppco Finance Company LLC. The following rating
actions are effective immediately:
--$31,941,609 class A-2A notes affirmed at 'AAA';
--$78,576,357 class A-2B notes downgraded to 'BB-' from 'BBB-';
--$35,135,770 class A-2C notes downgraded from 'BBB-' to 'BB-';
--$62,000,000 class A-3 notes remain at 'C';
--$16,500,000 class B notes remain at 'C'.
Shyppco is a collateralized debt obligation, which closed May 5,
1998 and is managed by MBIA Capital Management Corp. Shyppco is
composed primarily of high-yield bonds and approximately 17%
investment-grade bonds. Included in this review, Fitch discussed
the current state of the portfolio with the asset manager and
their portfolio management strategy. In addition, Fitch conducted
cash flow modeling utilizing various default timing and interest
rate scenarios.
Since the last rating action, the collateral has experienced
further deterioration. The weighted average rating has decreased
from 'B/B-' to 'B-/CCC+'. The overcollateralization ratio has
decreased from 74.77% as of June 2002 to 55.05% as of the most
recent trustee report dated May 10, 2004. The OC test is measured
by the total collateral divided by the sum of classes A-2, A-3,
and B notes, including deferred interest. An implied senior OC
test (total collateral divided by the sum of class A-2A, A-2B, and
A-2C notes) is equivalent to 103.42%. As of the most recent
trustee report available, Shyppco's defaulted assets represented
14.25% or $21.32 million of total collateral and eligible
investments. Assets rated 'CCC+' or lower represented
approximately 45.47%, including defaults.
The ratings of the class A-2A notes reflect the insurance wrap
provided by MBIA Insurance Corp., rated 'AAA' by Fitch. The class
A-2B and A-2C notes addresses the likelihood that investors will
receive full and timely payments of interest, as per the governing
documents, as well as the stated balance of principal by the legal
final maturity date. The class A-3 and class B Notes have been
deferring interest since December 1998.
Fitch conducted cash flow modeling utilizing various default
timing and interest rate scenarios to measure the breakeven
default rates relative to the minimum cumulative default rates
required for the rated liabilities. As a result of this analysis,
Fitch has determined that the current ratings assigned to the
classes A-2B and A-2C notes no longer reflect the current risk to
noteholders.
TELETECH HOLDINGS: Completes Debt Reduction Plan
------------------------------------------------
TeleTech Holdings, Inc. (Nasdaq: TTEC), a leading global provider
of customer solutions, announced the company completed its
previously announced debt reduction plan, including structuring a
new $100 million revolving credit facility in May, and recently
paying off its $75 million senior notes.
As previously announced, the above actions will result in an
estimated pre-tax charge in the second quarter 2004 of
approximately $8 million, of which just over $6 million will be a
cash charge related to the senior notes 'make-whole' payment, and
the remainder will be a non-cash charge to write-off previously
capitalized debt issuance costs. The estimated pre-tax charge is
lower than the company's original estimate of $9 million as a
result of recent increases in long-term treasury rates. The
company expects to recover the $8 million pre-tax charge from the
estimated future savings associated with reduced interest expense.
The company used approximately $60 million of existing cash to pay
off the senior notes, and drew approximately $65 million on the
new revolving credit agreement, consisting of $39 million to
terminate the previous revolving credit facility and $25 million
to terminate the senior notes, including the 'make-whole' payment.
As a result, the company's total long-term debt decreased by
approximately $50 million, and future annualized pre-tax interest
expense is estimated to decrease by approximately $5 million.
"We believe our new capital structure is in the best, long-term
interest of the shareholders and gives us the flexibility to
continue growing the business, while also lowering future interest
expense," said Dennis Lacey, TeleTech's chief financial officer.
"Our debt reduction plan is one element of our previously
announced cost reduction initiatives, and we remain committed to
successfully executing the plan we outlined to further improve the
company's long-term profitability."
About Teletech
TeleTech is a global leader of integrated customer solutions
designed to help clients acquire, grow, and retain profitable
relationships with their customers. TeleTech has built a worldwide
capability supported by more than 33,000 professionals in North
America, Latin America, Asia-Pacific and Europe. For additional
information, visit http://www.teletech.com/
THERMACLIME: S&P Places B- Corp. Credit Rating on Watch Negative
----------------------------------------------------------------
Standard & Poor's Ratings Services placed its 'B-' corporate
credit rating on Oklahoma City, Oklahoma-based ThermaClime Inc. on
CreditWatch with negative implications following the company's
termination of its proposed notes offering. At the same time,
Standard & Poor's withdrew its ratings on the proposed notes.
"The CreditWatch placement reflects heightened refinancing risk as
a result of the cancellation of an $80 million notes offering,"
said Standard & Poor's credit analyst Dominick D'Ascoli. Proceeds
from the proposed notes were to be used to repay debt due in 2005.
Consequently, the company will need to explore alternative means
of addressing upcoming debt maturities. As part of the CreditWatch
action, Standard & Poor's will monitor the company's efforts to
refinance. As such, ratings could be lowered if a refinancing
transaction is not executed in a timely manner.
ThermaClime, owned by LSB Industries Inc., manufactures components
for heating and air conditioning systems. It also manufactures
chemicals, including fertilizers, blasting-grade ammonium nitrate,
and industrial acids.
TRINITY PLUMAS: Extends Barnett Shale Acquisition to July 19
------------------------------------------------------------
Mr. Paul B. Manson, President of Trinity Plumas Capital
Corporation announced that both the Company and Eagle Oil & Gas
Co. have agreed to extend the closing date of the purchase of
Barnett Shale Interests in Newark East Field until July 19, 2004
to allow the TSX Venture Exchange additional time for approval of
the transaction. The engineering report submitted by the Company's
engineering firm must be adjusted to meet additional requirements
under the recently effective National Instrument 51-101. The
Company has met all standards required for its USA banking
relationships.
