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/raid1/www/Hosts/bankrupt/TCR_Public/040709.mbx T R O U B L E D C O M P A N Y R E P O R T E R Friday, July 9, 2004, Vol. 8, No. 140 Headlines ADELPHIA COMMUNICATIONS: Taps Munger Tolles As Special Counsel AIR CANADA: Plans To Hold Creditors Meeting On Aug. 17 in Montreal AIR CANADA: Jazz Pilots Ratify Secondary Concessionary Agreements AIRPORT COMMERCIAL: Case Summary & 11 Largest Unsecured Creditors ANDREW CORP: S&P Assigns B+ Rating To $240M Convertible Sub. Notes APIVA VENTURES: TSX Continues Cease Trade Order ARMSTRONG: Court Wants Status Reports to be Filed by July 28 ASPEN GROUP: Selling U.S. Assets to Crusader Energy for $22 Mil. ATLAS COLD: OSC Vs. Ex-Execs Proceeding Adjourned to August 11 AVAYA: Will Report Fiscal 3rd Quarter 2004 Results on July 27 BELDEN & BLAKE: Completes Merger With Carlyle/Riverstone Affiliate CAMBEX: Says Super PC's Liquidation Won't Greatly Affect Company CAPITAL BEVERAGE: Needs More Money to Continue as a Going Concern CATHOLIC CHURCH: Applies To Employ Sussman Shank As Counsel CHAS COAL: Wants to Hire Gregory Lathram as Bankruptcy Counsel COINSTAR INC: Completes American Coin Acquisition for $235 Mil. CS GOLF MANAGEMENT: Voluntary Chapter 11 Case Summary DAYTON SUPERIOR: Increases Credit Facility to $95 Million DEEP WELL OIL: Appoints Menno Wiebe as Director & COO DENNY'S CORP: Completes $92 Million Equity Private Placement DII/KBR: St. Paul Agrees to Pay $350K to Resolve Insurance Dispute DII/KBR: Lanzhou Taps SCORE Technology for Ethylene Plant DSI TOYS: Accounts Receivable to be Auctioned on July 12 ELDORADO PARKWAY: Voluntary Chapter 11 Case Summary ENRON CORP: Sues 40 Creditors to Recover Preferential Payments ENRON: Power Resources Presses For Administrative Claim Payment ENRON CORP: Agrees to Settle Retail Disputes With 17 Parties ENVIRONMENTAL LAND: Employs Foley & Lardner as Attorneys FISHER SCIENTIFIC: Hosting Earnings Conference Call on July 29 FLEMING COMPANIES: Oregon Objects to Plan Confirmation FLEMING: Issues Final Report On PACA Claim Objections & Payments FOOTSTAR INC: Court Approves Settlement with Former Chairman/CEO FOREST OIL: Offering Additional $125 Million 8% Senior Notes HAYES LEMMERZ: Inks Stipulation Resolving CIT's Rejection Claims HOLLINGER CANADIAN: Gives Update on Delayed Financial Statements HOLLINGER INTERNATIONAL: Provides Update On Filing Requirements HOLLYWOOD THEATERS: S&P Rates Corporate Credit at B HOME EQUITY: S&P Lowers SPMD 2001-A Class MF-2 Rating To D from B ICEFLOE TECHNOLOGIES: Coors Brewing to Use Draft Caddy ISACSOFT INC: Agrees to Acquire L'Institut Descartes KAISER: Wants Exclusive Plan Filing Period Stretched to Oct. 31 K2 INC: Acquires Volkl Sports Holding & Marker Group for $124M+ KIEL BROS: Hires Baker & Daniels as Bankruptcy Counsel LCA ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors LEVI STRAUSS: Will Webcast Q2 2004 Financial Review on July 13 LIFESTREAM TECH: Says Shipments Double in Fourth Quarter 2004 LONE PEAK LABELING: Case Summary & 20 Largest Unsecured Creditors MICROFINANCIAL: Satisfies NYSE Continued Listing Compliance Plan MYCOM: Secures Strategic Alliance Agreement With Process Software NATIONAL COAL: Plans to Acquire Horizon's Tennessee Mining Assets NEW WEATHERVANE: Wants to Appoint Trumbull Group as Claims Agent NEXTEL PARTNERS: Schedules Q2 2004 Conference Call on July 28 NRG ENERGY: Nelson Debtors Propose Assets Sale Bidding Procedures OWENS CORNING: Continues Global Manufacturing Capacity Additions PACIFIC GAS: Inks Stipulation Resolving California DWR Claims PARMALAT: Creditors' Sec. 304 Injunction Objections are Overruled PASCACK VALLEY HOSPITAL: S&P Removes B+ Rating From Negative Watch PEGASUS: Court OKs Committee's Proposed Screening Wall Procedures PG&E NATIONAL: USGen Wants Until Nov. 1 to Exclusively File Plan PRIMEDIA INC: Redeems All Outstanding Series J Preferred Stock PROVIDIAN FINANCIAL: Q2 2004 Conference Call Set for July 26 PROVIDIAN FINANCIAL: Closing San Antonio Site by Year-End QWEST COMMUNICATIONS: Opens Seven Retail Stores in Minnesota RECYCLING SOLUTIONS: Case Summary & Largest Unsecured Creditors REMEDIATION FINANCIAL: Case Summary & Largest Unsecured Creditors ROANOKE TECH: Withdraws November 18, 2003 SB 2 Filing with SEC SAXON ASSET: Fitch Takes Various Rating Actions on 1999-1 Notes SHELTON CANADA: Completes First Tranche Offering SLS INTERNATIONAL: Taps Kennell SAS as New Italian Distributor SPEEDWAY MOTORSPORTS: Closes $100M Senior Notes Private Placement SPIEGEL GROUP: Enters Into CBA Termination Agreement STELCO INC: Will Publish Second Quarter 2004 Results on August 3 ULTRALIFE BATTERIES: Secures New $25 Million Credit Facility UNITED AIRLINES: Agrees To Settle Tax Disputes With Louisiana US AIRWAYS: Will File Annual Reports On Benefits Plans Late US UNWIRED: Will Continue to Manage IWO Holdings through 2005 USA TELECOM: Changes Name to ZannWell Inc. WINSTAR: Seven Adversary Proceedings Reassigned to Judge Lindsey WORLDCOM INC: Asks Court to Disallow Karin Johnson's $1M+ Claim W.R. GRACE: Zonolite Claimants Provide Status Report * Davis Wright Tremaine Adds Corporate Diversity Counseling Team * BOOK REVIEW: Transnational Mergers and Acquisitions in the United States ********* ADELPHIA COMMUNICATIONS: Taps Munger Tolles As Special Counsel -------------------------------------------------------------- Shelley C. Chapman, Esq., at Willkie Farr & Gallagher, LLP, in New York, relates that the Adelphia Communications (ACOM) Debtors continue to consult with their stakeholders concerning modifications and revisions to their revised Plan. Comcast Corporation, in its capacity as the ACOM Debtors' joint venture partner in the Century/ML Cable Venture, is both a stakeholder and a potential buyer of the ACOM Debtors' businesses. Accordingly, the ACOM Debtors determined that to avoid any conflict with Comcast, it is necessary to hire outside attorneys to assist them in their negotiations with Comcast and its affiliates and subsidiaries relating to the Plan. The ACOM Debtors believe that Munger, Tolles & Olson, LLP, is well equipped to serve as their special conflicts counsel. Therefore, the ACOM Debtors seek the Court's authority to employ Munger Tolles, nunc pro tunc to May 1, 2004. Munger Tolles, a California law firm, provides general representation to its clients in numerous areas, including securities law, anti-trust law, corporate finance, employment law, and general business transactions. In addition to its main office in Los Angeles, Munger Tolles also has an office in San Francisco. The firm's bankruptcy and reorganization practice is nationally recognized. In 2002, one Munger Tolles partner was named as one of the top ten Outstanding Bankruptcy Lawyers in the United States. In addition, Munger Tolles has significant expertise in general litigation and received commendation for its commitments to its clients. Munger Tolles will provide legal representation to the ACOM Debtors in their Chapter 11 cases, but not limited to: (1) negotiations and possible litigation with Comcast and its affiliates and subsidiaries relating to ACOM's Plan or the sale of some or all of ACOM's assets; (2) resolution of the Comcast claims; and (3) representation with respect to certain corporate issues. In consideration for its services, Munger Tolles will be compensated on an hourly basis, plus reimbursement of actual and necessary out-of-pocket expenses incurred. Munger Tolles' hourly rates are: Attorneys $200 - 650 Paralegals 90 - 185 The attorneys and the paralegals expected to represent the ACOM Debtors and their hourly rates are: Robert Denham -- partner, corporate $650 Thomas B. Walper -- partner, bankruptcy 575 Mark Shinderman -- partner, bankruptcy 500 Monica S. Weiner -- associate, bankruptcy 315 Maria Seferian -- associate, bankruptcy 315 All of Munger Tolles' rates are subject to periodic, ordinary course adjustments. The attorneys and paralegals involved in the ACOM Debtors' cases span Munger Tolles' rate ranges. Munger Tolles has neither received any payments from the ACOM Debtors nor is owed compensation for services rendered and expenses incurred in the ACOM Debtors' Chapter 11 cases. Mark Shinderman, a partner at Munger Tolles, assures the Court that the firm: * does not represent any party, or hold any interest, adverse to the ACOM Debtors with respect to the matters on which it is to be retained; and * has no connection with any of the potential parties-in- interest that would affect the firm's ability to represent the ACOM Debtors in their Chapter 11 cases. (Adelphia Bankruptcy News, Issue No. 63; Bankruptcy Creditors' Service, Inc., 215/945-7000) AIR CANADA: Plans To Hold Creditors Meeting On Aug. 17 in Montreal ------------------------------------------------------------------ For Air Canada's Plan to obtain the necessary creditor approval pursuant to the CCAA, the resolution to approve the Plan must be accepted by a majority in number of the Affected Unsecured Creditors entitled to vote, representing not less than 66-2/3% in value of the Voting Claims of the Affected Unsecured Creditors. In this regard, the Applicants ask Mr. Justice Farley for permission to call on the Affected Unsecured Creditors for meeting on August 17, 2004 at the Grand Salon at the Fairmont Queen Elizabeth, in Montreal, Quebec at 10:00 a.m. The Applicants will present the Resolution for the Affected Unsecured Creditors' approval at the meeting. If the required majorities of Affected Unsecured Creditors approve the Plan at the meeting, the Applicants intend to present the Plan to the CCAA Court for approval and sanction on August 23, 2004. The Applicants will mail the Circular, Plan Prospectus, and related materials to Affected Unsecured Creditors on July 15, 2004. The Creditors' meeting is dependent on the Applicants' domestic unions ratifying the amendments to their collective agreements, as expressly required in the Applicants' Amended Standby Purchase Agreement with Deutsche Bank. The Applicants does not intend to hold a meeting with their shareholders since the shareholders will receive only consideration under the Plan. The Applicants also ask the CCAA Court to establish July 31, 2004 as the record date to determine the creditors entitled to participate in the Rights Offering. The Plan entitles Affected Unsecured Creditors to participate in the Rights Offering. Headquartered in Saint-Laurent, Quebec Canada, Air Canada -- http://www.aircanada.ca/-- represents Canada's only major domestic and international network airline, providing scheduled and charter air transportation for passengers and cargo. The Company filed for CCAA protection on April 1, 2003 (Ontario Superior Court of Justice, Case No. 03-4932) and Section 304 petition with the U.S. Bankruptcy Court for the Southern District of New York (Case No. 03-11971). Matthew A. Feldman, Esq., and Elizabeth Crispino, Esq., at Willkie Farr & Gallagher serve as the Debtors' U.S. Counsel. When the Debtors filed for protection from its creditors, they listed C$7,816,000,000 in assets and C$9,704,000,000 in liabilities. (Air Canada Bankruptcy News, Issue No. 40; Bankruptcy Creditors' Service, Inc., 215/945-7000) AIR CANADA: Jazz Pilots Ratify Secondary Concessionary Agreements ----------------------------------------------------------------- The Jazz Master Executive Council of the Air Line Pilots Association, International's 1400 Air Canada Jazz pilots have ratified the Concessionary Agreement resulting from the Deutsche Bank/GECAS requirement for an additional $200M in cost reductions at Air Canada and Air Canada Jazz. "We are announcing that we have unconditionally ratified the agreement reached between the parties on May 15th as part of the ongoing financial and operational restructuring of Air Canada and Air Canada Jazz," said Captain Nick DiCintio, chairman of the Air Canada Jazz pilots' unit of ALPA. "We are optimistic that all other parties will similarly provide unconditional ratifications by the deadline of July 9th and that the process to emerge from CCAA protection can proceed," he added. "We have reviewed the Plan of Arrangement that was submitted to the court on June 30th which confirms an expanded role for Air Canada Jazz as a significant operator of small and medium sized jets representing the Air Canada code in North America," commented Captain DiCintio. The Air Canada Jazz pilots have been working cooperatively with Air Canada and Air Canada Jazz throughout the restructuring with a view to realigning fleet and costs to ensure Air Canada's continued success in the increasingly competitive North American market. This will ensure the ultimate objective of maximizing shareholder value and economic return for all stakeholders. ALPA, the world's oldest and largest union of airline pilots, represents 64,000 pilots at 42 carriers in Canada and the U.S. Air Canada Jazz provides service to over 70 destinations in Canada and the United States, and services more communities in Canada than any other airline. Visit the ALPA website at http://www.alpa.org/ Headquartered in Saint-Laurent, Quebec Canada, Air Canada -- http://www.aircanada.ca/-- represents Canada's only major domestic and international network airline, providing scheduled and charter air transportation for passengers and cargo. The Company filed for CCAA protection on April 1, 2003 (Ontario Superior Court of Justice, Case No. 03-4932) and Section 304 petition with the U.S. Bankruptcy Court for the Southern District of New York (Case No. 03-11971). Matthew A. Feldman, Esq., and Elizabeth Crispino, Esq., at Willkie Farr & Gallagher serve as the Debtors' U.S. Counsel. When the Debtors filed for protection from its creditors, they listed C$7,816,000,000 in assets and C$9,704,000,000 in liabilities. AIRPORT COMMERCIAL: Case Summary & 11 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Airport Commercial Center, Ltd. fdba Austin-Bergstrom Airport Centre 7200 North MoPac Expressway, Suite 450 Austin, Texas 78731 Bankruptcy Case No.: 04-13504 Chapter 11 Petition Date: July 2, 2004 Court: Western District of Texas (Austin) Judge: Frank R. Monroe Debtor's Counsel: Joseph D. Martinec, Esq. Martinec, Winn, Vickers & McElroy, P.C. 919 Congress Avenue, Suite 1500 Austin, TX 78701 Tel: 512-476-0750 Fax: 512-476-0753 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 11 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Kucera Management, Inc. $155,800 Airport Commercial Owners Assoc. Inc. $18,356 Airport FastPark-Austin $7,999 Christ, David P. $7,018 Armbrust and Brown, LLP $4,229 K C Engineering, Inc. $3,902 CFX, L.P. $3,689 Thrower Design $2,700 Durbin and Bennett, CPAs $2,030 MoPac Construction, Inc. $475 Miller Blueprint Co. $142 ANDREW CORP: S&P Assigns B+ Rating To $240M Convertible Sub. Notes ------------------------------------------------------------------ Standard & Poor's Ratings Services assigned its 'B+' rating to Andrew Corp.'s $240 million 3.25% convertible subordinated notes due Aug. 15, 2013. In addition, Standard & Poor's assigned its preliminary BB/B+ ratings to the company's $750 million Rule 415 shelf registration for senior unsecured/subordinated debt. A 'BB' corporate credit rating also was assigned to Andrew Corp. The outlook is stable. As a result of the Allen Telecom and Celiant Corp. acquisitions in July 2003 and June 2002, respectively, Andrew Corp. is one of the leading global suppliers of communications products and systems to the wireless subsystem infrastructure market. The company provides total customer solutions, including virtually all components of a wireless base station that are outsourced by major network original equipment manufacturers and operators. As of March 31, 2004, total debt outstanding was about $353 million, adjusted for operating leases. "The ratings reflect a below-average business profile due to the highly competitive and cyclical spending environment of the wireless and cable television industries in which the company operates, as well as its acquisitive growth strategy," said Standard & Poor's credit analyst Rosemarie Kalinowski. "This is partially offset by a solid financial profile for the rating and the company's strong market position in wireless infrastructure components." Antennas and base station subsystems represented about 49% of fiscal year 2003 sales, while cable products represented about 43%. Although Andrew Corp.'s coaxial cable product is principally used to carry radio frequency signals, it recently started manufacturing coaxial cable and connectors for the broadband cable television market to further diversify its revenue mix. Following periods of declining and then flat growth, sales have increased in the first two fiscal quarters of 2004, reflecting recent acquisitions, increased wireless operator capital expenditures for network upgrades and expansion, and increased wireless coverage requirements. In the second quarter of 2004, sales increased 9% sequentially, reflecting growth across all regions as wireless service providers focus on service quality and improving capacity. Andrew Corp.'s financial profile remains relatively strong for the rating level. The Allen Telecom and Celiant Corp. acquisitions have contributed to cash flow growth without pressuring debt coverage significantly due to the significant use of equity in their financing. The $451 million acquisition of Allen Telecom was financed primarily with stock, while the $470 million acquisition of Celiant Corp. was financed with stock and cash. Debt to EBITDA, adjusted for operating leases, increased materially in fiscal 2003 to 3.7x, from below 1.0x in previous years, due to the $240 million convertible subordinated note issue and pressures on operating margins. However, debt leverage has declined to 2.5x in the second quarter of fiscal 2004 due to higher cash flow. Based on management's balanced acquisition funding strategy, debt leverage metrics are expected to continue to be strong for the rating. APIVA VENTURES: TSX Continues Cease Trade Order ----------------------------------------------- The Cease Trading Order issued by the Toronto Securities Exchange on June 23, 2003 for Apiva Ventures Inc. will continue starting on July 7, 2004. Apiva Ventures Ltd. has been researching and developing search engine technology and Linux-based software. The Company's current search technology developments are geared towards search technology for specific usage such as site specific searching. The Company is also developing Linux help/reference software and reference accessories. At December 31, 2003, Apiva Ventures Ltd.'s balance sheet shows a deficit of C$4,434 as compared to a deficit of C$30,212 at December 31, 2002. ARMSTRONG: Court Wants Status Reports to be Filed by July 28 ------------------------------------------------------------ Judge Robreno directs the Armstrong Holdings, Inc. Debtors, the Official Committee of Unsecured Creditors, the Official Committee of Asbestos Claimants, the Official Committee of Asbestos Property Damage Claimants, the Future Claimants' Representative, and the United States Trustee to file written status reports on or before July 28, 2004, describing which Chapter 11 steps have been accomplished and which have not, including timelines for accomplishment, a listing of any major unresolved issues, and description of any remaining litigation, and suggested strategies to facilitate completion of the Debtors' proceedings. Judge Robreno also invites any interested party to participate by also submitting similar status reports by the deadline. Headquartered in Lancaster, Pennsylvania, Armstrong World Industries, Inc. -- http://www.armstrong.com/-- the major operating subsidiary of Armstrong Holdings, Inc., designs, manufactures and sells interior finishings, most notably floor coverings and ceiling systems, around the world. The Company filed for chapter 11 protection on December 6, 2000 (Bankr. Del. Case No. 00-04469). Stephen Karotkin, Esq., Weil, Gotshal & Manges LLP and Russell C. Silberglied, Esq., at Richards, Layton & Finger, P.A., represent the Debtors in in their restructuring efforts. When the Debtors filed for protection from their creditors, they listed $4,032,200,000 in total assets and $3,296,900,000 in liabilities. (Armstrong Bankruptcy News, Issue No. 63; Bankruptcy Creditors' Service, Inc., 215/945-7000) ASPEN GROUP: Selling U.S. Assets to Crusader Energy for $22 Mil. ---------------------------------------------------------------- Aspen Group Resources Corporation (TSX:ASR) announced that it has signed a binding Letter of Intent with Crusader Energy Corporation, an Oklahoma-based production and development company, to sell its U.S. oil and gas assets for approximately US$22 million cash, pending closing adjustments. The transaction has an effective date of June 1, 2004 upon closing, which must occur on or before October 1, 2004, subject to final due diligence by Crusader, negotiation and execution of a definitive Purchase and Sale agreement, and receipt of all applicable regulatory approvals. The LOI proposes the sale of all of Aspen's U.S. oil and gas production and reserves, which equates to approximately 600 boepd (3,600 mcfepd) of production and approximately 4.4 million boe (26.4 bcfe) of proven reserves. Aspen's wholly owned subsidiary United Cementing and Acidizing Co. is not included in the sale. The reserves are approximately 88 percent natural gas. "As we have stated before, our goal is to turn Aspen into a profitable, growing company. As part of that process, we have reviewed every aspect of the Company's operations and evaluated all of our assets in order to determine the best course for achieving that goal," commented Robert Calentine, CEO of Aspen. "By monetizing the U.S. assets, we are able to eliminate our long- term debt, add significant cash to our balance sheet, and move forward with a corporate strategy that enables us to control our own destiny." Crusader Energy Corporation is a new entity funded by an equity investment made by Kayne Anderson Capital Advisors, L.P. and David D. LeNorman. Aspen Group Resources Corporation is an independent oil and natural gas producer engaged in the acquisition, exploration, and development of oil and natural gas properties in North America. Aspen's shares trade on The Toronto Stock Exchange under the symbol "ASR". ATLAS COLD: OSC Vs. Ex-Execs Proceeding Adjourned to August 11 -------------------------------------------------------------- At an appearance Wednesday at the Ontario Court of Justice at Old City Hall, the proceeding commenced by the Ontario Securities Commission against former senior officers of Atlas Cold Storage Income Trust was adjourned to August 11, 2004 at 9:00 a.m. in court room 111, Old City Hall, to be spoken to at that time. On June 3, 2004, the OSC charged Patrick Gouveia, Andrew Peters, Ronald Perryman and Paul Vickery with violations of the Ontario Securities Act. Information on the charges is summarized in an OSC news release issued June 3, 2004, available on the OSC web site http://www.osc.gov.on.ca/ Presented with evidence of a serious medical condition, the OSC has stayed charges against Andrew Peters, as it is no longer considered in the public interest to proceed with those charges. The Commission has also issued a Notice of Hearing and staff of the Commission have filed a Statement of Allegations with the Commission against the four individuals in relation to the filing of misleading financial statements as alleged in the quasi- criminal charges. These documents are also available on the OSC web site at http://www.osc.gov.on.ca/ * * * As reported in the Troubled Company Reporter's February 4, 2004 edition, Atlas is in the process of attempting to negotiate an agreement with its lenders under the Credit Agreement whereby the lenders will deal with the existing defaults under the Credit Agreement. The agreement being sought by Atlas will continue the cap on availability at amounts presently outstanding and impose additional reporting, financial and other covenants on Atlas. The agreement will also provide the terms upon which the credit facilities will remain in place until their scheduled maturity on July 24, 2004. The principal terms of the agreement are subject to continuing negotiation and it is not certain that an agreement will be reached. The failure to obtain such an agreement may have a material adverse impact on the Trust's financial position, results of operations and cash flows. AVAYA: Will Report Fiscal 3rd Quarter 2004 Results on July 27 -------------------------------------------------------------- Avaya Inc. (NYSE: AV), a leading global provider of business communications software, systems and services, said it plans to report fiscal third quarter 2004 results after the market close on Tuesday, July 27, 2004. Avaya also will host a conference call to discuss its financial results at 5:00 p.m. EDT on July 27, 2004. A listen-only broadcast of the conference call and presentation notes can be accessed on the company's website at http://www.avaya.com/investors/.You also may listen to a replay of the conference call beginning at 8:00 p.m. EDT on July 27 through August 5, by dialing 800-642-1687 within the United States and 706-645-9291 outside the United States. The replay access code is 8354879. About Avaya Avaya Inc. designs, builds and manages communications networks for more than 1 million businesses worldwide, including 90 percent of the FORTUNE 500(R). Focused on businesses large to small, Avaya is a world leader in secure and reliable Internet Protocol (IP) telephony systems and communications software applications and services. Driving the convergence of voice and data communications with business applications -- and distinguished by comprehensive worldwide services - Avaya helps customers leverage existing and new networks to achieve superior business results. For more information visit the Avaya Web site http://www.avaya.com/ * * * As reported in the Troubled Company Reporter's May 4, 2004 edition, Standard & Poor's Rating's Services revised its outlook on the rating of Avaya Inc. to positive from stable. The 'B+' corporate credit and senior secured debt and 'B' senior unsecured debt ratings were affirmed. The outlook revision reflects improved profitability in recent quarters combined with reduced debt, improving debt protection metrics and increased balance sheet liquidity. BELDEN & BLAKE: Completes Merger With Carlyle/Riverstone Affiliate ------------------------------------------------------------------ Belden & Blake Corporation announced the completion of its merger with Capital C Energy Operations, LP, an affiliate of Carlyle/Riverstone Global Energy and Power Fund II, L.P. Capital C acquired Belden & Blake in an all-cash transaction. Headquartered in North Canton, Ohio, Belden & Blake is one of the oldest and largest oil and gas producers in the Appalachian and Michigan Basins with estimated proved reserves of approximately 360 Bcfe at the end of 2003. The company is engaged in every aspect of the development and production of its extensive resource base including exploitation, operation, compression, gathering and marketing. The management team will remain with the company post merger with the exception of the retirement of the current CEO, John L. Schwager. Frost W. Cochran, President and CEO of Capital C, will serve as Belden & Blake's new Chief Executive Officer. "Belden & Blake is a significant step in our mission of acquiring low risk, long-life producing reserves," said Mr. Cochran. "In addition to its extensive acreage position in Appalachia and Michigan, the company is one of the most experienced operators in extracting gas and oil from shallow blanket formations." "The acquisition has been accomplished through a financing structure that captures the benefits of today's attractive commodity prices and minimizes risk," commented Gregory A. Beard, Principal of Carlyle/Riverstone. "Additionally, the company provides us with a presence in some of the nation's often overlooked, but strategically important, hydrocarbon producing regions." Capital C was formed to acquire, own and operate domestic, onshore, oil and gas and mineral interests. The partnership focuses on extensively developed, low risk fields with medium- to long-life production, and predictable operating costs. Additionally, Capital C utilizes commodity price risk management tools extensively in the structuring of its investments to better manage the predictability of operating results. Riverstone Holdings and The Carlyle Group are the co-general partners of the Carlyle/Riverstone Global Energy and Power Fund II. Riverstone, a New York-based energy and power focused private equity firm founded in 2000, has approximately $1.5 billion under management. Riverstone conducts buyout and growth capital investments in the midstream, upstream, power, and oilfield service sectors of the energy industry. To date, the firm has committed approximately $875 million to 10 investments across each of these four sectors. The Carlyle Group is a global private equity firm with more than $18 billion under management. Carlyle invests in buyouts, venture, real estate, and leveraged finance in North America, Europe, and Asia. Since 1987, the firm has invested $10.8 billion of equity in 317 transactions. The Carlyle Group employs more than 500 people in 14 countries. Visit http://www.carlyle.com/for additional information. Randall & Dewey, an oil and gas strategic advisory and consulting firm based in Houston, TX, acted as financial advisors to Belden & Blake. Goldman Sachs & Co. arranged the debt financing and acted as financial advisor to Capital C. * * * As reported in the Troubled Company Reporter's June 30, 2004 edidtion, Standard & Poor's Rating Services raised its corporate credit rating on independent oil and gas company Belden & Blake Corp. to 'B' from 'CCC+', and at the same time assigned its 'BB-' rating and recovery rating of '1' to its proposed $170 million credit facility secured by a first lien on all assets. The secured credit facility is rated two notches above the corporate credit rating reflecting the very strong likelihood of a full recovery of principal if Belden defaults. In addition, Standard & Poor's assigned its 'B-' rating and a recovery rating of 3 to the proposed $192.5 million senior secured notes due 2012, reflecting its junior position to the first-lien debt and weaker recovery prospects. Finally, Belden's existing subordinated debt rating is raised to 'CCC+' and its $225 million subordinated notes are placed on CreditWatch with positive implications reflecting the cash tender offer for them expiring July 15, 2004. All of Belden's outstanding subordinated debt should be retired from the proceeds of the aforementioned funding vehicles. The rating actions follow a review of the announced merger between Belden and Capital C Energy, an affiliate of the Carlyle Group and Riverstone Holdings energy fund, which is expected to close in the beginning of July. The ratings decisions were made based on preliminary documents before the completion of the transactions. Standard & Poor's reserves the right to downgrade its ratings on review of the final documents, pending any changes to the terms of the proposed financing that differ from those that were outlined to Standard & Poor's by Belden. The outlook is stable. CAMBEX: Says Super PC's Liquidation Won't Greatly Affect Company ---------------------------------------------------------------- On May 21, 2004, Super PC Memory, Inc., a wholly-owned subsidiary of Cambex Corporation, discontinued its operations and executed an Assignment for the Benefit of Creditors. The purpose of the Assignment is to provide an orderly liquidation of Super PC's assets and distribution of the proceeds to Super PC's creditors. Super PC's assets primarily consist of inventory, receivables, fixed assets and a Purchase Agreement for the sale of Super PC's customer base relating to Wintel Products and rights to do business with said customers. The Assignee is Maximum Asset Recovery Services, Inc., a Los Angeles, California based financial consulting and management firm. Maximum Asset Recovery Services, Inc. has no relationship to Super PC Memory, Cambex Corporation or any of their affiliates. The Company acquired Super PC Memory in March 2002. Super PC Memory incurred substantial operating losses in fiscal year 2003 and fiscal year 2004 to date. Due to unfavorable memory market conditions, Super PC's cost structure could not be supported by the revenues and gross profit Super PC could generate. Consequently, Super PC Memory executed an Assignment for the Benefit of Creditors. Cambex Corporation