/raid1/www/Hosts/bankrupt/TCR_Public/040705.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
Tuesday, July 6, 2004, Vol. 8, No. 137
Headlines
AAR CORP: S&P Affirms Low-B Ratings & Revises Outlook To Stable
ACCLAIM ENTERTAINMENT: March 31 Equity Deficit Widens to $98MM
ADELPHIA COMMS: Plans to Hire Investment Bankers To Assist In Sale
ADVANTA CORP: S&P Revises Outlook to Positive & Affirms Ratings
AGCO CORP: Plans to Restructure Denmark Manufacturing Facility
ALASKA AIR: Releasing 2nd Quarter Financial Results on July 22
ALION SCIENCE: S&P Rates Corporate & Senior Secured Debt At B+
ALPHA SPACECOM: DeJoya & Co. Replaces Spear Safer as Accountants
AMERICAN ENERGY: Demands Delisting from Berlin Stock Exchange
APPLIANCE CONTROLS: Court Okays SSG Capital Retention as Bankers
BE INC: Court Approves Asset Distribution Plan to Stockholders
BIOGAN INTERNATIONAL: Confirmation Hearing Scheduled for July 9
CHEMED CORP: Extends 8-3/4% Senior Note Exchange Offer to July 9
COMM 2001-FL4: S&P Lowers Ratings on 5 Classes To Low-Bs
CREST DARTMOUTH: Fitch Affirms $12M Class D Note Rating At BB
DB COMPANIES: Brings-In Matrix Capital as Investment Banker
ENRON CORPORATION: Reaches Settlements with 12 Counterparties
ENRON CORP: Various Creditors Sell Claims Totaling $38,643,614
ENRON NORTH AMERICA: Consents To Sale Of Loan Agreements
FASTENTECH INC: S&P Cuts Senior Secured Bank Loan Rating To BB-
FLEMING COS: Agrees to Resolve Dispute with Northeast Frozen Foods
FONIX CORPORATION: Amends First Quarter 2004 and Form 8-K Reports
FUN-4-ALL: Hires Cornerstone Consulting as Financial Advisors
GROUPE BOCENOR: Incurs $2.4 Million Net Loss in FY 2004
HOLLINGER: Argus Provides Update on Delayed Financial Statements
IBASIS INC: Will Webcast Second Quarter 2004 Results on July 21
IMA EXPLORATION: Corporate Reorganization Takes Effect on July 7
INTERTAPE POLYMER: S&P Assigns B+ Rating To Corporate Credit
JILLIAN'S ENTERTAINMENT: Asks Court to Set Aug. 19 Claims Bar Date
JOHN HARVARD'S BREW: Case Summary & Largest Unsecured Creditors
KMART CORPORATION: Selling Up To 54 Stores To Sears, Roebuck & Co.
LARK-BELL COMPANIES: Case Summary & Largest Unsecured Creditors
LEVI STRAUSS: Miriam Haas Succeeds Husband as Board Member
LINREAL: Wants to Sign-Up Damon & Morey as Bankruptcy Attorneys
MADISON RIVER: S&P Revises Outlook To Stable From Negative
MILLENIUM ASSISTED: Hires Kraemer Burns as Special Counsel
MIRANT CORPORATION: Appoints Terry Thompson As VP -- Restructuring
NANOPIERCE: Posts $1M Net Loss for the 9 Months Ended March 2004
NEMO DEVELOPMENT: Case Summary & 14 Largest Unsecured Creditors
OMNE STAFFING: Charles M. Forman Appointed as Chapter 11 Trustee
OMNE STAFFING: Committee Brings-In Fox Rothschild as Attorneys
OMNI FACILITY: Wants to Obtain $5.3 Mil. DIP Financing Facility
OWENS CORNING: M. Pope Wants To Disqualify Hamlin Gross & Mcgovern
PARMALAT GROUP: Court Gives Final Nod on AP Services' Employment
PASCACK VALLEY HOSPITAL: Fitch Downgrades Bond Rating to BB
PEGASUS SATELLITE: Wants To Employ Shaw Pittman As Special Counsel
PHIBRO ANIMAL: La Cornubia Unit Files for Bankruptcy in France
PRIMEDEX HEALTH: Lenders Agree to Restructure $160 Million Debt
PROJECT FUNDING: S&P Removes Lowered Ratings from Credit Watch
QUINTEK: Elects Robert Steele & Andrew Haag as Directors
RCN CORPORATION: Court Sets August 11 as General Claims Bar Date
RELIANCE GROUP: Liquidator To Sell 26-Acre Lot To TC Midatlantic
SEITEL INC: Reorganization Plan Declared Effective July 2, 2004
SOLUTIA INC: Asks Court for November 11 Deadline to Remove Actions
SOUTHERN STRUCTURES: Case Summary & Largest Unsecured Creditors
SPORTS ARENAS: Needs More Investors to Pay Taxes & Fund Operations
STORAGE COMPUTER: Recurring Losses Raise Going Concern Uncertainty
TAE BO RETAIL: Gets Nod to Sign-Up Baker & Hostetler as Counsel
TANGO INC: Reports 300% Increase in Blank Shirt Orders
TELEX COMMUNICATIONS: Sells Australian Subsidiary to Manager
TESORO PETROLEUM: Prepays $297.5 Million Debt
THEDE ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors
UNITED AGRI: Extends Senior Debt Tender Offer to July 12, 2004
UNITED AIRLINES: Asks Court to Amend Derivative Contracts Order
USG CORP: Exclusive Period to File Plan Extended Through Dec. 1
U.S. STEEL: S&P Affirms Low-B Ratings & Changes Outlook to Stable
VISHNU LLC: Case Summary & 9 Largest Unsecured Creditors
VITROTECH CORP: Inks Investment Banking Pact with Brean Murray
VITROTECH CORP: Thomas Costales Resigns as Chief Financial Officer
WEIRTON COURT: Associates Leasing Sues to Compel Vehicle Turn Over
WILSONS THE LEATHER: Closes $35 Million Equity Financing
WINSTAR: Trustee Reaches Settlement With Winstar Holdings & IDT
WORLDCOM INC: Inks Stipulation Resolving Mississipi EdNet Claims
WMC FINANCE: S&P Withdraws Ratings On General Electric Acquisition
* Large Companies with Insolvent Balance Sheets
*********
AAR CORP: S&P Affirms Low-B Ratings & Revises Outlook To Stable
---------------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on AAR
Corp. to stable from negative. At the same time, Standard & Poor's
affirmed its ratings, including the 'BB-' corporate credit rating,
on the company.
The Wood Dale, Illinois-based provider of aviation support
services has about $250 million of debt outstanding.
"The outlook revision is based on gradually recovering demand from
the airline industry, AAR's primary market, the firm's return to
profitability in the fiscal year ended May 31, 2004, and better
liquidity," said Standard & Poor's credit analyst Roman Szuper.
The ratings on AAR reflect the risks associated with highly
cyclical conditions in the airline industry, offset partly by the
company's established business position and moderately leveraged
capital structure. The ratings also incorporate expectations that
the firm's weak profitability and subpar credit protection
measures will continue to improve.
AAR is the largest independent provider of aviation support
services, operating in four groups: inventory and logistic
services; maintenance, repair, and overhaul (30%-35%);
manufacturing (20%-25%); and aircraft and engine sales and leasing
(5%). The U.S. is the largest market, accounting for about 75% of
sales.
In fiscal 2004, AAR recorded sales and earnings growth in most of
its operations, reversing a three-year decline in revenues,
stemming from the severe downturn in the airline and commercial
aviation sectors. The company returned to profitability after two
years of losses, aided by extensive cost reductions, strength in
the defense-related manufacturing and logistics business (35%-40%
of revenues), and a diversified customer base. AAR has also
benefited from a noticeable recovery in air traffic, spurred by a
healthier economy, and generally improving operating results
of airline customers. The firm's moderately leveraged capital
structure, with debt to capital about 50%, remains a relatively
strong area for the ratings.
Looking ahead, AAR is well positioned for continued outsourcing by
airlines, in view of its broad service offerings, investment in
new capabilities, low cost structure, and good reputation.
Anticipated earnings gains in fiscal 2005 should strengthen credit
protection measures to levels appropriate for the ratings,
although a highly competitive business environment will likely
limit the extent of improvement.
ACCLAIM ENTERTAINMENT: March 31 Equity Deficit Widens to $98MM
--------------------------------------------------------------
Acclaim Entertainment, Inc. (Nasdaq: AKLM) announced its financial
results for the fourth quarter and fiscal year ended March 31,
2004.
Acclaim's net revenue for the fiscal year ended March 31, 2004 was
$142.7 million as compared to $210.1 million for the twelve months
ended March 31, 2003. For fiscal year 2004, the Company reported a
net loss of $56.4 million, or $0.53 per diluted share, as compared
to a net loss of $84.8 million, or $0.92 per diluted share for the
twelve months ended March 31, 2003.
Net revenue for the fourth quarter of fiscal year 2004 was $29.0
million as compared to $28.0 million for the same period of the
prior year. For the fourth quarter of fiscal 2004, the Company
reported a net loss of $25.4 million, or $0.23 per diluted share,
as compared to a net loss of $45.0 million, or $0.49 per diluted
share for the same period of the prior year.
At March 31, 2004, Acclaim Entertainment's balance sheet reflects
a stockholders' deficit of $97,983,000 compared to a deficit of
$55,088,000 at March 31, 2003.
Gross Profit
The Company's gross profit for its fiscal year ended March 31,
2004 was $64.1 million as compared to $78.1 million for the twelve
months ended March 31, 2003. The decrease in gross profit for
fiscal year 2004 was primarily due to lower revenues, partially
offset by a decrease in the amortization of capitalized software
development costs as compared to the same period of the prior
year.
Gross profit for the fourth quarter of fiscal 2004 was $10.7
million compared to a gross loss of $9.6 million for the same
period of the prior year. The increase in gross profit was
primarily due to more normalized provisions for price concessions
and returns, and a decrease in the amortization of capitalized
software development costs as compared to the same period of the
prior year.
Operating Expenses
As part of the Company's operating plan, operating expenses for
fiscal year 2004 decreased by $46.9 million to $109.3 million from
$156.2 million for the comparable period of the prior year.
Operating expenses for the fourth quarter of fiscal 2004 decreased
by $1.8 million to $32.2 million from $34.0 million for the same
period of the prior year. The $46.9 million decrease in fiscal
2004, resulted primarily from the closure of the Salt Lake City
development studio, reduction in worldwide headcount, reduction in
sales and marketing costs, and the reduction of general and
administrative expenses.
Other Expenses
Interest expense, net of $5.4 million for the twelve months ended
March 31, 2004 increased by $0.4 million, as compared to
$5 million for the comparable period of the prior year. This
increase was primarily due to charges associated with the issuance
of our 9% and 16% convertible subordinated notes.
Non-cash financing expense of $3.3 million for fiscal 2004
increased $2.2 million from the same period of the prior year. The
increase relates primarily to costs associated with (i) the
issuance of warrants to purchase shares of the Company's common
stock, (ii) the issuance of the Convertible Notes and (iii) the
issuance, and continued holding in escrow, of 4.0 million shares
of common stock for two of the Company's major shareholders in
connection with their cash deposits of $2.0 million with GMAC as a
limited guarantee of the Company's obligations. The liability
related to the pending issuance of the 4.0 million shares of
common stock is being adjusted to the market value of the shares
on a quarterly basis pending stockholder ratification of the share
issuance.
Other expenses for fiscal 2004 of $2.4 million were $1.8 million
greater than the comparable period of the prior year. This
increase was primarily due to charges from foreign currency
transaction losses, penalties paid to purchasers of the Company's
16% convertible subordinated notes, as well as the increase in the
fair value of the derivative securities underlying the 16% Notes.
Liquidity
The Company's short-term liquidity has been supplemented with
borrowings under its North American and International credit
facilities with GMAC Commercial Finance, LLC ("GMAC"), its primary
lender, as well as the private placement of its 16% and 9%
Convertible Subordinated Notes. As of March 31, 2004, GMAC had
advanced the Company a supplemental discretionary loan of $2.0
million, which was repaid as of April 8, 2004. On May 4, 2004, the
Company entered into a Waiver and Amendment Agreement relating to
its North American credit agreement with GMAC to allow for a
supplemental discretionary loan of $3.0 million, the waiver of the
Company's covenant defaults under the credit agreement and the
termination of the North American and International credit
agreements on June 20, 2004. On June 18, 2004, the Company entered
into an Extension Agreement with GMAC that amended the Waiver and
Amendment agreement it signed with GMAC on May 4, 2004. Under the
Extension Agreement, GMAC has agreed to extend, from June 20, 2004
to August 4, 2004, the date upon which the Company's banking
agreement with GMAC will terminate.
Additionally, on May 4, 2004, the Company entered into a letter of
intent with a proposed new lender, for a $30.0 million asset based
credit facility, with an equity component, to replace the credit
agreement with GMAC. The Company is currently working with the
proposed new lender in order to implement timely the new credit
facility which is subject to the execution of definitive
documentation by both parties; provided, however that there can be
no assurance that the new credit facility or any other banking
facility will be consummated. Failure to obtain a new banking
facility would materially adversely affect the Company's
operations and liquidity and the Company could be forced to cease
operations or seek bankruptcy protection.
In February 2004, the Company completed the sale of its 9% senior
convertible subordinated notes from which it raised gross proceeds
of $15.0 million. In September and October 2003, the Company
completed the sale of its 16% convertible subordinated notes,
resulting in gross proceeds of $11.9 million. Subsequent to March
31, 2004, investors holding $5.5 million of the 16% convertible
subordinated notes had converted their notes into 9.6 million
shares of the Company's common stock. The Company is in default on
its 16% convertible notes with respect to interest payments and
certain payments due under the notes resulting from the delay in
registering the Company's shares issuable upon conversion of the
notes. The Company is in continued discussions with the holders of
the convertible notes and believes that it will be successful in
obtaining a waiver of those defaults; however, there can be no
assurance that the Company will be successful in obtaining these
waivers.
The Company's future liquidity will significantly depend in whole
or in part on its ability to (1) replace by August 4, 2004, the
current credit agreement with a credit agreement from a new
lender, (2) timely develop and market new software products that
meet or exceed its operating plans, (3) continue to realize long-
term benefits from its previously implemented expense reductions,
(4) resolve or obtain waivers for any defaults under its
convertible note and note purchase agreements and (5) continue to
receive the support of certain key suppliers and vendors. If the
Company does not timely implement the new credit facility,
substantially achieve its overall projected revenue levels as
reflected in its business operating plan, continue to realize
additional benefits from the expense reductions it has already
implemented, and continue to receive the support of key suppliers
and vendors, the Company will need to make further significant
expense reductions, including, without limitation, sale of assets
or the consolidation or closing of certain operations, additional
staff reductions, and the delay, cancellation or reduction of
certain product development and marketing programs. Additionally,
some of these measures may require third party consents or
approvals from our primary lender and others, and there can be no
assurance those consents or approvals will be obtained. If these
measures are not attained, the Company cannot assure its
stockholders that its future operating cash flows will be
sufficient to meet its operating requirements and debt service
requirements. If any of the preceding events were to occur, the
Company's operations and liquidity would be materially and
adversely affected and it could be forced to cease operations or
seek bankruptcy protection.
Organizational/Management Changes
On February 23, 2004, the Company appointed Dominique Cor as
Managing Director of the Acclaim's Paris-based division. In
addition, on April 15, 2004, the Company appointed Martin Currie
as Vice President of Marketing Communications, and Nique Fajors as
Vice President of Brand Management.
Product Release Schedule
Acclaim's projected product release schedule through the spring of
2005 includes:
Summer 2004:
PlayStation(R)2 computer entertainment system:
- SHOWDOWN(TM): Legends of Wrestling(TM)*
Xbox(R):
- SHOWDOWN(TM): Legends of Wrestling(TM)*
- Worms 3D - Special Edition(TM)
PC:
- Alias(TM)*
Fall 2004:
PlayStation(R)2 computer entertainment system:
- 100 Bullets(TM)
- Juiced(TM)
- The Bard's Tale(TM)*
- The Red Star(TM)
- Worms Forts: Under Siege!(TM)
Xbox(R):
- 100 Bullets(TM)
- Juiced(TM)
- The Bard's Tale(TM)*
- The Red Star(TM)
- Worms Forts: Under Siege!(TM)
PC:
- Juiced(TM)
- The Bard's Tale(TM)*
- Worms Forts: Under Siege!(TM)
Winter 2005:
PlayStation(R)2 computer entertainment system:
- Interview with a Made Man(TM)
Xbox(R):
- Interview with a Made Man(TM)
Spring 2005:
PlayStation(R)2 computer entertainment system:
- ATV Quad Power Racing 3(TM)
- Emergency Mayhem(TM)
- The Last Job(TM)
Xbox(R):
- ATV Quad Power Racing 3(TM)
- Emergency Mayhem(TM)
- The Last Job(TM)
* Denotes International release only.
About Acclaim Entertainment
Based in Glen Cove, N.Y., Acclaim Entertainment, Inc., is a
worldwide developer, publisher and mass marketer of software for
use with interactive entertainment game consoles including those
manufactured by Nintendo, Sony Computer Entertainment and
Microsoft Corporation as well as personal computer hardware
systems. Acclaim owns and operates five studios located in the
United States and the United Kingdom, and publishes and
distributes its software through its subsidiaries in North
America, the United Kingdom, Australia, Germany, France and Spain.
The Company uses regional distributors worldwide. Acclaim also
distributes entertainment software for other publishers worldwide,
publishes software gaming strategy guides and issues "special
edition" comic magazines periodically. Acclaim's corporate
headquarters are in Glen Cove, New York and Acclaim's common stock
is publicly traded on NASDAQ.SC under the symbol AKLM. For more
information visit its website at http://www.acclaim.com/
ADELPHIA COMMS: Plans to Hire Investment Bankers To Assist In Sale
------------------------------------------------------------------
Adelphia Communications Corp. intends to engage investment
bankers to assist them in the sale of substantially all of their
assets, Ron Cooper, ACOM's Chief Operating Officer, said in a
televised interview in New York. Mr. Cooper, however, declined
to name the firms.
"We're in the process of engaging investment banking counsel,"
Chitra Somayaji and Allan Dodds Frank at Bloomberg News report
Mr. Cooper said. "I hope we can bring that to closure shortly."
Comcast Corporation, Time Warner, Inc., and Cox Communications,
Inc., are reportedly considering buying ACOM's assets. (Adelphia
Bankruptcy News, Issue No. 62; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
ADVANTA CORP: S&P Revises Outlook to Positive & Affirms Ratings
---------------------------------------------------------------
Standard & Poor's Ratings Service revised its outlook on Advanta
Corporation to positive from stable and affirmed its ratings on
the company, including its 'B' long-term counterparty credit
rating.
"The outlook revision reflects momentum that the firm has garnered
in its business credit card unit, solid leverage metrics, and a
reduction in both operational and legal overhang from discontinued
operations," said Standard & Poor's credit analyst Jeffrey Zaun.
"Partly offsetting the positive trends are Advanta's short track
record as a monoline business credit card company, history of
losses, and lack of scale in the increasingly competitive card
industry."
From 2000 to 2002, Springhouse, Pennsylvania-based Advanta was
buffeted by significant operational and litigation losses as it
divested and closed business units. Since then, the firm has
developed a sound niche business focused on a narrowly defined
segment of small businesses. The firm's emphasis on marketing for
credit quality and transaction flow has had demonstrably positive
results. Over the past eight quarters, Advanta's number of
accounts has grown only intermittently while its credit quality
has improved and its managed receivables have grown. The business
card unit's ratio of operational expenses to managed receivables
declined to 7.4% in first-quarter 2004 from 9.5% in second-quarter
2002
In June 2004, Advanta settled a five-year legal confrontation that
had resulted from the transfer of the company's consumer credit
card portfolio to FleetBoston Financial Corp. in 1998. The
settlement benefits Advanta financially and removes one legal
threat. Advanta, however, remains exposed to damage claims by J.P.
Morgan Chase & Co. that arose from that firm's purchase of
Advanta's residential mortgage business. The trial on this matter
ended in May 2004, and the decision is pending.
"While Standard & Poor's is wary of Advanta's historical lack of
strategic focus, the firm's operations are now built around a
solid plan and its performance trends are positive," Mr. Zaun
said. "We expect Advanta to maintain or improve the credit quality
of its customers and to continue on a trajectory of prudent
growth."
AGCO CORP: Plans to Restructure Denmark Manufacturing Facility
--------------------------------------------------------------
AGCO Corporation (NYSE:AG), a worldwide designer, manufacturer and
distributor of agricultural equipment, announced a plan to
restructure its European combine manufacturing operations located
in Randers, Denmark. The restructuring plan will reduce the cost
and complexity of the Randers manufacturing operation, by
simplifying the model range and eliminating the facility's
component manufacturing operations. AGCO will outsource
manufacturing of the majority of parts and components to suppliers
and retain critical key assembly operations at the Randers
facility. By retaining only the facility assembly operations, AGCO
plans to reduce the Randers workforce by approximately 300
employees and permanently eliminate 70% of the square footage
utilized. AGCO's plans also include a rationalization of the
combine model range to be assembled in Randers, retaining the
production of the high specification, high value combines.
Martin Richenhagen, who has been elected as AGCO's President and
Chief Executive Officer, commented, "the Randers combine
manufacturing facility has operated well below capacity level in
recent years, which has negatively impacted the profitability of
our European combine product line. The planned restructuring of
the Randers facility will allow AGCO to reduce cost by eliminating
underutilized production capacity."
"AGCO is committed to providing its dealers and distributors in
Europe with a full line of equipment which includes a competitive
line of combine harvesters," continued Mr. Richenhagen. "We
believe that this action and future product plans will allow AGCO
to improve its position in the European combine market. We deeply
regret the job losses which will result from this restructuring
plan and appreciate the contribution of the Randers employees."
As a result of the restructuring plan, AGCO estimates that it will
generate annual cost savings of approximately $7 million to $8
million. Cash restructuring costs of the restructuring plan are
estimated to be approximately $6 to $8 million to be incurred
primarily in 2004. In addition, AGCO expects to record in the
second quarter of 2004 a non-cash write-down of inventory of $3.5
million and a non-cash write-down of property, plant and equipment
of approximately $7.5 million.
AGCO Corporation, headquartered in Duluth, Georgia, is a global
designer, manufacturer and distributor of agricultural equipment
and related replacement parts. AGCO products are distributed in
over 140 countries. AGCO offers a full product line including
tractors, combines, hay tools, sprayers, forage, tillage equipment
and implements through more than 9200 independent dealers and
distributors around the world. AGCO products are distributed under
the brand names AGCO, Agco Allis, AgcoStar, Challenger, Farmhand,
Fendt, Fieldstar, Gleaner, Glencoe, Hesston, LOR*AL, Massey
Ferguson, New Idea, RoGator, SisuDiesel, Soilteq, Spra-Coupe,
Sunflower, TerraGator, Tye, Valtra, White, and Willmar. AGCO
provides retail financing through AGCO Finance in North America
and through Agricredit in the United Kingdom, France, Germany,
Ireland, and Brazil. In 2003, AGCO had net sales of $3.5 billion.
* * *
As reported in the Troubled Company Reporter's April 12, 2004
edition, Standard & Poor's Ratings Services affirmed its 'BB+'
corporate credit rating on AGCO Corp. following the firm's $300
million (net proceeds) common equity offering.
At the same time, Standard & Poor's lowered its senior unsecured
debt rating on AGCO to 'BB-' from 'BB'. The outlook is stable.
"The rating reflects AGCO's satisfactory competitive business
position as the world's third-largest agricultural equipment
manufacturer with annual sales of $4.5 billion, and subpar cash
flow protection measures that are expected to strengthen as the
firm derives efficiency benefits from restructuring and cost-
cutting actions," said Standard & Poor's credit analyst Daniel R.
DiSenso. Debt usage should diminish as AGCO is now expected to be
less acquisitive.
ALASKA AIR: Releasing 2nd Quarter Financial Results on July 22
--------------------------------------------------------------
Alaska Air Group, Inc. (NYSE: ALK) the parent company of Alaska
Airlines, Inc. and Horizon Air Industries, Inc., will announce its
second quarter 2004 financial results on Thursday, July 22, 2004.
A conference call is scheduled at 11:30 a.m. ET/8:30 a.m. PT.
Interested parties may listen to the call via webcast at
http://www.alaskaair.com/
Seattle-based Alaska Air Group is the parent company of Alaska
Airlines and Horizon Air Industries. The company and its sister
carrier, Horizon Air, together serve 80 cities in Alaska, the
Lower 48, Canada and Mexico.
As previously reported, Standard & Poor's Ratings Services lowered
its ratings on Alaska Air Group Inc. and subsidiary Alaska
Airlines Inc., including lowering the corporate credit rating on
both to 'BB-' from 'BB.' Ratings were removed from CreditWatch,
where they were placed March 18, 2003. The outlook is negative.
ALION SCIENCE: S&P Rates Corporate & Senior Secured Debt At B+
--------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to McLean, Virginia-based Alion Science and
Technology Corp. At the same time, Standard & Poor's assigned its
'B+' senior secured debt rating, with a recovery rating of '3', to
Alion's proposed $130 million senior secured bank facility, which
will consist of a $30 million revolving credit facility and a $100
million term loan, both due 2009.
