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/raid1/www/Hosts/bankrupt/TCR_Public/040719.mbx T R O U B L E D C O M P A N Y R E P O R T E R Monday, July 19, 2004, Vol. 8, No. 148 Headlines A.B.DICK: Court Approves First-Day Orders & Interim DIP Financing ACCREDO HEALTH: S&P Rates $550 Mil. Sr. Secured Facility at BB AGILENT TECHNOLOGIES: Wins Exclusive Rights to Sell SSI's CyberLAB AIR CANADA: Jazz Flight Attendants Ratify Labour Agreement AIR CANADA: Judge Farley Approves CN$250 Million Cerberus Deal AIRCRAFT TOOLING: Case Summary & 20 Largest Unsecured Creditors AIRNET COMMS: BDO Seidman Replaces Deloitte & Touche as Auditors ARLINGTON HOSPITALITY: Engages Financial and Strategic Advisor ARMSTRONG HOLDINGS: Sells Land Next To Wave Facility For $275,000 ASPECT COMMS: Reports $91 Million Second Quarter Revenues ASPEN TECHNOLOGY: FTC Publishes Proposed Settlement Agreement AVIGEN INC: Implements Restructuring Plan & Reducing Headcount BAYVIEW FINANCIAL: Fitch Affirms Low-B Ratings of 4 Classes BIOTRANSPLANT: Liquidating Chapter 11 Plan Took Effect April 26 BOYDS COLLECTION: Dennis Brando Leaves Post as VP-Merchandising BREUNERS HOME: Seeks to Retain Keen in Real Estate Disposition CALPINE CORP: Broadcasts Second Quarter Earnings Call on August 5 CATHOLIC CHURCH: Seeks Approval To Employ Schwabe As Counsel CENTERPOINT ENERGY: Reschedules Q2 2004 Webcast to August 6 CHALK MEDIA: TELUS Communications Inc. Provides Title Sponsorship CHAPCO CARTON CO: Case Summary & 20 Largest Unsecured Creditors CITYSCAPE CORPORATION: Fitch Downgrades Class B-1F Ratings to CCC CONSECO INC: Appoints Dewey Ingham as Executive Vice President-HR COVANTA ENERGY: Court Extends Unsecured Claims Objection Deadline CRESCENT REAL: Declares Q2'04 Common & Preferred Share Dividends DATATEC SYSTEMS: Senior Credit Facility Increased & Extended DIGITAL LIGHTWAVE: Expands Worldwide Distribution With Telmaco EL CAPITAN: James Ricketts & Bill Weeks Join Board of Directors ENDURANCE SPECIALTY: Closes $250 Million Senior Debt Offering ENRON CORP: Ask Court Okay To Sell Jefferson Lot To Golden Pass ENRON: Employee Committee Comments on Bankruptcy Plan Approval EQUIFIN INC: Begins Trading in the Over-the-Counter Market FALCON HOSPITALITY: Hires Marcus & Millichap as Estate Broker FLEMING COMPANIES: Court Okays Dunigan Committee Settlement FLINTKOTE COMPANY: Members of Asbestos Claimants Committee Named FRANK'S NURSERY: Names Walter Spokowski as New President & CEO GMAC COMMERCIAL: Fitch Affirms Low Ratings of Classes J To P GROUPE BOCENOR: Creditors Consent to Canadian BIA Proposal GTC BIOTHERAPEUTICS: Refinances $10 Million Credit Facility HARRAH'S: Fitch Affirms BB+ Sr. Subordinated Debt Ratings HIGH ROCK HOLDING: Case Summary & 6 Largest Unsecured Creditors INFRASTRUCTURE SERVICE: Case Summary & 19 Unsecured Creditors IPIX CORP: Reports $3.6 Million Net Loss in 1st & 2nd Quarters JIM RICH ENTERPRISES: Case Summary & Largest Unsecured Creditors J NET ENTERPRISES: InterWorld Corp. Subsidiary files for Chapter 7 KING SERVICE INC: Case Summary & 20 Largest Unsecured Creditors LA QUINTA: Fitch Affirms Sr. Unsecured Ratings at BB- MIRANT CORP: Court Okays Simpson's Withdrawal as Committee Counsel MORGAN STANLEY: Fitch Affirms Low Ratings on 6 Classes NAVITRAK INT'L: Extends Closing Date For Sale To Blackstone NESS ENERGY: Says $946,000 2nd Quarter Gross Income Highest Ever NEW HEIGHTS: U.S. Trustee Names 3-Member Creditors' Committee NEWMARKET TECHNOLOGY: Acquires 25% Interest in RedMoon Broadband NEXEN INC: Generates Solid Second Quarter Financial Results NEXTEL COMMS: Subsidiary Re-Finances Secured Debt Facility NIR DIAGNOSTICS: Shareholders Approve New CME Telemetrix Name OCWEN RESIDENTIAL: Fitch Downgrades Class B-2 Ratings to CCC OGLEBAY NORTON: Closes on $305 Mil. Debtor-in-Possession Financing ORDERPRO LOGISTICS: Subsidiary Reports 63% Increase in Revenues PARMALAT GROUP: Expands Scope of Lazard Freres' Retention PARMALAT USA: Farmland Agrees to Sell Milk Products of Alabama PARMALAT USA: Martin Margherio Sits as Farmland Dairies' New COO PENTON MEDIA: Stockholders Reelect Directors & Approve Accountants PG&E NATIONAL: Exclusive Plan Period Extended to Sept. 16 PLEJ'S LINEN: Committee Taps Poyner as North Carolina Counsel RELIANCE GROUP: Court Okays Sale of 26-Acre Lot to TC MidAtlantic SHAW GROUP: Reports $10 Million Net Income in Third Quarter SOLUTIA INC: Court Extends Plan Proposal Period to Oct. 12 SAINT AMBROSE APARTMENTS: Voluntary Chapter 11 Case Summary TELEWEST COMMUNICATIONS: Completes Financial Restructuring TITAN INTERNATIONAL: S&P Hangs Junk Rating on Sr. Sub. Notes TRANSTECHNOLOGY: June 27 Stockholders' Deficit Widens to $4.5M US AIRWAYS: Flight Attendants to Discuss Cost-Saving Alternatives WOMEN FIRST: Wants Until September 27 to Make Lease Decisions WORLDSPAN LP: Bolsters Unique Supplier Content in Canada * BOND PRICING: For the week of July 19 - July 23, 2004 ********* A.B.DICK: Court Approves First-Day Orders & Interim DIP Financing ----------------------------------------------------------------- A.B.Dick Company said that U.S. Bankruptcy Judge Charles G. Case II of the United States Bankruptcy Court for the District of Delaware has approved "first-day" motions presented by the Company, including orders allowing the Company to continue to pay salaries, wages and benefits and honor pre-petition obligations to its employees, and orders authorizing the Company to honor its customers' maintenance contracts. The Court also gave the Company interim approval to borrow up to $3.194 million from a $7 million debtor-in-possession credit facility being provided to the Company by Presstek, Inc. and KeyBank National Association. The DIP credit facility also provides A.B.Dick Company with the ability to use proceeds from its pre-petition and post-petition receivables to fund its continuing operations through the Section 363 sale proceedings. The orders provide the Company with the liquidity necessary to continue operations without disruption and meet its obligations to its suppliers, customers and employees during the Chapter 11 process. A final hearing on approval for use of the entire DIP facility has been set for August 5, 2004. On July 13, 2004, A.B.Dick, a privately held, worldwide supplier of equipment and supplies to the graphic arts and printing industry, filed a voluntary petition for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code, along with its parent company, Paragon Corporate Holdings, Inc., and the Paragon subsidiaries Interactive Media Group and Multigraphics LLC. A.B.Dick at the same time has signed a purchase agreement with Presstek, Inc. (Nasdaq: PRST), for Presstek to acquire the business and assets of A.B.Dick, subject to Court approval. During the Chapter 11 and sale process, A.B.Dick and all its units will continue to manufacture and deliver products and provide services to customers as usual. A.B.Dick has retained H. Jeffrey Schwartz and John A. Gleason of Benesch, Friedlander, Coplan & Aronoff LLP as debtor counsel, Candlewood Partners LLC as financial adviser, and Squire Sanders & Dempsey LLP as special corporate counsel. Presstek, Inc. is a leading manufacturer and marketer of environmentally responsible high-tech digital imaging solutions to the graphic arts and laser imaging markets. For more information on Presstek, visit http://www.presstek.com/or call 603-595-7000 or email: info@presstek.com. A.B.Dick Company celebrates 120 years as a leading worldwide supplier to the graphic arts and printing industry in 2004. It manufactures and markets equipment and supplies for all stages of document creation -- pre-press, press and post-press -- and provides continuing service and support. ACCREDO HEALTH: S&P Rates $550 Mil. Sr. Secured Facility at BB -------------------------------------------------------------- Standard & Poor's Ratings Services assigned a 'BB' senior secured debt rating to the proposed $550 million senior secured credit facility of specialty pharmaceutical distributor Accredo Health Inc. The proposed facility consists of a $175 million revolving credit facility due 2009 and a $375 million term loan B due 2011. Standard & Poor's has assigned a recovery rating of '2' to the entire $550 million facility. This rating indicates Standard & Poor's expectations of a substantial recovery of principal in the event of a default. At the same time, Standard & Poor's affirmed its 'BB' corporate credit rating on the company. The outlook is stable. Proceeds from the proposed offering will be used to refinance a prior credit facility and to fund operations and future acquisitions. After the transaction, Accredo will have $550 million of rated debt. "The speculative-grade ratings on Accredo reflect concerns about the company's concentration on a single, highly competitive business segment, specialty pharmaceuticals," said Standard & Poor's credit analyst Arthur Wong. "The ratings also reflect the company's exposure to reimbursement rate cuts and the risks inherent in its acquisition activity. These concerns are tempered by the prospects of increasing demand for specialty pharmaceutical services, the promise of an increasing number of biotech drug approvals, the company's successful track record of operating success, and its moderate financial profile." Memphis, Tennessee-based Accredo holds a leading position in the estimated $7 billion specialty pharmacy business. The company serves patients with chronic diseases, who, though small in number, account for a significant share of all health care costs. Drugs for these patients are very expensive and mainly consist of injectable medications for incurable chronic conditions. Because the drugs are typically provided for a lifetime of treatment, they offer the company a sustained, highly visible revenue stream. Accredo competes not only on service but also on the price advantage it offers its customers. It is able to buy from manufacturers at these lower prices because of its large purchasing volume in specific therapeutic categories. Accredo derives approximately 35% of its revenues from the sale of hemophilia products and intravenous immunoglobin. AGILENT TECHNOLOGIES: Wins Exclusive Rights to Sell SSI's CyberLAB ------------------------------------------------------------------ Agilent Technologies Inc. (NYSE:A) and Scientific Software Inc. signed an exclusive agreement for Agilent to market, sell and support SSI's industry-leading CyberLAB Enterprise Content Management System. Agilent will market the product under its new family name -- Agilent Cerity -- to the pharmaceutical, chemical, petrochemical, forensic, environmental, homeland security, and food and beverage markets. "The addition of CyberLAB is a key part of our strategy to provide a family of software solutions that address the complete lifecycle of analytical information, from data acquisition to knowledge management and retention," said Jim Miller, director of software for Agilent's Life Sciences and Chemical Analysis business. "This will enable scientists to collaborate across laboratory operations, linking information from a wide range of analytical instrumentation and data sources." Currently used by leading pharmaceutical and chemical companies worldwide, CyberLAB ECMS is a Web-based electronic library that collects, organizes, indexes, stores, archives and shares electronic records -- from raw analytical instrument data and reports to compliance records, MS Office documents, PDF documents, molecular drawings, pictures and video. CyberLAB automatically extracts searchable metadata from each of the files, and provides powerful search capabilities and embedded viewers for many file types. As a result, knowledge workers find information faster and make more informed decisions. Agilent's current portfolio of laboratory software includes the Agilent Cerity chromatography data system and ChemStation analytical workstations, which are used to acquire, process and report data from analytical instruments. Agilent has also established a series of application integrations that provide open and seamless interfaces to enterprise resource planning and laboratory information management systems. With the addition of CyberLAB, Agilent can provide customers with a portfolio of software for information management in the laboratory and beyond. "With a reputation for outstanding customer service and knowledge of laboratory operation and informatics that spans the instrument- to-enterprise level, Agilent is an ideal partner for SSI," said Dr. Soheil Saadat, president and CEO of Scientific Software, Inc. "We are excited that CyberLAB will now be more accessible to Agilent's 22,000 life sciences and chemical customers worldwide, and we are fully committed to satisfying the needs of current and future customers together with Agilent as a strategic channel partner." Existing and new CyberLAB customers will benefit from extended support, worldwide consulting and validation services from Agilent as a single-source provider. Under the agreement, Scientific Software maintains intellectual property rights to CyberLAB ECMS and will continue to focus on new product development as well as work with technology partners to develop integrations with enterprise applications such as eNotebook, LIMS, ERP and established vendors of analytical instrumentation. More information about CyberLAB is available on Agilent's Web site at http://www.agilent.com/chem/CerityECMS About Scientific Software, Inc. Scientific Software, Inc. is a world leader in the development, sale and support of enterprise content management solutions to help organizations better manage the complete lifecycle of business information. Scientific Software, Inc. is based in Pleasanton, Calif. Further information about Scientific Software, Inc. and its products is available at www.scisw.com or at 1-800- 588-8878. About Agilent Technologies Agilent Technologies Inc. (NYSE:A) is a global technology leader in communications, electronics, life sciences and chemical analysis. The company's 28,000 employees serve customers in more than 110 countries. Agilent had net revenue of $6.1 billion in fiscal year 2003. Information about Agilent is available on the Web at http://www.agilent.com/ * * * As reported in the Troubled Company Reporter's May 27, 2004 edition, Standard & Poor's Ratings Services revised its outlook on Palo Alto, California-based Agilent Technologies Inc. to positive from negative. The 'BB' corporate credit and senior unsecured debt ratings were affirmed. The outlook revision reflects a strengthening operating profile, as evidenced by significant improvements in profitability and a return to revenue growth in recent quarters, combined with a liquid balance sheet. "Agilent has sharply improved its profitability over the past three quarters following an extended period of losses. A continuation of current operating performance could result in a higher rating within a few quarters," said Standard & Poor's credit analyst Joshua Davis. The ratings on Agilent continue to reflect volatility in profitability resulting from a three-year downturn in overall operating performance and challenges in gearing the company's cost structure to the reduced revenue levels. This partially is offset by a broad and diverse business profile, entrenched positions in test and measurement and other segments, and relatively strong balance sheet liquidity. Agilent serves the communications, electronics, and life science markets with test, measurement, and other instruments, and also makes semiconductor products. AIR CANADA: Jazz Flight Attendants Ratify Labour Agreement ---------------------------------------------------------- Air Canada Jazz announced that with the ratification of its flight attendant labour agreement all Jazz collective agreements have been ratified. These agreements are part of the $200 million annual labour cost realignment required to satisfy the Deutsche Bank Standby Purchase Agreement and the GE Capital Aviation Services Global Restructuring Agreement. The Ontario Supreme Court had granted Air Canada Jazz flight attendants, represented by Teamsters Canada, an extension to complete the ratification process. Air Canada Jazz employs approximately 600 flight attendants. "This is a very significant milestone, as it clears the way for Jazz to focus on our future and to move ahead with finalizing the expansion of our regional jet fleet," said Joseph D. Randell, President and Chief Executive Officer for Air Canada Jazz. Canadian Air Lines Dispatch Association, representing Air Canada Jazz dispatchers, was the first to ratify its collective agreement on May 16th. Agreements have also been ratified by Air Canada Jazz's 1000 pilots represented by the Air Line Pilots Association International, 800 maintenance and engineering employees, 600 customer and aircraft services staff, and 20 crew schedulers represented by Canadian Auto Workers. "All Jazz employees have made significant sacrifices during this challenging period and have pulled together to achieve this positive outcome," said Joseph Randell. "We are very optimistic about things to come at Jazz. I sincerely thank our flight attendants for recognizing the importance of this deal and for supporting Jazz's future." Air Canada Jazz is Canada's second largest airline, operating a fleet of over 90 aircraft to over 70 destinations in Canada and the United States. 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: Judge Farley Approves CN$250 Million Cerberus Deal -------------------------------------------------------------- At the Applicants' behest, Mr. Justice Farley approves the CN$250,000,000 equity investment agreement Air Canada signed with Cerberus ACE Investment, LLC, an affiliate of Cerberus Capital Management, L.P. Cerberus, a New York-based private investment firm, will invest in the convertible preference shares of ACE Aviation Holdings, Inc., the new parent holding company of Air Canada. The convertible preference shares will be convertible into common shares at the option of Cerberus and will, initially upon issuance, be convertible into 9.16% of the common equity of Air Canada. The investment will be effected as part of the Applicants' Plan of Compromise and Arrangement. The Applicants initially solicited bids from 18 potential private equity investors in accordance with the Equity Protocol approved by the CCAA Court. The potential investors conducted detailed due diligence during May and June 2004. The Applicants determined that Cerberus' offer is the best. The 9.16% common equity ownership represented by the convertible preference shares to be issued upon the Applicants' exit from the CCAA proceedings is materially lower than the target 12% initially established under the Equity Protocol. Therefore, the initial conversion terms of the Investment Agreement are less dilutive -- and hence, more favorable -- to the Applicants' creditors. Based on the financial analysis prepared by Seabury Securities, LLC, the Applicants' financial advisor, the annual accretion in the value of the convertible preference shares will increase the potential common equity ownership on an as-converted basis to (i) 10.4% on the anniversary date at the end of the second year after issuance and (ii) 12.9% on maturity at the end of the seventh year after issuance in the event the convertible preference shares are not otherwise converted under the terms of the Investment Agreement before that time. Seabury illustrates the allocation of equity, on an as-converted basis, upon the Applicants' emergence: Stakeholder/Investor Approx. Equity Allocation -------------------- ------------------------- Creditors (from claims) 45.80% Rights Offering/Deutsche Bank 42.00% Cerberus (initial) 9.20% Management Options 3.00% Current Shareholders 0.01% Ernst & Young, Inc., the Court-appointed Monitor, recommended the approval of the Cerberus investment. The Ad Hoc Unsecured Creditors' Committee supports the Investment Agreement. The major terms of the Investment Agreement are: Pricing: $250 million preference share investment for the equivalent of 9.16% of the fully diluted common share equity of ACE on an as-converted basis on exit from CCAA. Capital Structure: Three classes of equity: (1) ACE Preference Shares -- issued to Cerberus; (2) ACE Variable Voting Common Shares -- issued to non-Canadian creditors; and (3) ACE Voting Common Shares -- issued to Canadian creditors. Accretion: Non-cash accretion of 5.0% per annum compounded semi-annually. Term: Seven years with up to six 6-month extension periods, in certain circumstances, to a maximum term of ten years. Conversion: Convertible at the option of Cerberus at any time at a premium of 35% over the buy-in price, adjusted downward to a premium of 30% after one year. Mandatory conversion at the option of ACE in the event that the common stock trades above 200% of the conversion price for 30 consecutive trading days during the first year. Mandatory conversion at the option of ACE in the event that the common stock trades above 175% of the conversion price for 30 consecutive trading days after the first year. Mandatory Redemption: Mandatory conversion into common shares after seven years unless the stock price has been trading at less than the then accreted value, which would result in Cerberus not being required to convert and a reduction in the conversion price of 3.75%. After the seventh year anniversary, the evaluation process is repeated every 6 months -- conversion is mandatory unless the common stock price has been trading at less than the then accreted value, which would result in Cerberus not being required to convert and a further reduction in the conversion price of 3.75% in each successive 6-month period up to 10 years. Cerberus has the right to require ACE to redeem preference shares in cash at the accreted value on the 10th anniversary. No redemption at the option of Air Canada. Lock-Up Period: A 24-month lock-up period unless forced conversion takes place, which results in a lock-up restriction remaining on 50% of the shares. Governance: Cerberus has a non-transferable right to designate three persons to the 11-member Air Canada Board of Directors. Board designation threshold reduced in the event Cerberus sells below 75% and 50% of its initial stake after two years. Material Conditions: To be satisfied or waived by Closing: (1) The GE Capital Exit Financing and other GE Capital financing arrangements will be completed on terms not materially inconsistent with the current terms; (2) Deutsche Bank will not have terminated its obligations under the Standby Purchase Agreement pursuant to the occurrence of a material adverse change; (3) All necessary regulatory approvals will have been obtained; (4) Consummation of the rights offering will take place contemporaneously; and (5) All necessary approvals for the Plan will have been obtained as necessary. Closing: Closing on the date of consummation of the Rights Offering. Termination: (1) By either party, if the parties are in mutual agreement or if the Closing does not occur by December 31, 2004; (2) By Cerberus, if Air Canada's closing conditions are not fulfilled; or (3) By Air Canada, if Cerberus' closing conditions are not fulfilled. Expenses and Fees: The Applicants will pay: -- $250,000 in monthly fees from July 1, 2004 until the Closing; and -- the balance of all reasonable unpaid fees and expenses associated with Cerberus' investment in Air Canada. 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. 41; Bankruptcy Creditors' Service, Inc., 215/945-7000) AIRCRAFT TOOLING: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Aircraft Tooling, Inc. 11250 Luna Drive Dallas, Texas 75229 Bankruptcy Case No.: 04-37704 Type of Business: The Debtor provides aircraft repair services. See http://www.atirepairstation.com/ Chapter 11 Petition Date: July 15, 2004 Court: Northern District of Texas (Dallas) Judge: Harlin DeWayne Hale Debtor's Counsel: Mark Ian Agee, Esq. Mark Ian Agee, P.C. 5207 McKinney Avenue, Suite 16 Dallas, TX 75205 Tel: 214-320-0079 Total Assets: $1,725,577 Total Debts: $1,055,807 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Jeremy Jackson Litigation $1,000,000 c/o Law Office of Joel Fineberg 3811 Turtle Creek Blvd., Suite 1900 Dallas, TX 75219 GMAC Bankruptcy Dept. Purchase Money $15,240 United Healthcare Insurance $15,099 The Trident Company Services $4,488 Boeing Commercial Airplane Services $4,140 American Express Credit Card $3,125 Genie Products, Inc. Services $3,039 Campbell Grinding & Machine, Services $2,643 Inc. A.I. Credit Corp. Services $909 Citibank Advantage Services $831 Bay State Surface Services $720 Technologies, Inc. T.P.I. Reagan, Inc. Services $708 Home Depot Credit Services Services $604 Metroplex Welding Supply Services $538 Bron Tapes of Texas, Inc. Services $435 Federal Express Services $344 Cingular Wireless Services $317 Bodycote Thermal Processing, Services $309 Inc. Cingular Wireless Services $254 Dun & Bradstreet Services $215 AIRNET COMMS: BDO Seidman Replaces Deloitte & Touche as Auditors ---------------------------------------------------------------- AirNet Communications Corporation (Nasdaq:ANCC), the technology leader in software defined base station products for wireless communications appointed BDO Seidman, LLP as the Company's independent auditors for the year ending December 31, 2004. The appointment of BDO was approved by AirNet's Audit Committee following a thorough and comprehensive evaluation process, a review of BDO's qualifications, and proposed audit scope and fees. Commenting on the appointment of BDO Seidman, Dr. George Calhoun, Chairman of the Board and Audit Committee for AirNet Communications, said: "We are pleased to engage BDO Seidman as independent auditors for AirNet Communications. We believe they possess the requisite base of industry experience required by our business. We also believe that BDO will prove to be an excellent fit for AirNet relative to their fees, the scope of their services, and their ability to fully serve the needs of a company of our size." On June 2, 2004, AirNet Communications said Deloitte & Touche LLP would be replaced. The change in accountants was not the result of any disagreement between AirNet and Deloitte & Touche on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedures. Deloitte & Touche has agreed to assist the Company in effecting an efficient transition to BDO. About BDO Seidman, LLP BDO Seidman, LLP is a national professional services firm providing assurance, tax, financial advisory and consulting services to private and publicly traded businesses. For more than 90 years, BDO has provided quality service and leadership through the active involvement of its most experienced and committed professionals. BDO Seidman serves clients through more than 35 offices and 250 independent alliance firm locations nationwide. As an independent member firm of BDO International, BDO Seidman serves clients by leveraging a global distribution network of resources comprised of nearly 600 member firm offices in 99 countries. About AirNet AirNet Communications Corporation is a leader in wireless base stations and other telecommunications equipment that allow service operators to cost-effectively and simultaneously offer high-speed wireless data and voice services to mobile subscribers. AirNet's patented broadband, software-defined AdaptaCell(R) SuperCapacity(TM) adaptive array base station solution provides a high-capacity base station with a software upgrade path to high- speed data. The Company's AirSite(R) Backhaul Free(TM) base station carries wireless voice and data signals back to the wireline network, eliminating the need for a physical backhaul link, thus reducing operating costs. The Company's RapidCell(TM) base station provides government and military communications users with up to 96 voice and data channels in a compact, rapidly deployable design capable of processing multiple GSM protocols simultaneously. AirNet has 69 patents issued or filed and has received the coveted World Award for Best Technical Innovation from the GSM Association, representing over 400 operators around the world. More information about AirNet by visiting the AirNet Web site at http://www.airnetcom.com/ * * * As reported in the Troubled Company Reporter's March 10, 2004 edition, AirNet Communications Corporation announced that its auditors, Deloitte & Touche LLP, had informed the Company that its independent auditors' report issued with the Company's financial statements as of and for the year ended December 31, 2003 will include a paragraph that describes conditions that give rise to substantial doubt about the Company's ability to continue as a going concern. This paragraph is consistent with the going-concern paragraph received by the Company in fiscal years 2001 and 2002. Such conditions and management's plans concerning those matters will be disclosed in the annual financial statements included in Form 10-K. ARLINGTON HOSPITALITY: Engages Financial and Strategic Advisor -------------------------------------------------------------- Arlington Hospitality, Inc. (Nasdaq/NM:HOST), a hotel development and management company, said Houlihan Lokey Howard & Zukin is providing investment banking services in connection with reviewing Arlington's business plan and related strategies for the purpose of assisting Arlington in optimally structuring and obtaining new debt or equity financing as needed. However, there can be no assurance as to the availability and form of such financing, and whether this financing will be on terms acceptable to the company. About Arlington Hospitality Arlington Hospitality, Inc. is a hotel development and management company that builds, operates and sells mid-market hotels. Arlington is the nation's largest owner and franchisee of AmeriHost Inn hotels, a 106-property mid-market, limited-service hotel brand owned and presently franchised in 20 states and Canada by Cendant Corporation (NYSE:CD). Currently, Arlington Hospitality, Inc. owns or manages 58 properties in 15 states, including 52 AmeriHost Inn hotels, for a total of 4,221 rooms, with additional AmeriHost Inn & Suites hotels under development. About Arlington Hospitality Arlington Hospitality, Inc. is a hotel development and management company that builds, operates and sells mid-market hotels. Arlington is the nation's largest owner and franchisee of AmeriHost Inn hotels, a 106-property mid-market, limited-service hotel brand owned and presently franchised in 20 states and Canada by Cendant Corporation (NYSE: CD). Currently, Arlington Hospitality, Inc. owns or manages 58 properties in 15 states, including 52 AmeriHost Inn hotels, for a total of 4,221 rooms, with additional AmeriHost Inn & Suites hotels under development. * * * In its Form 10-Q for the quarterly period ended March 31,2004 filed with the Securities and Exchange Commission, Arlington Hospitality, Inc. reports: Liquidity And Capital Resources "The net cash flow from the operations of many