The Company has agreed to pay a US$75,000 extension fee and an
additional Performance Deposit of US$350,000 to effect the
extension of the closing. The US$350,000 Performance Deposit will
be applied to the purchase price.
Mr. Manson reports, "In that our economic closing of this
purchase was dated March 1, 2004, the project will virtually feel
no economic impact by adjusting the closing date to July 19,
2004. The extension allows the Company to make the appropriate
adjustments to meet all Canadian policy issues and improve on
additional reserves and cash flow numbers given that additional
wells have come on stream since announcing the definitive
agreement between Trinity and Eagle."
The acquisition of Barnett Shale Interests now consists of 22
producing natural gas wells and 2 shut-in wells awaiting fracture
stimulation. The entire package includes an additional 23 Proved
Undeveloped locations and 20 Probable Undeveloped locations to be
drilled.
About Trinity
Trinity Plumas Capital Corp. is a resource exploration and
development company. Its focus is on the efficient development of
natural resources in North and Central America regions while
maintaining high standards of environmental responsibility.
At March 31, 2003, Trinity Plumas Capital Corp.'s balance sheet
shows a total shareholders' deficit of $2,300,090 compared to a
deficit of $15,504,414 at December 31, 2002.
UNIFAB INTERNATIONAL: Nasdaq to Delist Common Stock on June 28
--------------------------------------------------------------
UNIFAB International, Inc. (NASDAQ: UFAB) reports that it received
a final Nasdaq Staff Determination on June 17, 2004, indicating
that the Company has not regained compliance with Nasdaq's market
capitalization requirement, stockholders' equity requirement or
requirement for net income from operations, as set forth in
Marketplace Rule 4310(c)(2)(B). Consequently, the Company's common
stock will be delisted from the NASDAQ SmallCap Market at the
opening of business on June 28, 2004.
"With no expectation that we could meet any one of the required
Nasdaq standards in the foreseeable future, our Company was not
able to prevent delisting from the Nasdaq SmallCap Market," said
Martin K. Bech, Vice President and General Counsel of UNIFAB.
The Company's common stock will be available on the OTC Bulletin
Board, effective with the open of business on June 28, 2004,
provided a market maker enters a quote on that day. If no quote is
entered on June 28, then the Company's common stock may trade on
the Bulletin Board upon application made by a broker-dealer.
About the Company
UNIFAB International, Inc. is a custom fabricator of topside
facilities, equipment modules and other structures used in the
development and production of oil and gas reserves. In addition,
the Company designs and manufactures specialized process systems
and refurbishes and retrofits existing jackets and decks.
As reported in the Troubled Company Reporter's April 7, 2004
edition, UNIFAB International, Inc. (NASDAQ: UFAB) reports, as
required by Nasdaq Marketplace Rule 4350(b), that the Company's
independent auditor issued its audit report on the Company's
financial statements for the year ended December 31, 2003.
The report includes a "going concern qualification," which is an
explanatory paragraph relating to the Company's ability to
continue as a going concern, and states that the Company's
recurring losses from operations, negative working capital
position, and difficulties in meeting its financial obligations
and funding its operations raise substantial doubt about the
Company's ability to continue as a going concern. The
qualification is due, in part, to the Company's dependence upon
Midland Fabricators and Process Systems, LLC, its majority
shareholder, for its working capital requirements. Under an
informal arrangement with the Company, Midland has agreed to
provide financial support and funding for working capital or other
needs at Midland's discretion, from time to time. During the year
ended December 31, 2003, Midland advanced $5.9 million to the
Company for working capital, which is classified as a current
liability at December 31, 2003. If Midland does not make available
such additional funding to the Company when needed in the future,
the Company could be unable to satisfy its working capital
requirements and meet its obligations in the ordinary course of
business.
UAL CORP: Asks Court to Authorize Settlement With Mae Entities
--------------------------------------------------------------
The UAL Corporation Debtors ask Judge Wedoff for authorization to
enter into an amendment to a General Services Agreement with
Singapore Technologies Aerospace, Ltd., ST Mobile Aerospace
Engineering, Inc., Dalfort Aerospace, LP, and ST Aviation Services
Company PTE, LTD.
ST Mobile Aerospace Engineering has been the Debtors' primary
airframe maintenance services provider since 1996. ST Mobile
Aerospace is currently the Debtors' exclusive provider of heavy-
maintenance services for the Debtors' Airbus and 747 aircraft.
On December 14, 2001, the Debtors entered into an agreement with
the MAE Entities to provide airframe maintenance services.
Although the Agreement is with all the MAE Entities, the Debtors
have only used Mobile Aerospace Engineering's services.
James H.M. Sprayregen, Esq., explains that the Debtors listed
Mobile Aerospace Engineering on their bankruptcy schedules as
having an unsecured, non-priority, prepetition claim for
$4,689,427. On May 12, 2003, Mobile Aerospace Engineering filed
a proof of claim for $4,769,975 alleging unpaid prepetition
services performed under the Agreement.
Mr. Sprayregen tells the Court that after the Petition, the
Debtors asserted warranty claims against Mobile Aerospace
Engineering:
(a) $454,091 for damages to B747-400 reverser track beams;
(b) $420,423 for damages to the nose landing gear of Aircraft
A319; and
(c) $4,719,700 for damages to a V2500 engine.