The 'B+' rating is the same as the corporate credit rating and the
'3' recovery rating indicates that the senior secured debt holders
can expect meaningful (50%-80%) recovery of principal in the event
of a default. The proceeds from this facility will be used to
refinance the majority of Alion's existing debt, fund modest
acquisitions, and cover expenses associated with the transaction.
The outlook is stable.
"The ratings reflect Alion's relatively modest position
(approximately $300 million in revenue) in the highly competitive
and consolidating government IT services market, an acquisitive
growth strategy, and high financial leverage," said Standard &
Poor's credit analyst Ben Bubeck. A predictable revenue stream
based upon a strong backlog and the expectation that government-
related business will remain solid over the intermediate
term are partial offsets to these factors.
Alion is a R&D, engineering, and information technology company
that provides services and communications solutions primarily to
the federal government. Pro forma for the proposed credit
facility, Alion had approximately $140 million in operating lease-
adjusted debt as of June 2004.
A recent trend of consolidation within the government IT services
industry has left Alion facing many larger competitors with
greater financial resources and broader technical capabilities as
the company competes for new contracts. Alion's ability to
maintain its historically strong recompete success rate
(approximately 98%) will be important as it faces an increasingly
competitive bidding environment. A strong backlog, about $1.8
billion as of June 2004, combined with no major recompetes over
the next 12 months, offers a predictable source of revenue over
the near to intermediate term.
ALPHA SPACECOM: DeJoya & Co. Replaces Spear Safer as Accountants
----------------------------------------------------------------
Effective May 10, 2004, Alpha Spacecom, Inc., dismissed Spear,
Safer, Harmon & Co., as the Company's independent accountants.
Effective May 10, 2004, the Company engaged DeJoya & Company, as
the Company's new independent accountants. The dismissal of SSHC
and the engagement of DeJoya were approved by the Company's Board
of Directors.
SSHC audited the Company's financial statements for the period
from April 10, 2001 to December 31, 2002. SSHC's report for this
period did not contain an adverse opinion or a disclaimer of
opinion, however, the report was modified as to certainty relative
to the ability of the Company to continue as a going concern.
AMERICAN ENERGY: Demands Delisting from Berlin Stock Exchange
-------------------------------------------------------------
American Energy Production Inc. (OTCBB:AMEP) announced that it is
taking immediate steps to de-list its common stock from trading on
the Berlin Stock Exchange. The Company's shares were listed on the
Berlin Stock Exchange without the Company's prior knowledge,
consent or authorization.
American Energy Production Inc. has recently been made aware of an
unauthorized listing of its common stock on the Berlin-Bremen
Stock Exchange. Company executives became suspicious that "naked
short selling" was taking place in its stock due to the continuous
drop in share price over the past several weeks for no apparent
reason. Naked shorting is possible due to the unregulated nature
of the Berlin Exchange.
Legal counsel to the Company is sending a written demand to the
Berlin-Bremen Stock Exchange that it immediately stop trading in
the Company's common stock by designating the Company's common
stock as "NA" on the next trading day while concurrently
proceeding without delay to completely de-list the Company's
common stock from the BBSE.
About American Energy Production, Inc.
American Energy Production, Inc. -- March 31, 2004 balance sheet
shows a stockholders' deficit of $350,914 -- is an oil and gas
lease acquisition company. The Company will specialize in
acquiring oil and gas leases that have potential for increased oil
and natural gas production utilizing new technologies, well work-
overs and fracture stimulation systems. American Energy
Production, Inc. will acquire oil and gas leases that have proven
reserves. The Company will initiate developmental drilling
programs to drill new wells on these leases and, if successful,
will add oil and gas reserves to the acquired property. American
Energy Production, Inc. is involved in three areas of oil and gas
operations: Leasing Programs, Production Acquisitions and Drilling
with new technologies. American Energy Production, Inc.'s main
objective is to find oil and gas leases with upside potential for
enhanced production. The Company does this by utilizing the
following rules: 1) leases, 2) geology, 3) engineering and 4)
mapping from 3-D seismic.
* * *
Going Concern Uncertainty
In its Form 10-Q for the quarterly period ended March 31, 2004
filed with the Securities and Exchange Commission, American Energy
Production, Inc. reports:
"As reflected in the accompanying financial statements, the
Company has a net loss of $3,011,680 and net cash used in
operations of $215,696 for the three months ended March 31, 2004
and a working capital deficiency of $336,687, deficit accumulated
during the development stage of $4,722,074 and a stockholders'
deficiency of $350,914 at March 31, 2004. The Company is also in
default on certain notes to banks and is in the development stage
with minimal revenues. The ability of the Company to continue as a
going concern is dependent on the Company's ability to further
implement its business plan, raise capital, and generate revenues.
The financial statements do not include any adjustments that might
be necessary if the Company is unable to continue as a going
concern.
"The time required for us to become profitable is highly
uncertain, and we cannot assure you that we will achieve or
sustain profitability or generate sufficient cash flow from
operations to meet our planned capital expenditures, working
capital and debt service requirements. If required, our ability to
obtain additional financing from other sources also depends on
many factors beyond our control, including the state of the
capital markets and the prospects for our business. The necessary
additional financing may not be available to us or may be
available only on terms that would result in further dilution to
the current owners of our common stock.
"We cannot assure you that we will generate sufficient cash flow
from operations or obtain additional financing to meet scheduled
debt payments and financial covenants. If we fail to make any
required payment under the agreements and related documents
governing our indebtedness or fail to comply with the financial
and operating covenants contained in them, we would be in default.
The financial statements do not include any adjustments to reflect
the possible effects on recoverability and classification of
assets or the amounts and classification of liabilities which may
result from the inability of the Company to continue as a going
concern."
APPLIANCE CONTROLS: Court Okays SSG Capital Retention as Bankers
----------------------------------------------------------------
Appliance Controls Group, Inc., and its debtor-affiliates sought
and obtained approval from the U.S. Bankruptcy Court for the
Northern District of Illinois, Eastern Division, to engage SSG
Capital Advisors, LP as their investment bankers.
On behalf of the Debtors, SSG Capital will:
a. prepare an Offering Memorandum describing ACGI, its
historical performance and prospects, including existing
contracts, marketing and sales, labor force, and
management and anticipated financial results of the ACGI.
This Offering Memorandum will not be given to any
potential buyer without the prior consent of the ACGI and
only after execution of a confidentiality agreement
satisfactory to the ACGI, unless otherwise agreed upon by
SSG and ACGI in writing;
b. work with ACGI in developing a list of suitable potential
buyers who will be contacted on a discreet and
confidential basis after approval by ACGI;
c. coordinate the execution of confidentiality agreements for
potential buyers wishing to review the Offering
Memorandum;
d. help ACGl to coordinate site visits for interested buyers
and work with the management team to develop appropriate
presentations for such visits;
e. solicit competitive offers from potential buyers;
f. advise and assist ACGI in structuring the transaction and
negotiating of the transaction agreements; and
g. upon execution of a letter of intent or similar documents,
SSG will assist in negotiating the transaction and assist
ACGI's attorneys and accountants, as necessary, through
closing on a best efforts basis.
J. Scott Victor from the firm tells the Court that SSG is a
"disinterested person" within the meaning of Section 101(14) of
the Bankruptcy Code.
Subject to an aggregate $125,000 cap, the Debtors will pay SSG
Capital:
a) a $25,000 Initial Fee; and
b) an Advisory Fee equal to $200,000 plus 5% in excess of the
Total Consideration.
In addition, the Debtors agree to reimburse SSG Capital, on a
monthly basis, for all reasonable out-of-pocket expenses, not to
exceed $10,000.
Headquartered in Sugar Grove, Illinois, Appliance Controls Group
Inc., is one of the world's leading designers, manufacturers and
distributors of combustion-related components for the gas cooking
appliance industry. The Company filed for chapter 11 protection
on April 12, 2004 (Bankr. N.D. Ill. Case No. 04-14517). Robert M.
Fishman, Esq., at Shaw Gussis Fishman Glantz Wolfson & Towbin LLC
represents the Debtors in their restructuring efforts. When the
Company filed for protection from their creditors, they listed
both estimated debts and assets of over $10 million.
BE INC: Court Approves Asset Distribution Plan to Stockholders
--------------------------------------------------------------
On May 12, 2004, Be Incorporated, a Delaware corporation,
announced that the Court of Chancery of the State of Delaware has
responded affirmatively to Be's Petition for Determinations and
has approved its plan of distribution of assets to stockholders.
In accordance with that plan, on or about May 18, 2004, Be's
transfer agent, Wells Fargo Bank, N.A., began mailing notices and
"letters of transmittal" to those Be stockholders of record as of
March 15, 2002, instructing such stockholders of record how to
exchange their shares of Be common stock for cash. The initial
distribution of cash for the surrender of shares will be in the
amount of fifty-eight cents (U.S. $0.58) per share, without
interest. Stockholders that purchased or sold shares of Be common
stock with "due bills" after March 15, 2002, should refer any
questions to their own brokers with regard to their rights to
receive any distribution and the procedures relating to the
surrender of those shares.
In April 2004, the Court of Chancery of the State of Delaware in
and for New Castle County granted Be's Petition for
Determinations. The Court (i) ordered Be to establish a limited
purpose tax security trust in the amount not less than $2,500,000
(U.S) to secure payment for tax obligations potentially owed to
certain taxing organizations and to pay any ancillary and
administrative expenses related to the continuance and maintenance
of such trust, and (ii) authorized Be to distribute its remaining
assets in accordance with Del. Code Ann. tit. 8,; 281(a) in one or
more distributions. Pursuant to section 281(a), Be is also
required to pay or make provision for payment of all other
remaining expenses of Be required for final liquidation and for
claims that are mature, known and uncontested or that have been
finally determined to be owing by Be or other successor entity,
including but not limited to any continuing obligations that may
be incurred by Be in the course of the final winding up its
affairs (Be has reserved approximately $400,000 (U.S.) for such
expenses).
Be intends to distribute finally any remaining assets (unused
expense reserves, if any) in accordance with Del. Code Ann. tit.
8, 281(a) and those secured by the limited purpose tax security
trust after the discharge of Be's obligations in full and upon
application to the Delaware Court of Chancery. The length of time
the trust will hold these amounts will be until the resolution of
potential tax obligations or other claims, or not later than four
years after Be files its final tax return in March 2005, after
which and upon approval of the court, Be intends to direct the
trustee, Wilmington Trust Company, a Delaware banking company, to
make the final distribution of the remaining assets to the Be
stockholders of record as of March 15, 2002.
BIOGAN INTERNATIONAL: Confirmation Hearing Scheduled for July 9
---------------------------------------------------------------
The U.S. Bankruptcy Court for the District of Delaware approved
Biogan International, Inc.'s Disclosure Statement explaining its
Liquidating Chapter 11 Plan. The Bankruptcy Court found that the
disclosure statement contains adequate information allows
creditors to make informed decisions about whether to accept or
reject the Plan.
A summary of the Debtor's Plan appears in the Troubled Company
Reporter's May 18, 2004, issue.
A hearing will be held before the Honorable Judge Peter J. Walsh
at 2:30 p.m. on July 9, 2004, to consider confirmation of the
Plan.
Headquartered in Toronto, Ontario, Canada, Biogan International,
Inc., was a mineral products smelter and seller. The Company
filed for chapter 11 protection on April 15, 2004 (Bankr. Del.
Case No. 04-11156). Michael R. Nestor, Esq., at Young Conaway
Stargatt & Taylor represent the Debtor. When the Company filed
for protection from its creditors, it listed $9,038,612 in total
assets and $8,280,792 in total debts.
CHEMED CORP: Extends 8-3/4% Senior Note Exchange Offer to July 9
----------------------------------------------------------------
Chemed Corporation (NYSE:CHE) announced that it has extended its
offer to exchange its 8-3/4% Senior Notes Due 2011, which have
been registered under the U.S. Securities Act of 1933, as amended,
for any and for all of its outstanding 8-3/4% Senior Notes Due
2011.
The Exchange Offer, previously scheduled to expire at 5:00 p.m.,
New York City time, on July 1, 2004, will expire at 5:00 p.m., New
York City time, on July 9, 2004, unless further extended. All
other terms and conditions of the Exchange Offer remain the same.
As of 5:00 p.m., New York City time, on July 1, 2004,
approximately $139.2 million (out of $150 million) in aggregate
principal amount of the Old Notes had been tendered in exchange
for the like principal amount of New Notes. The extension is
intended to allow additional time for the holders of the remaining
outstanding Old Notes to tender in exchange for the New Notes. As
a result of the extension, tenders of the Old Notes, received to
date, may continue to be withdrawn at any time on or prior to the
new expiration date. There can be no assurance that Chemed will
further extend the Exchange Offer.
The Old Notes have not been registered under the Securities Act
and may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements. This news release is not an offer of the Old Notes
or the New Notes for sale or a solicitation of an offer to
purchase the Old Notes or the New Notes. The Exchange Offer is
subject to all the terms and conditions set forth in the
Prospectus dated June 3, 2004, previously distributed to holders
of the Old Notes.
Listed on the New York Stock Exchange and headquartered in
Cincinnati, Ohio, Chemed Corporation -- http://www.chemed.com/--
is the nation's largest provider of end-of-life hospice care
services through its VITAS Healthcare Corporation subsidiary.
Chemed also maintains a presence in the residential and commercial
repair-and-maintenance industry through two subsidiaries. Roto-
Rooter is North America's largest provider of plumbing and drain
cleaning services. Service America Network Inc. provides major-
appliance and heating/air-conditioning repair, maintenance, and
replacement services.
* * *
As reported in the Troubled company Reporter's June 1, 2004
edition, Standard & Poor's Ratings Services assigned its 'B+'
corporate credit rating to Cincinnati, Ohio-based hospice,
plumbing, and drain cleaning services provider Chemed Corporation
(formerly Roto-Rooter, Inc.).
At the same time, Standard & Poor's assigned its 'B+' senior
secured debt rating to Chemed's $110 million floating rate notes
maturing on Feb. 24, 2010, and assigned its 'B-' senior unsecured
debt rating to the company's $150 million senior notes maturing on
Feb. 24, 2011. The outlook is negative.
"The low speculative-grade ratings on Chemed reflect the company's
flat to declining plumbing, drain cleaning, and heating and air
conditioning business, its limited experience functioning as a
combined entity, its exposure to third-party reimbursement, and
the integration risks associated with its future acquisition
strategy," said Standard & Poor's credit analyst Jesse Juliano.
"These concerns are partially offset by the company's industry
leading positions in its two businesses, the positive near- and
long-term growth potential in the hospice industry, and its
ability to generate significant operating cash flows."
COMM 2001-FL4: S&P Lowers Ratings on 5 Classes To Low-Bs
--------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on four
classes of COMM 2001-FL4's commercial mortgage pass-through
certificates. At the same time, Standard & Poor's raised its
ratings on two other classes and affirmed its ratings on six other
classes from the same transaction.
The lowered ratings reflect the continued stress experienced by
100 Pine Street, a San Francisco, California office building
securing a $118 million mortgage, $82 million of which is in the
pool. The raised ratings reflect the increased credit support for
the senior pooled classes due to the 84% pay down of principal
balance since issuance.
As of June 2004, the principal balance of the loan pool was
$134.61 million, and two of the loans are on ORIX Capital
Markets LLC's watchlist due to declines in the properties'
occupancy and net cash flow.
The transaction is structured with senior pooled classes from
classes A-2 to E and subordinate classes directly secured by
specific loans. The following describes the three remaining loans.
The largest loan balance is the 100 Pine Street building, which is
a class B, 33-story, 394,039 sq.-ft. office building on Pine
Street, which is situated in the north financial district of San
Francisco. As of May 2004, the property's occupancy had declined
to 67.4%, compared to 70.2% year-end 2003 and 98% at issuance.
This submarket continues to be weaker since issuance, with limited
improvement expected in the foreseeable future. The current
submarket vacancy is 16.4% and submarket rents are $32.35 per sq.
ft., according to Reis's first quarter 2004 report. The current
in-place average rent at this property is approximately $35 per
sq. ft., with most recent tenants receiving free rent for one
year. There are also significant lease rollovers in the next
two years prior to loan maturity. The borrower has extended its
loan maturity to Jan. 1, 2006, and continues to be current with
debt service payments.
The Cherry Hill Office Portfolio ($25.6 million, 19.0%) consists
of two, class A office buildings in Cherry Hill, N.J., with a
total of 606,492 sq. ft. As of June 2004, the remaining two
properties reported a combined occupancy of 78.5%. The lease
rollovers in 2003 resulted in the decline in the occupancy from
issuance and a 39% decline in reported NCF. In addition, there is
lease-rollover risk over the next year when three large tenants
roll. However, the properties are well situated in a relatively
stable market. Reis's first quarter 2004 report stated that the
submarket vacancy was 13.4% with rents of $17.79 per sq. ft.,
which is similar to current in-place rents. Presently, the
borrower has two prospects interested in leasing approximately
40,000 sq. ft., and a current tenant is expected to expand into
about 28,000 sq. ft. This loan is scheduled to mature in
December 2004 and has one remaining optional loan maturity
extension of one year.
Key Center at Fountain Plaza ($27.0 million, 20.0%) is a 435,715-
sq.-ft., two-building office complex in Buffalo, New York, which
was built between 1990 and 1991. Although primarily office space,
the property has 58,908 sq. ft. of retail space, an outdoor
skating rink, and an underground parking garage. At issuance, the
property's occupancy was 81.4%; year-end 2003 occupancy was 76%,
causing a 4.6% decline in the reported NCF. The property has a
strong tenant roster with no near-term lease expirations; however,
there is rollover risk in 2005 when leases for two large tenants,
totaling approximately 93,000 sq. ft., will expire. ORIX advised
Standard & Poor's that the borrower is currently seeking
refinancing to take out the loan on or before its final loan
maturity in December 2004.
Ratings Lowered
COMM 2001 FL4
Commercial mortgage pass-thru certs
Rating Credit
Class To From Support (%)
D BB+ BBB 9.73
E BB- BB N.A.
K-PS B B+ N.A.
L-PS B- B N.A.
Ratings Raised
COMM 2001 FL4
Commercial mortgage pass-thru certs
Rating Credit
Class To From Support (%)
B AAA AA 90.42
C AAA A 58.94
Ratings Affirmed
COMM 2001-FL4 Commercial mortgage pass-thru certs
Credit
Class Rating Support (%)
M-PS B- N.A.
K-CH BBB+ N.A.
M-CH BBB- N.A.
L-KC BBB N.A.
M-KC BBB- N.A.
X2 AAA N.A.
CREST DARTMOUTH: Fitch Affirms $12M Class D Note Rating At BB
-------------------------------------------------------------
Fitch Ratings upgrades the ratings on two classes and affirms the
ratings on three classes of notes issued by Crest Dartmouth Street
2003-1 Limited.
The ratings on the following classes have been upgraded:
--$13,125,000 class B-1 notes upgraded from 'A' to 'A+';
--$21,000,000 class B-2 notes upgraded from 'A' to 'A+'.
The ratings on the following classes have been affirmed:
--$278,672,987 class A notes affirmed at 'AAA';
--$14,875,000 class C notes affirmed at 'BBB';
--$12,250,000 class D notes affirmed at 'BB'.
The rating of the class A 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 ratings of the
class B-1, B-2, C, and D notes address the likelihood that
investors will receive ultimate and compensating interest
payments, as per the governing documents, as well as the stated
balance of principal by the legal final maturity date.
Crest is a collateralized debt obligation that closed in April
2003. The portfolio consists of 57% senior unsecured REIT
securities, 38% commercial mortgage-backed securities, and 5%
commercial mortgage loans. Fitch reviewed the credit quality of
the individual assets constituting the portfolio. The portfolio
was selected prior to closing by Massachusetts Financial Services
Co., the collateral administrator. The collateral administrator is
limited to sales of credit-impaired, credit risk, and defaulted
securities.
The rating upgrades reflect the positive rating migration and
increased seasoning of the portfolio. Upgrades of one rating notch
have occurred on 9.3% of the portfolio while upgrades greater than
one notch occurred on 6% of the portfolio.
According to the trustee report dated June 28, 2004, all the
coverage and portfolio quality tests are passing their levels.
Additionally, no collateral has defaulted since closing.
DB COMPANIES: Brings-In Matrix Capital as Investment Banker
-----------------------------------------------------------
DB Companies, Inc., and its debtor-affiliates ask for permission
from the U.S. Bankruptcy Court for the District of Delaware to
hire Matrix Capital Markets Group, Inc., as their investment
banker.
The Debtors selected Matrix Capital as their investment banker
based on the firm's substantial experience in, and depth of
knowledge of, the Company's industry, and the firm's reputation
and experience in conducting Section 363 Sales in the Company's
industry.
Matrix Capital has worked with the Company to prepare a sale
process designed to maximize value by encouraging participation
from the greatest possible range of bidders, including national
chains that might wish to expand their presence in the Debtors'
geographic area by purchasing all or a group of stores to single-
store purchasers. Key aspects of the sale process include:
a) an advertising and direct-mail program designed to reach
not only strategic buyers in the convenience store/gas
station industry but also individuals who might wish to
acquire a convenience store as a family business and
potential buyers of the Company's stores for a different
use or as real estate investments;
b) broadest possible access to due diligence information at
minimal cost for both the Company and prospective buyers
by providing information through a website as well as the
more traditional "data room;" and
c) sale by open auction with greatest possible latitude for
prospective buyers to bid for individual stores, Matrix-
designated groups of stores, or buyer-specified groupings,
and with flexibility for stores to be removes from the
auction if an especially attractive preemptive bid is
received.
In this retention, the Debtors expect Matrix Capital to:
a) provide valuation consulting services to the Company;
b) market the Company and its assets to potential buyers,
including preparing offering materials with the assistance
of the Company, as well as organizing, implementing and
conducting an auction process;
c) assist the Company in evaluating candidates as potential
buyers or potential merger candidates;
d) qualify potential buyers or merger candidates;
e) assist the Company in analyzing and comparing transaction
offers from potential buyers;
f) advise the Company in connection with structuring and
negotiating the terms and conditions of each transaction;
g) assist the Company in preparing for due diligence
investigations by potential buyers;
h) assist the company and its counsel and accountants in
analyzing the acquisition documents; and
i) assist with the Closing of a transaction or a series of
transactions.
Matrix Capital intends to charge the Debtors 2.0% of the
transaction value realized from each closing on the sale of the
assets or equity securities of the Company. In addition, Matrix
Capital also received a $25,000 non-refundable payment from the
Debtors.
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.
ENRON CORPORATION: Reaches Settlements with 12 Counterparties
-------------------------------------------------------------
Pursuant to the Amended Safe Harbor Termination Protocol, the
Enron Corporation Debtors inform the Court that they have reached
settlements with 12 parties with respect to these Contracts:
A. Cascades Contracts
* Six Confirmations (Swap) between Enron North America
Corporation and the Cascades Parties -- Cascades, Inc.,
Cascades Canada, Inc., and Cascades Auburn Fiber, Inc.;
* ISDA Master Agreement between ENA and Norampac, Inc.;
* Confirmation between ENA and Norampac;
* Enron Corporation Guaranty, dated June 4, 1999, on behalf
of ENA, for the benefit of Norampac; and
* Enron Corp. Guaranty, dated May 12, 2000, on behalf of ENA,
for the benefit of Cascades Boxboard, Inc., now known as
Cascades Canada, Inc.;
B. Transammonia Contracts
* ISDA Master Agreement, dated November 1, 1994, between
ENA and Transammonia, Inc., doing business as Trammochem;
* Enron Liquids Fuels, Inc., General Terms and Conditions
applicable to crude oil, products and petrochemicals,
between ELFI and Transammonia;
* Enron Gas Liquids, Inc., General Terms and Conditions for
Sale, Purchase and Exchange Agreement, between EGLI and
Transammonia; and
* Enron Corp. Guaranty, dated November 1, 1994, for the
benefit of Transammonia Company, LLC;
C. El Paso Electric Company Contracts
* Two Enfolio Firm Confirmations dated as of May 7, 2001 and
June 4, 2001;
D. Dayton Contracts
* Twenty-two Contracts entered into by ENA and The Dayton
Power and Light Company;
* Three Contracts entered into by ENA and MVR Valley
Resources, Inc., doing business as DPL Energy;
* Six Enron Corp. Guarantys issued for the benefit of Dayton;
and
* DPL, Inc. Guaranty issued for the benefit of ENA;
E. Powell Contract
* Enfolio Master Firm Purchase/Sale Agreement, dated
effective as of March 1, 2001, between ENA and
Powell-Clinch Utility District of Anderson and Campbell
Counties, Tennessee;
F. Orange & Rockland Contract
* Firm Gas Sales Contract between Orange & Rockland
Utilities, Inc., and PennUnion Energy Services, LLC, dated
as of November 1, 1995, which was purchased by Columbia
Energy Services, LLC, and was subsequently purchased by ENA;
G. Elk River Contracts
* All versions of Enfolio Firm General Terms, Conditions and
Enfolio "Spot" General Terms and Conditions, along with all
confirmations, and any other energy commodity contracts
between ENA and Elk River Public Utility District;
H. Chemoil Contracts
* Confirmation Letter Agreement between ELFI and Chemoil
Corporation; and
* Commodity Swap Confirmation Letter Agreement between ENA
and Chemoil, dated June 27, 2001;
I. Texla Contracts
* Six varied Contracts between ENA and Texla Energy
Management, Inc.; and
* Confirmation - Master Purchase Agreement, dated April 27,
2001, between Enron Energy Services, Inc., and Texla;
J. UAMPS Contracts
* Confirmation Letter, dated March 1, 2001, between Enron
Power Marketing, Inc. and Utah Associated Municipal Power
System;
* Master Purchase & Sale Agreement, dated August 10, 2001,
between EPMI and UAMPS; and
* Revised Confirmation Letter, dated August 14, 2001, between
EPMI and UAMPS;
K. Encada Contracts
* Various Contracts between the Debtors and the Encada
Parties -- Encada Corporation, Encada Energy Holdings,
Inc., Encada Marketing (USA) Inc., Encada West Ltd., WD
Energy Services, Inc., and Wild Goose Storage, Inc.; and
L. Westward Contracts
* IDSA Master Agreement, dated July 16, 1999, between ENA and
Westward Communications, LLC; and
* Enron Corp. Guaranty, on behalf of ENA, for the benefit of
Westward.