of our hotels has been insufficient to support their related mortgage debt payments, or lease payments, primarily to PMC, as well as necessary and ongoing capital expenditures. In addition, our hotel development activity for joint ventures has also decreased over the past two years, with only one joint venture project completed in 2003 and one joint venture project completed thus far in 2004. As a result, the cash flow from all of our business segments, with the largest amount funded by the sale of hotel properties, has been utilized to maintain liquidity and meet the line-of-credit availability reductions. A smaller amount has been used for investment in new hotel development. "We believe that during the next twelve months, in order to maintain our liquidity, it is critical for us to continue to sell hotel properties. In addition, we seek to increase income from our existing hotel properties by focusing on new revenue enhancement opportunities, and aggressive cost controls. We believe that an upturn in the economy will result in increased demand for hotel rooms, including ours, and such upturn could result in significantly improved hotel operating results. However, historically we have seen that lodging demand trends will typically lag six to nine months behind any such economic trends. We have also been in discussions with PMC requesting a reduction in our subsidiary's monthly lease payment and other modifications. "In addition to our normal operational and growth oriented liquidity needs, other contingencies may also have a significant impact on us, including the impact of seasonality on our hotel operations and hotels sales, and the inability to pay off mortgage loans when maturing. "Our hotels are seasonal in nature, with the second and third calendar quarters being the strongest from a cash flow standpoint, and the fourth and first calendar quarters being the weakest. In addition, the buyers of our hotels tend to purchase hotels on a seasonal basis, wanting to acquire the property just in time for the stronger summer season. As the sale of hotel properties is a critical part of our liquidity, our inability to sell during the winter months could have a negative impact on our liquidity, if we do not generate strong cash flow from our other segments, or if we do not have adequate financing sources. "We believe our revenues, together with proceeds from financing activities, will continue to provide the necessary funds for our short-term liquidity needs. However, material changes in these factors, including factors that could inhibit our ability to sell hotels under acceptable terms and within certain time frames, or ability to secure new hotel level or corporate level debt, may adversely affect net cash flows. Such changes, in turn, would adversely affect our ability to fund debt service, lease obligations, capital expenditures, and other liquidity needs. In addition, a material adverse change in our cash provided by operations may affect the financial performance covenants under our unsecured line of credit and certain mortgage notes. ARMSTRONG HOLDINGS: Sells Land Next To Wave Facility For $275,000 ---------------------------------------------------------------- Judge Fitzgerald allows Armstrong World Industries, Inc. to sell, free and clear of liens, claims and encumbrances, a vacant land located in Baltimore County, Maryland, to Millers Island Propeller, Inc., and pay a 6% commission to CB Richard Ellis, the real estate broker connected with the sale. Upon closing, the Broker has agreed to provide Armstrong Realty Group, a wholly owned subsidiary of AWI, with a rebate equal to 20% of the commission. AWI owns a parcel of land located at 5301 North Point Boulevard in Baltimore County. AWI bought the property in November 1985 to establish a manufacturing facility. The property is made up of: (1) approximately 10 acres of land that contains a manufacturing facility and other improvements; and (2) a vacant lot of approximately 6.56 acres located at the north end of the property. The vacant property has never been used or leased by AWI. The improved property is currently leased by AWI to Worthington Armstrong Venture, a joint venture owned by AWI and Worthington Industries, Inc. Wave has outgrown the manufacturing facility located on the Baltimore property, and consequently did not renew its lease. This lease will terminate under its own terms in the fourth quarter of 2004. By January 2004, AWI could see that it had no future use for the vacant property and determined to sell it. In March 2004, AWI employed CB Richard Ellis to provide brokerage services in connection with the sale of the property. Millers owns a parcel of land that is adjacent to the vacant property. Millers manufactures marine propellers and associated marine products on the adjacent property, and intends to use AWI's vacant property to expand its existing manufacturing facility. AWI and the broker believe that there is a limited market for the vacant property, and that this sale is by far the best available. The Purchase Terms The purchase price for the vacant property is $275,000, or $41,920.73 per acre. The purchase price will be paid in the form of a $5,000 deposit, paid to the Broker when the sale agreement was signed. The balance of the closing price will be paid at closing. Millers has 60 days after the Court authorizes the sale to conduct due diligence to determine that: (1) the property is suitable for its intended uses; (2) public water and sewer are available to the vacant property, or that the vacant property will be approved by the applicable governmental authorities for the installation of a well or private sewage disposal system; (3) other public utilities, including public water, gas, sewer, electricity and telephone service are available to the vacant property; and (4) existing or proposed zoning, subdivision, environmental, and other laws and regulations existing or formally proposed, or other pertinent information will allow it to use the vacant property for heavy industrial purposes. If, during the due diligence period, a defect is discovered, Millers will notify AWI and provide an opportunity for cure. If no cure is had, the proposed sale is void and the deposit will be returned to Millers. 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) ASPECT COMMS: Reports $91 Million Second Quarter Revenues --------------------------------------------------------- Aspect Communications Corporation (Nasdaq: ASPT), a leading provider of enterprise customer contact solutions, reported financial results for the second quarter ended June 30, 2004. Second Quarter Financial Results Revenues for the second quarter of 2004 totaled $91.0 million compared to $89.4 million for the second quarter last year and $91.5 million for the first quarter of 2004. Product revenue in the second quarter of 2004 was $29.9 million compared to $27.5 million for the second quarter last year and $28.1 million for the first quarter of 2004. Services revenue totaled $61.1 million in the second quarter compared to $61.9 million for the second quarter last year and $63.4 million for the first quarter of 2004. Net income attributable to common shareholders for the second quarter was $12.2 million or a profit of $0.15 per share on a basic and fully diluted basis. This compares with a net income attributable to common shareholders of $4.5 million or a profit of $0.06 per share for the second quarter of 2003 and a net income attributable to common shareholders of $13.4 million or a profit of $0.17 per share for the first quarter of 2004. "While it is still a complex economic environment, I am pleased with the strong growth we demonstrated this quarter in software revenues, both sequentially and year-over-year," said Gary Barnett, Aspect President and CEO. "We are also pleased with important new customer wins made possible by key new products delivered this quarter. This represents the beginning of the rollout of our Uniphi solution that will continue through the remainder of the year." For the second quarter of 2004, gross margins were 60%. This compares to 56% for the second quarter of 2003 and 61% for the first quarter of 2004. Operating expenses were $38.4 million for the second quarter of 2004 compared to $41.4 million for the same period last year and $37.9 million in the first quarter of 2004. Cash, cash equivalents, and short-term investments totaled $212.4 million as of June 30, 2004. This compares to $195.0 million as of March 31, 2004. During the second quarter, the company generated $21.7 million in cash from operations. Accounts receivable at quarter-end totaled $37.3 million and days sales outstanding were 30 days compared to 33 days at March 31, 2004. Second Quarter Operational Highlights During the first quarter Aspect received significant revenue from customers across a variety of industry segments. Some of these Aspect customers included: Accent Marketing Services, AMICA Insurance, CitiCorp North America, Comcast Cable, Garlands, Gerling, HealthNet, Royal Bank of Scotland, StarTek, Inc., and Washington Mutual. Business Outlook The following statements are forward-looking, and actual results may differ materially: -- The company is planning for third quarter total revenue to be the same as or grow slightly from the second quarter. -- The company expects Q3 gross margins to remain generally consistent with Q2 levels. Variability in gross margin percentages is dependent upon, among other factors, the mix and volume of revenues. -- Operating expenses for the third quarter are expected to be in a range of $37 million to $39 million. About Aspect Communications Aspect Communications Corporation is a leading provider of contact center solutions and services that enable businesses to manage and optimize customer communications. Aspect's global customer base includes more than two-thirds of the Fortune 50 and leading corporations in a range of industries, including transportation, financial services, insurance, telecommunications, retail and outsourcing, as well as large government agencies. The company's leadership is based on 18 years of expertise. Aspect is headquartered in San Jose, Calif., with 24 offices in 11 countries around the world. * * * As reported in the Troubled Company Reporter's May 19, 2004 edition, Standard & Poor's Ratings Services raised its corporate credit rating on San Jose, California-based Aspect Communications Corp to 'B+' from 'B'. The outlook is stable. "The rating action is based on a strengthened financial profile following several quarters of improved profitability and free operating cash flow generation resulting from cost cutting actions. The company has also recently refinanced its funded debt, pushing maturities out until 2007," said Standard & Poor's credit analyst Ben Bubeck. The ratings on Aspect Communications Corp reflect a limited revenue base and an inconsistent earnings record, combined with a difficult IT spending environment. These factors are partially offset by improved cost controls that have restored profitability and adequate financial flexibility. ASPEN TECHNOLOGY: FTC Publishes Proposed Settlement Agreement ------------------------------------------------------------- The Proposed Consent Decree to settle the proceedings brought against Aspen Technology, Inc. (Nasdaq: AZPN) regarding its acquisition of Hyprotech, Ltd., has been accepted for public comment by the commissioners of the Federal Trade Commission. Final approval of the consent decree will be determined after a 30-day public comment period. "We are very pleased to obtain this initial acceptance of a settlement agreement that would resolve the proceeding and eliminate the ongoing uncertainty and associated legal expenses of this case," said David McQuillin, President and CEO of AspenTech. "Under the agreement, we would be able to continue to sell and develop our comprehensive offering of process industry software products, including key products we acquired with the acquisition of Hyprotech. We believe this settlement is on terms favorable to AspenTech, its customers and its shareholders, and we are eager to move forward to maintain our commitments to customers to provide consistently excellent products, services, support and new innovations." Under the proposed settlement agreement, AspenTech would agree to sell its operator training services business and rights to the Hyprotech product line to an FTC-approved buyer. AspenTech would otherwise retain rights to continue selling and developing all of the engineering software products acquired in its acquisition of Hyprotech, such as the HYSYS family of products, but not including AXSYS. AspenTech would retain all of its other products with the exception of the OTISS product. Additionally, AspenTech has entered into a definitive agreement to sell its assets and business related to the AXSYS product line to Bentley Systems, which is expected to close within the next ten days. The order will not become final until after the commissioners issue their final approval following the public comment period. AspenTech would then be allowed to complete a sale to an FTC- approved buyer within a 60-to-90 day timeframe, as set out in the Proposed Consent Decree. If AspenTech does not complete a transaction within the relevant time periods, then the FTC may appoint a trustee to carry out the process. "Regardless of the identity of the final buyer, AspenTech will continue to have full rights to all of our key engineering software products," continued Mr. McQuillin. "This important settlement means that our customers will continue to benefit from the delivery of our products, and we will work hard to maintain the level of services, support, and product investment our customers have come to expect from AspenTech." After the 30-day public comment period is completed, the FTC commissioners will make a final decision on the settlement. The FTC decision would be automatically effective upon their final determination which would be published. "Through our extensive efforts we have been able to work out a positive settlement that has avoided a divesture of Hyprotech," said David McQuillin. "Our product roadmap and enterprise operations management (EOM) vision remains intact and we look forward to continuing to deliver software solutions that provide our customers sustainable value for their businesses." About AspenTech Aspen Technology, Inc. provides industry-leading software and implementation services that enable process companies to increase efficiency and profitability. AspenTech's engineering product line is used to design and improve plants and processes, maximizing returns throughout an asset's operating life. Its manufacturing/supply chain product line allows companies to increase margins in their plants and supply chains, by managing customer demand, optimizing production, and streamlining the delivery of finished products. These two offerings are combined to create solutions for enterprise operations management (EOM), integrated enterprise-wide systems that provide process manufacturers with the capability to dramatically improve their operating performance. Over 1,500 leading companies already rely on AspenTech's software, including Aventis, Bayer, BASF, BP, ChevronTexaco, Dow Chemical, DuPont, ExxonMobil, Fluor, Foster Wheeler, GlaxoSmithKline, Shell, and Total. For more information, visit http://www.aspentech.co/ * * * In its Form 10-Q for the quarter ended March 31, 2004, Aspen Technology, Inc. reports: Liquidity and Capital Resources "During the nine months ended March 31, 2004, operating activities provided $40.8 million of cash primarily due to income from operations, our commitment to both the aggressive collection of receivables and the increased sale of receivables, partially offset by the continuing cash payments related to the ongoing proceedings in connection with the anti-trust claims filed by the Federal Trade Commission, or FTC, with respect to our acquisition of Hyprotech, Ltd., and our previous restructuring charges. Investing activities used $5.8 million of cash primarily as a result of the capitalization of computer software development costs and the ordinary purchases of property and equipment, partially offset by the proceeds from the sale of land in December 2003. Financing activities provided $27.0 million of cash primarily due to the proceeds from the Series D financing, partially offset by pay-off of amounts owed to Accenture and repurchase and retirement of $24.4 million of the convertible debentures. "We believe our current cash balances, availability of sales of our installment contracts, availability under the Silicon Valley Bank line of credit and cash flows from our operations will be sufficient to meet our working capital and capital expenditure requirements for at least the next 12 months. However, we may need to obtain additional financing thereafter or earlier, if our current plans and projections prove to be inaccurate or our expected cash flows prove to be insufficient to fund our operations because of lower-than-expected revenues, unanticipated expenses or other unforeseen difficulties, due to normal operations or FTC-related costs. In addition, we may seek to take advantage of favorable market conditions by raising additional funds from time to time through public or private security offerings, debt financings, strategic alliances or other financing sources. Our ability to obtain additional financing will depend on a number of factors, including market conditions, our operating performance and investor interest. These factors may make the timing, amount, terms and conditions of any financing unattractive. They may also result in our incurring additional indebtedness or accepting stockholder dilution. If adequate funds are not available or are not available on acceptable terms, we may have to forego strategic acquisitions or investments, reduce or defer our development activities, or delay our introduction of new products and services. Any of these actions may seriously harm our business and operating results." AVIGEN INC: Implements Restructuring Plan & Reducing Headcount -------------------------------------------------------------- Avigen, Inc. (Nasdaq: AVGN) has implemented a plan to restructure the Company and reduce staff levels. The restructuring is consistent with the Company's recent decision to halt patient enrollment in the Coagulin-B trial for the treatment of hemophilia-B and its newly realigned product development strategy focused on serious neurological disorders. Avigen continues to work with the Food and Drug Administration (FDA) to facilitate the initiation of a Phase I trial of AV201, its product candidate for the treatment of Parkinson's disease. However, the restructuring is also driven by longer than previously anticipated clinical development timelines for AV201. Avigen will reduce its workforce by 38 employees, or approximately 39%. "The steps we are taking are intended to extend our financial resources to support longer than expected clinical development timelines while retaining our core competencies and leadership position in adeno-associated virus (AAV) gene delivery technology. We are disappointed to lose such a dedicated group of valued employees, but considering our decision to halt our Coagulin-B trial and protracted clinical timelines for AV201, we believe it is prudent to take such steps at this time to conserve our financial resources. Given the Company's remaining cash position and talented management and scientific team, we remain committed to developing drug candidates for serious neurological disorders," said Kenneth Chahine, Ph.D., J.D., Avigen's President and Chief Executive Officer. About Avigen Avigen currently has two promising neurological product candidates. The first is AV201 for the treatment of Parkinson's disease. After extensive preclinical research, Avigen filed an Investigational New Drug application seeking clearance to begin clinical testing of AV201. Following receipt of FDA clearance, the drug will initially be administered to individuals in the late stages of Parkinson's disease who have exhausted most of their therapeutic options. The second program is AV333 for the treatment of severe chronic pain, a very poorly managed condition resulting from a variety of disease states. AV333 represents an innovative approach to the treatment of unremitting pain, with demonstrated success in reversing neuropathic pain in established preclinical models. Avigen, Inc., based in the San Francisco Bay Area, is committed to developing innovative therapeutics to treat serious disorders, primarily focused on neurological conditions. Avigen's proposed gene delivery products are designed for direct administration to patients in order to achieve expression of therapeutic proteins within the body. Additionally, Avigen is actively seeking to broaden its portfolio of drug development candidates through an in-licensing program. This effort has identified several validated compounded that are being investigated, some of which are currently in human clinical trials. Patients or physicians who would like more information should contact the Clinical Development Department at clinicaltrials@avigen.com or call at 1-877-4-AVIGEN (428-4436). Additional information on Avigen's proprietary gene delivery products can be found at http://www.avigen.com/ * * * In its Form 10-Q for the quarterly period ended March 31, 2004 filed with the Securities and Exchange Commission, Avigen, Inc. reports: Liquidity and Capital Resources "Since our inception in 1992, cash expenditures have significantly exceeded our revenue. We have funded our operations primarily through public offerings and private placements of our equity securities. Subsequent to our initial public offering in May 1996, we have raised $189 million from private placements and public offerings of our common stock and warrants to purchase our common stock, and we received $2.5 million in research support from Bayer Corporation in March 2003. "We believe that we will continue to require substantial additional funding in order to complete the research and development activities currently contemplated and to commercialize our proposed products. We believe that our capital resources at March 31, 2004 will be adequate to fund our current operating needs over the next three years. However, this forward-looking statement is based upon our current plans and assumptions regarding our future operating and capital requirements, which may change. "We intend to continue to seek additional funding through public or private equity or debt financing, when market conditions allow, or through additional collaborative arrangements with corporate partners. If we raise additional funds by issuing equity securities, there may be further dilution to existing stockholders. We cannot assure our investors that we will be able to enter into such financing arrangements on acceptable terms or at all. Without such additional funding, we may be required to delay, reduce the scope of, or eliminate one or more of our research or development programs." BAYVIEW FINANCIAL: Fitch Affirms Low-B Ratings of 4 Classes ----------------------------------------------------------- Fitch Ratings has taken rating actions on the following Bayview Financial Acquisition Trust Issue: Series 1998-1 group 1: --Class AI affirmed at 'AAA'; --Class IO-I affirmed at 'AAA'; --Class IM1 affirmed at 'AA'; --Class IM2 affirmed at 'A'; --Class IM3 affirmed at 'BBB; --Class IM4 affirmed at 'BBB; --Class IB1 affirmed at 'BB'; --Class IB2 affirmed at 'B'. Series 1998-1 group 2: --Class A-II affirmed at 'AAA'; --Class IO-II affirmed at 'AAA'; --Class IIM1 affirmed at 'AA'; --Class IIM2 affirmed at 'A'; --Class IIM3 affirmed at 'BBB'; --Class IIM4 affirmed at 'BBB'; --Class IIB1 affirmed at 'BB'; --Class IIB2 affirmed at 'B'. The affirmations on these classes reflect levels of credit enhancement consistent with future loss expectations. BIOTRANSPLANT: Liquidating Chapter 11 Plan Took Effect April 26 --------------------------------------------------------------- The Bankruptcy Court entered an order confirming the Company's Chapter 11 liquidation plan on April 13, 2004. That plan became effective on April 26, 2004. As of the Effective Date, all outstanding shares of the Company's common stock were cancelled. As previously reported in the Troubled Company Reporter, the United States Bankruptcy Court in Boston, Massachusetts, approved the sale of its Eligix(TM) HDM Cell Separation System to Miltenyi Biotec GmbH, in July 2003. Miltenyi acquired all intellectual property and physical assets associated with the Eligix business in exchange for an upfront payment of $450,000 and royalties of 4-10% of future sales. The Eligix(TM) HDM Cell Separation Systems use monoclonal antibodies to remove unwanted cells from bone marrow, peripheral blood stem cell and donor leukocyte grafts used in transplant procedures. BioTransplant discovers, develops and commercializes therapeutics, therapeutic devices and therapeutic regimens designed to suppress undesired immune responses and enhance the body's ability to accept donor cells, tissues and organs. BioTransplant Incorporated and its wholly-owned subsidiary Eligix, Inc. filed on February 27, 2003 voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code. Daniel C. Cohn, Esq. Cohn Khoury Madoff & Whitesell LLP represents the debtor. BOYDS COLLECTION: Dennis Brando Leaves Post as VP-Merchandising --------------------------------------------------------------- The Boyds Collection, Ltd. (NYSE:FOB) said that Dennis Brando, Vice President of Merchandising, is leaving the Company, effective July 16, 2004. The Company has commenced a search with the executive search firm of Heidrick & Struggles and will work quickly to appoint a new Vice President of Merchandising. In the interim, David Miller, who is Vice President of Marketing, is overseeing merchandising activities at Boyds. The Boyds Collection, Ltd. is a leading designer and manufacturer of unique, whimsical and "Folksy With Attitude(SM)" gifts and collectibles, known for their high quality and affordable pricing. The Company sells its products through a large network of retailers, as well as at Boyds Bear Country(TM) in Gettysburg, Pennsylvania -- http://www.boydsbearcountry.com/-- "the world's most humongous teddy bear store." Founded in 1979, the Company was acquired by Kohlberg Kravis Roberts & Co. (KKR) in 1998 and is traded on the NYSE under the symbol FOB. Information about Boyds can be found at http://www.boydsstuff.com/ * * * As reported in the Troubled Company Reporter's May 12, 2004 edition, Moody's Investors Service lowers the senior ratings of The Boyds Collection Ltd., concluding the review for possible downgrade initiated on December 22, 2003. The outlook is negative. Affected ratings are: --Senior Implied Rating to B1 from Ba3; --$40M senior secured revolving credit facility due 2005 to B1 from Ba3; --$28M senior secured term loan facility due 2005 to B1 from Ba3; --$34.4M 9.0% senior subordinated notes due 2008 to B3 from B2; --Unsecured Issuer Rating to B2 from B1 The downgrade reflects the material reduction in Boyds' capacity to repay debt due to the continuous decline in its wholesale business, the projected step-up in funding requirements for the decision to start a major expansion in retail, and the potential liquidity pressures arising from the scheduled April 2005 maturity of bank credit facilities. While new senior management has made several moves to stop the unabated decline of the wholesale business, Moody's assumes no evidence of a reduced operating cost structure, the development and introduction of new products until the second half of 2004. Moody's supposes that current operating challenges and growing financial leverage may limit Boyds' decision to expand its retail operations over the next several years. BREUNERS HOME: Seeks to Retain Keen in Real Estate Disposition -------------------------------------------------------------- Breuners Home Furnishings Corp. has filed court papers to retain Keen Realty, LLC to market and dispose of the company's retail, distribution center, and office leasehold interests located throughout the northeast and in northern California. Breuners is the parent company to Huffman Koos, Good's Furniture, and Breuners Home Furnishings, all featuring quality, value priced brand named furniture. Keen will be coordinating the property sales with Breuners' restructuring advisors from FTI Consulting and attorneys at Pachulski Stang Ziehl Young Jones & Weintraub P.C. "We are pleased to offer these leasehold interests for sale, as they are located in prime locations throughout the northeast and in northern California," said Matthew Bordwin, Keen Realty's Executive Vice President. "We expect there to be a tremendous amount of interest in these locations. These leases represent an excellent opportunity for users, as well as a great investment opportunity for a group that would like to acquire the entire portfolio as a going concern business. These companies have excellent brand recognition in the marketplace," Bordwin added. The following locations are available: -- Operating as Huffman Koos - 20 retail leases, consisting of 997,751+/- sq. ft. of retail space, located in New York, New Jersey, and Connecticut, and two distribution centers totaling 450,608+/- sq. ft. located in Connecticut and New Jersey; -- Operating as Good's Furniture - 17 retail leases, consisting of 679,009+/- sq. ft. of retail space, located in Pennsylvania, New Jersey, and Delaware, and two distribution centers totaling 178,000+/- sq. ft. located in Delaware and Pennsylvania; and -- Operating as Breuners Home Furnishings - Ten retail leases, consisting of 485,011+/- sq. ft. of retail space, and one distribution center totaling 130,140+/- sq. ft., located in northern California. Also available is an office/headquarters location consisting of 31,256+/- sq. ft. located in Lancaster, PA. For over 22 years, Keen Consultants has had extensive experience solving complex problems and evaluating and selling real estate, leases and businesses. Keen Consultants, a leader in identifying strategic investors and partners for businesses, has consulted with hundreds of clients nationwide, evaluated and disposed of over 250,000,000 square feet square of properties, and repositioned nearly 13,000 retail stores across the country. Recent clients include: Spiegel/Eddie Bauer, Arthur Andersen, Service Merchandise, Country Road, Tommy Hilfiger, Warnaco, Fila, and JP Morgan Chase. For more information regarding the disposition of these leaseholds for Breuners Home Furnishings Corp., please contact Keen Realty, LLC, 60 Cutter Mill Road, Suite 407, Great Neck, NY 11021, Telephone: 516-482-2700, Fax: 516-482-5764, e-mail: mbordwin@keenconsultants.com Attn: Matthew Bordwin. Breuners Home Furnishings filed for Chapter 11 protection on July 14, 2004 in the United States Bankruptcy Court District of Delaware. Keen Realty, LLC is a real estate consulting firm specializing in maximizing the value of its clients' real estate assets nationwide. CALPINE CORP: Broadcasts Second Quarter Earnings Call on August 5 ----------------------------------------------------------------- Calpine Corporation (NYSE: CPN), a leading North American power company, will release its second quarter 2004 financial results on Thursday, August 5, 2004 before the market opens. The company has scheduled a conference call to discuss the results at 8:30 a.m. PDT on that day. Interested parties may access the teleconference via a web cast on Calpine's Investor Relations page, http://www.calpine.com/,or by dialing 1-888-603-6685 (1-706-634-1265 for international callers) at least five minutes before the start of the call. The call will be open to the public and media in a listen-only mode by telephone and web broadcast. A replay and transcript of the conference call will be available for 30 days on Calpine's Investor Relations page at http://www.calpine.com/ About Calpine Calpine Corporation (S&P, CCC+ Senior Unsecured Convertible Note and B Second Priority Senior Secured Note Ratings, Negative Outlook), celebrating its 20th year in power in 2004, is a leading North American power company dedicated to providing electric power to customers from clean, efficient, natural gas- fired and geothermal power facilities. The company generates power at plants it owns or leases in 21 states in the United States, three provinces in Canada and in the United Kingdom. Calpine is also the world's largest producer of renewable geothermal energy, and owns or controls approximately one trillion cubic feet equivalent of proved natural gas reserves in the United States and Canada. For more information about Calpine, visit http://www.calpine.com/ CATHOLIC CHURCH: Seeks Approval To Employ Schwabe As Counsel ------------------------------------------------------------ In connection with the Archdiocese of Portland in Oregon's application to retain the law firm of Schwabe Williamson & Wyatt, PC, as its special litigation counsel, Thomas Dulcich, Esq., further discloses to the Court that the firm currently represents, on unrelated matters, Key Bank, a creditor with a contingent claim against the Archdiocese of Portland in Oregon. "Key Bank has an unsecured guaranty from the Debtor in approximately $22,300,000 owed by companies, which have provided security therefor, to Key Bank," Mr. Dulcich says. The Debtor is the sole member of Village Enterprises, an Oregon non-profit corporation. Village Enterprises owes Key Bank approximately $6,000,000 under a debt reimbursement agreement dated April 1, 2002. The Debtor has guaranteed repayment of the debt by an unlimited guaranty dated April 1, 2002. Village Enterprises, in turn, also is the sole member of Assumption Village, LLC, and Trinity Court, LLC, both Oregon limited liability companies. Assumption Village owes Key Bank approximately $13,100,000 under a debt reimbursement agreement dated March 1, 2001. The Debtor has guaranteed repayment of the debt by an unlimited guaranty dated March 1, 2001. Trinity Court owes Key Bank approximately $3, 200,000 under a debt reimbursement agreement dated June 1, 2001. The Debtor has guaranteed repayment of the debt by an unlimited guaranty dated June 1, 2001. None of the unlimited guaranties of the Debtor is secured by any assets of the Debtor. The Debtor believes that the security provided by the borrowers to Key Bank is sufficient to pay those obligations. 