and its other subsidiaries are unaffected by the Super PC Memory action. However, the Assignment will significantly reduce the Company's revenues. On the other hand, it also will reduce its operating costs and positively impact its cash flow. At April 4, 2004, Cambex Corporation's balance sheet shows a total stockholders' deficit of $5,154,760 compared to a deficit of $5,468,483 at December 31, 2003. CAPITAL BEVERAGE: Needs More Money to Continue as a Going Concern ----------------------------------------------------------------- Capital Beverage Corporation has a history of losses with an accumulated deficit of $5,367,639 and $5,222,395 at March 31, 2004 and December 31, 2003, respectively. The Company also has a working capital deficiency of $4,101,264 and $4,028,322 at March 31, 2004 and December 31, 2003, respectively. These conditions raise substantial doubt about the Company's ability to continue as a going concern. The Company's continuation as a going concern is dependent upon its ability to ultimately attain profitable operations, generate sufficient cash flow to meet its obligations, and obtain additional financing as may be required. The Company has a revolving loan with Entrepreneur Growth Capital, LLC. The loan limit is $2,500,000 and carries an interest rate of prime plus 2%. The loan is collateralized by the Company's accounts receivable, inventory, pledged property and distribution rights. The outstanding balance was $1,534,128 and $1,882,185 at March 31, 2004 and December 31, 2003, respectively. On December 11, 2003, the Park Slope Group, LLC, a single member limited liability company whose sole member is Addie Realty Properties, Inc., which in turn is wholly owned by certain officers of the Company loaned the Company $2,500,000 maturing on December 11, 2004 and accruing interest at 12% per annum. Addie and the officers of the Company have entered into this transaction in order to permit the Company to pay off its term loan with EGC, to pay down a portion of its revolving credit promissory note and agreement with ECG, and to restructure and amend its revolving credit agreement with EGC upon terms more favorable than those presently existing and available to the Company from EGC. Addie has transferred certain real property to the LLC. The LLC agreed to borrow $2,500,000, secured by a mortgage to Seaway Capital Corp. under credit terms more favorable than those which could presently be obtained by Capital. The LLC is lending the net proceeds of its loan from Seaway to Capital. Addie and the officers have also entered into an agreement with EGC to pay the net proceeds of the Seaway loan to EGC for the benefit of Capital to pay off its term loan with EGC, to pay down a portion of Capital's revolving credit promissory note and agreement with EGC, and to restructure and amend Capital's revolving credit agreement with EGC upon terms more favorable than those presently existing and available to Capital from EGC. Capital's working capital deficiency increased from a deficit of $4,028,322 at December 31, 2003 to a deficit of $4,101,264 at March 31, 2004 due to the rise in accounts payable impacted by the future product price increase. At March 31, 2004 the Company's primary sources of liquidity were $191,438 in cash, $1,124,814 in accounts receivable and $3,171,483 in inventories. Management believes it has sufficient sources of working capital to adequately meet the Company's needs through the end of 2004. CATHOLIC CHURCH: Applies To Employ Sussman Shank As Counsel ----------------------------------------------------------- The Archdiocese of Portland in Oregon asks the U.S. Bankruptcy Court for permission to employ the law firm of Sussman Shank, LLP, in Portland, Oregon, as its bankruptcy counsel. Archbishop John G. Vlazny tells the Bankruptcy Court that Sussman Shank is well qualified to represent the Archdiocese. The Firm will perform all of the services necessary and desirable to the conduct of the Debtor's chapter 11 case. Within the year prior to the Petition Date, Sussman received $37,638.06 from the Archdiocese. Additionally, the Archdiocese paid a $200,000 retainer to Sussman. Sussman Shank will bill for postpetition services at its customary hourly rates: Partners $200 to $315 Special Counsel $210 to $240 Associates $150 to $185 Paralegals $70 to $125 Legal Assistants $50 Thomas W. Stilley, Esq., assures the Court that he, his partners and his firm are disinterested within the meaning of Section 101(14) of the Bankruptcy Code as required under Section 327. Out of an abundance of caution, Mr. Stilley discloses that his firm has represented Oregon Catholic Press since February 2003 in employment related matters. OCP is not currently one of the Debtor's creditors. Mr. Stilley also discloses that the Archbishop (or his designee) serves on boards overseeing Catholic Charities, Oregon Catholic Press, St. Mary's Home, and Village Enterprises. The Archdiocese of Portland in Oregon filed for chapter 11 protection (Bankr. Ore. Case No. 04-37154) on July 6, 2004. Thomas W. Stilley, Esq. and William N. Stiles, Esq. of Sussman Shank LLP represent the debtor in its restructuring efforts. When the debtor filed for chapter 11 protection, it listed estimated assets of $10,000,000 to $50,000,000 and estimated debts of $25,000,000 to $50,000,000. (Catholic Church Bankruptcy News, Issue No. 1; Bankruptcy Creditors' Service, Inc., 215/945-7000) CHAS COAL: Wants to Hire Gregory Lathram as Bankruptcy Counsel -------------------------------------------------------------- Chas Coal, LLC, asks the U.S. Bankruptcy Court for the Eastern District of Kentucky, London Division, to hire the Law Offices of R. Gregory Lathram, P.S.C., as its legal counsel. Mr. Lathram will overlook the principal duties in representing the Debtor. In his capacity, Mr. Lathram will: a. prepare pleadings and applications and conducting examinations on behalf of the Debtor in Possession incidental to any related proceedings or to the administration of this case; b. develop the status of the relationship between Debtor as a Debtor in Possession and the claims of all creditors in the pending Chapter 11 bankruptcy case; c. advise Debtor in Possession of its rights, duties, and obligations in the course of operating a business under Chapter 11 of the United States Bankruptcy Code; d. take any and all other necessary actions on behalf of the Debtor in Possession incident to the proper preservation and administration of the pending Chapter 11 bankruptcy case; and e. advise and assist Debtor in Possession in the formation and development of a plan of reorganization, the disclosure statement, and any and all other matters related thereto in the pending Chapter 11 bankruptcy case. Mr. Lathram's current rate is $200 per hour and his paralegals bill at $50 per hour. Headquartered in London, Kentucky, Chas Coal, LLC -- http://www.chascoal.com/-- is a provider of high quality, low sulfur Eastern Kentucky coal. The Company filed for chapter 11 protection on June 17, 2004 (Bankr. E.D. Ky. Case No. 04-60972). Robert Gregory Lathram, Esq., represents the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $28,080,624 in total assets and $8,601,895 in total debts. COINSTAR INC: Completes American Coin Acquisition for $235 Mil. --------------------------------------------------------------- Coinstar Inc. (Nasdaq:CSTR), the market leader in self-service coin counting and growing supplier of e-payment services, announced that it has completed the purchase of American Coin Merchandising Inc. and its parent company, ACMI Holdings Inc., for $235 million. Coinstar Inc. also announced the completion of $310 million of debt financing consisting of a $250 million term loan and a $60 million revolver. The proceeds will be used primarily to fund the acquisition, with the balance used for general corporate and working capital purposes. On May 24, 2004, Coinstar Inc. announced its proposed acquisition of ACMI, one of the largest vendors of plush toys in the United States with a product line consisting of skill crane machines, bulk vending, kiddie rides and video games. The company distributes its equipment to mass merchants, supermarkets, warehouse clubs, restaurants, entertainment centers, truck stops, and other distribution channels. Coinstar Inc. secured a $250 million term loan with a tenor of seven years, amortizing at one percent per year with a balloon payment at maturity. The interest rate for the term loan is LIBOR plus 225 basis points with a step-down to LIBOR plus 200 basis points when total leverage falls below two-and-a-half times annual EBITDA. Customary covenants apply to the term loan, including maximum total leverage, interest coverage, capital expenditure limits, stock repurchase and dividend limitations and standard restrictions on investments and mergers and acquisitions. In addition, the Company is required to enter into interest rate protection agreements in the amount of $125 million. The Company also secured a $60 million revolving credit facility with a tenor of five years to be used for general corporate needs. Copies of the Merger Agreement and Credit Agreement will be filed on Form 8- K with the SEC. The facilities were arranged by J.P. Morgan Securities Inc. and Lehman Brothers Inc. Bank of America, N.A., KeyBank, N.A., and Wells Fargo Bank, N.A served as documentation agents for the financing and are also participating in the revolving credit facility. As previously stated, the Company expects this transaction to be accretive within the first twelve months, excluding the effects of the amortization of intangible assets. Over the next 30 to 60 days the Company will obtain an independent valuation of certain of ACMI's tangible and intangible assets, which will enable the Company to determine purchase price allocations including amounts assigned to intangible assets and goodwill. As a result, reported GAAP EPS will be impacted by the non-cash accounting charges related to such amortization of intangible assets. The Company will give guidance regarding GAAP EPS for the combined companies once the valuation of tangible and intangible assets is complete. About Coinstar Inc. Coinstar Inc. owns and operates a network of nearly 11,000 automated self-service coin-counting machines that provide consumers with a convenient means to convert loose coins into cash. Acquisitions during the past year have laid the foundation for the distribution of a wide variety of prepaid products through point-of-sale and self-service kiosks in over 13,000 drugstores, universities, shopping malls and convenience stores, bringing the total to over 24,000 distribution points throughout the United States, Canada and the United Kingdom. * * * As reported in the Troubled Company Reporter's June 15, 2004 edition, Standard & Poor's Ratings Services assigned its 'BB-' corporate credit rating to Coinstar Inc. The outlook is stable. At the same time, Standard & Poor's assigned its 'BB-' bank loan rating, as well as a recovery rating of '4', to Coinstar's proposed $300 million senior secured credit facilities, comprising a $250 million seven-year term loan due 2011 and a $50 million five-year revolving credit facility due 2009. The '4' recovery rating indicates the expectation for a marginal recovery of principal (25%-50%) in the event of a default. Proceeds of the $250 million term loan will be largely used to fund the cquisition of American Coin Merchandise Inc. Coinstar signed a definitive agreement to acquire ACMI for $235 million, representing about 7.3x ACMI's March 31, 2004 last-12-month EBITDA of $32 million. "The ratings on Coinstar reflect significant customer concentration, the relatively short-term nature of its contracts with retail partners, higher operating risks at ACMI, and potential risks integrating this operation," said Standard & Poor's credit analyst Ana Lai. "These risks are partly mitigated by the company's relatively efficient proprietary coin processing technology, positive operating performance, and adequate credit protection measures." CS GOLF MANAGEMENT: Voluntary Chapter 11 Case Summary ----------------------------------------------------- Debtor: CS Golf Management LC 1817 Kingfisher Ridge Cove Leander, Texas 78645 Bankruptcy Case No.: 04-13502 Chapter 11 Petition Date: July 2, 2004 Court: Western District of Texas (Austin) Judge: Frank R. Monroe Debtor's Counsel: Duane J. Brescia, Esq. Strasburger & Price, L.L.P. 600 Congress Avenue, Suite 2600 Austin, TX 78701 Tel: 512-499-3600 Fax: 512-499-3660 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million The Debtor did not file a list of its 20-largest creditors. DAYTON SUPERIOR: Increases Credit Facility to $95 Million --------------------------------------------------------- Dayton Superior Corporation reported that it has increased its existing $80 million senior secured revolving credit facility with General Electric Capital Corporation and General Motors Acceptance Corporation (GMAC) to $95 million effective July 2, 2004. The $15 million increase in credit availability will provide the Company with additional liquidity capacity to effectively manage its business. Availability of borrowings continues to be subject to a borrowing base calculation. Stephen R. Morrey, Dayton Superior's President and Chief Executive Officer stated, "The additional liquidity capacity under the credit facility provides us with the flexibility to pursue opportunities to enhance our business performance as they come available. At this time there are no immediate intentions to utilize any portion of the additional credit availability." Dayton Superior is the largest North American manufacturer and distributor of metal accessories and forms used in concrete construction, and a leading manufacturer of metal accessories used in masonry construction in terms of revenues. The company's products are used in two segments of the construction industry: infrastructure construction, such as highways, bridges, utilities, water and waste treatment facilities and airport runways, and non- residential building, such as schools, stadiums, prisons, retail sites, commercial offices, hotels and manufacturing facilities. The company sells most products under the registered trade names Dayton Superior(R), Dayton/Richmond(R), Symons(R), Aztec(R), BarLock(R), Conspec(R), Edoco(R), Dur-O-Wal(R) and American Highway Technology(R). * * * As reported in the Troubled Company Reporter's June 17, 2004 edition, Standard & Poor's Ratings Services lowered its ratings on Dayton Superior Corp., a concrete construction products manufacturer. The outlook is negative. Standard & Poor's lowered its corporate credit and senior secured ratings on Dayton Superior to 'B-' from 'B', and the subordinated debt rating to 'CCC' from 'CCC+'. "The downgrade reflects Dayton Superior's very weak cash flow protection measures and narrow liquidity. The lingering impact of the lengthy downturn in commercial construction markets and skyrocketing steel prices have combined to reduce earnings and cash flows to subpar levels," said Standard & Poor's credit analyst Pamela Rice. DEEP WELL OIL: Appoints Menno Wiebe as Director & COO ----------------------------------------------------- Deep Well Oil & Gas, Inc., a Nevada Corporation, announced that on July 6, 2004, the Directors approved the appointment of Menno Wiebe to the Board of Directors and his appointment of the Management team as Chief Operating Officer. Mr. Wiebe brings to the company not only previous Senior Management and Board level experience but a wealth of hands on project management knowledge and a valuable international perspective. Mr. Wiebe was born in 1948 and obtained his BSc. Geology degree from the University of Manitoba in 1970. He subsequently earned an MBA from the University of Warwick, England in 1993. During his early career he participated in the evaluation of the heavy oil sands in the Fort McMurray area carried out by Hudsons Bay Oil & Gas. From 1975 to 1983 Mr. Wiebe served with Occidental Petroleum in postings in Libya, Scotland and the U.S. During this period he joined Oxy Management as Chief Geologist for the development of two large North Sea fields. In 1983, Mr. Wiebe joined Bow Valley Industries for a four year posting in Jakarta, Indonesia where, as Exploration Manager, he directed extensive drilling programs in the Java Sea and North Sumatra. In 1986, when the Indonesian authorities signaled that they planned to offer large secondary recovery blocks to international oil companies, Mr. Wiebe moved to Husky Oil serving in both Jakarta and Calgary and he successfully managed the acquisition, negotiation and project implementation, of the first of these projects amid conditions of strong competition. During his 8 years in Indonesia, Mr. Wiebe served as a director of the Canadian Business Association and established strong industry and government contacts in Southeast Asia. Mr. Wiebe joined Hall-Houston Oil Company, a privately held firm, in 1991 and served in Kuala Lumpur, Malaysia as President and General Manager for its exploration and drilling projects there. This activity resulted in a gas discovery and central involvement in gas field development and power generation project planning. In early 1999, Mr. Wiebe returned to Canada and became a Director and then CEO of Pertacal Energy Inc. with operated interests in Yemen, the UK and France. In late 2001, Mr. Wiebe formed a private international Oil Industry consulting company. He remains very active in both the Canadian and International oil industry including a position on the management team at Adulis Resources Inc. a public Company listed on the TSX-V and continues to be a member of a number of technical and management associations. The Directors and Management would like to thank Mr. Brown for his contributions to Deep Well Oil & Gas, Inc. and wish him good fortune on the pursuit of his new career. The Company continues to focus on its new business plan to commence operations as an oil and gas exploration and development company with special emphasis on heavy oil and gas exploration activities in Northern Alberta, Canada. Deep Well Oil & Gas, Inc. -- whose total stockholders' deficit tops $44,440 at March 31, 2004 -- and its former subsidiaries, were engaged in the manufacture and distribution of standard and custom precision mechanical assemblies and components throughout the United States. DENNY'S CORP: Completes $92 Million Equity Private Placement ------------------------------------------------------------ Denny's Corporation (OTCBB: DNYY) announced that it has closed a private placement of 48,429,997 shares of its common stock sold to accredited institutional investors at a price of $1.90 per share yielding gross proceeds of approximately $92 million. The Company now has 89.7 million aggregate shares outstanding. The proceeds from the private placement will be used to reduce indebtedness and for general corporate purposes. The Company may initially reduce debt by repaying a portion of amounts outstanding under the Company's credit facility as well as prepaying or acquiring a portion of the Company's 12.75% Senior Notes due 2007 and/or 11.25% Senior Notes due 2008. UBS Securities LLC acted as exclusive placement agent and financial advisor to the Company in connection with this private placement. Commenting on the transaction, Andrew F. Green, Chief Financial Officer of Denny's, said, "The deleveraging effected by this substantial equity investment, along with our improving operational performance, enhances Denny's credit profile. In order to further strengthen our capital structure, we are moving forward with refinancing our credit facility as well as evaluating a refinancing of some or all of our senior notes. We believe these efforts will enable us to lower our interest expense, providing additional cash flow for investment in new restaurants, remodels of current restaurants and other growth initiatives." Nelson J. Marchioli, President and Chief Executive Officer of Denny's, stated, "We are very pleased with the support provided by these institutional investors, which include both existing shareholders and new investors. We feel it is further confirmation of the strength of the Denny's brand and the steps we have taken to build upon that strong foundation." The securities sold in the private placement have not been registered under the Securities Act of 1933, as amended, and may not be re-offered or re-sold in the United States in the absence of an effective registration statement or exemption from registration requirements. However, as part of the transaction, the Company has agreed to file a registration statement with the Securities and Exchange Commission no later than 30 days after the closing of the transaction, and thereafter to seek and maintain the effectiveness of such registration statement, for purposes of registering for resale the shares of common stock issued in the private placement. Denny's is America's largest full-service family restaurant chain, operating directly and through franchisees 1,630 Denny's restaurants in the United States, Canada, Costa Rica, Guam, Mexico, New Zealand and Puerto Rico. * * * As previously reported, Standard & Poor's Ratings Services lowered its ratings on family dining restaurant operator Denny's Corp. The corporate credit rating was lowered to 'CCC+' from 'B-'. At the same time, all ratings were removed from CreditWatch, where they were placed July 31, 2003. The outlook is negative. The rating actions are based on Denny's deteriorating operating performance and cash flow protection measures, as well as Standard & Poor's heightened concern that continued poor performance will constrain the company's liquidity. DII/KBR: St. Paul Agrees to Pay $350K to Resolve Insurance Dispute ------------------------------------------------------------------ St. Paul Mercury Insurance Company has issued or is alleged to have issued certain general liability insurance policies to various entities, including Brown & Root, Inc. -- a predecessor to KBR, Inc. -- under which policies KBR asserts that it has or may have rights to obtain reimbursement of indemnity and defense costs incurred in connection with asbestos and silica-related claims. Michael G. Zanic, Esq., at Kirkpatrick & Lockhart, LLP, in Pittsburgh, Pennsylvania, informs the Court that a lawsuit brought by KBR against St. Paul relating to certain of the Insurance Policies is currently pending in Harris County, Texas, and is captioned as "Kellogg Brown & Root, Inc. v. AIU Insurance Co., et al." According to Mr. Zanic, the issues raised in the Coverage Lawsuit are complex and continued litigation would be costly to KBR and its estate and creditors. While KBR believes that it ultimately would prevail in the Coverage Lawsuit, as in any litigation, the outcome remains uncertain. Thus, to mitigate the risks and avoid the expense associated with continued litigation, KBR and St. Paul entered into a Settlement Agreement on June 9, 2004 for the purpose of effectuating a full and final settlement that releases and terminates all rights, obligations, and liabilities that St. Paul may owe to KBR under the Subject Insurance Policies in consideration for certain monetary payments and other consideration. The consummation of the Settlement Agreement will involve St. Paul's payment of $350,000 in exchange for a complete release of its obligations under the Insurance Policies. St. Paul will also be released from liability for Asbestos Claims and Silica Claims under the Post-1992 Insurance Policies. The material terms of the Settlement are: (a) St. Paul Settlement Payment Within 10 days of the satisfaction or waiver of the conditions precedent, St. Paul will pay KBR $350,000. (b) Conditions Precedent to Payment of the Settlement Amount The Settlement Agreement conditions the obligation of St. Paul to pay the Settlement Amount on the satisfaction or waiver of, among other conditions: * entry of a final order approving the Settlement; and * occurrence of the Effective Date of the Plan. (c) Release in Favor of St. Paul After the payment of the Settlement Amount, and except for obligations created by the Settlement Agreement, KBR, on behalf of itself and its successors and assigns, will be deemed to release, remise, covenant not to sue, and forever discharge St. Paul: * from and against all claims that KBR had, now has, or may have arising from the Insurance Policies; * from and against all claims that KBR had, now has, or may have arising from the Post-1992 Insurance Policies; * from and against all liability to KBR arising from the Coverage Lawsuit; and * from and against any event, transaction, occurrence, act, or any other misfeasance or nonfeasance relating in any way to the Insurance Policies, the Post 1992 Insurance Policies and the Coverage Lawsuit. (d) Release in Favor of KBR At the same time the release in favor of St. Paul becomes effective, St. Paul will be deemed to release and forever discharge KBR: * from and against all claims that St. Paul had, now has, or may have with respect to the Insurance Policies; * from and against all claims that St. Paul had, now has, or may have arising from the Post-1992 Insurance Policies; * from and against liability arising from the Coverage Lawsuit; and * from and against any event, transaction, occurrence, act, or any other misfeasance or nonfeasance relating in any way to the Insurance Policies, the Post 1992 Insurance Policies and the Coverage Lawsuit. (e) Reservation of Rights by KBR KBR will reserve all rights and benefits it may have in connection with certain insurance policies and, with respect to the Post-1992 Insurance Policies, all past, present or future claims that are not specifically released by the Settlement Agreement. (f) Amendments to Plan Documents Subject to the satisfaction or waiver of the Conditions Precedent of the Settlement Agreement: * the Settlement Agreement will constitute an "Asbestos/Silica Insurance Settlement Agreement" for purposes of the Plan; * St. Paul will be a "Settling Asbestos/Silica Insurance Company" entitled to the protection of the "Asbestos/Silica Insurance Company Injunction;" * Exhibit 1 to the Plan will be amended to include all of the Subject Insurance Policies; and * Exhibit 2 to the Plan will be amended to add the Settlement Agreement as an "Asbestos/Silica Insurance Settlement Agreement." St. Paul will, therefore, be a Settling Asbestos/Silica Insurer entitled to the benefit of the Asbestos/Silica Insurance Company Injunction to be issued in connection with the Plan pursuant to Sections 524(g) and 105 of the Bankruptcy Code, which will, subject to the occurrence of the Effective Date and satisfaction or waiver of the Conditions Precedent, enjoin the assertion against St. Paul of all claims arising under the Insurance Policies. (g) Dismissal of Coverage Lawsuit and Standstill Agreement The Settlement Agreement provides for a dismissal of the parties' claims and counterclaims against one another in the Coverage Lawsuit and a standstill with respect to the prosecution of the Coverage Lawsuit pending fulfillment of the Conditions Precedent. Mr. Zanic contends that the terms of the Settlement Agreement are fair and reasonable and that the Settlement Agreement is in the best interests of KBR's estate and creditors because: (1) The Settlement Agreement is the product of extensive and intensive arm's-length negotiations between KBR and St. Paul; (2) As a result of the Settlement Agreement, KBR will recover insurance proceeds amounting to $350,000, which will enhance its liquidity and increase the feasibility of the Plan; and (3) The Settlement Agreement will result in the resolution of portions of the Coverage Lawsuit, thus reducing the costs associated with the prosecution of the lawsuit and eliminating any uncertainty regarding the extent of recovery from St. Paul. Accordingly, the Debtors seek the Court's authority to enter into the Settlement Agreement. Mr. Zanic asserts that the proposed modifications to the Plan are not material. These modifications are entirely consistent with the Debtors' expressed intention in the Disclosure Statement to attempt to reach pre-confirmation settlement agreements with their insurers, and thus do not require the resolicitation of acceptances for the Plan. Headquartered in Houston, Texas, Kellogg, Brown & Root is engaged in the engineering and construction business, providing a wide range of services to energy and industrial customers and government entities in over 100 countries. DII has no business operations. The Company filed for chapter 11 protection on December 16, 2003 (Bankr. W.D. Pa. Case No. 02-12152). Jeffrey N. Rich, Esq., Michael G. Zanic, Esq., and Eric T. Moser, Esq., at Kirkpatrick & Lockhart LLP, represent the Debtors in their restructuring efforts. (DII & KBR Bankruptcy News, Issue No. 15; Bankruptcy Creditors' Service, Inc., 215/945-7000) DII/KBR: Lanzhou Taps SCORE Technology for Ethylene Plant --------------------------------------------------------- KBR (Kellogg Brown & Root) has been awarded a basic design engineering package for a new 360,000 ton/yr ethylene plant capacity expansion, which will be added to an existing 240,000 ton/yr unit for a total capacity of 600,000 ton/year by the Lanzhou Petrochemical Company, which operates under the auspices of PetroChina. The facility will be located in Lanzhou City, Gansu Province of the Peoples Republic of China and will utilize KBR's proprietary SCORE(TM) (Selective Cracking Optimum REcovery) technology. Huanqiu Chemical Engineering and Construction Company (HQCEC) will perform the detailed engineering. KBR is the engineering and construction subsidiary of Halliburton (NYSE:HAL). KBR's SCORE(TM) technology brings together the expertise and experience of KBR and ExxonMobil Chemical to provide the petrochemical industry with state-of-the art technology with both a design contractor's and ethylene producer's perspective. Safety, operability, and reliability are combined with low capital and energy costs to give producers the competitive edge in today's markets. Since 1995, KBR ethylene technology has been used in approximately 30 percent of the world's new olefins plant capacity and has built the reputation it continues to stand for. "Being a world-famous engineering company, KBR has licensed its technology to many plants both inside and outside China, enjoying a high reputation in the international ethylene field," said Mr. Sun Li, president of PetroChina Company Limited. "We are quite excited about this award as it represents the first application of KBR's entire SCORE(TM) technology in China," said Ray Orriss, vice president of Olefins at KBR. Orriss added that although SCORE(TM) cracking furnaces will be started up this year at Daqing, Lanzhou Petrochemical Company will be the first complex in China to use both the hot and cold section SCORE(TM) design. To add to the expansion of the SCORE(TM) facilities, two new SCORE(TM) grassroots ethylene plants will be starting up within the next year in Thailand and Saudi Arabia. KBR is a global engineering, procurement and services company. Whether designing a chemical plant, serving as a defense industry contractor, or providing capital construction, KBR delivers world class service and performance. KBR employs 64,000 people in 43 countries around the world. Halliburton, founded in 1919, is one of the world's largest providers of products and services to the petroleum and energy industries. The company serves its customers with a broad range of products and services through its Energy Services Group and Engineering and Construction Group business segments. The company's World Wide Web site can be accessed at http://www.halliburton.com/ Headquartered in Houston, Texas, Kellogg, Brown & Root is engaged in the engineering and construction business, providing a wide range of services to energy and industrial customers and government entities in over 100 countries. DII has no business operations. The Company filed for chapter 11 protection on December 16, 2003 (Bankr. W.D. Pa. Case No. 02-12152). Jeffrey N. Rich, Esq., Michael G. Zanic, Esq., and Eric T. Moser, Esq., at Kirkpatrick & Lockhart LLP, represent the Debtors in their restructuring efforts. DSI TOYS: Accounts Receivable to be Auctioned on July 12 -------------------------------------------------------- Sunrock Capital Corp., DSI Toys, Inc.'s secured lender, obtained relief from the automatic stay in DSI's bankruptcy case on October 30, 2003, and repossessed the collateral securing repayment of its 1999 Loan Agreement. On Monday, July 12, 2004, at the offices of its counsel: Hughes & Luce, LLP 