The Settlements provide that:
(a) the Cascades Parties will pay ENA a settlement payment
they agreed on;
(b) the Transammonia Parties will pay to the Debtors their
agreed settlement payment;
(c) El Paso will make a payment to ENA with respect to the
Contracts;
(d) Dayton and MVR will pay the Debtors $2,945,000;
(e) Powell-Clinch will may a payment to ENA;
(f) Orange & Rockland will make a payment to ENA;
(g) Elk River will pay ENA an agreed settlement payment;
(h) Chemoil will pay ELFI and ENA the settlement payments
agreed by the parties;
(i) Texla will pay to ENA and EESI the settlement payment
agreed by the parties;
(j) UAMPS will pay the Debtors the settlement payments agreed
by the parties;
(k) the Encada Parties will pay the Debtors the settlement
payment agreed by the parties;
(l) Westward will pay ENA the settlement payment agreed by
the parties; and
(m) any and all proofs of claim the Counterparties filed
against the Debtors are deemed withdrawn with prejudice
and, to the extent applicable, will be expunged and
disallowed in their entirety.
The Debtors and the Counterparties will also exchange mutual
releases of claims with respect to the Contracts. (Enron
Bankruptcy News, Issue No. 114; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
ENRON CORP: Various Creditors Sell Claims Totaling $38,643,614
--------------------------------------------------------------
Pursuant to Rule 3001(e) of the Federal Rules of Bankruptcy
Procedure, the Court received these notices of claim transfer
from May 5, 2004 through June 16, 2004, 2004:
A. To Longacre Master Fund Ltd.:
Claim
Transferor No. Amount
---------- ----- ------
Classid Oil & Gas Resources, Inc. 2556 $47,218
Pennaco Energy, Inc. 24578 5,810,540
B. To Capital Investors, LLC:
Claim
Transferor No. Amount
---------- ----- ------
Revenue Management - $763,415
C. To Goldman Sachs Credit Partners, LP:
Claim
Transferor No. Amount
---------- ----- ------
Banca Intesa S.p.A., New York Branch 12794 $12,200,000
D. To Stark Event Trading, Ltd.:
Claim
Transferor No. Amount
---------- ----- ------
Steven R. Myers 18529 $45,803
Brennan Industrial Contractors, Inc. - 386,200
Paladin Energy Corporation - 55,170
Anthony J. Barnhart - 27,342
E. To Contrarian Funds, LLC:
Claim
Transferor No. Amount
---------- ----- ------
Loop Paper Recycling, Inc. 3642 $107,684
EXCO Resources, Inc. 19252 10,000,000
Dean Pipeline Company, LP 13420 7,288,332
Memphis Recycling Services, Inc. 3635 49,535
Ivan Torres & Associates 22305 162,819
Chicago Miniature Optoelectric 277 524,094
Technologies, Inc.
F. To Bank of America Securities, LLC:
Claim
Transferor No. Amount
---------- ----- ------
The Yuma Companies, Inc. - $968,806
G. To Cantera Natural Gas, LLC:
Claim
Transferor No. Amount
---------- ----- ------
Connect Energy Services, LP 5714 $102,078
5718 102,078
H. To Tarver Investment Trust Management:
Claim
Transferor No. Amount
---------- ----- ------
Acta Technology, Inc. - $2,500
(Enron Bankruptcy News, Issue No. 114; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
ENRON NORTH AMERICA: Consents To Sale Of Loan Agreements
--------------------------------------------------------
Boulder Power, LLC, through its wholly owned subsidiary, Black
Mountain Power, LLC, is the indirect owner of a 14% General
Partnership and a 1% Limited Partnership interest in Saguaro
Power Company. Saguaro's remaining interests are held by:
(i) Magna Energy Systems, Inc., to the extent of a 34%
General Partnership and a 1% Limited Partnership
interest; and
(ii) Eastern Sierra Energy Company, a wholly owned subsidiary
of NRG Energy, Inc., to the extent of a 49% General
Partnership and a 1% Limited Partnership interest.
Saguaro is the owner of a 100 MW natural gas-fired electric
generating facility in southern Nevada. The Facility provides 90
MW of capacity and energy to Nevada Power Company under the terms
of a CPI-adjusted power purchase agreement, which expires on
2022. Nevada Power also has the right to purchase any excess
capacity and energy produced by the Facility at reduced prices.
The Transaction Structure
On December 28, 1000, Enron North America Corporation and Joint
Energy Development Investments II Limited Partnership entered
into a Loan Agreement with Boulder Power, wherein each Lender
granted Boulder Power:
(a) a $5,820,000 term loan; and
(b) a revolving facility aggregating $3,00,000, which facility
has not been used.
All of the members of the Boulder Power pledged to the Lenders a
continuing security interest in all of the members' rights, title
and interest in the ownership interests in Boulder Power and in
any distributions paid by Boulder Power to the members.
Martin A. Sosland, Esq., at Weil, Gotshal & Manges, LLP, in New
York, relates that ENA and JEDI II also entered into an option
agreement with all of the members of Boulder Power wherein the
members irrevocably granted an option to purchase all of their
interests in Boulder Power and the associated equity rights. On
December 7, 2000, ENA assigned to ECT Merchant Investments
Corporation its interest in the Loan Agreement and related notes
and the Option Agreement. In turn, ECT assigned its interest in
the Loan Agreement and related notes, and the Option Agreement to
ECTMI Trutta Holdings, LP.
The Marketing Process
In January 2004, ENA contacted more than 160 parties to solicit
interest in the sale of the Loan Agreement and related notes, and
the Option Agreement to the equity rights in Boulder Power. From
those contacted, 19 companies signed confidentiality agreements
and were given access to documentation related to the Assets.
Mr. Sosland reports that nine prospective purchasers submitted
indicative offers that included a purchase price. Site visits
were held in April 2004 and draft purchase and sale agreements
were distributed to the six bidders submitting the highest
offers. Four of these bidders submitted second round bids.
After negotiating with the four bidders, Paragon Boulder, LLC,
emerged as the leading candidate and moved forward with the
negotiation of a derivative agreement.
The Purchase and Sale Agreement
On June 10, 2004, sellers JEDI II and Trutta, and Paragon
executed the Purchase Agreement with respect to the Assets. The
Purchase Agreement provides, among other things, that:
A. Purchase Price
The Purchase Price for the Assets will be $18,100,000, subject
to certain adjustments for any cash balance at Boulder Power
at Closing, less adjustment for any 2004 distributions to
Boulder Power and distributed to its members. Paragon has
placed in escrow an Earnest Money Deposit equal to $1,810,000
and will pay the remainder of the Purchase Price at Closing.
B. Assets
The Assets consist of all of the Sellers' right, title and
interest in and to the $5,820,000 JEDI II Term Note, the
$5,820,000 ENA Term Note, the Revolving Notes, the Loan
Agreements, the Option Interest, and any and all other
tangible and intangible assets, property and rights and
liabilities and obligations arising therein, except for any
and all claims or rights that Lenders now have or may in the
future have against the Optionors under the Loan Agreement for
any tax refunds that Optionors would be entitled to and have
received arising from any re-filing of amended tax statements
by Boulder Power for the tax periods prior to calendar year
2004.
C. Transfer Taxes
Paragon will pay any Transfer Taxes resulting from the
contemplated transactions.
The Sale will be subjected to higher and better offers through an
auction.
Accordingly, ENA and ECT ask the Court to authorize their
consent, by and through their subsidiaries and affiliates, to the
sale of the Assets to Paragon or to the Winning Bidder at the
Auction in accordance with the Purchase Agreement, free and clear
of all liens, claims, interests, encumbrances, netting and
deductions.
Mr. Sosland contends that the Sale will benefit the Sellers, the
Debtors, their estates and creditors because it will maximize the
value of the Assets as compared to its continued retention. The
Purchase Agreement was negotiated at arm's-length and through the
marketing process. The Assets will be subjected to higher and
better offers through the Auction. Thus, the price ultimately
obtained for the Assets will represent the fair market value for
the Assets. (Enron Bankruptcy News, Issue No. 115; Bankruptcy
Creditors' Service, Inc., 215/945-7000)
FASTENTECH INC: S&P Cuts Senior Secured Bank Loan Rating To BB-
---------------------------------------------------------------
Standard & Poor's Ratings Services lowered its senior secured bank
loan rating on FastenTech Inc. to 'BB-' from 'BB'. At the same
time, Standard & Poor's affirmed its 'B+' corporate credit rating
and stable outlook on FastenTech Inc. Also, Standard & Poor's
assigned a recovery rating of '1' indicating full recovery of
principal in the event of a default (100%) to the $115 million
amended and restated credit facility which matures in May 2008.
The outlook is stable.
"The downgrade of the senior secured bank loan rating is due to
the increase in the size of the amended and restated facility to
$115 million, from $40 million," said Standard & Poor's credit
analyst John Sico.
Bloomington, Minnesota-based FastenTech Inc. with about
$250 million in annual sales manufactures and markets highly
engineered specialty components to a broad range of end-markets,
including the automotive and light truck, construction,
industrial, military, power generation, and medium-and heavy-duty
truck markets.
Standard & Poor's does not expect the ratings to change over the
intermediate term. The recently increased revolving credit
facility does provide the company with an opportunity to further
pursue modest "bolt-on" or perhaps larger type acquisitions.
However, the company is expected to maintain financial discipline
and sustain its current financial profile and credit measures
within the parameters for the current rating.
The secured bank loan is rated one notch higher than the corporate
credit rating. The revolving credit facility has been amended and
restated to increase the size of the facility to $115 million from
$40 million. The syndicated facility is secured by essentially all
of the assets of the company.
FLEMING COS: Agrees to Resolve Dispute with Northeast Frozen Foods
------------------------------------------------------------------
Christopher J. Lhulier, Esq., at Pachulski Stang Ziehl Young
Jones & Weintraub, PC, in Wilmington, Delaware, tells the Court
that, in May 1999, Northeast Frozen Foods Co., LLC, and Fleming
Companies, Inc., signed a supply agreement under which Northeast
provided services related to the acquisition and warehousing of
frozen food products for grocery stores supplied by Fleming's
Philadelphia Division. The Agreement was terminated by agreement
on May 31, 2002. In accordance with the Termination Agreement
and an Escrow Agreement dated June 20, 2002, among Fleming,
Northeast, and Comerica Bank-Texas, Dallas, Texas, as escrow
agent, Fleming deposited $638,498.38 otherwise due to Northeast
in the ordinary course of business with Comerica. Comerica has
been holding the escrowed funds pending a determination of their
rightful ownership.
In August 2002, Northeast began an arbitration proceeding styled
"Northeast Frozen Foods Co., LLC v. Fleming Companies, Inc.,"
with the American Arbitration Association under the Supply
Agreement. In the arbitration, Northeast sought to recover
$800,000 in outstanding invoices.
In September 2002, Fleming filed a counterclaim seeking a
$1,417,816 judgment against Northeast. The counterclaim includes
rebates, margins, store deductions, credits and overpayments,
after all set-offs and interest.
Hence, the Debtors ask the Court to approve a settlement and
release agreement to resolve their disputes with Northeast. The
primary terms of the Settlement Agreement, as they affect Fleming,
are:
(a) Comerica will disburse (i) $300,000 from the escrowed
funds to Northeast, and (ii) the balance, after
deductions of Comerica's fees, charges and expenses --
estimated to be less than $10,000 -- to Fleming;
(b) The Debtors and Northeast will grant each other a
general release from all claims or causes or action,
except any claims arising under the Settlement
Agreement itself; and
(c) Northeast will dismiss the arbitration with prejudice.
In their business judgment, the Debtors believe that the
Settlement Agreement is the best deal for their estates and
creditors because they are receiving more than 50% of the
escrowed funds in return for a release of what they do not
believe to be bona fide claims. The dismissal of the arbitration
also eliminates any potential litigation expenses and claim
exposure.
Headquartered in Lewisville, Texas, Fleming Companies, Inc. --
http://www.fleming.com/-- is the largest multi-tier distributor
of consumer package goods in the United States. The Company filed
for chapter 11 protection on April 1, 2003 (Bankr. Del. Case No.
03-10945). Richard L. Wynne, Esq., Bennett L. Spiegel, Esq.,
Shirley Cho, Esq., and Marjon Ghasemi, Esq., at Kirkland & Ellis,
represent the Debtors in their restructuring efforts. When the
Debtors filed for protection from its creditors, they listed
$4,220,500,000 in assets and $3,547,900,000 in liabilities.
(Fleming Bankruptcy News, Issue No. 37; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
FONIX CORPORATION: Amends First Quarter 2004 and Form 8-K Reports
-----------------------------------------------------------------
Fonix Corp. (OTC BB: FNIX), an industry leader in delivering
conversational speech solutions to consumer systems and devices
for everyday use through its Fonix Speech Group, and a provider of
telephone and data services through its new subsidiaries LecStar
Telecom Inc. and LecStar DataNet Inc., filed an amended Form 10-Q
for the quarter ending March 31, 2004, and an amended Form 8-K/A
in respect of certain financial statements for the acquisition of
LecStar in February 2004. Based upon a change in the date on which
the value of Fonix shares issued in connection with the
acquisition of LecStar was determined, Fonix amended its financial
statements contained in the filings described above to reflect a
$750,000 reduction in the carrying value of the assets of LecStar.
About Fonix
Fonix Corp. is an industry leader in delivering conversational
speech solutions to consumer systems and devices for everyday use.
Manufacturers and developers incorporate Fonix's award-winning
technology to provide their customers with an easy, convenient,
and reliable user experience. Fonix currently offers voice
technology for mobile/wireless devices; computer telephony
systems; game consoles, toys and appliances; the assistive market
and automobiles. Fonix recently acquired LecStar Telecom Inc., a
rapidly growing Atlanta-based regional provider of integrated
communications services to businesses and consumers. LecStar
offers a full array of wireline voice, data, long distance and
Internet services to business and residential customers throughout
BellSouth's Southeastern operating territory. LecStar's solid
customer base offers a unique direct marketing and distribution
channel for Fonix speech technologies and solutions.
* * *
Liquidity and Capital Resources
In its pre-amended Form 10-Q for the quarterly period ended March
31, 2004 filed with the Securities and Exchange Commission, Fonix
Corp. reports:
"We must raise additional funds to be able to satisfy our cash
requirements during the next 12 months. Product development,
corporate operations, and marketing expenses will continue to
require additional capital. Because we presently have only
limited revenue from operations, we intend to continue to rely
primarily on financing through the sale of our equity and debt
securities to satisfy future capital requirements until such time
as we are able to enter into additional third-party licensing,
collaboration, or co-marketing arrangements such that we will be
able to finance ongoing operations from license, royalty, and
sales revenue. There can be no assurance that we will be able to
enter into such agreements. Furthermore, the issuance of equity
or debt securities which are or may become convertible into equity
securities of Fonix in connection with such financing could result
in substantial additional dilution to the stockholders Fonix.
"As of March 31, 2004, we had an accumulated deficit of
$212,878,000, negative working capital of $11,430,000, accrued
employee wages and other compensation of $4,723,000, accrued
liabilities of $6,119,000, and accounts payable $5,365,000. Sales
of products and revenue from licenses based on our technologies
have not been sufficient to finance ongoing operations, although
we have limited capital available under an equity line of credit.
These matters raise substantial doubt about our ability to
continue as a going concern. Our continued existence is dependent
upon several factors, including our success in (1) increasing
license, royalty and services revenues, (2) raising sufficient
additional funding, and (3) minimizing operating costs. Until
sufficient revenues are generated from operating activities, we
expected to continue to fund our operations through the sale of
our equity securities, primarily in connection with the fifth
equity line. We are currently pursuing additional sources of
liquidity in the form of traditional commercial credit, asset
based lending, or additional sales of our equity securities to
finance our ongoing operations. Additionally, we are pursuing
other types of commercial and private financing which could
involve sales of our assets or sales of one or more operating
divisions. Our sales and financial condition have been adversely
affected by our reduced credit availability and lack of access to
alternate financing because of our significant ongoing losses and
increasing liabilities and payables. Over the past year, we have
reduced our workforce by approximately 50%. This reduction in
force may adversely affect our ability to fill existing orders.
As we have noted in our annual report and other public filings, if
additional financing is not obtained in the near future, we will
be required to more significantly curtail our operations or seek
protection under bankruptcy laws."
FUN-4-ALL: Hires Cornerstone Consulting as Financial Advisors
-------------------------------------------------------------
Fun-4-All Corp., sought and obtained approval from the U.S.
Bankruptcy Court for the Southern District of New York to hire
Cornerstone Consulting Group, LLC as its financial advisor and
broker.
Cornerstone Consulting will perform financial advisory services in
connection with the Debtor's reorganization and attempt to locate
a lender or purchaser of the business.
Specifically, Cornerstone Consulting will:
a. provide summary of financial and cash flow projections;
b. provide summary of historical information and other data
pertinent to obtain an understanding of operations;
c) evaluate various strategic and financial alternatives for
the Debtor;
d) assist with plan and disclosure statement;
e) prepare and summarize documents as needed to potential
investors and asset purchasers; and
f) other appropriate tasks that could assist the Debtor with
obtaining financing or the marketing and sale of the
Corporation.
Cornerstone Consulting will bill the Debtor at its current hourly
rates:
Designation Billing Rate
----------- ------------
Principals $300 - $350 per hour
Senior Associates $225 - $300 per hour
Associates and Staff $100 - $225 per hour
Robert Iommazzo, a principal of Cornerstone Consulting, will be
primarily involved in this engagement.
Headquartered in New York, New York, Fun-4-All Corp.,
manufactures, sells and distributes toys under various licenses.
The Company filed for chapter 11 protection on June 8, 2004
(Bankr. S.D.N.Y. Case No. 04-13943). Steven H. Newman, Esq., at
Esanu Katsky Korins & Siger, LLP represents the Debtor in its
restructuring efforts. When the Company filed for protection from
its creditors, it listed $4,554,659 in total assets and $9,856,993
in total debts. The Company's Chapter 11 Reorganization Plan and
Disclosure Statement are due on
October 6, 2004.
GROUPE BOCENOR: Incurs $2.4 Million Net Loss in FY 2004
-------------------------------------------------------
For the fiscal year ended February 29, 2004, Groupe Bocenor Inc.
(ticker symbol GBO, TSX) incurred a net loss of $2.4 million or
$0.04 per share, compared with a net profit of $1.6 million or
$0.03 per share the previous year. Management estimates that the
sharp rise in the Canadian dollar in relation to the U.S. dollar
had a $ 2.6 million or $0.05 per-share impact on the Company's
after-tax results, without which Bocenor would have achieved net
earnings of $ 0.2 million.
Sales of $126.5 million, showed a slight decrease of 1% compared
to $127.7 million in 2002-2003. However, at a constant exchange
rate, sales would have risen by 2.2% to $130.5 million. The value
of exports to the United States decreased by $1.7 million or 5.7%,
while at a constant exchange rate, they would have increased by
7.6% as Bocenor expanded its presence in the American Northeast
and Midwest. Sales in Canada grew by 0.5%. This modest growth can
be partly explained by a different timing in fourth-quarter
promotional shipments, as a result of which some sales were
postponed to the first quarter of the new fiscal year. For the
year as a whole, however, Bocenor strengthened its presence in the
Greater Toronto Area. Business was also strong in Quebec, in both
the residential market and the commercial sector. Bocenor's new
aluminum production plant in Laval, commissioned in the summer of
2003, increased its capacity to service its customers base.
Earnings before depreciation and amortization, interest and income
taxes (1) amounted to $5.7 million compared to $10 million the
previous year. The change in the exchange rate had a negative
impact of approximately $3.3 million on the Company's operating
income. Furthermore, financial expenses totalled $5.4 million
versus $3.7 million the previous year, largely due to the
recognition of a $0.5 million foreign exchange loss in 2003-2004,
as opposed to a $0.7 million exchange gain in 2002-2003.
"Clearly, the salient event of 2003-2004 was the sharp rise in the
Canadian dollar, which impeded the achievement of the Company's
main financial objectives, namely to increase sales and lower
production costs through strategic investments. The fluctuation in
the exchange rate had a substantial negative impact on the
Company's sales and operating profit, which in turn delayed the
debt refinancing we had hoped to carry out during the year. This
is still under negotiation with the banking syndicate. As a
result, we had to postpone part of the investments that had been
planned to increase our production capacity, improve quality of
service and lower our operating costs," stated Chris Southey,
President and Chief Executive Officer.
The C.E.O. added that despite the major challenges of 2003-2004,
Bocenor made progress with respect to its market and operational
objectives, as it continued to develop its markets, increased its
production capacity for wood, aluminum, PVC and sealed glass unit
products, while controlling its operating costs.
Results for the First Quarter of Fiscal 2004-2005
For the three-month period ended May 31, 2004, Bocenor's sales
were $30.9 million, an increase of 7.6% over sales of $28.7
million for the same quarter of the previous year. (At a constant
exchange rate, sales would have risen by more than 9%). Sales in
the United States increased by 1.9%, while at a constant exchange
rate, they would have increased by 9%. Canadian sales posted an
increase of 9.1%, under the combined effect of market development
efforts, last year's increase in Bocenor's production capacity for
wood, aluminum, PVC and sealed glass unit products, and some
promotional shipments delayed from the fourth quarter of last
year. It should also be noted that sales in the first quarter of
the last fiscal year had been affected by particularly harsh
weather conditions.
EBITDA amounted to $0.6 million compared to $1.3 million the
previous year, this decline being attributable to increased
occupancy costs and to the change in the exchange rate, which had
a negative impact of approximately $0.4 million. However,
financial expenses decreased by $0.3 million, where a small
foreign exchange gain this year compared to a $0.3 million foreign
exchange loss in 2003-2004. Bocenor incurred a net loss of $0.7
million or $0.01 per share, compared with a net loss of $0.6
million or $0.01 per share the previous year.
Proposal pursuant to the Bankruptcy and Insolvency Act (Canada)
On June 10, 2004, while the banking syndicate was still
negotiating for the refinancing of Bocenor's indebtedness, the
Company filed a notice of intention to make a proposal pursuant to
the Bankruptcy and Insolvency Act (Canada), in order to set out
the terms of the restructuring of its debts and other obligations
to its creditors. The proposal was filed on June 28, 2004, for
approval by the creditors on or about July 14, 2004. The Company's
two principal shareholders, 3264289 Canada Inc., controlled by the
Wood Family, and the Fonds de solidarit‚ des travailleurs du
Qu‚bec (F.T.Q.), have extended guarantees or letters of credit to
support the Company's short term indebtedness during this process.
Meanwhile, Bocenor continues its operations and satisfy its
customers' orders. Suppliers to the Company for goods and services
provided after the filing of the notice of intention are being
paid in the normal course of business.
GROUPE BOCENOR is a manufacturer and distributor of a complete
line of windows and doors. The company sells its products in
Quebec, the Maritimes, Ontario and U.S.A, under the Bonneville
Windows and Doors and Polar Windows and Doors trade marks. The
Multiver division manufactures sealed units and commercial glass.
HOLLINGER: Argus Provides Update on Delayed Financial Statements
----------------------------------------------------------------
Argus Corporation Limited (TSX:AR.PR.A) (TSX:AR.PR.D)
(TSX:AR.PR.B) provided a status update on its preparation of
financial statements to be filed and other related matters and
additional information regarding its subsidiary Hollinger Inc.
Argus owns 61.8% of the Retractable Common Shares of Hollinger
Inc.
This update is provided pursuant to the alternative information
guidelines of the Ontario Securities Commission. These guidelines
contemplate that Argus will normally provide bi-weekly updates on
its affairs until it is able to be current with its public filing
obligations.
The OSC issued a permanent Management and Insider Cease Trade
Order against Argus on June 3, 2004 following the issuance of a
temporary Management and Insider Cease Trade Order on May 25,
2004. The last status update of Argus was included in its News
Release of June 18, 2004.
The Order was issued as a result of Argus not being able to
complete and file its financial statements for the first Quarter
of 2004 together with its related Management's Discussion and
Analysis when due on May 15, 2004.
This delay in filing resulted from a change in accounting
guidelines. Argus is now required to file its financial statements
on a basis of consolidation with those of Hollinger Inc. However,
Hollinger Inc. has been unable to complete its financial
statements due to a material change in its relationships with
Hollinger International Inc.
The OSC issued Management and Insider Cease Trade Orders on June
1, 2004 against each of Hollinger Inc. and International for the
failure of each to file their audited financial statements for the
year ended on December 31, 2003, interim financial statements for
the first Quarter of 2004 and related MD&A reports.