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. 2; Bankruptcy Creditors' Service, Inc., 215/945-7000) CENTERPOINT ENERGY: Reschedules Q2 2004 Webcast to August 6 ----------------------------------------------------------- CenterPoint Energy, Inc. (NYSE: CNP) has rescheduled the live webcast of its second quarter 2004 earnings conference call to Friday, August 6, 2004 at 10:30 a.m. Central time (11:30 a.m. Eastern time). To listen to the webcast, go to Centerpoint Energy's website at http://www.CenterPointEnergy.com/investors/eventsClick the link, "CenterPoint Energy, Inc. Second Quarter 2004 Earnings Conference Call Webcast". For more details, contact Marianne Paulsen at (713) 207-6500. About the Company CenterPoint Energy, Inc. (Fitch, BB+ Preferred Securities and Zero-Premium Exchange Notes' Ratings, Negative), headquartered in Houston, Texas, is a domestic energy delivery company that includes electric transmission and distribution, natural gas distribution and sales, interstate pipeline and gathering operations, and more than 14,000 megawatts of power generation in Texas, of which nearly 3,000 megawatts are currently in mothball status. The company serves nearly five million customers primarily in Arkansas, Louisiana, Minnesota, Mississippi, Oklahoma, and Texas. Assets total $21 billion. With more than 11,000 employees, CenterPoint Energy and its predecessor companies have been in business for more than 130 years. Visit http://www.CenterPointEnergy.com/for more information. CHALK MEDIA: TELUS Communications Inc. Provides Title Sponsorship ----------------------------------------------------------------- Chalk Media Corp. says that TELUS Communications Inc. will be the title sponsor for Dave Chalk Connected, Chalk Media's in-flight entertainment technology show that is produced for Air Canada. TELUS will provide a 12 month exclusive telecommunications title sponsorship for Dave Chalk Connected. Under the agreement, Chalk Media will provide advertising space around the show, an informational tip introduced as a 'TELUS Tip' within the program, and a feature of the TELUS logo in the sponsorship section of the http://www.chalktv.com/in-flight entertainment website. The show features informative and entertaining overviews of new echnologies and annually reaches approximately 24 million Air Canada passengers. Jill Schnarr, Vice President Customer Marketing for TELUS Communications Inc., says, "TELUS is excited to be working with Chalk Media. The Dave Chalk Connected in-flight show delivers easy to understand messages and information and is viewed by the ideal target demographic for TELUS' products and services." About TELUS Communications Inc. TELUS (TSX: T, T.A; NYSE: TU) is the largest telecommunications company in Western Canada and the second largest in the country, with more than $7 billion of annual revenue, 4.8 million network access lines and 3.5 million wireless subscribers. The company provides subscribers with a full range of telecommunications products and services including data, voice and wireless services across Canada, utilizing next generation Internet-based technologies. TELUS was a premier founding supporter of the successful bid to bring the 2010 Winter Olympic and Paralympic Games to Canada, and is committed to being Canada's premier corporate citizen by investing in communities across Canada where we live, work and serve. For more information about TELUS, please visit http://www.telus.com/ About Chalk Media Corp. Chalk Media (TSX-V: CKM) produces network television & in-flight entertainment programming and online training & marketing solutions. The company's television shows, ranging from Dave Chalk Computer Show to Dave Chalk Connected, have won many awards and accolades and have built a highly recognizable brand name. Leveraging this brand has allowed the company to build relationships with a blue-chip customer base and provide them with custom online training and marketing solutions. Chalk Media's custom solutions help industry-leading companies communicate more effectively with their customers, distribution partners and employees. With offices in Toronto, Ontario and Vancouver, British Columbia, Chalk Media works with global organizations such as Samsung, Intrawest, TELUS Mobility, RBC Financial, HSBC, Future Shop, Terasen, Verizon, Sony, Bell Canada, Thomson Carswell and Microsoft. At March 31, 2004, Chalk Media Corp.'s balance sheet shows a deficit of C$416,886. CHAPCO CARTON CO: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: Chapco Carton Company 515 Crossroads Parkway Bolingbrook, Illinois 60440 Bankruptcy Case No.: 04-26000 Type of Business: The Debtor manufactures, sells and distributes folding cartons used for retail packaging in food, candy, office supplies and the automotive parts industries. See http://www.chapcocarton.com/ Chapter 11 Petition Date: July 13, 2004 Court: Northern District of Illinois (Chicago) Judge: Bruce W. Black Debtor's Counsel: Chad H. Gettleman, Esq. Adelman Gettleman & Merens 53 West Jackson Suite 1050 Chicago, IL 60604 Tel: 312-435-1050 Total Assets: $15,232,256 Total Debts: $19,220,379 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Newark Pacific Paperboard Supplier $1,628,500 P.O. Box 31001-0929 Pasadena, CA 91110-0929 Newark Group Subordinated note, $1,515,000 20 Jackson Drive principal and Cranford, NJ 07079 accrued interest Gibbon America II, Corp. Subordinated note $753,684 801A N. State St. for goods sold Elgin, IL 60573 $336,894, plus Outstanding accounts payable of $416,790 Ekvall International Ltd. Supplier $574,583 309 Vine St., Ste. 710 Cincinnati, OH 45202 Smurfit-Stone - Wabash Supplier $527,676 455 W. Factory St. Wabash, IN 46992 Rockford Paperboard, Inc. Subordinated note $408,288 P.O. Box 560 payable for goods Rockford, MI 49341 received, outstanding principal $399,799 plus accrued interest $8,489 Rock Tenn- Battle Creek Mill Supplier $368,813 177 Angell St. Battle Creek, MI 49015 Cargill Financial Service Subordinated note $355,954 6000 Clearwater Drive payable for prior Minnetonka, MN 55343-9497 working Simkins Industries Inc. Supplier $333,145 Dept. 0271, PO Box#4000 Hartford, CT 06151 Printers Service Supplier $274,040 P.O. Box 5120 Ironbound Station Newark, NJ 07105-5120 Cascades Boxboard Group Inc. Supplier $240,653 Wisconsin Paperboard Corp. Supplier $237,981 Alois Box Company Supplier $214,857 Anderson & Vreeland Inc. Supplier $171,299 The Custom Companies Freight $160,487 Graphic Packaging Supplier $154,338 International, Inc. Joe Piper Inc. Supplier $118,129 Mardi Transportation Inc. Freight $117,080 RiverCor, LLC Supplier $115,989 Interfilm Holdings, Inc. $106,552 CITYSCAPE CORPORATION: Fitch Downgrades Class B-1F Ratings to CCC ----------------------------------------------------------------- Fitch Ratings has taken rating actions on the following Cityscape Corporation Home Equity Loan Trust issue: Series 1997-C group 1: --Classes A-3, A-4 affirmed at 'AAA'; --Class M-1F affirmed at 'AA'; --Class M-2F downgraded to 'BBB' from 'A'; --Class B-1F downgraded to 'CCC' from 'BB'. The affirmations on the above classes reflect credit enhancement consistent with future loss expectations. The negative rating action on classes M-2F and B-1F is due to the deterioration of credit enhancement. Monthly realized losses have been exceeding the monthly excess spread, depleting the overcollateralization (OC) amount. As of the June 25th, 2004 distribution, there is $139,964.73 of OC outstanding. The 12-month average monthly loss is approximately $68,355. CONSECO INC: Appoints Dewey Ingham as Executive Vice President-HR ----------------------------------------------------------------- Conseco, Inc. (NYSE:CNO) has named Dewey Ingham as the company's executive vice president of human resources, a new position reporting to Conseco's President and CEO Bill Shea. "Dewey is a high-energy, goal-driven problem solver who has excellent communication, analytic and creative skills," Mr. Shea said. "We are pleased to welcome him to Conseco's executive team. I feel he will make a key contribution to our program to build our businesses into steady long-term performers by executing a companywide strategy to attract, reward and retain the best people in the industry." "Conseco has accomplished much since its emergence from Chapter 11," Ingham said. "I'm very excited to become one of the Conseco associates who will face the challenges that lie ahead, and in particular to help HR support all Conseco associates as they tackle the company's aggressive goals." Mr. Ingham is the former senior vice president of human resources for the investment management businesses of ING Americas, where he lead the effort to combine four distinct businesses into one integrated company, including organization structure, HR policies, management development and benefit and compensation platforms. He joined ING following that firm's acquisition of Reliastar Financial, where he had headed the human resources function. Among his other achievements at Reliastar, he built a management development program for the company's 100 top executives, streamlined the HR systems infrastructure and led the company's succession planning effort. Before Reliastar, he was employed by R.R. Donnelley & Sons Company - the last nine years as corporate vice president, compensation and benefits, with responsibility for all domestic and international compensation and benefit activities. Mr. Ingham holds Bachelor of Science and Master of Science degrees from The Pennsylvania State University. A Certified Management Accountant, he is a member of the Society for Human Resource Management and the Institute for International Human Resources. Conseco, Inc.'s insurance companies help protect working American families and seniors from financial adversity: Medicare supplement, long-term care, cancer, heart/stroke and accident policies protect people against major unplanned expenses; annuities and life insurance products help people plan for their financial futures. * * * As reported in the Troubled Company Reporter's May 31, 2004 edition, Standard & Poor's Ratings Services said that it raised its counterparty credit and senior debt ratings on Conseco Inc. to 'BB-' from 'B-' and its preferred stock rating to 'B-' from 'CCC-', and removed the ratings from CreditWatch where they were placed April 19, 2004. At the same time, Standard & Poor's raised its counterparty credit and financial strength ratings on Bankers Life & Casualty Co., Colonial Penn Life Insurance Co., Conseco Insurance Co., Conseco Health Insurance Co., Conseco Life Insurance Co., and Conseco Life Insurance Co. of NY to 'BB+' from 'BB-' and removed the ratings from CreditWatch where they were placed April 19, 2004. The outlook is stable. "The upgrades reflect Conseco Inc.'s recapitalization, which utilizes proceeds from the bank loan and preferred stock issue, in conjunction with about $920 million of proceeds from a common equity issuance to replace $1.3 billion of existing bank debt and about $930 million of convertible exchangeable preferred stock and enhance the capital of the insurance operations," said Standard & Poor's credit analyst Jon Reichert. "Standard & Poor's believes it is too early to consider Conseco Inc.'s insurance operations to be investment grade largely due to the uncertainty regarding the company's future competitive position," Mr. Reichert added. "Before investment grade FSRs can be considered, management will need to demonstrate its ability to generate sustainable, profitable sales growth." The outlook reflects Standard & Poor's expectation that management will be challenged in its efforts to revitalize profitable sales growth, primarily through its independent agent distribution channel. COVANTA ENERGY: Court Extends Unsecured Claims Objection Deadline ---------------------------------------------------------------- Covanta Energy Corporation and James N. Lawlor, the Liquidating Trustee appointed pursuant to the Second Joint Plan of Liquidation, advise the Court that the initial 120-day period within which the Debtors or the Liquidating Trustee must object to unsecured claims is automatically extended until August 7, 2004, as provided under the Findings of Fact, Conclusions of Law and Order Confirming the Debtors' Second Joint Plans. Headquartered in Fairfield, New Jersey, Covanta Energy Corporation -- http://www.covantaenergy.com/-- is a publicly traded holding company whose subsidiaries develop, own or operate power generation facilities and water and wastewater facilities in the United States and abroad. The Company filed for Chapter 11 protection on April 1, 2002 (Bankr. S.D.N.Y. Case No. 02-40826). Deborah M. Buell, Esq., and James L. Bromley, Esq., at Cleary, Gottlieb, Steen & Hamilton represent the Debtors in their restructuring efforts. When the Debtors filed for protection from its creditors, they listed $3,280,378,000 in assets and $3,031,462,000 in liabilities. (Covanta Bankruptcy News, Issue No. 60; Bankruptcy Creditors' Service, Inc., 215/945-7000) CRESCENT REAL: Declares Q2'04 Common & Preferred Share Dividends ---------------------------------------------------------------- The Board of Trust Managers of Crescent Real Estate Equities Company (NYSE:CEI) has declared the following cash dividends for the quarter ended June 30, 2004: Second Quarter 2004 Annualized ------------------- ------------- Common $0.375000 $1.5000 6.75% Series A Convertible Preferred $0.421875 $1.6875 9.50% Series B Redeemable Preferred $0.593750 $2.3750 The dividends are payable August 13, 2004, to shareholders of record on July 30, 2004. About the Company Celebrating its tenth year, Crescent Real Estate Equities Company (NYSE:CEI) is one of the largest publicly held real estate investment trusts in the nation. Through its subsidiaries and joint ventures, Crescent owns and manages a portfolio of more than 75 premier office buildings totaling more than 30 million square feet primarily located in the Southwestern United States, with major concentrations in Dallas, Houston, Austin, Denver, Miami and Las Vegas. In addition, Crescent has investments in world-class resorts and spas and upscale residential developments. For more information, visit the Company's website at http://www.crescent.com/ * * * As reported in the Troubled Company Reporter's July 2, 2004 edition, Standard & Poor's Ratings Services lowered its corporate credit ratings on Crescent Real Estate Equities Co. and its operating partnership, Crescent Real Estate Equities L.P., to 'BB-' from 'BB'. In addition, the rating on the company's senior unsecured notes is lowered to 'B' from 'B+', and the rating on the company's preferred stock is lowered to 'B-' from 'B'. The outlook is revised to stable from negative. "The lowered ratings reflect office market conditions that remain persistently weak, pressuring Crescent's highly concentrated portfolio," said Standard & Poor's credit analyst Elizabeth Campbell. "They also reflect tenant concentration concerns, an aggressive financial profile with weak coverage measures, limited financial flexibility, and a high dividend payout ratio." DATATEC SYSTEMS: Senior Credit Facility Increased & Extended ------------------------------------------------------------ Datatec Systems, Inc. (DATC.PK) an IT professional services firm focused exclusively on the configuration, staging and implementation of large-scale, complex, local and wide area networks incorporating a broad range of technology, has reached an agreement with IBM Credit, its senior lender, to forbear Datatec's current loan defaults, increase the principal amount of the credit facility and extend its term to August 31, 2005. Pursuant to the amendment to the credit facility, the maximum available under the credit facility will be $28 Million until November 30, 2004; $27.3 Million from December 1, 2004 through January 31, 2005; $26 Million from February 1, 2005 through February 28, 2005; $23.4 Million from March 1, 2005 through March 31, 2005; and, $21 Million from April 1, 2005 through August 31, 2005. The interest rate charged under the credit facility will be prime plus an applicable margin that varies according to the average outstanding balance. In addition, the amendment requires the Company to maintain certain financial covenants and conditions and requires the Company to issue to IBM Credit a warrant to purchase 1 million shares of the Company's common stock. Separately, the Company remains in default of its subordinated secured convertible notes issued to other parties. This press release is a summary of the credit facility amendment and does not purport to be complete and is qualified in its entirety to the full text of the amendment that will be filed as an exhibit to the Company's Current Report of Form 8-K. Mr. Raul Pupo, Chief Executive Officer, Datatec Systems, indicated that "this new agreement with IBM Credit, its largest creditor, is taken by the Company as a strong signal of support for its continued efforts to streamline operations, remove unnecessary costs, and refocus the business on its unique strength as a technology deployment supplier." About Datatec Systems, Inc. Fairfield, New Jersey - based Datatec Systems specializes in the large-scale deployment of networking technologies. Datatec's deployment services utilize a software-enabled implementation model and 'best practices' structured process to ensure consistent outcomes. Datatec's customers include Fortune 1000 companies with large, complex, multi-branch environments and world-class technology providers. DIGITAL LIGHTWAVE: Expands Worldwide Distribution With Telmaco -------------------------------------------------------------- Digital Lightwave(R), Inc. (Nasdaq:DIGL), a leading provider of optical networking technology and test instruments, expands its European sales network with the addition of Telmaco S.A. in Eastern Europe. Telmaco S.A. will act as a distributor, selling and supporting Digital Lightwave's portable and embedded test equipment product lines. Telmaco S.A. has exclusive representation in the country of Greece and the Republic of Cyprus joining other distributors that sell and support Digital Lightwave products in Europe. "Continuing with our strategy of expanding our distribution and support channels in Europe, Telmaco is a logical choice for us as a partner," said Kjell Axelsson, Director of Sales, Eastern Europe at Digital Lightwave. "Their enduring history and expertise in the television broadcast arena and communications systems is an ideal fit for both of our companies." Digital Lightwave's distribution channel partners have existing, long-standing relationships with telecom customers within their respective territories. Additionally, distributors provide Tier 1 technical support for Digital Lightwave products. "We recognize Digital Lightwave as a leader at the forefront of testing technology," said Dimitris Kyriazis, Senior Managing Director at Telmaco S.A. "Our customers will benefit from the advanced capabilities of the NIC and NAA products that this partnership jointly provides." European network providers have been early implementers of Next Generation Network (NGN) technologies creating a strong marketplace for Digital Lightwave's Network Information Computer(R) (NIC(R)) and Network Access Agent(R) (NAA(R)) products featuring Generic Framing Procedure (GFP), Link Capacity Adjustment Scheme (LCAS), and Virtual Concatenation (VCAT). About Telmaco S.A. Telmaco S.A. was established in 1975, focusing on the design, construction, supply, installation and after-sales service of electronic equipment and high technology systems in the fields of audiovisual, broadcasting and telecommunications. All the above activities are being handled by experienced, specialized and highly educated personnel made available by the company, whose aim is to provide its customers with professional and effective technical support. Telmaco S.A. has independent departments for the design, construction, installation, maintenance and repair of their products, as well as a department for the quality and inspection of their performance, which is ISO-certified. About Digital Lightwave, Inc. Digital Lightwave, Inc. -- whose March 31, 2004 balance sheet shows a stockholders' deficit of $23,557,000 -- provides the global communications networking industry with products, technology and services that enable the efficient development, deployment and management of high-performance networks. Digital Lightwave's customers -- companies that deploy networks, develop networking equipment, and manage networks -- rely on its offerings to optimize network performance and ensure service reliability. EL CAPITAN: James Ricketts & Bill Weeks Join Board of Directors --------------------------------------------------------------- El Capitan Precious Metals, Inc. (OTCBB: ECPN) adds Mr. James Ricketts and Mr. Bill Weeks to its board of directors. Mr. Ricketts is an inventor and real estate developer who has previous experience as chairman of the board of a publicly-traded company with mining interests. Mr. Weeks is presently the chief executive officer of a small financial company and was formerly the chief operating officer of a company that manufactured homes. He has also been involved in the mining of kaolin, a clay mineral used primarily in the production of paper products. The Company also appointed Steve Antol as its chief financial officer. Mr. Antol is a certified public accountant who has served as the CFO of Gold and Minerals Co., Inc., the Company's majority stockholder. El Capitan President, Chuck Mottley, commented: "We are fortunate to have quality people such as Mr. Ricketts, Mr. Weeks and Mr. Antol, and to have the benefit of their diversified business interests plus their experience in the mining industries. I look forward to working closely with them as we seek to achieve our goals relative to El Capitan's mining interests." About the Company El Capitan Precious Metals, Inc. -- whose December 31, 2003 balance sheet shows a total stockholders' deficit of $749,298 -- is a nominally capitalized development stage company that owns a 40% interest in the El Capitan mine located near Capitan, New Mexico, as well as 13 mining claims and other assets known as the COD Property located near Kingman, Arizona. ENDURANCE SPECIALTY: Closes $250 Million Senior Debt Offering ------------------------------------------------------------- Endurance Specialty Holdings Ltd. (NYSE:ENH), a Bermuda-based provider of property and casualty insurance and reinsurance, closes its public offering of $250 million principal amount of 7% Senior Notes due 2034. The offering resulted in net proceeds to the Company of approximately $245.1 million. Endurance will use a portion of the net proceeds from the offering to repay the $103 million term loan outstanding under its bank credit facility and intends to use the remaining proceeds for general corporate purposes, including potential acquisitions and repurchases of its shares and share equivalents. The Senior Notes were initially offered by the underwriters at a price of 99.108% of their principal amount, providing an effective yield of 7.072%, and, unless previously redeemed, will mature on July 15, 2034. A complete description of the terms of the Senior Notes can be found in the prospectus supplement relating to the offering which has been filed with the U.S. Securities and Exchange Commission. The joint bookrunning managers for the offering were J.P. Morgan Securities Inc. and Barclays Capital Inc. Banc of America Securities LLC, BNY Capital Markets, Inc. Deutsche Bank Securities, ING Financial Markets, Wachovia Securities, Comerica Securities and Calyon Securities (USA) Inc. acted as co-managers. About Endurance Specialty Holdings Endurance Specialty Holdings Ltd. is a global provider of property and casualty insurance and reinsurance. Through its operating subsidiaries, Endurance currently writes property per risk treaty reinsurance, property catastrophe reinsurance, casualty treaty reinsurance, property individual risks, casualty individual risks, and other specialty lines. Endurance's operating subsidiaries have been assigned a group rating of A from A.M. Best and A- from Standard & Poor's. Endurance's headquarters are located at Wellesley House, 90 Pitts Bay Road, Pembroke HM 08, Bermuda and its mailing address is Endurance Specialty Holdings Ltd., Suite No. 784, No. 48 Par-la-Ville Road, Hamilton HM 11, Bermuda. For more information about Endurance, please visit http://www.endurance.bm/ * * * As reported in the Troubled Company Reporter's June 18, 2004 edition, Standard & Poor's Ratings Services assigned its 'BBB' counterparty credit rating to Endurance Specialty Holdings Ltd. and its preliminary 'BBB' senior debt, 'BBB-' subordinated debt, and 'BB+' preferred stock ratings to the company's $1.8 billion universal shelf registration. "The ratings on Endurance are based on its strong competitive position, which is supported by a diversified business platform," noted Standard & Poor's credit analyst Damien Magarelli. "In addition, Endurance maintains strong capital adequacy and strong operating performance." Offsetting these positive factors are concerns about Endurance's exposure to catastrophes and minimal reinsurance protections. Endurance also is a relatively new operation, and management has not been tested through difficult market cycles. ENRON CORP: Ask Court Okay To Sell Jefferson Lot To Golden Pass --------------------------------------------------------------- In Enron Corporation's chapter 11 cases, Debtor Enron Gas Liquids, Inc., Texas Natural Gas, Inc., and TE Products Pipeline Company, Limited Partnership -- the Sellers -- and ExxonMobil Oil Corporation, formerly known as Mobil Oil Corporation, are parties in a Participation Agreement/Sabine Pass Terminal, dated January 1, 1977. Under the Participation Agreement, the parties agreed to jointly conduct a program to evaluate the technical and economic feasibility of constructing and operating an import terminal on the Texas coast of the Gulf of Mexico for the importation of propane, butane and compatible petroleum products. According to Martin A. Sosland, Esq., at Weil, Gotshal & Manges, LLP, in New York, the Project was to include: (i) the selection of possible sites on the Gulf of Mexico, which would provide deep water and un-congested approaches to the unloading facility; (ii) acquisition of sufficient land space for onshore facilities, including a salt dome storage site; (iii) access to the salt dome storage site from the unloading facility; and (iv) a design to provide for staged construction options with ultimate terminal throughput capacity of about 300,000 BPD. In connection with the Project, the Sellers and Exxon acquired certain assets, including a 250-acre land in Jefferson County, Texas. Title to the Property is held by Gilbert I. Low, Trustee pursuant to an Agreement in Recognition and Declaration of Trust, dated June 9, 1986, as amended on July 2, 1991 and November 23, 1993. The Sellers collectively own an undivided 75% interest in the Participation Agreement, of which 25% is EGLI's share. Exxon owns the remaining 25% interest. The Participation Agreement provided that the Project was to be completed no later than December 1995, which did not occur. The Marketing Process Under the Participation Agreement, Mr. Sosland notes that, if at any time after December 31, 1979, none of the parties wish to continue with construction of the proposed terminal, the physical assets and real property interests the parties acquired can be sold by majority vote of the Management Committee and any proceeds received from the sale will be divided among the parties in proportion of each party's contribution to the Project. In the mid-1990s, the parties concluded that it was no longer in their interest to pursue the Project further, and all of the physical assets were marketed for sale. Mr. Sosland reports that the assets were marketed for about five years. During this time, the parties received only one offer -- $250,00 for all of the assets. Given the lack of interest by third parties in the assets held under the Participation Agreement, the parties concluded that the most likely purchaser of all or some of the assets was one of the other partners to the Participation Agreement. After extensive negotiations, the Sellers determined to sell their interests in the Property to Golden Pass LNG Terminal, LP, an Exxon affiliate. On June 16, 2004, the Sellers and Golden Pass executed a Purchase Agreement. The Purchase and Sale Agreement Under the terms of the Purchase Agreement, the Sellers will sell and convey to Golden Pass all of their undivided 75% interest in and to the Property. The Purchase Agreement provides that: A. Purchase Price The Purchase Price for the Property will be $1,750,000. Exxon, on Golden Pass' behalf, has deposited into escrow $175,000 and will pay the balance of the Purchase Price at Closing. B. As-Is Purchase The Property is being sold in an "as is" condition and "with all faults" as of the effective date of the Purchase Agreement. C. Taxes General real estate taxes, water rates, charges, sewer taxes and assessments, if any, and rent and income, if any, under leases, contracts and other agreements relating to the Property for the year of the Closing will be prorated as of the date of Closing in accordance with the Sellers' undivided 75% interest. Golden Pass will be responsible for any "rollback taxes" imposed as a result of a change in the use of the Property, or any part thereof, or transfer of the Property, if any. D. Conditions Precedent to Closing The Purchase Agreement sets forth the conditions precedent to the obligations of the Sellers and Golden Pass. In addition to usual and customary conditions for real estate transactions, including (i) the truth of representations and warranties, (ii) title commitment, and (iii) no material adverse change in the condition of the Property, the Court must approve the Purchase Agreement and the contemplated transaction prior to the Closing. Accordingly, EGLI asks the Court to and approve the Purchase Agreement and authorize the sale of its interest in the Property, free and clear of any liens and encumbrances, pursuant to Section 363 of the Bankruptcy Code. EGLI believes that selling its interest in the Property will result in maximizing its value for the estate and will result in a greater return to creditors if the Property is not sold. Mr. Sosland points out that selling the Property will facilitate the eventual termination of the Participation Agreement and the recovery of the value of EGLI's interest in it. The Purchase Price for the Sellers' interest in the Property far exceeds the only other offer previously received for all of the assets. Furthermore, an appraisal performed in 1995 indicated that the Property's value at that time was only $40,000. Mr. Sosland informs Judge Gonzalez that EGLI is not aware of any liens, claims, encumbrances, interests, or rights of setoff, netting, deduction or recoupment relating to its interest in the Property. To the extent any Interest exists, EGLI proposes that the Sale Order provide that any Interest will attach to the sale proceeds EGLI receives. Mr. Sosland assures the Court that the terms of the Purchase Agreement was negotiated by the parties at arm's length and in good faith.