Mobile Aerospace Engineering disputes the amounts owed for the
reverser track beams and the V2500 engine. To reconcile these
disputed amounts, the Parties engaged in good faith negotiations
and reached an agreement:
(1) The MAE Entities will pay the Debtors $2,880,746 to settle
the Warranty Claims;
(2) Mobile Aerospace Engineering's $4,769,975 claim will be
treated as a general, unsecured, prepetition claim even if
the Claim would otherwise be entitled to payment as a
cure claim;
(3) The 2004 labor rate for existing contract pricing will be
reduced by $2 per hour for Mobile Aerospace Engineering's
services;
(4) The MAE Entities will remain the Debtors' exclusive heavy
maintenance service providers during 2004 for the 747,
A320 and A319 Aircraft; and
(5) The Debtors will assume the Agreement in any plan of
reorganization.
The Agreement will allow the Debtors to avoid complex and time-
consuming litigation. The Agreement mandates the MAE Entities to
provide the Debtors with substantial benefits. The Debtors will
benefit by continuing their business relationship with the MAE
Entities because they are uniquely able to provide the high
quality of service necessary to maintain the Aircraft.
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. 50; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
US AIRWAYS: Agrees to Settle AT&T Aircraft Claims For $16,918,817
-----------------------------------------------------------------
AT&T Credit Holdings, Inc., successor to AT&T Credit Corporation,
timely filed three claims, in unliquidated amounts, asserting
various tax indemnity claims relating to Aircraft bearing Tail
Nos. N436US, N651US and N652US.
After extensive negotiations, AT&T and the Reorganized US Airways
Group Inc. Debtors stipulate that the tax indemnity claims are
allowed as Class USAI-7 General Unsecured Claims:
Claim No. Tail No. Allowed Amount
--------- -------- --------------
5516 N436US $3,491,895
5521 N651US 6,713,461
5522 N652US 6,713,461
--------------
Total $16,918,817
All other AT&T general unsecured claims relating to the three
Aircraft are disallowed. (US Airways Bankruptcy News, Issue No.
57; Bankruptcy Creditors' Service, Inc., 215/945-7000)
US UNWIRED: S&P Raises Junk Ratings and Removes Credit Watch
------------------------------------------------------------
Standard & Poor's Ratings Services raised its corporate credit
rating on wireless carrier US Unwired Inc. to 'CCC+' from 'CCC-'.
The subordinated debt rating was raised to 'CCC-' from 'C'. These
ratings were removed from CreditWatch, where they were placed with
positive implications on June 2, 2004, following the company's
announcement of its refinancing plan and recent operating
improvement, including better customer retention and cash flow
growth. The upgrades are based on financial profile improvement
from 3(a)(9) debt for equity exchanges, together with the
company's recent offerings of $125 million senior secured first-
priority floating rate notes due 2010 and $233.4 million in senior
secured second-priority notes due 2012. The 'CCC+' rating on the
first-priority notes and the 'CCC-' rating on the second-priority
notes were affirmed. The ratings outlook is positive.
Proceeds from the new notes were used to retire US Unwired's
senior secured credit facility, to repurchase a portion of the
13.375% senior subordinated discount notes, and to fund the
company's cash balance. (The 'CCC-' rating on the bank facility
was withdrawn.) The $140.3 million March 31, 2004 pro forma cash
balance will allow the company to call the approximately $89
million remaining face amount of 13.375% notes beginning
in November 2004.
The 'CC' corporate credit rating and 'C' senior unsecured debt
rating on IWO Holdings Inc., a wholly-owned subsidiary of US
Unwired, were affirmed. The outlook remains negative. IWO is a
Sprint PCS affiliate operating in the Northeast. US Unwired
expects to file IWO for bankruptcy protection because of very weak
liquidity, which makes IWO unable to pay the July 2004 interest
payment on its senior notes. Under the terms of the two new
US Unwired issues, IWO is classified as an unrestricted
subsidiary, and US Unwired is limited in its capacity to provide
financial support to IWO.
Lake Charles, Louisiana-based US Unwired, an affiliate of Sprint
PCS, serves more than 430,000 wireless subscribers in markets
totaling 11.3 million people in several Southern states. Pro forma
for the June 2004 financing, the company's March 31, 2004 debt
balance was $447.8 million.
"Ratings on US Unwired reflect high financial risk from elevated
debt levels caused by negative discretionary cash flow incurred
during the company's wireless network construction and business
start-up period, a weaker market position compared with more
deeply entrenched competitors because of the company's late entry
into its territories, intense wireless industry competition, and a
potential negative liquidity impact from pending litigation
between the company and Sprint PCS," said Standard & Poor's credit
analyst Eric Geil. "Furthermore, asset recoveries in the event of
a default or bankruptcy could be restrained because the company
does not own the wireless spectrum licenses that it uses. These
factors are partly mitigated by US Unwired's growing wireless
subscriber base and operating benefits from the Sprint PCS
affiliation agreement."
VIVENDI UNIVERSAL: Lays-Off 350 Workers as Part of Turnaround Plan
------------------------------------------------------------------
Vivendi Universal Games (VU Games) announced another step in its
turnaround plan to improve operating effectiveness, reduce costs
and position for growth. The changes include a significant staff
reduction in its North American based operations resulting in the
elimination of 350 staff positions. The Company's Blizzard
Entertainment studio was not part of the staff reduction.
"Restructuring the organization and reducing our cost base are
necessary to improve our operating effectiveness and
profitability," said VU Games CEO Bruce Hack. "This constitutes
another important step in our turnaround plan aimed to better
position the Company for growth."
With a global and more focused organization in place, VU Games is
looking ahead to the second half of the year with several major
releases scheduled for launch. VU Games plans to release World of
Warcraft from Blizzard Entertainment, marking the Company's entry
into the massively multi-player online role-playing games
category. Other current and upcoming releases for 2004 include
Crash Twinsanity, Leisure Suit Larry, The Chronicles of Riddick:
Escape from Butcher Bay, Van Helsing, Ground Control II, Fight
Club and Spyro: A Hero's Tail.