Argus continues to devote significant resources to the completion
and filing of its financial statements as soon as possible. The
Audit Committee of Argus met on June 25, 2004 with a
representative of Argus' new auditor, Zeifman and Company, LLP,
Monique Delorme, the Chief Financial Officer of Argus and Adrian
M.S. White, who was subsequently appointed Acting Chief Financial
Officer of Hollinger Inc., to review the preparation of Argus'
draft financial statements and related MD&A.
Argus continues to communicate with the OSC to review how to
appropriately deal with sophisticated accounting issues that have
resulted from the changed circumstances between Hollinger Inc. and
International and changes in accounting policy.
At its meeting on June 25, 2004, Argus' Audit Committee reviewed
and approved its Change of Auditor Notice with respect to the
advice of PricewaterhouseCoopers LLP on June 1, 2004 that it would
not be standing for re-election as the auditor of Argus. The Audit
Committee further reviewed the letters of PricewaterhouseCoopers
LLP and Zeifman and Company, LLP with respect to that Change of
Auditor Notice.
On June 25, 2004, Argus declared regular quarterly dividends to be
paid on August 1, 2004 to the holders of record of its Class A and
Class B Preference Shares at the close of business on July 16,
2004. The dividends to be paid are respectively 62 1/2 cents per
share on the Class A Preference Shares $2.50 Series, 65 cents per
share on the Class A Preference Shares $2.60 Series and 67 1/2
cents per share on the Class B Preference Shares 1962 Series.
Since the last Status Report of Argus, International announced on
June 22, 2004 that it had agreed to sell its United Kingdom assets
including the Telegraph for a purchase price of $729.5 million
pounds in cash (approximately US $1,327.4 million). The proposed
sale is to Press Acquisitions Limited, a company controlled by its
Chairman, Sir Aidan Barclay, and his brother. That amount includes
64.5 million pounds (approximately US $117.3 million) of cash on
the balance sheet of the Telegraph Group. International announced
that the transaction was expected to result in a cash-free / debt-
free price of approximately 665 million pounds (approximately US
$1,210 million).
Hollinger Inc. announced that same day that it considered that
shareholders approval was required for the potential sale. It
stated: "Hollinger Inc. has not made a final determination as to
the desirability of the proposed transaction, since we have not
been provided with all of the necessary information, including
details regarding the transaction, possible alternatives and
future plants for the company, to make such a decision. We
believe, however, that all shareholders should be provided with
sufficient information to evaluate the proposed transaction, to
weigh it against alternative opportunities that may be available
to the company and to determine whether they believe the proposed
transaction represents the best way to maximize shareholder
value."
Certain discussions were then held with International respecting
this matter. On July 1, 2004, Hollinger Inc. announced that it had
filed a Complaint in Delaware Chancery Court seeking to have the
Court require that International submit the potential sale of its
U.K. assets to ratification by its shareholders.
Hollinger Inc. announced on June 29, 2004 that it had appointed
Adrian M.S. White to be its Acting Chief Financial Officer
replacing Frederick A. Creasey on a temporary basis. It further
announced that it was devoting resources to the completion and
filing of its financial statements as soon as practicable and that
it was taking steps to require International to provide access to
its financial records, management personnel and its auditors'
working papers to allow for the preparation and audit of its
financial statements.
Hollinger Inc. further announced on June 29, 2004 that it would be
prevented from honouring further retractions of its Retractable
Common Shares and Series II Preference Shares unless an
anticipated June 30, 2004 reporting default under the terms of its
senior secured notes due 2011 was remedied or waived.
Hollinger Inc. advised on June 29, 2004 that 22,149,958 of its
Series II Preference Shares had been submitted for retraction and
the retractions were honoured since June 15, 2004 and that
10,188,978 shares of Class A Common Stock of International were
issued in connection with those retractions. As a result, the
equity interest of Hollinger Inc. in International has been
reduced to 18.2% from 29.7%.
Hollinger Inc. further advised on June 29, 2004 that 1,068,603 of
its Retractable Common Shares had been submitted for retraction
since May 31, 2004 for aggregate consideration of $9,617,427 in
cash. Hollinger Inc. announced that it was not able to complete
the retractions of any of its Retractable Common Shares submitted
after May 31, 2004 or Series II Preference Shares submitted after
June 30, 2004 as such retractions would unduly impair its
liquidity. Retractions of the outstanding shares of Hollinger Inc.
submitted after those dates were suspended until further notice.
Vice-Chancellor Strine of the Delaware Chancery Court granted an
Order and Final Judgment on June 28, 2004 as against Hollinger
Inc., its wholly-owned subsidiary 504468 N.B. Inc. and Lord Black,
including that Hollinger Inc. and Lord Black are jointly liable to
pay US $21,154,025.92 (including interest to June 1, 2004) to
International. This amount represents amounts that Hollinger Inc.
received on account of certain non-competition payments. Further
interest will accrue from June 1, 2004.
By that Order and Final Judgment, Lord Black is further liable to
pay to International US $8,693,053.66 (including interest to June
1, 2004 with further interest to accrue thereafter).
Amongst other terms of that Order, each of Hollinger Inc., 504468
N.B. Inc. and Lord Black were further enjoined from taking any
steps to pursue or to consummate any transaction in violation of
the Restructuring Proposal dated November 15, 2003.
Hollinger Inc. has previously announced that it believes there are
meritorious grounds for appeal of this Order and Final Judgment
and is considering its options.
There has been no other material change from the information
contained in Status Update Report on June 18, 2004.
IBASIS INC: Will Webcast Second Quarter 2004 Results on July 21
---------------------------------------------------------------
iBasis, Inc. (OTCBB: IBAS), the leader in Internet-based voice
communications, announced that it will report second quarter 2004
financial results on Wednesday, July 21, 2004, before the opening
of the stock market.
The company will host a conference call to discuss the results,
led by Ofer Gneezy, iBasis president & CEO, on Wednesday, July 21,
2004, at 11:00 a.m. EDT. The public is invited to listen to the
simultaneous webcast of the call by logging in through the
investor relations section of the iBasis website at
http://www.ibasis.com/
About iBasis
Founded in 1996, iBasis (OTCBB: IBAS) is a leading carrier of
wholesale international telecommunications services and a provider
of retail international prepaid calling cards sold through major
distributors. iBasis customers include many of the largest
carriers in the world, including AT&T, Cable & Wireless, China
Mobile, China Unicom, MCI, Sprint, Telefonica, Telenor, and
Telstra. iBasis has carried more than nine billion minutes of
international voice traffic over its global Cisco Powered
Network(TM), and is one of the ten largest carriers of
international voice traffic in the world(1). For two consecutive
years service providers have named the company as the best
international wholesale carrier in Atlantic-ACM's annual
International Wholesale Carrier Report Card(2). iBasis was ranked
the #1 fastest-growing technology company in New England in the
2002 and 2003 Technology Fast 50 programs sponsored by Deloitte &
Touche. The Company can be reached at its worldwide headquarters
in Burlington, Massachusetts, USA at 781-505-7500 or on the
Internet at http://www.ibasis.com/
At March 31, 2004, iBasis' balance sheet shows a stockholders'
deficit of $51,381,000 compared to a deficit of $42,108,000 at
December 31, 2003.
IMA EXPLORATION: Corporate Reorganization Takes Effect on July 7
----------------------------------------------------------------
IMA Exploration Inc. (TSX VENTURE:IMR) (OTCBB:IMXPF)
(FRANKFURT:IMT) (BERLIN:IMT) (WKN:884971) announced that all
conditions to the Company's proposed reorganization, including
Court and exchange approval, have been satisfied. The corporate
reorganization will become effective on July 7, 2004 at which time
the Company's assets will be split into two public companies: IMA,
which will continue to hold the Navidad Area Properties, including
the Navidad Project; and Golden Arrow Resources Corporation, which
will hold the other exploration properties.
Each IMA shareholder of record on July 7, 2004 will receive one
Golden Arrow common share for each 10 IMA common shares held.
IMA's common shares began trading on the TSX Venture Exchange
without the right to receive Golden Arrow shares at the opening on
Monday, July 5, 2004.
The shares of Golden Arrow have been conditionally approved for
listing on TSX-V, subject to completion of the arrangement and
filing of final documentation. It is expected that the Golden
Arrow shares will begin trading on the TSX-V on Friday July 9,
2004.
* * *
Liquidity and Capital Resources
In its Form 20-F for the fiscal year ended December 31, 2003 filed
with the Securities and Exchange Commission, IMA Exploration Inc.
reports:
"The Company's cash position at December 31, 2003 was $4,454,241
an increase of $3,018,117 from December 31, 2002. Total assets
increased from $7,432,489 at December 31, 2002 to $12,097,844 at
December 31, 2003, funded primarily from the issue of common
shares for net proceeds of $6,352,774.
"The Company has capitalized expenditures of approximately
$1,500,000 subsequent to December 31, 2003 on the Navidad Project
related to the Phase I drilling program which continued into March
2004.
"As at May 31, 2004 the Company had working capital of
approximately $7,600,000.
"The Company considers that it has adequate resources to maintain
its ongoing operations but currently does not have sufficient
working capital to fund all of its planned exploration work and
property commitments. A Phase II budget for the Navidad Project
has been approved in the amount of $2,100,000. The Company will
continue to rely on successfully completing additional equity
financing and/or conducting joint venture arrangements to further
exploration on its properties. There can be no assurance that the
Company will be successful in obtaining the required financing or
negotiating joint venture agreements. The failure to obtain such
financing or joint venture agreements could result in the loss of
or substantial dilution of its interest in its properties."
INTERTAPE POLYMER: S&P Assigns B+ Rating To Corporate Credit
------------------------------------------------------------
Standard & Poor's Ratings Services assigned its 'B+' corporate
credit rating to St. Laurent, Quebec-based Intertape Polymer Group
Inc.
At the same time, Standard & Poor's assigned its 'B+' bank loan
rating and a recovery rating of '2' to the company's proposed $250
million senior secured credit facilities based on preliminary
terms and conditions. The 'B+' rating and the '2' recovery rating
indicate an expectation of substantial (80%-100%) recovery of
principal in the event of a default.
In addition, Standard & Poor's assigned its 'B-' rating to the
company's proposed $125 million senior subordinated notes due
2014, to be issued by Intertape Polymer US Inc. under Rule 144A
with registration rights. The senior subordinated notes will be
guaranteed by Intertape Polymer Group Inc. and its subsidiaries.
The notes are rated two notches below the corporate credit
rating, reflecting the substantial amount of priority debt in
relation to total assets, which meaningfully weakens the
noteholders' prospects for recovery of principal in the event of a
default.
The outlook is positive. Proceeds of the proposed secured term
loan and subordinated notes will be used to repay Intertape's
existing debt. Pro forma for the refinancing, total debt will be
about $313 million at July 1, 2004.
"The ratings reflect Intertape's limited scope of operations, some
exposure to volatile raw-material prices, very aggressive
financial profile, and potential challenges associated with higher
growth-related capital spending. These credit concerns are
partially offset by its below-average business profile, decent
market position in competitive niches, broad product mix and
customer base, and a range of end markets," said Standard & Poor's
credit analyst Liley Mehta.
With annual sales of about $630 million, Intertape is a
manufacturer of paper and film pressure-sensitive tapes,
polyolefin films, and packaging systems. The company produces a
mix of value-added and general-purpose products including carton
sealing tapes, shrink films, masking tapes, flexible intermediate
bulk containers, electrical tapes, duct tapes, stretch wrap,
engineered fabric, and reinforced filament tapes.
JILLIAN'S ENTERTAINMENT: Asks Court to Set Aug. 19 Claims Bar Date
------------------------------------------------------------------
Jillian's Entertainment Holdings, Inc., and its debtor-affiliates
ask the U.S. Bankruptcy Court for the Western District of
Kentucky, Louisville Division, to set a deadline for all creditors
owed money on account of claims arising prior to May 23, 2004,
against:
* Jillian's Entertainment Holdings, Inc.;
* Derby City Promotions, Inc.;
* Jillian's America Live of Minneapolis, Inc.;
* Jillian's Billiard Cafe of Akron, Inc.;
* Jillian's Billiard Cafe of Columbia, SC, Inc.;
* Jillian's Billiard Cafe of Raleigh, NC, Inc.;
* Jillian's Billiard Cafe II of Raleigh, North;
* Jillian's Billiard Club of Annapolis, Inc.;
* Jillian's Entertainment Corporation;
* Jillian's Billiard Club of Champaign Urbana, Inc.;
* Jillian's Billiard Club of Champaign Urbana, LP;
* Jillian's Billiard Club of Charlotte, NC, Inc.;
* Jillian's Billiard Club of Cleveland, Inc.;
* Jillian's Billiard Club of Cleveland Heights, Inc.;
* Jillian's Billiard Club of Cleveland Heights, LP;
* Jillian's Billiard Club of Manchester, NH, Inc.;
* Jillian's Billiard Club of Louisville, Kentucky;
* Jillian's Billiard Club of Seattle, Inc.;
* Jillian's Billiard Club of Pasadena, Inc.;
* Jillian's Billiard Club of Worcester, Inc.;
* Jillian's Billiard Club of Tacoma, Inc.;
* Jillian's Gators of Minneapolis, Inc.;
* Jillian's Billiard Club of Worcester, LP;
* Jillian's Inc.;
* Jillian's Management Company, Inc.;
* Jillian's Knuckleheads of Minneapolis, Inc.;
* Jillian's of Albany, NY, Inc.;
* Jillian's of Arundel, MD, Inc.;
* Jillian's of Concord, NC, Inc.;
* Jillian's of Farmingdale, NY, Inc.;
* Jillian's of Covington, Kentucky, Inc.;
* Jillian's of Gwinnett, GA, Inc.;
* Jillian's of Franklin, PA, Inc.;
* Jillian's of Hollywood, CA, Inc.;
* Jillian's of Houston, TX, Inc.;
* Jillian's of Indianapolis, IN, Inc.;
* Jillian's of Katy, TX, Inc.;
* Jillian's of Memphis, TN, Inc.;
* Jillian's of Minneapolis, MN, Inc.;
* Jillian's of Montreal, Inc.;
* Jillian's of Nashville, TN, Inc.;
* Jillian's of Norfolk, VA, Inc.;
* Jillian's of Rochester, NY, Inc.;
* Jillian's of San Francisco, CA, Inc.;
* Jillian's of Scottsdale, AZ, Inc.;
* Jillian's of Westbury, NY, Inc.;
* Jillian's of Youngstown, OH, Inc.; and
* River Vending, Inc.
to file written proofs of claim. The Debtors want the Court to
set 4:00 p.m. on August 19, 2004, as the General Claims Bar Date.
All proofs of claim must be delivered to:
Jillian's Entertainment Holdings, Inc.
c/o Kurtzman Carson Consultants, LLC
1219 Culver Boulevard, Suite I
Los Angeles, CA 90066
Four categories of claims are exempt 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; and
(d) administrative expense claims.
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.
JOHN HARVARD'S BREW: Case Summary & Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: John Harvard's Brew House, L.L.C.
One Federal Street
Boston, Massachusetts 02110
Bankruptcy Case No.: 04-15448
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
The Brew House, L.L.C. 04-15451
Brew House Management, Inc. 04-15453
The Brew House Limited Partnership 04-15456
The Brew House Rhode Island, L.L.C. 04-15459
The Brew House Connecticut, L.L.C. 04-15464
John Harvard's Brew House Pennsylvania, L.L.C 04-15468
John Harvard's Brew House New York, L.L.C. 04-15473
The Brew House Roswell, L.L.C. 04-15475
Type of Business: The Debtor operates a restaurant that serves
food and brewery.
See http://www.johnharvards.com/
Chapter 11 Petition Date: June 30, 2004
Court: District of Massachusetts (Boston)
Judge: William C. Hillman
Debtors' Counsel: Charles A. Dale, III, Esq.
Gadsby Hannah LLP
225 Franklin Street
Boston, MA 02110
Tel: 617-345-7064
Fax: 617-204-8064
Estimated Assets Estimated Debts
---------------- ---------------
John Harvard's Brew House $0 to $50,000 $10 M to $50 M
The Brew House, L.L.C. $0 to $50,000 $0 to $50,000
Brew House Management, Inc. $0 to $50,000 $0 to $50,000
The Brew House Limited $1 M to $10 M $0 to $50,000
Partnership
The Brew House Rhode Island $50,000-$100,000 $0 to $50,000
The Brew House Connecticut $50,000-$100,000 $0 to $50,000
John Harvard's Brew House $1 M to $10 M $0 to $50,000
Pennsylvania
John Harvard's Brew House $500,000 to $1 M $0 to $50,000
New York
The Brew House Roswell
A. John Harvard's Brew House's 16 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Holly Young Trade Debt $12,000
Star Human Resources Trade Debt $8,150
ADP, Inc. Trade Debt $4,638
MCI Worldcom Technologies Trade Debt $4,144
Inc.
Jackson Lewis LLP Trade Debt $2,352
Parker & Brown PC Trade Debt $1,738
Xcellenet Trade Debt $1,314
United Parcel Service Trade Debt $928
Millennium Graphics Trade Debt $632
The HMS Group Trade Debt $595
Wormser, Kiely, Galef, & Trade Debt $546
Jacobs LLP
Neos Trade Debt $280
Iron Mountain Trade Debt $240
Fine & Block Trade Debt $144
Metropolitan Moving & Trade Debt $75
Storage
Access Point Inc. Trade Debt $22
B. The Brew House Limited's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Sysco Hallsmith Trade Debt $45,102
Hallsmith Sysco Food Service Trade Debt $34,783
Sysco-Smelkinson Trade Debt $14,778
Floor Tech Industries Trade Debt $12,932
United East Foodservice Trade Debt $12,756
United East Foodservice Trade Debt $12,539
Nstar Electric Trade Debt $8,382
Steve Connolly Seafood Trade Debt $8,268
Hearn Kirkwood Trade Debt $8,241
Steve Connolly Seafood Trade Debt $7,016
Lowell Bros. & Bailey Inc. Trade Debt $5,056
Sid Wainer & Son Trade Debt $4,854
V.A.C. Janitorial Trade Debt $4,402
Lowell Bros. & Bailey Inc. Trade Debt $4,039
United East Foodservice Trade Debt $3,577
Potomac Electric Power Co. Trade Debt $3,489
V.A.C. Janitorial Solution Trade Debt $2,850
American Linen Supply Co. Trade Debt $2,345
Commonwealth Wine Spirits Trade Debt $2,289
Warner Theater Operating Trade Debt $2,200
C. Brew House Rhode Island's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Hallsmith Sysco Food Ser. Trade Debt $17,001
United East Foodservice Trade Debt $6,298
Sid Wainer & Son Trade Debt $6,131
V.A.C. Janitorial Solution Trade Debt $4,960
New England Gas Utility $3,202
American Linen Supply Co. Trade Debt $3,124
Narragansett Electric Utility $3,034
RI Distributing Trade Debt $2,488
Steve Connolly Seafood Trade Debt $2,458
New Vermont Creamery, Inc. Trade Debt $1,941
Copley Distributors Trade Debt $1,563
GCS Service, Inc. Trade Debt $1,245
Johnson Bros. of RI, Inc. Trade Debt $1,168
New England Fire Patrol Trade Debt $1,103
Spicemill, RI Trade Debt $754
Martignetti Company Trade Debt $707
A J Martin, Inc. Trade Debt $649
Clean Beer Inc. Trade Debt $582
MPM Agent for Hennessey Trade Debt $520
Carr's Specialty Cakes Trade Debt $492
D. Brew House Connecticut's 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Sysco Food Services of CT Trade Debt $19,029
Fowler & Hunting Trade Debt $8,318
United East Foodservice Trade Debt $6,260
Florete Cleaning Co. Trade Debt $3,630
Connection Natural Gas Utilities $2,776
MCL Mechanical Services Trade Debt $2,200
Steve Connolly Seafood Co. Trade Debt $1,860
Ameri Pride Linen Trade Debt $1,693
Allan S. Goodman, Inc. Trade Debt $1,434
USA Town & Country Trade Debt $1,340
Brescome Barton, Inc. Trade Debt $930
The North Country Malt Trade Debt $872
Facilitec Trade Debt $661
Connection Distributors Trade Debt $645
Town of Manchester Taxes $603
Airgas Northeast Trade Debt $600
Crosby & Baker Ltd. Trade Debt $583
ADT Security Services Trade Debt $503
SNET Trade Debt $395
National Graphics Trade Debt $392
E. John Harvard's Brew House Pennsylvania's 20 Largest Unsecured
Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Sysco Food Services Phila. Trade Debt $35,861
Sysco Food Services Phila. Trade Debt $27,849
Sysco Food of Pittsburgh Trade Debt $19,296
Sysco of Philadelphia Trade Debt $18,596
Peco Energy Utility $7,858
J. Ambrogi Food Dist. Trade Debt $6,966
United East Foodservice Trade Debt $6,895
Connectiv Power Delivery Utility $6,783
Advanced Mechanical Trade Debt $5,735
United East Foodservice Trade Debt $5,140
J. Ambrogi Food Dist. Inc. Trade Debt $4,743
Five Star Refrigeration Trade Debt $4,324
PRO Cleaning Trade Debt $4,000
NCR Corporation Trade Debt $3,491
Advanced Mechanical Trade Debt $3,774
United East Foodservice Trade Debt $3,710
J Ambrogi Produce Inc. Trade Debt $3,630
Mirko's Maintenance Service Trade Debt $3,300
United East Trade Debt $3,271
Jani-King of Philadelphia Trade Debt $3,175
F. John Harvard's Brew House New York's 20 Largest Unsecured
Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Sysco Food Services CT Trade Debt $27,132
Islandwide Food Service Trade Debt $10,040
Long Island Power Author Utility $6,166
United East Foodservice Trade Debt $4,044
Era Cleaning Contractors Trade Debt $3,861
Keyspan Energy Delivery Utility $3,172
Arrow Supply Co., Inc. Trade Debt $2,030
Catamount Glassware Trade Debt $1,767
Jet Sanitation Serv. Corp. Trade Debt $1,305
Wind River Environmental Trade Debt $1,278
North Country Malt Supply Trade Debt $830
Day & Nite Refrigeration Trade Debt $799
Verizon Utility $775
Commercial Service Plus Trade Debt $757
DirectTV Trade Debt $756
Advanced Air Conditioning Trade Debt $707
Ecolab Institutional Trade Debt $674
J Kings Food Service Trade Debt $653
Kitchen Supreme Co. Trade Debt $549
Steve Connolly Seafood Co., Trade Debt $548
Inc.
KMART CORPORATION: Selling Up To 54 Stores To Sears, Roebuck & Co.
------------------------------------------------------------------
Kmart Corporation, a wholly-owned subsidiary of Kmart Holding
Corporation (Nasdaq: KMRT), announced that it has signed a
definitive agreement with Sears, Roebuck and Co. (NYSE: S), to
sell up to 54 of its stores for a maximum purchase price of $621
million in cash. The exact number of stores, locations, and total
purchase amount will be determined based upon the satisfaction of
certain conditions which are to occur within 60 days for the
majority of the stores and 75 days for the remainder. Kmart will
continue to operate the stores that are to be sold until March or
April 2005. Sears has agreed to consider offering employment to
any Kmart employee who desires to be employed by Sears at the
converted stores.
Julian C. Day, President and Chief Executive Officer of Kmart,
said, "Today we announced the second of two transactions involving
the sale of stores. The transactions with Sears and Home Depot
(which was announced on June 4, 2004) represent a total purchase
price of almost $1 billion for less than 80 of our stores, or
approximately 5% of our current store base. Both transactions
represent opportunities to realize value, which can be utilized to
improve the remaining store base and to strengthen the Company.
We are not currently in discussions regarding any additional
significant store sales, although we will continue to evaluate
opportunities as they arise."
Day stated further, "We are committed to achieving value for our
shareholders by operating our stores and recognizing the value of
our assets. After both transactions are closed, Kmart will remain
one of the largest retailers in America, with over 1,420 stores
and approximately $20 billion in revenues. We will be able to
direct all our attention on building upon and accelerating the
considerable operating improvements that we have already achieved,
including the Fall Apparel launch in July and our partnership with
the WB Network. We have a strong management team in place and are
committed to making Kmart a better company every day."
Kmart also announced that its Board of Directors has increased its
existing share repurchase authorization to $100 million.
Purchases made under this program will depend on the prevailing
stock price, market conditions, alternative investment
opportunities and other factors.
About Kmart Holding Corporation
Kmart Holding Corporation (Nasdaq: KMRT) and its subsidiaries
(together, "Kmart") is a mass merchandising company that offers
customers quality products through a portfolio of exclusive brands
that include Thalia Sodi, Jaclyn Smith, Joe Boxer, Kathy Ireland,
Martha Stewart Everyday, Route 66 and Sesame Street. For more
information visit the Company's website at http://www.kmart.com/
(Kmart Bankruptcy News, Issue No. 76; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
LARK-BELL COMPANIES: Case Summary & Largest Unsecured Creditors
---------------------------------------------------------------
Lead Debtor: Lark-Bell Companies, Inc.
301 Old East Vine Street, Suite 101
Lexington, Kentucky 40507
Bankruptcy Case No.: 04-52128
Debtor affiliates filing separate chapter 11 petitions:
Entity Case No.
------ --------
LBI North, Inc. 04-52131
Type of Business: The Debtor operates Papa John's Pizza
Restaurants.