(Enron Bankruptcy News, Issue No. 117; Bankruptcy Creditors' Service, Inc., 215/945-7000) ENRON: Employee Committee Comments on Bankruptcy Plan Approval -------------------------------------------------------------- The Enron Employment Related Issues Committee released the following statement from Richard D. Rathvon, committee co-chair, regarding the bankruptcy court approval of Enron's bankruptcy plan: "Approval of Enron's bankruptcy plan is a significant step towards final resolution for current and former Enron employees and retirees. But it is not the final step. The Employee Committee continues to move forward to recover 11th Hour Bonuses and other payments received by certain individuals immediately prior to the bankruptcy filing. "Throughout the bankruptcy, the Employee Committee has successfully negotiated the outcome of many employee related issues. These include, but are not limited to: * the recovery, in collaboration with Enron, of nearly $11 million to date in disbursed deferred compensation payments; * the continuation of health and welfare benefits for retirees; * the historic Severance Settlement Agreement; * the filing of 11th Hour Bonus lawsuits against more than 290 favored former employees; and, * assisting severed and former employees in filing proofs of claim. Claimants who have allowed claims are now one step closer to receiving their mandated distributions. "Even though the bankruptcy plan has been confirmed by the bankruptcy court, the Employee Committee continues to be authorized to prosecute, or continue to prosecute, as the case may be, Deferred Compensation Litigation and Severance Settlement Fund Litigation." The Employee Committee is an official committee appointed by the United States Trustee charged with representing the collective interests of all current, former and retired Enron employees in Enron's bankruptcy case. The Employee Committee serves as a strong advocate for the interests of former and current Enron employees during the bankruptcy process. Members of the committee were selected by the United States Trustee and the make-up of the committee was designed to reflect the broad diversity of Enron's current and former workforce. The Employee Committee will attempt to provide employees with timely, accurate information on the status of the bankruptcy case. Enron is the No.1 buyer and seller of natural gas and the top wholesale power marketer in the US. The company also markets and trades other commodities, including metals, paper, coal, chemicals, and fiber-optic bandwidth. Enron's 9,000-MW power portfolio includes interests in energy facilities around the world. The company operates a 25,000-mile gas pipeline system in the US, and it provides consulting and construction services. Enron plans to sell its remaining utility interests and its telecommunications unit. Before the company agreed to be acquired, controversy over accounting procedures had caused Enron's stock price and credit rating to drop sharply. The company filed for chapter 11 protection (Bankr. S.D.N.Y. Case No. 01-16033) on December 2, 2001. Martin J. Bienenstock, Esq. and Brian S. Rosen, Esq. of Weil, Gotshal & Manges LLP 767 -and- Melanie Gray, Esq. of Weil, Gotshal & Manges LLP represents the debtor. EQUIFIN INC: Begins Trading in the Over-the-Counter Market ---------------------------------------------------------- EquiFin Inc.'s (OTC Pink Sheets:EQUI-PK) common stock began trading in the pink sheet listings of the over-the-counter market under the symbol EQUI-PK. EquiFin is in discussion with various market makers in an attempt to have its common stock traded in the coming days in the over-the-counter, bulletin board market. The Company is hopeful that these discussions will result in a bulletin board listing, but at this time there can be no assurance that this will occur. EquiFin, Inc., (AMEX:II AND II,WS) an early stage, commercial finance company provides a range of capital solutions to small and mid-size business enterprises. * * * In its Form 10-KSB for fiscal year ended December 31, 2003 filed with the Securities and Exchange Commission, Equifin, Inc. reports: Liquidity and Capital Resources "Cash used in operating activities amounted to $916,000 for the year ended December 31, 2003. Investing activities required cash of $6,904,000, which included $7,474,000 for development of the loan portfolio which was offset to an extent by $250,000 received from the sale of a participation. Financing activities provided $8,510,000 in cash, which included $6,066,000 in borrowings and $2,880,000 from the sale of convertible notes. The result of these activities was a net increase in cash of $690,000 which increased cash to $1,078,000 at year-end December 31, 2003. "In December 2001, Equinox Business Credit Corp., an 81% owned subsidiary of the Company, entered into a Loan and Security Agreement with Wells Fargo Foothill, which provided for the initiation of a $20,000,000 revolving credit facility. The agreement provides for interest at the prime rate plus 1.25% (equal to 5.25% at December 31, 2003). Equinox is permitted to borrow under the Credit Facility at up to 85% of the borrowing base, which consists of eligible notes receivable, as defined in the Agreement. Under the terms of the Agreement, as amended, Equinox must maintain tangible net worth (including subordinated debt) of $3,000,000 from December 31, 2003 through February 29, 2004; $3,050,000 through May 31, 2004; $3,100,000 through August 31, 2004 and $3,150,000 thereafter; a leverage ratio, as defined, of not more than 5 to 1 and an interest coverage ratio of not less than 1.1 to 1, increasing to 1.25 to 1 beginning April 2004. Equinox did not maintain the tangible net worth requirement for December 31, 2002, January 31, 2003, February 28, 2003 and June 30, 2003 and the interest coverage ratio at September 30, 2003. Through amendments to the Agreement, the lender waived the defaults for those periods. "During 2004, Equinox is also required to realize, for each fiscal quarter in 2004, 75% of its projected revenues and projected earnings before tax based on projections previously furnished to Foothill. All the assets and the capital stock of Equinox are pledged to secure the Credit Facility, which is also guaranteed by the Company. There was $9,839,000 outstanding on the Credit Facility at December 31, 2003. The Agreement matures December 19, 2004 and the lender has informed the Company that it does not currently intend to renew the agreement. "The Company will seek to replace the credit facility prior to maturity, however there can be no assurance that such efforts will be successful. If our current facility is not replaced, we might negotiate a sale of our portfolio, apply all cash flow generated by the loans securing the facility to pay down our borrowings thereby adversely effecting our liquidity position. In this situation, we may not be able to satisfy our outstanding loan commitments, originate new loans or continue to fund our operations." Also, the report of Equifin Inc.'s independent public accountants includes this paragraph: "The Company incurred net losses and negative cash flows from its operating activities during 2003 and 2002. As of March 12, 2004, the Company did not have any other source of funds to replace the funds provided by the credit facility when it expires in December 2004. Such matters raise substantial doubt about the Company's ability to continue as a going concern." FALCON HOSPITALITY: Hires Marcus & Millichap as Estate Broker ------------------------------------------------------------- The U.S. Bankruptcy Court for the Southern District of Nevada gave its stamp of approval to Falcon Hospitality Development, LLC to hire Marcus & Millichap as real estate brokers to sell real property of the estate. The Debtor listed the value of the real estate property, Ramada Inn Hotel at Mesquite Nevada 89027, for $11,000,000. The Debtor is informed that Marcus & Millichap is experienced in the sale of like kind real estate, including, but not limited to the sale of commercial real property. The firm is proposing a list price of $10,000,000 for the Nevada Property. The Debtor will pay a total of 4% commission to Marcus & Millichap who will handle the sale and will market the property. Headquartered in Henderson, Nevada, Falcon Hospitality Development, LLC filed for chapter 11 protection on April 28, 2004 (Bankr. Nev. Case No. 04-14601). Zachariah Larson, Esq., at Larson Law Firm LLC represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $11,108,000 in total assets and $8,340,000 in total debts. FLEMING COMPANIES: Court Okays Dunigan Committee Settlement ----------------------------------------------------------- The U.S. Bankruptcy Court for the District of Delaware approved a settlement among Fleming Companies, Inc., its debtor-affiliates and the Unofficial Committee of Dunigan Unsecured Trade Creditors. The Unofficial Committee of Dunigan Unsecured Trade Creditors argued that Debtor Dunigan Fuels, Inc., which is a profitable company, received nothing of value in exchange for the guaranty of Fleming's obligations to pay a $975,000,000 credit facility Fleming entered with Deutsche Bank Trust Company Americas, as administrative agent, and a consortium of 123 other lenders. Fleming had used the proceeds to fund the acquisition of the wholesale distribution business comprised of Core-Mark International, Inc., and its subsidiaries, and to repay certain obligations. Dunigan, which operates Fleming's stand-alone fuel distribution business, and each of the other co-guarantors secured Fleming's obligations under the Credit Agreement with first priority security interests and liens on substantially all of their then existing and after acquired assets, including their accounts receivable and inventory. Absent Dunigan's liability for Fleming's Obligations under the Loan Documents and the Indentures, the Dunigan Unofficial Unsecured believes that Dunigan would not have been insolvent as of the Petition Date. Dunigan had a positive cash flow at the time it executed certain of the Loan Documents. Dunigan's cash flow remained positive through the filing of its petition. Dunigan generated positive cash flow in excess of $1,000,000 during the year before the Petition Date. Other than any obligations Dunigan owed to the Transferees under the Loan Documents, Dunigan was not in default under any of the obligations to its creditors on the Petition Date and was generally paying its debts as they became due. In 2003, the Dunigan Unofficial Committee sued the Debtors, Deutsche Bank, JPMorgan Chase Bank in its capacity as Collateral Agent, Provider of Treasury Services and Syndication Agent, to stop these parties from enforcing the Loan Documents against Dunigan. In the alternative, the Committee insists that the Transferees' claims and liens should be subordinated to its claims. To avoid the substantial expense of litigation and any delay of these cases, the Debtors, the Lenders and the Dunigan Unofficial Committee entered into an "across the board" resolution of numerous disputes, including: (1) the claims asserted by the Dunigan Unofficial Committee in the adversary proceeding styled "The Unofficial Committee of Unsecured Trade Creditors of Dunigan Fuels, Inc. v. Deutsche Bank Trust Company Americas et al."; (2) all reclamation rights, claims and causes of action the Dunigan Unofficial Committee has or may have against the Fleming Debtors, the Agents or Lenders, relating to any of the Debtors' Chapter 11 cases; (3) the objections raised by the Dunigan Unofficial Committee in connection with the replacement financial proposed in these cases; (4) any objections by the Dunigan Unofficial Committee to the Fleming Debtors' and the Official Committee of Unsecured Creditors' Joint Plan of Reorganization; and (5) any preference or avoidance rights or actions that the Fleming Debtors may have against the Dunigan Unofficial Committee or its members. The parties agree that: (a) Allowed Administrative Claims. The claims asserted by the Dunigan Unofficial Committee in the Adversary Proceeding and objections to the Debtors' financing and Plan are allowed as administrative claims for $312,500, to be divided among the members of the Dunigan Unofficial Committee. The amount in payment of the allowed claim will be paid by wire transfer to the counsel for the Dunigan Unofficial Committee; and (b) Mutual Releases. The parties exchange mutual releases and agree to dismiss with prejudice all pending reclamation demands, complaints and objections. However, the Dunigan Unofficial Committee retains any claims or causes of action against any of the Debtors' past or present directors or officers regarding any conduct or event occurring before the Petition Date so long as any recovery does not exceed the scope or coverage limit of any applicable Directors and Officers insurance policy. The Dunigan Committee is comprised of: -- ExxonMobil Corporation, -- Marathon Ashland Petroleum LLC, -- TransMontaigne Product Services Inc., -- Santmyer Oil Company, Inc., and -- Papco, Inc. 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. 39; Bankruptcy Creditors' Service, Inc., 215/945-7000) FLINTKOTE COMPANY: Members of Asbestos Claimants Committee Named ---------------------------------------------------------------- The United States Trustee for Region 3 appointed nine asbestos claimants to serve on an Official Committee of Asbestos Personal Injury Claimants in The Flintkote Company's Chapter 11 case: 1. Donald A. Borel, Sr. c/o Brent Coon, Esq. Brent Coon & Associates 3550 Fannin Beaumont, Texas 77701 Phone: 409-835-2666, Fax: 409-833-4483; 2. Joel Turenne, Sr. c/o Thomas M. Wilson, Esq. Kelley & Ferraro LLP 1300 East Ninth St. 1901 Penton Media Building, Cleveland, Ohio 44114 Phone: 216-575-0777, Fax: 216-575-0799; 3. Calvin E. Clark c/o Alan Kellman, Esq. The Jaques Admiralty Law Firm 1370 Penobscot Building Detroit, Michigan 48226 Phone: 313-961-1080, Fax: 313-961-5275; 4. Juanita Deason Independent Executrix for the Estate of Kenneth Wagner c/o David W. Ferrell, Esq. Reaud Morgan & Quinn, LLP 801 Laurel Street P.O. Box 26005 Beaumont, Texas 77720-6005 Phone: 409-838-1000, Fax: 409-433-5236; 5. Margaret May St. Charles Individually and as Personal Representative of the Estate of Roger W. St. Charles c/o Steven Kazan, Esq. Kazan, McClain, Abrams, Fernandez, Lyons & Farrise 171 Twelfth Street, Third Floor Oakland, California 94607 Phone: 510-465-7728, Fax: 510-835-4913; 6. Foston James Breaux c/o J. Burton Le Blanc, IV, Esq. LeBlanc & Waddell Essen Centre, Suite 420 5353 Essen Lane Baton Rouge, Louisiana 70809 Phone: 225-768-7222, Fax: 225-768-7999; 7. Patricia Shea as Executrix for the Estate of John Tubridy c/o Lisa N. Busch, Esq. Weitz & Luxenberg, P.C. 180 Maiden Lane, 17th Floor New York, New York 10038 Phone: 212-558-5500, Fax: 212-344-5461; 8. John Hyrb c/o John Barry Julian, Esq. Wise & Julian, PC 3555 College Ave. Alton, Illinois 62002 Phone: 618-462-2600, Fax: 618-462-2622; and 9. Robert Lustgarten & Phyllis Lustgarten c/o David M. Lipman, Esq. David M. Lipman, P.A. 5901 S.W. 74th Street Miami, Florida 33143 Phone: 305-662-2600, Fax: 305-667-3361. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in San Francisco, California, The Flintkote Company is engaged in the business of manufacturing, processing and distributing building materials. The Company filed for chapter 11 protection on April 30, 2004 (Bankr. Del. Case No. 04-11300). Attorneys at Sidley Austin Brown & Wood LLP serve as lead counsel to the Company. James E. O'Neill, Esq., Laura Davis Jones, Esq., and Sandra G. McLamb, Esq., at Pachulski, Stang, Ziehl, Young & Jones serve as local counsel to the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed both estimated debts and assets of more than $100 million. FRANK'S NURSERY: Names Walter Spokowski as New President & CEO -------------------------------------------------------------- Walter Spokowski has joined Frank's Nursery & Crafts, Inc. (OTC:FNCN) as its new President and Chief Executive Officer. His appointment became effective July 12, 2004. Mr. Spokowski joins Franks from Woodworkers Warehouse, Inc., where he had been President and Chief Executive Officer since October 2001. Mr. Spokowski originally joined Woodworkers' predecessor, Trend-lines, Inc., in March 1997 as Executive Vice President, Merchandising. Prior to joining Trend-lines, Mr. Spokowski spent twelve years in merchandising at Home Depot, including six years in the lawn, garden and nursery businesses, and he has over twenty five years of experience in the retail industry. "We are very fortunate and pleased to have an executive of the caliber of Mr. Spokowski join us, particularly as he has significant experience in the retail industry. Our company has faced a number of struggles over the past few years, but with the help of Abacus Advisors, we have been successful in conducting a bottom-to-top review of our operations. We are excited to have someone with Walt's experience become our CEO and capitalize on the opportunities we have identified with Abacus' assistance. Although Abacus will no longer be providing interim management services for Franks, it will continue to provide consulting services to the Board of Franks," said Gerald Hellerman, a member of the Franks Board of Directors. "I am excited to be joining Franks at this dynamic time in its history," said Mr. Spokowski. "I look forward to working with the revitalized Franks organization." About Franks Franks Nursery is the nation's largest lawn and garden specialty retailer and operates 169 stores in 14 states. Franks Nursery is also a leading retailer of indoor garden products and accessories, including silk floral arrangements, as well as Christmas decor merchandise. Franks was recently named "Michigan's Best Nursery/Garden Center" in 2004 by the Detroit News readers. At May 16, 2004, Frank's Nursery & Crafts' balance sheet shows a stockholders' deficit of $15,831,000 compared to a deficit of $13,966,000 at January 25, 2004. GMAC COMMERCIAL: Fitch Affirms Low Ratings of Classes J To P ------------------------------------------------------------ GMAC Commercial Mortgage Securities, Inc.'s mortgage pass-through certificates, series 2001-C2, are upgraded by Fitch as follows: --$34 million class B to 'AA+' from 'AA'; --$11.3 million class C to 'AA' from 'AA-'; --$15.1 million class D to 'A+' from 'A'; --$9.4 million class E to 'A' from 'A-'; In addition, Fitch affirms the following classes: --$122.3 million class A-1 at 'AAA'; --$437.7 million class A-2 at 'AAA'; --Interest-only class X-1 at 'AAA'; --Interest-only class X-2 at 'AAA'; --$15.1 million class F at 'BBB+'; --$10.4 million class G at 'BBB'; --$9.4 million class H at 'BBB-'; --$23.6 million class J at 'BB+'; --$5.7 million class K at 'BB'; --$5.7 million class L at 'BB-'; --$11.3 million class M at 'B+'; --$3.8 million class N at 'B'; --$3.8 million class O at 'B-'; --$3.8 million class P remains 'CCC'. Fitch does not rate the $11.3 million class Q certificates. The upgrades reflect the consistent loan performance of the pool since issuance and an increase in credit enhancement since issuance and levels, which are in line with the subordination levels of deals issued having similar characteristics. As of the June 2004 distribution date, the pool's aggregate certificate balance has decreased 2.83% to $733.6 million from $754.9 million at issuance. To date, there have been no loan payoffs or realized losses. Currently, there is one loan (0.56%), collateralized by a multifamily property in Asheboro, NC that is with the special servicer. The property has experienced a decline in performance as a result of weakness in the submarket. Based on a recent appraisal value of $3.5 million and the current exposure of $4.3 million, there is a potential loss at the time of disposition. GMAC Commercial Mortgage Corp., the master servicer, collected year-end (YE) 2003 financials for 72% of the pool balance. Based on the information provided, the resulting YE 2003 weighted average debt service coverage ratio is 1.32 times (x), a slight increase from issuance for the same loans. GROUPE BOCENOR: Creditors Consent to Canadian BIA Proposal ---------------------------------------------------------- Groupe Bocenor Inc. obtained approval of its proposal from its creditors pursuant to the Bankruptcy and Insolvency Act. In addition, the Corporation is pleased to announce that its two principal shareholders, Fonds de solidarit� des travailleurs du Qu�bec and 3264289 Canada Inc. have agreed to invest $14,000,000 in common shares of the Corporation conditional principally upon obtaining regulatory consents, closing of the refinancing of the indebtedness of the Corporation and ratification of the proposal by the Court. The Corporation continues to discuss the refinancing of its indebtedness with a financial institution, which financing will be used in part to repay its banking syndicate and finance its continued operations. The Corporation is negotiating with the hope to close by August 30, 2004. The Corporation continues its operations and satisfy its customers' orders. Suppliers of the Corporation for goods and services provided after the filing of the notice of intention are being paid in the normal course of business. "The overwhelming majority support of our trade creditors and the commitment of $14 million of new equity are major steps to the completion of our restructuring process. With these two important milestones behind us we can now proceed in finalizing our new financing. This will ensure the Company can commence a three-year capital investment program to increase its capacity, lower its cost base and improve overall profitability" stated Chris Southey, President and Chief Executive Officer. * * * As reported in the Troubled Company Reporter, July 6, 2004 edition, on June 10, 2004, while the banking syndicate was still negotiating for the refinancing of Bocenor's indebtedness, the Company filed a notice of intention to make a proposal pursuant to the Bankruptcy and Insolvency Act, in order to set out the terms of the restructuring of its debts and other obligations to its creditors. The proposal was filed on June 28, 2004, for approval by the creditors on or about July 14, 2004. The Company's two principal shareholders, 3264289 Canada Inc., controlled by the Wood Family, and the Fonds de solidarit, des travailleurs du Qu,bec, have extended guarantees or letters of credit to support the Company's short term indebtedness during this process. Meanwhile, Bocenor continues its operations and satisfy its customers' orders. Suppliers to the Company for goods and services provided after the filing of the notice of intention are being paid in the normal course of business. GROUPE BOCENOR is a manufacturer and distributor of a complete line of windows and doors. The company sells its products in Quebec, the Maritimes, Ontario and U.S.A, under the Bonneville Windows and Doors and Polar Windows and Doors trade marks. The Multiver division manufactures sealed units and commercial glass. GTC BIOTHERAPEUTICS: Refinances $10 Million Credit Facility ----------------------------------------------------------- On May 26, 2004, GTC Biotherapeutics, Inc., refinanced the Company's previous credit facility with Silicon Valley Bank with a new $10 million senior secured credit facility with General Electric Capital Corporation. The new credit facility is secured by a pledge of substantially all of the Company's assets, excluding intellectual property. Under the new credit facility, the Company is no longer required, as it was under the previous credit facility, to provide cash collateral for the full amount of the outstanding credit facility if its balance of cash and marketable securities falls below $18.2 million. In addition, the Company is not subject to any financial covenants under the new credit facility. At the closing the Company received approximately $10 million of gross proceeds from borrowings under the new credit facility. Approximately $9 million of the gross proceeds were used to repay principal and interest on the outstanding borrowings under the Company's previous credit facility. The Company plans to use the remaining proceeds of approximately $1 million for general corporate purposes. Headquartered at Framingham, Massachusetts, GTC Biotherapeutics is a biotechnology company engaged in development and production of therapeutic products, and cloning of animals. HARRAH'S: Fitch Affirms BB+ Sr. Subordinated Debt Ratings --------------------------------------------------------- Fitch Ratings has affirmed the following long-term debt ratings of Harrah's Entertainment and placed the long-term ratings of Caesars Entertainment on Rating Watch Positive. HET --Senior secured debt 'BBB-'; --Senior subordinated debt 'BB+'. CZR --Senior unsecured debt 'BB+'; --Senior subordinated debt 'BB-'. The action follows the July 15, 2004 announcement that HET has reached an agreement to purchase CZR for $9.44 billion comprised of $1.8 billion cash, 66.3 million shares of HET common stock ($3.3 billion), and the assumption of $4.3 billion in debt. This represents an 8.4 times (x) multiple of CZR's estimated 2004 EBITDA of $1.1 billion. One third of the purchase price will be paid in cash and two-thirds in stock. The combined entity will have the capacity to begin reducing debt from free cash flow and asset sales, with the pace of debt reduction contingent on the level of discretionary spending and timing of asset sales. Fitch's Positive Rating Watch of CZR is expected to be resolved by successful completion of the transaction. The rating(s)/ and of outlook would be adversely affected if HET is unable to reduce debt in a timely manner or chooses to pursue additional large- scale debt-financed acquisitions and/or growth projects. From a credit perspective, the transaction can be adequately absorbed within HET's existing rating category given the significant level of equity in the transaction and steady free cash flow produced by both entities. On a pro forma basis, Fitch estimates the combined entity would produce leverage of 4.5x - 5.0x at closing, depending on the level of asset sales. Following the merger, leverage would be expected to fall below 4.0x within 12-18 months of closing. Discretionary capex is expected to remain heavy through 2005, but fall off in 2006, producing $600-$700 million in free cash flow. Fitch expects share repurchase activity to be limited. While initial leverage is considerable for this rating category, Fitch notes that this is consistent with HET's historic capital structure policies with rapid improvement in leverage following acquisition-related debt increases. Management reiterated this commitment on a conference call this morning. Fitch acknowledges the strong and stable discretionary free cash flow of both companies, and HET's solid track record of integrating acquisitions. Strategically this acquisition allows HET to establish a stronger presence on