About Vivendi Universal Games
Headquartered in Los Angeles, VU Games (S&P, BB Long-Term and B
Short-Term Corporate Credit Ratings, Positive) is a leading global
developer, publisher and distributor of multi-platform interactive
entertainment. Its development studios and publishing labels
include Blizzard Entertainment, Sierra Entertainment, Fox
Interactive and Massive Entertainment. VU Games' library of over
700 titles features multi-million unit selling properties such as
Warcraft, StarCraft and Diablo from Blizzard; Crash Bandicoot,
Spyro The Dragon, Ground Control, Tribes and Leisure Suit Larry.
WACHOVIA BANK: S&P Assigns Low-B Ratings to 6 Ser 2004-C12 Classes
------------------------------------------------------------------
Standard & Poor's Ratings Services assigned its preliminary
ratings to Wachovia Bank Commercial Mortgage Trust's $1.1 billion
commercial mortgage pass-through certificates series 2004-C12.
The preliminary ratings are based on information as of
June 21, 2004. Subsequent information may result in the assignment
of final ratings that differ from the preliminary ratings.
The preliminary ratings reflect the credit support provided by the
subordinate classes of certificates, the liquidity provided by the
trustee, the economics of the underlying loans, and the geographic
and property type diversity of the loans. Classes A-1, A-2, B, C,
D, and E are currently being offered publicly. Standard & Poor's
analysis determined that, on a weighted average basis, the pool
has a debt service coverage of 1.58x, a beginning LTV of 90.3%,
and an ending LTV of 77.6%.
Preliminary Ratings Assigned
Wachovia Bank Commercial Mortgage Trust 2004-C12
Class Rating Amount ($)
A-1 AAA 327,879,000
A-2 AAA 478,063,000
B AA 25,250,000
C AA- 9,302,000
D A 22,592,000
E A- 10,631,000
A1-A AAA 115,031,000
F BBB+ 11,960,000
G BBB 11,960,000
H BBB- 13,289,000
J BB+ 3,986,000
K BB 2,657,000
L BB- 5,315,000
M B+ 3,986,000
N B 2,657,000
O B- 2,657,000
P N.R. 15,957,325
MAD BBB- 13,555,555
IO* AAA 1,063,172,325**
*Interest-only class.
**Notional amount. N.R.-Not rated.
WEIRTON: Gets Nod to Reject Contracts Except for GE Capital Lease
-----------------------------------------------------------------
As previously reported, the Weirton Steel Corporation Debtors
sought the Court's authority pursuant to Sections 105 and 365 of
the Bankruptcy Code and Rules 2002, 6006 and 9014 of the Federal
Rules of Bankruptcy Procedure, to reject, effective the closing of
the ISG Weirton Sale Transaction:
(a) 71 executory contracts and unexpired leases;
(b) all other executory contracts and unexpired leases to
which any Debtor is a party and which have not previously
been assumed by the Debtors and are not subject to a
pending motion to assume the contract or lease.
GE Capital Responds
General Electric Capital Corporation entered into seven equipment
leases with the Debtors pursuant to a Master Lease Agreement
dated September 1, 1993 and various other documents. The leases
and their corresponding expiration dates are:
Lease Number Description Expiry Date
------------ ----------- -----------
4064575-005 Herzog Automated Lab BOP/BOF January 4, 2004
4060203-004 Locomotive January 4, 2004
4074937-001 Railcar Mover & Cat 9086 April 23, 2003
4074937-002 Taylor Forklift at HCL Plant June 24, 2003
4074937-003 Autolift Ram Truck July 1, 2003
1007558-002 Slab Tracking System June 30, 2004
4060203-002 Overhead Cranes September 4, 2004
(2 Tin Mill; 1 Strip Steel)
According to James A. Byrum, Jr., Esq., in Wheeling, West
Virginia, the Debtors have not surrendered the equipment that is
the subject of the GE Leases. The Debtors continue to be in
possession of the leased equipment and continue to negotiate to
amend, assume, and assign the GE Leases to ISG Weirton, Inc.,
while simultaneously seeking to reject the GE Leases.
Mr. Byrum argues that the Debtors cannot reject Lease Nos.
4064575-005, 4060203-004, 4074937-001, 4074937-002 and 407-4937-
003 because those leases have expired and Section 365(a) of the
Bankruptcy Code permits a trustee or debtor-in-possession to
reject only unexpired leases. The Debtors' attempt to reject the
expired leases "effective upon the closing (Closing) of the Sale
Transaction" is a transparent effort to gain leverage in the
negotiations among GECC, the Debtors, and International Steel
Group, Inc., and to eliminate GECC's administrative expense claim
for continued use and possession of the leased equipment
retroactive to May 17, 2004 without relinquishing possession of
the leased equipment to GECC.
On the other hand, Lease Nos. 1007558-002 and 4060203-002 have
not expired and are thus, subject to assumption or rejection
under Section 365. As the Debtors have sold substantially all of
their assets to ISG Weirton, Inc., GECC cannot contest in good
faith the Debtors' assertion that the rejection of those leases
is consistent with the exercise of their business judgment.
However, Mr. Byrum emphasizes, rejection should not be effective
as of the "Closing," as the Debtors request. Rather, rejection
should be effective only on the earlier of the surrender of all
of the leased equipment to GECC or the entry of the Order
approving the rejection of Lease Nos. 1007558-002 and 4060203-
002.
Mr. Byrum points out that the Debtors are not seeking to reject
the GE Leases retroactively to the date of the "Closing" because
it is equitable to do so. "The Debtors are seeking to reject the
GE Leases retroactively to gain a negotiating advantage and to
avoid their obligations under Section 365(d)(10) to timely
perform all of their obligations under the GE Leases until they
are rejected while continuing to retain the leased equipment."
* * *
Judge Friend authorizes the Debtors to reject all of their
executory contracts and unexpired leases that are not Assigned
Contracts or Transition Contracts, except for the unexpired
leases of GE Capital Corporation, effective as of May 17, 2004.