Chapter 11 Petition Date: June 24, 2004
Court: Eastern District of Kentucky (Lexington)
Judge: William S. Howard
Debtor's Counsel: Patricia K. Burgess, Esq.
Robert V. Sartin, Esq.
Sawyer & Glancy, PLLC
3120 Wall Street, Suite 310
Lexington, KY 40513
Tel: 859-223-1500
Estimated Assets Estimated Debts
---------------- ---------------
Lark-Bell Companies, Inc. $1 M to $10 M $1 M to $10 M
LBI North, Inc. $500,000 to $1 M $1 M to $10 M
A. Lark-Bell Companies' 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
National City Bank of Bank Loan $979,186
Kentucky
Commercial Loan Operations
P.O. Box 36000
Louisville, KY 40233
Papa John's International Franchise Related $520,000
2002 Papa John's Blvd. Fees
Louisville, KY 40299
Citizens National Bank Bank Loan $115,000
Greenebaum Doll & McDonald, Legal Services $24,483
PLLC
Griffith, Delaney, Hillman Services $18,888
& Co.
Mail Marketing Trade Debt $12,977
Accelerated Mail Service Trade Debt $12,208
Reliance National Insurance Trade Debt $7,937
Jackson Kelly PLLC Legal Services $7,916
Sprint Trade Debt $6,848
Land America Trade Debt $6,014
Smith Price & Wright, LLP Legal Services $5,000
New Plan Realty Trust, Inc. Trade Debt $4,301
Christopher Todd Viers Real Estate Taxes $3,500
Coupon Mint Magazine Trade Debt $2,794
Refrigeration Services Trade Debt $872
United Directories, Yellow Trade Debt $833
Pages
Power Signs, Inc. Trade Debt $500
Universal Directories Trade Debt $355
Universal Advertising Trade Debt $180
Association
B. LBI North, Inc.'s 20 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Papa John's International Franchise Fees $240,000
Antonelli Advertising, Inc. Trade Debt $25,871
Special Delivery, Inc. Trade Debt $16,340
Saltz Shamis & Goldfarb Inc. Trade Debt $7,760
Day By Day, Inc. Trade Debt $7,135
Forum Communications, Co. Trade Debt $4,779
Phillip J. & Carol Gouveia Trade Debt $3,027
Mailbox Marketing Trade Debt $2,995
Quality Service Trade Debt $1,906
Clear Channel Trade Debt $1,499
Q98 FM KQWB Trade Debt $1,196
Froggy 99.9 FM KVOX Trade Debt $1,032
YDES Major Appliance Service Trade Debt $857
Otter Tail Trade Debt $715
Gary & Sons Trade Debt $701
Red River Heating Trade Debt $628
Hobart Sales and Service Trade Debt $578
Lakes Area Guest Guide Trade Debt $525
Alpha 6, Inc. Trade Debt $468
Mann Signs & Services, Inc. Trade Debt $335
LEVI STRAUSS: Miriam Haas Succeeds Husband as Board Member
----------------------------------------------------------
Levi Strauss & Co. (LS&CO.) Thursday elected Miriam (Mimi) L.
Haas, president of the Miriam and Peter Haas Fund, to its board of
directors, effective immediately. Mrs. Haas is succeeding her
husband, Peter Haas, Sr., 85, who is stepping down as chairman
emeritus of the board of directors after 56 years of service. He
will remain a trustee on the company's voting trust.
"Peter has been a vital member of the board of directors since
1948," said LS&CO.'s chairman Bob Haas. "His commitment to the
company's values and passion for our products and people have
inspired all of us on the board. I look forward to continuing to
draw upon his experience and insights as a member of the company's
voting trust.
"I am also pleased to welcome Mimi as our newest board member,"
Haas continued. "She is a dedicated advocate for public service
and the arts. Considering our company's long-standing commitment
to corporate citizenship and community involvement, Mimi's civic
mindedness makes her a positive addition to our board."
Mrs. Haas has served as president of the Miriam and Peter Haas
Fund since 1981. The fund supports activities that provide San
Francisco's young, low-income children and their families with
access to high-quality early childhood programs. It also helps
fund the arts, public policy programs, and health and human
services. In 2003, the fund awarded $10.1 million in grants.
Mrs. Haas also is a trustee and a member of the finance and
executive committees at both the San Francisco and the New York
Museums of Modern Art.
"I am delighted to join Levi Strauss & Co.'s board of directors,"
Mrs. Haas said. "This is a remarkable company with an unparalleled
151-year history. I am keenly interested in doing whatever I can
to help build upon the company's legacy."
A strong proponent of public service since receiving a degree in
political science from George Washington University, Mrs. Haas is
a member of the Advisory Board of the Haas Center for Public
Service at Stanford University. She also participates on the Board
of Visitors at the Terry Sanford Institute of Public Policy at
Duke University and as a member of the Council on Foreign
Relations.
Peter Haas, Sr. joined the family business in 1945 and has served
on LS&CO.'s board of directors since 1948. Beginning in the late
1950s, Peter and his brother, Walter Haas, Jr., managed the
company together, sharing responsibilities and exchanging titles.
In 1958, Peter became executive vice president and Walter, Jr.
became president. Peter served as president of Levi Strauss & Co.
from 1970 to 1981, while Walter was chairman of the board. In
1976, Peter became president and chief executive officer, and from
1981 until 1989 he was chairman of the board. From 1989 until July
2, Peter was chairman of the company's executive committee, and,
more recently, chairman emeritus of the board. He has been a
trustee of LS&CO.'s voting trust since its inception in 1996.
The voting trust members are Peter Haas, Sr., Peter Haas, Jr., Bob
Haas and F. Warren Hellman. The voting trust has the exclusive
ability to elect and remove directors, amend the by-laws and take
other certain actions which would normally be within the power of
the stockholders.
Levi Strauss & Co. (LS&CO.) is one of the world's largest brand-
name apparel marketers with 2003 sales of $4.1 billion. The
company manufactures and markets branded jeans and casual
sportswear under the Levi's(R), Dockers(R) and Levi Strauss
Signature(TM) brands.
* * *
As reported in the Troubled Company Reporter's May 14, 2004
edition, Levi Strauss & Co. announced that it is exploring the
sale of its worldwide Dockers casual clothing business. The
company has retained Citigroup Inc. to assist with the potential
sale of the Dockers business.
The Dockers brand is one of the world's largest apparel brands,
generating annual worldwide revenue of approximately $1.4 billion,
including more than $360 million in licensee wholesale revenue. It
is the leading casual pants brand in the United States and has a
worldwide presence with sales in more than 50 countries in North
America, Latin America, Europe and Asia.
"We are choosing to sell the Dockers brand because we want to
reduce our debt substantially, improve the capital structure of
the company, and focus our resources on growing our Levi's and
Levi Strauss Signature(TM) businesses," said Phil Marineau, chief
executive officer. "We have made good progress in improving our
competitiveness and financial strength, including taking cost and
complexity out of our business, revamping our Levi's brand
products and marketing, and expanding our Levi Strauss
Signature(TM) brand for value-conscious consumers. Selling the
Dockers business would be a significant next step towards
achieving our long-term financial performance goals for the
company."
LINREAL: Wants to Sign-Up Damon & Morey as Bankruptcy Attorneys
---------------------------------------------------------------
Linreal Corp., asks the U.S. Bankruptcy Court for the Western
District of New York for permission to employ Damon & Morey LLP as
its general counsel.
Damon & Morey will provide legal services as required to maximize
the bankruptcy estate, to negotiate with creditors and to assist
the Debtor in developing a plan of reorganization.
Damon & Morey attorneys who will be primarily responsible for
providing services to the Debtor are:
Professional Designation Billing Rate
------------ ----------- ------------
William F. Savino Partner $235 per hour
Daniel F. Brown Partner $235 per hour
Beth Ann Bivona Associate $175 per hour
Christian J. Henrich Associate $145 per hour
Tracy L. Fruehauf Paralegal $75 per hour
Lisa A. Metlak Paralegal $60 per hour
The Debtor has selected Damon & Morey to act as its counsel
because the firm has great experience in representing debtors
seeking to reorganize pursuant to Chapter 11 of the Bankruptcy
Code.
Headquartered in Buffalo, New York, Linreal Corp., is a Real
Estate Holding Company. The Company filed for chapter 11
protection on June 10, 2004 (Bankr. W.D.N.Y Case No. 04-14386).
Daniel F. Brown, Esq., at Damon & Morey represents the Debtor in
its restructuring efforts. When the Company filed for protection
from its creditors, it listed $10,000,000 in total assets and
$8,000,000 in total debts.
MADISON RIVER: S&P Revises Outlook To Stable From Negative
----------------------------------------------------------
Standard & Poor's Ratings Services revised its outlook on Madison
River Telephone Co. LLC and related entities to stable from
negative. Ratings on the company, including the 'B' corporate
credit rating, were affirmed. As of March 31, 2004, total debt
outstanding was about $625 million. Net debt, excluding
the Rural Telephone Finance Cooperative subordinated capital
certificates, was about $580 million.
"The outlook change primarily reflects recent trends that show a
stemming in access line loss," explained Standard & Poor's credit
analyst Rosemarie Kalinowski. "In addition, the stable outlook
recognizes the higher demand for digital subscriber line services
resulting from increased marketing and the recent introduction of
a bundled package, which offers unlimited DSL." While DSL does not
increase the number of access lines, it does provide an additional
high-margin revenue stream. Increased revenue from DSL has
resulted in a stabilization of the revenue stream, although there
continues to be a soft economy in the Illinois service area.
Mebane, North Carolina-based Madison River is a private rural
local exchange company providing communications services to
business and residential customers in North Carolina, Alabama,
Mississippi, and Illinois. The company's incumbent local exchange
company operations represent about 92% of total revenues and the
majority of its cash flow. The remainder is contributed from its
competitive local exchange carrier business, which has been scaled
back. As of March 31, 2004, access lines totaled about 185,453.
The ratings on Madison River reflect the company's high debt
leverage and limited ability to withstand intense competitive
pressures due to its size. These factors are partially mitigated
by the stable cash flows of its core ILEC business and increased
demand for DSL services. In addition, the quality of the company's
revenue stream is not compromised by the uncertain future of
universal services funding because USF represents less than 10% of
total revenues.
Although Madison River's ILEC business saw a minimal decrease in
voice access lines in the first quarter of 2004, a material
rebound is not anticipated in the near term due to the weak
economy in Illinois. In the first quarter of 2004, the ILEC's
revenues grew about 10% over first-quarter 2003 revenues,
reflecting the growth in DSL lines, the success of the "No Limits"
bundle, and increased penetration of vertical services, partially
offset by the loss of primary access lines in Illinois. The ILEC's
EBITDA margin experienced an increase to 55.8% in the first
quarter of 2004, compared with 50% in the fourth quarter of 2003,
due to benefits realized from increased DSL penetration and the
new bundled offering. The fourth-quarter 2003 EBITDA margin had
been affected by increased marketing costs related to these two
products. The increased demand for these two products should
partially mitigate the impact of any further decline in primary
lines in the Illinois service area.
MILLENIUM ASSISTED: Hires Kraemer Burns as Special Counsel
----------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey gave its
stamp of approval to Millenium Assisted Living Residence at
Freehold, LLC's application to employ the law firm of Kraemer,
Burns, Mytleka, Lovell & Kulka P.A. as its special corporate
counsel.
Kraemer Burns is expected to:
(i) act as corporate and transactional counsel for the
Debtor;
(ii) prepare contracts or any other requisite documents or
agreements in conjunction with the sale of the Debtor's
assets;
(iii) review and negotiate contracts and leases for the Debtor;
and
(iv) provide human resource assistance, if necessary, in areas
such as employee terminations and employee benefits.
Scott Stolbach, Esq., will lead the team in this engagement. Mr.
Stolbach reports that the firm does not have any connection with
the Debtor, its creditors, or any other party in interest, and
does not hold or represent an interest materially adverse to the
estate. Mr. Stolbach did not disclose the firm's current hourly
rates it will charge for legal services rendered to the estate.
Headquartered in Freehold, New Jersey, Millenium Assisted Living
Residence at Freehold, LLC, filed for chapter 11 protection on
June 7, 2004 (Bankr. N.J. Case No. 04-29097). Larry Lesnik, Esq.,
and Sheryll S. Tahiri, Esq., at Ravin Greenberg PC represent 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.
MIRANT CORPORATION: Appoints Terry Thompson As VP -- Restructuring
------------------------------------------------------------------
Mirant Corporation (Pink Sheets: MIRKQ) announced that it has
hired Terry Thompson, 31, as vice president, restructuring. He
will report directly to Mirant's chief financial officer, Michele
Burns, effective June 21.
Thompson will be responsible for managing the day-to-day
bankruptcy process and for facilitating the company's preparations
for emergence. He will work in conjunction with AlixPartners,
LLC, a consulting firm that has been assisting Mirant in its
restructuring.
Thompson was recently director of treasury and business
development at Delta Airlines, Inc.
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. 37; Bankruptcy Creditors' Service, Inc., 215/945-7000)
NANOPIERCE: Posts $1M Net Loss for the 9 Months Ended March 2004
----------------------------------------------------------------
NanoPierce Technologies Inc. is engaged in the design, development
and licensing of products using its intellectual property, the PI
Technology. The PI Technology consists of patents, pending
patent applications, patent applications in preparation, trade
secrets, trade names, and trademarks. The PI Technology improves
electrical, thermal and mechanical characteristics of electronic
products. The Company has designated and is commercializing its
PI Technology as the NanoPierce Connection System (NCS(TM)) and
has begun to market the PI Technology to companies in various
industries for a wide range of applications.
NCOS business activities are to include the licensing, sale and/or
manufacturing of certain electronic products using the NCS
technology. Through March 31, 2004, NCOS activities have primarily
consisted of research and development, marketing and
administrative functions. Prior to discontinuing operations, NCT
activities consisted primarily of providing software development
and implementation services, and performing administrative,
research and development, and selling and marketing activities.
Through March 31, 2004, EPT activities have primarily consisted of
manufacturing inlay components used in, among other things Smart
Labels, which is a paper sheet holding a chip-containing module
that is capable of memory storage and/or processing. Scimaxx
Solutions, LLC, which is an equity investment is primarily
involved in research and development and marketing functions.
On April 1, 2003, NCT filed insolvency with the Courts of Munich,
Germany. The insolvency filing was necessary in order to comply
with specific German legal requirements. In conjunction with the
insolvency filing, management made a decision in April 2003 to
discontinue operations at NCT and liquidate NCT, either though the
German courts or through a self-liquidation. In September 2003,
the German courts rejected the application for insolvency;
therefore NCT implemented a plan of self-liquidation as provided
by German law. The Company anticipates that liquidation will be
completed by June 30, 2004.
NanoPierce Technologies Inc.'s financial statements for the nine
months ended March 31, 2004 have been prepared on a going concern
basis, which contemplates the realization of assets and the
settlement of liabilities and commitments in the normal course of
business. The Company reported a net loss of $1,048,786 for the
nine months ended March 31, 2004, and an accumulated deficit of
$22,122,406 as of March 31, 2004. The Company has not recognized
any significant revenues from its PI technology, the Company's
subsidiary NCT is under a plan of self-liquidation, and in
December 2003, the Company sold a controlling 51% interest in EPT.
In January 2004, the Company entered into an equity financing
agreement, of which the Company received $2 million upon the
issuance of restricted common stock. The Company intends to use
these funds to support operations and for possible business
acquisitions.
Currently, the Company does not have a revolving loan agreement
with any financial institution, nor can the Company provide any
assurance it will be able to enter into any such agreement in the
future, or be able to raise funds through a further issuance of
debt or equity in the Company.
NEMO DEVELOPMENT: Case Summary & 14 Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Nemo Development, Incorporated
5240 West 94th Terr, Suite 106
Prairie Village, Kansas 66207
Bankruptcy Case No.: 04-22701
Type of Business: The Debtor is a new home construction company.
Chapter 11 Petition Date: June 28, 2004
Court: District of Kansas (Kansas City)
Judge: Robert D. Berger
Debtor's Counsel: Cynthia F. Grimes, Esq.
Grimes & Rebein, L.C.
15301 West 87th Street, Parkway Suite 200
Lenexa, KS 66219
Tel: 913-888-4800
Fax: 913-888-0570
Total Assets: $1,095,050
Total Debts: $1,347,769
Debtor's 14 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Mark W. McKenzie Attorney fees $22,000
McCray Millwork Trade Debt $13,628
DJ's Foundation and Flatwork Judgment $9,814
Vielhauer Plumbing Inc. Trade Debt $8,438
US Bank Credit Card Purchases $6,031
US Bank Credit Card Purchases $4,688
Factory Direct Appliance Inc Trade Debt $4,580
Santa Fe Trails Judgment $4,107
Geiger Ready Mix Trade Debt $3,171
Atmos Energy Utility Bills $2,339
Kansas City Utility Bills $1,745
Complete Home Concepts Business Debt $1,417
Delden Mfg. Co. Trade Debt $607
Brandt Trucking Trade Debt $178
OMNE STAFFING: Charles M. Forman Appointed as Chapter 11 Trustee
----------------------------------------------------------------
The U.S. Bankruptcy Court for the District of New Jersey approved
Roberta A. DeAngelis' appointment of Charles M. Forman, Esq., to
serve as the Chapter 11 Trustee in Omne Staffing, Inc.'s cases.
The U.S. Trustee reports that she consulted with these parties in
interest regarding her appointment of Mr. Forman:
1. John K. Sherwood, Esq.
Counsel for the Debtors
Lowenstein Sandler
65 Livingston Ave.
Roseland, New Jersey 07068
2. Hal L. Baume, Esq.
Counsel for the Official Committee of Unsecured Creditors
Fox Rothschild LLP
Princeton Pike Corporate Center
997 Lenox Drive, Building 3
Lawrenceville, New Jersey 08648-2311
3. Gerald H. Gline, Esq.
Counsel for American Protection Insurance Company
Cole, Schotz, Meisel, Forman & Leonard
25 Main St.
Hackensack, New Jersey 07601
4. Anthony J. LaBruna, Esq.
Counsel for the United States of America
United States Attorney's Office
970 Broad Street, Suite 700
Newark, New Jersey 07102
Headquartered in Cranford, New Jersey, Omne Staffing, Inc., filed
for chapter 11 protection on April 9, 2004 (Bankr. D. N.J. Case
No. 04-22316). John K. Sherwood, Esq., at Lowenstein Sandler
represents the Debtors in their restructuring efforts. When the
Company filed for protection from their creditors, they listed
both estimated debts and assets of over $10 million.
OMNE STAFFING: Committee Brings-In Fox Rothschild as Attorneys
--------------------------------------------------------------
The Official Unsecured Creditors Committee appointed in Omne
Staffing, Inc.'s chapter 11 cases sought and obtained approval
from the U.S. Bankruptcy Court for the District of New Jersey to
retain Fox Rothschild LLP as its counsel.
Fox Rothschild will:
a. assist, advise and represent the Committee with respect
to the administration of this case and the exercise of
oversight with respect to the Debtor's affairs, including
all issues arising from or impacting the Debtor, the
Committee or this chapter 11 case;
b. provide all necessary legal advice with respect to the
Committee's powers and duties;
c. assist the Committee in maximizing the value of the
Debtor's assets for the benefit of all creditors;
d. participate in the formulation of and negotiation of a
plan of reorganization and approval of an associated
disclosure statement;
e. conduct an investigation, as the Committee deems
appropriate, concerning, among other things, the assets,
liabilities, financial condition and operating issues of
the Debtor and any other matter relevant to the case or to
the formulation of a plan;
f. commence and prosecute any and all necessary and
appropriate actions and proceedings on behalf of the
Committee that may be relevant to this case;
g. prepare on behalf of the Committee necessary applications,
motions, answers, orders, reports and other legal papers;
h. communicate with the Committee's constituents and others
as the Committee may consider desirable in furtherance of
its responsibilities;
i. appear in Court and to represent the interests of the
Committee; and
j. perform all other legal services for the Committee which
are appropriate, necessary and proper in this chapter 11
case.
Hal L. Baume, Esq., a partner of Fox Rothschild, reports that the
firm will bill the Debtors' estates at its current customary
hourly rates:
Designation Billing Rate
----------- ------------
Partners, associates and counsel $160 to $500 per hour
paralegals and legal assistants $75 to $160 per hour
Headquartered in Cranford, New Jersey, Omne Staffing, Inc., filed
for chapter 11 protection on April 9, 2004 (Bankr. D. N.J. Case
No. 04-22316). John K. Sherwood, Esq., at Lowenstein Sandler
represents the Debtors in their restructuring efforts. When the
Company filed for protection from their creditors, they listed
both estimated debts and assets of over $10 million.
OMNI FACILITY: Wants to Obtain $5.3 Mil. DIP Financing Facility
---------------------------------------------------------------
Omni Facility Services, Inc., and its debtor-affiliates want to
obtain access to a secured superpriority postpetition financing
facility for $5.3 million from Heller Financial, Inc., and ZOHAR
CDO, 2003-1, Limited through December 15, 2004, and ask the
Bankruptcy Court to approve the borrowing arrangement.
The Debtors tell the U.S. Bankruptcy Court for the Southern
District of New York that Heller Financial, as administrative
agent, made loans and advances to the Debtors prior to the
Petition Date. As of the Petition Date, the Debtors owe
$43,800,000 in unpaid principal plus accrued and unpaid interest
and fees under the Prepetition Credit Facility.
To secure the Prepetition Indebtedness, each of the Debtors will
grant Heller Financial security interests and liens in and on
substantially all of its existing and after-acquired assets.
In connection with the Postpetition Loans, the Debtors will pay
Interest equal to Heller's Index Rate (prime plus 0.50%) plus
3.0%, and will pay these fees:
* a $100,000 Facility Fee;
* a $20,000 Agent's Fee; plus
* 0.50% on every dollar not borrowed as an Unused Line Fee.
The proceeds of the loan will be used to finance the Debtors'
ordinary working capital and capital expenditure needs, or other
purposes that are reasonably satisfactory to the DIP Facility
Agent and DIP Facility Lenders.
The Debtors will grant the lenders a fully perfected first
priority security interest in the Collateral subject only to the
Carve-Out and Priority Prepetition Liens and administrative
superpriority in accordance with Section 364(c)(1) of the
Bankruptcy Code, over any and all administrative expenses.
The Debtors submit that their need for financing is critical. In
the absence of the DIP Facility and the authorized use of Cash
Collateral, the continued operation of their businesses would not
be possible, and serious and irreparable harm to the Debtors and
their estates would occur. The Debtors do not have sufficient
available sources of working capital and financing to operate
their businesses in the ordinary course of business or maintain
their property in accordance with state and federal law without
the DIP Facility.
The Debtors' ability to maintain business relationships with their
vendors, suppliers and customers, to pay their employees and
otherwise finance their operations, is essential to their
continued viability.
Frank A. Oswald, Esq., at Togut, Segal & Segal, LLP points out
that the Debtors "are unable to obtain the required funds in the
form of unsecured debt allowable under Section 503(b)(1) of the
Bankruptcy Code as an administrative expense pursuant to Section
364(a) or (b) of the Bankruptcy Code, unsecured debt having the
priority afforded by Section 364(c)(1) of the Bankruptcy Code or
debt secured only as described in Section 364(c)(2) or (3) of the
Bankruptcy Code."
A critical need exists for the Debtors to obtain financing, both
on an interim basis and a final basis, in order to continue the
operation of their businesses. Mr. Oswald explains that the
Debtors operate a service business. Without immediate access to
such funds, the Debtors will not be able to pay their payroll and
other critical business expenses. At this time, the ability of the
Debtors to finance their operations and the availability to them
of sufficient working capital and liquidity through the incurrence
of new indebtedness for borrowed money and other financial
accommodations are vital to the confidence of the employees,
vendors and suppliers and to the preservation and maintenance of
the Debtors' brand and going concern value.
Headquartered in South Plainfield, New Jersey, Omni Facility
Services, Inc. -- http://www.omnifacility.com/-- provides
architectural, janitorial, landscaping, and electrical services.
The Company filed for chapter 11 protection on June 9, 2004
(Bankr. S.D.N.Y. Case No. 04-13972). Frank A. Oswald, Esq., at
Togut, Segal & Segal LLP represents the Debtors in their
restructuring efforts. When the Company filed for protection from
their creditors, they listed $80,334,886 in total assets and
$100,285,820 in total debts.
OWENS CORNING: M. Pope Wants To Disqualify Hamlin Gross & Mcgovern
------------------------------------------------------------------
Michael Pope, an unsecured creditor with unliquidated asbestos
personal injury claims against the Owens Corning Debtors as well
as against Armstrong World Industries, Inc., USG Corporation, and
Federal-Mogul Global, Inc., asks the Court to disqualify and
terminate the appointment of Judson Hamlin, David Gross and
Francis McGovern, and require them to disgorge the fees they
received as Court-appointed advisors.
Mr. Pope's request does not affect W.R. Grace & Co.'s bankruptcy
cases since Mr. Pope is not a Grace creditor.
William J. Marsden, Esq., at Fish & Richardson, PC, in
Wilmington, Delaware, asserts that Messrs. Hamlin, Gross and
McGovern should be disqualified and ordered to disgorge their
fees because the United States Court of Appeals for the Third
Circuit ruled that they operated under serious and substantial
conflicts of interests. While serving as the District Court's
"supposedly" neutral advisors, they were in fact advocating the
interests of future asbestos claimants in a related proceeding
and had an interest in creating -- and did create -- a precedent
that was beneficial to the future claimants.