the Las Vegas Strip, and reduces exposure to the more volatile regulatory environments of regional riverboat markets. While HET had previously expressed interest in building or buying discrete property on the Strip, the purchase will allow HET to immediately take advantage of currently strong Las Vegas fundamentals in a more meaningful way. CZR's Las Vegas portfolio should also allow HET to capture Total Rewards members who are bypassing HET's current offerings in Las Vegas in favor of alternative properties. Caesars' four prominent Strip properties include Caesars, Paris, Bally's and Flamingo, which are situated at one of the busiest intersections at the center of the Strip. In addition, HET should be able to improve same store sales and efficiency at CZR properties by implementing its industry-leading player tracking systems and loyalty programs. Returns on CZR's heavy capital investment program over the last several years have been disappointing, and upside exists in better asset utilization. Similarity between the regional portfolio of assets may present some obstacles from a strategic and/or regulatory standpoint that may necessitate asset sales. Extensive overlap occurs in Tahoe and Tunica, both markets in which achieving attractive prices could prove difficult. In Indiana, the legal limit of two licenses would force the sale of one of three licenses the combined company would own. In Atlantic City, the FTC or New Jersey regulatory body may view HET's ownership of five of the 12 properties (50% of the market revenues) negatively and may order divestiture. In addition, while the acquisition allows HET to leverage growth of the Las Vegas market, the same opportunity does not exist in the regional markets where same store growth potential is limited. This includes Atlantic City which is still absorbing the addition of The Borgata and faces the new competitive threat of legalized gambling in Pennsylvania. Finally, as HET's second large-scale acquisition in the past 12 months, synergies may be delayed. Over the next 12-18 months, Fitch would expect HET to focus on integrating current operations as opposed to seeking new growth opportunities. HIGH ROCK HOLDING: Case Summary & 6 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: High Rock Holding, LLC 1755 Purina, 2nd Floor Sparks, Nevada 89431 Bankruptcy Case No.: 04-52135 Type of Business: The Debtor is engaged in the business of real estate holding and development. Chapter 11 Petition Date: July 15, 2004 Court: District of Nevada (Reno) Judge: Gregg W. Zive Debtor's Counsel: Jeffrey L. Hartman, Esq. Hartman & Hartman 499 West Plumb Lane, Suite 202 Reno, NV 89509 Tel: 775-324-2800 Total Assets: $30,000,000 Total Debts: $14,322,684 Debtor's 6 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ Sierra Pacific Power Co. $5,067 Liberty Mutual Insurance $3,084 Michael B. Stewart $2,759 3 Public Communications $2,000 Franchise Tax Board $1,600 Orient Farms LLC $200 INFRASTRUCTURE SERVICE: Case Summary & 19 Unsecured Creditors ------------------------------------------------------------- Debtor: Infrastructure Service Company, LLC fka Ocean Atlantic Development, LLC 1800 Diagonal Road, Suite 425 Alexandria, Virginia 22314 Bankruptcy Case No.: 04-12037 Chapter 11 Petition Date: July 15, 2004 Court: District of Delaware Judge: Peter J. Walsh Debtor's Counsel: Michael David Debaecke, Esq. Blank Rome LLP 1201 Market Street, Suite 800 Wilmington, DE 19899 Tel: 302-425-6400 Fax: 302-425-6464 Estimated Assets: $1 Million to $10 Million Estimated Debts: $1 Million to $10 Million Debtor's 19 Largest Unsecured Creditors: Entity Claim Amount ------ ------------ McClure Charitable Remainder Trust $917,699 74900 Highway 111, Ste. 127 Indian Wells, CA 92210 Equivest, LLC $767,000 74900 Highway 111, Ste. 127 Indian Wells, CA 92210 Kenneth Wolcott Family & Equivest, LLC $700,000 74900 Highway 111, Ste. 127 Indian Wells, CA 92210 Healthcare Construction Services, Inc. $389,000 20371 Irvine Ave., Ste. 210 Santa Ana, CA 92707 The Keith Companies $67,588 Alhadeff & Solar, LLP $58,861 Project Design Consultants $58,566 T&B Planning $37,899 Southwest Strategies, LLC $28,136 Alhambra Group $10,459 Real Estate Economics $9,037 Architects Orange $7,020 R.R. Brown & Co., LLP $5,292 MDMG, Inc. $3,525 Linscott Law & Greenspan $1,930 London Group Realty Advisors $1,283 Jackson DeMarco & Peckenpaugh $1,055 Lantson E. Eldred, Esq. $911 Jon H. Lieberg, Esq. $580 IPIX CORP: Reports $3.6 Million Net Loss in 1st & 2nd Quarters -------------------------------------------------------------- IPIX Corporation (Nasdaq:IPIX), a leader in mission-critical imaging solutions where visual content is required for the protection of life and property and eCommerce, released its financial results for the quarter ended June 30, 2004. For the second quarter, revenue was $1.3 million, up from $0.7 million in the first quarter of 2004. Net loss available for common stockholders was $3.6 million in the first and second quarters of 2004. Fully diluted loss per common share was $0.23 in the second quarter compared with $0.41 in the first quarter of 2004. "Second quarter revenue includes the first sales of our Security products, which began shipping in late June," said Don Strickland, IPIX president and CEO. "We have already announced distribution relationships for our Security products in the United States, United Kingdom, Turkey, Iraq and Korea. We will continue to focus our efforts on building this channel." "Along with the sequential increase in revenues seen during the quarter, we increased our sales and marketing investments to support the launch of our new Security and AdMission products," said Paul Farmer, IPIX CFO. "We also increased spending in G&A during the quarter primarily as a result of increased expenses associated with being a public company." IPIX has total cash and short-term investment balances of $15.5 million as of June 30, 2004 up from $9.0 Million at the end of the first quarter. About IPIX IPIX Corporation -- http://www.ipix.com/-- is a leader in mission-critical imaging solutions for three core markets: 360- degree panoramic photography and movies; government and commercial video security; and self service on-line and off-line advertising. IPIX's extensive intellectual property covers patents for immersive imaging, video and surveillance applications. IPIX is headquartered in Oak Ridge, Tennessee, with co-headquarters in San Ramon, California. * * * As reported in the Troubled Company Reporter's April 2, 2004 edition, IPIX Corp.'s independent auditor expressed its opinion with respect to the Company's 2003 financial statements in the 10K and included an explanatory paragraph expressing its concern about the Company's ability to continue as a going concern. Management's plans for 2004 to address the going concern issue and associated risks are described further in the Management's Discussion and Analysis section of its Form 10K, in Footnote 3 to the 2003 financial statements and elsewhere in the 10K. JIM RICH ENTERPRISES: Case Summary & Largest Unsecured Creditors ---------------------------------------------------------------- Debtor: Jim Rich Enterprises Inc. dba Chicago West Inc. 270 Main Street Sugar Grove, Illinois 60554 Bankruptcy Case No.: 04-25940 Type of Business: The Debtor is a public restaurant lounge. Chapter 11 Petition Date: July 13, 2004 Court: Northern District of Illinois (Chicago) Judge: Pamela S. Hollis Debtor's Counsel: Forrest L. Ingram, Esq. Forrest L. Ingram, P.C. 79 West Monroe Street Suite 1210 Chicago, IL 60603 Tel: 312-759-2838 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 ------ --------------- ------------ GEC Consultants, Inc. $32,500 American Express Revolving Credit $29,437 American Express Revolving Credit $24,938 I-Dine - Rewards Network $20,000 MBNA America Revolving Credit $19,954 Northern Trust Misc. $18,000 American Express Revolving Credit $17,605 Chase Platinum Revolving Credit $15,973 Beacon News Advertising in $15,564 Suburban Chicago Newspapers U.S. Food Service Food $12,990 Sysco Food $12,271 The Plitt Co. Food $9,637 MBNA America Revolving Credit $9,616 Discover Card Revolving Credit $8,299 Capital One Revolving Credit $7,127 Aramark Misc. $6,078 Tim Dwyer Lawyer $5,213 VIP Misc. $4,350 Computer Accounting Misc. $3,500 SBC Phone book $3,453 advertising J NET ENTERPRISES: InterWorld Corp. Subsidiary files for Chapter 7 ------------------------------------------------------------------ On May 25, 2004, InterWorld Corporation, a 95.3% owned subsidiary of J Net Enterprises, Inc., filed a voluntary petition for relief under chapter 7 of title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York (Case No. 04-13590). Section 362(a)(3) of the Bankruptcy Code provides that "any act to obtain possession of property from the estate or to exercise control over the property of the estate" was automatically stayed upon the filing of InterWorld's chapter 7 petition. The automatic stay will protect property of the Debtor's estate from the reach of individual creditors so that it will be available to all creditors, thereby ensuring that all creditors, including any future tort claimants, are treated equitably. The automatic stay prohibits the prosecution of claims against the Debtor outside of the bankruptcy case. Once one of Nevada's largest gaming-machine operators, J Net Enterprises sold its one-armed bandits and bet the house on transforming itself into an Internet incubator. Then came the Tech Wreck. Headed by CBS MarketWatch co-founder Allan Tessler, the firm has since sold or written off most of its investments in business software and technology infrastructure startups and consolidated InterWorld into J Net's operations. The software firm has since filed for bankruptcy. J Net's making a bet that its latest investment, investment advisors Epoch Investment Partners, will bring about a reversal of its bad fortune. KING SERVICE INC: Case Summary & 20 Largest Unsecured Creditors --------------------------------------------------------------- Debtor: King Service, Inc. dba King Fuels 8049 Main Street Troy, New York 12180 Bankruptcy Case No.: 04-14661 Type of Business: The Debtor operates gasoline service stations, convenience stores and a fuel oil business. Chapter 11 Petition Date: July 14, 2004 Court: Northern District of New York (Albany) Judge: Robert E. Littlefield Jr. Debtor's Counsel: Howard M. Daffner, Esq. Segel, Goldman, Mazzotta & Siegel, P.C. 9 Washington Square Albany, NY 12205 Tel: 518-452-0941 Total Assets: $12,090,890 Total Debts: $13,498,949 Debtor's 20 Largest Unsecured Creditors: Entity Nature Of Claim Claim Amount ------ --------------- ------------ Sun Refining & Marketing 2nd mortgage-530 $1,600,000 1801 Market Street Route 67 Philadelphia PA 19103 Value of Collateral: $3,500,000 Petroleum Realignment Co. 1st & 2nd mortgage $4,250,000 750 Second Avenue Value of Collateral: Troy, NY 12182 $3,500,000 Net Unsecured: $890,000 City of Troy Treasurer Taxes $800,000 City Hall Monument Square Troy, NY 12180 Finkle Distributors, Inc. Judgment creditor $400,000 P.O. Box 689 Johnstown, NY 12095 Whiteman Osterman Hanna Judgment creditor $350,000 One Commerce Plaza Albany, NY 12260 John Schneider Judgment creditor $341,370 102 Liberty Road Troy, NY 12180 Business Loan Center Hoosick Rd., Troy $300,000 645 Madison Avenue Prop. 19th Floor Value of Collateral: New York, NY 10022 $900,000 Metz Family LLC Hoosick St. property $250,000 Value of Collateral: $900,000 McGinn Smith & Co., Inc. Note payable $210,000 R. Jerry Tommasone Judgment creditor - $168,384 Hoosick Rd. prop. Value of Collateral: $900,000 Joseph LaForte Hoosick St. property $110,000 Value of Collateral: $900,000 Niagara Mohawk Utilities $96,340 Lynn Lounsbery Slote Note payable $76,000 Daniel Slote Loan $75,000 Urbach Kahn & Werlin, P.C. Judgment creditor $60,000 Robert M. Webb Note payable $45,000 Mackey Electric, Inc. Maintenance of $37,123 equipment Preserver Group, Inc. Misc. insurance $35,000 Aurora Inc. Property insurance $27,638 Continental Programming Maintenance / office $19,724 Group LA QUINTA: Fitch Affirms Sr. Unsecured Ratings at BB- ----------------------------------------------------- Fitch Ratings has affirmed the senior unsecured ratings of La Quinta at 'BB-' following LQI's recent announcement that it will acquire the limited service lodging business of Marcus Corporation for $395 million in cash. Structured as an asset sale, the acquisition entails 178 properties or roughly 16,837 rooms, which include 84 owned Baymont hotels, seven owned Woodfield hotels, one owned Budgetel hotel, seven joint venture interests and management contracts; and 84 existing Baymont franchises. Baymont branded hotels account for 85% of acquired EBITDA. The proposed transaction represents a 12 times (x) multiple of LTM pro forma EBITDA of approximately $33 million, or approximately $38,000 per room. In the event that certain liabilities are assumed, the purchase price would be reduced accordingly. The purchase price appears to be in line with recent limited service hotel transactions, and well below estimated replacement cost. The Rating Outlook is Stable. The acquisition will initially be financed with cash-on-hand of $291 million and committed debt financing of $150 million. Committed debt financing will take the form of either a term bank loan or senior notes, and may be upsized to $200 million to meet additional financing requirements. The acquisition can be accommodated within existing financial covenants, but required a waiver under the current credit agreement which limited acquisition spending to $300 million. The acquisition is expected to close sometime in late-summer or early-autumn 2004. In the event that the deal is not completed, Fitch would continue to regard LQI's acquisition appetite as overhang to the rating despite credit metrics that are relatively strong for the rating. From a credit perspective, the acquisition increases fee income and keeps credit measures within an acceptable range for the existing category. Pro forma for the acquisition, fiscal year-end 2004 total leverage and net leverage is projected to be 4.4x and 4.3x respectively versus 5.8x and 2.9x, respectively at FYE 2003. This is the same level of leverage that existed prior to the equity offering in November 2003. Coverage ratios are actually projected to improve slightly post-acquisition. Notably, Fitch's December 2003 rating affirmation incorporated the assumption that LQI's acquisition ambitions would ultimately reverse improvement in net leverage achieved in 2003 by the equity offering. Management has stated that it is targeting net leverage range of 3.5x - 4.5x. At these levels, upward revision of the rating may be considered. Fitch's conservative case projections suggest that leverage will decline at an acceptable pace over the next several years. From a strategic perspective, the acquisition is in line with LQI's stated priority of growing the company through acquisition through both complementary brand purchase and/or real estate expansion. The well-regarded regional Baymont brand provides a strong new presence in Illinois, Wisconsin, Michigan and other parts of the Midwest, and reduces relatively high geographic concentration in certain markets. This should drive increased brand awareness through conversions, and improving delineation of existing product through re-branding. Revenue synergies are expected to be achieved by combining loyalty programs, improving Baymont's electronic distribution activity and utilizing LQI's yield management skills. In calendar 2003, LQI outperformed the Baymont branded properties on all these fronts. The acquisition also provides new growth opportunities through the franchising of additional brands, and accelerates franchising of the La Quinta brand. On the cost side, LQI management believes there is an opportunity to improve Marcus' lodging margins, which have been on the decline since 1995, even prior to the lodging downturn when revenues were increasing. The combined entity will leverage LQI's existing overhead and Baymont's operating costs will be rationalized through the implementation of LQI's training programs, utilization of a single technological platform and consolidation of purchasing and sales. Fitch acknowledges the progress management has made since assuming control in April 2000. This team has performed well in a challenging environment, executing on stated goals to divest the healthcare assets, improve the capital structure, launch a franchise program, and upgrade assets. The challenging demand environment over the last several years has made it difficult for management to improve operating results over their tenure. However, LQI is starting to benefit from both a general improvement in lodging industry fundamentals, as well as revenue enhancement strategies implemented in recent years. Over the last several quarters LQI has posted strong RevPAR gains of 7%, 10% and 11%, outperforming industry RevPAR growth of 2%, 4% and 6%, respectively. Importantly, positive RevPAR comparisons and outperformance extended to LQI's top-ten markets, which had been hardest hit by the downturn. Looking forward, Fitch believes LQI will be able to positively leverage this RevPAR growth to EBITDA increases in 2004 and beyond. As such, management is now calling for standalone La Quinta RevPAR growth of approximately 6%, and a concomitant rise in EBITDA of 8% in 2004. Based on year to date performance, this appears to be achievable MIRANT CORP: Court Okays Simpson's Withdrawal as Committee Counsel ------------------------------------------------------------------ In Mirant Corporation's chapter 11 cases, Simpson obtained Court approval to withdraw as counsel to the Mirant Committee. The Mirant Committee retained Simpson Thacher & Bartlett, LLP, as its co-counsel on July 25, 2003. The Mirant Committee has recently determined to employ the slate of advisors that advised the prepetition bank agents. Simpson is willing to facilitate the Mirant Committee's preference to receive advice from those sources by withdrawing from representation of the Mirant Committee. Headquartered in Atlanta, Georgia, Mirant Corporation -- http://www.mirant.com/-- together with its direct and indirect subsidiaries, generate, sell and deliver electricity in North America, the Philippines and the Caribbean. The Company filed for chapter 11 protection on July 14, 2003 (Bankr. N.D. Tex. 03- 46590). Thomas E. Lauria, Esq., at White & Case LLP represent the Debtors in their restructuring efforts. When the Company filed for protection from their creditors, they listed $20,574,000,000 in assets and $11,401,000,000 in debts. (Mirant Bankruptcy News, Issue No. 38; Bankruptcy Creditors' Service, Inc., 215/945-7000) MORGAN STANLEY: Fitch Affirms Low Ratings on 6 Classes ------------------------------------------------------ Fitch Ratings upgrades Morgan Stanley Capital I Inc., commercial mortgage pass-through certificates, series 1999-RM1, as follows: --$45.1 million class C to 'AAA' from 'AA'; --$12.9 million class D to 'AA+' from 'A+'; --$34.4 million class E to 'A' from 'BBB+'; --$17.2 million class F to 'BBB+' from 'BBB'; --$10.7 million class G to 'BBB' from 'BBB-'. The following classes are affirmed by Fitch: --$69.0 million class A-1 'AAA'; --$429.3 million class A-2 'AAA'; --Interest-only class X 'AAA'; --$43.0 million class B 'AAA'; --$23.6 million class H to 'BB+'; --$8.6 million class J to 'BB'; --$12.9 million class K at 'B+'; --$6.4 million class L at 'B'; --$8.6 million class M at 'B-'. The $8.6 million class N remains at 'CCC'. Fitch does not rate the $15.0 million class O certificates. The upgrades reflect both the increased credit enhancement levels from loan payoffs, amortization, and the subordination levels of deals with similar characteristics issued on July 15, 2004. As of the June 2004 distribution date, the transaction's aggregate principal balance has decreased 13.4% to $743.0 million from $859.7 million at closing. Currently, one loan (0.57%) is in special servicing and real estate owned. The loan is secured by a retail property in Kernersville, NC. The special servicer is currently negotiating a contract with a potential buyer and losses are expected. All of the other loans in the deal remain current. Realized losses to date total $2.2 million or 0.26% of the original principal balance. NAVITRAK INT'L: Extends Closing Date For Sale To Blackstone ----------------------------------------------------------- Navitrak International Corporation (NEX: NV.H) and Blackstone Holdings Corporation, a private Nevada corporation, have agreed to extend the deadline for completing the sale of all of the operating assets of Navitrak International to Blackstone to September 16, 2004. The shareholders of Navitrak International approved the sale transaction at the annual and special meeting of shareholders held on April 30, 2004. The closing of the sale transaction is conditional upon Blackstone completing aggregate equity financings equal to at least US$2.6 million. Blackstone has agreed to increase the aggregate principal amount of secured loans to be advanced to Navitrak International prior to the scheduled closing to approximately US$1.6 million. To date, Navitrak International has received approximately US$1.2 million from Blackstone and the US$400,000 of additional advances are planned to be received prior to the scheduled closing date according to an agreed funding schedule. In the event that Blackstone fails to advance any of the scheduled additional advances or raise the required aggregate equity financing of US$2.6 million by certain dates, then the interest rate per year applicable to the loans advanced by Blackstone to Navitrak International shall be reduced from 18% to 12% and Navitrak International shall have the right to extend the maturity date of the loans from December 31, 2004 for consecutive periods of 90 days, subject to certain conditions. Subject to certain conditions, if Blackstone fails to make any loan advance by the established deadline and Blackstone fails to cure such default within 30 days, Navitrak International may terminate the purchase agreement. If Blackstone fails to raise the balance of the required equity by September 16, 2004 and Navitrak elects to close the transaction on the amount advanced, then the Blackstone and Navitrak International secured debt will be converted into Blackstone equity. Navitrak International sells Active Maps and Map Activated EO/IR Turret Control systems used by airborne, marine and ground personnel, including unmanned vehicles, typically engaged in law enforcement, military, firefighting and search and rescue missions or resource and utility services. Specific mission profiles include incident or emergency response or surveillance activities. The system provides tools for end-to-end mission management; covering planning through to post mission analysis and including a suite of sophisticated GIS tools. The digital Active Map based system integrates with a range of real time sensors, including sophisticated gimbal camera systems with EO/IR payloads to provide superior spatial information about extended targets, as well as the asset upon which the system is installed. Upon completion of the transaction, Blackstone will carry on the business currently conducted by Navitrak International. At March 31, 2004, Navitrak International Corp.'s balance sheet shows a deficit of CN$3,229,102 as compared to a deficit of CN$2,570,590 at December 31, 2003 NESS ENERGY: Says $946,000 2nd Quarter Gross Income Highest Ever ---------------------------------------------------------------- Ness Energy International, Inc. (OTC Bulletin Board:NESS) has acquired additional leases, continues to progress business with independents, with significant income forecasted, and Ness achieved record income for the completed second quarter. Additional Texas Leases Ness extended lease holdings with new acquisitions. Additional leases supply Ness with the opportunity, directly or working with larger independents, to seek the vast resources of the Barnett Shale, from a long term perspective, but on the short term, Ness expects a multi-million dollar return from its lease business, working with independents. Ness increased the 13,000 acres recently acquired up to 24,000 acres, and from five to six Texas counties. The sixth county, Montague, Texas, reflects completed transactions acquiring exploration and development rights to an additional 2,900 acres containing 5 wells, with production, though at limited levels. According to President, C.E.O. Sha Stephens, "A third party, near the N.W. corner of our new acreage, is in the Barnett Shale, having produced approximately 50,000 barrels of oil the past six months, and about 1 million cubic feet of natural gas per day. The nearby Barnett Shale activity is a promising feature of the acquisition, for potential Barnett Shale returns from our efforts." Working With Independents, $3 Million Plus Forecasted As recently announced Ness is establishing business, with significant income projected, based upon deals with larger independent oil and gas companies. Ness operations are already benefited by recently completed transactions of close to a million dollars. Pending talks with three large independents has resulted in new terms, subject to contracts, on almost 15,000 acres which Management expects may equal about $5 million gross, or over $3,000,000 net dollars for Ness. President, C.E.O. Stephens further commented, "Cash flow should be boosted by completion of pending deals with independents. The demands of acquiring properties in six counties, and dealing with the large independents and other efforts, including on the financing side... I will be at Wall Street today...has not allowed time for communicating our progress, so I am pleased to supply this announcement, with more news as it develops." Record Second Quarter The second quarter, now complete, supports Management's projections. Ness accounting department confirmed $946,000 in gross income for the quarter. This figure, not as high as hoped, is the highest quarterly income in Ness history. President and C.E.O. Stephens further commented, "Only reason we did not reach full projections is the significant logistics of paperwork and labor regarding title searching and related deal tasks." Other News Ness is in the process of leasing to bring leasehold rights up to about 50,000 acres, and if acquired, these rights may be exploited directly or working deals with independents. As circumstances permit, additional projections may be released in the days ahead. About Ness-The Vision The current business of the Company is focused upon development and execution of oil and gas exploration plans with a focus both on pursuits in the petroleum rich State of Texas, and also in the Middle East, specifically Israel. Ness believe Israel, in particular the southwest end of The Dead Sea, is a place where "Science and The Bible shake hands" and that Ness will achieve the vision of the location and recovery of an abundant source of oil and gas in Israel. * * * As reported in the Troubled Company Reporter's May 5, 2004 edition, Ness Energy International Inc. dismissed its accountants. The dismissal was the Company's determination, and part of its plan to appoint a new firm with both international abilities and that is located nearer to Wall Street as the replacement. The Company says that the dismissal was in no way due to dissatisfaction with their firm, which it found to be both experienced and professional in Company dealings and there was no dispute with the prior accountant. Management, however, believes, for this New Year of 2004, that Ness Energy International needs to work more closely with firms in the northeast, and a northeastern auditing firm with contacts overseas may be a better fit for the Company's current and future needs, hence the need to terminate the old firm and hire a new one. The dismissal was confirmed by letter received February 19, 2004 from the former accountants, the firm of Weaver and Tidwell, LLP, dated February 17, 2004, confirming the client-auditor relationship had ceased. A letter was supplied to Ness Energy dated March 11, 2004 from the Former Accountant, where the accountants stated they modified their reports for the years ended December 31, 2002 and 2001 regarding the Company's ability to continue as a going concern. NEW HEIGHTS: U.S. Trustee Names 3-Member Creditors' Committee ------------------------------------------------------------- The Acting United States Trustee for Region 3 appointed three creditors to serve on an Official Committee of Unsecured Creditors in New Heights Recovery & Power, LLC's Chapter 11 case: 1. Thoesen Tractor & Equipment Co., Inc. Attn: Joseph M. Thoesen 3142 Lincoln Highway Lynwood, Illinois 60411 Phone: 708-758-2060, Fax: 708-758-8369; 2. Fluid Power Services, Inc. Attn: Amy M. Rubino 5050 W. 45th Avenue Gary, Indiana 45408 Phone: 219-828-4143, Fax: 219-838-4158; and 3. Advanced Recovery Systems Attn: Thomas Edward Walma 10855 W. 400 N. Michigan City, Indiana 46360 Phone: 219-879-0444, Fax: 219-879-0402. Official creditors' committees have the right to employ legal and accounting professionals and financial advisors, at the Debtors' expense. They may investigate the Debtors' business and financial affairs. Importantly, official committees serve as fiduciaries to the general population of creditors they represent. Those committees will also attempt to negotiate the terms of a consensual chapter 11 plan -- almost always subject to the terms of strict confidentiality agreements with the Debtors and other core parties-in-interest. If negotiations break down, the Committee may ask the Bankruptcy Court to replace management with an independent trustee. If the Committee concludes reorganization of the Debtors is impossible, the Committee will urge the Bankruptcy Court to convert the Chapter 11 cases to a liquidation proceeding. Headquartered in Ford Heights, Illinois, New Heights Recovery & Power, LLC -- http://www.tires2power.com/-- is the owner and operator of the Tire Combustion Facility and other tire rubber processing facilities. The Company filed for chapter 11 protection on April 29, 2004 (Bankr. Del. Case No. 04-11277). Eric Lopez Schnabel, Esq., at Klett Rooney Lieber & Schorling represents the Debtor in its restructuring efforts. When the Company filed for chapter 11 protection, it listed both its estimated debts and assets of over $10 million. NEWMARKET TECHNOLOGY: Acquires 25% Interest in RedMoon Broadband ---------------------------------------------------------------- NewMarket Technology Inc. (OTCBB:IPVO) and RedMoon Broadband reported the stock sale of a 25% interest in RedMoon to NewMarket. The RedMoon stock acquisition represents one of several strategic acquisition opportunities NewMarket is currently negotiating. The purchase price of $1.2 Million for the 25% stock position will be paid in