1717 Main Street Dallas, Texas 75201 Telephone (214) 939-5500 Sunrock will auction DSI's accounts receivable to the highest bidder. The accounts receivable are owed by: Ames Department Stores Arlington Toy Enterprises, Inc. Brainstorm Logistics Circuit City CRG Toys, SA (Costa Rica) FAO FAO - Zainy Brainy Frank W. Kerr Co. Kay-bee Stores, Inc. Kmart Lash Tamaron Learning Express - Great Falls Learning Express - Newton Gibsons Learning Express - Wilmington Limited Too, Inc. LiquidXS.com Meijer, Inc. Nestle USA, Inc. Popular Club Plan, Inc. QVC, Inc. Shopko Stores Starquest Products Target Northern Ops. Center Toys-R-Us Contact Sunrock at 215-856-0340 for an accounting. Additional information is available from: Robert Castine Dominion Pacific Group 11625 Montana Ave., Suite 112 Los Angeles, CA 90045 Telephone (310) 472-2378 Fax (310) 472-1873 When DSI filed for bankruptcy, it estimated its accounts receivable totaled $4.5 million, of which $2.9 million was more than 90 days old. DSI Toys, Inc., filed its chapter 7 petition on October 17, 2003 (Bankr. S.D. Tex. Case No. 03-44867-H5-7). William B. Finkelstein, Esq., and Matthew J. Cleaves, Esq., at Hughes & Luce, L.L.P., in Dallas, represent Sunrock Capital Corp., DSI's secured lender. ELDORADO PARKWAY: Voluntary Chapter 11 Case Summary --------------------------------------------------- Debtor: Eldorado Parkway Creek Investments, Ltd. 8117 Preston Road, Suite 420 Dallas, Texas 75225 Bankruptcy Case No.: 04-43113 Type of Business: The Debtor is engaged in real estate investment. Chapter 11 Petition Date: July 3, 2004 Court: Eastern District of Texas (Sherman) Judge: Brenda T. Rhoades Debtor's Counsel: Harriet L. Langston, Esq. Harriet Langston, P.C. 12900 Preston Road, Suite 1050 Dallas, TX 75230 Tel: 972-233-3328 Total Assets: $1,007,252 Total Debts: $681,475 The Debtor did not file a list of its 20-largest creditors. ENRON CORP: Sues 40 Creditors to Recover Preferential Payments -------------------------------------------------------------- On or within 90 days before the Bankruptcy Petition Date, the Enron Corporation Debtors made, or caused to be made, transfers to 40 creditors: Creditor Amount -------- ------ Akin, Gump, Strauss, Hauer & Feld, LLP $338,930 Avca Corporation 392,190 Avis Rent-A-Car System, Inc. 113,689 Avtec, Inc. 510,888 B&A Redmond Partner, Ltd. 255,037 B&J Industrial Supply 32,646 Baker Tanks, Inc. 52,470 Bank & Office Interiors 100,023 Bank One 101,584 Banner Industrial Supply 32,283 Cutler-Hammer, Inc. 86,612 Dale C. Rossman, Inc. 212,649 Daniel J. Shea 38,500 Daniel Valve Company 26,484 Dawson County Appraisal District 36,473 Dea Construction Company 290,915 Hmt, Inc. 140,400 Hobart West Group, LLC 84,592 Holtec International 523,100 Hood River Sand & Gravel 48,281 Horizon Constructors, Inc. 75,415 Houghton Chemical 27,457 Hugh Murphy 21,600 Huntsman Corporation 177,400 Industrial Marine Service, Inc. 31,788 Idylwood Village Apartments 29,158 Illinois Blower, Inc. 22,986 Indeck Power Equipment Company 157,927 Industrial Communications 106,653 Oilfield Supply 46,708 PB Energy Storage Services, Inc. 151,420 Rexel Southern Electrical Supply 117,829 Rexel Summers 132,767 Rhoads Industries, Inc. 71,746 Richard Surrey 40,600 Richard Company 63,000 Ridge Cut Farms Partnership 30,000 Robertson-Ceco Corporation 59,499 Rockland County Solid Waste Authority 56,024 Rohm & Haas Company 157,500 ------------- TOTAL $4,995,223 Neil Berger, Esq., at Togut, Segal & Segal, LLP, in New York, relates that: (a) the Transfers constitute transfers of interest of the Debtors' property; (b) the Debtors made, or caused to be made, the Transfers to, or for the benefit of, the Creditors; (c) the Debtors made, or caused to be made, the Transfers for, or on account of, antecedent debts owed to the Creditors prior to the dates on which the Transfers were made; (d) the Debtors were insolvent when the Transfers were made; (e) the Transfers enabled the Creditors to receive more than they would have received if: -- Enron's cases were administered under Chapter 7 of the Bankruptcy Code; -- the Transfers had not been made; and -- the Creditors had received payment of the debt to the extent provided by the Bankruptcy Code. Thus, Mr. Berger contends that the Transfers constitute avoidable preferential transfers pursuant to Section 547(b) of the Bankruptcy Code. In accordance with Section 550(a), the Debtors may recover from the Creditors the amount of the Transfers, plus interest. In the alternative, Mr. Berger asserts that the Transfers are avoidable fraudulent transfers under Section 548(a)(1)(B) since: (a) the Transfers constitute transfers of interest in the Debtors' property; (b) the Transfers were to or for the benefit of the Creditors; (c) the Debtors received less than reasonable equivalent value in exchange for some or all of the Transfers; (d) the Debtors were insolvent, or became insolvent, or had unreasonably small capital in relation to their businesses or their transactions at the time or as a result of the Transfers; and (e) the Transfers were made within one year before the Petition Date. Accordingly, the Debtors ask the Court to: (i) avoid and set aside the Transfers pursuant to Section 547(b); (ii) in the alternative, avoid and set aside the Transfers pursuant to Section 548(a)(1)(B); (iii) direct the Creditors to immediately pay them an amount equal to the Transfers pursuant to Section 550(a), together with interest from the date of the Transfers; and (iv) award them attorneys' fees, costs and other expenses incurred. (Enron Bankruptcy News, Issue No. 115; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENRON: Power Resources Presses For Administrative Claim Payment --------------------------------------------------------------- Power Resources Operating Company, Inc., asks the Court to allow and compel the payment of its administrative expenses amounting to $119,870, pursuant to Section 503(b)(1)(A) of the Bankruptcy Code. Paul Hollender, Esq., at Corash & Hollender, PC, in Staten Island, New York, relates that Enron Energy Services, Inc., and Power Resources entered into a Client Commission Agreement on August 24, 2001 pursuant to which Power Resources could identify and recommend existing clients who were commercial or industrial natural gas users in Illinois, New York, Ohio, Pennsylvania and Virginia, for introduction to EESI. EESI could then enter into Individual Energy Agreements to supply the natural gas requirements of those Potential Customers. EESI agreed to pay Power Resources a monthly commission for natural gas purchased by each Participating Customer under each Individual Energy Agreement. According to Mr. Hollender, the Commission is equal to 100% of the spread between the price it had negotiated with a particular Participating Customer and the price at which EESI was willing to sell natural gas to that Participating Customer. The Commission was to be calculated by multiplying: (a) a positive difference, if any, obtained by subtracting the Enron Price from the Sales Price; times (b) the estimated number of MMBtu's of natural gas consumed by the Participating Customer. Between August 24, 2001 and November 30, 2001, Mr. Hollender reports that EESI or its Enron-affiliated designee, entered into Individual Energy Agreements with about 111 Customers Power Resources identified and recommended. Upon entering into Individual Energy Agreements, the 111 Customers became Participating Customers and Power Resources became entitled to a monthly Commission based on the natural gas the Participating Customers purchased from EESI or its designee. By notice dated and effective as of November 4, 2002, EESI rejected the Client Commission Agreement. Mr. Hollender tells Judge Gonzalez that the Debtors failed to pay Power Resources any Commission. Power Resources asserts a $92,431 claim for Commissions due for the natural gas sold to Participating Customers before the Petition Date. EESI has proposed certain adjustments to the claim. The resolution of the proposal is still pending. For December 2001, Power Resources asserts that it is owed $119,970 in Commissions. Power Resources agrees to waive any right to the Commissions based on natural gas sold to Participating Customers after December 31, 2001. Power Resources informally requested payment of the December 2001 Commission but EESI took the position that because the Client Commission Agreement was rejected, the claim for the December 2001 Commissions should be treated as a prepetition claim. However, Mr. Hollender contends that EESI is obligated to pay the Commission because it continued to receive benefits from the Client Commission Agreement before rejecting it. Power Resources should receive payment for the reasonable value of the benefits EESI received. If EESI is not required to pay the postpetition Commission as an administrative expense, the estate will be unjustly enriched by $119,870 at Power Resources' expense. Base on the Sales Price Power Resources negotiated with the Participating Customers, and based on their historical usage, Power Resources estimates that EESI received $1,141,505 in revenue from sales of natural gas to Participating Customers in December 2001. If Power Resources' request is denied, Mr. Hollender points out that: -- EESI's estate will have received EESI's original contemplated profit margin on the $1,141,505 in sales, plus $119,870 in postpetition windfall; and -- Power Resources will have handed over 111 of its customers and $1,141,505 in gross revenues to the estate and receive nothing in return. "A debtor-in-possession who rejects a prepetition contract should not be allowed to escape paying for postpetition benefits it received under the contract prior to the rejection," Mr. Hollender argues. (Enron Bankruptcy News, Issue No. 115; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENRON CORP: Agrees to Settle Retail Disputes With 17 Parties ------------------------------------------------------------ Pursuant to the Settlement Protocol of Retail Customer Contracts, the Enron Corporation Debtors inform the Court that they entered into Settlement Agreements with 17 Counterparties: A. Western Metal Decorating * Contract: Enovative Lite Energy Service Agreement, dated August 7, 2001, between Enron Energy Services, Inc. and Western Metal * Settlement Term: Western Meal will pay EESI $21,644 B. Crossroads Manor Realty Company, Ltd. * Contract: Enovative Lite Energy Service Agreement, dated March 27, 2001, between EESI and Crossroads * Settlement Term: Crossroads will pay EESI $35,000 C. Buddy Bar Casting Corporation * Contract: Endustrial Master Firm Sales Agreement, dated October 1, 1995, between EESI, as successor-in-interest in Enron Capital Trade Resources Corporation, and Buddy Bar * Settlement Term: Buddy Bar will pay EESI $104,000 D. Appaniane Pizza, Inc. * Contract: Electric Energy Sales Agreements, dated September 6, 2001 and September 10, 2001, between EESI and Appaniane * Settlement Term: Appaniane will pay EESI $1,081 E. East Village Farm & Grocery, Inc. * Contract: Electric Energy Sales Agreement, dated September 20, 2001, between EESI and East Village * Settlement Term: East Village will pay EESI $1,870 F. Entertainment Concept, Inc. * Contract: Gas Sales Agreement, dated April 1, 1998, between Enron Energy Marketing Corporation, as successor-in-interest to PG&E Energy Services Corporation, and Entertainment Concept * Settlement Term: Entertainment Concept will pay EEMC $3,178 G. R and R Hotel Motel Dvlp. Ltd. * Contract: Enovative Lite Energy Service Agreement, dated June 21, 1999, as amended on April 9, 2001, between EESI and R and R * Settlement Term: R and R will pay EESI $4,252 H. Resource Management Group * Contract: Enovative Lite Energy Service Agreements, dated November 4, 1999, October 4, 2000 and November 26, 2001, between EESI and Resource Management * Settlement Term: Resource Management will pay EESI $61,369 I. SHROD, Inc., doing business as Burger King #6202 * Contract: Power Sales Agreement, dated August 1998, between EEMC and Burger King * Settlement Term: Burger King will pay EEMC $4,006 J. White Pines Inn * Contract: Enovative Lite Energy Service Agreement, dated September 20, 2001, between EESI and White Pines * Settlement Term: White Pines will pay EESI $1,320 K. Tass Development & Construction, Ltd. * Contract: Enovative Lite Energy Service Agreement, dated May 1, 2001, between EESI and Tass Development * Settlement Term: Tass Development will pay EESI $133,613 L. J & R Engineering and B & C Diversified Products * Contract: Enovative Energy Service Agreements, one dated May 17, 2001, between EESI and J & R Engineering, and one dated July 3, 2001, between EESI and B & C Diversified Products * Settlement Term: J & R and B & C will pay EESI $162,676 M. Rich Morton's Glen Burnie Lincoln-Mercury * Contract: Direct Gas Sales Agreement, dated March 13, 1996, between EESI and Rich Morton's * Settlement Term: Rich Morton's will pay EESI $4,781 N. Harvey Management Corporation * Contract: EESI and Harvey are parties to: -- Electric Energy Sales and Services Agreement dated June 15, 2000; -- Enovative Energy Service Agreement, dated November 7, 1997; and -- Enovative Lite Energy Service Agreement, dated August 27, 2001 * Settlement Term: Harvey will pay EESI $45,000 O. HKM II, LLC * Contract: Power Sales Agreement, dated June 23, 1998, between EEMC and HKM * Settlement Term: HKM will pay EEMC $175,000 P. Marstan Bake Shoppe, Inc. * Contract: Commercial Gas Sales Agreement, dated April 4, 1999, between EEMC and Marstan * Settlement Terms: Marstan will pay EEMC $5,224 Q. Hycor Biomedical, Inc. * Contract: Accounts Receivable Agreement between EESI and Hycor * Settlement Terms: Hycor will pay EESI $8,080 Edward A. Smith, Esq., at Cadwalader, Wickersham & Taft, in New York, adds that the parties will mutually release all claims related to their contracts. (Enron Bankruptcy News, Issue No. 115; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENVIRONMENTAL LAND: Employs Foley & Lardner as Attorneys -------------------------------------------------------- Environmental Land Technology, Ltd., wants to hire Foley & Lardner LLP as its attorneys in its chapter 11 restructuring. The Debtor tells the U.S. Bankruptcy Court for the District of Columbia that Foley & Lardner has extensive general experience and knowledge, and in particular, it has reorganized expertise in the field of creditors rights and business reorganizations under chapter 11 of the Bankruptcy Code. Foley & Lardner will: a) take all necessary action to protect and preserve the estate of the Debtor, including the prosecution of actions on the Debtor's behalf, the defense of any actions commenced against the Debtor, the negotiation of disputes in which the Debtor is involved, and the preparation of objections to claims filed against the Debtor's estate; b) provide legal advice with respect to the Debtor's powers and duties as a debtor-in-possession in its business and management of its properties; c) negotiate, prepare and pursue confirmation of a plan and approval of a disclosure statement; d) prepare on behalf of the Debtor, as debtor-in-possession, necessary motions, applications, answers, orders, reports, and other legal papers in connection with the administration of the Debtor's estates; e) appear in Court and to protect the interest of the Debtor before the Court; f) assist with any disposition of the Debtor's assets, by sale or otherwise; and g) perform all other legal services in connection with this chapter 11 case as may reasonably be required. The principal attorneys and legal assistants designated to represent the Debtor and their current standard hourly rates are: Professional Designation Billing Rate ------------ ----------- ------------ Donald A. Workman partner $475 per hour Salvatore A. Barbatano partner $495 per hour Roderick B. Williams senior counsel $340 per hour Erika L. Morabito associate $285 per hour Helen T. Fentress paralegal $150 per hour Bryant F. Eckert paralegal $105 per hour Headquartered in Washington, District of Columbia, Environmental Land Technology, Ltd., filed for chapter 11 protection on June 8, 2004 (Bankr. D.C. Case No. 04-00926). Donald A. Workman, Esq., at Foley & Lardner represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed estimated assets of over $10 million and estimated debts of over $50 million. FISHER SCIENTIFIC: Hosting Earnings Conference Call on July 29 -------------------------------------------------------------- Fisher Scientific International Inc. (NYSE: FSH) will host a conference call on Thursday, July 29 at 10 a.m. Eastern Daylight Time (EDT). During the conference call, the company's second- quarter financial results and highlights will be discussed. Earnings guidance will also be provided. A question-and-answer session will follow. Participation details are provided below. The company will issue its second-quarter earnings press release on Wednesday, July 28 after the market closes. Conference Call Details What: Fisher Scientific's Second-Quarter Earnings Conference Call When: Thursday, July 29 at 10 a.m. EDT Dial-in: 800-299-8538, Domestic 617-786-2902, International Title: Fisher Scientific Earnings Call Replay Access #: 888-286-8010, Domestic 617-801-6888, International Passcode: 85603722 The replay will be available for two weeks following the conference call. Webcast: Log on to http://www.fisherscientific.com/at least 15 minutes prior to the call to provide enough time to download any necessary software. The webcast will be listen-only, and will be archived until August 27. About Fisher Scientific International Inc. As a world leader in serving science, Fisher Scientific International Inc. (NYSE: FSH) offers more than 600,000 products and services to more than 350,000 customers located in approximately 145 countries. Fisher's customers include pharmaceutical and biotech companies; colleges and universities; medical-research institutions; hospitals and reference labs; quality-control, process-control and R&D labs in various industries; as well as government and first responders. As a result of its broad product offering, electronic-commerce capabilities and integrated global logistics network, Fisher serves as a one-stop source of products, services and global solutions for its customers. The company primarily serves the scientific-research, clinical-laboratory and safety markets. Additional information about Fisher is available on the company's Web site at http://www.fisherscientific.com/ * * * As reported in the Troubled Company Reporter's May 26, 2004 edition, Standard & Poor's Ratings Services' ratings on Fisher Scientific International Inc. remain on CreditWatch with positive implications following the company's announcement of $3.6 billion merger with Apogent Technologies Inc. Standard & Poor's will raise its corporate credit rating on Hampton, New Hampshire-based life science equipment provider to 'BBB-' from 'BB' upon the upon completion of the merger. The senior secured rating will be raised to 'BBB-' from 'BB+'. The senior unsecured rating will be raised to 'BBB-' from 'BB-' as the increased asset base suggests that unsecured senior creditors will not be disadvantaged in bankruptcy by the presence of secured lenders. The subordinated rating will be raised to 'BB+' from 'B+'. FLEMING COMPANIES: Oregon Objects to Plan Confirmation ------------------------------------------------------ Fred C. Ruby, Esq., Assistant Attorney General for the Department of Justice of the State of Oregon in Salem, Oregon, complains that the Fleming Companies, Inc. Debtors' amended Joint Plan improperly describes the Oregon Department of Revenue as having filed duplicate claims, and proposes the reduction of those claims from $6,699,083.05 to $2,426,607.82 on that basis. ODOR has not filed duplicate claims, Mr. Ruby says. Rather, ODOR filed an original claim and a subsequent claim clearly labeled as an amendment, which superseded and replaced the first claim. The only change from the original proof of claim was the addition of one more unpaid tobacco tax account that was inadvertently omitted from the first claim. Mr. Ruby also contends that the $6,699,083.05 claim amount is the correct amount for ODOR's priority tax claim. After the Petition Date, Mr. Ruby notes, ODOR prosecuted a bond clam which covered the three cigarette tax accounts, resulting in those accounts being paid in full. Thus, the unpaid portion of ODOR's amended claim is the three tobacco tax accounts, which were not bonded, totaling $1,163,780.65. Mr. Ruby suggests that the best course for Debtors' counsel is to contact him to resolve the objection. 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) FLEMING: Issues Final Report On PACA Claim Objections & Payments ---------------------------------------------------------------- Fleming Companies, Inc. releases its final status report on PACA Claims Objections and Payments: (1) Treasure Valley Business Group Inc. Joseph O. Crum, Controller for TVBG, formerly known as Treasure Valley Sales & Marketing, Inc., tells the Court that the company has a claim against the Debtors that is qualified as a trust claim under PACA for $29,794.56. The Debtors dispute the claim as invalid. However, the Debtors have not complied with the Court's Order that they provide in detail the legal or factual basis for listing TVBG's claim as invalid, or a determination of the result of the reconciliation conference between TVBG and Fleming. (2) NORPAC Foods, Inc. The Debtors have failed to provide any meritorious basis for withholding the $260,440.89 portion of NORPAC's $750,874.35 PACA claim as "PACA ineligible." Until recently, the Debtors characterized most of the ineligible balance as "unreconciled." NORPAC has provided all the requested information to the Debtors and has, on "innumerable occasions," attempted to discuss the status of its claim with the Debtors. However, the Debtors have been "unresponsive and uncooperative." As of this date, NORPAC has not received the Reconciliation Report promised in previous and the Final PACA Reports. Despite NORPAC's provision of the requested information and attendance at conferences, the Debtors have yet to articulate meritorious grounds for categorizing the PACA claim as "ineligible" and have simply chosen to be non-responsive. Surely this behavior will not be permitted. 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) FOOTSTAR INC: Court Approves Settlement with Former Chairman/CEO ---------------------------------------------------------------- Footstar, Inc. announced that the Bankruptcy Court overseeing its Chapter 11 case approved a settlement with former Chairman and Chief Executive Officer J. M. "Mickey" Robinson of disputes relating to the Company's termination of Mr. Robinson's services on September 12, 2003. Footstar acknowledged that Mr. Robinson's termination was not "for cause." About Footstar, Inc. Footstar, Inc. -- http://www.footstar.com/-- which filed for Chapter 11 bankruptcy protection (Bankr. S.D.N.Y. Case No.: 04- 22350) on March 3, 2004, is a leading footwear retailer. As of May 1, 2004, the Company operates 2,498 Meldisco licensed footwear departments nationwide and 36 Shoe Zone stores. The Company also distributes its own Thom McAn brand of quality leather footwear through Kmart, Wal-Mart and Shoe Zone stores. Paul M. Basta, Esq. of Weil Gotshal & Manges represents the debtor in its restructuring efforts. When the company filed for bankruptcy protection, it listed total assets of $762,500,000 and total debts of $302,200,000. FOREST OIL: Offering Additional $125 Million 8% Senior Notes ------------------------------------------------------------ Forest Oil Corporation (Forest) (NYSE:FST) announced that it has agreed to sell an additional $125 million in aggregate principal amount of its 8% Senior Notes due 2011 at 107.75% priced to yield 6.66% plus accrued interest. Forest previously issued $160 million principal amount of the 8% Senior Notes on December 7, 2001. Forest intends to use the proceeds of the offering to repurchase or repay existing indebtedness. The securities to be offered have not been registered under the Securities Act of 1933, as amended, or any state securities laws and, unless so registered, the securities may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities. Forest Oil Corporation is engaged in the acquisition, exploration, development, and production of natural gas and liquids in North America and selected international locations. Forest's principal reserves and producing properties are located in the United States in the Gulf of Mexico, Texas, Louisiana, Oklahoma, Utah, Wyoming and Alaska, and in Canada. Forest's common stock trades on the New York Stock Exchange under the symbol FST. For more information about Forest, please visit our website at http://www.forestoil.com/ * * * As reported in the Troubled Company Reporter's June 1, 2004 edition, Standard & Poor's Ratings Services said that it lowered its corporate credit and senior unsecured debt ratings on Forest Oil Corp. to 'BB-' from 'BB'. Standard & Poor's also lowered its senior secured bank loan rating on Forest's credit facility due 2005 to 'BB' from 'BB+' and assigned a recovery rating of '1' to the facility. All of the ratings were removed from CreditWatch where they were placed with negative implications on Jan. 27, 2004. The outlook is stable. The ratings downgrade on Forest reflects the company's increasing dependence on acquisitions to offset its faltered frontier development strategy, its high operating cost structure relative to its peers, and its debt leverage that is not commensurate with an acquire-and-exploit strategy. HAYES LEMMERZ: Inks Stipulation Resolving CIT's Rejection Claims ---------------------------------------------------------------- As of the Bankruptcy Petition Date, CIT Group/Equipment Financing, Inc., leased equipment to the Hayes Lemmerz International, Inc. Debtors pursuant to one or more unexpired leases. During the Chapter 11 cases, the Debtors assumed certain of the CIT leases and rejected others. CIT and the Debtors are in dispute over the aggregate cure amount due on account of the leases assumed by the Debtors. CIT submitted Claim No. 3428 for $4,715,436 and Claim No. 3433 for $59,275 as general unsecured claims relating to lease rejection damages. In its 30th Omnibus Objection to Claims, the Debtors asked the Court to disallow the Rejection Claims. At the parties' request, Judge Walrath approves the terms of a stipulation resolving the Cure Dispute and the Omnibus Objection as it relates to the Rejection Claims. The Court rules that: (a) CIT's outstanding cure claim will be fixed at $215,000 and will be paid on or before July 8, 2004; and (b) The Rejection Claims will be reduced and allowed as general unsecured claims for $343,614 representing Claim No. 3428, and $24,552 for Claim No. 3433. (Hayes Lemmerz Bankruptcy News, Issue No. 51; Bankruptcy Creditors' Service, Inc., 215/945-7000) HOLLINGER CANADIAN: Gives Update on Delayed Financial Statements ---------------------------------------------------------------- Hollinger Canadian Newspapers, Limited Partnership is providing this update in accordance with Ontario Securities Commission Policy 57-603 Defaults by Reporting Issuers in Complying with Financial Statement Filing Requirements. Certain management and other insiders of the Partnership are currently subject to a cease trade order in respect of securities of the Partnership issued by the OSC on June 1, 2004. The cease trade order results from the delay in filing the Partnership's annual financial statements for the year ended December 31, 2003, its interim financial statements for the three months ended March 31, 2004 and its Annual Information Form by the required filing dates. The cease trade order will remain in place until two business days following receipt by the OSC of all filings that the Partnership is required to make pursuant to Ontario securities laws. The Partnership believes that it needs to review the final report of the Special Committee of Hollinger International Inc. before it can complete and file the financial statements and the AIF in question. The work of the Special Committee is ongoing and its final report has not yet been issued. The Partnership will continue to provide bi-weekly updates, as contemplated by the OSC Policy, until the financial statements and AIF have been filed. The Toronto Stock Exchange notified the Partnership that its Units will be suspended from trading on the TSX as of the market close on Friday, August 6, 2004 unless Hollinger Canadian Newspapers G.P. Inc., the general partner of the Partnership, has two independent directors on its board, as required by applicable TSX listing requirements, by that time. The Limited Partnership Agreement governing the Partnership requires that the General Partner have not less than three independent directors. The General Partner currently has one independent director. The search process for suitable candidates is well underway and it is expected that at least one additional independent director will have been elected to the board of the General Partner prior to August 6, 2004. If so, the Partnership Units will not be suspended from trading. Hollinger Canadian Newspapers, Limited Partnership owns and operates of 13 daily and non-daily community newspapers, 55 trade magazines and directories, 7 newsletters, the Northern Miner weekly industry newspaper, and four business publications in electronic formats.