Mr. McGovern, who was appointed to serve as advisor and mediator
in the proceedings, failed to disclose his previous and ongoing
close association with Joseph Rice, a domineering figure in many
bankruptcy proceedings. With Mr. McGovern's assistance, Mr. Rice
engineered settlement agreements that benefit him at the expense
of asbestos personal-injury claimants.
The Third Circuit rules that the conflicts of Messrs. Hamlin,
Gross and McGovern were so serious that they tainted and
ultimately required the recusal of District Judge Wolin. That
ruling is tantamount to a determination that they breach their
ethical duties as fiduciaries to the Court and to the parties.
According to Mr. Marsden, decisional law indicates that
disqualification, termination and disgorgement of fees are the
appropriate remedies where professional persons appointed under
Section 327 of the Bankruptcy Code have conflicts of interest.
Headquartered in Toledo, Ohio, Owens Corning --
http://www.owenscorning.com-- manufactures fiberglass insulation,
roofing materials, vinyl windows and siding, patio doors, rain
gutters and downspouts. The Company filed for chapter 11
protection on October 5, 2000 (Bankr. Del. Case. No. 00-03837).
Mark S. Chehi, Esq., at Skadden, Arps, Slate, Meagher & Flom
represents the Debtors in their restructuring efforts. On Jun 30,
2001, the Debtors listed $6,875,000,000 in assets and
$8,281,000,000 in debts. (Owens Corning Bankruptcy News, Issue No.
78; Bankruptcy Creditors' Service, Inc., 215/945-7000)
PARMALAT GROUP: Court Gives Final Nod on AP Services' Employment
----------------------------------------------------------------
Judge Drain authorizes the Parmalat U.S. Debtors to employ AP
Services as crisis managers on a final basis. The $300,000
retainer the Debtors paid to AlixPartners will be transferred to
and held by AP Services for application in accordance with the
AlixPartners Agreement, and any unearned portion of the retainer
will be returned to the Debtors upon the termination of AP
Services' engagement.
Judge Drain will convene a separate hearing to consider the
definition, parameters, and size of any Contingent Success Fee
due AP Services. Any Contingent Success Fee will be determined
based on reasonableness. All objections of any party related to
any Contingent Success Fee are preserved until that time.
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. 23; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
PASCACK VALLEY HOSPITAL: Fitch Downgrades Bond Rating to BB
-----------------------------------------------------------
Fitch Ratings has downgraded to 'BB' from 'BBB-' the $51 million
New Jersey Health Care Facilities Financing Authority revenue
bonds, series 2003 and the approximately $35 million New Jersey
Health Care Facilities Financing Authority revenue bonds, series
1998. The bonds have been removed from Rating Watch Negative. The
Rating Outlook is Negative.
The downgrade to 'BB' is primarily due to PVH's large recent
operating and bottom-line losses, which have resulted in very low
debt service coverage. In 2003, PVH had audit adjustments totaling
$11 million, which resulted in an $11.2 million operating loss.
Fitch had internal 12 month interim unaudited statements that
exhibited an operating gain of $485,000. The audit adjustments
were largely attributed to an understatement of contractual
allowances ($9 million), and an increase in provision for bad
debts related to reimbursement from a Blue Cross contract ($1.8
million). Management stated that it has changed its internal
procedures regarding estimating contractual allowances and no
retroactive adjustments are expected. Due to the large operating
loss in fiscal 2003, debt service coverage was negative 0.3x
resulting in a rate covenant violation. As a result, PVH has
retained Cambio as a consultant. Performance through the five
months ended May 31, 2004 remains weak with a $3.2 million
operating loss. However, due to the recent implementation of
several cost saving initiatives, management believes breakeven
performance to occur in the fourth quarter resulting in an
operating loss of $5 million for fiscal 2004. PVH's high debt
burden and light liquidity position remain ongoing credit
concerns. PVH had a low 18.6% cash to debt ratio at May 31, 2004
and maximum annual debt service as a percent of revenue of 4.7%
through the interim period. At May 31, 2004, PVH had 42.5 days
cash on hand, a decline from 58.7 days at fiscal year-end 2003.
Credit strengths include PVH's leading market position in an
affluent service area. PVH maintains a leading 33% market share
position, although it operates in a fragmented market with four
competitors that have market share positions ranging from 12%-16%.
PVH is implementing several cost containment initiatives that
total $3.5 million in savings, in addition to $3 million
associated with recent labor cutbacks. PVH's ongoing expansion and
renovation project, which includes a new four-story patient tower,
is currently under budget and on time with completion scheduled
for March 2005. Fitch believes the building project is
strategically necessary and will better position PVH among its
competitors, some of which are also planning expansion and
renovation projects.
The Negative Rating Outlook is due to PVH's continued negative
operating performance. If PVH does not return to profitable
operations over the near- to medium-term, additional downward
rating pressure may result.
PVH is the sole obligor of the series 2003 and series 1998 bonds.
Fitch's analysis utilized financial statements of PVH, which
accounts for approximately 90% of parent and sole corporate member
Well Care Group (WCG)'s revenue. The 2003 audit for WCG has not
been released. Management does not expect a material difference
between the 2003 audited results for PVH and WCG.
Located in Westwood, NJ, approximately ten miles from Hackensack,
Pascack Valley Hospital is a 291-licensed bed general acute-care
facility. In 2003, total operating revenues for PVH were $134
million. PVH has covenanted to provide quarterly disclosure to
bondholders, which is viewed positively by Fitch. Disclosure to
Fitch has been good in terms of content and timeliness.
PEGASUS SATELLITE: Wants To Employ Shaw Pittman As Special Counsel
------------------------------------------------------------------
Given the technical nature of the Pegasus Satellite
Communications, Inc. Debtors' businesses and the importance of
broadcast licenses, the Debtors require the services of a law firm
with extensive experience in communication law issues.
Accordingly, the Debtors seek the Court's authority to employ Shaw
Pittman, LLP, as special counsel in connection with certain
communication law matters in their Chapter 11 cases.
Specifically, Shaw Pittman will:
(a) advise the Debtors in connection with issue of compliance
relating to laws and regulations affecting the operation
of broadcast entities;
(b) prepare, file and prosecute Federal Communications
Commission applications;
(c) prepare and file reports and other submissions required by
various communications laws;
(d) prepare pleadings and petitions to be filed with FCC, or
subsequently on appeal to other courts; and
(e) deal with rulemaking and adjudicatory matters involving
one or more of the Debtors.
Scott A. Blank, Esq., the Debtors' Senior Vice President for
Legal and Corporate Affairs, relates that, over the last 11
years, the attorneys at Shaw Pittman have represented certain of
the Debtors and their non-debtor affiliates in connection with:
* the licensing and operation of television stations and other
communications systems;
* the prosecution of FCC administrative rulemaking and
adjudicatory matters; and
* the transactional and regulatory matters related to
satellite procurement.
Through their representation of the Debtors and certain of the
Debtors' non-debtor affiliates, Shaw Pittman have become uniquely
and thoroughly familiar with the Debtors and their business
affairs.
While Shaw Pittman intends to continue its prepetition
representation of the Debtors' non-debtor affiliates, Shaw
Pittman agreed to provide legal services to those entities only
with regard to matters in which their interests are not adverse
to the Debtors or their estates.
David D. Oxenford, a partner at Shaw Pitman, assures the Court
that the law firm is a "disinterested person," as defined in
Section 101(14) of the Bankruptcy Code. Shaw Pittman will
conduct an ongoing review of its files to ensure that no
conflicts or other disqualifying circumstances exist or arise.
The Debtors have paid Shaw Pittman $539,476 for its services as
regulatory and corporate counsel over the past 12 months.
Although the cost of professional fees on a going forward basis
cannot be estimated with certainty, the Debtors believe that Shaw
Pittman's professional fees will not exceed $175,000 per year.
The Debtors will compensate Shaw Pittman for its legal services
on an hourly basis in accordance with its ordinary and customary
rates. The Debtors will reimburse the firm for all necessary
costs and expenses incurred. Shaw Pittman's current billing
rates are:
Professional Hourly Rate
------------ -----------
Attorneys $195 - 685
Para-professionals 90 - 195
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.
5; Bankruptcy Creditors' Service, Inc., 215/945-7000)
PHIBRO ANIMAL: La Cornubia Unit Files for Bankruptcy in France
--------------------------------------------------------------
On June 30, 2004, one of the Company's French subsidiaries, La
Cornubia SA, filed for bankruptcy under the insolvency laws of
France. The Company believes that, as a result of the bankruptcy
filing by La Cornubia, it is possible that LC Holdings SA, La
Cornubia's parent and another of the Company's French
subsidiaries, may also file for bankruptcy in France.
The Company's domestic Loan and Security Agreement, dated as of
October 21, 2003, as amended, among the Company, various of its
domestic Subsidiaries and Wells Fargo Foothill, Inc., as Agent,
and the lenders thereunder, contains certain provisions with
respect to the Company's subsidiaries, including Events of Default
with respect to the commencement by subsidiaries of
reorganization, bankruptcy, insolvency or similar proceedings. The
Company has obtained a waiver under the Senior Credit Facility so
that neither La Cornubia's bankruptcy filing, nor the possible
bankruptcy filing by LC Holdings, would constitute an Event of
Default under the Senior Credit Facility.
The Indenture, dated as of October 21, 2003, among the Company,
Phillip Brothers Netherlands III B.V., an indirect wholly-owned
subsidiary of the Company, the Guarantors named therein and HSBC
Bank USA, as trustee and as collateral agent, relating to the
issuance of 105,000 units consisting of $85.0 million of 13%
Senior Secured Notes due 2007 of the Company and $20.0 million 13%
Senior Secured Notes due 2007 of the Dutch Issuer, contains
certain provisions providing for Events of Default based on
breaches of covenants with respect to, defaults in respect of
Indebtedness of, and judgments, orders or decrees against,
Restricted Subsidiaries. The Issuers have obtained the requisite
consent of a majority of the holders of the Units to amend the
Indenture to exclude each of the French Subsidiaries as a
Restricted Subsidiary from various provisions defining such Events
of Default under the 2003 Indenture, and otherwise waiving any
Event of Default thereunder due to bankruptcy filings by the
French Subsidiaries.
The Indenture, dated as of June 11, 1998, as supplemented, among
the Company, the Guarantors named therein and JP Morgan Chase
Bank, as trustee, relating to the Company's 9-7/8% Senior
Subordinated Notes due 2008, contains certain provisions providing
for Events of Default based on breaches of covenants with respect
to, defaults in respect of Indebtedness of, and judgments, orders
or decrees against, Restricted Subsidiaries, as well as Events of
Default due to various events involving the bankruptcy of
Restricted Subsidiaries. The Company has obtained the requisite
consent of a majority of the holders of the Notes to amend the
1998 Indenture to exclude each of the French Subsidiaries as a
Restricted Subsidiary from various provisions defining such Events
of Default under the 1998 Indenture, and otherwise waiving any
Event of Default thereunder due to bankruptcy filings by the
French Subsidiaries.
The Company does not believe that La Cornubia's bankruptcy filing,
nor the possible bankruptcy filing by LC Holdings, will have a
material adverse effect on its financial condition or results of
operations.
PRIMEDEX HEALTH: Lenders Agree to Restructure $160 Million Debt
---------------------------------------------------------------
Primedex Health Systems, Inc. (OTCBB:PMDX) announced it has
reached an agreement in principal to restructure its outstanding
approximate $160 million credit arrangements utilizing its current
lenders.
The proposed arrangements involve a revision and extension of the
terms of the outstanding Primedex obligations to those entities.
The contemplated arrangement with the Primedex existing lenders is
intended to replace the previously sought third-party financing
arrangements.
While the revised financing arrangements with the Primedex
existing lenders will not result in a reduction in the Primedex
outstanding debt as previously contemplated, it will provide a
payment schedule designed to facilitate the current operations of
Primedex.
The replacement lending facility is expected to be in place by
July 31, 2004. Inasmuch as an agreement in principle only has been
reached, no assurance can be given that the agreement as now
contemplated will be reached or any agreement at all.
Primedex Health Systems, through its RadNet Management subsidiary,
Primedex owns and manages about 55 California facilities that
offer magnetic resonance imaging (MRI), ultrasound, mammography,
diagnostic radiology, and similar services. Medical services at
most of these facilities are provided by Beverly Radiology Medical
Group, which is almost wholly-owned by Primedex CEO Howard Berger,
who also owns about 30% of Primedex.
The Company filed for bankruptcy protection under chapter 11 on
September 4, 2003 (Bankr. C.D. Calif. Case No. 03-33211).
At April 30, 2004, Primedex Health Systems' balance sheet shows a
stockholders' deficit of $56,181,000 compared to a deficit of
$53,087,000 at October 31, 2004.
PROJECT FUNDING: S&P Removes Lowered Ratings from Credit Watch
--------------------------------------------------------------
Standard & Poor's Ratings Services lowered its ratings on the
class I, II, III, and IV notes issued by Project Funding Corp. I
and removed them from CreditWatch with negative implications,
where they were placed on March 4, 2004.
Project Funding Corp. I is a project funding CDO collateralized by
a pool of project finance loans. The transaction was originated in
March 1998 by Credit Suisse First Boston.
The lowered ratings assigned to the notes reflect structural
features of the transaction and the projected recovery rates for
the loans within the collateral pool. Given the relatively small
number of loans remaining within the collateral pool and the
continuing pro-rata paydowns of its liabilities, Project Funding
Corp. I is becoming increasingly exposed to the default of any one
asset as the number of loans within the collateral pool decreases.
To date, $468.46 million worth of loans in the collateral pool
have paid down, with the proceeds being applied pro-rata across
the rated notes. When the transaction was initially rated, it was
contemplated that the recovery rates for the loans in the
collateral pool would increase as the project finance loans within
the pool amortized. However, Standard & Poor's recent analysis of
the loans within the pool has resulted in a view that the average
recovery rate assumption for the loans within the pool has changed
little from the time Project Funding Corp. I was originated.
Ratings Lowered And Off Creditwatch Negative
Project Funding Corp. I
Rating
Class To From
I BBB AAA/Watch Neg
II BB A/Watch Neg
III B BBB/Watch Neg
IV CCC+ BB/Watch Neg
QUINTEK: Elects Robert Steele & Andrew Haag as Directors
--------------------------------------------------------
Quintek Technologies, Inc. (OTCBB:QTEK) announced the results of
its proxy voting from its annual meeting of shareholders held June
30, 2004 in Ventura, California.
Robert Steele, Chairman and CEO of Quintek commented, "We are
pleased at the overwhelming vote of confidence from the
shareholders of Quintek, which was exhibited in the voting on
these important corporate issues." He added, "Quintek has made
substantial progress over the last twelve months with the support
of its customers, vendors and employees. We've restructured debt,
created new lines of business, added key employees and attracted a
new president with significant sales generating experience in the
document management space.
All issues proposed in the company's recent proxy were passed.
These issues were:
-- Election of Robert Steele and Andrew Haag as Directors;
-- Proposal Ratifying Kabani & Co. as the company's auditors;
-- Amendment to increase the number of authorized shares of
Common Stock to 200,000,000 and to increase the number of
authorized shares of preferred stock to 50,000,000;
-- Amendment to authorize the Board of Directors to divide the
Preferred Stock into any number of classes or series, fix the
designation and number of shares of each such series or class,
and alter or determine the rights, preferences, privileges and
restrictions of each class or series of Preferred Stock not
yet issued, Amendment to authorize a quorum for any
shareholder meeting to be at least one third (1/3) of the
shares entitled to vote;
-- To approve and adopt the Quintek Technologies, Inc. 2004 Stock
Option Plan.
Steele added, "We are receiving solid traction from our Quintek
Services, Inc (QSI) team. The revenues, partnerships and growth
that we are experiencing should be evident in the recent current
quarter that ends September 30th. With the continuing support of
everyone involved with the company, Quintek should realize its
goals for FY 2005 and beyond."
About Quintek
Quintek Technologies, Inc. has been a manufacturer of hardware and
software and a service provider to the corporate and public sector
markets since 1991. The Company's new division, Quintek Services
Inc. (QSI) delivers Business Process Outsourcing (BPO) services
and Information Lifecycle Management (ILM) solutions to document
intensive industries such as public utilities, healthcare,
insurance, financial, legal, telecommunications and manufacturing.
The solutions and services the Company provides enable
organizations to secure and manage their information and document
business processes more efficiently. The Aberdeen Group, a
provider of IT market intelligence, forecasts 13 percent annual
growth for the BPO industry through 2005, when the market is
projected to reach $248 billion.
At March 31, 2004, Quintek Technologies' balance sheet shows a
stockholders' deficit of $1,710,992.
RCN CORPORATION: Court Sets August 11 as General Claims Bar Date
----------------------------------------------------------------
Judge Drain fixes August 11, 2004, at 5:00 p.m., Eastern Time, as
the Bar Date for creditors to file their proofs of claim against
RCN Corp. and its debtor-affiliates. November 23, 2004 is the
deadline for Governmental Units to file their proofs of claim.
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. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000)
RELIANCE GROUP: Liquidator To Sell 26-Acre Lot To TC Midatlantic
----------------------------------------------------------------
M. Diane Koken, Insurance Commissioner of the Commonwealth of
Pennsylvania, as Liquidator of Reliance Insurance Company, asks
the Commonwealth Court for permission to sell Virginia Tax Map
93, Parcel 13, to TC MidAtlantic Development.
Parcel 13 is a 26.19-acre real estate portion of the Loudoun
Parkway Center, located in Loudoun County, Virginia. Ann B.
Laupheimer, Esq., at Blank Rome, in Philadelphia, Pennsylvania,
relates that the Property was purchased in 1987 as part of RIC's
acquisition of 409 acres for $26,634,439, or $1.49 per square
foot. Of the 409 acres, 112.5 acres were zoned residential and
296.5 acres were zoned commercial. At $1.49 per square foot, the
112.5 acres of residential land had an underlying pro rata cost
of $7,301,745. During the course of obtaining various
governmental approvals, 41.5 residential acres were designated as
flood plain, community recreational space or roadway
improvements. Of the remaining 71 net acres of residential land,
50 acres were sold in four transactions between 1999 and 2001 for
$5,014,000. The sale of the remaining 21.01 residential acres
was approved by the Commonwealth Court in 2002 for $17,956,800.
The Property is part of the 296.5 commercial acres and was
originally included in the proposed sale of 211.81 acres of
commercially zoned land to Toll Brothers Realty Trust for
$16,511,000. This price amounted to $1.79 per square foot. The
Sale Agreement with Toll Brothers Realty Trust was terminated
during the due diligence period after Toll Brothers demanded
price concessions that were deemed unacceptable by RIC.
Cassidy and Pinkard represented RIC as its broker both before and
after the Toll Brothers transaction. In its initial efforts,
Cassidy and Pinkard sent information packages on the Loudoun
Parkway Center to local and national developers in the Washington
area. RIC wanted to sell the 211.81 acres on an as-is basis.
After termination of the Toll Brothers contract, Cassidy and
Pinkard approached competing bidders that RIC initially rejected.
These bidders declined to pursue the Center, stating that the
Center was not saleable on an as-is basis at or near the
appraised value.
Based of the lack of interest as zoned, RIC investigated rezoning
selected portions of the remaining commercial land. In that
review, RIC discovered that the retail commercial market was
stronger than the office commercial market. RIC determined that
a mixed use site, having significant retail uses in place, would
present a superior marketing platform for sale of the remaining
office land, as office users will demand the immediate
availability of a variety of retail services. RIC developed a
strategy to rezone certain parts of the Center to allow portions
to be used for retail commercial, office commercial and
residential uses.
In June 2003, TC MidAtlantic, a subsidiary of Trammel Crow, one
of the initial bidders, submitted an offer to buy a portion of
the Center at a significantly higher price than any previously
offered. The offer was subject to RIC's obtaining a change in
the zoning to allow retail commercial uses.
Ms. Laupheimer tells the Commonwealth Court that TC MidAtlantic's
offer was accepted because it represented an opportunity to
obtain a higher price for the Center. RIC hoped the transaction
would ignite the interest of other purchasers and potentially
increase potential sale prices for the remainder of the Center.
TC MidAtlantic was selected because of its credibility in the
marketplace and familiarity with the Property.
TC MidAtlantic will pay RIC $7,599,247, or $6.66 per square foot.
TC MidAtlantic will make a $100,000 initial deposit and will
accept the Property in as-is condition. RIC is obligated to
spend up to $25,000 per acre to cure any code or other violation
that may be issued until the date of closing.
RIC will pursue rezoning of the Property to allow retail
commercial uses and seek subdivision approval if required.
Simultaneously, RIC will attempt to rezone portions of the
balance of the commercial property for sale to future purchasers.
TC MidAtlantic will perform due diligence and terminate the
agreement if any condition is unacceptable. If the due diligence
review is successful, TC MidAtlantic will increase the deposit
escrow to $200,000. After the deposit, RIC will file an
application to rezone the Property for the construction of
150,000 square feet of retail commercial space, with office
commercial usage of the remainder at specified densities and
parking ratios.
TC MidAtlantic is responsible for preparing specific plans,
reports, studies and other data necessary for the rezoning
process. RIC is responsible for costs attendant to any required
subdivision of the Property, including costs of any subdivision
plan. Closing must occur within 28 months of Court approval.
RIC will pay Cassidy and Pinkard a Broker's Fee of 5% of the
first $1,000,000 and 3% of the balance. Based on the $7,599,247
purchase price, RIC stands to pay Cassidy and Pinkard $247,999 or
3.26% of the price.
To ensure that the Liquidator receives fair value for the Center,
the Liquidator hired Robert G. Johnson, MAI of JMSP, Inc., in
Herndon, Virginia. Mr. Johnson prepared an appraisal report that
indicated a $7,700,000 fair market value for the Property, which
is near the price proposed by Trammel Crow. Ms. Laupheimer
states that the purchase price represents 46% of the value
approved by the Court for the Toll Brothers Transaction, but
includes only 16% of the net developable acreage that was to have
been sold to Toll Brothers. The purchase price per square foot
is $6.66, which is 3.7 times more than the $1.79 per square foot
in the Toll Brothers Transaction.
Headquartered in New York, New York, Reliance Group Holdings, Inc.
-- http://www.rgh.com/-- is a holding company that owns 100% of
Reliance Financial Services Corporation. Reliance Financial, in
turn, owns 100% of Reliance Reliance Insurance Company. The
Company filed for chapter 11 protection on June 12, 2001 (Bankr.
S.D.N.Y. Case No. 01-13403). When the Company filed for
protection from their creditors, they listed $12,598,054,000 in
assets and $12,877,472,000 in debts. (Reliance Bankruptcy News,
Issue No. 55; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SEITEL INC: Reorganization Plan Declared Effective July 2, 2004
---------------------------------------------------------------
Seitel, Inc. (OTC Bulletin Board: SEIEQ), a leading provider of
seismic data and related geophysical services to the oil and gas
industry in North America, announced that its Plan of
Reorganization has become effective Friday, July 2, 2004.
In accordance with the Plan, which was confirmed by the bankruptcy
court on March 18, 2004, Seitel consummated a private placement of
$193 million aggregate principal amount due at maturity of its 11
3/4% Senior Notes due 2011. The Notes were offered to investors at
a price of 97.675% of the face amount of the Notes, resulting in
gross proceeds to Seitel of approximately $188.5 million. The
notes will pay stated interest of 11 3/4% per annum, semi-annually
in arrears, commencing January 15, 2005. Net proceeds of
approximately $180.7 million from the Notes offering, together
with an additional cash amount, have been placed in escrow pending
the completion of equity financing transactions contemplated by
the Plan (including the warrant offering described below), and
will be used, together with the net proceeds from the warrant
offering and certain cash on hand, to pay 100% of allowed
creditors' claims, together with post-petition interest, as
required under the Plan. If certain conditions to the release from
escrow of such funds do not occur on or prior to September 15,
2004, the escrowed funds will be used to fund a special mandatory
redemption of all outstanding notes at a cash redemption price
equal to 101% of the accreted value thereof, plus accrued and
unpaid interest.
Commencing Friday, each holder of record of Seitel's common stock
as of June 25, 2004 will receive for each share owned by them on
such date, one warrant to purchase 4.926 newly issued shares of
Seitel's common stock, at an exercise price of 60 cents per share.
The warrants will be exercisable and transferable until 5:00 p.m.,
New York City time, on August 2, 2004. Stockholders who do not
exercise their warrants will have their percentage equity
ownership in Seitel diluted by up to approximately 83%. American
Stock Transfer & Trust Company is Seitel's transfer and warrant
agent. Upon surrender of and in exchange for certificates
representing Seitel's "old" common stock, together with a properly
completed letter of transmittal being distributed by AST&T,
certificates representing shares of Seitel's reorganized common
stock will be issued.
Also in accordance with the Plan, effective July 2, Friday,
Messrs. Walter M. Craig, Jr., Robert L. Knauss, William Lerner and
John E. Stieglitz resigned as directors of Seitel. Seitel now has
a classified board of directors consisting of three classes. Class
I consists of three directors who will serve for an initial term
of three years expiring in 2007, Class II consists of three
directors who will serve for an initial term of two years expiring
in 2006, and Class III consists of one director who will serve for
an initial term of one year expiring in 2005. Effective Friday,
each of Messrs. Randall D. Stilley, Seitel's President and Chief
Executive Officer, Robert Kelley, J.D. Williams, Charles H.