cash over the next twelve months with a performance-based option to purchase an additional 26% interest. NewMarket has previously reported an acquisition pipeline that could add more than $30 million in annual revenue to the company. "We have established a solid foot hold with our existing products and services in the telecommunication, healthcare and homeland security markets, all of which hold substantial opportunity for emerging WiFi solutions," said Philip Verges, CEO of NewMarket. "We believe the addition of NewMarket will drive RedMoon sales well past the current $10 million dollar forecast for the next 12 months." The WiFi industry represented $6 Billion in revenue in 2003 according to Gartner with 4.2 Million WLAN users in North America. Gartner projects that WLAN users in North America will grow to more than 31 million users by 2007. The addition of wireless broadband into NewMarket's existing telecommunication products and services further strengthens NewMarket's position in the competitive telecommunications sector. "We see multiple cross selling opportunities within NewMarket's existing channels and great potential in the functions and features NewMarket can bring to our current WiFi solutions," said Bryan Thompson, CEO of RedMoon. "RedMoon currently has WiFi and fixed wireless service contracts in place with leading national residential builders and will soon be a recognized leader in the residential market. We are also involved in a number of municipal wireless mesh network projects and anticipate significant sales growth from implementing and managing city government mobile data broadband networks." About RedMoon Broadband Inc RedMoon Broadband Inc. -- http://www.redmoonbroadband.com/-- specializes in the design, construction and maintenance of wireless high-speed Internet networks, public "Hot Spot" user authentication services, as well as back office data and billing management systems for ISPs. WiFi, also known as 802.11b, has now become the most popular, worldwide standard for wireless local area networks in offices, homes and public spaces. RedMoon Neighborhood Networks, WiFi Hot Spots, homebuilders, schools, libraries, medical facilities and government buildings can benefit from high-speed Internet access at a fraction of the cost of traditional broadband services. RedMoon eliminates the need for last-mile copper connectivity and is able to combine out-of-this- world speed with down-to-earth-pricing. About NewMarket Technology Inc. In 2002, NewMarket -- http://www.newmarkettechnology.com/-- launched a business plan to continuously introduce emerging communication technologies to market. The plan included a financing model for early technologies and an approach to creating economies of scale through a specialized service and support organization intended specifically for the emerging technology industry. The Company posted six consecutive profitable quarters through 2003 and established an annualized $15 million in revenue. In 2003, NewMarket acquired Infotel Technologies in Singapore and IP Global Voice, led by CEO Peter Geddis, a former Executive Vice President and Chief Operating Officer of Qwest Communications (NYSE:Q). In 2004, the Company diversified its communications technology offering into the healthcare and homeland security industries with the respective acquisitions of Medical Office Software Inc. and Digital Computer Integration Corp. RKM IT Solutions of Caracas, Venezuela, was also recently acquired as NewMarket's entry into the Latin American market. * * * In the Form 10-QSB for the quarterly period ended March 31, 2004, NewMarket reports: Liquidity and Capital Resources "At March 31, 2003, the Company had cash of $16,300 and a working capital deficit of $1,510,700 as compared to cash of $1,395,000 and working capital surplus of $252,000 at March 31, 2004. This improved working capital situation was due primarily to the implementation of the previously herein described new business model implemented in June 2002, which includes as part of the plan the acquisitions made over the last year. In addition we have been successful attracting investment capital to carry out this business model. "Since inception, the Company has financed operations primarily through equity security sales and convertible debt. The nature of the growth strategy of the Company will require further funding to be acquired either through equity or debt. Accordingly, if revenues are insufficient to meet needs, we will attempt to secure additional financing through traditional bank financing or a debt or equity offering; however, because the rapid growth and nature of the acquisitions of the Company and the potential of a future poor financial condition, we may be unsuccessful in obtaining such financing or the amount of the financing may be minimal and therefore inadequate to implement our continuing plan of operations. There can be no assurance that we will be able to obtain financing on satisfactory terms or at all, or raise funds through a debt or equity offering. In addition, if we only have nominal funds by which to conduct our operations, it will negatively impact our potential revenues." NEXEN INC: Generates Solid Second Quarter Financial Results ----------------------------------------------------------- Nexen had another quarter of strong earnings and cash flow. This was driven by high commodity prices and attractive margins, offset by a stronger Canadian dollar and lower production in Yemen, the US Gulf of Mexico and Canada. Our cash flow and earnings were impacted by a reduced contribution by marketing during the quarter. This largely reflects the accounting treatment of natural gas storage positions held by our marketing group. Accounting rules require that losses on financial positions which offset natural gas in storage be expensed during the quarter, while the gains on these inventory positions are not recognized until the gas is withdrawn from storage. At quarter- end, we had unrecognized gains of $21 million on the 20 billion cubic feet of natural gas held in storage. As approved by our shareholders in May, our stock option plan converted to a tandem option plan. In the second quarter, we recognized a one-time non-cash expense of $54 million on the conversion of this plan. Operating costs increased 14% to $6.06 per boe compared to the second quarter of 2003 due to higher water-handling and disposal costs, coupled with increased maintenance and workover activity in Yemen; and lower production and unplanned maintenance offshore Australia. We expect operating costs to decrease in the second half of the year as we add new production in the Gulf of Mexico. Although operating costs increased in the second quarter, we continue to expect to deliver 10% growth in cash flow per year, between 2002 and 2004, assuming constant prices and volumes. "If oil prices average US$30 per barrel and natural gas prices average US$4.25 per mmbtu during the second half of the year, we expect cash flow for the year of approximately $1.7 billion, and a modest increase in our net debt," commented Charlie Fischer, Nexen's President and Chief Executive Officer. "At current prices, we expect to further reduce our debt this year. This is important as we continue to develop our Long Lake Synthetic Crude Oil project." Yemen produced 106,100 bbls/d in the second quarter of 2004. Production was impacted by declines and lower than expected productivity from wells drilled this year. An additional service rig will be added to the program in order to meet the demands of ongoing field maintenance. Offshore Australia, the Buffalo field was shut-in May 28th because of damage to a production vessel. This field will be brought back on stream in late July. This will restore over 3,000 bbls/d of production until the facilities are decommissioned in November this year. The Gulf of Mexico produced 48,100 boe/d in the second quarter. Incremental oil production from new wells at Gunnison was offset by lower oil production at Aspen where increased water production from Aspen-1 affected volumes. We plan to remediate this well later this summer to reduce water production. Natural gas production was impacted by base declines at Vermilion 76 in the shallow-water and the sanding-off of a high rate well at Gunnison in early May. The Gunnison well had been performing above expectation and was scheduled for re-completion in the fourth quarter of 2004. It will now be re-completed in July. Our business plan on the shelf is to exploit mature assets. Historically, we have offset base declines through drilling. The timing of our shelf drilling program prevented this until late in the second quarter. Our current production in the Gulf of Mexico is approximately 63,000 boe/d following the tie-in of an updip development well at Aspen and the tie-in of successful development wells at West Cameron 170, Vermilion 302, and Gunnison. In the second half, we will see further increases in our shallow-water production from drilling at Vermilion 76, Vermilion 302 and re-completions at West Cameron 170. In the deep water, we will work-over Aspen-1 to reduce water production and at Gunnison, we will tie-in the final three development wells and re-complete the shut-in well. We continue to expect the Gulf of Mexico to exit the year producing at approximately 75,000 boe/d. "Current corporate production is over 250,000 boe/d and the second half of the year will see our overall production grow," said Fischer. "However, factoring in second quarter results for the Gulf of Mexico and Yemen, we will likely be at or slightly below the lower end of our guidance range of 255,000 to 275,000 boe/d for the full year." Yemen - East Al Hajr (Block 51) Development Underway Development of our BAK-A field on East Al Hajr in Yemen is on schedule to commence early production in late 2004. To date, 16 of the 17 planned development wells have been drilled. The final one will be drilled in the third quarter. Contracts are currently being awarded for construction of the central processing facility, gathering system, and pipeline tieback to our Masila export system. Pipeline construction began last month. Full production from BAK-A is expected to commence during the second quarter of 2005 at 25,000 bbls/d. We have an 87.5% interest in East Al Hajr. One exploration well was drilled on Block 51 during the quarter. The well will be tested at a future date. We plan to drill five additional independent prospects this year with the next exploration well to start drilling early in the third quarter. Athabasca Oil Sands - Long Lake Synthetic Crude Oil Project on Track Our Long Lake Synthetic Crude Oil project remains on schedule and on budget. We have focussed on purchasing major equipment, materials and services; developing detailed schedules; site clearing and civil engineering work; and completing detailed engineering work. Flint Infrastructure Services Ltd. and Ledcor Projects Inc. are the prime construction contractors for the project. To date, over 80% of the major equipment for the steam-assisted-gravity-drainage production facilities and over 45% of the equipment for the upgrader have been purchased. Site clearing has been completed and rough grading is underway. Drilling of 65 SAGD well pairs for the project will start in the third quarter of 2004. Fabrication of the more than 700 equipment modules required by the project begins in the fourth quarter, with on-site mechanical work commencing in the first quarter of 2005. The Long Lake project will develop and upgrade bitumen into a high-quality, light, sweet, premium synthetic crude (PSC) oil. SAGD bitumen production is expected to commence in 2006, with 60,000 bbls/d of upgraded PSC oil production beginning in 2007. This project is the first phase in the development of our bitumen assets at Long Lake. "Long Lake is a key part of our strategy to developing a stable, high value production base in North America," explained Fischer. Gulf of Mexico Exploration We expect to drill a number of high-potential exploration wells in the Gulf of Mexico in the second half of the year. These include prospects at Crested Butte, three miles northwest of our Aspen field; Anduin in the Mississippi Canyon; and a deep-shelf test at Main Pass 240. We are finalizing our technical evaluation of a number of additional deep-shelf gas prospects and expect to begin drilling four or more of these before year-end. "All of these prospects are exciting opportunities, featuring relatively short-cycle times from discovery to production," said Fischer. In March, we acquired a 13.34% interest in the Tobago prospect. Tobago is located in 7,500 feet of water on Alaminos Canyon Block 859 and the east half of Block 858, between the Great White and Trident discoveries. The discovery well, which has been temporarily plugged and abandoned, encountered 50 feet of net pay. We expect Tobago to be part of a future Alaminos Canyon regional development. West Africa Exploration Offshore Nigeria, the Usan West-1 exploration well located on OPL- 222 commenced drilling on May 17th. This well is four miles west of the main Usan field and is testing a separate structure. Results are expected during the third quarter. We anticipate two additional wells will be drilled on the block this year. We are working with our partners to finalize a field development plan for Usan by year-end. On OML-115, we will spud our Ameena prospect in mid-August, and if successful, we will move the rig and drill an appraisal well. Ameena is in 125 feet of water, approximately 40 miles offshore Nigeria. On Block K, offshore Equatorial Guinea, we plan to drill two exploration prospects which are on trend with recent commercial discoveries directly to the northeast. The first well is expected to spud in September. Quarterly Dividend The Board of Directors has declared the regular quarterly dividend of $0.10 per common share payable October 1, 2004 to shareholders of record on September 10, 2004. Nexen Inc. is an independent, Canadian-based global energy and chemicals company, listed on the Toronto and New York stock exchanges under the symbol NXY. We are uniquely positioned for growth in the deep-water Gulf of Mexico, the Athabasca oil sands of Alberta, the Middle East and West Africa. We add value for shareholders through successful full-cycle oil and gas exploration and development, a growing industrial bleaching chemicals business, and leadership in ethics, integrity and environmental protection. * * * As previously reported, Standard & Poor's Ratings Services affirmed its 'BBB' long-term corporate credit and senior unsecured debt ratings, its 'BBB-' subordinated debt rating and 'BB+' preferred stock rating on Calgary, Alberta-based Nexen Inc. following the company's announcement of the 67 million barrels of oil equivalent negative revision to the company's proven reserves. The outlook is stable. Nexen's average business risk profile reflects the company's 811 million boe proven reserve base and strong liquids focus; its geographically diversified exploration and production operations; and the business diversification provided through its chemicals operations. Nexen's moderate financial risk profile reflects the company's improved financial position achieved through its recent efforts to reduce debt. In addition, Nexen's financial policies focus on the diversification of debt types and maturities as a means of maintaining financial flexibility. Although the company has both increased capital expenditures and funded debt reduction on the strength of stronger pricing fundamentals in the recent past, debt levels could trend higher if Nexen proceeds with its North American development projects and expands its international operations in a less robust pricing environment. NEXTEL COMMS: Subsidiary Re-Finances Secured Debt Facility ---------------------------------------------------------- Nextel Finance Company, a subsidiary of Nextel Communications Inc. (NASDAQ:NXTL) has entered into a new five year $4 billion revolving credit facility, replacing its existing secured term loan A and revolving credit facilities which totaled $2.6 billion. Under the new secured revolving credit facility, the full $4 billion commitment will remain available until final maturity in 2009 and may also be used to secure letters of credit. The amended credit agreement governing the new facility includes revised terms designed to provide Nextel with greater operating flexibility, including simplified covenants, collateral and guarantee release provisions and other features typically found in facilities entered into by investment grade borrowers. "The closing of our new $4 billion revolver represents another important milestone on our path to investment grade," said Paul Saleh, Nextel's executive vice president and chief financial officer. "Nextel's consistently strong financial results, positive credit ratings trajectory, and favorable bank market conditions combined to produce exceptional demand for our new revolving credit facility. We are increasing our liquidity while at the same time reducing our interest rates, extending our maturities and improving our overall credit profile. We have enhanced our financial flexibility and our balance sheet has never been stronger." At closing, Nextel borrowed $1 billion of the new facility and used $476 million cash on hand to repay the outstanding balance of the existing term loan A ($1.36 billion) and revolving credit facility ($116 million). The existing $2.2 billion secured term loan E that matures in 2010 remains outstanding subject to the terms of the amended credit agreement. Under the terms of the new facility, Nextel has increased its borrowing capacity by $1.4 billion and reduced its borrowing costs by 25 basis points on the "drawn" portion and 60 basis points on the "undrawn" portion of the revolving credit facility, based on current debt ratings. The new revolving credit facility also provides for further reductions in borrowing costs as Nextel's debt ratings improve, as well as the termination of liens and subsidiary guarantees upon satisfaction of certain conditions. About Nextel Nextel Communications, a FORTUNE 200 company based in Reston, Va., is a leading provider of fully integrated wireless communications services and has built the largest guaranteed all-digital wireless network in the country covering thousands of communities across the United States. Today 95 percent of FORTUNE 500(R) companies are Nextel customers. Nextel and Nextel Partners, Inc. currently serve 296 of the top 300 U.S. markets where approximately 252 million people live or work. * * * As reported in the Troubled Company Reporter's June 28, 2004 edition, Fitch Ratings has upgraded the ratings on Nextel Communications Inc.'s senior unsecured notes to 'BB+' from 'BB' and Nextel Finance Company's senior secured bank facility to 'BBB-' from 'BB+' and Nextel's preferred stock rating to 'BB' from 'BB-'. In addition, Fitch has assigned a 'BBB-' rating on Nextel Finance Company's new five-year $4 billion senior secured revolving credit facility. The Rating Outlook is Positive. The rating action reflects Nextel's continued progress in improving its credit profile by optimizing its capital structure through the company's proposed $4 billion revolving credit facility, the $770 million reduction in debt since the end of 2003, and future expectations for balance sheet improvement to further reduce financial risk. Moreover, Nextel's strong operational performance through its differentiated push-to-talk service, leading to high average revenue per user, low churn, and solid net additions, underpins management expectations for healthy free cash flow prospects in 2004 in excess of $1.7 billion. NIR DIAGNOSTICS: Shareholders Approve New CME Telemetrix Name -------------------------------------------------------------- NIR Diagnostics Inc., (TSX Venture:CEM) formerly CME Telemetrix Inc., a leading-edge developer of near-infrared instruments, reports that its shareholders approved a new name for the Company at the Annual General and Special Meeting held on July 15, 2004 in Toronto. The new name, NIR Diagnostics, is intended to better reflect the Company's focus on developing and commercializing diagnostic devices to monitor key blood analytes using its patented near-infrared technology. "Our new name reflects the transformation of our Company over the past year, during which we broadened our technology portfolio to include in vitro diagnostic applications, streamlined our development activities and secured additional capital," said Duncan MacIntyre, President and CEO of NIR Diagnostics Inc. "NIR Diagnostics has a two pronged strategy for building shareholder value: commercializing our in vitro product pipeline for near-term revenue generation and securing strategic alliances to develop our non-invasive glucose monitoring technology." Addressing shareholders, Mr. MacIntyre outlined the next series of significant milestones in NIR Diagnostic's product development programs: - The Company intends to rapidly commercialize HemoNIR(TM), an in vitro diagnostic device to determine functional and non-functional hemoglobin in a clinical setting. This device will enter clinical trials in 2004 with the objective of submitting regulatory fillings for approval in early 2005. - The Company will continue to develop its in vitro technology to measure blood analytes critical to two of the largest markets in the blood analysis market, cholesterol and diabetes, and is seeking strategic alliances to further these programs. - The Company remains committed to commercializing GlucoNIR(TM), its non-invasive blood-glucose monitoring device, either through partnering or out licensing opportunities. In addition, shareholders elected the Hon. Al Graham, P.C., LL.D. to the Company's Board of Directors. Senator Graham is a former Leader of the Government in the Senate and a former President of the Liberal Party of Canada. About NIR Diagnostics NIR Diagnostics is a leading developer of near infrared, spectroscopy based, medical diagnostic technology. The Company has an extensive portfolio of optical, electronic and algorithm related patents in the field of blood analysis. Currently, the Company's primary focus is the development of in vivo and in vitro devices that utilize near infrared light to measure key blood analytes. * * * As reported in the Troubled Company Reporter's February 19, 2004 edition, NIR Diagnostics, formerly known as CME Telemetrix is continuing to pursue strategic initiatives, which include ongoing discussions with potential partners and the exploration of merger and acquisition opportunities. Also, to manage its cash position, management gave working notice to substantially all of its employees of their termination. This action ensures that should the Company not be able to secure adequate short-term and long- term financing it will not be liable for statutory termination payments. "We regret having to take this action in light of the tremendous dedication and loyalty our employees have demonstrated," said Duncan MacIntyre, President and Chief Executive Officer. "We remain committed to our goal of developing non-invasive blood monitoring devices that will improve the quality of life of millions of people, but in order for our scientists to continue this vital work we must secure additional capital resources." In the event that a financing solution is not found in the coming weeks, the Company will take further steps to wind down operations. OCWEN RESIDENTIAL: Fitch Downgrades Class B-2 Ratings to CCC ------------------------------------------------------------ The following rating actions have been taken on Ocwen Residential MBS Corporation, series 1998-3: Ocwen 1998-3 --Classes A-1 and A-WAC are affirmed at 'AAA'; --Class B-1 is affirmed at 'AA' and is removed from Rating Watch Negative; --Class B-2 is downgraded to 'CCC' from 'BB'. The negative rating actions are taken due to the level of losses incurred and the high delinquencies in relation to the applicable credit support levels as of the June 25, 2004 distribution date. OGLEBAY NORTON: Closes on $305 Mil. Debtor-in-Possession Financing ------------------------------------------------------------------ Oglebay Norton Company (Other OTC: OGLEQ) has closed on a $305 million second Debtor-in-Possession credit facility with a syndicate of lenders led by Silver Point Finance, LLC. The facility was earlier approved by United States Bankruptcy Judge Joel B. Rosenthal of the U.S. Bankruptcy Court for the District of Delaware in Wilmington. The new DIP loan was immediately used to pay off the $123.8 million balance on the prepetition revolving credit facility and the $113.2 million balance on the prepetition term loan, as well as the $9.4 million balance on the first DIP credit facility. The $13.4 million vessel term loan remains outstanding, as does other pre-petition debt. Upon confirmation of the Company's plan of reorganization and emergence from chapter 11, the $305 million DIP loan will convert to a five-year credit facility that will provide financing for the reorganized Company. "We are pleased to have closed on the second DIP facility," said Michael D. Lundin, Oglebay Norton president and chief executive officer. "This is another milestone that keeps us on track with our original plan to emerge from court protection in an expedited manner as a reorganized company with a new capital structure." Oglebay Norton Company, a Cleveland, Ohio-based company, provides essential minerals and aggregates to a broad range of markets, from building materials and home improvement to the environmental, energy and metallurgical industries. The Company has approximately 1,770 full-time and part-time hourly and salaried employees in 13 states. On February 23, 2004, the Company and its wholly owned subsidiaries filed voluntary petitions under chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware in Wilmington to complete the financial restructuring of its long-term debt. ORDERPRO LOGISTICS: Subsidiary Reports 63% Increase in Revenues --------------------------------------------------------------- JBP Express, a subsidiary of OrderPro Logistics (OTC BB: OPLO), has reported revenue (unaudited) of $326,308 for the month of June 2004, an increase of 63% over the June 2003 period. JBP has reported revenue for the six months ended June 2004 of $1,724,579, an increase of 60% over the same period of 2003. "Our JBP Express subsidiary continues to show exceptional growth in revenues for the fiscal year 2004," said Jeffrey Smuda, CEO of OrderPro Logistics Inc. "The Indianapolis market is very strong and, when coupled with the products and services of our operations, has sparked considerable interest in JBP Express. This performance can be tied to many factors, most notably the 'back- to-basics' approach we are taking within all facets of the corporation. Every business unit is pushing hard to maximize earnings and profits. JBP Express is leading the way and we fully expect that the substantial efforts of that team will continue to deliver positive results to our shareholders," added Smuda. JBP Express is strategically and geographically postured for continued growth. Aggressive market penetration strategy for 2004 includes targeting new, over-the-road customers, increasing its 3PL market presence and expanding services offered to established customers. About OrderPro Logistics Inc. OrderPro Logistics Inc. was created to capture the potential of the Internet in the transportation and logistics industry by employing new and innovative processes. OrderPro Logistics Inc. can integrate every aspect of the customer shipping needs from order entry through successful delivery. Customer priorities, shipment integrity, best quality, and optimization of every load is the objective of supply chain management with OrderPro Logistics Inc. lowering costs while adding value in process and service. For more information, please visit http://www.orderprologistics.com/ * * * In its Form-10QSB for the quarterly period ended March 31, 2004, filed with the Securities and Exchange Commission, OrderPro Logistics, Inc. reports: Liquidity and Capital Resources "Cash used for operating activities was approximately $715,000 in 2004 as compared to approximately $266,000 in 2003. The use of cash in 2004 is the result of a net loss of approximately $6,313,000, partially offset by non-cash charges of approximately $5,839,000, and a net change in operating assets and liabilities of approximately $241,000. For 2003, a loss of approximately $617,000 was partially offset by non-cash charges of approximately $320,000 and a net increase in operating assets and liabilities of approximately $31,000. "The accompanying condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying condensed consolidated financial statements, the Company has a net loss of $6,313,458, a negative cash flow from operations of $714,627 and a working capital deficiency of $1,019,391. These factors raise substantial doubt about its ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional funds and become profitable. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern." PARMALAT GROUP: Expands Scope of Lazard Freres' Retention --------------------------------------------------------- Parmalat Group North America are authorized by the Court to expand the scope of Lazard Freres' retention, nunc pro tunc to June 1, 2004, to include the provision of Restructuring Services. The U.S. Debtors recently determined that reorganizing their businesses as a going concern provides greater benefits to creditors and other parties-in-interest. As a result of this new reorganization strategy, the Debtors propose to expand the scope of Lazard Freres & Co.'s services to include providing restructuring services like: (a) assisting the Debtors arrange out-of-court DIP and exit financing, and preparing financial information in support of it; (b) assisting the Debtors evaluate their potential debt capacity in light of their projected cash flows; (c) assisting the Debtors determine a reorganized capital structure; (d) assisting the Debtors determine the range of value the Debtors could receive for the sale of certain assets as part of a restructuring; (e) advising the Debtors on tactics and strategies for negotiating with creditors; (f) advising and attending meetings of the Debtors' Boards of Directors and their committees on matters related to a restructuring; (g) providing testimony and evidence related to its services, as necessary, in any proceeding before the Court on matters related to a restructuring; and (h) providing other general restructuring advice on matters related to a restructuring. The U.S. Debtors also revise Lazard Freres' compensation structure. For the Expanded Services, the Debtors will pay Lazard Freres: (1) a fee payable on the consummation of any Sale Transaction equal to 2.5% of the Aggregate Consideration involved in the Sale Transaction, subject to a minimum of $1 million for the first Sale Transaction. Any fee paid under the first Sale Transaction in excess of 2.5% of the Aggregate Consideration involved in the first Sale Transaction will be credited, without duplication, against any fee payable in any subsequent Sale Transaction; (2) a Restructuring Fee payable on the consummation of any Restructuring equal to $1.25 million, with any fees payable on the consummation of a Sale Transaction being credited against this fee; and (3) a $50,000 monthly fee payable until the effective date of a plan of reorganization. All Monthly Fees paid will be credited against any Restructuring Fee. However, if a Sales Transaction is consummated, then only Monthly Fees paid with respect to the months of June through October will be credited against any Restructuring Fee. Pursuant to the Engagement Letter, Lazard Freres is entitled to a fee payable upon consummation of any Sale Transaction equal to 1.3% of the Aggregate Consideration involved in the Sale Transaction, subject to a minimum of $1 million. While the Revised Engagement Letter contemplates additional fees payable to Lazard Freres in consideration of their expanded role in these cases, the U.S. Debtors believe that the additional fees are reasonable. Lazard Freres will also be reimbursed for reasonable out-of- pocket expenses, and other fees and expenses, including reasonable expenses of counsel, if any. The U.S. Debtors will indemnify Lazard Freres. James Mesterharm, the U.S. Debtors' Chief Restructuring Officer, tells Judge Drain that the Restructuring Services to be performed by Lazard Freres are necessary to enable the Debtors to make fully informed decisions that would maximize the value of their estates for the benefit of all creditors and parties-in-interest. As a result of Lazard Freres' retention as financial advisor and investment banker from the outset of the U.S. Debtors' cases, the firm gained an unmatched familiarity with the Debtors' current financial situation and stands singularly capable of providing specialized and immediate services related to the Debtors' reorganization. Lazard Freres has forged a close working relationship with the Debtors' financial personnel. Frank "Terry" A. Savage, Managing Director at Lazard Freres, assures the Court that the firm remains a "disinterested person" within the meaning of Section 101(14) of the Bankruptcy Code. 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) PARMALAT USA: Farmland Agrees to Sell Milk Products of Alabama -------------------------------------------------------------- Milk Products of Alabama L.L.C. has filed a motion in the United States Bankruptcy Court for the Southern District of New York to approve procedures for the sale of a majority of the assets of Milk Products of Alabama L.L.C., an 80% subsidiary of Farmland Dairies LLC, to National Dairy Holdings, LP for US$19.7 million. The sale may be conducted as an auction under section 363 of the Bankruptcy Code and will be subject to approval by the Bankruptcy Court. MPA anticipates that the hearing to approve the sale will occur on or about September 10, 2004. "The sale of the Milk Products of Alabama subsidiary is a key step in the restructuring of Farmland," said James Mesterharm, Farmland's Chief Restructuring Officer. "We've made some significant progress in our restructuring efforts and this transaction, when complete, will further increase our focus on our core business and ensure that we achieve maximum value and asset recovery for Milk Products' creditors." Since Farmland began its Chapter 11 case on February 24, 2004, management has thoroughly reviewed the business. Based on that review, it was concluded that the best course of action is to develop a plan of reorganization to allow Farmland to emerge from Chapter 11 with a new capital structure in place, and to make operational improvements to achieve the long-term financial and operational stability the business requires to succeed. The post- petition lenders have decided to move forward on this plan. To this end, it was determined not to pursue a sale of assets at this time, and the post-petition lending agreement will be modified to remove all deadlines relating to a sale of assets. "The development of this plan is recognition of the intrinsic value of the Farmland business and its future profitability," said Jim Mesterharm, Principal, AlixPartners. "While Farmland's original DIP financing package continues to provide the liquidity necessary for operations in the shorter term, the company is now in a position to be able to work with post-petition lenders and other creditors to secure longer-term financing that, when in place, would allow Farmland to develop and implement a standalone restructuring plan around the Company's core businesses." 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 USA: Martin Margherio Sits as Farmland Dairies' New COO ---------------------------------------------------------------- Farmland Dairies LLC appointed Martin Margherio as President and Chief Operating Officer for the company subject to the approval of the Bankruptcy Court. In his new role expected to commence in late July 2004, Mr. Margherio will focus his efforts on leading and building Farmland's commercial and operating structure. "His significant experience and accomplishments as President and CEO of Crowley Foods combined with his excellent reputation in the industry make Marty an ideal addition to the Farmland organization," said James A. Mesterharm, Farmland's Chief Restructuring Officer. "We are delighted that he is joining our team and believe that his proven leadership skills and operational abilities will make Farmland stronger and more successful as we work towards our emergence from Chapter 11." "Farmland is a great organization with a solid reputation and I'm looking forward to leading the company forward and to building on the success of such solid and recognizable consumer brands as Farmland's Skim Plus." Margherio said. "I am eager to meet with our customers, employees and vendors, and to see where we can make a difference for them and our stakeholders." Mr. Margherio joined Crowley Foods Dairy Group in 1979 and worked his way up the Group's corporate ladder serving as General Sales Manager, Vice President of Sales and Marketing and then President before being named President and CEO of Crowley Foods in 1993. During his tenure at Crowley he helped lead the company from its position as a local milk processor to a diversified regional food company with estimated 2003 sales of $577 million. Mr. Margherio led Crowley through ten acquisitions which helped to both expand the company's product lines and to solidify its position in various markets. Mr. Margherio currently serves on the Board of Directors of Binghamton University School of Management and St. Joseph's University, Food Marketing School. In the past he served as a board member of the Milk Processor Education Program for six years. He also has co-chaired many fundraising functions and is very involved in Cystic Fibrosis fundraising. Mr. Margherio holds a Bachelor of Science degree in Business Administration from Kent State University. Since Farmland began its Chapter 11 case on February 24, 2004, management has thoroughly reviewed the business. Based on that review, it was concluded that the best course of action is to develop a plan of reorganization to allow Farmland to emerge from Chapter 11 with a new capital structure in place, and to make operational improvements to achieve the long-term financial and operational stability the business requires to succeed. The post- petition lenders have decided to move forward on this plan. To this end, it was determined not to pursue a sale of assets at this time, and the post-petition lending agreement will be modified to remove all deadlines relating to a sale of assets. "The development of this plan is recognition of the intrinsic value of the Farmland business and its future profitability," said Jim Mesterharm, Principal, AlixPartners. "While Farmland's original DIP financing package continues to provide the liquidity necessary for operations in the shorter term, the company is now in a position to be able to work with post-petition lenders and other creditors to secure longer-term financing that, when in place, would allow Farmland to develop and implement a standalone restructuring plan around the Company's core businesses." 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. PENTON MEDIA: Stockholders Reelect Directors & Approve Accountants ------------------------------------------------------------------ Penton Media, Inc. (OTCBB:PTON) a diversified business-to-business media company, said that stockholders at Thursday's annual meeting elected to three-year terms expiring in 2007: -- Peni A. Garber, a partner of ABRY Partners, LLC, an investment holding company, and a director of Penton since 2002; and -- Hannah C. Craven, managing director of Sandler Capital Management, an investment holding company, and a director of the Company since 2002. Stockholders also approved the selection of PricewaterhouseCoopers LLP as independent accountants for Penton. Penton Media -- http://www.penton.com/-- is a diversified business-to-business media company that provides high-quality content and integrated marketing solutions to the following industries: aviation; design/engineering; electronics; food/retail; government/compliance; business technology/enterprise IT; leisure/hospitality; manufacturing; mechanical systems/construction; health/nutrition and natural and organic products; and supply chain. Founded in 1892, Penton produces market-focused magazines, trade shows, conferences and online media, and provides a broad range of custom media and direct marketing solutions for business-to-business customers worldwide. At March 31, 2004, Penton Media, Inc.'s balance sheet shows a stockholders' deficit of $154,902,000 compared to a deficit of $144,929,000 at December 31, 2003. PG&E NATIONAL: Exclusive Plan Period Extended to Sept. 16 --------------------------------------------------------- In PG&E National Energy Group Inc.'s chapter 11 cases, the U.S. Court grants the ET Debtors extension of exclusive periods. The ET Debtors need additional time to negotiate a Chapter 11 plan with the Official Committee of Unsecured Creditors in their cases, for the winding down of their business operations. By this motion, the ET Debtors ask the Court to extend their: (a) exclusive plan proposal period to and including September 16, 2004; and (b) exclusive solicitation period to and including November 16, 2004. Paul M. Nussbaum, Esq., at Whiteford, Taylor & Preston, LLP, in Baltimore, Maryland, tells the Court that the ET Debtors are at an early stage of making good faith progress towards the winding down of their business operations and formulating a plan of liquidation. So far, the ET Debtors have rejected a number of contracts, including contracts with pipeline companies for natural gas transportation and storage, and tolling agreements. In accordance with the Court-approved procedures for trade contracts settlement, and a protocol for mediation of trading and tolling contracts, the ET Debtors have reached settlements with numerous counter-parties, and are in various stages of active settlement discussions with other trading contract counter- parties. The settlements include: * Settlement between NEGT Energy Trading - Gas Corporation, Ultramar, Inc., and Valero Refining Company - California; * Settlement among NEGT Energy Trading - Power, L.P., National Energy & Gas Transmission, Inc., and Conectiv Energy Supply, Inc.; * Settlement between NEGT Energy Trading - Power, L.P., and La Paloma Generating Company, LLC; * Settlement between NEGT Energy Trading - Gas Corporation and Virginia Power Energy Marketing, Inc.; * Settlement between NEGT Energy Trading - Gas Corporation and Equilon Enterprises, LLC; and * Settlement between NEGT Energy Trading - Power, LP, and New York State Electric & Gas Corporation. The recent successful confirmation of NEG's reorganization plan is a significant step forward for the NEG Debtors' overall restructuring efforts and helps set the stage for the successful restructuring of the ET Debtors. Mr. Nussbaum contends that additional time is necessary for resolving and settling contingencies relating to numerous disputes relating to Safe Harbor Contracts which is a complex and time-consuming process that directly affects the winding down of the ET Debtors' business operations, and to any Plan. Mr. Nussbaum assures the Court that any postpetition obligations that are being incurred in relation to the wind-down and liquidation of the ET Debtors' businesses are being paid as they become due. Mr. Nussbaum asserts that the 120-day extension is not an excessive period of time in a case as large and complex as the ET Debtors' Chapter 11 cases. Mr. Nussbaum notes that there has been no breakdowns in plan negotiations in which the continuation of the ET and Quantum Debtors' exclusivity would result in the Debtors having unfair bargaining position over creditors. The ET Debtors have developed a generally positive relationship with the ET Committee and are actively working through the legal and factual issues the resolution of which are predicate to a consensual Plan for the ET Debtors. Therefore, at this time, there is every reason to believe that the ET Debtors will reach a consensus with the ET Committee with respect to a Plan. Although it is contemplated that the ET Debtors will be liquidated as part of the NEG Debtors' overall reorganization, the ET Debtors' winding-down and liquidation does not relate to any failure to resolve fundamental reorganization issues, but rather reflects sound business judgment and a proper exercise of fiduciary duties. Given the collapse of the energy trading industry and the financial status of the ET Debtors, winding down and liquidating these operations is the only prudent course. Thus, in the ET Debtors' cases, the fundamental reorganization matters are those involved in expeditiously and efficiently winding down and liquidating operations to minimize costs and maximize values. Mr. Nussbaum ascertains that there are no credible allegations of debtor misconduct in connection with the ET Debtors' Chapter 11 cases. 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) PLEJ'S LINEN: Committee Taps Poyner as North Carolina Counsel ------------------------------------------------------------- The Official Unsecured Creditors Committee appointed in Plej's Linen Supermarket SoEast Stores, LLC's chapter 11 cases sought and obtained approval from the U.S. Bankruptcy Court for the Western District of North Carolina, Charlotte Division, to retain Poyner & Spruill, LLP as its North Carolina Counsel. By separate application, the Committee has expressed its willingness to retain Traub Bonacquist & Fox LLP as lead counsel. The Committee submits that it is essential to employ both of these firms in these cases. Traub Bonacquist has extensive experience in retail store cases which will help to make representation of the Committee more efficient. Both firms have discussed a division of responsibilities and will make every effort to avoid duplication of effort. Poyner & Spruill principal attorneys and paralegals presently designated to represent the Committee and their hourly rates are: Attorney Billing Rate -------- ------------ Judy D. Thompson $350 per hour Anna S. Gonnan $250 per hour Diane P. Furr $270 per hour S. Andrew Jurs $235 per hour Deborah M. Tyson $175 per hour Paralegal Billing Rate --------- ------------ Susan Black $130 per hour Poyner & Spruill will: a) provide legal advice with respect to the Committee's powers and duties and keep the Committee informed of developments; b) assist the Committee in evaluating the legal basis for, and effect of the various pleadings that will be filed by the Debtor and other parties in interest in these cases; c) investigate the acts, conduct, assets, liabilities, and financial condition of the Debtors; d) assist the Committee in evaluating the monthly reports and evaluating and negotiating the Debtors' or any other party's plan of reorganization and any associated disclosure statement; e) consult with the Debtors and their professionals concerning administration of the case; f) commence and prosecute any and all necessary and appropriate actions and proceedings on behalf of the Committee in this case; g) appear in Court to protect the interests of the Committee; and h) perform all other legal services for the Committee which may be necessary and proper in these proceedings. Headquartered in Rock Hill, South Carolina, Plej's Linen Supermarket SoEast Stores LLC, with its debtor-affiliates, are engaged primarily in two core businesses: retail sale of first quality program home accessories for bed, bath, window, decorative and house wares and limited closeout and discontinued opportunistic merchandise; and wholesale distribution of similar bed and bath textiles. The Company filed for chapter 11 protection on April 15, 2004 (Bankr. W.D. N.C. Case No.04-31383). John R. Miller, Jr., Esq., and Paul R. Baynard, Esq., at Rayburn Cooper & Durham, P.A., represent the Debtors in their restructuring fforts. When the Company filed for protection from their creditors, they listed both estimated debts and assets of over $10 million. RELIANCE GROUP: Court Okays Sale of 26-Acre Lot to TC MidAtlantic ----------------------------------------------------------------- M. Diane Koken, Insurance Commissioner of the Commonwealth of Pennsylvania, as Liquidator of Reliance Insurance Company, asks the Commonwealth Court for permission to sell Virginia Tax Map 93, Parcel 13, to TC MidAtlantic Development. Parcel 13 is a 26.19-acre real estate portion of the Loudoun Parkway Center, located in Loudoun County, Virginia. Ann B. Laupheimer, Esq., at Blank Rome, in Philadelphia, Pennsylvania, relates that the Property was purchased in 1987 as part of RIC's acquisition of 409 acres for $26,634,439, or $1.49 per square foot. Of the 409 acres, 112.5 acres were zoned residential and 296.5 acres were zoned commercial. At $1.49 per square foot, the 112.5 acres of residential land had an underlying pro rata cost of $7,301,745. During the course of obtaining various governmental approvals, 41.5 residential acres were designated as flood plain, community recreational space or roadway improvements. Of the remaining 71 net acres of residential land, 50 acres were sold in four transactions between 1999 and 2001 for $5,014,000. The sale of the remaining 21.01 residential acres was approved by the Commonwealth Court in 2002 for $17,956,800. The Property is part of the 296.5 commercial acres and was originally included in the proposed sale of 211.81 acres of commercially zoned land to Toll Brothers Realty Trust for $16,511,000. This price amounted to $1.79 per square foot. The Sale Agreement with Toll Brothers Realty Trust was terminated during the due diligence period after Toll Brothers demanded price concessions that were deemed unacceptable by RIC. Cassidy and Pinkard represented RIC as its broker both before and after the Toll Brothers transaction. In its initial efforts, Cassidy and Pinkard sent information packages on the Loudoun Parkway Center to local and national developers in the Washington area. RIC wanted to sell the 211.81 acres on an as-is basis. After termination of the Toll Brothers contract, Cassidy and Pinkard approached competing bidders that RIC initially rejected. These bidders declined to pursue the Center, stating that the Center was not saleable on an as-is basis at or near the appraised value. Based of the lack of interest as zoned, RIC investigated rezoning selected portions of the remaining commercial land. In that review, RIC discovered that the retail commercial market was stronger than the office commercial market. RIC determined that a mixed use site, having significant retail uses in place, would present a superior marketing platform for sale of the remaining office land, as office users will demand the immediate availability of a variety of retail services. RIC developed a strategy to rezone certain parts of the Center to allow portions to be used for retail commercial, office commercial and residential uses. In June 2003, TC MidAtlantic, a subsidiary of Trammel Crow, one of the initial bidders, submitted an offer to buy a portion of the Center at a significantly higher price than any previously offered. The offer was subject to RIC's obtaining a change in the zoning to allow retail commercial uses. Ms. Laupheimer tells the Commonwealth Court that TC MidAtlantic's offer was accepted because it represented an opportunity to obtain a higher price for the Center. RIC hoped the transaction would ignite the interest of other purchasers and potentially increase potential sale prices for the remainder of the Center. TC MidAtlantic was selected because of its credibility in the marketplace and familiarity with the Property. TC MidAtlantic will pay RIC $7,599,247, or $6.66 per square foot. TC MidAtlantic will make a $100,000 initial deposit and will accept the Property in as-is condition. RIC is obligated to spend up to $25,000 per acre to cure any code or other violation that may be issued until the date of closing. RIC will pursue rezoning of the Property to allow retail commercial uses and seek subdivision approval if required. Simultaneously, RIC will attempt to rezone portions of the balance of the commercial property for sale to future purchasers. TC MidAtlantic will perform due diligence and terminate the agreement if any condition is unacceptable. If the due diligence review is successful, TC MidAtlantic will increase the deposit escrow to $200,000. After the deposit, RIC will file an application to rezone the Property for the construction of 150,000 square feet of retail commercial space, with office commercial usage of the remainder at specified densities and parking ratios. TC MidAtlantic is responsible for preparing specific plans, reports, studies and other data necessary for the rezoning process. RIC is responsible for costs attendant to any required subdivision of the Property, including costs of any subdivision plan. Closing must occur within 28 months of Court approval. RIC will pay Cassidy and Pinkard a Broker's Fee of 5% of the first $1,000,000 and 3% of the balance. Based on the $7,599,247 purchase price, RIC stands to pay Cassidy and Pinkard $247,999 or 3.26% of the price. To ensure that the Liquidator receives fair value for the Center, the Liquidator hired Robert G. Johnson, MAI of JMSP, Inc., in Herndon, Virginia. Mr. Johnson prepared an appraisal report that indicated a $7,700,000 fair market value for the Property, which is near the price proposed by Trammel Crow. Ms. Laupheimer states that the purchase price represents 46% of the value approved by the Court for the Toll Brothers Transaction, but includes only 16% of the net developable acreage that was to have been sold to Toll Brothers. The purchase price per square foot is $6.66, which is 3.7 times more than the $1.79 per square foot in the Toll Brothers Transaction. Headquartered in New York, New York, Reliance Group Holdings, Inc. -- http://www.rgh.com/-- is a holding company that owns 100% of Reliance Financial Services Corporation. Reliance Financial, in turn, owns 100% of Reliance Reliance Insurance Company. The Company filed for chapter 11 protection on June 12, 2001 (Bankr. S.D.N.Y. Case No. 01-13403). When the Company filed for protection from their creditors, they listed $12,598,054,000 in assets and $12,877,472,000 in debts. (Reliance Bankruptcy News, Issue No. 56; Bankruptcy Creditors' Service, Inc., 215/945-7000) SHAW GROUP: Reports $10 Million Net Income in Third Quarter ----------------------------------------------------------- The Shaw Group Inc. (NYSE:SGR) released financial results for its third quarter ended May 31, 2004. The Company reported net income from continuing operations of $10.0 million, or $0.16 per diluted share, versus $3.6 million, or $0.10 per diluted share, for the quarter ended May 31, 2003. Results for the third quarter of fiscal 2004 also include $3.6 million after taxes, or $0.06 per diluted share, after taxes, for losses from discontinued operations versus loss from discontinued operations of $0.5 million, or $0.02 per diluted share, in the May 31, 2003 quarter. After the loss from discontinued operations, net income for the third quarter of 2004 was $6.4 million, or $0.10 per diluted share, versus $3.1 million, or $0.08 per diluted share in the May 31, 2003 quarter. Results for the prior year's third quarter included a $30 million pre-tax charge related to the settlement of project claims. Shaw also generated $48.3 million of net cash from operations during the third quarter ended May 31, 2004 versus net cash used in operations of $45.6 million in the third quarter of last year. Revenues for the quarter ended May 31, 2004 were $917.8 million versus $821.7 million for the third quarter of fiscal 2003. Revenues increased 33 percent over the $691.2 million reported for the second quarter of fiscal 2004. Shaw's backlog increased to $6.0 billion at May 31, 2004, a $0.5 billion increase over the $5.5 billion recorded for the second quarter ended February 29, 2004 and a $1.2 billion increase over the $4.8 billion recorded at August 31, 2003. Contributing to backlog during the quarter was $1.5 billion in net new awards. The Shaw engineering, construction and maintenance (ECM) division's backlog from the power generating industry, including nuclear, increased to $2.2 billion, or 37% of total backlog at May 31, 2004, with approximately $820 million in net new awards. ECM's backlog from process industry businesses posted over $100 million in net new awards. Shaw's environmental and infrastructure (E&I) division reported backlog as of May 31, 2004 of $3.1 billion, or 51% of total backlog, with approximately $460 million in net new awards during the quarter. Approximately 42% of the May 31, 2004 backlog, or $2.5 billion, is expected to be worked off during the next 12 months. J.M. Bernhard, Jr., Chairman and Chief Executive Officer of Shaw said, "Our improving performance was reflected in our third quarter financial results and near record backlog. We posted income from continuing operations of $0.16 per diluted share. In addition, we generated over $48 million of net cash from operations this quarter." Mr. Bernhard continued, "In addition to our good financial results, we are extremely pleased with the growth of our backlog of work which has increased across all industry sectors. The addition of two large power plant construction contracts contributed over $730 million to our backlog to be worked off over about two years. The energy sector continues to show signs of recovering and our maintenance group has achieved several bookings of new work. Our process technologies line is expanding internationally and our environmental and infrastructure group is currently involved in projects in the Middle East and new infrastructure work domestically." Mr. Bernhard also said, "Our third quarter results also reflect our strategic decision to discontinue involvement in the hanger engineering and pipe support businesses. We began marketing these businesses for sale and consequently have included them as discontinued operations in our financial statements. This is a decisive step as we work to position the Company for improving domestic and global economies. We will continue to view our businesses strategically, as we focus on streamlining our operations, creating innovative solutions and technologies, and targeting strategic markets and clients in the U.S and abroad." Shaw also announced that fourth quarter fiscal 2004 earnings are expected to be within a range of approximately $0.14 to $0.18 per diluted share, lower than previously expected, primarily because of the delays in the startup of our two major power plant construction projects, although these projects are both currently well underway. The Shaw Group Inc. is a leading global provider of technology, engineering, procurement, construction, maintenance, fabrication, manufacturing, consulting, remediation and facilities management services for government and private sector clients in the power, process, environmental, infrastructure and emergency response markets. A Fortune 500 company, Shaw Group is headquartered in Baton Rouge, Louisiana and employs approximately 17,000 people at its offices and operations in North America, South America, Europe, the Middle East and the Asia-Pacific region. * * * As reported in the Feb. 10, 2004, issue of the Troubled Company Reporter, Standard & Poor's Ratings Services affirmed its 'BB' corporate credit rating and its other ratings on The Shaw Group Inc. At the same time, Standard & Poor's revised the outlook on the company to negative from stable. "The outlook revision reflects the fact that profitability and cash flow generation for fiscal 2004 ending August will be weaker than previously anticipated, because of continuing challenges on a few problem projects, reduced expectations of asset divestitures, and weakness in the higher margin pipe manufacturing operation," said Standard & Poor's credit analyst Heather Henyon. As a result, it is unlikely that Shaw will be able to meet Standard & Poor's expectations of total debt to EBITDA of 2.5-3x and EBITDA to interest coverage in the 3x area in 2004. However, a growing backlog of more steady environmental and infrastructure projects may enable the company to achieve an acceptable credit profile in the intermediate term. SOLUTIA INC: Court Extends Plan Proposal Period to Oct. 12 ---------------------------------------------------------- The U.S. Bankruptcy Court in Manhattan granted Solutia, Inc.'s second motion to extend its exclusive period during which to propose a chapter 11 plan of reorganization. Conor D. Reilly, Esq., at Gibson, Dunn & Crutcher, LLP, in New York, tells Judge Beatty that during the first six months of the Debtors' Chapter 11 cases, the Debtors focused on creating a business environment conducive to productive and constructive negotiations with respect to a Chapter 11 plan. After six months of work, the building blocks for those negotiations are moving into place and the Debtors believe that discussions can now begin in earnest. Significant progress has been made in the last six months with respect to three critical areas: (i) stabilization of the Debtors' businesses and development of their business plan; (ii) productive discussions with creditor and equity constituencies; and (iii) progress toward clarifying issues and positions in connection with challenging legal issues and litigation areas. However, Mr. Reilly states that there is much left to do and while the Debtors believe that the parties are poised to begin plan negotiations, it would be impossible in light of the complexity of