(TSX: HCN.UN) HOLLINGER INTERNATIONAL: Provides Update On Filing Requirements --------------------------------------------------------------- Hollinger International Inc. is providing this update in accordance with Ontario Securities Commission Policy 57-603 Defaults by Reporting Issuers in Complying with Financial Statement Filing Requirements. Certain management and other insiders of the Company are currently subject to a cease trade order in respect of securities of the Company issued by the OSC on June 1, 2004. The cease trade order results from the delay in filing the Company's annual financial statements for the year ended December 31, 2003, its interim financial statements for the three months ended March 31, 2004 and its Annual Information Form by the required filing dates. The cease trade order will remain in place until two business days following receipt by the OSC of all filings that the Company is required to make pursuant to Ontario securities laws. The Company believes that it needs to review the final report of the Special Committee established by the Company before it can complete and file the financial statements and the AIF in question. The work of the Special Committee is ongoing and its final report has not yet been issued. The Company will continue to provide bi-weekly updates, as contemplated by the OSC Policy, until the financial statements and AIF have been filed. * * * As reported in the Troubled Company Reporter's March 17, 2004 edition, Hollinger International Inc. (NYSE: HLR) announced that primarily as a result of the ongoing investigation being conducted by the Special Committee of the Company's Board of Directors, as well as the disruption of management services provided to the Company arising from its ongoing dispute with Ravelston Corporation Limited, the Company is not able to complete its financial reporting process and its audited financial statements for inclusion in the Annual Report on Form 10-K for fiscal year 2003 by the filing deadline. The Company intends to complete its financial reporting process as soon as practicable after the completion of the investigation by the Special Committee, and then promptly file the 10-K. The company's September 30, 2003, balance sheet shows a working capital deficit of about $293 million. HOLLYWOOD THEATERS: S&P Rates Corporate Credit at B --------------------------------------------------- Standard & Poor's Ratings Services assigned its 'B' corporate credit rating to Portland, Oregon-headquartered Hollywood Theaters Inc., which is analyzed on a consolidated basis with its parent company, Hollywood Theaters Holdings Inc. "At the same time, Standard & Poor's assigned a single 'B' and a recovery rating of '4' to the company's proposed five-year $125 million first-lien credit facility, indicating expectations of a marginal recovery of principal (25%-50%) in a default scenario. Standard & Poor's also assigned a 'CCC+' and a recovery rating of '5' to Hollywood's proposed $35 million, five and one-half year second-lien term loan, indicating expectations of a negligible recovery of principal (0%-25%) in a default scenario," said Standard & Poor's credit analyst Steve Wilkinson. The term loan proceeds of $135 million, plus $10 million in cash and a $4 million equity sponsor contribution will be used to refinance the company's existing credit facilities. Pro forma for these transactions, the movie exhibitor will have $135 million in debt and about $36.2 million in sponsor preferred stock. The outlook is negative. The ratings reflect Hollywood's high financial risk, the need for additional theater investment to improve its competitive position, cash flow concentration risks, and the mature and highly competitive nature of the industry. The ratings also consider the company's good profit margins and competitive position in many of its small markets. Hollywood operates 53 theaters with 440 screens in small to medium markets, primarily in 12 states in the southwestern, midwestern, and western U.S. The company improved its theater circuit over the past several years by closing 38 poorly performing theaters and opening a few new theaters. About 67% of the company's screens have stadium seating and about 81% of its screens have unfettered access to all films, comparing favorably to many leading movie exhibitors. However, its sloped floor theaters are undersized, and many are significantly underperforming. These theaters are vulnerable to further deterioration, although the limited appeal of Hollywood's markets to competitors and the industry's currently low level of new theater development provides some protection. Still, the company needs further theater closures, upgrades, and additions to maintain its competitive profile. Hollywood plans a fairly aggressive new theater expansion and upgrade program over the next several years, involving some execution and financial risk. HOME EQUITY: S&P Lowers SPMD 2001-A Class MF-2 Rating To D from B ----------------------------------------------------------------- Standard & Poor's Ratings Services raised its ratings on six classes from five transactions issued by Home Equity Mortgage Loan Asset-Backed Trust. Concurrently, ratings are lowered to 'CCC' from 'BB' on class BF from series SPMD 2000-A and to 'D' from 'B' on class MF-2 from series SPMD 2001-A. In addition, ratings are affirmed on the remaining classes from the same issuer. The raised ratings reflect the following: -- Credit support percentages that are at least 1.87x the loss coverage levels associated with the raised ratings; -- The majority of the transactions have failing delinquency triggers, prohibiting the securities from stepping down their credit support; -- Most transactions have paid down to less than 20% of their original pool balances, with the remaining senior- certificate balances having less than 12% of their initial size; and -- At least 26 months of seasoning. The increased credit support percentages resulted from the shifting interest, senior-subordination structure of the securitizations, which was further influenced by significant principal prepayments. In addition, the growth of credit support was further enhanced by overcollateralization. The lowered ratings reflect: -- Continued erosion of credit support due to deteriorating collateral performance; -- In the case of class MF-2 from series SPMD 2001-A, a complete erosion of credit support has resulted in a cumulative principal write-down of $398,278 to the class; and -- Serious delinquencies (90-plus days, foreclosure, and REO) of 24.79% (series 2000-A) and 37.37% (series 2001-A). Standard & Poor's reviewed the results of stress cash flow runs for the securitizations and determined that the remaining credit support for the classes was not consistent with the prior ratings. Standard & Poor's will continue to monitor the performance of the transactions to ensure that the ratings assigned to the certificates accurately reflect the risks associated with these securities. The affirmations reflect sufficient levels of credit support despite high levels of delinquencies. As of May 2004 distribution date, the mortgage pools backing the classes with affirmed ratings had serious delinquencies ranging between 8.65% (SPMD 2002-B) and 37.37% (SPMD 2001-A fixed-rate loan group). Cumulative realized losses, as a percentage of original pool balance, ranged between 0.26% (SPMD 2002-B) and 3.63% (SPMD 2000-B fixed-rate loan group). The collateral for these transactions consists of either fixed- or adjustable-rate home equity first- and second-lien loans secured primarily by one- to four-family residential properties. Ratings Raised Home Equity Mortgage Loan Asset-Backed Trust Rating Series Class To From SPMD 2000-A MF-1 AA+ AA SPMD 2000-A MV-1 AA+ AA SPMD 2000-B MV-1 AA+ AA SPMD 2000-C MV-1 AAA AA SPMD 2001-B MF-1 AA+ AA SPMD 2002-A M-1 AA+ AA Ratings Lowered Rating Series Class To From SPMD 2000-A BF CCC BB SPMD 2001-A MF-2 D B ICEFLOE TECHNOLOGIES: Coors Brewing to Use Draft Caddy ------------------------------------------------------ Icefloe Technologies Inc. (TSX Venture Exchange: ICY) announced that it received written confirmation that icefloe's Draft Caddy has been approved by the Coors Brewing Company of Golden, Colorado for use in the dispensing of Coors Brewing Company draught products. Coors Brewing Company actively encourages its network of 548 distributors throughout the United States to use only qualified and approved draught equipment in order to assure a quality presentation to Coors customers. The list of draught equipment that has been qualified and approved by Coors is distributed to the distributor network on a regular basis. Icefloe President and CEO, Wayne Newson, commented "This is a significant step forward for icefloe's entry sales strategy for the large United States market, not only for the revenue potential that it represents, but also for the credibility it provides for icefloe's patented chiller technology. While the company has a number of Draft Caddies in service in the US, we have long recognized the need to have approval of our technology from a major US Brewery in order to accelerate our overall sales strategy." Founded in March 2001, Icefloe (TSX Venture Exchange: ICY) is a Canadian-based company dedicated to the development and commercialization of its proprietary chilling technology which brings flash chilling capability in a portable form and enables the beverage industry to serve ice cold draft beer without excessive foam loss, anytime and anywhere. Since April 2001, Icefloe has focused its efforts on securing patents for its platform technologies, while developing, field-testing, manufacturing and marketing commercial products using its unique technologies. Its wholly-owned subsidiary, Draught Guys Inc., provides installation, sales and service for both traditional draft systems and Icefloe's proprietary products in the Ontario market. At March 31, 2004 Icefloe Technologies Inc.'s balance sheet shows a deficit of C$2,442,825 as compared to a deficit of C$1,834,309 at December 31, 2003. ISACSOFT INC: Agrees to Acquire L'Institut Descartes ---------------------------------------------------- ISACSOFT Inc. (TSX:ISF) announced that it has agreed to acquire MYCISC, doing business as L'Institut Descartes -- http://www.idescartes.qc.ca/-- a company specialized in providing training and content and licensed by the Quebec Ministry of Education. Under the terms of the agreement, ISACSOFT will issue 700,000 shares at a price of $0.50 per share for a total value of $350,000. There are no finder's fees payable on this transaction by either party. L'Institut Descartes had revenues of approximately $1,696,000 and an EDITDA of $145,000 for its fiscal year ended on May 31, 2003, and is well known for its advanced computer based training programs with training centers located in Quebec an also in Nantes, France. Madame Myriem Guerroumi, currently Chief Executive of Institut Descartes will remain with ISACSOFT after completion of the transaction. "L'Institut Descartes provides us with new content and the ability to provide e-Learning solutions at our own facilities", said Mr. Ronald Brisebois, President and Chief Executive Officer, "and gives us a more complete product offer for our customers with recurring revenues and copyrighted content." The acquisition of L'Institut is subject to the execution of definitive agreements and satisfaction of certain conditions, as well as shareholder and regulatory approval. ABOUT ISACSOFT ISACSOFT -- whose December 31, 2003 balance sheet shows a total shareholders' deficit of $82,068 -- is a provider of content-based software solutions to its international customers. The revenue model is based on software licences, copyrighted content development, recurring revenues and services. The solutions of ISACSOFT include knowledge management, e-Learning management and document management. ISACSOFT is headquartered in Montreal, Canada with sales offices in New York, Barcelona and Quebec City, as well as an international network of distributors. KAISER: Wants Exclusive Plan Filing Period Stretched to Oct. 31 --------------------------------------------------------------- Pursuant to Section 1121(d) of the Bankruptcy Code, the Kaiser Aluminum Corporation Debtors ask the Court to extend their exclusive periods to file and solicit acceptances of a reorganization plan so they may continue ongoing efforts to resolve various restructuring issues. Specifically, the Debtors want their Exclusive Filing Period extended through and including October 31, 2004, and their Exclusive Solicitation Period through and including December 31, 2004. Daniel J. DeFranceschi, Esq., at Richards, Layton & Finger, in Wilmington, Delaware, tells the Court that, most recently, the Debtors have: (a) finalized agreements with each of their labor unions to modify the collective bargaining agreements and retiree benefit obligations pursuant to Sections 1113 and 1114 of the Bankruptcy Code; (b) obtained the Court's authorization to make effective and proceed with implementation of the agreements with the labor unions and the Official Committee of Salaried Retirees to restructure the Debtors' retiree benefit obligations, alleviating the ongoing obligation to pay around $5 million a month in respect of retiree benefits; (c) continued to make progress in the efforts to sell the commodities businesses, including: -- obtaining the Court's authorization and approval of: -- the sale of the interests in Alumina Partners of Jamaica; -- entering into a purchase agreement to sell the refinery in Gramercy, Louisiana and interests in and related to Kaiser Jamaica Bauxite Company; and -- filing a motion to establish bidding procedures for the sale of the interests in and related to Queensland Alumina Limited; and (d) continued negotiations with the Official Committee of Unsecured Creditors regarding an agreement to resolve all issues relating to intercompany claims among the Debtors. The Debtors have made considerable progress on several important issues and have taken a variety of actions to maximize the value of their estates. An extension of the Exclusive Periods is essential for the Debtors to continue making progress on a variety of key liability issues and advance their programs toward a successful reorganization. The Debtors anticipate using the extensions to: (a) continue negotiations with the Creditors Committee regarding the finalization of an agreement resolving issues relating to intercompany claims; (b) continue negotiations with the Pension Benefits Guaranty Corporation regarding the termination of certain of the Debtors' pension plans and the implementation of replacement plans pursuant to the agreements reached with the Debtors' unions; (c) continue negotiations with the advisors for and representatives of the Debtors' asbestos and other tort creditors to reach a consensual resolution of the Debtors' asbestos and other tort liabilities; and (d) proceed with the sale of the Debtors' Gramercy refinery and Kaiser Bauxite Company's interests in Kaiser Jamaica Bauxite Company and the Debtors' interests in Queensland Alumina Limited. According to Mr. DeFranceschi, the successful completion of the negotiations and sales will permit the Debtors to proceed expeditiously with the formulation and promulgation of a reorganization plan. The Official Committee of Asbestos Claimants and Martin J. Murphy, the legal representative for future asbestos claimants, support the Debtors' request. The Creditors Committee, on the other hand, has not yet taken a formal position on the requested extension. Judge Fitzgerald will convene a hearing on August 23, 2004 at 1:30 p.m. to consider the Debtors' request. By application of Del.Bankr.LR 9006-2, the Debtors' exclusive filing deadline is automatically extended through the conclusion of that hearing. Headquartered in Houston, Texas, Kaiser Aluminum Corporation operates in all principal aspects of the aluminum industry, including mining bauxite; refining bauxite into alumina; production of primary aluminum from alumina; and manufacturing fabricated and semi-fabricated aluminum products. The Company filed for chapter 11 protection on February 12, 2002 (Bankr. Del. Case No. 02-10429). Corinne Ball, Esq., at Jones, Day, Reavis & Pogue, represent the Debtors in their restructuring efforts. On September 30, 2001, the Company listed $3,364,300,000 in assets and $3,129,400,000 in debts. (Kaiser Bankruptcy News, Issue No. 45; Bankruptcy Creditors' Service, Inc., 215/945-7000) K2 INC: Acquires Volkl Sports Holding & Marker Group for $124M+ --------------------------------------------------------------- K2 Inc. (NYSE:KTO) announced that it has closed its previously announced acquisition of Volkl Sports Holding AG, and The Marker Group. The purchase price was approximately $124 million plus the assumption of seasonal working capital debt. Volkl and Marker are leading global brands in premium skis and ski bindings. Additionally, K2 announced that the net proceeds from the recently completed $200 million, 7 3/8% senior notes offering have been released from escrow in connection with the closing of Volkl and Marker. About K2 Inc. K2 Inc. is a premier, branded consumer products company with a portfolio of leading brands including Rawlings, Worth, Shakespeare, Pflueger, Brass Eagle, Worr Games, Stearns, Volkl, Marker, K2, Ride, Olin, Morrow, Tubbs, Atlas, Dana Design, Marmot, Ex Officio, Planet Earth, Adio and Hawk. K2's diversified mix of products is used primarily in team and individual sports activities such as baseball, softball, fishing, paintball, watersports activities, alpine skiing, snowboarding, snowshoeing, in-line skating, camping, trekking, skate boarding, and mountain biking. Rawlings, Worth, Shakespeare, Pflueger, Brass Eagle, Stearns, Volkl, Marker, K2, Ride, Olin, Morrow, Marmot, Ex Officio, Tubbs, Atlas, K2 Licensing and Promotions, Dana Designs, Planet Earth, Adio and Hawk skateboard shoes, JT, and Worr Games are trademarks or registered trademarks of K2 Inc. or its subsidiaries in the United States or other countries. * * * As reported in the Troubled Company Reporter's June 18, 2004 edition, Standard & Poor's Ratings Services assigned a 'BB' corporate credit rating to sporting goods manufacturer K2 Inc. At the same time, Standard & Poor's assigned a 'BB' senior unsecured debt rating to the company's planned $150 million senior unsecured note offering due in 2014. The notes will be issued under Rule 144A with registration rights. The outlook is stable. K2 plans to use these issues in a combination with about $150 million of equity to fund the acquisitions of Volkl Sports Holdings AG, CT Sports Holding AG, and Marmot Mountain Ltd., as well as to refinance existing debt. "Carlsbad, California-based K2 Inc.'s ratings reflect its participation in the highly competitive and mature sporting goods manufacturing industry, and an aggressive acquisition strategy," said Standard & Poor's credit analyst Patrick Jeffrey. "These risks are mitigated somewhat by the company's leading market positions in the industry and its continued use of equity to help fund its growth strategy." KIEL BROS: Hires Baker & Daniels as Bankruptcy Counsel ------------------------------------------------------ Kiel Bros. Oil Company, Inc., and KP Oil, Inc., ask the U.S. Bankruptcy Court for the Southern District of Indiana, New Albany Division, for permission to hire Baker & Daniels as their counsel in their chapter 11 proceedings. The Debtors expect Baker & Daniels to: a) prepare and file their Chapter 11 petitions; b) seek approval of debtor in possession financing; c) give legal advice with respect to the company's Chapter 11 rights, powers and duties and continued operation of their businesses and management of Debtors' property as debtors in possession; d) represent the Debtors in the Chapter 11 cases and in any adversary proceeding commenced in or in connection with the Chapter 11 cases; e) prepare, on behalf of the Debtors, applications, answers, proposed orders, reports, motions and other pleadings and papers that may be required in the Chapter 11 cases; f) provide legal assistance and advice to the Debtors in connection with the preparation and submission of a Chapter 11 plan; g) cooperate with any special counsel employed by the Debtors in connection with the Chapter 11 cases; and h) perform any other legal services as counsel for the Debtors-In-Possession that may be required by the Debtors or the Bankruptcy Court. Baker & Daniels will bill the Debtors at current (undisclosed) hourly rates. The Debtors have paid Baker & Daniels a $200,000 retainer. Jay Jaffe, Esq., leads the engagement. Headquartered in Columbus, Indiana, Kiel Bros. Oil Company, Inc., operates a convenience store and has a wholesale fuel supply business. The Company filed for chapter 11 protection on June 15, 2004 together with its affiliate KP Oil, Inc. (Bankr. S.D. Ind. Case No. 04-92128). Jay Jaffe, Esq., at Baker & Daniels 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. LCA ENTERPRISES: Case Summary & 20 Largest Unsecured Creditors -------------------------------------------------------------- Debtor: LCA Enterprises, L.L.C. dba Watergarden Cinema 6 dba Thanksgiving Point Cinema 8 912 Watergardens Drive Pleasant Grove, Utah 84062 Bankruptcy Case No.: 04-30756 Type of Business: The Debtor operates movie theaters. Chapter 11 Petition Date: July 2, 2004 Court: District of Utah (Salt Lake City) Judge: Judith A. Boulden Debtor's Counsel: R. Mont McDowell, Esq. McDowell & Gillman Twelfth Floor, 50 West Broadway Salt Lake City, UT 84101 Tel: 801-359-3500 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Thanksgiving Point $166,998 Development Co., LC Lehi City Admission Tax $114,469 Halestone $8,608 Twentieth Century Fox Film $8,419 Corp. Utah State Tax Commission $7,510 Innovation Film Group $6,710 Young Electric Sign Company UCC-1 financing $6,385 statement DreamWorks Distribution, LLC $5,911 Niche Business Solutions, $5,429 Inc. Gold Circle Films $4,908 Buena Vista Pictures $4,220 Paramount Pictures $3,814 The Daily Herald $3,371 Lehi City Corporation $2,926 Warner Brothers Distribution $2,817 KSL Radio $2,650 Newspaper Agency Corporation $2,271 Zion Films $2,227 Pepsi of Springville $2,145 Utah Power $1,995 LEVI STRAUSS: Will Webcast Q2 2004 Financial Review on July 13 -------------------------------------------------------------- Levi Strauss & Co. will broadcast over the Internet its conference call to discuss second-quarter 2004 financial results for the period ended May 30, 2004. The call will be held on Tuesday, July 13, 2004 at 10 a.m. Eastern Daylight Time/7 a.m. Pacific Daylight Time and will be hosted by Phil Marineau, chief executive officer, and Jim Fogarty, chief financial officer. To access, go to http://levistrauss.com/news/webcast.htm/ To listen to the live webcast via telephone, call 1-800-891-4735 in the United States or Canada; or 1-706-645-0194 from other international locations. A replay of the webcast will be available at approximately 2 p.m. Eastern Daylight Time, and it will be archived on the Web site for six months. To access the related earnings release on July 13, 2004, visit http://www.levistrauss.com/and click on "Financial News" and "Financial Releases." Levi Strauss & Co. is one of the world's leading branded apparel companies, marketing its products in more than 110 countries worldwide. The company designs and markets jeans and jeans-related pants, casual and dress pants, shirts, jackets and related accessories for men, women and children 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." LIFESTREAM TECH: Says Shipments Double in Fourth Quarter 2004 ------------------------------------------------------------- Lifestream Technologies (OTCBB:LFTC), the leading manufacturer of home cholesterol monitors and professional screening devices, announced that shipments in the fourth quarter were twice that of the same quarter ending 2003. The addition of a new retail account contributed to this increase in shipments. "With the addition of a major retailer and our recent advertising and promotional programs, we are looking forward to an improvement in sales numbers," said Christopher Maus, Lifestream President and CEO. "An important component of improving our cash position is better management of our inventory as our sales increase. We expect to see an improvement in performance over the coming quarters with continued strong orders, increased margins, and cost containment. We continue to aggressively pursue the remaining distribution channels through the addition of new retail accounts." "Lifestream's revenue recognition policy does not necessarily result in revenue recognition at the time product is shipped and, therefore, shipments may not be an indicator of the revenue to be reported on our financial statements. This increase in shipments is, however, a good indicator of our success in increasing distribution and creating awareness of our cholesterol monitor with consumers," stated Nikki Nessan, VP Finance. About Lifestream Technologies Lifestream Technologies, Inc., a Nevada corporation headquartered in Post Falls, Idaho, is a marketer of a proprietary total cholesterol measuring device for at-home use by health conscious consumers and at-risk medical patients. The company's Dec. 31, 2003, balance sheet reports a net capital deficit of $1,121,655. For Company information, visit http://www.lifestreamtech.com/ LONE PEAK LABELING: Case Summary & 20 Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Lone Peak Labeling Systems, Inc. 1272 West 2240 South, Suite B Salt Lake City, Utah 84119 Bankruptcy Case No.: 04-30905 Type of Business: The Debtor specializes in equipment and custom made labels designed to provide easy, flexible and economical labeling solutions. See http://www.lonepeaklabeling.com/ Chapter 11 Petition Date: July 7, 2004 Court: District of Utah (Salt Lake City) Judge: William T. Thurman Debtor's Counsel: Gregory J. Adams, Esq. McKay Burton & Thurman 170 South Main Street, Suite 800 Salt Lake City, UT 84101 Tel: 801-521-4135 Fax: 801-521-4252 Estimated Assets: $0 to $50,000 Estimated Debts: $1 Million to $10 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Videojet Business debt $365,000 1500 Mittel Blvd. Wood Dale, IL 60191-1073 Fasson Note $280,000 7570 Auburn Road Painesville, OH 44077 Green Bay Packaging Promissory Note $112,623 MacTac Business debt $72,000 Pioneer Labels Business debt $67,950 Datamax Corp. Business debt $67,163 Ricoh Business debt $41,550 Technicote Business debt $36,623 Peerless Financial, L.C. Business debt $31,266 Label-Aire Business debt $28,210 Azcoat, Inc. Business debt $25,019 Century Systems Business debt $15,995 Qwest Direct Business debt $14,849 Die Craft Eng. & Mfg. Co. Business debt $14,653 Inc. VM Services, Inc. Business debt $13,322 Flexcon Company, Inc. Business debt $13,256 Environmental Inks & Business debt $12,286 Coatings First Industrial Realty Rent $10,900 Trust Protect-All Business debt $9,952 Federal Express Business debt $8,730 MICROFINANCIAL: Satisfies NYSE Continued Listing Compliance Plan ---------------------------------------------------------------- MicroFinancial Incorporated (NYSE:MFI) announced that the Company has been notified by the New York Stock Exchange that the Company has been removed from the NYSE's "Watch List" and is now considered a "Company in Good Standing" in accordance with the NYSE's continued listing standards currently in effect. The NYSE's decision comes as a result of MicroFinancial Incorporated's consistent positive performance with respect to the achievement of the goals and objectives outlined in its continued listing plan, the previous cure of its share price non compliance, and the achievement of a minimum of $15 million of market capitalization based upon a 30 day trading average over the NYSE's past four quarterly monitoring periods. The Company has been preliminarily notified by the NYSE of a pending rule change on eligibility for continued listing. The Company will continue to monitor the status of this proposed change and any effect it might have on the Company's compliance with continued listing standards going forward. In accordance with the NYSE's guidelines, the Company will be subject to a 12-month follow-up period to ensure that it remains in compliance with the NYSE's continued listing standards and will continue to be subject to its routine continued listing monitoring process. About Microfinancial MicroFinancial Inc. (NYSE: MFI), headquartered in Woburn, MA, is a financial intermediary specializing in leasing and financing for products in the $500 to $10,000 range. The company has been in operation since 1986. Company Liquidity In its Form 10-K for the fiscal year ended December 31, 2003 filed with the Securities and Exchange Commission, MicroFinancial Inc. reports: "MicroFinancial incurred net losses of $22.1 million and $15.7 million for the years ended December 31, 2002 and 2003, respectively. The net losses incurred by the Company during the third and fourth quarters of 2002 caused the Company to be in default of certain debt covenants in its credit facility and securitization agreements. In addition, as of September 30, 2002, the Company's credit facility failed to renew and consequently, the Company was forced to suspend new origination activity as of October 11, 2002. On April 14, 2003, the Company entered into a long-term agreement with its lenders. This long-term agreement waives the covenant defaults as of December 31, 2002, and in consideration for this waiver, requires the outstanding balance of the loan to be repaid over a term of 22 months beginning in April 2003 at an interest rate of prime plus 2.0%. The Company received a waiver, which was set to expire on April 15, 2003, for the covenant violations in connection with the securitization agreement. Subsequently, the Company received a permanent waiver of the covenant defaults and the securitization agreement was amended so that going forward, the covenants are the same as those contained in the long-term agreement entered into on April 14, 2003, for the senior credit facility. To date, the Company has fulfilled all of its debt obligations, as agreed to by the bank group, in a timely manner. "MicroFinancial has taken certain steps in an effort to improve its financial position. Management continues to actively consider various financing, restructuring and strategic alternatives as well as continuing to work closely with the Company's lenders to ensure continued compliance with the terms of the long term agreement. In addition, Management has taken steps to reduce overhead and align its infrastructure with current business conditions, including a reduction in headcount from 380 at December 31, 2001 to 136 at December 31, 2003. The failure or inability of MicroFinancial to successfully carry out these plans could ultimately have a material adverse effect on the Company's financial position and its ability to meet its obligations when due. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty." MYCOM: Secures Strategic Alliance Agreement With Process Software ----------------------------------------------------------------- Mycom Group, Inc. (OTCBB:MYCO), a technology products, managed services, and software development company, has secured a Strategic Alliance Agreement with Process Software for their private label marketing of Mycom's email and virus filtering service technology. Process Software is owned by Platinum Equity, LLC, one of the largest and fastest growing privately held IT companies in the United States. Process Software is a premier, worldwide, supplier of infrastructure software solutions to mission critical environments. Process serves thousands of customers including many Global 2000 and Fortune 1000 companies. Process intends to market the Mycom technology globally under the PreciseMail brand name, which includes a broader range of enterprise messaging products and services. "We are pleased to be offering a premier mail filtering service. It complements our email software product suite by giving customers the option to filter unwanted mail with minimal effort by the IT staff. It also requires no additional investment in systems or maintenance," said Brian P. McDonald, President and Chief Executive Officer for Process Software. Terms of the agreement were undisclosed, but Mycom's President and COO, Jim Bobbitt indicated, "The contract with Process Software should provide a very positive step for Mycom. Process has the customer base, expertise and marketing capability to quickly expand our email and virus filtering technology into many large international accounts." Mycom is contracting its technology and service which scans both inbound and outbound email checking for viruses, harassing or inappropriate (pornographic) content, pictures, and attachments while blocking up to 98% of unwanted spam. The new, more powerful, spam and virus filtering service, built by Mycom, operates on a highly secure Linux cluster. New and enhanced features include 60% faster processing time, the ability to create users and groups for each domain, greater granularity in spam filtering, an improved user interface, a summary notification option, an enhanced queue monitor and a bypass list for every setting. It controls attachments, and oversized message delivery and provides unauthorized encryption detection. Address list and bypass list management is available and policy can be controlled by an administrator. The technology employs a tiered approach to help combat the ever- changing and rapidly growing problem of spam. The approach consists of four tiers, working in concert and providing granular tailoring of the system to a client's specific needs. Mycom markets the technology throughout North America as mycomPRO(TM) mailMAX II. View mailMAX II at http://www.mycompro.com/ About Process Process Software was established in 1989 and is headquartered in Framingham, Massachusetts. Process Software was acquired by Platinum Equity, LLC in April of 2000. Process delivers customer- centric and innovative IP-based technologies to customers worldwide, and provides them superior customer support and service. Process brands include, PMDF, a high-performance standards-based Internet messaging product suite, PreciseMail Anti-Spam Gateway, eliminates spam at the Internet gateway, MultiNet and TCPware, a suite of TCP/IP applications and service for HP Alpha and VAX systems running OpenVMS, and SSH for OpenVMS, a client and server software that provides secure encrypted communications for HP Alpha and VAX systems running TCP/IP Services for OpenVMS. View Process Software at http://www.process.com/ About Mycom The Mycom Group, Inc. is a technology solutions and managed services provider to businesses and organizations throughout North America. It markets a wide range of software, hardware, enterprise solutions and technology services. Mycom develops and markets new software applications and services using the mycomPRO(TM) brand name. The company's technical and communications services include email management, technology security, and networking; ISP and co- location; design, online and classroom training and instructional design; communications services for businesses; and technical marketing and documentation services. Mycom is headquartered in Cincinnati, Ohio. Mycom Group is on the web at http://www.mycom.com/and http://www.broughton-int.com/ At March 31, 2004, Mycom Group's balance sheet reflects a stockholders' deficit of $1,267,254 compared to a deficit of $1,177,868 at December 31, 2003. NATIONAL COAL: Plans to Acquire Horizon's Tennessee Mining Assets ----------------------------------------------------------------- National Coal Corp. (OTCBB:NLCP) announced that it has executed a non-binding Letter of Intent with Horizon Natural Resources to acquire certain assets from Horizon's Tennessee Mining, Inc. subsidiary, including land, five existing mining permits, and mining equipment. National expects a definitive agreement between the parties to be signed in the upcoming weeks. About National Coal Corp. National Coal Corp. -- whose March 31,2004, National Coal's balance sheet shows a stockholders' deficit of $436,729 -- owns the coal mineral rights on approximately 70,000 acres in Eastern Tennessee. NEW WEATHERVANE: Wants to Appoint Trumbull Group as Claims Agent ---------------------------------------------------------------- New Weathervane Retail Corp., and its debtor-affiliates ask the U.S. Bankruptcy Court for the District of Delaware to approve their appointment of The Trumbull Group, LLC as the official claims and noticing agent in their chapter 11 cases. Trumbull group will: a) prepare and serve required notices in these chapter 11 cases, including: (1) notice of the commencement of these chapter 11 cases and the Section 341 meeting; (2) notice of the claims bar date; (3) notice of objections to claims; (4) notice of any hearings on a disclosure statement and confirmation of a plan of reorganization; and (5) other miscellaneous notices to any entities, as the Debtors or the Court may deem necessary or appropriate for an orderly administration of these chapter 11 cases; b) within five days after the mailing of a particular notice, file with the Clerk's Office a certificate or affidavit of service that includes a copy of the notice served, an alphabetical list of persons to whom the notice was served and the date and manner of service; c) maintain copies of all proofs of claim and proofs of interest filed; d) maintain official claims registers by docketing all proofs of claim and proofs of interest on claims registers, including the following information: (1) the applicable Debtor entity; (2) the name and address of the claimant and any agent thereof, if the proof of claim or proof of interest was filed by an agent; (3) the date the proof of claim or proof of interest was received by Trumbull and/or the Court; (4) the claim number assigned to the proof of claim or proof of interest; and (5) the asserted amount and classification of the claim; e) implement necessary security measures to ensure the completeness and integrity of the claims registers; f) transmit to the Clerk's office a copy of the claims register on a weekly basis, unless requested by the Clerk's Office on a more or less frequent basis; g) maintain an up-to-date mailing list for all entities that have filed a proof of claim or proof of interest, which list shall be available upon request of a party-in- interest or the Clerk's Office; h) provide access to the public for examination of copies of the proofs of claim or interest without charge during regular business hours; i) respond to creditors' inquiries regarding their claims or the claims process; j) record all transfers of claims, and provide notice of such transfers, as required by Bankruptcy Rule 3001(e); k) prepare any exhibits for objections to claims, as requested; l) mail voting documents to claimants, and serve notice thereof; m) respond to claimants' inquiries regarding the disclosure statement and the voting procedures (restricting answers only to information contained in the plan documents); n) receive, examine and tabulate returned ballots in accordance with established procedures, and prepare a certified report of voting results for delivery to the Court; o) provide temporary employees, as necessary; p) comply with applicable federal, state, municipal and local statutes, ordinances, rules, regulations, orders and other requirements; and q) promptly comply with such further conditions and requirements as the Clerk's Office or the Court may at any time prescribe. Trumbull Group will also assist the Debtors with, inter alia: (a) the preparation of their schedules, statements of financial affairs and master creditor list, and any amendments thereto; (b) the reconciliation and resolution of claims; and (c) the preparation, mailing and tabulation of ballots of certain creditors for the purpose of voting to accept or reject a plan or plans of reorganization. Trumbull Group will bill the Debtors at its current hourly consulting rates: Designation Billing Rate ----------- ------------ Administrative Support $55 per hour Assistant Case Manager/ Data Specialist $65 to $110 per hour Case Manager $100 to $125 per hour Automation Consultant $140 per hour Sr. Automation Consultant $155 to $175 per hour Consultant $225 per hour Sr. Consultant $245 to $300 per hour Headquartered in New Britain, Connecticut, New Weathervane Retail Corporation -- http://www.wvane.com/-- is a Women's specialty retailer. The Company filed for chapter 11 protection on June 3, 2004 (Bankr. Del. Case No. 04-11649). William R. Firth, III, Esq., at Pepper Hamilton LLP, represents the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $28,710,000 in total assets and $24,576,000 in total debts. NEXTEL PARTNERS: Schedules Q2 2004 Conference Call on July 28 ------------------------------------------------------------- Nextel Partners, Inc., (NASDAQ:NXTP) will host its second quarter 2004 financial results conference call with its senior management. When: Wednesday, July 28, 2004 Time: 11:00 AM - 11:45 AM EDT Title: "Second Quarter 2004 Financial Results Dial-in: 888-540-9242 (Domestic) 1-484-630-1056 (International) Passcode: PARTNER Host: Alice Kang Ryder All participants are asked to dial in 10 minutes prior to the start of the conference call. If you are unable to participate, a playback of the conference call will be available through Friday, Aug. 20: Domestic 888-568- 0908, International 1-402-998-1584. The conference call will also be available via a live Webcast. To listen to the live call, please go to http://www.nextelpartners.com/at least fifteen minutes early to register, download, and install any necessary software. For those who cannot listen to the live broadcast, it will be archived on the Website for one week following the call. Nextel Partners was established to construct and operate digital wireless communications services under Nextel Communications' brand name in midsize and smaller cities throughout the U.S. Many of these markets are contiguous to Nextel Communications' existing properties. Like Nextel Communications, Nextel Partners exclusively uses Motorola's iDEN technology, which allows wireless services to be provided over lower special mobile radio frequencies. At the end of first-quarter 2004, there were about 1.3 million subscribers, with a substantial mix of these in the construction, transportation, manufacturing, government, and services sectors. Although Nextel Communications owns about 31% of Nextel Partners, it does not provide any credit support to the company. * * * As reported in the Troubled Company Reporter's May 26, 2004 edition, Standard & Poor's Rating Services assigned its 'B+' bank loan rating, along with a recovery rating of '3', to the $800 million senior secured credit facility of Nextel Partners Operating Corp., a wholly owned subsidiary of Kirkland, Washington-based wireless carrier Nextel Partners Inc. In addition, a 'B-' rating has been assigned to Nextel Partners' $25 million 8.125% senior notes due 2011, issued under Rule 144A with registration rights. The rating on Nextel Partners' senior unsecured debt was affirmed at 'B-' and removed from CreditWatch, where it was placed with positive implications May 7, 2004. The 'B+' corporate credit rating also was affirmed. The outlook remains stable. "The rating on Nextel Partners is dominated by financial risks associated with the company's still aggressive leverage, which was about 5.5x debt to annualized EBITDA (about 5.8x after adjusting for operating leases) for the quarter that ended in March 2004," said Standard & Poor's credit analyst Michael Tsao. "The high leverage is mainly a legacy of the company's use of substantial debt to finance the building of a network and operating losses that typically occur in the early stages of a business. Somewhat mitigating these risks is Nextel Partners' good competitive position, and solid EBITDA and free cash flow prospects." NRG ENERGY: Nelson Debtors Propose Assets Sale Bidding Procedures ----------------------------------------------------------------- Debtors LSP-Nelson Energy, LLC, and NRG Nelson Turbines, LLC, ask the Court to approve the proposed bidding procedures for the auction related to the sale of all of their assets. According to Samuel S. Kohn, Esq., at Kirkland & Ellis, in New York, the proposed Bidding Procedures are designed to maximize the value of the Nelson Assets for the Nelson Debtors' estates, creditors, and other interested parties. A. Due Diligence All bidders who request an information packet relating to the Sale will be required to enter into a standard confidentiality agreement with the Nelson Debtors. Upon (i) the execution of a confidentiality agreement that is satisfactory in form and substance to the Nelson Debtors and Credit Suisse First Boston, and (ii) the Nelson Debtors' determination that the Potential Bidder is qualified to participate in the bidding process, the Nelson Debtors will provide Potential Bidders reasonable access to their books, records and executives to allow the bidder to conduct due diligence prior to the submission of a bid. By participating in the Auction, all Potential Bidders are deemed to acknowledge that they have had sufficient and reasonable access to the Nelson Debtors' books, records and executives for the opportunity to conduct due diligence. B. Bid Documents Each Potential Bidder that wishes to be qualified as a Qualified Bidder and continue to participate in the bidding process must deliver to the Debtors, Thomassen Amcot International, LLC, and CSFB: (1) A written offer for a sum certain to acquire all or any portion of the Nelson Assets; (2) Written evidence that an amount equaling 10% of the Bid Amount, representing a good faith deposit, has been placed in escrow in an account of a mutually acceptable third party agent. The Good Faith Deposit will be non-refundable, in the event that the prospective purchaser is determined by the Nelson Debtors and CSFB, at the Auction to be the successful bidder or the second highest Bidder and subject to the jurisdiction of the Bankruptcy Court; and (3) Evidence reasonably satisfactory to the Nelson Debtors and CSFB, demonstrating the Potential Bidder's ability to (i) close and to consummate the acquisition of the Nelson Assets, and (ii) if applicable, provide adequate assurance for the assumption and assignment of the Contracts and Leases pursuant to Section 365 of the Bankruptcy Code, including, if available, the Potential Bidder's audited financial statements, the adequacy of which, the Debtors will determine in consultation with CSFB. C. Bid Deadline Bids must satisfy the Bid Requirements and be actually received no later than 5:00 p.m., on August 2, 2004. On August 6, 2004, the Debtors, in consultation with CSFB, will determine and will notify the Potential Bidder, whether the Potential Bidder has submitted acceptable Bid Documents so that the Potential Bidder may be considered a Qualified Bidder. D. Bid Requirements (1) Each Qualified Bid must be in the form of the Bid Documents; (2) Each Qualified Bid must constitute a good faith, bona fide offer to acquire all or a portion of the Nelson Assets; (3) Each Qualified Bid will not be conditioned on any terms or conditions, including but not limited to financing, regulatory approval, shareholder approval, environmental contingencies, and the outcome of due diligence by the bidder; (4) Each Qualified Bid must remain irrevocable until the Closing; and (5) As a condition to making a Qualified Bid, any Potential Bidder must provide the Debtors and CSFB, on or before the Bid Deadline, with sufficient and adequate information to demonstrate that the bidder: -- has the financial wherewithal and ability to consummate the acquisition of their business; and -- can provide all non-debtor counterparties to the Contracts and Leases with adequate assurance of future performance as contemplated by Section 365, if applicable. E. Auction and Bidding Increments The Nelson Debtors will conduct an auction with respect to all or a portion of the Nelson Assets on August 11, 2004, at 10:00 a.m., at the offices of Kirkland & Ellis, or at a later time or other place as the Nelson Debtors will notify all Qualified Bidders who have submitted Qualified Bids. The Auction may be continued to a later date by the Nelson Debtors, in consultation with CSFB, by making an announcement at the Auction. No further notice of any continuance will be required to be provided to any party. Bidding increments will be set and modified at the Auction, at the Nelson Debtors' discretion, in consultation with CSFB. Bidding at the Auction will continue until the time as the highest or otherwise best bid is determined. Only the Nelson Debtors, CSFB, Qualified Bidders and their professionals will be entitled to attend and be heard at the Auction and only Qualified Bidders will be entitled to make any subsequent bids at the Auction. F. Expenses Each person submitting a bid will bear its own expenses in connection with the Sale of the Nelson Assets, whether or not that person is the Successful Bidder or the sale of the Nelson Assets is ultimately approved. G. Winning Bid Upon conclusion of the Auction, the Nelson Debtors and CSFB, on the Lenders' behalf, will identify the highest and best offer or offers for any combination of any or all of the Nelson Assets. In the event of a disagreement between CSFB and the Nelson Debtors with respect to the Winning Bid, CSFB may seek a review by the Court at the Sale Hearing of the Nelson Debtors' determination of the Winning Bid. Within 24 hours after adjournment of the Auction, each Successful Bidder will complete and execute all agreements contracts, instruments or other documents evidencing and containing the terms and conditions on which the Winning Bid was made. If only one Qualifying Bid is received by the Bid Deadline and any modifications to the Asset Purchase Agreement are accepted by the Nelson Debtors, the Nelson Debtors will report this to the Court at the Sale Approval Hearing, where the Debtors will ask the Court to: (1) deem the bid as the highest or otherwise the best offer for the Nelson Assets; and (2) authorize them to proceed to close the Sale, in accordance with the Asset Purchase Agreement, as promptly as possible. H. The Sale Approval Hearing will take place on August 18, 2004 at 2:30 p.m., prevailing Eastern Time. I. Closing Each Successful Bidder will be required to close the Transaction, which consummates the sale of the relevant Nelson Assets no later than 10 days after the Court approves the Sale. If a Successful Bidder fails to close the Winning Bid within the time limitations and terms set forth in the applicable asset purchase agreement, the Successful Bidder will forfeit the Good Faith Deposit to, and the Good Faith Deposit will be retained irrevocably by, the Nelson Debtors. The Nelson Debtors will also retain the right to seek all other appropriate damages from the Successful Bidder. In the event of a Purchase Default, at the Nelson Debtors' discretion, in consultation with CSFB, the next highest or otherwise best Qualifying Bid for the relevant Nelson Assets will automatically be deemed to be the Winning Bid for the assets, and each bidder submitting the bid will be deemed to be a Successful Bidder without the need for additional hearing or Court order. J. Return of Good Faith Deposit The Good Faith Deposit of any Successful Bidder will be credited to the price paid for the relevant Nelson Assets. The Good Faith Deposit of any unsuccessful bidders will be returned within 15 days after consummation of the Sale or on permanent withdrawal by the Nelson Debtors of the proposed sale of the Nelson Assets. The Nelson Debtors reserve the right to reject any bid if they determine that the Qualified Bid is: -- inadequate or insufficient; -- not in conformity with the requirement of the Bankruptcy Code, any related rules or the terms set forth; or -- contrary to the best interests of their estates. Notice of Sale, Auction And Bidding Procedures The Nelson Debtors propose to serve copies of the Sale Motion, the Bidding Procedures Order, the proposed Sale Approval Order and all exhibits to the orders by first-class mail, postage prepaid to: (1) the Office of the United States Trustee, (2) the attorneys for CSFB, on behalf of the Lenders, (3) the attorneys for the Creditors Committee, (4) all counterparties to the Contracts and Leases, (5) all parties who have made written expressions of interest in acquiring the Nelson Assets, (6) all known persons holding a lien on any of the Nelson Assets, (7) the Securities and Exchange Commission, (8) all taxing authorities that have jurisdiction over the Nelson Assets, (9) all Governmental Agencies having jurisdiction over the Nelson Assets with respect to any non-bankruptcy regulations, (10) the Attorney General of the State of Illinois, and (11) all other parties that had filed a notice of appearance and demand for service of papers in the bankruptcy cases under Rule 2002 of the Federal Rules of Bankruptcy Procedure as of June 28, 2004. The Nelson Debtors believe that the notice is sufficient to provide effective notice of the Bidding Procedures, the Auction and the proposed Sale to potentially interested parties in a manner designed to maximize the chance of obtaining the broadest possible participation in the Sale process while minimizing costs to the estates. Accordingly, the Nelson Debtors ask the Court to deem the notice sufficient under Rules 2002(a)(2), 2002(c)(1) and 6004 of the Federal Rules of Bankruptcy Procedure. NRG Energy, Inc. owns and operates a diverse portfolio of power- generating facilities, primarily in the United States. Its operations include baseload, intermediate, peaking, and cogeneration facilities, thermal energy production and energy resource recovery facilities. The company, along with its affiliates, filed for chapter 11 protection (Bankr. S.D.N.Y. Case No. 03-13024) on May 14, 2003. Debtors' counsel are James H.M. Sprayregen, P.C., Matthew A. Cantor, Esq., and Robbin L. Itkin, Esq. of Kirkland & Ellis. When the company filed for protection from its creditors, it listed total assets of $10,310,000,000 and total liabilities of $9,229,000,000. (NRG Energy Bankruptcy News, Issue No. 30; Bankruptcy Creditors' Service, Inc., 215/945-7000) OWENS CORNING: Continues Global Manufacturing Capacity Additions ---------------------------------------------------------------- As construction and remodeling continues to increase in the U.S. and in key markets around the world, Owens Corning announced plans for two new manufacturing plants in China to produce shingles and insulation -- the latest in a series of manufacturing expansions and capacity increases for the company. The new shingle plant, which is being constructed in East China and will open at the end of the year, is the first Owens Corning shingle plant in China and the first Chinese facility to manufacture international standard glass fiber asphalt shingle products. Demand for the "Owens Corning Roof" soared following the success of a municipal re-roofing project in Shanghai, which other cities have since copied. In addition, the Company began construction on a new fiber glass insulation facility in Tianjin, China -- its fourth glass fiber insulation and fifth building materials plant in China. The facility, which is expected to be in operation by the end of the third quarter of 2004, will produce insulation products for commercial, industrial and residential construction markets -- including trademarked PINK(R) insulation -- to meet the rapidly increasing demand. This news follows on the heels of the company's recent announcement of low-cost expansions and upgrades at six core facilities in the U.S. and Canada to increase capacity for the North American market. Owens Corning's recent acquisition of Vitro Fibras, Mexico's largest fiberglass maker, also adds further capacity for the North American and Latin American markets. "We're constantly evaluating our global businesses to make certain we're adding capacity to meet our customers' needs and grow with them," said Owens Corning Chief Executive Officer Dave Brown. "Worldwide, we expect markets to continue to be strong, and we're committed to meeting that demand now and in the future." Insulation Transforms Market In Tianjin, the new Owens Corning insulation plant will produce glass fiber insulation products that are increasingly in demand as Owens Corning educates the market about energy efficiency and as American building techniques become more visible as air- conditioned hotels, offices and housing are built, especially in preparation for the 2008 Summer Olympics in Beijing. "In the ten years that we have been operating in Asia, we have seen tremendous change," said Brown. "At the same time, we have learned how to effectively and efficiently operate in the market without compromising quality. Our new expansion initiatives derive from that learning process." Brown emphasized that Owens Corning will continue to incorporate the highest levels of environmental protection in its processes, which are designed to minimize waste and conserve energy. "We're not only providing products that promote energy conservation, we're committed to protecting our resources and more importantly, ensuring a safe workplace for our employees." 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) PACIFIC GAS: Inks Stipulation Resolving California DWR Claims ------------------------------------------------------------- In a Court-approved stipulation, Pacific Gas and Electric Company and the State of California, Department of Water Resources agree to resolve the Debtor's Objection to DWR's asserted ordinary course liability claims, and related issues without further litigation. The parties stipulate that: (a) Each of the DWR Claims, in its entirety, will be classified and treated as an Ordinary Course Liability under the Plan; (b) The Debtor's Objection with respect to each of the administrative claims filed monthly by DWR commencing in September 2001 through January 2004 is resolved pursuant to the stipulation. The stipulation also resolves any potential objection to each of the administrative claims filed monthly by DWR commencing February 2004 through May 2004, on the grounds that each of those claims constitutes an Ordinary Course Liability. The stipulation will not affect the Debtor's and DWR's rights in the event the Debtor disputes the DWR Claims pursuant to the Plan; (c) As a result of the Plan's Effective Date, DWR is not required to continue to file any administrative claim asserting amounts due generally from the sale of electricity energy or services for customers, which it has been filing on a monthly basis; (d) The stipulation will not be construed to alter or amend in any manner the terms and conditions of another stipulation entered into by DWR, which resolves Claim No. 12323 as amended by Claim No. 12592; (e) DWR represents and warrants that it has neither assigned nor in any way transferred any part of the DWR Claims subject to the stipulation to any person or entity; and (f) DWR contends that by entering into the Stipulation, DWR is making a special and limited appearance and that DWR does not waive any objections or defenses that DWR or any other agency, unit, or entity of the State of California may have to the Court's jurisdiction over DWR or any other agency, unit or entity based on the Eleventh Amendment or related principles of sovereign immunity or otherwise, all of which are reserved. The Debtor disputes these contentions. The DWR Ordinary Course Liability Claims are: Docket Original Amended Time Period No. Claim Amount Claim Amount ----------- ------ ------------ ------------ April 7 - June 30, 2001 2250 $179,423,648 $179,423,648 July 2001 3639 32,777,879 32,777,879 August 2001 4056 35,000,000 35,000,000 September 2001 4553 13,000,000 13,000,000 October 2001 4961 15,000,000 15,000,000 November 2001 5606 8,000,000 8,000,000 December 2001 6112 3,500,000 3,500,000 January 2002 6766 11,000,000 11,000,000 February 2002 8312 3,000,000 3,000,000 March 2002 9319 30,000,000 30,000,000 April 2002 9965 19,000,000 19,000,000 May 2002 10414 26,000,000 26,000,000 June 2002 10828 20,000,000 20,000,000 July 2002 11155 27,000,000 27,000,000 August 2002 11537 29,000,000 29,000,000 September 2002 11947 56,000,000 56,000,000 October 2002 12219 38,324,841 38,324,841 November 2002 12450 102,640,179 102,640,179 December 2002 12649 86,000,000 86,000,000 January 2003 12854 40,000,000 40,000,000 February 2003 13012 29,042,517 29,042,517 March 2003 13277 45,908,180 45,908,180 April 2003 13483 37,862,562 37,862,562 May 2003 13772 20,067,424 20,067,424 June 2003 13958 29,500,833 29,500,833 July 2003 14162 3,803,951 3,803,951 August 2003 14327 3,323,409 3,323,409 September 2003 14537 3,000,000 3,000,000 October 2003 14693 3,000,000 3,000,000 November 2003 14978 12,000,000 12,000,000 December 2003 15226 11,655,536 11,655,536 January 2004 15319 3,000,000 3,000,000 Headquartered in San Francisco, California, Pacific Gas and Electric Company -- http://www.pge.com/-- a wholly-owned subsidiary of PG&E Corporation (NYSE:PCG), is one of the largest combination natural gas and electric utilities in the United States. The Company filed for Chapter 11 protection on April 6, 2001 (Bankr. N.D. Calif. Case No. 01-30923). James L. Lopes, Esq., William J. Lafferty, Esq., and Jeffrey L. Schaffer, Esq., at Howard, Rice, Nemerovski, Canady, Falk & Rabkin represent the Debtors in their restructuring efforts. On June 30, 2001, the Company listed $23,216,000,000 in assets and $22,152,000,000 in debts. (Pacific Gas Bankruptcy News, Issue No. 79; Bankruptcy Creditors' Service, Inc., 215/945-7000) PARMALAT: Creditors' Sec. 304 Injunction Objections are Overruled ----------------------------------------------------------------- As previously reported, Marcia L. Goldstein, Esq., at Weil, Gotshal & Manges, LLP, in New York, appeared before Judge Drain in the United States Bankruptcy Court for the Southern District of New York to obtain a Temporary Restraining Order and Preliminary Injunction, enjoining and restraining U.S. creditors from seizing the U.S. assets of Parmalat Finanziaria SpA and 22 foreign subsidiaries and affiliates. ABN AMRO and an ad hoc committee protest this motion. Objections (1) ABN AMRO Parmalat should not be allowed to use Section 304 of the Bankruptcy Code to achieve greater protection in the United States than Parmalat would receive in Italy, Jarrett M. Behar, Esq., at Wolf, Block, Schorr And Solis-Cohen, LLP, in New York, tells Judge Drain on behalf ABN AMRO Bank N.V. Parmalat must demonstrate that the Italian court shares the U.S. court's policy of equal distribution of assets and that Italian law mandates the issuance or at least authorizes the request for the stay. Parmalat must also submit evidence to the Court in support of its claim that Wishaw Trading S.A., a co-defendant in a pending lawsuit ABN AMRO commenced against Parmalat SpA, is merely a creature of Parmalat. Without documentation, Parmalat stated that it owns 16.67% of Wishaw. Parmalat has not met its burden to demonstrate that Wishaw is "involved in" the Parmalat insolvency proceeding in Italy. Parmalat's claim that the State Court Action should be enjoined, otherwise Dr. Bondi would have a substantial burden of responding to discovery requests and would default on the action on behalf of Wishaw, is specious. Cesare Vecchio, a partner at Freshfields Bruckhaus Deringer in Milan, and Giuseppe Curto, an associate at Freshfields, explain that any action against Wishaw, and any default of Wishaw, would not have any direct effect vis-a-vis Parmalat because under Italian law, "any action taken on the assets of subsidiary and/or affiliates of the insolvent company which have not been declared insolvent does not infringe the par condicio creditorum principle." Messrs. Vecchio and Curto assist the ABN AMRO Group in Italy on certain cases related to Parmalat's insolvency. According to Messrs. Vecchio and Curto, the Italian Supreme Court ruled in the case of 19 December 1990 no. 12031 that: (i) an insolvency declaration adjudicated by an Italian Court neither freezes nor has any influence over the assets owned by an insolvent company outside of the Italian territory, unless the receiver succeeds in obtaining in the relevant jurisdiction the recognition of the insolvency declaration in the jurisdiction where the assets are located or an order freezing the assets; therefore (ii) any creditor may commence individual actions before non-Italian Courts on assets of the insolvent company located outside Italy. The Italian Supreme Court also stated that these conclusions do not contrast with the general principle of the so-called par condicio creditorum -- pursuant to which creditors of the same ranking must equally participate in the distribution of funds raised in the procedure -- as the principle applies only in relation to the liquidation of the assets over which the freezing effect of the insolvency declaration operates. Messrs. Vecchio and Curto studied both the Italian Royal Decree no. 267 of 16 March 1942, which provides general rules regulating insolvency procedures in Italy, and the legislation regulating Amministrazione Straordinaria, which has been set by Law Decree no. 26 of 30 January 1979, Legislative Decree no. 270 of 8 July 1999 and Law Decree no. 347 of 23 December 2003. Messrs. Vecchio and Curto observe that none of the decrees provide any rule enjoining actions and proceedings against non-Debtor subsidiary and affiliates. In March 2003, ABN AMRO provided $10,000,000 in financing to facilitate a shipment of agricultural commodities from Archer Daniels Midland Company to Wishaw or its designee. Wishaw is a company organized and existing under the laws of the Republic of Uruguay with its principal offices at Av. Millan, 531, 12.900 Montevideo, Uruguay. To implement and evidence the requested financing, Wishaw executed a Promissory Note dated March 27, 2003 for $9,999,999.91 payable to Archer Daniels. By letter dated March 27, 2003, Wishaw delivered the Note directly to ABN AMRO and confirmed that, at maturity, Wishaw would make full payment under the Note to ABN AMRO without deductions, set-off, counterclaims or withholding. In consideration of payment by ABN AMRO, Archer Daniels endorsed the Note to ABN AMRO and assigned to ABN AMRO all of its rights, title and interest in the Note. The Note provides that: -- the $9,999,999.91 is payable to ABN AMRO at maturity on March 19, 2004; -- Wishaw waives all requirements as to presentment, demand, protest or notice of any nature; -- interest from maturity will be due at the rate of 12% per annum; and -- Wishaw will reimburse ABN AMRO for all reasonable costs and expenses of collection, including ABN AMRO's attorney's fees. Pursuant to a Guarantee (Per Aval) dated March 27, 2003, Parmalat SpA unconditionally and irrevocably guaranteed to any holder of the Note, as primary obligor, all payment obligations. Wishaw failed to pay the amounts due under the Note at maturity. As a result, on March 22, 2004, ABN AMRO commenced an action against Parmalat SpA before the Supreme Court of the State of New York, County of New York, to recover the principal and interest due under the Note. ABN AMRO named Wishaw as a co-defendant in the Complaint. (2) Ad Hoc Committee An ad hoc committee of Parmalat private and public noteholders warns Judge Drain that Parmalat is seeking the Bankruptcy Court's assistance in achieving a unilateral restructuring behind closed doors. Made-to-Order Dictatorial Proceedings Evan D. Flaschen, Esq., at Bingham McCutchen, LLP, in Hartford, Connecticut, explains that throughout the six months that Parmalat has sought insolvency protection in Italy, Dr. Enrico Bondi denied the Ad Hoc Committee access to basic information, any opportunity to make an independent assessment of even basic business decisions, and any opportunity to provide any meaningful input at all into the plan process. After stringing along the Ad Hoc Committee for months and after being provided with more than 100 institutional investor signature pages confirming that Bingham McCutchen, LLP, represented the Ad Hoc Committee, Dr. Bondi