Mouquin, C. Robert Black and Ned S. Holmes commenced serving as
directors of Seitel. Messrs. Fred S. Zeidman, Seitel's Chairman of
the Board, J.D. Williams and C. Robert Black will serve as the
three Class I directors, Messrs. Robert Kelley, Charles H. Mouquin
and Ned S. Holmes will serve as the three Class II directors, and
Mr. Stilley will serve as the sole Class III director. Each class
of directors standing for election upon the expiration of his
initial term will be elected for successive terms of three years.
Accordingly, Seitel will not hold an annual meeting of
stockholders to elect a Class III director until 2005.
About Seitel
Seitel is a leading provider of seismic data and related
geophysical services to the oil and gas industry in North America.
Oil and gas companies to assist in the exploration for and
development and management of oil and gas reserves use Seitel's
products and services. Seitel has ownership in an extensive
library of proprietary onshore and offshore seismic data that it
has accumulated since 1982 and that it offers for license to a
wide range of oil and gas companies. Seitel believes that its
library of onshore seismic data is one of the largest available
for licensing in the United States and Canada. Seitel's seismic
data library includes both onshore and offshore three- dimensional
(3D) and two-dimensional (2D) data and offshore multi-component
data. Seitel has ownership in approximately 32,000 square miles of
3D and approximately 1.1 million linear miles of 2D seismic data
concentrated primarily in the major North American oil and gas
producing regions. Seitel markets its seismic data to over 1,300
customers in the oil and gas industry, and it has license
arrangements with in excess of 1,000 customers.
SOLUTIA INC: Asks Court for November 11 Deadline to Remove Actions
------------------------------------------------------------------
The Solutia, Inc. Debtors ask the Court to extend the deadline
to remove actions through and including November 11, 2004.
M. Natasha Labovitz, Esq., at Gibson, Dunn & Crutcher, LLP, in
New York, relates that during the initial stages of the Debtors'
Chapter 11 cases, the Debtors and their professional
restructuring advisors were focused primarily on stabilizing and
maintaining day-to-day operations, developing and implementing an
overall business plan, analyzing complex contracts and
relationships in connection with the implementation of the
business plan, preparing each Debtor's schedules of assets and
liabilities and statements of financial affairs, and addressing
certain litigation matters that are critical to the
reorganization.
The Debtors recently announced that they made significant changes
to restructure Solutia, Inc.'s senior management team. The
changes also necessitated changes and shifts in responsibility in
Solutia's legal department. The Debtors' management has been
focused on implementing the restructurings and achieving costs
savings inherent in the Debtors' new business plan. As a result,
the Debtors have not had sufficient opportunity to review the
scope of all the civil actions they are party to, let alone
review the details of those actions in consultation with the
attorneys handling those matters, to consider whether removal
would be appropriate. Therefore, although the Debtors have
pursued the removal of at least one significant Civil Action,
additional time is necessary to review all of the Civil Actions
with respect to removal.
The Debtors believe that the extension sought will afford their
management, bankruptcy counsel and other professional advisors
additional time to make fully informed decisions concerning the
removal of the Civil Actions. Ms. Labovitz assures the Court
that the rights of any party to the Civil Actions will not be
prejudiced by the requested 120-day extension.
Headquartered in St. Louis, Missouri, Solutia, Inc. --
http://www.solutia.com/-- with its subsidiaries, make and sell a
variety of high-performance chemical-based materials used in a
broad range of consumer and industrial applications. The Company
filed for chapter 11 protection on December 17, 2003 (Bankr.
S.D.N.Y. Case No. 03-17949). When the Company filed for
protection from their creditors, they listed $2,854,000,000 in
assets and $3,223,000,000 in debts. (Solutia Bankruptcy News,
Issue No. 18; Bankruptcy Creditors' Service, Inc., 215/945-7000)
SOUTHERN STRUCTURES: Case Summary & Largest Unsecured Creditors
---------------------------------------------------------------
Debtor: Southern Structures, Inc.
P.O. Box 52005
Lafayette, Louisiana 70505
Bankruptcy Case No.: 04-51559
Type of Business: The Debtor is the owner and operator of a
metal building and component manufacturing
facility located in Youngsville, Louisiana.
See http://www.southernstructures.com/
Chapter 11 Petition Date: June 28, 2004
Court: Western District of Louisiana (Opelousas)
Judge: Gerald H. Schiff
Debtor's Counsels: Patrick S. Garrity, Esq.
William E. Steffes, Esq.
Steffes, Vingiello & McKenzie, L.L.C.
3029 South Sherwood Forest Boulevard, Suite 100
Baton Rouge, LA 70816
Tel: 504-344-1333
Estimated Assets: $1 Million to $10 Million
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
Coated Steel Corp. $1,170,904
3021 Lorna Road, Suite 100
Birmingham, AL 35216
Coil-Plus Jackson $522,403
212 Apache Dr.
Jackson, MS 39272
Southwest Steel Trading $326,394
Houston Plant
501 N. Greenwood St.
Houston, TX 77011
Metal Bldg. Comp, Inc. $241,554
Nucor Steel Corp. $195,716
Dominion Building Product $183,258
Macsteel $150,574
Sabel Industries $122,500
Atlas Bolt & Screw Co. $112,467
Friedman Ind. $111,472
Nat'l Steel Corp. $84,155
Namasco $76,583
Hanna Steel Corp. $61,189
Metron Steel $59,419
Arrow Trucking Co. $58,278
JMS Processing, Inc. $46,669
Metallic Products Corp. $43,905
Premier Insulation Division of Bay $41,946
Insulation
IMSA, Inc. $40,905
Airgas-Gulf States Region $40,842
SPORTS ARENAS: Needs More Investors to Pay Taxes & Fund Operations
------------------------------------------------------------------
Sports Arenas Inc.'s consolidated financial statements have been
prepared assuming the Company will continue as a going concern.
The Company has suffered recurring losses, has negative working
capital, a shareholders' deficit, and is forecasting negative cash
flows for the next twelve months.
Additionally, the Company estimates that it will have a tax
liability of approximately $926,000 due in September 2004 as a
result of reporting the taxable portion of the sale of the
apartment project owned by UCV, LP. The Company is currently
uncertain of where the Company will obtain the funds to pay these
tax liabilities. These items raise substantial doubt about the
Company's ability to continue as a going concern. The Company's
ability to continue as a going concern is dependent on obtaining
additional investors in its subsidiary, Penley Sports, or
increasing the sales volume of Penley Sports.
Management estimates positive cash flow of $50,000 to $100,000 in
total for the remaining quarter for the year ending June 30, 2004
from operating activities after deducting capital expenditures and
principal payments on notes payable and adding estimated
distributions from UCV and VRLP. The Company estimates it will
receive approximately $240,000 of distributions from UCV in the
fourth quarter of which $100,000 was received on May 10, 2004.
$200,000 of these estimated distributions from UCV represents the
remainder of funds to be distributed by UCV to the Company from
the sales proceeds of UCV's apartment project.
Management expects continuing cash flow deficits until Penley
Sports develops sufficient sales volume to become profitable.
There can be no assurances that Penley Sports will ever achieve
profitable operations. In April of 2004, management implemented a
number of cost cutting measures to manufacturing and marketing and
promotion (primarily the tour department). However, unless Penley
can increase its revenues, it is not likely to reach a break even
level of operations without identifying other opportunities to cut
costs in manufacturing expenses.
Management is currently evaluating other sources of working
capital including the sale of assets or obtaining additional
investors in Penley Sports. Management has not assessed the
likelihood of the Company receiving any other sources of long-term
or short-term liquidity. If the Company is not successful in
obtaining other sources of working capital this could have a
material adverse effect on the Company's ability to continue as a
going concern.
The Company has working capital deficit of $489,803 at March 31,
2004, which is a $1,551,356 decrease from the working capital of
$1,061,553 at June 30, 2003. The decrease in working capital is
primarily attributable to the reclassification of $926,000 from a
non-current deferred tax liability to a current deferred tax
liability and cash used by operating activities for the nine
months ended March 31, 2004. The cash used by operating
activities was partially offset by distributions received from
the Company's investees.
STORAGE COMPUTER: Recurring Losses Raise Going Concern Uncertainty
------------------------------------------------------------------
Storage Computer Corporation's consolidated financial statements
have been prepared on a going concern basis, which contemplates
the realization of assets and the satisfaction of liabilities in
the normal course of business. The Company has suffered recurring
losses from operations and negative cash flows that raise
substantial doubt about its ability to continue as a going
concern.
Management recognizes that the Company's continuation as a going
concern is dependent upon its ability to generate sufficient cash
flow to allow the Company to satisfy its obligations on a timely
basis. The generation of sufficient cash flow is dependent on the
successful expansion of the Company's share of the market for its
software, controlling costs and securing new financing.
The Company's future success depends on maintaining adequate
liquidity and working capital to meet operational requirements.
Revenues from products and services have fallen dramatically and
continued to fall in the first quarter of 2004. Storage Computer
did not receive any revenue from license fees in 2003 or in the
first quarter of 2004, and there can be no assurances that the
Company will be able to secure license fees at all during the
coming twelve months. Furthermore, given the continued volatility
of the global securities markets and, in particular, the market
for the securities of technology companies, as well as the recent
results of Storage Computer's pending legal actions concerning
enforcement of its intellectual property rights, the Company
cannot assure that it will be able to secure additional debt or
equity financing. Failure to maintain adequate liquidity and
working capital would have a material adverse effect on the
Company, its financial condition and results of operations.
Storage Computer incurred operating losses through 2003
and continues to incur operating losses at this time. While the
development and introduction of its new products continues,
actual sales revenue has declined significantly over the last year
and continues to be at a low level. In response, the Company has
reduced its activity level in marketing, sales and administration
and implemented cost reduction programs primarily in employee
headcount, the use of independent software subcontractors and the
level of expenses for development, travel and administration. The
Company's operating plan and related cash flow projections for
2003 were estimated by management anticipating only a base level
of revenue from sales of the Company's new products to new and
existing customers and product upgrades, replacements parts and
maintenance services from the existing customer base. There
was not included any potential revenues from license fee
activities. The Company initially projected its costs and expenses
using its then current level of operating expenses for its core
business activity and only the minimum requirements for the
defense of its intellectual property.
The Company received notification from the American Stock Exchange
(AMEX) on April 29, 2003 that the Company was not in compliance
with certain listing standards relating to stockholders' equity
and net losses. In June 2003, the Company submitted a plan to AMEX
setting forth a plan for compliance with the AMEX continuing
listing standards. On July 28, 2003, AMEX notified the Company
that it had accepted the proposed plan and granted an extension
until October 31, 2004 to regain compliance. During such period,
the Company's common stock will continue to trade on AMEX and the
Company will be subject to periodic review of its progress
consistent with its plan.
A delisting of Storage Computer's common stock from AMEX would
materially reduce the liquidity of its common stock and result in
a corresponding material reduction in the price of its common
stock. In addition, any such delisting would materially adversely
affect Company access to the capital markets and the limited
liquidity and reduced price of its common stock would materially
adversely affect the Company's ability to raise capital through
alternative financing sources on terms acceptable to the Company,
or at all.
TAE BO RETAIL: Gets Nod to Sign-Up Baker & Hostetler as Counsel
---------------------------------------------------------------
Tae Bo Retail Marketing, Inc., along with NCP Marketing Group,
Inc., sought and obtained approval from the U.S. Bankruptcy Court
for the District of Nevada to employ Baker & Hostetler LLP as
their attorneys in their chapter 11 proceedings.
Baker & Hostetler has represented the Debtors since January 2004.
Its continued representation is critical to the success of the
Debtors reorganization because the firm is uniquely familiar with
the business and legal affairs.
Baker & Hostetler will:
a) advise the Debtors with respect to their powers and duties
as debtors and debtors-in-possession in the continued
management and operation of their business and properties;
b) attend meetings and negotiate with representatives of
creditors and other parties in interest;
c) take all necessary action to protect and preserve the
Debtors' estates, including the prosecution of actions on
their behalf, the defense of any actions commenced against
the estates, negotiations concerning litigation in which
the Debtors may be involved, and objections to claims
filed against the estates;
d) prepare on behalf of the Debtors all motions,
applications, answers, orders, reports, and papers
necessary to the administration of the estates;
e) advise the Debtors in connection with any sale of assets;
f) negotiate and prosecute on the Debtors' behalf plan(s) of
reorganization, disclosure statement(s), and all related
agreements and/or documents, and take any necessary action
on behalf of the Debtors to obtain confirmation of such
plan;
g) appear before this Court, any appellate courts, and the
United States Trustee, and protect the interests of the
Debtors' estates before such courts and the United States
Trustee; and
h) perform all other necessary legal services and provide all
other necessary legal advice to the Debtors in connection
with the chapter 11 cases.
Baker & Hostetler will charge the Debtors its current hourly
rates:
Designation Billing Rate
----------- ------------
Partners $320 to $500 per hour
Associates $150 to $300 per hour
Paralegals $100 to $170 per hour
Headquartered in North West Canton, Ohio, Tae Bo Retail Marketing,
Inc., is an infomercial producer and global marketer of the
platinum award-winning original Billy Blanks' Tae-Bo Video
Library. The Company field for chapter 11 protection on April 13,
2004 (Bankr. Nev. Case No. 04-51073). When the Company filed for
protection from its creditors, it listed estimated assets of over
$1 million and estimated debts of more than $10 million.
TANGO INC: Reports 300% Increase in Blank Shirt Orders
------------------------------------------------------
Tango Incorporated (OTCBB:TNGO) announced that it is experiencing
a 300% increase in the amount of materials being purchased for
delivery on orders already scheduled for the first two fiscal
quarters of next year. The Company's fiscal year ends July 31,
2004. Materials being purchased for these orders include inks,
screens, bags, hangers, boxes, hangtags, neck labels and customer
manufactured t-shirts.
A justifiably optimistic Todd Violette, Chairman and COO of Tango,
remarked that "The market place is becoming very responsive to
Tango's message of being a firm that provides its customers with
innovative, quality garment production at a competitive price. Our
new executive sales team has been very effective relaying this
message to both existing and new clients. Garment manufacturing
worldwide is easily a $5-billion a year industry. Considering this
notable increase in production, and the other significant
contracts we are close to securing, the $3.5-million in revenue we
will do this fiscal year should increase dramatically in 2005."
About Tango
Tango Incorporated -- whose January 31, 2004 balance sheet
shows a stockholders' deficit of $1,053,342 -- is a leading
garment manufacturing and distribution company, with a goal of
becoming a dominant leader in the industry. Tango pursues
opportunities, both domestically and internationally. Tango
provides major branded apparel the ability to produce the highest
quality merchandise, while protecting the integrity of their
brand. Tango serves as a trusted ally, providing them with quality
production and on time delivery, with maximum efficiency and
reliability. Tango becomes a business partner by providing
economic solutions for development of their brand. Tango provides
a work environment that is rewarding to its employees and at the
same time having aggressive plan for growth. Tango is currently
producing for many major brands, including Nike, Nike Jordan and
Chaps Ralph Lauren. Go to http://www.tangopacific.com/for more
information.
TELEX COMMUNICATIONS: Sells Australian Subsidiary to Manager
------------------------------------------------------------
Telex Communications, Inc., a worldwide leader in the design and
marketing of professional sound and communications equipment,
announced the sale of its Australian subsidiary, EVI Audio (Aust)
Pty Ltd to Mr. Colin Formston, who has been the manager of the
subsidiary for the past 18 years. Exact terms of the sale were not
announced.
EVI Audio will continue to act as exclusive distributor in
Australia, New Zealand and Fiji for a range of products of the
Telex group, including products marketed under the well-known
Dynacord(R), Electro-Voice(R), Klark Teknik(R) and Telex(R)
trademarks.
"This is a very positive step in providing greater flexibility in
the distribution of our products in Australia, New Zealand and
Fiji, and we expect our customers to benefit from the change,"
said Telex Chief Executive Officer Ray Malpocher. Gregory Richter,
Telex's Chief Financial Officer, added, "The sale of our
Australian subsidiary not only frees up the investment Telex had
in the company, but it allows the company itself to act more
independently, in what it determines to be the best interest of
its customers."
Telex is a worldwide industry leader in the design, manufacture
and marketing of audio and communications products and systems to
commercial, professional and industrial customers. Telex's product
lines include sophisticated loudspeaker systems, amplifiers, wired
and wireless microphones, military and aviation products, land
mobile communications systems, wireless assistive listening
systems and other related products, in over 30 product lines.
At March 31, 2004, Telex Communications' consolidated balance
sheet shows a stockholders' deficit of $6,390,000 compared to a
deficit of $7,989,000 at December 31, 2003.
TESORO PETROLEUM: Prepays $297.5 Million Debt
---------------------------------------------
Tesoro Petroleum Corporation (NYSE:TSO) announced that it prepaid,
on July 1, 2004, the remaining $297.5 million principal balance of
its 9% Senior Subordinated Notes due 2008, at a price of 103%
pursuant to the indenture. The Company will record a pretax charge
in the third quarter totaling approximately $16 million related to
the prepayment, including $9 million for the related redemption
premiums and $7 million for the non-cash write-off of the
unamortized discount and deferred financing costs related to the
notes.
The Company stated it had over $136 million of cash invested and
that it had no cash borrowings on its revolving credit facility
after the repayment on July 1.
"As of close of business on July 1, we estimate that our debt to
total capitalization ratio should be in the range of 52% to 53%,"
said Bruce A. Smith, Chairman, President and CEO of Tesoro. "As a
result of this prepayment, our future annual pre-tax interest
expense will be reduced by about $27 million."
"When we acquired the Golden Eagle refinery a little over two
years ago, we clearly stated our intention to de-lever our balance
sheet to strengthen our financial profile. In that short period of
time, despite a terrible economic environment in 2002, we have
repaid approximately $800 million or, nearly 40% of our debt. We
believe this performance confirms our expectation that we will
continue to generate strong free cash flow, which will enable us
to further reduce debt to a level in line with others in our peer
group," added Smith.
Tesoro Petroleum Corporation, a Fortune 500 Company, is an
independent refiner and marketer of petroleum products. Tesoro
operates six refineries in the western United States with a
combined capacity of nearly 560,000 barrels per day. Tesoro's
retail-marketing system includes approximately 550 branded retail
stations, of which over 200 are company operated under the
Tesoro(R) and Mirastar(R) brands.
* * *
As reported in the Troubled Company Reporter's June 9, 2004
edition, Fitch Ratings has placed the debt ratings of Tesoro
Petroleum Corporation on Rating Watch Positive in anticipation of
Tesoro's redemption of its $297.5 million of outstanding 9% senior
subordinated notes. Fitch rates Tesoro's debt as follows:
--Senior secured revolving credit facility 'BB-';
--Senior secured notes 'BB-';
--Senior secured term loan 'BB-';
--Senior subordinated notes 'B'.
Tesoro has publicly announced its intent to call its outstanding
9% senior subordinated notes due 2008 on July 1, 2004 when the
call premium on the notes drops to 3%. Fitch expects Tesoro to pay
for the redemption primarily through cash on hand given Tesoro's
cash position of $116.7 million at March 31, 2004 and the strong
industry wide margins throughout the second quarter. With the
redemption of the notes and the expectation that any required
revolver borrowings would be minimal, Fitch will raise Tesoro's
senior secured ratings to 'BB' and its senior subordinated notes
to 'B+' with a Stable Rating Outlook.
Management has recently amended its credit facility to increase
its capacity to $650 million and allow for up to $100 million of
borrowings to repay subordinated debt. At March 31, 2004, Tesoro
had approximately $1.6 billion of balance sheet debt. Tesoro also
had no cash borrowings and $216 million in letters of credit
outstanding under its revolver.
THEDE ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors
----------------------------------------------------------------
Debtor: Thede Enterprises, Inc.
4965 Copper Creek Drive
Pleasant Hill, Iowa 50327
Bankruptcy Case No.: 04-03977
Type of Business: The Debtor operates a grocery store in Madrid,
Iowa.
Chapter 11 Petition Date: June 23, 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: $100,000 to $500,000
Estimated Debts: $1 Million to $10 Million
Debtor's 20 Largest Unsecured Creditors:
Entity Claim Amount
------ ------------
SuperValu Arbitration $449,488
SuperValu Arbitration $123,221
SuperValu $74,378
Ballard LLC $51,855
AE Dairy $36,467
Messenger $31,931
Pepsi $28,850
Fleming Foods $28,441
Traveler's Express $18,615
Old Dutch $16,475
MidAmerican Energy LC System $16,015
American Bottling $9,980
Marick, Inc. $6,611
AE Dairy $6,460
Old Dutch $6,406
Aladdin $6,229
SuperValu Accounting $5,534
Shopping News $5,065
Deanda's $4,534
Valley News $4,500
UNITED AGRI: Extends Senior Debt Tender Offer to July 12, 2004
--------------------------------------------------------------
UAP Holding Corp. and United Agri Products, Inc. announced that
they are each extending the expiration date for the previously
announced offers to purchase for cash any and all of UAP Holdings'
outstanding $125,000,000 principal amount at maturity of 10 3/4%
Senior Discount Notes due 2012 and any and all of United Agri
Products' outstanding $225,000,000 principal amount of 8 1/4%
Senior Notes due 2011.
The tender offers by the Companies, each previously scheduled to
expire at 5:00 p.m., New York City Time, on Friday, July 2, 2004,
will now expire at 5:00 p.m., New York City Time, on Monday, July
12, 2004, unless further extended.
As of 5:00 p.m., New York City Time, on July 2, 2004, all
$125,000,000 aggregate principal amount at maturity of the 10 3/4%
Discount Notes and all $225,000,000 aggregate principal amount of
the 8 1/4% Notes have been validly tendered and have not been
withdrawn in the offers to purchase and consent solicitations.
Each Company's tender offer is conditioned on, among other things,
(a) the consummation of UAP Holdings' offering of Income Deposit
Securities and (b) United Agri Products amending its existing
revolving credit facility and entering into a new senior secured
second lien term loan facility, the net proceeds of both of which
will be used, among other things, to pay the considerations for
the Notes purchased in the tender offers. Information regarding
the pricing, tender and delivery procedures and conditions to the
tender offer and consent solicitation are contained in the Offer
to Purchase and Consent Solicitation Statement dated April 26,
2004, as supplemented by the Supplement thereto dated May 6, 2004
and the accompanying Letter of Transmittal and Consent.
UBS Investment Bank is acting as dealer manager for the tender
offers and consent solicitations. MacKenzie Partners, Inc. is
acting as information agent. Questions about the tender offers may
be directed to the Liability Management Group of UBS Investment
Bank at (888) 722-9555 x4210 (toll free) or (203) 719-4210
(collect), or to MacKenzie Partners, Inc. at (212) 929-5500
(collect) or (800) 322-2885 (toll free). Copies of the Offer
Documents and other related documents may be obtained from the
information agent.
The tender offer and consent solicitation are being made solely on
the terms and conditions set forth in the Offer Documents. Under
no circumstances shall this press release constitute an offer to
buy or the solicitation of an offer to sell the Notes or any other
securities of the Companies. It also is not a solicitation of
consents to the proposed amendments to the indentures and
registration rights agreements. No recommendation is made as to
whether holders of the Notes should tender their Notes or give
their consent.
About the Companies
UAP Holdings is a holding company with no significant assets or
operations other than the ownership of 100% of the stock of United
Agri Products. United Agri Products is the largest private
distributor of agricultural and non-crop inputs in the United
States and Canada. It markets a comprehensive line of products
including crop protection chemicals, seeds and fertilizers to
growers and regional dealers. In addition, as part of its product
offering, United Agri Products provides a broad array of value-
added services including crop management, biotechnology advisory
services, custom blending, inventory management and custom
applications of crop inputs. United Agri Products maintains a
comprehensive network of approximately 350 distribution and
storage facilities and five formulation and blending plants,
strategically located throughout the United States and Canada.
* * *
As reported in the Troubled Company Reporter's May 13, 2004
edition, Standard & Poor's Ratings Services lowered its corporate
credit rating on crop protection and agriculture distributor
United Agri Products Inc. to 'B' from 'B+'.
It also lowered the rating on UAP's existing $500 million senior
secured revolving credit facility to 'B+' from 'BB-'. The lower
ratings reflect the company's anticipated more aggressive
financial profile after its parent company, UAP Holdings Corp.,
proposed a $625 million issuance of income deposit securities
(IDS).
At the same time, Standard & Poor's assigned a rating of 'CCC' to
the senior subordinated notes of UAP Holdings Corp. The ratings on
UAP Holdings' existing senior discount notes have been lowered to
'CCC+' from 'B-', while the ratings on United Agri Products'
senior unsecured notes have been lowered to 'B-' from 'B'.
However, these ratings will be withdrawn upon issuance of the
income deposit securities, which will be used to retire the debt.
UAP Holdings' proposed $625 million IDS issuance will consist of
common stock and subordinated notes.
The new bank loan and subordinated debt ratings are based on
preliminary offering statements and are subject to review upon
final documentation. The ratings on both UAP and UAP Holdings have
been removed from CreditWatch, where they were placed April 13,
2004.
"Standard & Poor's believes that the IDS structure reflects a more
aggressive financial policy," said Standard & Poor's credit
analyst Ronald Neysmith. "Previously, UAP did not pay dividends on
its common stock. However, as a result of the IDS offering, UAP
will be distributing roughly 75% of its cash flow as interest and
dividends, thereby materially reducing financial flexibility."