the Chapter 11 cases to conclude those negotiations in time to finalize and confirm a reorganization plan within the current exclusive periods. Accordingly, the Debtors ask the Court to further extend their exclusive period to file a reorganization plan to October 12, 2004 and their exclusive period to solicit acceptances of that plan to December 11, 2004. Debtors' Businesses Stabilize The Debtors believe that they have taken important steps toward preserving and maximizing the value of their business enterprises. Work in that area undoubtedly must continue as the Debtors take the necessary steps to achieve their business plan. However, much as been accomplished to date: * The Debtors have stabilized their businesses and substantially eliminated or mitigated the negative effects of their Chapter 11 filing on the businesses. Most recently, the Debtors worked with their creditor and equity constituencies to negotiate and implement an employee retention and incentive plan that should stem employee losses related to the difficulty of working in a Chapter 11 environment. The stabilization of the Debtors' businesses frees their management and other parties-in-interest to focus on maximizing the value of the businesses and determine how that value should be distributed to stakeholders; * The Debtors have developed, with the Official Committee of Unsecured Creditors' input, an overall business plan that contemplates significant cost reductions as a means of improving the performance and viability of the Debtors' businesses. The Debtors have already taken key steps toward implementing the business plan, including rejecting unprofitable contracts with creditors like E. I. du Pont de Nemours and Company, Calpine Central, L.P., Calpine Power Services Company and Decatur Energy Center, L.P., and preparing to close their chlorobenzene business. The Debtors and their advisors continue to work hard toward identifying and implementing additional cost savings measures; and * In early May 2004, the Debtors announced that, with the Creditors Committee's consent, they made significant changes to restructure Solutia, Inc.'s senior management team. The Debtors believe that the new leaders of Solutia, and the focus that they will bring to bear on the reorganization process, will provide a strong foundation for execution of the business plan and the successful development of a reorganization plan. Discussions With Creditor and Equity Constituencies According to Mr. Reilly, an important development in the past six months with respect to the Debtors' ability to develop and negotiate a successful reorganization plan is that all of the constituencies have been identified and are acquiring the necessary background information about the Debtors' businesses and their financial condition. In addition to the Creditors Committee, an official committee of retirees and an official committee of equity security holders have been formed and all of the committees have retained professional advisors. Much has been accomplished to prepare all parties for plan negotiations: * In addition to having reviewed the business plan, the Creditors Committee and its professionals are developing a thorough understanding of the Debtors' businesses and industries, and of the various forms of legacy liabilities that the Debtors face. Creditors Committee members, together with advisors, are on the verge of concluding a series of tours of the Debtors' plants during which they have met with key members of the Debtors' operating management team. The on-site visits and interactions heightened their understanding of the manufacturing process, the complex guest-host relationships at the Debtors' facilities, and the work necessary to implement the next steps of the business plan. In addition, the Debtors created a "virtual data room" in which important documents and financial information can be made available quickly and efficiently to the Creditors Committee; * Representatives of Monsanto Company participated in the Creditors Committee's plant visits and other meetings with the Debtors' management and have been given access to the virtual data room, so that this important constituent can begin plan negotiations with a base of knowledge in common with that of other parties; and * The Retiree Committee and Equity Committee are currently in the process of gaining the necessary core knowledge about the Debtors' businesses and financial condition. In recent weeks, the Debtors have met with representatives of both of those committees, and each has begun using the virtual data room to gather information. Furthermore, the Debtors scheduled a meeting with the Retiree Committee and Equity Committee at which time the management team will formally present the business plan and engage in a question-and- answer session. Clarification and Stabilization of Litigation Positions Mr. Reilly relates that the Debtors' Chapter 11 cases will need some manner of resolution of complex legal questions, including challenging questions related to the interface between the Bankruptcy Code, on the one hand, and ERISA and federal and state environmental laws, on the other hand. To date, the Debtors and other parties pursued a dual-track strategy of litigation and negotiation with respect to several of these complex issues. That dual-track strategy appears to have created opportunities for the parties to pursue discussions toward a reorganization plan. Specifically: * The Debtors and the Environmental Protection Agency have entered into a stipulation that clarifies and limits the scope of discussion among them with respect to what environmental obligations must be performed during the Chapter 11 cases and, ultimately, which obligations are dischargeable under a reorganization plan; * Solutia, the EPA and Monsanto developed a working understanding with respect to division of responsibility for continuing environmental remediation efforts for various properties, which currently allows for an effective standstill that can allow plan negotiations to go forward; * Solutia, Monsanto, Pharmacia Corporation, the Creditors Committee and the Retiree Committee entered into a 45-day standstill agreement with respect to litigation among those parties to attempt to resolve the significant issues through negotiation rather than litigation; and * The briefing conducted in the pending litigation, together with informal analysis presented by the parties out of court, has begun to clarify the parties' positions on complex litigation issues so that negotiations can proceed from a more informed base. Next Steps Although the Debtors are pleased with the recent progress in their Chapter 11 cases, the work to be done and the complexity of the issues that they face will preclude them from being able to formulate a workable Chapter 11 plan in the short term. The Debtors have identified a short list of next steps aimed ultimately to negotiation and proposal to the Court of a Chapter 11 plan: (a) continuing to implement and refine the Debtors' business plan, including using the tools of bankruptcy to reduce or eliminate operating liabilities and improve cash flows; (b) identifying and quantifying the Debtors' potential liabilities, including considering the best way to proceed toward an effective and appropriate discharge of those liabilities by establishing procedures for identifying and handling claims in the Debtors' cases; (c) in the near term, developing and proposing to key constituencies a "straw man plan" that could form the basis for further plan discussions; (d) evaluating the potential for asset sales; (e) continuing to work toward stabilizing the Debtors' pension plan so as to avoid a distressed termination of that plan; and (f) working toward a valuation of the Debtors' domestic and foreign businesses. The Debtors have been working diligently toward completing these steps, and anticipate significant further work and progress in these areas. Headquartered in St. Louis, Missouri, Solutia, Inc. -- http://www.solutia.com/-- with its subsidiaries, make and sell a variety of high-performance chemical-based materials used in a broad range of consumer and industrial applications. The Company filed for chapter 11 protection on December 17, 2003 (Bankr. S.D.N.Y. Case No. 03-17949). When the Company filed for protection from their creditors, they listed $2,854,000,000 in assets and $3,223,000,000 in debts. (Solutia Bankruptcy News, Issue No. 19; Bankruptcy Creditors' Service, Inc., 215/945-7000) SAINT AMBROSE APARTMENTS: Voluntary Chapter 11 Case Summary ----------------------------------------------------------- Debtor: Saint Ambrose Apartments Housing Development Fund Company, Inc. aka Magnolia Plaza St Ambrose Aparments H.D.F.C. Attn: Vilma Scott 686 LaFayette Avenue Brooklyn, New York 11216-1057 Bankruptcy Case No.: 04-20327 Chapter 11 Petition Date: July 14, 2004 Court: Eastern District of New York (Brooklyn) Judge: Carla E. Craig Debtor's Counsel: Herbert K. Ryder, Esq. LeBoeuf Lamb Greene & MacRae LLP 125 West 55th Street New York, NY 10019 Tel: 212-424-8000 Fax: 212-424-8500 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. TELEWEST COMMUNICATIONS: Completes Financial Restructuring ---------------------------------------------------------- Telewest Communications plc's financial restructuring has become effective. As a result, all outstanding notes and debentures of Telewest and its Jersey-based finance subsidiary have been cancelled, reducing the total outstanding indebtedness of the business by approximately GBP 3.8 billion, or more than 65%, to approximately GBP 2.0 billion. As part of the financial restructuring, Telewest transferred substantially all of its assets and liabilities to a subsidiary of Telewest Global, Inc., a holding company incorporated in the state of Delaware and formed for the purpose of holding the businesses that have historically comprised Telewest. Trading in Telewest Global's common stock on the Nasdaq National Market will commence on 19 July 2004 under the symbol "TLWT". As part of the financial restructuring, 241,325,000 shares, or 98.5%, of Telewest Global's common stock will be distributed to the holders of Telewest's and its Jersey-based finance subsidiary's notes and debentures and certain other scheme creditors, and 3,675,000 shares, or 1.5%, of Telewest Global's common stock will be distributed to Telewest's existing shareholders. Details of the distribution of these shares will be announced tomorrow, 16 July 2004 after 5:00 p.m. when Telewest's and its finance subsidiary's schemes of arrangement are closed to claims for which no notice has been received. Telewest also successfully completed the amendment of its senior secured credit facility. The amended facility provides for fully committed facilities of GBP 2.03 billion. Cob Stenham, Chairman of Telewest, commented: "Completion of our financial restructuring ends a long and complex process for Telewest and allows us to focus our full resources on strengthening our position as a leading broadband communications and media group in the United Kingdom." Telewest Global's board of directors will include seven directors not historically associated with the Telewest business: Barry R. Elson, William Connors, John H. Duerden, Marnie S. Gordon, Donald S. La Vigne, Michael McGuiness and Steven R. Skinner. Cob Stenham, Chairman of the Board of Telewest, will serve as Chairman of Telewest Global. "This is a dynamic and experienced group of directors. Their expertise will be extremely valuable to the Telewest business, and I am looking forward to working with them", said Stenham. Telewest ADRs ceased trading on the Nasdaq National Market at 4.30 p.m. (New York time) on 13 July 2004 and dealings in Telewest shares and debt securities on the London Stock Exchange ceased at 4.30 p.m. (UK time) on 14 July 2004. The listing of Telewest's shares and debt securities on the Official List of the UK Listing Authority was cancelled with effect from 8.00 a.m. on 15 July 2004. Telewest Global, the newly-restructured broadband communications and media group, currently operates a network covering approximately 4.9 million homes in the UK and provides multi- channel television, telephone and internet services to approximately 1.74 million UK households, and voice and data telecommunications services to around 67,000 business customers. Its content division, Flextech, is the BBC's partner in UKTV. Together they are the largest supplier of basic channels to the UK pay-TV market. For further information go to http://www.telewest.co.uk/media * * * As reported in the Troubled Company Reporter's May 17, 2004 edition, Telewest Communications plc (LSE:TWT) reported financial results for the first quarter ended March 31, 2004: Liquidity and Capital Resources "Net cash inflow before use of liquid resources and financing for the quarter was GBP 17 million compared to GBP 7 million in 2003. "Capital expenditure, on an accruals basis, declined by 20% to GBP 52 million. The reduction was due mainly to improved utilisation of our network assets and falling electronic equipment prices. We have included disclosure of capital expenditure in accordance with National Cable and Telecommunications Association guidelines in note 9. "As at March 31, 2004, net debt was GBP 5,357 million. This consisted of GBP 3,640 million of notes and debentures, (including GBP 400 million of unpaid accrued interest), GBP 144 million of lease financing, GBP 7 million in other loans and GBP 2,000 million drawn down on our bank facility, offset by cash balances and term deposits of GBP 434 million. "We are currently in default on our outstanding notes and debentures, certain of our finance leases and our bank facility. As a result of these defaults, the senior lenders under our bank facility and many of our other creditors have the right to accelerate obligations and demand immediate repayment. In current conditions, we have been able to continue to operate and meet our working capital needs as a direct result of the continued support of our creditors (in generally not calling defaults or accelerating their claims) and the Directors' belief that a financial restructuring is likely to be implemented. Because we are not making current interest payments on our notes and debentures we have been able to finance our remaining working capital needs through available cash and cash generated by operations. However, we do not believe that our creditors will continue to forebear from declaring defaults if our financial restructuring is not implemented or it is not implemented in a timely manner." TITAN INTERNATIONAL: S&P Hangs Junk Rating on Sr. Sub. Notes ------------------------------------------------------------ Standard & Poor's Ratings Services placed its 'B-' corporate credit and 'CCC' senior subordinated note ratings on Titan International Inc. on CreditWatch with positive implications. The action followed the Quincy, Illinoois-based company's announcement that it intends to offer $100 million principal amount of convertible senior unsecured notes and that it is arranging a new $100 million revolving credit facility. The proceeds of these financings will be used to repay all of the amounts outstanding under the company's existing term loan that matures in January 2005 and to redeem all of the outstanding principal amount of the company's 8.75% senior subordinated notes due 2007. "The CreditWatch listing reflects our expectation that the company's financial flexibility will improve as a result of the proposed refinancing," said Standard & Poor's credit analyst Nancy Messer. "In addition, Titan's financial performance and liquidity position have begun to benefit from improvements in its end- markets." Titan, a manufacturer of steel wheels and tires for off-highway vehicles, had balance-sheet debt totaling $234 million at March 31, 2004. The CreditWatch listing will be resolved after a review of Titan's financial profile pro forma for the proposed refinancing. If Standard & Poor's judges the improved credit profile sustainable, a ratings upgrade may be warranted. Depending on the terms of the new revolving credit facility and the expectations for near-term cash flow generation from higher sales and margins, Titan's financial position could improve to a level sufficient to warrant a one-notch upgrade. TRANSTECHNOLOGY: June 27 Stockholders' Deficit Widens to $4.5M -------------------------------------------------------------- TransTechnology Corporation (NYSE:TT) reported operating income of $1.8 million for the first quarter of the fiscal year ending March 31, 2005 compared with $3.6 million in the year earlier period. The company reported a net loss of $.6 million or $.09 per share for the first quarter of fiscal 2005 compared to net income of $.7 million or $.10 per share one year ago. Net sales for the fiscal 2005 first quarter decreased 9.7% to $14.5 million from $16.1 million for the corresponding period of last year. Robert L. G. White, President and Chief Executive Officer of the company, said, "During the first quarter, almost all of the $1.6 million decrease in sales was attributable to our aftermarket overhaul and repair operation. New equipment sales were approximately the same as last year. We have implemented changes in our operating procedures and added new personnel to our overhaul and repair operation, all of which has had an impact on the results for the quarter. These changes were made as a result of the process and procedures review of that operation over the past nine months. In order to ensure that our products and documentation are at the highest levels, we have instituted additional levels of verification and are assuring that all personnel are appropriately trained. This situation produced higher labor and material costs than we had planned. As a result, our overhaul and repair throughput was impeded resulting in reduced gross margins in the first quarter. The combination of the lower sales in the overhaul and repair operation together with inefficiencies experienced as we implement improvements in that area accounted for approximately $.8 million of the shortfall in gross profit from our target with the remaining $.7 million being related to a higher percentage of aftermarket products with an above-normal margin in the same period last year. We do expect to see the overhaul and repair unit return to its historical levels of shipments and gross margin as the new quality control procedures become fully integrated into our overhaul and repair operation." Mr. White continued, "We expect to see improvements in the results of our overhaul and repair operation beginning in the second fiscal quarter, and remain focused on achieving our fiscal 2005 revenue and EBITDA targets of approximately $64 million and approximately $14 million respectively. We continue to pursue the refinancing of our subordinated debt, although to date we are not able to complete such a refinancing due to the continuing uncertainty resulting from the investigation of the United States Attorney into our overhaul and repair operations. Also, by its terms, the senior credit facility expires at the end of July. The Company is in active negotiations to extend the term of this facility." TransTechnology Corporation -- http://www.transtechnology.com/-- operating as Breeze-Eastern -- http://www.breeze-eastern.com/ -- is the world's leading designer and manufacturer of sophisticated lifting devices for military and civilian aircraft, including rescue hoists, cargo hooks and weapons-lifting systems. The company, which employs approximately 180 people at its facility in Union, New Jersey, reported sales of $64.6 million in the fiscal year ended March 31, 2004. At June 27, 2004, TransTechnology Corporation's balance sheet shows a stockholders' deficit of $4,353,000 compared to a deficit of $3,787,000 at March 31, 2004. US AIRWAYS: Flight Attendants to Discuss Cost-Saving Alternatives ----------------------------------------------------------------- The US Airways Master Executive Council of the Association of Flight Attendants-CWA, AFL-CIO, reached a decision Thursday and agreed to discuss cost-saving changes within the context of their current flight attendant agreement. The MEC has advised the company that it is not interested in discussing JetBlue work rules or America West pay rates as suggested by the company. The decision to engage in discussions with the company is conditioned upon the company's willingness to make positive changes to both the sick and reserve systems currently in place, as well as provide a fair and equitable profit-sharing plan as an integral part of any agreement that would be presented to the flight attendants at US Airways for ratification. The MEC met with CEO Bruce Lakefield and Senior Vice President Bruce Ashby in a closed session in Coraopolis, PA, on July 14. The two executives committed to working to correct problems that have arisen since the company's recent restructuring. More than 46,000 flight attendants, including the 5,200 flight attendants at US Airways, join together to form AFA, the world's largest flight attendant union. AFA is part of the 700,000 member strong Communications Workers of America, AFL-CIO. About the Company US Airways is the nation's seventh-largest airline, serving nearly 200 communities in the U.S., Canada, Europe, the Caribbean and Latin America. US Airways, US Airways Shuttle and the US Airways Express partner carriers operate over 3,300 flights per day. For more information on US Airways flight schedules and fares, contact US Airways online at usairways.com, or call US Airways Reservations at 1-800-428-4322. * * * As reported in the Troubled Company Reporter's May 7, 2004 edition, Standard & Poor's Ratings Services said it lowered its ratings on US Airways Group Inc. and its US Airways Inc. subsidiary, including lowering the corporate credit ratings to CCC+ from B-, and removed all ratings from CreditWatch, where they were placed on Dec. 10, 2003. The rating outlook is negative. "The downgrade was based on the difficult challenge faced by US Airways as it seeks to rapidly lower its operating expenses in response to mounting pressure from low-cost competitors," said Standard & Poor's credit analyst Philip Baggaley. The company is seeking further major cost-saving concessions from its labor groups, who already took pay cuts in 2002 and 2003, and failure to conclude those negotiations successfully over the next several quarters could force US Airways to undertake significant asset sales and/or file for bankruptcy a second time. During this process there is also some risk that US Airways will, as part of its overall restructuring, seek to renegotiate public debt obligations. Near-term liquidity is adequate, with $978 million of unrestricted cash at March 31, 2004. Ratings on US Airways Inc.'s various enhanced equipment trust certificates, excepting those that are insured, were lowered, as well. Downgrades were in most cases more extensive than the one- notch downgrade of US Airways' corporate credit rating, reflecting decreased confidence that the airline would be able to reorganize successfully if it were to enter a second bankruptcy proceeding. These obligations are, however, backed by modern technology Airbus aircraft that are considered good collateral. WOMEN FIRST: Wants Until September 27 to Make Lease Decisions ------------------------------------------------------------- Women First Healtcare, Inc., asks the U.S. Bankruptcy Court for the District of Delaware for more time to determine which unexpired nonresidential real property leases it should assume, assume and assign, or reject. The Debtor reminds that Court that it was in a dire financial situation when it filed for bankruptcy protection. Since the Petition Date, it has focused on marketing and selling its primary assets and, on June 25, 2004, the Court approved the sale of the Debtor's Vaniqa assets. As a result, the Debtor has not had sufficient time to determine whether it wants to assume and assign or reject the Unexpired Lease. Moreover, the Unexpired Lease is a real property lease for the headquarters and main operating facility. The Debtor needs an operating facility to conduct its business with respect to its remaining assets in order to maintain asset value during the marketing and sale process. Rejecting the Unexpired Lease and transitioning to another facility at this stage would be costly, inefficient and detract from the orderly liquidation of the Debtor's remaining assets. Assuming the Unexpired Lease at this point without being in a position to determine if an assignment of the lease would add value to the estate would be also be premature. If the Debtor was forced to prematurely assume or reject the Unexpired Lease at this time, the estate would be greatly prejudiced. The Debtor submits that it needs until September 27, 2004, to provide lease-related decisions. Headquartered in San Diego, California, Women First HealthCare, Inc. -- http://www.womenfirst.com/-- is a specialty pharmaceutical company dedicated to improve the health and well-being of midlife women. The Company filed for chapter 11 protection on April 29, 2004 (Bankr. Del. Case No. 04-11278). Michael R. Nestor, Esq., and Sean Matthew Beach, Esq., at Young Conaway Stargatt & Taylor represent the Debtor in its restructuring efforts. When the Company filed for protection from its creditors, it listed $49,089,000 in total assets and $73,590,000 in total debts. WORLDSPAN LP: Bolsters Unique Supplier Content in Canada -------------------------------------------------------- Worldspan, L.P. announced that scheduled flight inventory on Skyservice Airlines through Conquest Vacations is now available in Worldspan's global distribution system. Their new participation significantly increases distribution for the Conquest and Skyservice partnership, resulting in broader itinerary options for Worldspan travel agency retailers worldwide. Worldspan further expanded technology solutions for regional and specialty airlines Air Transat, Bearskin Airlines and Canadian North. All three airlines have upgraded to Worldspan Direct Access and Worldspan Direct Sell. With Direct Access, agents can access and process last seat availability, while Direct Sell provides real-time booking of inventory through the airline's internal reservation system. In addition, Bearskin Airlines and Canadian North will add Worldspan's e-Ticketing solution, eliminating the need for paper tickets. Worldspan agencies can book with added confidence they have the most accurate information available, while improving operational efficiencies and providing maximum customer service. "These wins are proof that Worldspan continues to demonstrate the value of our technology innovation," said Kevin Ficco, vice president - Airline Distribution and Business Development for Worldspan. "We are enhancing Conquest and Skyservice's distribution opportunities while boosting our agencies' ability to grow revenue through unique supplier inventory. By upgrading to advanced Worldspan solutions, Air Transat, Bearskin Airlines and Canadian North will improve efficiency and raise service levels for our agents." "Worldspan's innovative and extensive array of traditional and online travel selling outlets will greatly assist us in meeting our growing distribution needs," said Ian Patterson, vice president of Conquest. "Their proven ability to leverage industry leading technology will certainly play an important role in our efforts to expand growth throughout North America and around the globe." "Worldspan has once again demonstrated our firm commitment to the Canadian market. We continue to deliver increased access to a wider selection of suppliers in Canada for our agency customers around the world, leading to winning results for all of us," noted Worldspan general manager for Canada, Robert Kokonis. About Worldspan, L.P. Worldspan is a leader in travel technology services for travel suppliers, travel agencies, e-commerce sites and corporations worldwide. Utilizing some of the fastest, most flexible and efficient networks and computing technologies, Worldspan provides comprehensive electronic data services linking approximately 800 travel suppliers around the world to a global customer base. Worldspan offers industry-leading Fares and Pricing technology such as Worldspan e-Pricingr, hosting solutions, and customized travel products. Worldspan enables travel suppliers, distributors and corporations to reduce costs and increase productivity with technology like Worldspan Go!(R) and Worldspan Trip Manager(R). Worldspan is headquartered in Atlanta, Georgia. Additional information is available at worldspan.com. * * * As reported in the Troubled Company Reporter's April 7, 2004 edition, Standard & Poor's Ratings Services placed its 'B+' corporate credit rating and other ratings on Worldspan L.P. on CreditWatch with positive implications, reflecting the S-1 filing by its parent, Worldspan Technologies Inc., for an initial public offering of up to $315 million of common stock. Proceeds will be used primarily to repay debt. "The planned issuance of common stock, conversion of preferred stock into common stock, and subsequent debt reduction will aid Worldspan's credit ratios and strengthen its financial flexibility," said Standard & Poor's credit analyst Betsy Snyder. "Pro forma for the IPO, the company's balance sheet debt will decline by $113 million, its deferred compensation expense will decline by $117 million, and its equity will be comprised of only common stock," the analyst continued. Atlanta, Ga.-based Worldspan, the leading on-line travel distributor, was acquired in a leveraged buyout in July 2003. As a result, its credit ratios have been relatively weak. In addition, its financial flexibility has also been weaker than its major competitors, which are all publicly held. * BOND PRICING: For the week of July 19 - July 23, 2004 ------------------------------------------------------- Issuer Coupon Maturity Price ------ ------ -------- ----- American & Foreign Power 5.000% 03/01/30 68 AMR Corp. 9.000% 09/15/16 73 AMR Corp. 10.200% 03/15/20 72 Burlington Northern 3.200% 01/01/45 54 Calpine Corp. 7.750% 04/15/09 63 Calpine Corp. 8.500% 02/15/11 65 Calpine Corp. 8.625% 08/15/10 65 Calpine Corp. 8.750% 07/15/07 69 Comcast Corp. 2.000% 10/15/29 39 Continental Airlines 4.500% 02/01/07 71 Cummins Engine 5.650% 03/01/98 72 Delta Airlines 7.700% 12/15/05 64 Delta Airlines 7.900% 12/15/09 47 Delta Airlines 8.300% 12/15/29 39 Delta Airlines 9.000% 05/15/16 42 Delta Airlines 9.250% 03/15/22 40 Delta Airlines 9.750% 05/15/21 41 Delta Airlines 10.125% 05/15/10 49 Elwood Energy 8.159% 07/05/26 71 Inland Fiber 9.625% 11/15/07 51 Level 3 Communications 2.875% 07/15/10 73 Missouri Pacific 4.750% 01/01/30 73 National Vision 12.000% 03/30/09 62 Northwest Airlines 7.875% 03/15/08 71 Northern Pacific Railway 3.000% 01/01/47 53 ********* 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 ***