had the effrontery to characterize the Ad Hoc Committee as "a small group of creditors trying to insert themselves into the process and win fees from the company." Parmalat's international bond debt exceeds $10,000,000,000 -- a clear majority of Parmalat's total indebtedness, Mr. Flaschen says. "[O]ne need not indict the Italian insolvency system in general to reach the obvious conclusion that the made-to-order dictatorial Parmalat insolvency proceedings lack the requisite legitimacy and procedural fairness that would permit [the Bankruptcy] Court to enter a preliminary injunction under Section 304(b) of the Bankruptcy Code," Mr. Flaschen states. Mr. Flaschen tells the Court that Parmalat's restructuring plan, which was presented to the Italian Minister of Productive Activities in June 2004, is already a "done deal" even though bondholders still haven't seen it, let alone been permitted to provide any input, and regardless of whether they can find any possible ground for appealing its approval. Parmalat's claims process has also been a comedy of errors. On not less than three different occasions, the Parma Court or Parmalat itself announced new procedures for the filing of claims, each with new deadlines and format requirements. Whether each change improved the process is not really the point, since hundreds of thousands of dollars have been spent so far in the attempt to comply with each set of procedures before they were changed. "In a case that grew out of perhaps the largest financial fraud in European history, one would have expected at least an open plan process to reassure the financial markets that Parmalat's old ways of doing business had ended. But such was and is not the case," Mr. Flaschen laments. "Without any meaningful information from Parmalat at all, creditors have been left to guess at the accuracy or political expediency of one bizarre press 'trial balloon' after another. Request Fails to Satisfy Legal Elements of a Preliminary Injunction The Ad Hoc Committee asks the Court to deny Dr. Bondi's request for injunction. Mr. Flaschen contends that Dr. Bondi fails to allege both irreparable harm and facts necessary to show that he is likely to prevail on the merits. Dr. Bondi simply alleges that an injunction is necessary to stay collection efforts in connection with the ABN AMRO Complaint and supposedly similar suits. Dr. Bondi fails to explain, however, why he did not seek the Bankruptcy Court's protection more than six months ago when Parmalat commenced its insolvency proceedings and why, now that six months have passed, only one lawsuit against the relevant Parmalat entities exists. Mr. Flaschen points out that the existence of one lawsuit does not justify a sweeping injunction especially when Parmalat's insolvency proceeding does not provide a viable alternative that protects creditors' rights. U.S. Creditors Aren't Protected in Italy Dr. Bondi's request should also be denied because the Italian proceedings provided no procedural protections to U.S. creditors. The Insolvency proceeding denied creditors notice, due process, and an opportunity to be heard, all in stark contrast with U.S. law. "The Ad Hoc Committee does not expect Italian law to be identical to U.S. law by any means, but we are not really faced with 'general Italian law' at all. We are presented with a special enactment -- the 'Christmas Eve Decree' as twice amended -- to deal especially with Parmalat and to override even long-standing Italian precedent that, for example, administrators of an insolvent entity must be independent -- as they still must be for all except 'extraordinary' debtors, of which Parmalat is the only example to date," Mr. Flaschen cries. "And we are presented with an Extraordinary Commissioner whose absolute power makes it a matter of noblesse oblige as to whether he will deign to provide any information at all to an Ad Hoc Committee that is representative of the clear majority in amount of Parmalat's creditors. Mr. Flaschen reports that Parmalat rejected the "seemingly innocuous request" of the Ad Hoc Committee to be included as a Notice party with respect to the notices issued concerning the Preliminary Injunction Hearing. Mr. Flaschen reminds Judge Drain that in Bank of New York v. Treco (In re Treco), 240 F.3d 148 (2d Cir. 2001), Mr. Flaschen relates that the United States Court of Appeals for the Second Circuit denied the Bahamian Liquidators' request for a turnover order on the grounds that the payment of administrative expenses under Bahamian law would have invalidated the priority of a U.S. secured creditor's claim, and therefore would have amounted to a distribution of proceeds that was not "substantially in accordance with the order prescribed in [the Bankruptcy Code]" as set forth in Section 304(c)(4). The Treco court also found that the priority rules in the Bahamian proceedings denied the U.S. creditor the "strong protection" afforded to secured claims and property rights "protected by our Constitution's prohibition against takings without just compensation." The U.S. Bankruptcy Court for the Southern District of New York also refused to grant Section 304 protection where the foundations of a foreign proceeding lack certain fundamental procedural and substantive protections. In re Hourani, 180 B.R. 58 (Bankr. S.D.N.Y. 1995), the Liquidation Committee of Petra Bank of Amman in Jordan commenced Section 304 proceedings and sought for the turnover of all Petra Bank funds in the United States so that they could be administered under Jordanian law. A.I. Trade Finance, Inc., an international financing firm holding three promissory notes guaranteed by Petra Bank, objected to the Liquidation Committee's petition and sought to have the petition dismissed. In considering AITF's objection, Judge Lifland recognized that "[w]hile this nation's preparedness to grant deference to the laws and proceedings of other nations is considerable, it is not unlimited[, and] [d]eference should only be given to those insolvency proceedings that provide a reasonable degree of certainty that the consideration of all parties' rights will be fair and impartial." Judge Lifland then commenced a comprehensive review of the substantive and procedural aspects of Jordanian bankruptcy law to determine whether comity should be extended under Section 304. Thereafter, the Hourani Court found no shortage of procedural lapses in the Jordanian proceedings that weighed against granting Section 304 protection. Specifically, Judge Lifland found that: (a) the Liquidation Committee had the power to dispose of assets and claims in any manner that it "deem[ed] appropriate"; (b) creditors had no guaranteed right to appeal actions taken by the Liquidation Committee regarding the disposition of assets or from claims adjudications, besides their own claims; and (c) creditors had no access to information regarding actions taken by the Liquidation Committee. Judge Lifland also noted with concern that the special legislation for Petra Bank did not encompass the insolvency provisions of the Jordanian Commercial Law or Civil Law. Judge Lifland declined to enter Section 304 protection on the basis of these procedural defects. Judge Lifland held that the "[f]undamental requisites of due process of law include access to information and an opportunity to be heard in a meaningful manner . . . For effective participation, a certain degree of transparency within the system is needful." The court in Interpool Ltd. v. Certain Freights of the M/V Venture Star, 102 B.R. 373 (D.N.J. 1988), also reached a similar conclusion. There, KKL Kangaroo Lines, an Australian liner company with substantial assets in the United States, was forced into involuntary liquidation proceedings in Australia by one of its major creditors. KKL's court-appointed liquidator filed a petition for Section 304 protection seeking turnover of KKL's U.S. property. To prevent KKL's U.S. assets from being dispatched to Australia, several creditors filed an involuntary Chapter 7 petition in the bankruptcy court. The Section 304 petition was then withdrawn from the bankruptcy court and consolidated with related matters before the district court. The issue before the district court was whether, pursuant to Section 304, the liquidator should be permitted to administer the debtor's U.S. assets under the auspices of Australian bankruptcy law. In deciding whether to grant comity to the Australian proceedings, the district court determined whether (1) U.S. creditors have the ability to pursue their rights in Australian courts, and (2) the protections contained in the Australian Bankruptcy Rules provided U.S. creditors with sufficient protection. The district court noted that Australian winding-up proceedings are ex parte. Accordingly, those proceedings do not provide the same protections to creditors as dictated under the U.S. Bankruptcy Rules. The Interpool court also held that while there is no requirement that Australian law and United States law be identical, a U.S. court "must be convinced that the foreign Court has or will abide by fundamental standards of procedural fairness" before granting Section 304 protection. Under Australian law, bankruptcy proceedings result in the "private determination of the bankrupt" and liquidators are not required to give notice of the liquidation proceedings to creditors. Moreover, although creditors may call a meeting pursuant to Australian bankruptcy law, that right may often prove illusory because a creditor would only be able to call a meeting if he were aware of the pending liquidation proceedings. In light of the omission of notable procedural protections under Australian law, the district court refused to grant recognition to the Australian proceeding and instead granted the U.S. creditors' request for a Chapter 7 petition. No Proof that Dr. Bondi is Authorized to Commence the Sec. 304 Petitions The request should also be denied because Dr. Bondi failed to provide evidence that he is specifically authorized under Italian law to commence the ancillary proceedings. Dr. Bondi did not provide evidence of his own appointment or an explanation of how a company's Chairman and CEO brought in at the behest of Italian banks can suddenly become an independent administrator. Committee Sets Conditions If the Court is inclined to enter the preliminary injunction, the Ad Hoc Committee suggests that any order be conditioned on: (1) the recognition of the Ad Hoc Committee funded retroactively by Parmalat; (2) the creation of a U.S. claims process; (3) mandatory disclosures from Parmalat regarding the company's business operations, financial information and restructuring plan; and (4) further review following publication of Parmalat's plan. If Parmalat says that these conditions are not permitted under Italian law and if Parmalat indicates it won't change the law -- even though it has already done so three times -- Parmalat should be left to enforcing the Italian stay and the Italian plan pursuant to Italian law, without the assistance of the U.S. legal system. A list of the members of the Ad Hoc Committee is available at http://bankrupt.com/misc/ad_hoc_committee_members.pdfat no cost. Dr. Bondi Responds The Ad Hoc Committee's objection must be overruled. On Dr. Enrico Bondi's behalf, Marcia L. Goldstein, Esq., at Weil, Gotshal & Manges, LLP, explains that if the Section 304 injunction is not granted, Parmalat's estates may be prematurely "pieced out" and the orderly determination of claims and administration of assets in a centralized, foreign proceeding will be severely disrupted. Parmalat's reorganization requires the coordination of multiple jurisdictions and the protections afforded by the laws thereunder. Absent Parmalat's filing for protection and the Italian legislature's prompt revision of Italian bankruptcy law, which facilitates reorganization by providing for the ability to convert debt to equity, Ms. Goldstein points out that Parmalat most certainly would have been forced to liquidate, leading to limited creditor recoveries and great injury to all parties-in- interest. The Section 304 petition and request for injunction, Ms. Goldstein clarifies, will only serve to maintain the status quo and prevent an unnecessary race to the courthouse. The Ad Hoc Committee's assertion that Italian law is not fundamentally fair to creditors is untrue. The Committee's objection is based on mere hyperbole and innuendo rather than fact or legal precedent, Ms. Goldstein tells Judge Drain. Ms. Goldstein asserts that Italian insolvency law is "substantially in accordance" with U.S. bankruptcy law and, thus, worthy of Section 304 relief: -- The Italian Proceedings provide procedural protections to U.S. creditors. All creditors are afforded the opportunity to have their names placed on the list of creditors utilized for voting purposes. Even if a creditor does not place their name and claim on the list of creditors, the creditor is not barred from asserting its claim as there is no bar date under applicable Italian law. In addition, in the event the debtor disagrees with the classification and amount of a creditor's claim, any creditor -- Italian or otherwise -- is entitled to court adjudication of the dispute; and -- Parmalat is providing adequately information to creditors. Under applicable Italian law, a debtor may not disclose any information to one creditor without providing that information to all creditors. Notwithstanding this limitation, Parmalat endeavored to provide information to creditors in a consistent manner via publication in various newspapers and, more importantly, through the use of their Website, which is available to all parties. Ms. Goldstein also argues that, whether the Committee approves of Dr. Bondi's appointment by the Italian court is not relevant to his status as the foreign representative. Dr. Bondi is the duly appointed administrator and the authorized legal representative of Parmalat's estates. The Committee suggests that the Italian Proceeding is unworthy of comity because Italian insolvency law does not provide a role for or for compensation of professionals of an ad hoc noteholders' committee. Ms. Goldstein reminds Judge Drain that nothing in Section 304 or elsewhere in the Bankruptcy Code requires the payment of fees incurred by ad hoc committees. The fact that Italian law also does not provide for appointment of an official creditors' committee or for compensation of counsel for an ad hoc committee is not relevant to Parmalat's qualification for Section 304 protection. With respect to ABN AMRO's objection, Ms. Goldstein tells the Court that Parmalat has had difficulty ascertaining information regarding Wishaw, including the value of its assets if any, and its role in the corporate structure. Parmalat requires additional time to conduct its investigation of Wishaw to determine if Wishaw should: (i) be placed into an insolvency proceeding in Uruguay, with a potential Section 304 filing in the United States; (ii) oppose the ABN AMRO Complaint; or (iii) consent to entry of a judgment. Dr. Bondi asks Judge Drain to approve the preliminary injunction applicable to Wishaw for a 30-day period. * * * Judge Drain enjoins and restrains all persons subject to the jurisdiction of the U.S. court from commencing or continuing any action to collect a prepetition debt without obtaining permission from the Bankruptcy Court. Absent an injunction, Judge Drain holds that Parmalat, its estates and creditors will suffer immediate and irreparable injury. Dr. Bondi may become unnecessarily distracted from his centralized reorganization efforts by having to learn about or respond to pending and potential litigations in connection with claims against Parmalat in the United States. Parmalat could also become subject to the risk of default judgments. Dr. Bondi's ability to implement the Italian Plan may also be jeopardized by the efforts of certain Italian Plan creditors to thwart his restructuring efforts. The Court recognizes Dr. Bondi as the exclusive "foreign representative" of Parmalat within the meaning of Section 101(24) of the Bankruptcy Code. The Civil and Criminal Court of Parma will have exclusive jurisdiction to hear and determine any action, claim or proceeding, other than the SEC Action, and to settle all disputes which may arise out of the construction or interpretations of the Italian Plan, or out of any action taken or omitted to be taken by any entity in connection with the administration of the Italian Plan. Judge Drain will convene a hearing on August 26, 2004 at 10:00 a.m. to consider whether to continue the terms of the Preliminary Injunction beyond that date. Any party-in-interest, nonetheless, may seek to terminate or limit the terms of the Preliminary Injunction. 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. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000) PASCACK VALLEY HOSPITAL: S&P Removes B+ Rating From Negative Watch ------------------------------------------------------------------ Standard & Poor's Ratings Services lowered its rating three notches to 'B+' from 'BB+' on New Jersey Health Care Facilities Finance Authority's revenue bonds outstanding, issued for Pascack Valley Hospital, New Jersey. The rating was also removed from CreditWatch with negative implications, where it was placed on June 11, 2004. The outlook is negative. Pascack's total debt outstanding is $84.3 million. "The lowered rating reflects the sizable $11.2 million operating loss reported in the hospital's audited financial statements for fiscal 2003 that led to a debt service covenant violation, combined with the hospital's limited financial flexibility, given its slim liquidity and highly leveraged balance sheet," said Standard & Poor's credit analyst Anita Varghese. The negative outlook reflects the challenge that the hospital faces in returning to break-even operations after an approximately $12 million decline in Medicare outlier payments while undergoing its expansion project. The $11.7 million discrepancy between Pascack's audited financial statements and management's internal year-end numbers for fiscal 2003 is a result of adjustments relating to a $9.4 million understatement of the hospital's accounts receivable contractual allowances and a $1.8 million increase in the provision for bad debt. Management's internal year-end numbers overstated net accounts receivable and net patient revenues and indicated an operating profit of $485,000. Management plans to offset the decline in operating performance through various initiatives, including about $7 million in annual cost reductions and about $8 million in annual revenue enhancements, which should be fully realized in fiscal 2005. In addition, Pascack may also receive an additional $3 million in Medicare revenue, effective October 2004, if its wage index is reclassified to New York City from Bergen County. Pascack is current on its debt service payments and the event of default is not imminent. However, debt service payments will be steeper starting in 2005-2006 after the hospital's capitalized interest runs out. Per its bond documents, Pascack is required to hire a consultant and has chosen Cambio Health Solutions, which will begin its engagement in mid-July. Management expects to end fiscal 2004 with an approximately $5 million operating loss. Pascack is located in Westwood, New Jersey, an affluent suburb of Bergen County. The hospital is the smallest of five acute-care providers in a highly competitive county. It has a 35.6% market share in its primary service area of 24 towns, which accounts for 70% of its admissions. PEGASUS: Court OKs Committee's Proposed Screening Wall Procedures ----------------------------------------------------------------- At the Official Committee of Unsecured Creditors' request, the Court approves Screening Wall Procedures that are designed to prevent the misuse of Committee information, and that are acceptable to the United States Trustee. Committee members, which are engaged in the trading of securities as a regular part of their business, will not violate their duties as Committee members, and per se be in violation of the securities laws. Thus, the Committee members will not subject their claims to possible disallowance, subordination, or other adverse treatment, by trading in Pegasus Satellite Communications, Inc.'s Securities during the pendency of the Debtors' Chapter 11 cases, provided that any Committee member carrying out trades establishes and effectively implements and strictly adheres to the information blocking procedures detailed in the Screening Wall Declaration or otherwise approved by the Office of the United States Trustee. Jacob A. Manheimer, Esq., at Pierce Atwood, in Portland, Maine, relates that the term "Screening Wall" refers to a procedure established by an institution to isolate its trading activities from its activities as a member of an official committee of unsecured creditors in a Chapter 11 case. A Screening Wall includes the employment of different personnel to perform certain functions, physical separation of the office and file space, procedures for locking committee related files, separate telephone and facsimile lines for certain functions, and special procedures for the delivery and posting of telephone messages. The Procedures prevent the Securities Trading Committee Member's trading personnel from use or misuse of non-public information obtained by the Securities Trading Committee Member's personnel engaged in Committee-related activities and also precludes Committee Personnel from receiving inappropriate information regarding the Securities Trading Committee Member's trading in Securities in advance of those trades. Although Committee members owe fiduciary duties to the Debtors' creditors, the Securities Trading Committee Members also may have fiduciary duties to maximize returns to their clients through trading securities. Thus, if a Securities Trading Committee Member is barred from trading Pegasus' Securities during the Debtors' bankruptcy cases because of its duties to other creditors, it may risk the loss of a beneficial investment opportunity for itself or its clients and may breach its fiduciary duty to its clients. If a Securities Trading Committee Member resigns from the Committee, its interests may be compromised by virtue of taking a less active role in the reorganization process. Securities Trading Committee Members should not be forced to choose between serving on the Committee and risking the loss of beneficial investment opportunities or foregoing service on the Committee and possibly compromising its responsibilities by taking a less active role in the reorganization process. As evidence of the implementation of the Procedures, any Committee member that wishes to trade in Pegasus' Securities are required to file with the Bankruptcy Court a Screening Wall Declaration by each individual performing in Committee-related activities in the Chapter 11 cases. The declaration or affidavit will state that the individual will comply with the Procedures. 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. 6; Bankruptcy Creditors' Service, Inc., 215/945-7000) PG&E NATIONAL: USGen Wants Until Nov. 1 to Exclusively File Plan ---------------------------------------------------------------- Pursuant to Section 1121(d) of the Bankruptcy Code, USGen New England, Inc., asks the Court to further extend its Exclusive Plan Filing Period to November 1, 2004, and its Exclusive Solicitation Period to December 30, 2004. John Lucian, Esq., at Blank Rome, LLP, in Baltimore, Maryland, reminds the Court that USGen recently filed these pleadings: * Debtors' Joint Motion for Order Pursuant to Sections 363 and 365 of the Bankruptcy Code Authorizing and Approving the Assumption and Assignment of Coal Purchase and Sale Agreement with Glencore Limited; * Complaint for Declaratory Relief Against Bear Swamp Counterparties; * Joint Motion for Order Authorizing and Approving Affiliated Debtors' Cost Allocation Methodology; * Motion for Authority to Enter into Contract for Ash Disposal at Salem Harbor Facility; * Application to Compromise Controversy with Rhode Island Department of Transportation; * Joint Motion of Affiliated Debtors for Order (I) Approving Omnibus Intercompany Claims Reconciliation and Settlements and (II) Fixing Deadline for Filing Proofs of Claim and Approving Form and Manner of Notice Thereof for All Intercompany Claims not Included in the Omnibus Intercompany Claims Settlement; * Joint Motion for Order Approving Settlement of Certain Intercompany Claims and Authorizing Debtors to Implement Mutual Release in Connection Therewith; * Joint Motion to Approve Global Settlement with Algonquin Gas Transmission Company; * Motion for Authority to Enter into Salem Harbor Reliability Agreement with ISO New England, Inc.; * Expedited Motion for Order Approving and Authorizing Debtor to Implement New Key Employee Retention Plan; * Expedited Joint Motion for Order Approving Settlement of Existing Tax Sharing Agreement Issues and Authorizing Entry into New Tax Sharing Arrangement; and * Expedited Motion for Order Authorizing Engagement of Credit Suisse First Boston to Provide Staple Financing. The planning and preparation of the pleadings consumed substantial amounts of USGen's time and resources. The Bear Swamp Litigation According to Mr. Lucian, a resolution of the cardinal issues raised in the Bear Swamp adversary proceeding weighs heavily on USGen's reorganization efforts. Granting an additional exclusivity extension will allow USGen to concentrate on its post-trial brief due in mid-July, and any subsequent matters, without being distracted by a competing plan, as well as incorporate the litigation results into its plan formulations. The Algonquin Litigation Mr. Lucian relates that after lengthy settlement negotiations, a global resolution of all issues with Algonquin Gas Transmission Company was reached on April 16, 2004. At USGen's behest, the Court approved the proposed settlement with Algonquin at a hearing on May 12, 2004. The superlative settlement -- which reduced Algonquin's claim from $481,000,000 to $4,000,000 -- was the fruit of several rounds of comprehensive negotiations that spanned many weeks and involved a cadre of USGen's personnel and estate professionals who were required to divert their attention away from plan efforts to concentrate on the complex litigation. The Rockingham Condemnation Proceedings With respect to the eminent domain proceedings pursued by the Town of Rockingham, Vermont against USGen, Mr. Lucian informs the Court that USGen has conducted extensive negotiations with Rockingham, in which the parties have achieved an agreement in principle resolving the litigation. Moreover, a motion has been filed pursuant to Rule 9019 of the Federal Rules of Bankruptcy Procedure for Court approval of the settlement, which has been adjourned periodically. USGen hopes that a consensual resolution can finally be presented to the Court upon completion of the documentation. "This matter continues to considerably consume USGen's resources," Mr. Lucian says. Implementation of Reorganization Strategy Notwithstanding the enormous amount of time and resources necessarily required from it, Mr. Lucian points out that USGen has made substantial progress in formulating and implementing a reorganization strategy by evaluating the possibility of a sale of substantially all of its assets or, alternatively, emerging from Chapter 11 as a stand-alone entity. USGen has been engaged in discussions with possible purchasers of its assets since late 2003, with the assistance of its investment bankers, financial advisors and bankruptcy counsel. After concluding many of those discussions in early 2004, USGen identified several entities that appear qualified to acquire the assets and began to coordinate extensive due diligence with those entities. In addition, USGen conducted detailed management presentations at its headquarters for each of those entities and orchestrated in-depth site examinations of USGen's generating facilities. Based on the success of its efforts, USGen initiated a more comprehensive marketing process in April 2004 with the assistance of its investment banker and other estate professionals. Since then, USGen has been evaluating sophisticated bid proposals and engaging in discussions with the bidders to clarify various aspects of their proposals and obtain due diligence materials from them. However, in light of the magnitude and complexity of its assets and business, as well as the substantial litigation that has consumed significant resources during recent months, USGen needs additional time to complete its evaluation and determine which of its options will reap the greatest reward to the estate. During this time, USGen should not be distracted by the threat of a competing plan. Sophisticated Business Operations and Interaction with the Committee USGen has continued to focus on the fundamental task of operating its large and complex business. An enterprise of this magnitude presents complicated and novel issues requiring thorough analyses and timely responses from USGen's management, Mr. Lucien says. In recent months, USGen has: * negotiated and implemented a multi-year, multimillion dollar contract for environmental upgrades at its Brayton Point Facility -- approved by the Court in early 2004; * negotiated and obtained Court approval to enter into a sophisticated reliability agreement for the funding and construction of certain upgrades at its Salem Harbor Facility; * negotiated and implemented an ash disposal contract for its Salem Harbor Facility, which will reduce long-term costs by several million dollars; * resolved complicated tax disputes with certain municipalities; * negotiated the assignment of a beneficial coal contract to the estate; * negotiated resolutions of various disputed unsecured claims; and * achieved other notable operational successes. In addition, USGen has been working closely with the Official Committee of Unsecured Creditors and its financial and legal advisors on its reorganization efforts. USGen meets with the Creditors Committee and its advisors on a regular basis and communicates with them several times per week to discuss all aspects of the Chapter 11 case. USGen's efforts include many detailed presentations of its operational, financial and tactical activities, as well as other issues critical to the Creditors Committee's understanding of USGen and its reorganization efforts. The Creditors Committee's advisors are intimately involved in USGen's confidential negotiations with potential purchasers and are consulted on all major issues. Furthermore, USGen intends to maintain this approach and work with the Creditors Committee in good faith throughout any extended Exclusive Periods. Judge Mannes will convene a hearing on July 22, 2004 to consider USGen's request. Pursuant to the Order for Complex Chapter 11 Bankruptcy Case dated July 9, 2003, USGen's Exclusive Filing Period is automatically extended, without the necessity of a bridge order, until the conclusion of that hearing. Headquartered in Bethesda, Maryland, PG&E National Energy Group, Inc. -- http://www.pge.com/-- develops, builds, owns and operates electric generating and natural gas pipeline facilities and provides energy trading, marketing and risk-management services. The Company filed for Chapter 11 protection on July 8, 2003 (Bankr. D. Md. Case No. 03-30459). Matthew A. Feldman, Esq., Shelley C. Chapman, Esq., and Carollynn H.G. Callari, Esq., at Willkie Farr & Gallagher represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $7,613,000,000 in assets and $9,062,000,000 in debts. (PG&E National Bankruptcy News, Issue No. 24; Bankruptcy Creditors' Service, Inc., 215/945-7000) PRIMEDIA INC: Redeems All Outstanding Series J Preferred Stock -------------------------------------------------------------- PRIMEDIA Inc. (NYSE:PRM) announced that it has redeemed all of its outstanding Series J Convertible Exchangeable Preferred Stock, representing an aggregate of approximately 1,424,306 shares as of today's redemption date, for approximately $178,038,252 in cash. About PRIMEDIA PRIMEDIA is the leading targeted media company in the United States. With 2003 revenues of $1.3 billion, our properties comprise more than 200 brands that connect buyers and sellers in more markets than any other media company through our print publications, Web sites, events, newsletters and video programs in four market segments: -- Enthusiast Media includes more than 120 consumer magazines, their Web sites and About.com, and is the #1 special interest magazine publisher in the U.S. with well-known brands such as Motor Trend, Automobile, Creating Keepsakes, In-Fisherman, Power & Motoryacht, Hot Rod, Snowboarder, Stereophile and Surfer. -- Consumer Guides is the #1 publisher of free consumer guides in the U.S. with Apartment Guide, Auto Guide and New Homes Guide and the #1 distributor of free consumer publications through its proprietary distribution network in more than 16,000 locations. -- Business Information is a leading information provider in more than 20 business market sectors with 78 magazines, 108 websites, 23 events, and 53 directories and data products. -- Education and Training includes Channel One, a proprietary network to secondary schools; Films Media Group, a leading distributor of educational videos; and Workplace Learning, a group of employee training networks. * * * As reported in the Troubled Company Reporter's May 7, 2004 edition, Standard & Poor's Ratings Services assigned its 'B' rating to publishing company PRIMEDIA Inc.'s $275 million, privately placed, Rule 144A senior notes due 2010. In addition, Standard & Poor's affirmed its 'B' corporate credit and other outstanding ratings on New York, N.Y.