A full-text copy of the Rejected Contracts list is available for
free at:
http://bankrupt.com/misc/weirton_approvedrejectedcontracts.pdf
Further, Judge Friends rules that:
(a) The Debtors' request is continued as to those unexpired
leases to which GE Capital is a party, with all rights of
the Debtors and GE Capital being reserved;
(b) The Order will not apply to any policy of insurance or
executory contract for insurance coverage to which any
Debtor is a party. The Insurance Policies will remain in
full force and effect according to their terms unless they
are earlier rejected by the applicable Debtor; and
(c) Any claim by a non-Debtor party for contract rejection
must be asserted no later than July 2, 2004. (Weirton
Bankruptcy News, Issue No. 28; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
WESTERN WIRELESS: CFO to Present at Wachovia Conference Tomorrow
----------------------------------------------------------------
Western Wireless Corporation (Nasdaq:WWCA), a leading provider of
wireless communications services to rural America, announced that
CFO Wayne Wisehart will present at the 14th Annual Wachovia
Nantucket Equity Conference. Mr. Wisehart will speak at 8:30 a.m.
EST on Thursday, June 24, 2004.
The presentation will be broadcast live on the Internet. Investors
wishing to hear the presentation can access the webcast at the
following URL link:
http://wsw.com/webcast/wa22/wwca
Wachovia will archive the presentation for a period of 90 days
following the live presentation. Alternatively, the presentation
can be accessed through the Western Wireless web site at
http://www.wwireless.com,Investor Relations, Events.
About Western Wireless Corporation
Western Wireless Corporation, located in Bellevue, Washington,
serves over 1.2 million subscribers in 19 western states under the
Cellular One(R) and Western Wireless(R) brand names. Through its
subsidiaries and operating joint ventures, Western Wireless is
licensed to offer service in eight foreign countries.
As reported in the Troubled Company Reporter's April 23, 2004
edition, Standard & Poor's Ratings Services assigned its 'B-' bank
loan rating and a recovery rating of '4' to Western Wireless
Corp.'s new $1.5 billion secured credit facility, based on
preliminary documentation. The '4' recovery rating indicates the
expectation for a marginal recovery of principal (25%-50%) in the
event of a default. Proceeds from the bank loan will be used to
refinance existing bank debt.
Simultaneously, Standard & Poor's affirmed its existing ratings on
Western Wireless, including the 'B-' corporate credit rating. In
addition, the outlook was revised to positive from stable due to
lower debt leverage and liquidity improvement resulting from the
new bank facility.
WINDERMERE SCHOOL: Asks to Employ Allen Lang as Special Counsel
---------------------------------------------------------------
Windermere School Partners, L.L.L.P., and Windermere Preparatory
School, Inc., ask the U.S. Bankruptcy Court for the Middle
District of Florida, Orlando Division, for permission to employ
Allen, Lang, Carpenter & Peed, P.A., as their special counsel.
Thomas R. Allen, Esq., will be principally engaged to provide the
Debtors the necessary services. Mr. Allen will serve as real
estate and business counsel and assist the Debtor in the closing
of the sale of its assets in the proposed sale to Jeff Anderson
and Ken Furnish.
Mr. Allen reports that the debtor has paid the firm a $15,000
retainer, $7,500 for each debtor. The Debtor is informed that
Allen Lang is "disinterested" and hold no interest adverse to the
estate.
Headquartered in Windermere, Florida, Windermere School Partners
L.L.L.P., filed for chapter 11 protection on March 31, 2004
(Bankr. M.D. Fla. Case No. 04-03610). Frank M. Wolff, Esq., at
Wolff Hill McFarlin & Herron PA represent the Debtors in their
restructuring efforts. When the Company filed for protection from
their creditors, they listed both estimated debts and assets of
over $10 million.
W.R. GRACE: Proposes To Establish Non-Asbestos ADR Program
----------------------------------------------------------
The W.R. Grace Debtors ask the Court to establish an alternative
dispute resolution program, and to permit them to liquidate
certain prepetition claims. David W. Carickhoff, Jr., Esq., at
Pachulski Stang Ziehl Young Jones & Weintraub PC in Wilmington,
Delaware, explains that the ADR program will establish a fair,
expeditious and efficient procedure for resolving certain
significant claims that are:
(1) contested and unliquidated, and
(2) currently pending against these estates.
To date, 15,438 proofs of claim have been filed against the Grace
Debtors' estates. The Debtors believe that many of the timely
proofs of claim are patently illegitimate, duplicative, or
otherwise grossly overstated in amount. The Debtors are
currently pursuing a series of omnibus objections to deal with
many of these proofs of claim.
As a result of the Debtors' First, Second and Third Omnibus
Claims Objections, 970 claims have been expunged and 566 have
been reconciled, leaving 13,902 claims still to be reconciled.
The Debtors anticipate pursuing further omnibus objections in
addition to, and simultaneous with, the ADR Program. The Debtors
are also completing an analysis to quantify the number of claims
which have been paid or to which they have no objection, and will
allow the claims.
There are more than 200 filed, non-asbestos litigation-related
claims, and the Debtors are aware of as many as 20 additional
non-asbestos litigation claims for which no proof of claim has
been filed. The litigation claims are primarily prepetition
suits for non-asbestos products liability, breach of contract,
personal injury, contract indemnification, employment-related
discrimination, and environmental damages.
The Debtors also dispute the substantive validity or amount of a
substantial number of other non-asbestos claims. The resolution
of these disputed claims turns on an examination of the facts and
law underlying the claims, and will necessarily require dialogue,
mediation or litigation.
Mr. Carickhoff clarifies that the ADR Program does not
contemplate the resolution of asbestos property damage or
asbestos personal-injury claims.