UNITED AIRLINES: Asks Court to Amend Derivative Contracts Order
---------------------------------------------------------------
To reduce the risks associated with fluctuations in jet fuel
prices, interest rates and foreign currency exchange rates, the
United Airlines Inc. Debtors enter into financial contracts whose
values are derived from the prices of other related assets. Each
of these contracts may be used for purposes of hedging or reducing
risk or for purposes of speculating on the prices of underlying
securities, assets or indices.
At the onset of their Chapter 11 cases, the Debtors sought and
obtained permission to continue entering into, rolling over,
adjusting, modifying and settling Derivative Contracts to hedge
their risk to fluctuations in jet fuel prices and changes in
interest rates and foreign currency exchange rates. In addition,
the Debtors obtained permission to post letters of credit, enter
into escrow agreements, open and fund escrow accounts, post
collateral or margin, prepayment and delivery of settlement on
account of the Derivative Contracts.
Due to the volatile fuel cost environment, the Debtors are
considering entering into fuel hedging transactions. The
Derivative Contracts Order provides the necessary authority and
protections for any counterparty to enter into and perform under
a derivative contract. Nevertheless, a counterparty to a master
agreement, as defined by the International Swaps and Derivatives
Association, Inc., is unwilling to enter hedging transactions
without modifications to the Derivative Contracts Order. The
counterparty wants confirmation that:
(a) If an event of default occurs, the counterparty may
terminate and liquidate the contract early;
(b) The rights to net or set-off mutual obligations between
the Debtors and the counterparty are intact;
(c) The counterparty retains the right to collect any amounts
owed by the Debtors after netting and set-off; and
(d) The counterparties' rights may not be modified, stayed or
avoided by the Court.
Hence, the Debtors ask Judge Wedoff to amend the Derivative
Contracts Order to clarify that the automatic stay is modified to
allow counterparties to enforce their legal and contractual rights
and remedies under any postpetition derivatives contracts.
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. 52; Bankruptcy Creditors' Service,
Inc., 215/945-7000)
USG CORP: Exclusive Period to File Plan Extended Through Dec. 1
---------------------------------------------------------------
Judge Fitzgerald extends the USG Corporation Debtors' Exclusive
Plan Proposal Period through and including December 1, 2004 and
Exclusive Solicitation Period through and including February 1,
2005.
Headquartered in Chicago, Illinois, USG Corporation --
http://www.usg.com/-- through its subsidiaries, is a leading
manufacturer and distributor of building materials producing a
wide range of products for use in new residential, new
nonresidential and repair and remodel construction, as well as
products used in certain industrial processes. The Company filed
for chapter 11 protection on June 25, 2001 (Bankr. Del. Case No.
01-02094). David G. Heiman, Esq., and Paul E. Harner, Esq., at
Jones, Day, Reavis & Pogue represent the Debtors in their
restructuring efforts. When the Debtors filed for protection from
their creditors, they listed $3,252,000,000 in assets and
$2,739,000,000 in debts. (USG Bankruptcy News, Issue No. 68;
Bankruptcy Creditors' Service, Inc., 215/945-7000)
U.S. STEEL: S&P Affirms Low-B Ratings & Changes Outlook to Stable
-----------------------------------------------------------------
Fitch Ratings has affirmed the senior unsecured long-term debt
ratings of U.S. Steel at 'BB-', the ratings of the company's
senior secured bank debt at 'BB', and convertible preferred stock
at 'B'. The Rating Outlook has been changed to Stable from
Negative.
This rating action affects approximately $1.3 billion of
securities outstanding at the end of the first quarter.
In the wake of the National Steel acquisition, USS' operating
leverage is making a big difference. The company should move from
a loss last year to a profit of greater absolute magnitude this
year, and a net debt/EBITDA of 1.0 times (x) or less may not be
out of question by year-end. A $300/ton run-up in the price for
sheet products has been the primary earnings driver; synergies
from the merger and the labor agreement with the United
Steelworkers have also helped. Counter-balancing gains on the
revenues side have been increases in costs for coke, energy, and
scrap. USS is self-sufficient in iron ore and coke, except at its
Central European operations. The added costs are being eclipsed by
the increase in prices, and volumes have been good across all
major product lines.
In the near term, a relaxation in demand from China should
stimulate some retreat in spot prices, but nothing is likely to
wholly reverse the gains made so far, which are being supported by
a steady demand in North America and growth in Europe and Asia.
Adding a much stronger dollar to the climate could increase
foreign competition, but so far U.S. imports have largely been
semi-finished steels, which do not compete with USS' finished
products. For the foreseeable future, USS' focus will be what to
do with the cash being earned.
The longer term issue is sustainable demand and competing sources
of supply, with capacity additions coming on stream in China and
Brazil. The industry is in transition, and the competitive
landscape is changing through consolidation and cost
rationalization, likely for the better. USS' stake and size in the
market will change also and with it the company's financial
profile.
U.S. Steel is the second largest integrated producer of steel in
the U.S. and has a worldwide raw steel capacity of nearly 27
million tons per year. The company produces a wide variety of
steel products, is a leading supplier of carbon sheet to the
automotive and appliance industries, and is the second largest tin
mill product producer in North America. USS is also the largest
domestic producer of seamless oil country tubular goods used in
oil/gas drilling.
VISHNU LLC: Case Summary & 9 Largest Unsecured Creditors
--------------------------------------------------------
Debtor: Vishnu, L.L.C.
4200 Old Gentilly Road
New Orleans, Louisiana 70126
Bankruptcy Case No.: 04-14838
Type of Business: The Debtor operates a hotel.
Chapter 11 Petition Date: June 28, 2004
Court: Eastern District of Louisiana (New Orleans)
Judge: Thomas M. Brahney III
Debtor's Counsel: Ronald J. Hof, Esq.
Landwehr & Hof
225 Baronne Street, Suite 2116
New Orleans, LA 70130
Tel: 504-561-8086
Fax: 504-561-8089
Total Assets: $2,328,925
Total Debts: $2,549,104
Debtor's 9 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
Business Loan Center Value of Collateral: $2,412,034
645 Madison Ave. $2,300,000
18th Floor Unsecured Value:
New York, NY 10022 $112,034
City of New Orleans $37,614
State of Louisiana $35,000
Safemark Systems, LP $25,394
Viacom Outdoor, Inc. $21,756
City of New Orleans $12,000
Delta Waste Systems, Inc. $4,545
State of Louisiana $656
State of Louisiana $105
VITROTECH CORP: Inks Investment Banking Pact with Brean Murray
--------------------------------------------------------------
VitroTech Corporation (OTC Bulletin Board: VROT) announced that it
has entered into an investment banking agreement with the firm of
Brean Murray & Co. Inc., to act as placement agent with respect to
a private placement of VitroTech securities to accredited
investors. Funds from the placement are expected to be used for
strategic acquisitions and current operations. The proposed
securities offering is subject to satisfaction of a number of
conditions, including satisfactory completion of a due diligence
report by Brean Murray & Co.
VitroTech Corporation -- whose March 31, 2004 balance sheet shows
a stockholders' deficit of $7,879,691 -- is a materials technology
and research company, headquartered in Santa Ana, California, with
rights to purchase, process and sell approximately 35 billion
pounds of rare amorphous aluminosilicate deposits which are used
to produce its primary products, Vitrolite(R) and Vitrocote(R).
These products enhance both the physical qualities and production
of plastics, paint/coatings, and a variety of other market
segments.
VITROTECH CORP: Thomas Costales Resigns as Chief Financial Officer
------------------------------------------------------------------
VitroTech Corporation (OTC Bulletin Board: VROT) announced the
resignation of Thomas Costales as its chief financial officer. By
mutual agreement, he is leaving the Company to pursue other
consulting opportunities. Mr. John Keller will serve as interim
CFO. Mr. Keller previously served CFO of the Company's
predecessor, Hi-Tech Environmental Products, from 2000 until
February 2004. The Company has initiated a search to fill the
position on a permanent basis and is confident that it will be
making an announcement regarding a new CFO in the near future.
VitroTech Corporation -- whose March 31, 2004 balance sheet shows
a stockholders' deficit of $7,879,691 -- is a materials technology
and research company, headquartered in Santa Ana, California, with
rights to purchase, process and sell approximately 35 billion
pounds of rare amorphous aluminosilicate deposits which are used
to produce its primary products, Vitrolite(R) and Vitrocote(R).
These products enhance both the physical qualities and production
of plastics, paint/coatings, and a variety of other market
segments.
WEIRTON COURT: Associates Leasing Sues to Compel Vehicle Turn Over
------------------------------------------------------------------
On September 28, 1998, the Weirton Steel Corporation Debtors
entered into a Truck Lease Agreement with Associates Leasing,
Inc., where the Debtors leased certain vehicles from Associates
Leasing from time to time:
* 1999 Mack, CH713 Dump Truck (Serial No. 1M2AD09C9XW007327),
* 1999 Mack, CH713 Dump Truck (Serial No. 1M2AD09C2XW007329),
* 1999 Mack, CH713 Dump Truck (Serial No. 1M2AD09C9XW007330),
* 1999 Ford Ranger Pickup (Serial No. 1FTYR10C8XUB60915),
* 1999 Ford Ranger Pickup (Serial No. 1FTYR10C1XUB86465),
* 1999 Jeep Cherokee (Serial No. 1J4FF68S6XL515220),
* 1999 Jeep Cherokee (Serial No. 1J4FF68S3XL510945),
* 1999 Jeep Cherokee (Serial No. 1J4FF68S1X1508224),
* 1999 Ford F250 (Serial No. 1FTPF27L2XNC03221),
* 1997 Ford Aerostar Van (Serial No. 1FMDA11U4VZB61097),
* 1998 Chevrolet Astro Van (Serial No. 1GNDM19W9WB161129), and
* 1999 Jeep Cherokee (Serial No. 1J4FF28SXXL616933)
Pursuant to a June 2, 2004 Court Order, the Debtors rejected the
Truck Lease Agreement. The June 2 Order provided that rejection
damage claims for any rejected contracts had to be filed on or
before July 2, 2004. The June 2 Order further established that
the effective date of the rejection was deemed to be May 17,
2004.
Since the entry of the June 2 Order, Associates Leasing's counsel
has continually requested the Debtors to provide information as
to the location of the Leased Vehicles and to make the Leased
Vehicles available for repossession. Despite numerous phone
calls and e-mail communications to the Debtors' counsel, David M.
Thomas, Esq., at Kay Casto & Chaney, in Morgantown, West
Virginia, relates that no information has been provided to
Associates Leasing. Furthermore, no arrangements have been made
to turn over possession of the Leased Vehicles.
As of June 25, 2004, the Debtors continue to be in possession of
the Leased Vehicles. The Leased Vehicles have and will continue
to depreciate significantly as long as the Debtors fail and
refuse to turn them over to Associates Leasing.
Moreover, Associates Leasing will not be able to assess its
rejection damages until the Leased Vehicles are turned over.
Mr. Thomas also reports that the Debtors are in default of the
Agreement because the Debtors failed to make the required monthly
payments due. The Court has set July 2, 2004 as the Bar Date for
filing administrative claims. Associates Leasing timely filed an
administrative priority claim on June 1, 2004 for postpetition
payments that the Debtors failed to make while in possession of
the Leased Vehicles.
Hence, Associates Leasing asks the Court:
(a) to compel the Debtors to immediately turn over the Leased
Vehicles;
(b) to extend the deadline for filing a rejection damage claim
until the Debtors turn over the Leased Vehicles and it has
had ample time to assess its rejection damage claim;
(c) to extend the effective date of the rejection of the Truck
Lease Agreement beyond May 17, 2004 until the date that
the Debtors turn over possession of the Leased Vehicles;
and
(d) for permission to amend its administrative claim to
include postpetition payments that have become due since
it filed an administrative claim through the date the
Leased Vehicles are ultimately turned over. (Weirton
Bankruptcy News, Issue No. 29; Bankruptcy Creditors'
Service, Inc., 215/945-7000)
WILSONS THE LEATHER: Closes $35 Million Equity Financing
--------------------------------------------------------
Wilsons The Leather Experts Inc. (Nasdaq:WLSN) announced that it
completed the closing of its private placement of 17,948,718
shares of newly issued Common Stock to three institutional
investors at a purchase price of $1.95 per share and the issuance
of warrants to the investors to purchase an additional two million
shares of Common Stock exercisable for five years, at an exercise
price of $3.00 per share. This financing will provide the Company
with $35 million in new equity before offering expenses. Wilsons
Leather intends to use the proceeds from the issuance of the
Common Stock to repay its 11 1/4% Senior Notes due August 15,
2004, and for general working capital purposes.
As additional consideration for the investors' commitment, Wilsons
Leather previously issued warrants to the investors to purchase
two million shares of Common Stock exercisable for five years, at
an exercise price of $3.00 per share.
The securities sold in the private placement have not been
registered under the Securities Act of 1933, as amended, and may
not be offered or sold in the United States in the absence of an
effective registration statement or exemption from registration
requirements. However, as part of the financing, the Company has
agreed to file a registration statement on Form S-3 no later than
30 days after the closing of the financing with the Securities and
Exchange Commission for purposes of registering the resale of the
shares of Common Stock issued in the private placement.
About Wilsons Leather
Wilsons Leather is the leading specialty retailer of leather
outerwear, accessories and apparel in the United States. As of May
29, 2004, Wilsons Leather operated 457 stores located in 45 states
and the District of Columbia, including 332 mall stores, 108
outlet stores and 17 airport stores. The Company regularly
supplements its permanent mall stores with seasonal stores during
its peak selling season from October through January.
* * *
In its Form 10-Q for the quarterly period ended May 1, 2004,
Wilsons the Leather Experts Inc. reports:
"The Company currently does not have the funds to pay the
outstanding principal amount of the 11 1/4% Senior Notes when they
are due on August 15, 2004. The senior credit facility prohibits
the Company from incurring any indebtedness which refunds, renews,
extends or refinances the 11 1/4% Senior Notes on terms more
burdensome than the current terms of such notes, and the rate of
interest with respect to any replacement notes cannot exceed the
sum of the rate of interest on United States treasury obligations
of like tenor at the time of such refunding, renewal, extension or
refinancing, plus 7.0% per annum. The Company anticipates that it
will not be able to refund, renew, extend or refinance the 11 1/4%
Senior Notes with indebtedness that would comply with such
limitations. However, if the Company completes a sale of its
capital stock by August 15, 2004, on terms that are acceptable to
the lenders under the senior credit facility, such lenders have
agreed that the Company may use the proceeds from such sale to pay
the 11 1/4% Senior Notes. The lenders have agreed that the terms
of the Equity Financing if consummated, would be acceptable for
this purpose. If the Company is unable to close the Equity
Financing for any reason, it will need to find an alternative
source of permitted financing for the repayment of the 11 1/4%
Senior Notes before it will be permitted to borrow under the
senior credit facility. The Company anticipates that it will need
to access the revolving portion of the senior credit facility by
the middle of July 2004."
WINSTAR: Trustee Reaches Settlement With Winstar Holdings & IDT
---------------------------------------------------------------
Christine C. Shubert, the Chapter 7 Trustee of the estate of
Winstar Communications, Inc., asks the Court to approve her
settlement agreement with Winstar Holdings, LLC, and IDT
Corporation.
The Trustee alleged that Winstar Holdings withheld and failed to
return to the Chapter 7 estate certain assets totaling $3.3
million, which were excluded from the sale of Winstar
Communication's assets to Winstar Holdings. Winstar Holdings
denied the Trustee's allegations. In addition, Winstar Holdings
sought a $1.4 million reimbursement from the Trustee and asserted
that the Debtors are required to pay the Federal Communications
Commission $9 million to transfer certain LMDS licenses to it.
On June 27, 2003, the Trustee filed a complaint against Winstar
Holdings to recover the Property. Winstar Holdings denied all
liability and sought a judgment in excess of $11 million. The
Trustee asserted affirmative defenses to Winstar Holding's
Counterclaim, denying all liability.
On March 3, 2004, the Parties signed a stipulation whereby
Winstar Holdings withdrew without prejudice its LMDS License
Claim and the Trustee withdrew without prejudice her request for
partial judgment on the pleadings relating to the LMDS License
Claim.
Without admitting any liability on the part of either party, the
Parties agree to settle the Trustee's Claim, the LMDS License
Claim and the Counterclaim. The Parties believe that the
Agreement will benefit the Debtors' estates because it will allow
them to avoid the time and expense of litigation.
The salient provisions of the Settlement Agreement are:
(1) In full satisfaction of the Claim, the LMDS License Claim
and the Counterclaim, the Winstar Holdings will pay the
Trustee $2,000,000 without further delay;
(2) In consideration of the Settlement Payment, the Trustee
and Winstar Holdings will exchange mutual releases from
any and all claims, actions, liabilities, debts and causes
of action relating to or pertaining to the Claim, LMDS
License Claim and Counterclaim;
(3) The mutual release will not apply to any cross claims for
contribution and indemnity between and among the Trustee,
the Debtors and Winstar Holdings arising out of or
relating to the pending adversary proceeding captioned as
Corporate Telecommunications Group, Inc. v. Christine C.
Shubert, Chapter 7 Trustee, et al., Adversary No. 03-3028;
The Parties will file a stipulation in the CTG Litigation
permitting them to assert cross claims for contribution
and indemnity against each other arising out of the claims
in the CTG Litigation;
(4) The Parties agree that the Trustee has satisfied Winstar
Holding's claim for $222,503 in connection with the funds
collected by the Trustee relating to the Northwest Nexus
bank accounts;
(5) The Trustee will fully and competently defend against any
and all claims against her asserted by CTG. The Trustee
will not enter into any settlement with CTG without the
prior written consent and approval of Winstar Holdings.
Winstar Holdings will not be liable to indemnify the
Trustee for any settlement effected without Winstar
Holdings' consent; and
(6) The terms, conditions, requirements and obligations of the
Parties in the Asset Purchase Agreement will remain in
full force and effect. (Winstar Bankruptcy News, Issue No.
57; Bankruptcy Creditors' Service, Inc., 215/945-7000)
WORLDCOM INC: Inks Stipulation Resolving Mississipi EdNet Claims
----------------------------------------------------------------
Mississippi EdNet Institute, Inc., holds licenses granted by the
Federal Communications Commission to operate an Instructional
Television Fixed Service capacity. WorldCom Broadband Solutions
leases excess ITFS capacity from EdNet pursuant to a Lease
Agreement and an Operating Agreement, both dated August 25, 1993.
The Agreements are between EdNet and Truvision Communications,
Inc., a predecessor-in-interest to Worldcom Broadband.
In connection with its rights under the Lease, Worldcom Broadband
owned and installed 279 telecommunications equipment and 20
transmitters at various locations to transmit programming.
WorldCom Broadband rejected the Lease on October 31, 2003,
pursuant to the Plan. Before the Petition Date, EdNet and
Wireless One, Inc., a Debtor and predecessor-in-interest to
WorldCom Broadband, were parties to an arbitration proceeding
pending in Jackson, Mississippi. Wireless One submitted the
matter for arbitration in response to a notice of default under
the Lease served by EdNet.
EdNet asserted in the Arbitration that Wireless One was liable
for failing to complete certain build-out obligations under the
Lease. In response, Wireless One asserted that it had no further
obligations to buildout under the Lease because of EdNet's
failure to prepare its system for interconnection to portions of
Wireless One's system. Wireless One further asserted that a $1.5
million liability cap for build-out costs under the Lease also
applied to costs for construction and interconnection associated
with additional towers that were required to complete EdNet's
system. The Arbitration remains stayed as a result of the
Debtors' Chapter 11 cases and no award has been rendered.
EdNet filed Claim No. 31470 for $20,288 and Claim No. 23611 for
$25,000,000 against the Debtors.
Pursuant to a Sales Procedure Order dated October 22, 2002, the
Debtors abandoned the Equipment, effective as of December 22,
2003.
WorldCom Broadband wants to quitclaim whatever interest it has in
the Equipment Assets to EdNet pursuant to the Sale Order. EdNet
indicated that it would like to acquire the Equipment Assets.
The Debtors and EdNet want to resolve all claims and disputes
between them. In a Court-approved Stipulation, the Debtors and
EdNet agree that:
(a) As of May 11, 2004, WorldCom Broadband quitclaims to
EdNet, its rights, title and interest in the Equipment
Assets. WorldCom Broadband makes no warranties or
representations as to the condition of the Equipment
Assets, and EdNet takes ownership of the Equipment Assets
on an "as is and where is" basis;
(b) Claim No. 31470 is disallowed and expunged in its entirety
without the need for action by the parties;
(c) Claim No. 23611 is reduced and allowed as a WorldCom
General Unsecured Claim for $250,000, to be treated under
Class 6 of the Plan, in full and complete satisfaction of
all claims or proofs of claim EdNet has against the
Debtors;
(d) EdNet and the Debtors exchange mutual releases; and
(e) The Arbitration will be permanently stayed.
Headquartered in Clinton, Mississippi, WorldCom, Inc., now known
as MCI-- http://www.worldcom.com-- is a pre-eminent global
communications provider, operating in more than 65 countries and
maintaining one of the most expansive IP networks in the world.
The Company filed for chapter 11 protection on July 21, 2002
(Bankr. S.D.N.Y. Case No. 02-13532). On March 31, 2002, the
Debtors listed $103,803,000,000 in assets and $45,897,000,000 in
debts.
On April 20, the company (WCOEQ, MCWEQ) formally emerged from U.S.
Chapter 11 protection as MCI, Inc. This emergence signifies that
MCI's plan of reorganization, confirmed on October 31, 2003, by
the U. S. Bankruptcy Court for the Southern District of New York
is now effective and the company has begun to distribute
securities and cash to its creditors. (Worldcom Bankruptcy News,
Issue No. 56; Bankruptcy Creditors' Service, Inc., 215/945-7000)
WMC FINANCE: S&P Withdraws Ratings On General Electric Acquisition
------------------------------------------------------------------
Standard & Poor's Rating Services removed its ratings on Woodland
Hills, California-based WMC Finance Co., including the company's
'B' counterparty credit and 'B-' senior unsecured debt ratings,
from CreditWatch, where they were placed on April 21, 2004. The
ratings on WMC were subsequently withdrawn.
"The rating actions follow the redemption of all of the
outstanding 11 3/4 % senior notes due 2008," said Standard &
Poor's credit analyst Steven Picarillo. "WMC was acquired by
General Electric Capital Corp. Standard & Poor's will no longer
rate WMC Finance Co."
* Large Companies with Insolvent Balance Sheets
-----------------------------------------------
Total
Shareholders Total Working
Equity Assets Capital
Company Ticker ($MM) ($MM) ($MM)
------- ------ ------------ ------- --------
Alliance Imaging AIQ (68) 628 20
Akamai Technologies AKAM (175) 279 140
Amazon.com AMZN (1,036) 2,162 568
Bally Total Fitness BFT (158) 1,453 (284)
Blount International BLT (397) 400 83
Blue Nile Inc. NILE (27) 62 16
Cell Therapeutic CTIC (83) 146 72
Centennial Comm CYCL (579) 1,447 (99)
Choice Hotels CHH (118) 267 (42)
Cincinnati Bell CBB (640) 2,074 (47)
Compass Minerals CMP (144) 687 106
Cubist Pharmaceuticals CBST (18) 223 91
Delta Air Lines DAL (384) 26,356 (1,657)
Deluxe Corp DLX (298) 563 (309)
Diagnostic Imag DIAM 0 20 (3)
Echostar Comm DISH (1,033) 7,585 1,601
WR Grace & Co GRA (184) 2,874 658
Graftech International GTI (97) 967 94
Hawaian Holdings HA (143) 256 (114)
Imax Corporation IMAX (52) 250 47
Imclone Systems IMCL (271) 382 (3)
Kinetic Concepts KCI (246) 665 228
Lodgenet Entertainment LNET (129) 283 (6)
Lucent Technologies LU (3,371) 15,765 2,818
Maxxam INC MXM (601) 1,061 127
Memberworks Inc. MBRS (20) 248 (89)
Millennium Chem. MCH (46) 2,398 637
McDermott International MDR (363) 1,249 (24)
McMoRan Exploration MMR (54) 169 83
Milacron Inc MZ (34) 712 17
Northwest Airlines NWAC (1,775) 14,154 (297)
Nextel Partner NXTP (13) 1,889 277
ON Semiconductor ONNN (499) 1,161 213
Paxson Communications PAX (406) 1,284 67
Pinnacle Airline PNCL (48) 128 13
Primus Telecomm PRTL (96) 751 (26)
Per-Se Tech Inc. PSTI (18) 172 41
Qwest Communications Q (1,016) 26,216 (1,132)
Quality Distributors QLTY (19) 371 7
Sepracor Inc SEPR (619) 1,020 256
St. John Knits Int'l SJKI (65) 234 69
I-Stat Corporation STAT (1) 64 33
Stratagene Corp. STGN (5) 39 9
Syntroleum Corp. SYNM (12) 67 11
Triton PCS Holdings TPC (180) 1,519 52
UST Inc. UST (115) 1,726 727
Valence Tech VLNC (52) 21 (5)
Vector Group Ltd. VGR (3) 628 142
Western Wireless WWCA (225) 2,522 15
*********
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
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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
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Monthly Operating Reports are summarized in every Saturday edition
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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.
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