-based PRIMEDIA. The rating outlook is stable. PROVIDIAN FINANCIAL: Q2 2004 Conference Call Set for July 26 ------------------------------------------------------------ Providian Financial Corporation (NYSE:PVN) announced that it will hold its second quarter 2004 earnings conference call on Monday July 26, 2004, at 4:30 p.m., Eastern Time. The earnings release and accompanying financial information will be released shortly before the call and, together with the conference call script, will be available on the Company's web site at http://www.providian.com/ The call will be broadcast live over the Internet through the Investor Relations page of Providian's web site at http://www.providian.com/Those interested in listening to the live call should go to the web site at least 10 minutes before the start of the call to register and download any necessary software. A replay will be available shortly after the conclusion of the call and archived on the Company's web site. Monthly 8-K Filing on July 15, 2004 Consistent with the Company's disclosure practices, the June 2004 monthly asset quality data for the Providian Gateway Master Trust will be filed on Form 8-K on July 15, 2004 and the Company will release its reported and managed asset quality data for the month of June 2004 with its quarterly release on July 26, 2004. About Providian San Francisco-based Providian Financial is a leading provider of credit cards to mainstream American customers throughout the U.S. By combining experience, analysis, technology and outstanding customer service, Providian seeks to build long-lasting relationships with its customers by providing products and services that meet their evolving financial needs. As previously reported, Fitch Ratings upgraded the senior unsecured rating of Providian Financial Corp. to 'B+' from 'B'. The Rating Outlook for Providian was revised to Positive from Stable. Approximately $1.1 billion of debt was affected by this action. PROVIDIAN FINANCIAL: Closing San Antonio Site by Year-End --------------------------------------------------------- Providian Financial Corporation (NYSE:PVN) announced that it is consolidating its customer service operations and, as a result, will be closing its San Antonio, Texas site at the end of the year. "This was a difficult decision," said Mike Laubsted, executive vice president of Customer Service for Providian. "But consolidating our operations to better match the size and needs of our customer portfolio is necessary from an efficiency standpoint." All of the approximately 220 employees affected by Wednesday's announcement will be given transition packages, including job placement services. Customer service representatives are also being offered the opportunity to transfer to Providian's Arlington, Texas facility. In addition, Providian will sponsor a job fair with local employers. About Providian San Francisco-based Providian Financial is a leading provider of credit cards to mainstream American customers throughout the U.S. By combining experience, analysis, technology and outstanding customer service, Providian seeks to build long-lasting relationships with its customers by providing products and services that meet their evolving financial needs. As previously reported, Fitch Ratings upgraded the senior unsecured rating of Providian Financial Corp. to 'B+' from 'B'. The Rating Outlook for Providian was revised to Positive from Stable. Approximately $1.1 billion of debt was affected by this action. QWEST COMMUNICATIONS: Opens Seven Retail Stores in Minnesota ------------------------------------------------------------ Qwest Communications International Inc. (NYSE: Q) announced that it is opening seven company retail stores in the Twin Cities area. The move is part of a region-wide retail expansion, which brings the total number of new Qwest locations to 34. The company has opened stores in Arizona, Colorado, Nebraska, New Mexico, Oregon, Utah and Washington since April. Qwest's first-of-its-kind retail concept focuses on a unique service environment: the Qwest Solution CenterT. This retail setting makes Qwest the only communications provider to offer personal, face-to-face assistance for a full spectrum of communications choices all in one place. At Qwest Solution Centers, customers can sample and purchase products and talk to experts about Qwest wireless, high-speed Internet service, home-phone packages and long-distance service. Additionally, Qwest centers offer technical assistance and minor repairs for wireless handsets, answer billing inquiries, assist with feature changes and have a convenient bill drop location. Solutions Centers are now open at Rosedale Mall in Roseville, Northtown Mall in Blaine, Maplewood Mall in Maplewood, Eden Prairie Center in Eden Prairie and Southdale Center in Edina. Locations at Ridgedale Center in Minnetonka and Crossroads Center in St. Cloud will open later this summer. "More people rely on the conveniences of communication technology today than ever before," said Jim Vogel, vice president of channel sales for Qwest. "By offering Qwest services, such as high-speed Internet and wireless phones, in a hands-on environment, we are bringing these choices closer to everyone and ensuring that the services are as easy to purchase as possible." Making Qwest services available at retail locations is another example of Qwest's Spirit of Service -- the company's commitment to deliver excellent service and the best value to customers every day. In addition, Qwest offers MyAccount services at http://www.qwest.com/-- which bring customer-friendly service tools to the Web -- including click-to-chat assistance and free online bill payment. Right now, Qwest customers with qualifying state or national plans can share their minutes with family or friends by adding an additional line to their plan for only $19.99 per month. Customers can add up to four additional phones to one plan and share the minutes. About Qwest Qwest Communications International Inc. (NYSE:Q) is a leading provider of voice, video and data services to more than 25 million customers. The company's 46,000 employees are committed to the "Spirit of Service" and providing world-class services that exceed customers' expectations for quality, value and reliability. At March 31, 2004, Qwest Communications International, Inc.'s balance sheet shows a stockholders' deficit of $1,251,000,000 compared to a deficit of $1,016,000,000 at December 31, 2003. RECYCLING SOLUTIONS: Case Summary & Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Recycling Solutions, Inc. 1871 Slaughter Road, Suite Q Madison, Alabama 35758 Bankruptcy Case No.: 04-83052 Type of Business: The Debtor is a waste systems company with services like recycling waste and improving material handling efficiencies. Chapter 11 Petition Date: July 2, 2004 Court: Northern District of Alabama (Decatur) Judge: Jack Caddell Debtor's Counsel: Kevin D. Heard, Esq. Heard & Heard, P.C. 307 Clinton Avenue West, Suite 200 Huntsville, AL 35801 Tel: 256 535-0817 Total Assets: $5,064,689 Total Debts: $1,248,775 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ First Commercial Bank Line of credit $244,651 First Commercial Bank Screen (Keep) $126,285 Secured Value: $120,000 Ryder Rental Transportations 1997 Freightliner $29,019 Service (Surrender) 1996 Freightliner (Surrender) Secured Value: $24,000 Ashburn Properties LLC Royalties $25,180 Thompson Caterpillar parts and repairs $23,128 (services rendered) Thompson CAT Repair and parts $21,121 Pace Industries Landfill $10,356 W.H. Thomas Oil Company Fuel $8,214 Fees & Burgess PC Legal fees $7,814 American Express #2 Credit card $7,651 First Commercial Bank Balance on account $7,493 (Surrender) White, Fleming & Company Accounting service $6,274 American Express #2 Credit card $5,446 Tire Centers LLC-Huntsville $5,097 TCI Tire repair $4,975 G. King Enterprises, Inc. Trucking $3,259 Extec Screens & Crushers $3,000 Southeast Joe Money Machinery Parts $2,886 First Insurance Funding Corp WC/property insurance $2,736 Madison Mobile Storage Truck repair $1,644 REMEDIATION FINANCIAL: Case Summary & Largest Unsecured Creditors ----------------------------------------------------------------- Debtor: Remediation Financial Inc. 3200 North Central Avenue, Suite 100 Phoenix, Arizona 85012 Bankruptcy Case No.: 04-11910 Type of Business: The Debtor is a real estate developer. Chapter 11 Petition Date: July 7, 2004 Court: District of Arizona (Phoenix) Judge: Redfield T. Baum Sr. Debtor's Counsel: Alisa C. Lacey, Esq. Stinson Morrison Hecker LLP 1850 North Central Avenue #2100 Phoenix, AZ 85004 Tel: 602-279-1600 Fax: 602-240-6925 Estimated Assets: More than $100 Million Estimated Debts: $10 Million to $50 Million Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Greenberg Traurig LLP Trade Debt $259,822 800 Connecticut Avenue NW Suite 500 Washington, DC 20006 Seebach & Seebach Trade Debt $231,392 Wolf Group, L.A. Trade Debt $86,451 Hewitt & O'Neil Trade Debt $56,343 Short, Crossman & Burgess Trade Debt $54,798 PLLC Ikon Office Solutions Trade Debt $53,976 Gilchrest & Rutter PC Trade Debt $31,863 Legalink Los Angeles Trade Debt $20,927 Digital Connect Trade Debt $19,942 Old Republic Title Agency Rent $15,421 A & E Court Reporters Trade Debt $8,138 McCutchen, Doyle, Brown & Trade Debt $6,895 Enersen, LLP Winter Reporting, Inc. Trade Debt $6,368 William E. Hoffman PC Trade Debt $3,000 Staples Credit Plan Trade Debt $2,710 California Deposition Trade Debt $1,854 Reporters The Superior Group Trade Debt $1,373 CSC Trade Debt $1,156 Franchise Tax Board Trade Debt $1,112 State of California Trade Debt $1,045 Franchise Tax Board ROANOKE TECH: Withdraws November 18, 2003 SB 2 Filing with SEC -------------------------------------------------------------- Roanoke Technology Corp. (OTCBB:RNKE) confirms that the company's attorney has been instructed to proceed with the withdrawal of the SB 2 filing made with the SEC on November 18, 2003. This filing was for the registration of 726,562,962 common shares, which will now remain available in Treasury, when the SEC's acceptance of this withdrawal application is obtained. Indirectly, this withdrawal has the positive effect of reducing the increase in the public float which would have occurred had the shares been utilized as originally envisaged. Roanoke Tech C.E.O., Mr. David Smith added, "Our attorney has confirmed that the withdrawal filing will be done in the next few days and confirmation will be announced once acceptance by the SEC is received." * * * As reported in the Troubled Company Reporter's May 3, 2004 edition, Roanoke Technology Corporation has suffered losses from operations and may require additional capital to continue as a going concern as the Company develops its new markets. Management believes the Company will continue as a going concern in its current market and is actively marketing its services which would enable the Company to meet its obligations and provide additional funds for continued new service development. In addition, management is currently negotiating several additional contracts for its services. Management is also embarking on other strategic initiatives to expand its business opportunities. However, there can be no assurance these activities will be successful. There is also uncertainty with regard to managements projected revenue being in excess of its operating expenditures for the fiscal year ending October 31, 2004. Items of uncertainty include the Company's liabilities with regard to its payroll tax liability in excess of $700,000 and its Small Business Administration loan with a principal balance of $270,807 plus accrued interest. The Company has been in default of these liabilities and has had negotiations regarding resolution of these matters. The outcome of these negotiations was uncertain as of October 31, 2003. If the Company is not successful in these negotiations or payment, there is substantial doubt as to the ability of the Company to continue as a going concern. On December 25, 2003 the Company negotiated an installment agreement with the Internal Revenue Service with regard to its payroll tax liability. The agreement calls for payments of $5,000 per month for 48 months with a balloon payment for the balance owed at the end of that period. The Company's President, Dave Smith, signed for personal liability of the Trust Fund portion in the amount of $321,840 plus penalties and interest should the Company default on these payments. Should the Company default on these payments and any other current tax compliance, the Company's property can be taken to satisfy the liability. During the year ended October 31, 2003, the Company often remained current with its monthly payment for its Small Business Administration loan. Of the $270,807 balance owed, the Company has a past due balance of $131,150. The lender holds the Company's furniture and equipment as collateral for this loan. SAXON ASSET: Fitch Takes Various Rating Actions on 1999-1 Notes --------------------------------------------------------------- Fitch Ratings has taken rating actions on the following Saxon Asset Securities Trust issues: Series 1999-1 group 1 --Class AF-5 affirmed at 'AAA'; --Class AF-6 affirmed at 'AAA'; --Class MF-1 affirmed at 'AA'; --Class MF-2 affirmed at 'A'; --Class BF-1 affirmed at 'BBB'; --Class BF-2 affirmed at 'BB' and removed from Rating Watch Negative; --Class BF-3 remains at 'CCC'. Series 1999-1 group 2: --Class MV-2 upgraded to 'AA' from 'A'; --Class BV-1 upgraded to 'A' from 'BBB'; --Class BV-2 affirmed at 'BB'; --Class BV-3 remains at 'CCC'. The positive rating actions on class MV-2 and class BV-1 of group 2 are being taken as a result of low delinquencies and losses, as well as increased credit support. The affirmations reflect credit enhancement consistent with future loss expectations. SHELTON CANADA: Completes First Tranche Offering ------------------------------------------------ Shelton Canada Corp. (TSX-V:STO) announces that it has completed the first tranche of an offering of up to 4,750,000 units by the sale of 2,040,500 Units at $0.30 per Unit pursuant to a short form offering document dated May 21, 2004 raising gross proceeds of $612,150. Each Unit consists of one common share and one flow through common share in the share capital of Shelton. First Associates Investments Inc. acted as agent for the Offering and received a cash commission of $39,615 representing its proportionate interest in a cash commission of 10% of the gross proceeds received by Shelton from the sale of the Units and an option to purchase 292,900 common shares, representing its proportionate interest in an agent's option to purchase 10% of the common shares and flow through common shares sold, exercisable at a price of $0.14 per common share for a period of 24 months from the closing of the Offering expiring July 7, 2006. Canaccord Capital Corporation acted as a sub-agent for the Offering and received a cash commission of $21,600 representing its proportionate interest in a cash commission of 10% of the gross proceeds received by Shelton from the sale of the Units and an option to purchase 115,200 common shares, representing its proportionate interest in an agent's option to purchase 10% of the common shares and flow through common shares sold, exercisable at a price of $0.14 per common share for a period of 24 months from the closing of the Offering expiring July 7, 2006. Shelton intends to use the proceeds from the Offering for exploration and development of the Corporation's oil and gas properties and general working capital. At February 29, 2004 Shelton Canada Corp.'s balance sheet shows a deficit of C$213,830 as compared to a deficit of C$164,697 at November 30, 2003. SLS INTERNATIONAL: Taps Kennell SAS as New Italian Distributor -------------------------------------------------------------- SLS International (OTC Bulletin Board: SITI) announced the selection of Kennell SAS as its new Italian distributor. Kennell SAS has over 25 years of service in the professional sound industry with a distribution that covers the entire national territory of Italy. "Our agreement with SLS International allows us to continue to provide our customers with the best quality speakers in the industry," said Luciano Biamino, director of programming and marketing. "Kennell SAS has always been a leader in the professional audio industry, providing our clients with the highest level of sound, performance and reliability. Our partnership with SLS International will be a wonderful advantage for us in our industry." The new SLS marketing campaign, designed to increase its worldwide distribution, is enhanced by the addition of Kennell SAS. SLS' recent agreement with Quincy Jones and high-profile installations has enhanced its penetration of foreign markets. The agreement will allow SLS International to pursue its interests in targeting international markets and will give it the capability to meet the needs of foreign distributors. "We are very excited about our partnership with Kennell SAS," said John Gott, president of SLS International. "Italy is a highly attractive market, and we believe the relationship with Kennell will allow us to quickly penetrate it, as they are one of the leading professional audio distributors in Italy." About SLS International, Inc. Based in Springfield, Mo., SLS International, Inc. is a 28-year- old manufacturer and developer of new patent-pending ultra-high fidelity ribbon driver loudspeakers and sound systems for the commercial, home entertainment, professional and music markets. SLS has perfected the ribbon-driver technology enabling their loudspeakers to achieve exceptional inner detail and accuracy with 20 to 30 percent less the distortion of typical compression driver and dome tweeters. SLS speakers and systems are used in high profile venues such as NBC/MSNBC's 2002 Olympics studios in Salt Lake City -- NBC is a wholly owned subsidiary of General Electric; MSNBC is jointly owned by GE and Microsoft Corporation -- the Recording Academy's Grammy Producers SoundTable events, and for the NAMM winter show, providing sound in the AVID Technology booth. For more information, visit http://www.slsloudspeakers.com * * * As reported in the Troubled Company Reporter's July 2, 2004 edition, SLS International Inc. has suffered losses from operations during the three months ended March 31, 2004 and the years ended December 31, 2003, 2002, and 2001. Its cash position may be inadequate to pay all of the costs associated with establishing a market for sales of its loudspeakers. Management intends to use borrowings and security sales to mitigate the effects of its cash position, however no assurance can be given that debt or equity financing, if and when required, will be available. On March 31, 2004, the Company's current assets exceeded current liabilities by $3,435,620, compared to an excess of current assets over current liabilities of $1,945,227, on December 31, 2003. Total assets exceeded total liabilities by $3,786,615, compared to an excess of total liabilities over total assets of $2,249,489 on December 31, 2003. The increased working capital was primarily due to the sale of 143,500 shares of Series B Preferred Stock for net proceeds of $2,561,250 in the first quarter of 2004. In addition to funding operations, the proceeds from such sales of stock allowed SLS to increase cash by $1,209,656, increase inventory by $258,068, increase net fixed assets by $45,920, and decrease accounts payable by $53,483. On March 31, 2004, the Company had a backlog of orders of approximately $50,000. However, SLS International has experienced operating losses and negative cash flows from operating activities in all recent years. The losses have been incurred due to the development time and costs in bringing its products through engineering and to the marketplace. The report of its accountants contains an explanatory paragraph indicating that these factors raise substantial doubt about SLS' ability to continue as a going concern. SPEEDWAY MOTORSPORTS: Closes $100M Senior Notes Private Placement ----------------------------------------------------------------- Speedway Motorsports, Inc. (NYSE:TRK) announced it closed on the private placement of $100 million 6 3/4% Senior Subordinated Notes Due 2013. The Company used the proceeds of the offering to finance the acquisition of North Carolina Speedway, which occurred on July 1. Speedway also announced that, on July 1, the United States District Court for the Eastern District of Texas approved the litigation settlement agreement among Speedway's shareholders, NASCAR, International Speedway Corporation (Nasdaq/NM:ISCA)(OTC BB:ISCB) and Speedway. The acquisition of North Carolina Speedway by the Company from ISC resulted from the settlement of the Ferko/Vaughan Litigation, in which shareholders of the Company sued NASCAR and ISC. The Notes have not been registered under the Securities Act of 1933 or any securities laws of any state or other jurisdiction and may not be offered or sold in the United States or any state or other jurisdiction absent registration or an applicable exemption from registration requirements. The issuance of the Notes was structured to allow secondary market trading under Rule 144A and Regulation S under the Securities Act of 1933. Speedway Motorsports is a leading marketer and promoter of motorsports entertainment in the United States. The Company owns and operates, in addition to North Carolina Speedway, the following premier facilities: Atlanta Motor Speedway, Bristol Motor Speedways, Infineon Raceway, Las Vegas Motor Speedway, Lowe's Motor Speedway, and Texas Motor Speedway. The Company provides souvenir merchandising services through its SMI Properties subsidiary, and manufactures and distributes smaller- scale, modified racing cars through its 600 Racing subsidiary. The Company also owns Performance Racing Network which broadcasts syndicated motorsports programming to over 725 radio stations nationwide. * * * As reported in the Troubled Company Reporter's July 2, 2004 edition, Standard & Poor's Ratings Services assigned its 'B+' rating to Speedway Motorsports Inc.'s Rule 144A offering of $100 million 6.75% senior subordinated notes due 2013. The offering is an addition to the company's 2003 $230 million senior subordinated notes issue. Also, Standard & Poor's affirmed its ratings on the Concord, North Carolina-based motorsports facilities owner and operator, including its 'BB' corporate credit rating. The rating outlook remains positive. "Upgrade potential would hinge on the company's ability to favorably renegotiate or extend its lucrative broadcasting contracts, which rights holders can opt out of at the end of 2006," said Standard & Poor's credit analyst Hal Diamond. "Over the intermediate term, we expect that the company will pursue acquisitions of additional tracks if the opportunity arises, which could result in a temporary increase in debt leverage." SPIEGEL GROUP: Enters Into CBA Termination Agreement ---------------------------------------------------- James L. Garrity, Jr., Esq., at Shearman & Sterling, LLP, in New York, informs the Court that the Spiegel Group Debtors are party to an existing collective bargaining agreement with Teamsters Union 743. At present, only 15 of the Debtors' employees are members of Teamsters Union 743. The Union Employees primarily provide support services to Spiegel Catalog, Inc. On April 20, 2004, the Debtors publicly announced, and separately advised Teamsters Union 743, that they were in preliminary negotiations with a party interested in purchasing the Spiegel Catalog business. The Debtors publicly cautioned that there was no assurance that any purchase transaction with respect to the Spiegel Catalog business would occur. The Debtors also publicly stated that there is uncertainty as to whether a potential buyer would assume the majority of the current Spiegel Catalog work force. Subsequently, the Debtors began to rationalize the Spiegel Catalog business to minimize the ongoing operating losses. These rationalization efforts included the initial layoff of approximately 145 Spiegel Catalog and Spiegel, Inc., employees, which took place over a two-month period beginning April 20, 2004. In light of their rationalization efforts, which will include the termination of employment for all Union Employees, the Debtors notified Teamsters Union 743 of the pending dissolution of the bargaining unit and offered to engage in negotiations regarding: (i) the termination of the Collective Bargaining Agreement; and (ii) providing additional compensation to Union Employees adversely effected by the layoffs. The parties negotiated in good faith with respect to these matters, and their agreement is set forth in a Collective Bargaining Agreement Termination and Release. Mr. Garrity states that the CBA Termination Agreement provides that the Collective Bargaining Agreement terminates for all purposes effective July 1, 2004, and that the obligation of Spiegel and Spiegel Catalog to recognize Teamsters Union 743 also simultaneously terminates on that date. Under the CBA Termination Agreement, Teamsters Union 743 stipulates and agrees that Spiegel and Spiegel Catalog have fully complied with all of their legal obligations, including those under the National Labor Relations Act, the Collective Bargaining Agreement and applicable law. In addition to the benefits provided under the Collective Bargaining Agreement on the termination of employment, each eligible current Union Employee will receive an additional lump sum bonus equal to $40 for each year of service, less deductions required by applicable law and the CBA Termination Agreement. Furthermore, any Union Employee who is actively enrolled in the Spiegel or Spiegel Catalog medical and dental plans will receive an additional six months of medical and dental coverage from the employment termination date. The Debtors have advised Teamsters Union 743 of their intent to materially modify or terminate all benefit plans for employees and retirees. Accordingly, the CBA Termination Agreement provides that if the applicable employee benefit plans are terminated during the six- month period, each applicable former Union Employee will receive a lump sum payment equal to the employer's pro-rated cost for the remainder of the six-month period, and "cost" will be determined in accordance with the provisions of Section 4890(B) of the Internal Revenue Code, less any deductions required by applicable law. To receive these benefits, a Union Employee will be required to execute a waiver and release. The Debtors estimate that the aggregate cost of these additional benefits provided pursuant to the CBA Termination Agreement is $45,000. Hence, the Debtors seek the Court's authority to enter into and perform under the CBA Termination Agreement. The Debtors note that Section 1113 of the Bankruptcy Code is not applicable as they are not seeking to either assume or reject a collective bargaining agreement. Instead, the Debtors have negotiated in good faith with Teamsters Union 743 and have agreed on the consensual termination of an existing collective bargaining agreement. Mr. Garrity notes that given the need to terminate all of the Union Employees in light of the Spiegel Catalog business sale, and given the burdens imposed by Section 1113 with respect to the rejection of a collective bargaining agreement, the CBA Termination Agreement reflects the valid exercise of the Debtors' business judgment to consensually terminate the Collective Bargaining Agreement. The Debtors contend that the cost of the additional benefits provided to the Union Employees under the CBA Termination Agreement are substantially less than the administrative costs and potential rejection claim that they would have incurred in connection with an attempt to reject the Collective Bargaining Agreement pursuant to Section 1113. Headquartered in Downers Grove, Illinois, Spiegel, Inc. -- http://www.spiegel.com/-- is a leading international general merchandise and specialty retailer that offers apparel, home furnishings and other merchandise through catalogs, e-commerce sites and approximately 560 retail stores. The Company filed for Chapter 11 protection on March 17, 2003 (Bankr. S.D.N.Y. Case No. 03-11540). James L. Garrity, Jr., Esq., and Marc B. Hankin, Esq., at Shearman & Sterling represent the Debtors in their restructuring efforts. When the Company filed for protection from its creditors, it listed $1,737,474,862 in assets and 1,706,761,176 in debts. (Spiegel Bankruptcy News, Issue No. 28; Bankruptcy Creditors' Service, Inc., 215/945-7000) STELCO INC: Will Publish Second Quarter 2004 Results on August 3 ---------------------------------------------------------------- The results for second quarter 2004 will be issued by press release early the afternoon of Tuesday, August 3, 2004. Conference Call And Webcast Courtney Pratt, President and Chief Executive Officer; Colin Osborne, Chief Operating Officer and Executive Vice President - Strategy; Bill Vaughan, Senior Vice President - Finance and Chief Financial Officer; and Hap Stephen, Chief Restructuring Officer, will host a conference call and Webcast to review Stelco's financial results for second quarter 2004. Date: Tuesday August 3, 2004 Time: 3:00 p.m. Local or Overseas: (416) 405-9328 North America: (800) 387-6216 The conference call and Webcast will be available on Stelco's Web site at http://www.stelco.ca/Please choose the "Investor Information" section and follow the link at the top of the page. Please log in at least 15 minutes prior to the call. For those unable to participate in the conference call, a taped rebroadcast will be available until midnight August 10, 2004. The numbers for the rebroadcast are: Local or Overseas: (416) 695-5800 North America: (800) 408-3053 Passcode: "STELCO" or 783526 As well, the conference call will be archived on Stelco's Web site at http://www.stelco.ca/To access the replay, choose the "Investor Information" section then select "Replay Quarterly Earnings Call" at the top of the page. Stelco, which is currently undergoing CCAA restructuring proceedings, is the largest steel producer in Canada, with both integrated and minimill production of rolled and manufactured steel products at multiple production sites. In 2000, Stelco shipped 4.7 million tons of steel, about one-quarter of Canadian consumption. The company has a broad product mix with an above- average amount of value-added. Stelco serves diverse markets but has high exposure to the auto industry, which represents about 40% of sales. The company has a competitive cost position in hot rolled sheet, particularly at its Lake Erie plant, and in bar products at its two minimills, and an average cost structure in other product lines produced at Hilton Works. Stelco has invested more than CDN$800 million since 1997 in its facilities to increase capacity, reduce costs, and improve operating efficiency and overall profitability. This is expected to result in higher operating margins in the future. ULTRALIFE BATTERIES: Secures New $25 Million Credit Facility ------------------------------------------------------------ Ultralife Batteries, Inc. (NASDAQ: ULBI) reported that it closed on a new secured credit facility, effective June 30, totaling $25 million. This new facility is comprised of a five-year $10 million term loan and a three-year $15 million revolving credit facility. This agreement replaces the company's $15 million credit facility that expired