The ADR Program
The Debtors propose a two-stage process: negotiation and then, if
necessary, mediation. The negotiation phase would provide the
Debtors with a cost-effective method for resolving claims through
the exchange of written offers between the parties. The
mediation phase, where necessary, would afford the Debtors with
an additional, efficient form of alternative dispute resolution
that would permit the affected parties to use a neutral third
party to help achieve a voluntary, mutually beneficial
settlement.
Under the ADR Program, the Debtors will have the right, but not
the obligation, to designate certain Disputed Claims as ADR
claims by sending the recipients an ADR Notice Package. The ADR
claimants will then each have the option of either:
(1) participating in the ADR Program; or
(2) awaiting a subsequent liquidation of their claims
through the claims objection process and related
litigation in the Bankruptcy Court.
Upon Court approval of the ADR Program, the Debtors will serve
the holders of Disputed Claims that the Debtors believe can be
resolved expeditiously under the ADR Program with a Notice, a
copy of the Order, and a description of ADR Procedures.
Disallowance if No Response to Notice
The ADR Notice will direct the ADR Claimant to indicate on the
Notice whether they wish to participate in the ADR Program, and
return the completed and signed Notice to the Debtors within 30
calendar days after the date on the Notice. If an ADR Claimant
fails to return a completed and signed ADR Notice on a timely
basis, the ADR Claimant's claim will be forever discharged,
disallowed, waived and expunged.
If the ADR Claimant participates in the ADR Program, the Debtors,
within a reasonable time after receipt of the Notice, will mail
to the Claimant a Statement of Claim. Within 15 calendar days
after receipt of the Statement of Claim, those ADR Claimants who
still wish to participate in the ADR Program must return a
completed Statement of Claim to the Debtors.
The Statement of Claim requests information pertinent to
resolving the ADR Claim, including:
(1) the ADR Claimant's name and address;
(2) the date and location of the alleged incident;
(3) the name and address of any attorney representing
the ADR Claimant;
(4) the asserted amount of the ADR Claimant's claim;
(5) the name and address of the applicable Debtor;
(6) a list of witnesses;
(7) any applicable medical reports;
(8) any applicable incident reports; and
(9) a short statement of the ADR Claimant's contention.
Settlement Authority and Procedures
The Debtors propose to compromise and settle those ADR claims for
which the ADR Claimant participates in the ADR Program, and a
mutual resolution of the ADR claim is reached. The Debtors will
use a pre-approved stipulation to enter into final settlement
agreements for any ADR claims. If the Debtors were required to
file a request every time they resolved an ADR claim, the expense
to these estates and demand on the Court's limited time would be
considerable. Therefore, the Debtors will compromise and settle
any ADR claim without further notice or court approval for:
(a) an allowed claim amount that is 50% or less of the
amount of the claim asserted in the ADR Claimant's
proof of claim, as amended; or
(b) in the Debtors' sole discretion, any single allowed
claim for $100,000 or less.
When the Debtors compromise and settle a Pre-Approved Settlement,
they will filed with the Clerk of the Court and send to the
claims agent for these bankruptcy cases an ADR Stipulation signed
by the Debtors and the ADR Claimant. This ADR Stipulation will
be effective and binding on all parties-in-interest upon its
filing with the Clerk, and will not require the endorsement or
approval of the Court.
In the event that the Debtors and an ADR Claimant compromise and
settle an ADR Claim that is not a Pre-Approved Settlement, the
Debtors will seek Court approval of the settlement on 20 days'
negative notice after service on the United States Trustee and
the counsel for any official committee then recognized. If no
objections are timely filed, the Debtors will submit an order
approving the ADR Stipulation without further notice or hearing.
If an objection is timely filed, then the matter will be
scheduled for hearing at the next omnibus hearing that is at
least 30 days following the date of the objection.
Settlement Offers
Within 45 calendar days after receipt of a completed Statement of
Claim, the Debtors will serve on the applicable ADR Claimant an
initial settlement offer. Each ADR Claimant will be required to
accept or reject the Initial Offer within 15 calendar days after
its mailing.
If the Initial Offer is not a Pre-Approved Settlement, then the
Debtors will follow the Stipulation Approval Process. If for any
reason the Court does not approve the settlement, the ADR
Stipulation will be ineffective and the Debtors, in their sole
discretion, may elect to either continue negotiations with the
ADR Claimant, or treat the ADR Claimant as no longer
participating in the ADR Program.
If the ADR Claimant rejects the Initial Offer, then the Debtors
will have the option of:
(1) referring the ADR Claim to mediation;
(2) making a second written settlement offer to the
Claimant under the same procedural protocols as the
First offer; or
(3) treatment the ADR Claimant as having elected to
no longer participate in the ADR Program.
By mutual consent, any of these deadlines may be extended.
Mediation Procedures
If the settlement stage is unsuccessful, the Debtors may refer
disputes with those ADR Claimants whose claims have not settled
and which are not provisionally barred under the ADR Program to a
Court-appointed mediator to conduct mandatory, non-binding
mediation. The Debtors are in the process of identifying
appropriate candidates to serve as mediator and intend shortly to
file an application for the appointment of a mediator.
The mediator's fee will be shared equally by the Debtors and the
ADR Claimant. All fees required to be paid by an ADR Claimant
must be paid within 30 calendar days after the relevant session.
If an ADR Claimant does not pay the required fees when due, the
ADR Claimant's claim will be forever disallowed, discharged,
waived and expunged in its entirety without further Court order.
The Debtors will notify the ADR Claimant in writing of the
submission of his or her ADR Claim to mediation, and will forward
to the mediator all Statements of Claim and other relevant
information they have received from the Claimant, and any other
materials the Debtors deem relevant to the ADR Claim.