on June 30. On June 30 the company drew down the full $10 million term loan. The proceeds of the term loan, which is to be repaid in equal installments over five years, are to be used for the retirement of outstanding debt and capital expenditures. Availability under the revolving credit component is subject to various financial ratios whereas availability under the previous facility was limited by various asset values. The lenders of the new credit facility are JP Morgan Chase Bank and Manufacturers and Traders Trust Company, with JP Morgan Chase Bank acting as the administrative agent. John Kavazanjian, president and chief executive officer, said, "We are extremely pleased to form a financial partnership with two well-respected financial institutions. Our improved financial performance over the past 18 months has enabled us to obtain a broader, more flexible credit facility than we had previously, with a lower cost of borrowing, and based on Ultralife's financial performance. This new arrangement provides the financial backing to support our plans for continued growth into the future." About Ultralife Batteries, Inc. Ultralife is a leading developer, manufacturer, and marketer of standard and customized lithium primary (non-rechargeable), lithium ion and lithium polymer rechargeable batteries. Ultralife's high-energy batteries use advanced lithium technology and are used in military, industrial and consumer portable electronic products. Through its range of standard products and ability to customize for a wide range of applications, Ultralife is able to provide the next generation of battery solutions. OEM, retail and government customers include Energizer, Kidde Safety, Philips Medical Systems, Radio Shack and the national defense agencies of the United States and United Kingdom, among others. Ultralife's headquarters, principal manufacturing and research facilities are in Newark, New York, near Rochester. Ultralife (UK) Ltd., a second manufacturing and research facility, is located in Abingdon, U.K. Both facilities are ISO-9001 certified. * * * In its Form 10-Q for the quarterly period ended March 27, 2004, Ultralife Batteries, Inc. reports: "As of March 27, 2004, cash and cash equivalents totaled $1,136,000, excluding restricted cash of $51,000. During the three months ended March 27, 2004, the Company provided $373,000 of cash in operating activities as compared to using $62,000 for the three months ended March 29, 2003, mainly due to the increase in net income offset by an increase in inventory due to higher production volumes. In the three months ended March 27, 2004, the Company used $501,000 to purchase plant, property and equipment, a decrease of $858,000 from the prior year's capital expenditures. This decrease was mainly attributable to the timing of various projects. During the three month period ended March 27, 2004, the Company generated $404,000 in funds from financing activities. The financing activities included inflows from the issuance of stock, mainly as stock options were exercised during the period, and outflows resulting from a reduction in the Company's revolving loan balance. During the first three months of 2004, the Company issued 464,125 shares of common stock as a result of exercises of stock options and warrants. The Company received approximately $2,759,000 in cash proceeds as a result of these transactions. "The Company continues to be optimistic about its future prospects and growth potential. However, the recent rapid growth of the business has created a near-term need for certain machinery, equipment and working capital in order to enhance capacity and build product to meet demand. The recent positive financial results during 2003 have enhanced the Company's ability to acquire additional financing. The Company continually explores various sources of capital, including utilizing its unleveraged assets as collateral for additional borrowing capacity, issuing new or refinancing existing debt, and raising equity through private or public offerings. Although it is evaluating these alternatives, the Company believes it has the ability over the next 12 months to finance its operations primarily through internally generated funds, or through the use of additional financing that currently is available to the Company. "The Company typically offers warranties against any defects due to product malfunction or workmanship for a period up to one year from the date of purchase. The Company also offers a 10-year warranty on its 9-volt batteries that are used in ionization-type smoke detector applications. The Company provides for a reserve for this potential warranty expense, which is based on an analysis of historical warranty issues. While the Company believes that its current warranty reserves are adequate, there is no assurance that future warranty claims will be consistent with past history. In the event the Company's experiences a significant increase in warranty claims, there is no assurance that the Company's reserves are sufficient. This could have a material adverse effect on the Company's business, financial condition and results of operations." UNITED AIRLINES: Agrees To Settle Tax Disputes With Louisiana ------------------------------------------------------------- The United Airlines Inc. Debtors want to settle certain tax disputes with the State of Louisiana Department of Revenue. Before the Bankruptcy Petition Date, United Air Lines, Inc., sought a refund of sales taxes paid to Louisiana under protest by filing a lawsuit against the Louisiana Department of Revenue. The lawsuit is captioned United Airlines, Inc. v. Brett Crawford, Secretary of the Department of Revenue, State of Louisiana, and was filed in the 19th Judicial District Court, State of Louisiana, No. 467,527, Division N. The lawsuit serves as the Debtors' petition for a $1,343,676 refund. The Debtors also filed three lawsuits with the Louisiana Board of Tax Appeals seeking to recover sales taxes paid on their jet fuel purchases: (1) United Airlines, Inc. v. Ralph Slaughter, Secretary, Department of Revenue and Taxation, State of Louisiana, BTA Docket No. 4211; (2) United Airlines, Inc. v. Ralph Slaughter, Secretary, Department of Revenue and Taxation, State of Louisiana, BTA Docket No. 4249; and (3) United Airlines, Inc. v. State of Louisiana, BTA Docket No. 4570. To resolve these matters and avoid protracted litigation, the parties agree that the LDR will refund $200,000 of the sales taxes, which will be remitted to Elkins, plc's trust account. Of this amount, $100,000 will be paid to Elkins for professional services and legal fees, and $100,000 will be paid to the Debtors. The Debtors will dismiss all claims connected to the Litigation. 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) US AIRWAYS: Will File Annual Reports On Benefits Plans Late ----------------------------------------------------------- US Airways Group, Inc., will file its Annual Reports on Form 11-K for the year ended December 31, 2003 for these employee benefits plans late: 1. The US Airways, Inc. 401(k) Savings Plan for Pilots, 2. The US Airways, Inc. Employee Savings Plan, and 3. The US Airways, Inc. 401(k) Savings Plan. In three Form 12b-25s filed with the Securities and Exchange Commission on June 28, 2004, Anita P. Beier, Senior Vice President, Corporate Controller of US Airways Group, explains that the airline won't be able to file its Annual Report within the prescribed time period without unreasonable effort or expense due to unforeseen delays in the collection and review of information and documents affecting the disclosures in the Annual Report. (US Airways Bankruptcy News, Issue No. 58; Bankruptcy Creditors' Service, Inc., 215/945-7000) US UNWIRED: Will Continue to Manage IWO Holdings through 2005 ------------------------------------------------------------- US Unwired Inc. (OTCBB:UNWR) announced that it, the board of directors of IWO Holdings, Inc., and IWO's senior lenders have reached an agreement under which US Unwired would continue to manage IWO through 2005. IWO may extend the agreement through 2006. The pact also addresses US Unwired's compensation for its management services that has been on a cost-sharing basis to date. The new agreement allows US Unwired to charge a fixed fee for operating the company plus additional fees for assisting in IWO's restructuring. US Unwired also has the opportunity to earn bonuses for meeting pre-set operating targets or lending managerial support for a successful restructuring. Either party may terminate the agreement, but IWO would pay termination fees to exercise its rights while US Unwired would be obligated to perform pre-defined transitions services should it exercise its rights. "We are very pleased, despite that IWO's financial condition will likely force it to file bankruptcy soon, that the IWO Holdings board of directors and its senior lenders have recognized the tremendous progress we have made with the company. We have worked hard to improve IWO's operations and preserve its cash. Over the past year, we have grown IWO's subscriber base by 7% while decreasing its per-user operating costs by 25%. Our efforts can be summarized by last quarter's financial results, when IWO posted $6.8 million in EBITDA, $9.3 million more than in the same period last year," said Robert Piper, US Unwired's President and Chief Executive Officer. About US Unwired US Unwired Inc., headquartered in Lake Charles, La., holds direct or indirect ownership interests in five PCS Affiliates of Sprint: Louisiana Unwired, Texas Unwired, Georgia PCS, IWO Holdings and Gulf Coast Wireless. Through Louisiana Unwired, Texas Unwired, Georgia PCS and IWO Holdings, US Unwired is authorized to build, operate and manage wireless mobility communications network products and services under the Sprint brand name in 68 markets, currently serving over 650,000 PCS customers. US Unwired's PCS territory includes portions of Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Oklahoma, Tennessee, Texas, Massachusetts, New Hampshire, New York, Pennsylvania, and Vermont. US Unwired Inc. traded on the OTC Bulletin Board under the symbol "UNWR". For more information on US Unwired and its products and services, visit the company's web site at http://www.usunwired.com/ * * * As reported in the Troubled Company Reporter's June 23, 2004 edition, Standard & Poor's Ratings Services raised its corporate credit rating on wireless carrier US Unwired Inc. to 'CCC+' from 'CCC-'. The subordinated debt rating was raised to 'CCC-' from 'C'. These ratings were removed from CreditWatch, where they were placed with positive implications on June 2, 2004, following the company's announcement of its refinancing plan and recent operating improvement, including better customer retention and cash flow growth. The upgrades are based on financial profile improvement from 3(a)(9) debt for equity exchanges, together with the company's recent offerings of $125 million senior secured first-priority floating rate notes due 2010 and $233.4 million in senior secured second-priority notes due 2012. The 'CCC+' rating on the first-priority notes and the 'CCC-' rating on the second- priority notes were affirmed. The ratings outlook is positive. USA TELECOM: Changes Name to ZannWell Inc. ------------------------------------------ USA Telcom Internationale (OTCBB:USTC) announced that it has filed a Certificate of Amendment to its Articles of Incorporation which will effectuate a change of the Company's name to ZannWell Inc., effective June 30, 2004. The Board of Directors and a majority of the stockholders have approved the Certificate of Amendment. There is no stock split concurrent with the name change, however there is a new CUSIP number and a new NASD assigned stock symbol; ZWLL. The Company's stock will begin trading under the new symbol as of July 8, 2004. About Zannwell ZannWell Inc. is a Business Development Corporation with a primary focus on medical entities. A ZannWell website will be available in the near future. Contact information: ir@zannwell.com * * * In its Form 10-QSB for the quarterly period ended March 31, 2004, filed with the Securities and Exchange Commission, USA Telecom Internationale reports: "The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has had a change in control and has changed its business plan and it has not generated any revenues. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its new business opportunities. Management plans to research possible acquisitions of various entities and an officer of the Company has agreed to loan the Company funds as needed to sustain business for a period of twelve months. However, the Company is dependent upon its ability to secure equity and/or debt financing and there are no assurances that the Company will be successful, without sufficient financing it would be unlikely for the Company to continue as a going concern. "These conditions raise substantial doubt about the Company's ability to continue as a going concern. These financial statements do not include any adjustments that might arise from this uncertainty." WINSTAR: Seven Adversary Proceedings Reassigned to Judge Lindsey ---------------------------------------------------------------- In Winstar Communications, Inc.'s chapter 11 proceedings, Judge Rosenthal reassigns the adversary proceedings commenced by Christine C. Shubert, the Chapter 7 Trustee, against seven trade creditors to the Honorable Paul B. Lindsey, a visiting judge from the District Court of Oklahoma: Defendants Case No. ---------- -------- Bravo Technical Resources, Inc. 03-52782 Carrier Access Corporation 03-52605 Dorf Construction Co., Inc. 03-51963 Fidelity Engineering Corp. 03-52026 Hewlett Packard Company 03-52072 Intelicent, Inc. 03-52712 Roediger Construction, Inc. 03-52963 (Winstar Bankruptcy News, Issue No. 57; Bankruptcy Creditors' Service, Inc., 215/945-7000) WORLDCOM INC: Asks Court to Disallow Karin Johnson's $1M+ Claim --------------------------------------------------------------- The Worldcom Inc. Debtors ask the Court to disallow Karin Johnson's claim in their cases. Ms. Johnson was the Debtors' sales person servicing the account of Velocita Corporation. Ms. Johnson was removed from the Velocita Account effective April 21, 2001, and her employment with the Debtors terminated on June 7, 2001. Amy R. Miller, Esq., at Stinson Morrison Hecker, in Kansas City, Missouri, relates that Ms. Johnson filed a complaint against the Debtors in the Circuit Court of the State of Oregon for the County of Multnomah on March 5, 2002, alleging breach of contract, a statutory wage claim and quantum meruit or unjust enrichment. The Action was later removed to the United States District Court for the District of Oregon on April 5, 2002. The Debtors filed a request to dismiss the claims on April 12, 2002. On June 18, 2002, the Oregon District Court dismissed Ms. Johnson's quantum meruit or unjust enrichment claim. As of the Petition Date, Ms. Johnson had two claims remaining -- a breach of contract claim and a statutory wage claim. Ms. Johnson filed Claim No. 11453 against the Debtors, asserting unpaid compensation for services performed beginning January 1, 2000 relating to the Velocita Account, and attached her State Court Complaint. The Claim incorporates the allegations of the Complaint. In the Complaint and in the Claim, Ms. Johnson asserts that she is owed all the commissions she would have earned on the Velocita Account had her employment with the Debtors continued past the Removal Date of the Complaint and her Employment Termination Date. Ms. Johnson says that she is owed $1,444,110 in commissions. The terms and conditions of Ms. Johnson's commissions with the Debtors were contained in the 2001 Emerging Markets Account Manager II Compensation Plan and the 2001 Emerging Markets Account Manager Compensation Plan Policy Document, both effective February 1, 2001. According to Ms. Miller, the Debtors began billing the Velocita Account on May 22, 2000. Subsequently, Velocita stopped paying its invoiced charges. After defaulting in the payment of amounts owing to the Debtors, Velocita filed its own Chapter 11 bankruptcy petition on May 30, 2002, in the United States Bankruptcy Court for the District of New Jersey. In the Velocita case, the Debtors filed a claim for $951,889 for unpaid prepetition services. The Debtors continued to provide services to Velocita after May 30, 2002. Velocita ultimately sold its assets to AT&T pursuant to Section 363 of the Bankruptcy Code. After the AT&T sale, the Debtors were left with a $1,452,459 additional postpetition claim. The amounts still remain unpaid. Pursuant to the Debtors' Compensation Plan Policy, "[n]o commissions or bonuses will be paid on revenue billed from accounts more than 90 days past due." Moreover, "[c]ommissions and bonuses are not earned for sales where the customer does not pay the invoiced charges. . . ." Ms. Miller tells the Court that the invoice charges for the Velocita Account are at least 365 days past due. The Debtors have no reason to believe that they will ever receive any distribution on account of the Velocita Claim in the Velocita Case. Thus, Ms. Miller argues, Ms. Johnson would not be entitled to any commissions because the account was more than 90 days past due. Furthermore, if Ms. Johnson had remained assigned to the Velocita Account in 2001, and earned commissions after the Removal Date and the Termination Date, she would not be entitled to retain any commissions or bonuses on the account because Velocita did not pay the invoiced charges. Pursuant to the Policy, any commissions that had been paid on the account could be charged back by the Debtors because the revenue was not collected. Because Velocita did not pay any of the invoiced charges, Ms. Johnson is not eligible to receive any commissions on the account, or to retain any that had been paid. Consequently, the Debtors' records do not indicate that Ms. Johnson is entitled to any commissions with respect to the Velocita account. 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) W.R. GRACE: Zonolite Claimants Provide Status Report ---------------------------------------------------- According to William D. Sullivan, Esq., at Elzufon Austin Reardon Tarlov & Mondell, PA, in Wilmington, Delaware, the major issue involving the Zonolite Attic Insulation Claimants that needs to be resolved by discussion or decision is how the ZAI claims can be addressed in a way that facilitates W.R. Grace & Co.'s reorganization. While there are scientific disputes about the precise amount of asbestos in a typical bag of ZAI, the precise amount of asbestos released from different disturbances of ZAI, the amount of ZAI that must be removed to accomplish home improvements safely, and so on, these issues are all subsidiary to the major unresolved issues -- the inevitability of ZAI abatement costs for millions of homes and the need to address these costs in the Debtors' bankruptcy cases. Mr. Sullivan relates that the differences between the ZAI Claimants and the Grace Debtors on the major issues are relatively small and primarily concern the timing of ZAI removal. While some favor the removal of ZAI before it is disturbed, "virtually everyone" agrees that ZAI must be removed with special precautions and expense before remodeling or other significant disturbance. Thus, the question becomes how to provide appropriate abatement assistance to ZAI homeowners, many of whom will not confront a necessity to remove ZAI for years, while providing Grace the certainty of a dollar figure that can be incorporated into a reorganization plan. The ZAI Claimants believe that the pragmatic solution is to structure a ZAI claims resolution facility through the vehicle of the pending certified ZAI class action and the proposed national class action that was awaiting certification when Grace filed for bankruptcy protection. Even using a conservative estimate of 1,000,000 homes with ZAI, and a $3,000 to $5,000 per home cost to remove ZAI by vacuum truck, the total cost of that effort would be $3 billion to $5 billion. Under virtually any scenario, the value of the ZAI claims alone exceeds the value of the estate. The ZAI Claimants understand that the Debtors' bankruptcy will require them to "accept a significant discount on their claims." As the ZAI Claimants obtain additional information on removal costs and methods, they will pass this information on to Grace. If Grace discovers additional information concerning its sales patterns and distribution, the ZAI Claimants expect that Grace would share that, as it has in the past. The ZAI Claimants believe that, while a negotiated resolution with Grace is possible, Grace's inability to date to deal with the asbestos personal injury claims has been an impediment to reorganization. Mr. Sullivan understands that Grace attributes this to intransigence by the PI Committee, but the ZAI Claimants have not been privy to those discussions. However, if the Court can fashion a plan that will eliminate the impasse over the unimpaired personal injury disputes, the ZAI Claimants believe that good faith on both sides can lead to a resolution of the ZAI claims. (W.R. Grace Bankruptcy News, Issue No. 65; Bankruptcy Creditors' Service, Inc., 215/945-7000) * Davis Wright Tremaine Adds Corporate Diversity Counseling Team ---------------------------------------------------------------- Davis Wright Tremaine LLP (DWT), a national law firm with more than 400 lawyers, announced that its Washington, DC office has added one of the premier diversity counseling practices in the country to its Employment-related Services group. Weldon H. Latham, John M. Bryson II and Michael R. Hatcher, three partners formerly with Holland & Knight LLP, have joined DWT effective immediately. The addition makes DWT one of only a few law firms in the country with a dedicated comprehensive corporate diversity counseling practice. "We are very pleased to have this opportunity," Latham said. "Our group is dedicated to helping major national and international employers achieve real and effective diversity within their companies. DWT's Employment-related Services group shares our commitment and vision. We look forward to building on the firm's existing strengths to offer our clients an even more complete service." "We are very excited to have Weldon, John and Michael -- the Corporate Diversity Counseling Group -- on board, their special expertise will greatly enhance the services that DWT can provide to its clients" said Mary E. Drobka, chair of DWT's employment law practice. "The group's experience counseling some of the country's best known corporations on diversity issues has made them an acknowledged leader in this field," said Richard D. Ellingsen, DWT's firm-wide Managing Partner. "Opportunities to add three extraordinarily talented attorneys who add instant value are rare and we didn't hesitate to recruit them when given the chance. We have always had an impressive group of attorneys in our Employment-related Services practice, and we are even stronger today." Latham's group is considered one of the premier providers of diversity counseling services in the country, often assisting the nation's largest companies on compliance issues, diversity, and high-profile litigation matters. Their clients have included General Motors, Boeing, and Eastman Kodak. The group was instrumental in engineering Texaco's discrimination settlement in 1997; and Coca-Cola's settlement with its African-American employees in 2002 and more importantly, assisting each client's executive management to substantially enhance the company's diversity programs, performance and profile. Latham is a nationally recognized leader in corporate diversity counseling, having represented a wide range of clients, including several additional Fortune 500 companies. He has assisted corporations in developing "best practice" diversity initiatives, and comprehensive diversity action plans addressing a range of issues from executive management and workforce diversity to minority business procurement/supplier diversity programs as well as community outreach programs. Latham regularly writes and speaks to corporate executives and business and trade associations on diversity initiatives, preventative measures, avoiding a diversity crisis, and related subjects. He currently serves as the chair of Deloitte & Touche's Diversity Advisory Board; an adjunct professor at Georgetown University Law Center, teaching a seminar on corporate diversity counseling; a columnist for both Profiles in Diversity Journal and the Minority Business Entrepreneur magazine and serves on the boards of the Joint Center for Political and Economic Studies, Washington Metropolitan Airports Authority and the Congressional Black Caucus Corporate Advisory Board. Bryson is nationally known for representing large companies in complex civil litigation and alternative dispute resolutions, and counseling executives on corporate compliance matters, conducting internal investigations, and advising clients on corporate policies, practices and management decision-making processes and programs. Hatcher's practice includes counseling and crisis management services for corporate clients seeking to enhance their corporate diversity performance. This representation includes reviewing existing policies and procedures, and recommending enhancements to the structure and management of diversity programs. With the addition of the three attorneys, DWT now has 23 attorneys in its Washington, DC office. The firm represents a number of national clients, including Microsoft Corporation, Starbucks Coffee Company, Calpine Corporation, and Bank of America. About Davis Wright Tremaine LLP DWT is a full service business and litigation law firm with more than 400 attorneys in its nine offices located in Anchorage; Bellevue, Wash.; Seattle; Portland, Ore.; Los Angeles; San Francisco; New York; Washington D.C.; and Shanghai, China. * BOOK REVIEW: Transnational Mergers and Acquisitions in the United States ----------------------------------------------------- Author: Sarkis J. Khoury Publisher: Beard Books Softcover: 292 pages List Price: $34.95 Own your personal copy at http://www.amazon.com/exec/obidos/ASIN1587981505/internetbankrupt Review by Gail Owens Hoelscher Transnational Mergers and Acquisitions in the United States will appeal to a wide range of readers. Dr. Khoury's analysis is valuable for managers involved in transnational acquisitions, whether they are acquiring companies or being acquired themselves. At the same time, he provides a comprehensive and large-scale look at the industrial sector of the U.S. economy that proves very useful for policy makers even today. With its nearly 100 tables of data and numerous examples, Khoury provides a wealth of information for business historians and researchers as well. Until the late 1960s, we Americans were confident (some might say smug) in our belief that U.S. direct investment abroad would continue to grow as it had in the 1950s and 1960s, and that we would dominate the other large world economies in foreign investment for some time to come. And then came the 1970s. Whereas in 1958 European and Japanese firms held 25 percent of the assets of the world's top industrial firms, by 1978 that figure had soared to more than 65 percent. In 1970, U.S. investment abroad stood at $78 billion, in contrast to only $13 billion in foreign investment in the U.S. In 1978, however, only eight years later, foreign investment in the U.S. had skyrocketed to nearly $41 billion, about half of it in acquisition of U.S. firms. Foreign acquisitions of U.S. companies grew from 20 in 1970 to 188 in 1978. The tables had turned and Americans were worried. Acquisitions in the banking and insurance sectors were increasing sharply, which in particular alarmed many analysts. Thus, when it was first published in 1980, this book met a growing need for analytical and empirical data on this rapidly increasing flow of foreign investment money into the U.S, much of it in acquisitions. Khoury answers many of the questions arising from the situation as it stood in 1980, many of which are applicable today: What are the motives for transnational acquisitions? How do foreign firms plan, evaluate, and negotiate mergers in the U.S.? What are the effects of these acquisitions on competition, money and capital markets; relative technological position; balance of payments and economic policy in the U.S.? To begin to answer these questions, Khoury researched foreign investment in the U.S. from 1790 to 1979. His historical review includes foreign firms' industry preferences, choice of location in the U.S. and methods for penetrating the U.S. market. He notes the importance of foreign investment to growth in the U.S., particularly until the early 20th century, and that prior to the 1970s, foreign investment had grown steadily throughout U.S. history, with lapses during and after the world wars. Khoury found that rates of return to foreign companies were not excessive. He determined that the affect on the U.S. economy was generally positive and concluded that restricting the inflow of direct and indirect foreign investment would hinder U.S. economic growth both in the short term and long term. He found no compelling reason to restrict the activities of multinational corporations in the U.S. from a policy perspective. And, it didn't take all that long for him to be proven right. Japan, Inc. is gone and direct foreign investment never really made a significant impact on the huge U.S. economy. Khoury's research broke new ground and provided input for economic policy at the right time. Sarkis J. Khoury holds a Ph.D. in International Finance from Wharton. He teaches finance and international finance at the University of California, Riverside, and serves as the Executive Director of International Programs at the Anderson Graduate School of Business. ********* Monday's edition of the TCR delivers a list of indicative prices for bond issues that reportedly trade well below par. Prices are obtained by TCR editors from a variety of outside sources during the prior week we think are reliable. Those sources may not, however, be complete or accurate. The Monday Bond Pricing table is compiled on the Friday prior to publication. Prices reported are not intended to reflect actual trades. Prices for actual trades are probably different. Our objective is to share information, not make markets in publicly traded securities. Nothing in the TCR constitutes an offer or solicitation to buy or sell any security of any kind. It is likely that some entity affiliated with a TCR editor holds some position in the issuers' public debt and equity securities about which we report. Each Tuesday edition of the TCR contains a list of companies with insolvent balance sheets whose shares trade higher than $3 per share in public markets. At first glance, this list may look like the definitive compilation of stocks that are ideal to sell short. Don't be fooled. Assets, for example, reported at historical cost net of depreciation may understate the true value of a firm's assets. A company may establish reserves on its balance sheet for liabilities that may never materialize. The prices at which equity securities trade in public market are determined by more than a balance sheet solvency test. A list of Meetings, Conferences and Seminars appears in each Wednesday's edition of the TCR. Submissions about insolvency- related conferences are encouraged. Send announcements to conferences@bankrupt.com. Each Friday's edition of the TCR includes a review about a book of interest to troubled company professionals. All titles are available at your local bookstore or through Amazon.com. Go to http://www.bankrupt.com/books/to order any title today. Monthly Operating Reports are summarized in every Saturday edition of the TCR. For copies of court documents filed in the District of Delaware, please contact Vito at Parcels, Inc., at 302-658-9911. For bankruptcy documents filed in cases pending outside the District of Delaware, contact Ken Troubh at Nationwide Research & Consulting at 207/791-2852. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Frederick, Maryland USA. Yvonne L. Metzler, Bernadette C. de Roda, Rizande B. Delos Santos, Paulo Jose A. Solana, Jazel P. Laureno, Aileen M. Quijano and Peter A. Chapman, Editors. Copyright 2004. All rights reserved. ISSN: 1520-9474. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR subscription rate is $675 for 6 months delivered via e- mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 240/629-3300. *** End of Transmission ***