The mediator will schedule an initial mediation conference to
occur within 45 days of the mediator's receipt of the mediation
materials. The mediation will be held in the greater Baltimore,
Maryland metropolitan area, or another location agreed upon by
the Debtors, the ADR Claimant, and the mediator. The Debtors and
the ADR Claimant must have a person at the initial and any
subsequent mediation conference with authority to settle, but
neither the Debtors nor the ADR Claimant are required to be
represented by counsel.
If an ADR Claimant fails to attend a properly noticed initial or
subsequent mediation conference, or fails to materially comply
with any mediation procedure, the ADR Claimant's claim will,
without further Court order, be forever disallowed, discharged,
waived and expunged against the Debtors, their estates, their
successors, directors, officers and agents.
Conclusion of Mediation
If no consensual agreement is reached for settlement of the ADR
Claimant's claim, and the Debtors do not believe that further
mediation is likely to yield such an agreement, the Debtors will
send the ADR Claimant, within 15 calendar days after the initial
conference, a statement indicating that they do not believe the
ADR Claim can be settled through mediation. If no consensual
agreement is reached after the initial conference, and the
Debtors believe that further mediation may yield an agreement,
the mediator will schedule a subsequent mediation conference or
conferences. If the Debtors subsequently believe that further
mediation is not likely to yield an agreement, the Debtors will
promptly send the ADR Claimant a Conclusion Statement.
If a settlement agreement is reached, the same procedures will be
followed as those applicable to the pre-mediation phase.
Litigation
For those ADR Claimants whose ADR Claims are not resolved through
mediation, the ADR Claimants must send the Debtors, within 15
days after receipt of the Conclusion Statement, a written notice
that they desire to litigate their claims. If the ADR Claimant
does not timely serve the Debtors with a Litigation Statement,
the ADR Claimant will be deemed to have elected to no longer
participate in the ADR Program, and their ADR Claim will be
forever disallowed, discharged, waived and expunged against the
Debtors and their estates without further Court order.
If the Claimant timely serves the Debtors with a Litigation
Statement, then the ADR Claimant's claim will be litigated in two
ways, depending on whether the ADR Claim involves "immature" or
"mature" litigation. If immature -- unresolved ADR Claims where
the underlying litigation had not substantially progressed before
the Petition Date -- the claim will proceed to litigation in the
Bankruptcy Court. To the extent the Bankruptcy Court does not
have jurisdiction, the matter will be resolved in the U.S.
District Court for the District of Delaware.
With respect to mature litigation, unresolved ADR Claims where:
(1) the litigation had progressed through the discovery
stage and was substantially ready for trial; or
(2) where judgment was rendered and the matter was on
appeal,
the automatic stay will be lifted and the case will proceed to
trial in the forum where the case was pending when the stay went
into effect.
Effect of Insurance or Absence
To the extent the amount of any resolved ADR Claim is not
insured, the settlement amount will constitute an allowed claim
against the Debtors' estates in their reorganization plan. To
the extent that any resolved ADR Claims are covered by applicable
insurance, then the insurance companies will make payments for
the ADR Claims, only for any amounts exceeding any applicable
deductibles for the relevant policies, as set out in the relevant
policies, and the holder of the settled claim will have an
allowed, prepetition claim against the Debtors' estates for the
deductible amount. (W.R. Grace Bankruptcy News, Issue No. 64;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
* Chadbourne & Parke LLP Adds Attorneys to Pro Bono Committee
-------------------------------------------------------------
In keeping with its recent global expansion, the international law
firm of Chadbourne & Parke LLP announced that it has added
attorneys from four of its overseas offices to the Firm's Pro Bono
Committee.
Named to the committee are Sylwester Pieckowski, international
partner in the Warsaw office; Sergey Volfson, an associate in the
Moscow office; Sergiy Onishchenko, an associate in the Kyiv
office; and Amy McCarthy, an associate in the London office. Also
named to fill two U.S. office committee vacancies were Amy Nelson
in the Washington, DC office and Stacey Winograd in the New York
office. The committee now has 20 partner and associate members.
The move coincides with Chadbourne's recent expansion into Warsaw
and Kyiv and with the expansion of pro bono legal services for the
poor around the world. Chadbourne opened the Warsaw and Kyiv
offices in January 2004.
"Chadbourne is committed to pro bono on a firmwide basis and we
believe the expansion of our Pro Bono Committee will help us do
even more for those around the world who cannot afford access to
legal services, and for the organizations that assist those not
able to afford legal services," said Charles K. O'Neill,
Chadbourne's Managing Partner.
"There has been a significant increase in international pro bono
activity and since Chadbourne now has a wider international
presence, the time is good for us to expand our Pro Bono Committee
to reflect that," said Committee Chair Bernard W. McCarthy, who
has led Chadbourne's Pro Bono practice since 1996, and is the
Firm's Pro Bono Partner.
Some of Chadbourne's pro bono work in overseas offices includes:
* In Moscow, advising the Danish Refugee Council, a private
humanitarian organization concerned with refugee protection,
on general compliance work, contracts and labor issues;
assisting Perspectiva Foundation, a Russian NGO, in
obtaining educational benefits for disabled students.
* In Tashkent, provided legal assistance to an advisory
committee in an effort to restructure a school and accredit
it with the Uzbek educational authorities so as to provide
new educational opportunities in Tashkent; and assisting in
obtaining registration of a Chamber of Commerce in
Uzbekistan.
* In Warsaw, the Firm is handling more than 50 criminal and
civil matters assigned by the courts and is providing
assistance to Polish Humanitarian Action in cooperation with
the EU Office of Humanitarian Assistance.
* In London, assisting in forming a charitable organization,
Mothers Calling, dedicated to promoting dialogue between
Israeli and Palestinian mothers to increase communication
and understanding.
* In Kyiv, registered a unit of Junior Achievement and
continue to provide ongoing advice regarding various legal
issues.
* Working on other unique pro bono projects around the world,
such as helping a fundraising arm of an environmental group
active in Mongolia, and working on the creation of a bank in
a developing country.
About Chadbourne & Parke LLP
Chadbourne & Parke LLP, an international law firm headquartered in
New York City, provides a full range of legal services, including
mergers and acquisitions, securities, project finance, corporate
finance, energy, telecommunications, commercial and products
liability litigation, securities litigation and regulatory
enforcement, white collar defense, intellectual property,
antitrust, domestic and international tax, reinsurance and
insurance, environmental, real estate, bankruptcy and financial
restructuring, employment law and ERISA, trusts and estates and
government contract matters. The Firm has offices in New York,
Washington, D.C., Los Angeles, Houston, Moscow, Kyiv, Warsaw
(through a Polish partnership), Beijing and a multinational
partnership, Chadbourne & Parke, in London. For additional
information, visit http://www.chadbourne.com/
* Upcoming Meetings, Conferences and Seminars
---------------------------------------------
June 10-12, 2004
ALI-ABA
Chapter 11 Business Reorganizations
Omni Hotel, San Francisco
Contact: 1-800-CLE-NEWS; http://www.ali-aba.org
June 14-15, 2004
TURNAROUND MANAGEMENT ASSOCIATION
2004 Advanced Education Workshop
Toronto Univesity, Toronto Canada
Contact: 312-578-6900 or www.turnaround.org
June 24-25, 2004
BEARD GROUP & RENAISSANCE AMERICAN MANAGEMENT
The Seventh Annual Conference on Corporate Reorganizations
Successful Strategies for Restructuring Troubled
Companies
The Millennium Knickerbocker Hotel - Chicago
Contact: 1-800-726-2524; 903-592-5168;
dhenderson@renaissanceamerican.com
June 24-26,2004
AMERICAN BANKRUPTCY INSTITUTE
Hawaii Bankruptcy Workshop
Hyatt Regency Kauai, Kauai, Hawaii
Contact: 1-703-739-0800 or http://www.abiworld.org
July 15-18, 2004
AMERICAN BANKRUPTCY INSTITUTE
The Mount Washington Hotel
Bretton Woods, NH
Contact: 1-703-739-0800 or http://www.abiworld.org
July 28-31, 2004
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
The Ritz-Carlton Reynolds Plantation, Lake Oconee, GA
Contact: 1-703-739-0800 or http://www.abiworld.org
September 18-21, 2004
AMERICAN BANKRUPTCY INSTITUTE
Southwest Bankruptcy Conference
The Bellagio, Las Vegas, NV
Contact: 1-703-739-0800 or http://www.abiworld.org
October 9-10, 2004
INTERNATIONAL WOMEN'S INSOLVENCY & RESTRUCTURING CONFEDERATION
IWIRC Annual Fall Conference
Nashville, TN
Contact: 1-703-449-1316 or www.iwirc.com
October 10-13, 2004
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
Seventy Seventh Annual Meeting
Nashville, TN
Contact: http://www.ncbj.org/
October 15-18, 2004
TURNAROUND MANAGEMENT ASSOCIATION
2004 Annual Convention
Marriott Marquis, New York City
Contact: 312-578-6900 or www.turnaround.org
November 29-30, 2004
BEARD GROUP & RENAISSANCE AMERICAN MANAGEMENT
The Eleventh Annual Conference on Distressed Investing
Maximizing Profits in the Distressed Debt Market
The Plaza Hotel - New York City
Contact: 1-800-726-2524; 903-592-5168;
dhenderson@renaissanceamerican.com
December 2-4, 2004
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Marriott's Camelback Inn, Scottsdale, AZ
Contact: 1-703-739-0800 or http://www.abiworld.org
March 9-12, 2005
TURNAROUND MANAGEMENT ASSOCIATION
2005 Spring Conference
JW Marriott Desert Ridge, Phoenix, AZ
Contact: 312-578-6900 or www.turnaround.org
April 28- May 1, 2005
AMERICAN BANKRUPTCY INSTITUTE
Annual Spring Meeting
J.W. Marriot, Washington, DC
Contact: 1-703-739-0800 or http://www.abiworld.org
June 2-4, 2005
ALI-ABA
Partnerships, LLCs, and LLPs: Uniform Acts, Taxation,
Drafting, Securities and Bankruptcy
Omni Hotel, San Francisco
Contact: 1-800-CLE-NEWS; http://www.ali-aba.org
July 14 -17, 2005
AMERICAN BANKRUPTCY INSTITUTE
Ocean Edge Resort, Brewster, MA
Contact: 1-703-739-0800 or http://www.abiworld.org
July 27- 30, 2005
AMERICAN BANKRUPTCY INSTITUTE
Southeast Bankruptcy Workshop
Kiawah Island Resort and Spa, Kiawah Island, SC
Contact: 1-703-739-0800 or http://www.abiworld.org
October 19-23, 2005
TURNAROUND MANAGEMENT ASSOCIATION
2005 Annual Convention
Chicago Hilton & Towers, Chicago
Contact: 312-578-6900 or www.turnaround.org
November 2-5, 2005
NATIONAL CONFERENCE OF BANKRUPTCY JUDGES
Seventy Eighth Annual Meeting
San Antonio, TX
Contact: http://www.ncbj.org/
December 1-3, 2005
AMERICAN BANKRUPTCY INSTITUTE
Winter Leadership Conference
Hyatt Grand Champions Resort, Indian Wells, CA
Contact: 1-703-739-0800 or http://www.abiworld.org
The Meetings, Conferences and Seminars column appears in the
Troubled Company Reporter each Wednesday. Submissions via e-mail
to conferences@bankrupt.com are encouraged.
*********
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 ***